Prescriptive period for annulment of contract

How is the prescriptive period computed for the annulment of a contract entered into because of alleged threats and intimidation committed by cronies of then President Marcos?

Under the Civil Code, the action must be brought within four years from the “time the defect of the consent ceases.”  It provides:

Art. 1391. An action for annulment shall be brought within four years.

This period shall begin: In case of intimidation, violence or undue influence, from the time the defect of the consent ceases.

In case of mistake or fraud, from the time of the discovery of the same.

And when the action refers to contracts entered into by minors or other incapacitated persons, from the time the guardianship ceases.

In Associated Bank vs. Spouses Justiniano S. Montano, Sr. and Ligaya Montano, et al, G.R. No. 166383, October 16, 2009, the previous owners of the property claimed that the sale of property was made after their relatives were intimidated and threatened by Marcos cronies. The sale was done in 1976 and an action for reconveyance was filed in 1989.

The regional trial trial court ruled that the action had prescribed and granted the motion to dismiss filed by the current owner. The Supreme Court disagreed and held that the prescriptive period should be counted from the date President Marcos was ousted from power. It ruled:

It is true that an action for reconveyance of real property resulting from fraud may be barred by the statute of limitations, which requires that the action shall be filed within four (4) years from the discovery of the fraud.[ The RTC, however, seemed to have overlooked the fact that the basis of respondents’ complaint for reconveyance is not fraud but threat, duress and intimidation, allegedly employed by Marcos’ cronies upon the relatives of the Montanos while the latter were on self-exile. In fact, fraud was neither specifically alleged nor remotely implied in the complaint. . .

In the circumstances prevailing in this case, the threat or intimidation upon respondents is deemed to have ceased only upon the ouster of then President Marcos from power on February 21, 1986. The four-year prescriptive period must, therefore, be reckoned from the said date. Thus, when respondents filed their complaint for reconveyance on September 15, 1989, the period provided for by law had not yet prescribed. Therefore, petitioner’s motion to dismiss should be denied.