FACTS:

The case involves a dispute among siblings over the inheritance of a 940-square-meter parcel of land. The respondents alleged that they inherited the land from their late parents together with the petitioners. They claimed that a deed of extrajudicial settlement of estate was executed, wherein it was agreed that each heir would receive an equal portion of the land. However, upon subdivision, it was discovered that one of the petitioners was allocated two lots, while the other heirs received only one each. The respondents alleged fraud and deception and prayed for the nullification of the settlement. The petitioners denied the allegations and argued that the deed was voluntarily executed and that the respondents' cause of action had already prescribed. The trial court ruled in favor of the respondents, finding that the action was not barred by prescription and that there was insufficient evidence of fraud. Another aspect of the case involved the appellant's alleged lack of voluntary consent to the settlement. The respondents filed a separate complaint seeking the nullity of the settlement, alleging that one of the appellants was coerced into giving consent. The trial court dismissed the complaint, finding that the settlement was valid and that there was no evidence of fraud or coercion. The Court of Appeals, however, reversed the decision and set aside the settlement, holding that the consent was not given voluntarily. Appellant Concepcion, in particular, denied any knowledge of the document she signed and claimed that she did not understand the language it was written in. She invoked relevant provisions of the Civil Code to support her claim.

ISSUES:

1. • Whether the provisions of Articles 24 and 1332 of the Civil Code of the Philippines apply in this case.
2. • Whether the presumption of mistake or error on the part of appellant Concepcion was rebutted by appellees.

3. Whether the respondent's cause of action for annulment has prescribed.

4. Whether the respondents' actions indicating the absence of fraud or vitiation of consent should be considered.

5. Whether the deed of extrajudicial settlement or partition is valid despite the exclusion of certain heirs.

6. Whether the action to have the extrajudicial settlement annulled has prescribed.

7. Whether the subject deed of extrajudicial settlement is null and void.

8. Whether the action for the declaration of nullity of the defective deed of extrajudicial settlement has prescribed.

RULING:

1. The Supreme Court held that the provisions of Articles 24 and 1332 of the Civil Code of the Philippines apply in this case. It recognized that appellant Concepcion, due to her limited educational attainment, could not understand the contents of the document written in English. The Court emphasized that the burden is on the person enforcing the contract to show that the terms thereof have been fully explained to the party who is unable to read. In this case, appellees failed to offer any evidence to prove that the extrajudicial settlement of estate was explained to appellant Concepcion in a language known to her. Therefore, the presumption of mistake under Article 1332 remains unrebutted.

2. The Court ruled that appellant Concepcion's consent to the extrajudicial settlement was invalidated by a substantial mistake or error, rendering the agreement voidable. The deed of extrajudicial settlement was ordered to be annulled and set aside on the ground of mistake.

3. The Court ruled that the respondent's cause of action for annulment has not prescribed. The applicable prescriptive period in this case is the four-year period counted from the discovery of fraud. Although the complaint was filed twelve years after the execution of the deed, the respondents are deemed to have obtained constructive notice of the fraud upon its publication in a newspaper in 1995. Therefore, the action has not prescribed.

4. The Court disregarded the respondents' actions indicating the absence of fraud or vitiation of consent. The Court emphasized that the respondents, particularly Concepcion, did not know how to read and understand English, the language in which the deed of extrajudicial settlement was written. The fact that she did not object or register any objection during family gatherings and occasions does not negate the fraud or vitiation of consent. The Court recognized that the respondents' lack of education and trust in their sisters led them to sign the deed without knowing its contents.

5. The deed of extrajudicial settlement or partition is invalid because it excluded certain heirs who were entitled to equal shares. As a result, the partition is considered a total nullity and does not affect the excluded heirs.

6. The action to have the extrajudicial settlement annulled has not prescribed, as an action or defense for the declaration of the inexistence of a contract does not prescribe.

7. The subject deed of extrajudicial settlement is declared null and void.

8. The action for the declaration of nullity of the defective deed of extrajudicial settlement does not prescribe.

PRINCIPLES:

• The provisions of Articles 24 and 1332 of the Civil Code of the Philippines protect parties who are at a disadvantage on account of their moral dependence, ignorance, indigence, mental weakness, tender age, or other handicap.

• Under Article 1332, when one of the parties is unable to read or if the contract is in a language not understood by that party, the person enforcing the contract must show that the terms thereof have been fully explained to the former.

• The burden of proving a defect or lack of valid consent to a contract lies on the party alleging such mistake or error, and it must be established by full, clear, and convincing evidence.

• A substantial mistake which invalidates consent may justify the annulment of a contract.

• Misrepresentation to an illiterate person who does not understand the language in which the document is written can be considered fraudulent.

• The prescriptive period to institute an action to annul a contract based on fraud is four years from the discovery of the fraud.

• Constructive notice of fraud can be obtained through publication in a newspaper.

• According to Section 1, Rule 74 of the Rules of Court, no extrajudicial settlement shall be binding upon any person who has not participated therein or had no notice thereof.

• The exclusion of heirs in a settlement of estate renders the partition null and void, and does not affect the excluded heirs.

• The action to have an extrajudicial settlement annulled does not prescribe, as it is an action or defense for the declaration of the inexistence of a contract.

• Section 1 of Rule 74 only applies to valid partitions, and not to null and void partitions.

• A partition that excludes heirs who are entitled to equal shares in the partitioned property is considered invalid.

• No extrajudicial settlement shall be binding upon any person who has not participated therein or had no notice thereof.

• The action for the declaration of nullity of a defective deed of extrajudicial settlement does not prescribe when the same is a total nullity.