G.R. No. 179505 - FIRST PHILIPPINE HOLDINGS CORPORATION, VS. TRANS MIDDLE EAST (PHILS.) EQUITIES INC..D E C I S I O N - Supreme Court E-Library

Ruling

accordingly filed its Second Amended Complaint dated November 4, 1987 with this Court. Said sale , is therefore, void or voidable on said ground, in addition to having been obtained fraudulently with the connivance of defendant Kokoy Romualdez's dummy directors and officers in plaintiff-intervenors' Board and Executive Committee, in breach of their fiduciary obligations to plaintiff-intervenor and its stockholders under the Corporation Code. x x x. [10] Undoubtedly, the entirety of the allegations in the complaint-in-intervention makes up a case of a voidable contract of sale - not a void one. These circumstances surrounding the questioned transaction fit in with what Article 1390 of the Civil Code contemplates as voidable contracts, viz : Art. 1390. The following contracts are voidable or annullable, even though there may have been no damage to the contracting parties: x x x x (2) Those where the consent is vitiated by mistake, violence, intimidation, undue influence, or fraud . Thus, contracts where consent is given through fraud, are voidable or annullable. These are not void ab initio since voidable or anullable contracts are existent, valid, and binding, although they can be annulled because of want of capacity or the vitiated consent of one of the parties. However, before such annulment, they are considered effective and obligatory between parties. [11] While FPHC's complaint prayed for the declaration of nullity of the disputed sale transaction, such prayer does not determine the nature of the action at hand. It is the material allegations of fact in the complaint, not the legal conclusion made therein or the prayer that determines the nature of the case. [12] As ruled by this Court, it is the body and not the caption or the prayer of the complaint that determines the nature of the action. [13] As the complaint-in-intervention substantially alleged that the contract was voidable, the four-year prescriptive period under Art. 1391 of the New Civil Code will apply. Unyielding, FPHC invites this Court's attention to the applicability of the Islamic Directorate of the Philippines v. Court of Appeals [14] to the instant controversy. In Islamic Directorate , there were several groups claiming to be the legitimate board of trustees of Islamic Directorate of the Philippines (IDP). Two groups, the Carpizo Group and the Abbas Group, separately contended that they were the lawful board of trustees of IDP. This dispute reached the Securities and Exchange Commission (SEC). The SEC, however, ruled that the election of both groups as IDP board members was null and void. This declaration became final since none of them bothered to question the SEC ruling. Subsequently, despite its lack of authority, the Carpizo Group sold two parcels of land belonging to IDP. This sale was assailed by the Tamano Group as null and void. This Court sustained the stance of the Tamano Group and went on to explain that the questioned transaction was null and void because the Ca