Case Digest (G.R. No. 132864)
Facts:
Philippine Free Press, Inc. v. Court of Appeals (12th Division) and Liwayway Publishing, Inc., G.R. No. 132864, October 24, 2005, Supreme Court Third Division, Garcia, J., writing for the Court.Petitioner Philippine Free Press, Inc. (Free Press) is a domestic publishing corporation that owned land and a building at No. 2249 Pasong Tamo Street, Makati, evidenced by TCT No. 109767. Prior to Martial Law the magazine was a prominent critic of then-President Marcos. On the eve of Martial Law (September 20–21, 1972) soldiers seized and padlocked the Free Press building; its president, Teodoro Locsin, Sr., was arrested and later provisionally released on conditions that included refraining from publishing or criticizing the Marcos administration. The magazine ceased publication and the company fell into financial distress.
In mid-1973, representatives of the Marcos circle (including Brig. Gen. Hans Menzi) approached Locsin, Sr. with offers to purchase Free Press. After negotiations, on October 23, 1973, notarized deeds of sale were executed transferring the land, building and machinery to Menzi (later associated with respondent Liwayway Publishing, Inc.) for P5,775,000, of which P1,000,000 was paid as downpayment. Free Press used the sale proceeds to pay separation pay, buy out minority shareholders and settle obligations.
On February 26, 1987, Free Press filed a complaint for annulment of sale against Liwayway and the Presidential Commission on Good Government (PCGG) alleging vitiated consent (force, intimidation, duress, undue influence) and gross inadequacy of price. The trial court (Regional Trial Court, Makati, Branch 146) dismissed the complaint on October 31, 1995 and granted Liwayway’s counterclaim for recovery of attorney’s fees. The PCGG’s joinder was dismissed on its motion on October 22, 1987.
Free Press appealed to the Court of Appeals (CA-G.R. C.V. No. 52660). The Court of Appeals, in a decision dated February 25, 1998, affirmed the trial court with the sole modification of deleting the award of attorney’s fees in favor of Liwayway. Free Press then filed this petition for review on certiorari under Rule 45 seeking reversal of the CA decision, contending, among other things, that (a) the four-year prescription under Article 391 of the Civil Code was tolled by Martial Law (Article 1154), (b) its consent was vitiated by threats and c...(Pro-only)
Issues:
- Was the four-year prescriptive period under Article 391 for annulment of sale tolled by Martial Law so that Free Press’s action filed on February 26, 1987 was timely?
- Did duress, intimidation or undue influence vitiate Free Press’s consent to the October 23, 1973 deeds of sale, such that the sale should be annulled?
- Does the allegedly grossly inadequate purchase price of P5,775,000 alone warrant annulment of the sale?
- Did Free Press’s use of the proceeds of the sale constitute implied (tacit) ratification that bars rescission?
- Were the excluded proffered exhibits (purporting to show Marcos’ ownership of Liwayway) rel...(Pro-only)
Ruling:
- (Pro-only)
Ratio:
- (Pro-only)
Doctrine:
- (Pro-only)