G.R. No. 124760 - Gutang vs. Court of Appeals

On March 23, 1990, petitioner William Alain Miailhe, on his behalf and for Victoria Desbarats-Miailhe, Monique Miailhe-Sichere, and Elaine Miailhe-Lencquesaing, filed a Complaint for Annulment of Sale, Reconveyance, and Damages against the Republic of the Philippines and Development Bank of the Philippines (DBP).
Plaintiffs alleged ownership of three parcels of land located at J.P. Laurel St., San Miguel, Manila, under Transfer Certificate of Title No. 80645, possessed by them and their family for over one hundred (100) years until August 1, 1976.

On August 1, 1976, during martial law, the Republic of the Philippines, through armed forces, forcibly and unlawfully took possession of the properties from plaintiffs.
The government continued occupation without payment of rentals until August 19, 1977 despite repeated demands.

The Office of the President directed DBP to acquire the properties from plaintiffs on or about August 19, 1977.
Plaintiffs were coerced through threats and intimidation into selling the properties to DBP for a grossly low price of PHP 2,376,805 (approx. PHP 400 per sqm).
DBP subsequently sold the properties to the Republic of the Philippines through the Office of the President in 1982.

After President Marcos left the country on February 24, 1986 (after the EDSA revolution), plaintiffs made repeated extrajudicial demands for the return and reconveyance of the properties, the last being dated October 24, 1989.
Defendants refused to return or reconvey the properties.

Respondents filed Answers denying forcible takeover and claimed the purchase price was fair and reasonable; DBP also raised prescription as special affirmative defense.
On March 5, 1992, respondents filed a Motion to Dismiss on grounds of prescription.
On September 11, 1992, the trial court denied the motion for preliminary hearing on prescription, deferring resolution until trial.

The Court of Appeals granted a Petition for Certiorari filed by the Republic, setting aside the trial court order and dismissing the complaint due to prescription.
It held that the four-year prescriptive period for annulment started when the vitiating intimidation ceased — at Marcos’ departure on February 24, 1986.
Since the complaint was filed beyond four years (March 23, 1990), the action was prescribed.
The extrajudicial demands did not interrupt prescription because Article 1155 applies only to creditor-debtor obligations, which did not exist here.

Whether the Court of Appeals committed reversible error in annulling the trial court’s order and dismissing the complaint on the ground of prescription.
Whether extrajudicial demands made by petitioner interrupted the running of prescription under Article 1155 of the Civil Code.