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 conjugal property, Lot No. 1233, before the effectivity of the New Civil Code. They separated, and Devaras later remarried. During their marriage but without Devaras’s consent, Dumaguit sold one-half of the property to Eulagia Aras on May 4, 1958, who then mortgaged it to Philippine National Bank (PNB). Dumaguit sold the other half to Melinao Peregrino on December 8, 1970.
Devaras discovered the sales in 1971 and sought an amicable settlement, which failed. Represented by her attorney-in-fact, she filed a complaint for Recovery of Real Property on December 4, 1973, seeking to annul the deeds of sale. The trial court dismissed the complaint, ruling that the wife’s consent was unnecessary for the alienation of property acquired before the New Civil Code. The Court of Appeals reversed, holding that under Article 173 of the New Civil Code, the wife could still annul acts of the husband that defraud her, 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) has prescribed.

RULING

Yes, the action has 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, which provides that the wife may, during the marriage and within ten years from the transaction questioned, ask for the annulment of any act or contract of the husband that tends to defraud her or impair her interest in the conjugal partnership property. This article applies even to properties acquired before the New Civil Code, where the wife’s consent to alienation is not required under Article 166.
The Court emphasized that while Devaras and Dumaguit were still married at the time of filing in 1973, and Article 173 afforded her a remedy against fraudulent impairment of her interest, the prescriptive period of ten years from the date of the transaction was mandatory. The questioned sale to Aras occurred on May 4, 1958. Devaras’s cause of action to annul this transaction accrued on that date and prescribed ten years later in 1968. Her complaint filed on December 4, 1973, was approximately five years and seven months too late. Consequently, her action against Dumaguit, Aras, and PNB regarding the 1958 sale and mortgage had been barred by prescription.
However, the Court noted that the action regarding the 1970 sale to Peregrino, filed in 1973, was well within the ten-year prescriptive period. The defense of prescription was properly considered by the Supreme Court as it arose from the facts evident in the pleadings and record.