5. SPECIFIED CONTRACTORS & DEVELOPMENT, INC., AND SPOUSES ARCHITECT ENRIQUE O. OLONAN AND CECILIA R.

OLONAN,  vs. JOSE A. POBOCAN 

G.R. No. 212472 January 11, 2018

FACTS:

Respondent was in the employ of Specified Contractors until his retirement sometime in March 2011. His last position
was president of Specified Contractors and its subsidiary, Starland Properties Inc., as well as executive assistant of its other
subsidiaries and affiliates.

Architect Olonan allegedly agreed to give respondent one (1) unit for every building Specified Contractors were able
to construct as part of respondent's compensation package to entice him to stay with the company. Two (2) of these projects
that Specified Contractors and respondent were· able to build were the Xavierville Square Condominium in Quezon City and the
Sunrise 1-foliday Mansion Bldg. I in Alfonso, Cavite. Pursuant to the alleged oral agreement, SpeCified Contractors supposedly
ceded, assigned and transferred Unit 708 of Xavlerville Square Condominium and Unit 208 of Sunrise Holiday Mansion Bldg. I
(subject units) in favor of respondent.

Respondent requested petitioner Architect Enrique Olonan as chairman of Specified Contractors the execution of
Deeds of Assignment or Deeds of Sale over the subject units in his favor, along with various other benefits, in view of his
impending retirement on March 19, 2011.

When respondent's demand was unheeded, he filed a Complaint on November 21, 2011 before the RTC of Quezon
City praying that petitioners be ordered to execute and deliver the appropriate deeds of conveyance and to pay moral and
exemplary damages, as well as attorney's fees.

Petitioners, instead of filing an answer, interposed a Motion to Dismiss denying the existence of the alleged oral
agreement. They argued that, even assuming arguendo that there was such an oral agreement, the alleged contract is
unenforceable for being in violation of the statute of frauds, nor was there any written document, note or memorandum
showing that the subject units have in fact been ceded, assigned or transferred to respondent. Moreover, assuming again that
said agreement existed, the cause of action had long prescribed because the alleged agreements were supposedly entered into
in 1994 and 1999.

The RTC, in granting the motion, dismissed the respondent's complaint in its June 4, 2012 Order. While the RTC
disagreed with petitioners that the action had already prescribed under Articles 1144 and 1145  of the New Civil Code, by
reasoning that the complaint is in the· nature of a real action which prescribes after 30 years conformably with Article 1141, it
nonetheless agreed that the alleged agreement should have been put into writing, and that such written note, memorandum or
agreement should have been attached as actionable documents to respondent's complaint.

On appeal, the CA reversed the RTC's Order, reasoning that the dismissal of respondent's complaint, anchored on the
violation of the statute of frauds, is unwarranted since the rule applies only to executory and not to completed or partially
consummated contracts. According to the CA, there was allegedly partial performance of the alleged obligation based on: (1)
the respondent's possession of the subject units; (2) the respondent's payment of condominium dues and realty tax for Unit
708 Xavierville Square Condominium; (3) the endorsement by petitioners of furniture/equipment for Unit 208 Sunrise Holiday
Mansion I; and (4) that shares on the rental from Unit 208 Sunrise Holiday Mansion I were allegedly received by the respondent
and-deducted from his monthly balance on the furniture/equipment account.

Petitioners countered that while there is no dispute that respondent had been occupying Unit 708 - previously Unit
803 - of Xavierville Square Condominium, this was merely out of tolerance in view of respondent's then position as president of
the company and without surrender of ownership. Petitioners also insisted that Unit 208 of Sunrise Holiday Mansion I continues
to be under their possession and control.

Aggrieved, petitioners sought reconsideration of the CA decision, but were unsuccessful. Hence, the present petition.
ISSUES:

1. Whether or not the RTC had jurisdiction over the respondent's complaint considering that the allegations therein
invoked a right over the subject condominium units as part of his compensation package, thus a claim arising out of
an employer-employee relationship cognizable by the labor arbiter.
2. Whether or not the petitioners are estopped from raising the issue of jurisdiction before CA after actively taking part
in the proceedings before the RTC.
3. Whether or not the respondent's cause of action had already Prescribed.

RULINGS:

1. Yes, the RTC had jurisdiction over the respondent's complaint.

It is axiomatic that jurisdiction over the subject matter of a case is conferred by law and is determined by the
allegations in the complaint and the character of the relief sought, irrespective of whether the plaintiff is entitled to all or some
of the claims asserted therein. Settled jurisprudence considers some civil actions as incapable of pecuniary estimation, viz:1.
Actions for specific performance.

In the present case, petitioner seeks payment of her services in accordance with the undertaking the parties signed.
Therefore, respondent correctly designated his complaint as one for specific performance consistent with his allegations and
prayer therein. Accordingly, respondent's suit is one that is incapable of pecuniary estimation and indeed cognizable by the RTC
of Quezon City where both parties reside.

2. Yes, the petitioners are estopped from raising the issue of jurisdiction before CA after actively taking part in the
proceedings before the RTC.

While the lack of jurisdiction of a court may be raised at any stage of an action, nevertheless, the party raising such
question may be estopped if he has actively taken part in the very proceedings which he questions and he only objects to the
court's jurisdiction because the judgment or the order subsequently rendered is adverse to him.

In this case, petitioners' Motion to Dismiss, Reply to the opposition on the motion, and Sur-rejoinder  only invoked the
defenses of statute of frauds and prescription before the RTC. It was only after the CA reversed the RTC's grant of the motion to
dismiss that petitioners raised for the first time the issue of jurisdiction in their Motion for Reconsideration.

Therefore, petitioners are estopped from raising this issue after actively taking part in the proceedings before the
RTC, obtaining a favorable ruling, and then making an issue of it only after the CA reversed the RTC's order.

3. Yes, the respondent's cause of action had already Prescribed.

As the Court has ascertained that the present suit is essentially for specific performance - a personal action - over
which the court a quo had jurisdiction, it was therefore erroneous for it to have treated the complaint as a real action which
prescribes after 30 years under Article 1141 of the New Civil Code. As a personal action based upon an oral contract, Article
1145 providing a prescriptive period of six years applies in this case instead. The shorter period provided by law to institute an
action based on an oral contract is due to the frailty of human memory.

In this case, the complaint for specific performance was instituted on November. 21, 2011, or 17 years from the oral
agreement of 1994 and almost 12 years after the December 1, 1999 oral agreement. Thus, the respondent's action upon an oral
contract was filed beyond the six-year period within which he should have instituted the same.

Indubitably, in view of the instant suit for specific performance being a personal action founded upon an oral contract
which must be brought within six years from the accrual of the right, prescription had already set in.