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HEIRS OF SOFIA QUIRONG v. DEVELOPMENT BANK OF PHILIPPINES

FACTS:

FACTS

Emilio Dalope left an untitled lot in Pangasinan to his wife, Felisa Dalope, and their nine children, including Rosa Dalope-Funcion. To secure a loan from Development Bank of the Philippines (DBP), Felisa sold the lot to Rosa and her husband Antonio Funcion. The Funcions mortgaged the lot with the DBP but failed to pay their loan. As a result, the DBP foreclosed the mortgage and consolidated ownership of the lot in its name.

The DBP conditionally sold the lot to Sofia Quirong, who waived any warranty against eviction. Quirong made a down payment, and the DBP executed a deed of absolute sale in her favor. However, the Dalopes filed an action for partition and declaration of nullity of documents with damages against the DBP and the Funcions. Despite the suit, the DBP executed the deed of sale in Quirong's favor.

The Regional Trial Court (RTC) later rendered a decision declaring the DBP's sale to Quirong valid only with respect to the shares of Felisa and Rosa Funcion. The decision declared the earlier sale and mortgage void insofar as they prejudiced the shares of the eight other children of Emilio and Felisa. The DBP failed to appeal the decision within the prescribed period.

The DBP resisted the execution of the RTC judgment, but the RTC denied their motion. The DBP's recourse to the Supreme Court through a special civil action of certiorari was denied for failure to pay the prescribed fees. Subsequently, the Quirong heirs filed an action for rescission of the sale between Quirong and the DBP, seeking reimbursement of the price paid and damages. The RTC denied the DBP's motion to dismiss, but on appeal, the Court of Appeals (CA) reversed the RTC decision, ruling that the action was already barred by prescription. The Quirong heirs filed a motion for reconsideration, which the CA denied.

ISSUES:

  1. Whether or not the Quirong heirs' action for rescission of respondent DBP's sale of the subject property to Sofia Quirong was already barred by prescription.

  2. In the negative, whether or not the heirs of Quirong were entitled to the rescission of the DBP's sale of the subject lot to the late Sofia Quirong as a consequence of her heirs having been evicted from it.

RULING:

  1. The Court of Appeals (CA) held that the Quirong heirs' action for rescission was already barred by prescription. However, the Supreme Court reversed the CA's ruling and held that the action was not barred by prescription.

  2. The Supreme Court ruled that the Quirong heirs were entitled to the rescission of the DBP's sale of the subject lot to Sofia Quirong as a consequence of her heirs having been evicted from it.

PRINCIPLES:

  • Prescription, as a mode of acquiring ownership and other real rights over immovable property, requires the lapse of a certain period of time fixed by law.

  • Prescription does not commence to run during the existence of a juridical obstacle that prevents the filing of the action or proceeding.

  • The prescriptive period for an action for rescission of a contract of sale starts to run from the time the right of action accrues, which is when the seller is made aware of the buyer's eviction from the thing sold.