G.R. No. 69269 March 14, 1990
THE PHILIPPINE NATIONAL BANK, petitioner, vs. ELPIDIA DEVARAS, represented by her attorney-in-fact, ATTY. LEON T. TUMANDAO, respondent.

FACTS

Elpidia Devaras and Pio Dumaguit were spouses who acquired a parcel of land in Leyte before the effectivity of the New Civil Code. They separated, and Devaras later remarried and moved to the United States. Acting as administrator, Dumaguit sold one-half of the property to Eulagia Aras on May 4, 1958. Aras then mortgaged this portion to the Philippine National Bank (PNB) to secure a loan. On December 8, 1970, Dumaguit sold the other half to Melinao Peregrino.
In 1971, Devaras returned to the Philippines and discovered the sales. After failed amicable settlements, she, through her attorney-in-fact Atty. Leon T. Tumandao, filed a complaint for Recovery of Real Property on December 4, 1973, against Dumaguit, the vendees, and PNB. She sought to have the deeds of sale declared null and void. The trial court dismissed the complaint, ruling that for properties acquired before the New Civil Code, the husband’s alienation did not require the wife’s consent. The Court of Appeals reversed, holding that the wife could still protect her share under Article 173 of the New Civil Code against fraudulent acts, remanding the case for further proceedings.

ISSUE

Whether Devaras’s action to annul the 1958 sale between Dumaguit and Aras (and the subsequent mortgage to PNB) had prescribed.

RULING

Yes, the action had prescribed. The Supreme Court granted PNB’s petition, reversing the Court of Appeals regarding the 1958 sale. The legal logic centers on the application of Article 173 of the New Civil Code. While it is true that for properties acquired before the Code, the husband’s alienation does not require prior spousal consent (Article 166), Article 173 provides a protective remedy for the wife. It allows her, during the marriage and within ten years from the questioned transaction, to seek annulment of any act or contract of the husband that tends to defraud her or impair her interest in the conjugal partnership.
The Court applied this ten-year prescriptive period to the 1958 sale. The cause of action accrued on the date of the sale, May 4, 1958. Devaras had until May 4, 1968, to file an action for annulment. However, she only filed her complaint on December 4, 1973, which was approximately five years and seven months beyond the prescriptive period. Consequently, her action against Dumaguit, Aras, and PNB concerning that specific transaction was already barred by the statute of limitations. The Court clarified that the defense of prescription could be considered even if not expressly pleaded, as its factual basis was evident from the pleadings and records. The ruling did not affect the 1970 sale to Peregrino, as the action filed in 1973 was well within the ten-year period for that transaction.