GR 108991; (March, 2001) (Digest)
G.R. No. 108991; March 20, 2001
WILLIAM ALAIN MIAILHE, petitioner, vs. COURT OF APPEALS and REPUBLIC OF THE PHILIPPINES, respondents.
FACTS
Petitioner William Alain Miailhe, representing his family, filed a Complaint for Annulment of Sale, Reconveyance and Damages on March 23, 1990. He alleged that on August 19, 1977, during the Marcos martial law regime, the petitioners were coerced through threats and intimidation by government agents into selling their properties in Manila to the Development Bank of the Philippines (DBP) for a grossly low price. The DBP subsequently sold the properties to the Republic of the Philippines in 1982. The complaint stated that the intimidation ceased only after President Marcos left the country on February 24, 1986, following the EDSA Revolution. It further alleged that the petitioners made repeated extrajudicial demands for reconveyance, the last being on October 24, 1989.
The Republic and DBP filed their respective Answers, with DBP raising the affirmative defense of prescription. The Republic later filed a Motion to Dismiss on the same ground, arguing the action was filed beyond the four-year prescriptive period. The Regional Trial Court (RTC) denied the motion for a preliminary hearing on the affirmative defense and deferred resolution until trial. The Republic then filed a Petition for Certiorari with the Court of Appeals.
ISSUE
Whether the Court of Appeals erred in finding that the action for annulment had prescribed and that the extrajudicial demands did not interrupt the prescriptive period.
RULING
The Supreme Court denied the petition and affirmed the Court of Appeals. An action for annulment of a voidable contract prescribes in four years. Under Article 1391 of the Civil Code, when the ground is vitiation of consent by intimidation, the period begins from the time such defect ceases. The petitioners themselves alleged in their complaint that the intimidation ceased when President Marcos was deposed on February 24, 1986. Counting from this date, the four-year period lapsed on February 24, 1990. The complaint filed on March 23, 1990 was therefore filed 27 days beyond the prescriptive period.
The Court also ruled that the extrajudicial demands did not interrupt the running of prescription. Article 1155 of the Civil Code, which provides that a written extrajudicial demand interrupts prescription, applies only to a creditor-debtor relationship. In an action for annulment, no such relationship exists because a voidable contract remains binding unless annulled by a court. The defendant has no obligation to reconvey the property based merely on an extrajudicial demand; the obligation only arises after a judicial declaration of nullity. Consequently, the petitioners’ demands in 1989 did not toll the prescriptive period. Since the facts demonstrating prescription were clear from the allegations in the complaint itself, the Court of Appeals correctly held that the RTC committed grave abuse of discretion in not dismissing the case outright.