- Petitioner
- First Philippine Holdings Corporation
- Respondent
- Trans Middle East (Phils.) Equities Inc.
- Citation
- G.R. No. 179505
- Court
- Supreme Court
- Division
- Third Division
- Ponente
- Chico-Nazario, J.
- Decided
- December 4, 2009
Summary
FPHC challenged the 1984 sale of its PCIB shares to TMEE, claiming the transaction was fraudulent because it was approved by a dummy board controlled by Benjamin Romualdez during the Marcos era. TMEE successfully moved to dismiss the complaint-in-intervention on grounds of prescription. The Sandiganbayan ruled that FPHC's action was filed beyond the four-year prescriptive period under Article 1391 of the Civil Code, which should be counted from the date of discovery of fraud (May 24, 1984), not from when Marcos left power (February 1986). The Supreme Court affirmed, holding that the contract was merely voidable due to alleged fraud, not void ab initio, since FPHC's board had legal capacity to contract despite being allegedly controlled by dummies. The Court emphasized that fear of the Marcos regime was no excuse for non-observance of the prescriptive period, particularly since martial law had ended in 1984 when the sale occurred.