MWSS v CA
1986-1990.
G.R. No. 128520. October 7, 1998
 MWSS leased 128 hectares to CHGCCI, with the right of first
refusal should the subject property be made open for sale, sale
subject to president approval.
 (1982) Marcos directed MWSS to cancel the lease agreement with
CHGCCI. MWSS informed CHGCCI that property was now for sale.
 MWSS and Silhoutte, assignee of CHGCCI, approved of the
purchase price made by Asian Appraisal Co., Inc. of P53,800,000.00
for the 128hectare lot. Marcos Approved the Initial agreement.
 (1983) Marcos approved the sale. The BoT of MWSS passed a
Resolution 36-83 approving the sale to SILHOUTTE
o Written agreement after counteroffers and AAC’s
appraisal
 Purchase price of P 57,240,000 for 135 hectares;
 P 27,000,000 payable upon approval of the contract by
Marcos and
 Balance of P 30,240,000 after a year.
 (1984) SILHOUETTE sold 67 hectares to AYALA for 74 million.
 (1986) Marcos was deposed
 (1993) MWSS filed an action seeking for the declaration of nullity of
the MWSS-SILHOUTTE sales agreement. On the ground:
o Undue Influence by Marcos is considered void thus
imprescriptible
o Fraud
 AYALA pleaded affirmative defenses of:
o Prescription
o Laches
o Waiver/estoppel
o Non-joinder of indispensable parties
Issue: Whether or not MWSS action has prescribed
Held: Yes.
PRESCRIPTION
MWSS sold through a valid contract with the essential requisites present
(COC) is considered voidable. MWSS despite full knowledge that the
market value of subject property was much higher, passed the undated
resolution approving the sale. MWSS states that Marcos unduly influenced
the sale, the prescriptive period to annul the same would have begun on
If MWSS' consent was vitiated by fraud, then the prescriptive period
commenced upon discovery or from the date of the execution of the sale in
1984 when the agreements were registered and titles thereafter were issued to
respondent SILHOUETTE.
MWSS states that it prayed not for the nullification of voidable contracts but
for the declaration of nullity of void ab initio contracts which are
imprescriptible. Basic is the rule however that it is the body and not the
caption nor the prayer of the Complaint that determines the nature of the
action.
The Initial agreement in which MWSS and SILHOUTTE approved the
appraisal made by Asia Appraisal Co. made by Marcos was not the sale. The
real sale was after the written agreement of MWSS and SILHOUTTE to hire
Asia Appraisal Company to appraise the entire leased area in which there
was an exchange of counter offers. Which is fair and that initial agreement
was only subjected to the approval of Marcos. (1983)
LACHES
MWSS slept on its rights almost 10 years from the conclusion of the
sale in 1983 before formally laying claim to the subject property in 1993.
There was even implied ratification:
(a) sending three (3) demand letters for the payment of the
purchase price,
(b) accepting P25 Million as downpayment
(c) accepting a letter of credit for the balance
MWSS' stated that it returned the amounts. This means that MWSS'
acceptance and retention of benefits flowing from the sales transactions
which is another form of implied ratification.
DOCTRINE:
A contract where consent is given through mistake, violence, intimidation,
undue influence or fraud, is voidable
Art. 1391
Prescriptive period shall begin in the cases of intimidation, violence or undue
influence, from the time the defect of the consent ceases, and in case of
mistake or fraud, from the time of the discovery of the same time