FRANCISCA H. RAFOLS, FLO­RACION RAFOLS, AMPARO RAFOLS, CESAR CIMAFRANCA, CRISOSTOMO RAFOLS AND RI­CARDO RAFOLS, PLAINTIFFS-APPELLANTS, VS. MARCELO A. BARBA, DEFENDANT-APPELLEE.

Plaintiffs-appellants Rafols are the wife and the four (4)
children of Nicolas Rafols, a resident of Cebu City, who died testate on May 2,
1947.  His estate was the subject of
administration in Sp. Proc. No. 154-R of the Court of First Instance of Cebu,
entitled “Testate Estate of Nicolas Rafols” in which a certain Vital
T. Montayre, now deceased, was appointed administrator.

In a motion dated May 22, 1948, Vidal T. Montayre, thru counsel,
sought authority from the probate Court to sell a parcel of land belonging to
the estate in order to pay taxes, expenses of administration and other indebted­ness
of the estate.  The said motion was
granted by the Court in its order dated May 22, 1948.  The land authorized to be sold was a parcel
of cogon land with an area of approximately 100 hectares assessed at P7,800.00
under Tax Declaration No. 05805, situated in Barrio Bunga, Toledo City.  The sale of the said parcel of land, however,
was not effected despite the lapse of more than three (3) years from the time
that the Court had authorized the sale allegedly due to the lack of interested
buyers.

On August 14, 1951, herein defendant-appellee Marcelo A. Barba
purchased the land for the stated consideration of P18,000.00.  The deed of sale executed in his favor by adminis­trator
Vidal T. Montayre was submitted to the Court for approval on August 15,
1951.  The said sale was approved by
Judge Juan L. Bocar who manifested such approval on the face of the deed of
sale.

On November 24, 1966, or more than fifteen (15) years after the
execution of the deed of sale in favor of defendant-appellee, herein
plaintiffs-appellants instituted Civil Case No. 124-T in the Court of First
Instance of Cebu against defendant-appellee Marcelo A. Barba for the
declaration of the nullity of the said deed of sale and for the recovery of
damages and attor­ney’s fees.  They
anchor their complaint on the principal conten­tion that the sale was null and
void inasmuch as plaintiffs-appel­lants were not notified of the hearing of the
application to sell the said parcel of land, nor of the order dated May 22,
1948 and the approval of the sale which had been stamped on a deed of sale on
August 15, 1951.

Defendant-appellee filed an answer alleging, among others, the
affirmative defenses that he bought the land in good faith, that the
plaintiffs-appellants are in estoppel, and that the action had already
prescribed.  Subsequently, he filed a
motion to dismiss the complaint on the following grounds, to wit, (1) plaintiffs-appellants
have no legal capacity to sue; and (2) the cause of action is barred by the
statute of limitations.  In an order
dated June 29, 1967, the trial court dismissed Civil Case No. 124-T on the
grounds that it is barred by the statute of limitations and by estoppel by
laches.  This order of dismissal is the
subject-matter of the instant appeal.

Plaintiffs-appellants assail the ruling of the trial court that
their cause of action is barred by the statute of limitations by alluding to
the decisions of the Supreme Court in Boñaga vs. Soler, et al., G.R. No.
L-15717, promulgated on June 30, 1961; De Jesus, et al. vs. de Jesus, et al.,
G.R. No. L-16553, promulgated on November 29, 1961; and Corpuz, et al. vs.
Beltran, et al., G.R. No. L-7487, promulgated on October 27, 1955, which
held that the sale of properties pertaining to an estate must be done only upon
prior compliance with the requisites provided for in the Rules, such as written
notice to the heirs, devisees and legatees of the application to sell and of
the time and place for the hearing thereof; and that without compliance
therewith, the authority to sell itself and the order approving it would be
null and void.  They further argue that
an action to declare the inexistence of such a void contract is inprescriptible
pursuant to Article 1410 of the new Civil Code.

Answering these contentions of plaintiffs-appellants, de­fendant-appellee
argues that the plaintiffs-appellants are already in estoppel by their inaction
and failure to question the sale des­pite the lapse of more than fifteen (15)
years from the time of its execution and by conducting themselves in a manner
as to show consent and assent to the consummation of the sale; and that
defendant-appellee acquired the land in good faith with judicial approval and
for valuable consideration.  Moreover,
assuming that the plaintiffs-appellants may have a good cause of action, the
same had already prescribed.

The appeal taken by the plaintiffs-appellants must fail, both on
legal and equitable considerations.

1.     
It is true that when an application is made by
an administrator to sell real property of the estate for the pay­ment of debts,
expenses and other obligations of the estate, an application must be filed with
the probate court which may grant the same on written notice to the heirs,
devisees and legatees.  (Section 2, Rule
89, Rules of Court, formerly Section 2, Rule 90, of the old Rules of Court
which was the rule in force at the time of the transaction herein involved.) It
is also the rule that a sale of property of the estate without such notice to
the heirs, devisees and legatees is void. 
(Estate of Gamboa vs. Lorenza, 12 Phil. 191; Santos vs. Roman
Catholic Church, 45 Phil. 895; and Ortalez vs. Register of Deeds, 55
Phil. 33.) Equally unassailable is the statutory pronouncement that an action
declaring the inexistence of a void contract does not prescribe.  (Art. 1410, New Civil Code.)

Nevertheless, plaintiffs-appellants’ cause of action may not
derive support from the aforementioned doctrines.  There is no clear showing that the authority
granted by the probate court to sell the parcel of land in question way back
since May 22, 1948 was without written notice to the heirs, devisees and
legatees.  Plaintiffs-appellants offered
no proof as to such alleged lack of notice. 
They rely solely on Exhibits “A”, “B”,
“C”, “D” and “D-1” which were presented not by
them but by defendant-appellee during the hearing of the motion to dismiss to
support such contention.  Exhibit
“A” is the motion of Atty. Emilio Lumontad, counsel for the
administrator, praying that the administrator be authorized to sell the land in
question.  Exhibit “B” is the
order of Judge Higinio B. Macadaeg granting said authority for the purpose of
meeting the obligations of the estate. 
Exhibit “C” is another motion of Atty. Lumontad pray­ing that
the sale in favor of defendant-appellee be approved.  Exhibit “D” is the deed of sale and
Exhibit “D-1” is the approval of said sale indicated by Judge Juan L.
Bocar on page 2 thereof. 
Plaintiffs-appellants capitalize the fact that in none of said documents
or papers does it appear that they were served or given notice of the same.

To Our mind, the circumstance pointed out by
plaintiffs-appellants does not suffice to annul the sale in question.  The lack of any indication on the documents
mentioned that they were served with copies of the same does not necessarily
mean that they had no notice thereof.  In
the absence of a positive showing that the requirements for securing the author­ity
to sell had not been complied with, it is appropriate to apply the presumptions
that the law had been obeyed; that official duty has been regularly performed;
and that private transactions had been fair and regular.  (Sec. 5, pars. m, p and ff, Rule 131, Rules
of Court.)

“‘When, by the order of the court, a property of the estate is sold
under this pro­vision, the purchaser in good faith may rest on the presumption
of the legality of the court’s order.'” (Esguerra vs. de Leon, 69
Phil. 493.)

2. The record reveals sufficient indicia that the
plaintiffs-appellants were fully aware of the sale of the subject land in favor
of defendant-appellee despite which they ques­tioned the validity of the same
only after the lapse of fifteen (15) years from its execution.  They could not have been igno­rant of the
fact that the estate of their deceased father was under settlement proceedings
with a court-appointed administrator who is required by law to render an
accounting of his administration.  The
record shows that on August 18, 1951 or just three (3) days after the execution
of the deed of sale in favor of defendant-appellee, herein
plaintiffs-appellants Ricardo, Crisostomo and Amparo, all surnamed RAFOLS,
filed a motion praying that the administrator be ordered to pay each of them
the sum of P1,000.00, plus P600.00 for their lawyer.  This motion was granted by Judge Bocar on the
same date.  (Rollo, p. 31.) It also
appears that after the death of Vidal T. Montayre, who was the one originally appointed
administrator of the estate, he was substituted in such capacity by Ricardo
Rafols, one of the plaintiffs-appellants herein.

On January 8, 1954, the administrator filed a “REPORT ON THE
PRESENT STATUS OF THE ESTATE OF NICOLAS RAFOLS.” (Rollo, pp. 33-37.) In
the said report, mention is expressly made of the sale of the parcel of land in
question in favor of defendant-appellee for the sum of P18,000.00 (at page 3
thereof).  Plaintiffs-ap­pellants do not
claim that they had no notice of such report, nor of the final accounting and
motion for closing of administration filed by Ricardo Rafols as administrator
on September 17, 1962.  (Rollo, pp.
38-39.) It was not until November 24, 1966 that the plaintiffs-appellants
commenced the present action in the Court of First Instance of Cebu.

The motivation for having instituted this action was placed in
issue by the actuation of Ricardo Rafols who, during the pen­dency of the
present appeal in this Court, filed a motion to withdraw appeal on April 27,
1968.  In said motion, he stated, among
others, the following:

“d)    That the Deed of Sale of the land in
question was executed by the Administrator selling the same to defendant
Marcelo Barba for the consideration of EIGHTEEN THOUSAND PESOS (P18,000.00),
and the sale was approved by the Court on August 15, 1951;

“e)    That all of us, heirs of the late Nicolas
Rafols, knew all the time that the estate had no money with which to pay the
claims of the creditors, to pay the estate and inheritance taxes and other
expenses of the administration and the only way to raise money to meet all
obligations of the estate is to sell the land in question situa­ted in Toledo,
Cebu, or that other land situated in Dumanjug, Cebu;

“f)     That all of us, heirs of the late Ni­colas
Rafols, knew that the consideration of EIGHTEEN THOUSAND PESOS (P18,000.00)
paid by Marcelo Barba for the land in ques­tion was the best price offered for
the land was unproductive;

“g)    That out of the proceeds of the sale, the
inheritance and estate taxes, creditor’s claim, other expenses of the ad­ministration
and the attorney’s fees were paid and the surplus amount left were divided by
all of us, heirs of Nicolas Ra­fols;

“h)    That, in conscience, I cannot allow myself
to be a party to an injustice for deep down in my heart I and all of us, heirs
of the late Nicolas Rafols, are conscious that the transaction was on the level
and it helped the estate in meeting its obligations.” (Rollo, pp. 42-43.)

3. The infirmity of the subject deed of sale is premised on the
alleged nullity of the order of the court authorizing the sale.  The validity of said order may not be
attacked in a colla­teral proceeding, the supposed ground for declaring it void
for lack of jurisdiction not being apparent on the face thereof.  To enable the plaintiffs-appellants to rely
on the rule that the action to declare the inexistence of a contract does not
prescribe, it must first be shown that the subject contract is indeed null and
void.  As aforesaid, the basis of this
supposition, to wit, the nullity of the authority granted by the probate court
to sell the property, had not been adequately shown.

In the least, plaintiffs-appellants are already guilty of laches
as would effectively derail their cause of action.  While it is true that, technically, the
action to annul a void or inexist­ent contract does not prescribe, it may nonetheless
be barred by laches.  As was stated in Nielson
& Co. v. Lepanto Conso­lidated Mining Co., L-21601, December 17, 1966,
18 SCRA:

“The defense of laches applies inde­pendently of
prescription.  Laches is differ­ent from
the statute of limitations.  Prescript­ion
is concerned with the fact of delay, whereas laches is concerned with the
effect of delay.  Prescription is a
matter of time; laches is prin­cipally a question of inequity of permitting a
claim to be enforced, this inequity being founded on the same change in the
condition of the pro­perty or the relation of the parties.  Prescription is statutory; laches is
not.  Laches applies in equity, whereas
prescription applies at law. 
Prescription is based on fixed time; laches is not.”

The essential elements of the principle of laches are all present
herein, to wit:

“xxx xxx xxx (1) conduct on the part of the defendant, or one
under whom he claims, giving rise to the situation that led to the com­plaint
and for which the complaint seeks a remedy; (2) delay in asserting the
complainant’s rights, the complainant having had knowledge or notice of the
defendant’s conduct and having been afforded an op­portunity to institute a
suit; (3) lack of knowledge or notice on the part of the defendant that the com­plainant
would assert the right on which he bases his suit; and (4) injury or prejudice
to the defend­ant in the event relief is accorded to the complain­ant or the
suit it not held barred.” (Yusingco vs. Ong Hing Lian, 42 SCRA
589.)

The defendant-appellee purchased the parcel of land in question
giving rise to the complaint of herein plaintiffs-appellants.  The latter delayed the assertion of their
supposed right to annul the sale for a period of over fifteen (15) years
despite knowledge or notice of such sale. 
They had all the opportunity within that period of time to take action
to set aside or annul the sale. 
Defendant-appellee was never ap­prised of any intention on the part of
plaintiffs-appellants to annul the sale until this action was filed.  Finally, the defendant-appellee stands to
lose the property in question if the suit filed against him by
plaintiffs-appellants shall not be deemed barred.

WHEREFORE, the order appealed from is hereby
AFFIRMED.  With costs against
plaintiffs-appellants.

SO ORDERED.

Teehankee, Acting C.J., Melencio-Herrera, Plana, Relova, and Gutierrez, Jr., JJ., concur.