Inton vs. Quintana

A sale of a ward's real property by a guardian without special authority from the court, will, or statute is void as to the ward's share. The provision requiring ratification by minors was construed as a protection or option for the purchasers, not as a condition that invalidated the absolute sale as to the adult co-owners who had capacity to dispose of their shares.

Marcelo, Fe Severa, Antonio, and Olimpia Inton were siblings and co-owners in equal undivided shares of a parcel of land in Samal, Bataan. Their mother, Fidela Enrile, purported to act in representation of the then-minor siblings Antonio and Olimpia in a transaction with Alejandro Quintana and Alejandra Malibiran. Under the law then in force, a guardian could not sell a ward's real property without special authority from the court, will, or statute, and minors had a period after majority within which to recover property disposed of during minority.

Marcelo, Fe Severa, Antonio, and Olimpia Inton were brothers and sisters and owners in equal undivided shares of a 15,167-square-meter parcel of land in Samal, Bataan. On May 10, 1936, Marcelo and Fe Severa, both of age, and their mother, Fidela Enrile, the latter acting "in representation" of Antonio and Olimpia, then under age, sold the land to Alejandro Quintana and Alejandra Malibiran, husband and wife, for P800. The deed described the conveyance as a "venta real y absoluta" and stated that half of the price, P400, would be used for the maintenance and education of the minors Antonio and Olimpia. It also stated that if the minors refused to ratify the sale upon reaching majority, the signers obligated themselves jointly and severally to return the P800.

The buyers took possession of the property and held it until 1942, when they died. In the extrajudicial partition among their heirs, the land passed to Daniel Quintana, Alejandro Quintana's brother and the principal or virtually sole defendant in the case.

Sometime in 1944, after Antonio and Olimpia had attained the age of majority, Daniel Quintana attempted to have them, along with Marcelo and Fe Severa, execute an absolute deed of conveyance. The four brothers and sisters refused and commenced the present suit. The complaint was docketed on July 10, 1944.

At pre-trial, the parties agreed that there was no issue of fact and submitted the case on the sole issue arising from their differing interpretations of the deed. Plaintiffs interpreted it as a contract subject to ratification by the minors Antonio and Olimpia; defendants interpreted it as a contract of absolute sale. Plaintiffs contended that Antonio, who reached legal age in 1939, and Olimpia, who reached majority in 1941, exercised their right to repudiate or disapprove the contract within the period fixed by law. Defendants urged that neither minor exercised that right within a reasonable period and that both were guilty of laches.

The record also showed that Antonio reached the age of 21 in 1939 and Olimpia in 1941, and that their mother died shortly before the action was instituted. The plaintiffs asserted that Antonio and Olimpia learned of the sale only in 1944, shortly before they commenced the action. The parties submitted the case for decision on the agreed statement of issues, with no factual dispute between them.

• Absolute Sale: Defendants-Appellants maintained that the deed was a contract of absolute sale, not a contract subject to ratification by the minors.
• Ratification Clause: They argued that the provision regarding ratification by the minors was intended as a protection of the purchasers, not as a condition suspending or invalidating the sale.
• Laches: They urged that neither Antonio nor Olimpia exercised the right to repudiate or disapprove the sale within a reasonable period and that both were guilty of laches.
• Statute of Limitations as Departure from Theory: They assigned as error that the application of the statute of limitation was a departure from the theory in their answer.

• Conditional Sale: Plaintiffs-Appellees interpreted the contract as subject to ratification by the minors Antonio and Olimpia.
• Timely Repudiation: They contended that Antonio, who became of legal age in 1939, and Olimpia, who reached majority in 1941, exercised their right to repudiate or disapprove the contract within the period fixed by law.
• Timeliness of Action: They expressly set out in the stipulation that the action was filed "within the period fixed by law."
• Recovery of Land / Annulment: They prayed for annulment or rescission of the sale, which the Court characterized as essentially an action to recover land.

• Validity of Sale as to Minors' Shares: Whether the sale executed by the mother purportedly in representation of the minor children without court authority was void as to the shares of Antonio and Olimpia Inton.
• Nature of Ratification Clause: Whether the provision requiring ratification by the minors made the entire sale conditional, or was intended as a protection or option for the purchasers and left the sale valid as to the adult siblings' shares.
• Laches: Whether the action of Antonio and Olimpia was barred by laches.
• Prescription: Whether the action of Antonio and Olimpia to recover their shares was barred by the statute of limitations.
• Refund: Whether Antonio and Olimpia must refund the P400 paid for their shares.
• Procedural — Statute of Limitations as Departure from Theory: Whether the application of the statute of limitation was a departure from the theory of the defendant in his answer.

• Validity of Sale as to Minors' Shares: Yes, void as to the shares of Antonio and Olimpia. A guardian has no authority to sell a ward's real estate without special authority from the court, will, or statute; a sale without court approval is void.
• Nature of Ratification Clause: The ratification clause did not make the entire sale conditional. It was intended as a protection or option for the purchasers, and the sale remained valid as to the shares of Marcelo and Fe Severa.
• Laches: No. Laches did not bar the action because Antonio and Olimpia sought to vindicate a vested legal right, not to establish an executory right.
• Prescription: No. The action was filed within the ten-year prescriptive period as extended by the minority of Antonio and Olimpia.
• Refund: Yes. Antonio and Olimpia must refund P400 to the defendant, the deed reciting that the amount was for their education and the statement not having been disproved or denied.
• Procedural — Statute of Limitations as Departure from Theory: No. The plaintiffs' pre-trial stipulation expressly raised the timeliness of the action, and the pre-trial order controls the subsequent course of action.

• Validity of Sale as to Minors' Shares: The Court began by distinguishing the four siblings according to age and legal capacity. The stipulation's first proposition could affect only the signers of the deed, Marcelo and Fe Severa. Antonio and Olimpia were minors and took no part in the sale; they were not bound by the agreement regardless of its terms unless their action was barred by limitation, prescription, or estoppel. Although the mother was alleged to be their guardian, there was no evidence of that, and it did not appear that she was authorized to enter the transaction or that the sale was approved by the competent court. A guardian has no authority to sell a ward's real estate merely by general powers; absent special authority from a will, statute, or court order, such a sale is void. The Court cited Lafarga vs. Lafarga and Ledesma Hermanos vs. Castro for this rule. Thus, the sale was ineffective as to the minor children's shares even if the mother were their judicial guardian.
• Nature of Ratification Clause: The trial court had treated the sale as conditional upon ratification by the minors and cancelled it when they refused. The Supreme Court disagreed. The provision on ratification was intended as a protection of the purchasers. The phrase "Hacemos constar, tambien" denoted continuity of thought and made ratification an additional safeguard of the purchasers' right, like the implied warranty of title and peaceful possession. Nothing in the vendors' circumstances contradicted the deed's express statement that the sale was "real y absoluta." If the minors repudiated, the prejudice would fall on the buyers alone; it would not diminish the consideration or place the sellers in a worse position, since they had received the purchase price in cash, apparently the full market value. That only the sellers signed the agreement was an added, though not decisive, argument that the condition was intended to apply against the vendors and not the purchasers. The buyers, however, had reason to realize the defects in the mother's capacity to act for the minors; they might not wish to keep only one-half of the parcel if the minors disaffirmed. It was natural to insert a stipulation allowing them to surrender the land and recover their money, but they might also choose to adhere to the sale as to the adult children's shares. The reasonable interpretation was therefore that the ratification condition was an option extended to the buyers either to call off the whole transaction or to stick to the sale as to the shares of the adult children who had full capacity to dispose of their property independently of the minors' future action. The Court also found the plaintiffs' delay significant: Antonio reached 21 in 1939 and Olimpia in 1941, yet they moved to rescind only after Daniel Quintana sought a new deed in 1944, a delay made more significant by the property's considerable increase in value. The assertion that Antonio and Olimpia learned of the sale only in 1944 was found untenable.
• Laches: The Court held laches inapplicable. It distinguished cases involving protection of a present vested property right or "executed interest" from cases involving an "executory" right that lies in action and requires equitable relief to invest the plaintiff with the claimed right. In executory-interest cases, laches applies fully and the plaintiff must come without unreasonable delay. But where the plaintiff seeks protection of an executed or vested legal right, laches has little, if any, application. Unless the statutory period of limitations has run or sufficient time has elapsed to create a presumption of grant, mere delay does not bar equitable relief in support of a legal right; the plaintiff is precluded only by conduct amounting to abandonment or estoppel. Antonio and Olimpia were not protecting an executory right but vindicating a legal right. The Court distinguished Uy Soo Lim vs. Tan Un Chuan, cited by the defendant, because that case involved rescission of a voidable contract over personal property entered into by the plaintiff himself and invoked a general equity principle, not a statute of limitations. The Court also found the defendant's invocation of laches paradoxical: he was interested in confirming the sale, and if prompt action was needed, it was he who should have acted before the mother died to have the signers persuade the children to honor the commitment. The minors were not bound to inform him of their attitude toward a contract in which they had no part and could rely on the ten-year period allowed by law to recover their land. Laches cannot interfere with the running of the period of limitation; only a valid contract or conduct operating as estoppel can. If the defendant made improvements between 1941 and 1944, he did so with full knowledge of the precariousness of his title.
• Prescription: The suit was essentially one to recover land, which prescribes in ten years under section 40 of Act No. 190. Assuming the cause of action accrued in 1936, the ten-year period had not expired when the complaint was docketed on July 10, 1944. Section 42 of the Code of Civil Procedure allowed a person under minority at the time the cause of action accrued to bring the action within three years after disability was removed, after expiration of ten years from accrual. Although Antonio was already 26 and more than three years past majority when the action was filed, the Court applied Ramos vs. Ramos, which construed sections 40 and 42 to mean that if the three years after attainment of majority expires before the full ten-year period elapses, prescription becomes effective at the expiration of the latter period. The action was therefore timely. The mother's statements or intentions in the deed could not bind the minors; a contract cannot impose obligations on a non-party, and the contracting parties could not shorten the prescriptive period to the prejudice of the minor children any more than they could alienate the minors' property without due authority.
• Refund: The Court ordered Antonio and Olimpia to refund the P400 paid by the Quintanas for their shares. The deed recited that this amount was to be used for their education, and that statement had not been disproved or denied. No evidence was presented as to any improvements the defendant or his grantors may have introduced on the land.
• Procedural — Statute of Limitations as Departure from Theory: The Court found no merit in the assignment of error that applying the statute of limitation departed from the defendant's theory in his answer. Section 1 of Rule 25 on pre-trial provides that the court shall make an order regarding the parties' agreements on matters considered, and that order controls the subsequent course of action. The plaintiffs expressly set out in the stipulation that it was their contention that the action was filed "within the period fixed by law." Additionally, the prayer for annulment or rescission did not change the fundamental and prime objective and nature of the action, which was to recover real property. The annulment was not secondary. In any event, because the sale was absolutely void as to the minors, it could be impeached in a collateral proceeding by anyone whose rights and interests conflicted with it, and there was no presumption of its validity.

• Guardian's sale of ward's realty without court authority is void — A guardian has no authority to sell real estate of the ward merely by reason of general powers; absent special authority conferred by will, statute, or order of court, the sale is void. The Court applied this to the mother's purported sale of Antonio and Olimpia's shares, holding the sale ineffective as to them because no court authority or approval was shown.
• Ratification clause as purchasers' protection or option — A stipulation requiring ratification by minors may be intended as an additional safeguard for purchasers rather than as a condition suspending the absolute sale as to adult co-owners. The Court construed the clause as giving the buyers the option either to call off the whole transaction or to adhere to the sale as to the adult children's shares.
• Laches does not bar protection of an executed or vested legal right — Laches applies fully to executory interests, but has little, if any, application where the plaintiff seeks protection of an executed or vested legal right. Mere delay does not bar equitable relief in support of a legal right unless the statutory period has run or conduct amounts to abandonment or estoppel. The Court applied this to hold that Antonio and Olimpia's action to recover their land was not barred by laches.
• Prescription for minors' recovery of land — Under section 40 of Act No. 190, recovery of title to or possession of real property prescribes in ten years. Under section 42 of the Code of Civil Procedure, a minor may bring the action within three years after disability is removed, but if the three-year period expires before the full ten-year period elapses, prescription becomes effective at the expiration of the ten-year period. The Court applied this to find the action timely.
• Contract cannot bind a non-party or shorten prescription — A contract cannot impose contractual obligations on one who is not a party to it, and the contracting parties cannot shorten the period of prescription to the prejudice of minor children. The mother's stipulation did not bind Antonio and Olimpia or shorten their prescriptive period.
• Void sale may be impeached collaterally — A sale that is absolutely void is entitled to no authority or respect and may be impeached in a collateral proceeding by anyone whose rights and interests conflict with it; there is no presumption of its validity. The Court applied this in holding that the prayer for annulment did not change the action's fundamental nature as one to recover land.

• "A guardian has no authority to sell real estate of his ward, merely by reason of his general powers, and in the absence of any special authority to sell conferred by will, statue, or order of court. (28 C.J., 1133.) A sale of the wards realty of guardian without authority of the court is void." — This passage states the controlling rule that rendered the mother's sale void as to the minor children's shares.
• "The reasonable interpretation of the condition of ratification seems therefore to be that it was in the nature of an option extended to the buyers either to call off the whole transaction or to stick to the sale with reference to the shares of the adult children who had full capacity to dispose of their property independently of the minor children's future action." — This defines the Court's construction of the ratification clause as a protection or option for the purchasers, not a condition invalidating the adult siblings' shares.
• "Where however, plaintiff come into equity, not for the creation or establishment of the executory right, but for the mere protection of an executed or vested legal right, the doctrine of laches has little if any, application." — This is the Court's ratio for holding that laches did not bar the minors' action to recover their land.
• "If the three years after attainment of majority expires before the full ten-year period elapses, prescription becomes effective at the expiration of the latter period." — This quotation from Ramos vs. Ramos supplies the rule that made the minors' action timely despite the lapse of more than three years after Antonio reached majority.

• Lafarga vs. Lafarga, 22 Phil. 374 — Cited as authority that a sale of a ward's realty by a guardian without authority of the court is void.
• Ledesma Hermanos vs. Castro, 55 Phil. 136 — Cited to the same rule that a guardian's sale of a ward's real property without court authority is void.
• Uy Soo Lim vs. Tan Un Chuan, 38 Phil. 522 — Cited by the defendant but distinguished; the Court held it involved an executory right and rescission of a voidable contract over personal property entered into by the plaintiff himself, not a vested legal right to land.
• Ramos vs. Ramos, 45 Phil. 362 — Construed section 40 of Act No. 190 and section 42 of the Code of Civil Procedure, holding that if the three-year post-majority period expires before the full ten-year period, prescription becomes effective at the expiration of the latter period.

• Section 40, Act No. 190 — An action for recovery of title to, or possession of, real property or an interest therein may be brought within ten years after the cause of action accrues. The Court applied this to characterize the suit as essentially one to recover land and to find that the ten-year period from 1936 had not expired when the action was filed on July 10, 1944.
• Section 42, Code of Civil Procedure — If a person entitled to bring the action under the preceding section is within the age of minority at the time the cause of action accrues, such person may, after expiration of ten years from the time the cause of action accrues, bring the action within three years after disability is removed. The Court applied this with Ramos vs. Ramos to hold that the minors' action was timely.
• Section 1, Rule 25 (Pre-trial) — The court shall make an order regarding the agreements of the parties as to matters considered, and such order when entered controls the subsequent course of action. The Court applied this to reject the claim that the statute of limitation was a departure from the defendant's theory, because the plaintiffs' stipulation expressly raised the timeliness of the action.

Justices Feria and Bengzon concurred.

• Justice Perfecto (concurring and dissenting) — Concurred in the decision except the part ordering Antonio and Olimpia Inton to refund P400. He reasoned that although the deed stated the amount was to be used for their education, that statement is not evidence that the amount was actually spent for that purpose; absent such evidence, it is not fair to compel them to refund it.