G.R. No. L-27841 October 20, 1978
MARIA ENCARNACION CASTILLO, ELISEA GALVAN, and PATROCINIO GALVAN, plaintiffs-appellants, vs. JOSEFA GALVAN, EMILIO SAMSON, and NATIVIDAD GALVAN, defendants-appellees.

FACTS

Plaintiffs, the widow and children of Paulino Galvan, sought the annulment of a 1955 “Deed of Absolute Sale” wherein Paulino and his wife purportedly sold his undivided half-interest in two parcels of land to defendants (his daughters from a first marriage) for only P500.00. Plaintiffs alleged the sale was fraudulent, claiming the spouses were tricked into signing the document under the false pretense that it was merely to facilitate separate tax declarations. They argued the sale was void, noting the gross inadequacy of price (the share was allegedly worth P22,500) and that Paulino had no reason to sell his only residential lot. The complaint was filed on August 1, 1961. Defendants initially answered without raising prescription. Years later, in 1964, they were permitted to amend their answer to include the defense that the action, based on fraud, had prescribed under the four-year period in Article 1391 of the Civil Code. Subsequently, in 1966, they filed a motion to dismiss on that ground, which the trial court granted, ruling prescription began from the deed’s registration on August 4, 1955.

ISSUE

The primary issue is whether the action for annulment had prescribed. A subsidiary procedural issue is whether the trial court erred in allowing defendants to amend their answer to plead prescription.

RULING

The Supreme Court reversed the trial court’s dismissal. On the procedural issue, the Court held the amendment was properly allowed. Under the Rules of Court, amendments to pleadings are favored and should be liberally permitted to secure a just determination of the case. The defense of prescription, not being a jurisdictional matter, can be raised at any stage of the proceedings before final judgment, and its inclusion in an amended answer did not substantially alter the defendants’ case.
On the substantive issue, the Court ruled the action had not prescribed because the contract was void or inexistent, not merely voidable. Applying the precedent in Mapalo v. Mapalo, the Court found the alleged circumstances—gross inadequacy of price and the fraudulent procurement of signatures where the vendors did not intend to sell at all—indicated a complete absence of consent to the sale. Such a contract is void ab initio. The inexistence of a void contract is permanent and incurable; it cannot be ratified and does not prescribe. An action to declare its nullity can be brought at any time. Consequently, the four-year prescriptive period for annulment based on fraud under Article 1391, which begins from discovery (here, tied to registration in 1955), was inapplicable. The case was remanded for trial on the merits to determine the factual validity of the plaintiffs’ allegations of a void contract.