G.R. No. L-27841 - Castillo vs. Galvan

Plaintiffs-Appellants: Maria Encarnacion Castillo, Elisea Galvan, and Patrocinio Galvan.
Defendants-Appellees: Josefa Galvan, Emilio Samson, and Natividad Galvan.
The case arises from a dispute over an alleged fraudulent “Deed of Absolute Sale” executed on August 3, 1955.

The deed purportedly conveyed Paulino Galvan’s undivided one-half interest in two contiguous parcels of land (Lot Nos. 4541 and 4542, Dagupan Cadastre).
The other undivided half belonged to his two daughters from a previous marriage (defendants Josefa and Natividad Galvan).
The properties, including a family home, were the subject of the dispute as the plaintiffs contended that the sale was fraudulent and void ab initio.

Plaintiffs alleged that in 1953, under fraudulent misrepresentation by Josefa Galvan, Paulino Galvan and his wife Encarnacion Castillo were induced to sign a document they believed was solely for obtaining separate tax declarations.
The document, later discovered to be a deed of sale, purportedly transferred Paulino Galvan’s one-half share for the paltry sum of P500.00, despite the actual market value being approximated at P22,500.00.
The transaction was criticized on the grounds that there was no genuine intention to sell given Paulino Galvan’s residential requirements and financial capacity.

The complaint was filed on August 1, 1961, seeking the annulment of the deed of sale, a declaration that the plaintiffs were the rightful owners of four-sixths (4/6) of the related property, damages, and attorney’s fees.
Defendants filed an answer with counterclaim on August 23, 1961, asserting both negative and affirmative defenses, including ownership by legal conveyance.
On August 24, 1964, prior to trial, defendants sought to amend their answer to include a defense that the action was barred by the statute of limitations (prescription).
Despite plaintiffs’ objections on the ground that such amendment was untimely and effectively waived the defense by not being in the original answer, the trial court allowed the amendment.
Subsequently, on August 27, 1966, defendants filed a motion to dismiss the complaint on the prescription ground, leading the trial court to dismiss the complaint on September 22, 1966.
After a failed motion for reconsideration, the plaintiffs appealed the dismissal.

Whether the trial court erred in allowing the defendants to amend their answer to include the defense of prescription despite not having pleaded it originally.
Whether, by adding the statute of limitations defense, the defendants waivered their right to do so or substantially altered their defense beyond what is permitted by the Rules of Court.

Whether the annulment action, seeking to declare the deed of sale void ab initio due to fraud and lack of consideration, is subject to prescription.
Whether the trial court’s dismissal of the complaint on the ground of prescription was proper in view of the alleged facts and the nature of the relief sought.