G.R. No. 74423 . January 30, 1989.
EUSTAQUIO BAEL and TEOFILA JUMALON, petitioners, vs. THE INTERMEDIATE APPELLATE COURT and HEIRS OF ZOILO BAEL, namely: EUSEBIA VDA. DE BAEL, RENERIO, LERMA, CONRADO, ZOSIMA, EMELITA AND DESIDERIO, all surnamed BAEL, respondents.

FACTS

The land in dispute is a portion of Lot No. 4620, inherited by Zoilo Bael. Upon his death, his heirs took possession. The heirs of Zoilo Bael filed a complaint alleging that after Zoilo’s death, the petitioners, through deceit, made Desiderio Bael sign a Deed of Absolute Sale in 1964, which he believed was merely a mortgage document for a P200 loan. They claimed the deed falsely stated a P1,500 consideration and that Eusebia Vda. de Bael’s thumbmark was forged. They argued the land was unpartitioned and Desiderio and Eusebia had no authority to alienate the shares of the other co-heirs. They sought nullification of the deed, damages, and recovery of possession.
The petitioners, Eustaquio Bael and Teofila Jumalon, defended the validity of the deed as a true sale. They asserted there had been an oral partition and that they had purchased the shares of most heirs, except two minors, through the 1964 deed and separate private “Salabutan” documents. They claimed the contents were properly translated, the deed was notarized, and as purchasers, they were entitled to possession. They raised affirmative defenses, including that the action was barred by the statute of limitations.

ISSUE

The primary issue is whether the action for annulment of the deed of sale had already prescribed.

RULING

The Supreme Court reversed the Intermediate Appellate Court and reinstated the trial court’s decision, declaring the deeds valid. The Court held the action had prescribed. An action for annulment of a voidable contract, such as one based on fraud, prescribes in four years from the discovery of the fraud. The Court found the fraud, if any, was discovered no later than 1964 when the deed was executed, or by 1967 when the tax declaration was transferred to the petitioners’ names. The respondents’ inaction—failing to demand the land’s produce, allowing the petitioners to pay taxes, and only filing suit in 1972—constituted laches. The complaint filed in 1972 was thus filed beyond the four-year prescriptive period.
Regarding the documents’ admissibility, the Court ruled the notarized Deed of Sale was a public document admissible as to its date and execution. The private “Salabutan” documents were also admissible; their genuineness was established by testimonies, including from the respondents’ own witnesses, and the respondents failed to deny them under oath as required by the Rules of Court. The petitioners’ long-term possession, tax payments, and the respondents’ acquiescence supported the finding of a valid sale, not a mere mortgage. Consequently, the action was barred by prescription.