Topic: Art. 1393. Ratification may be effected expressly or tacitly.

It is understood that there is a tacit ratification if, with knowledge of the reason which renders the contract voidable and such reason having ceased, the person who has a right to invoke it should execute an act which necessarily implies an intention to waive his right. Title: Metropolitan Waterworks and Sewerage System (MWSS) vs CA, Hon. Lopez, Ayala Corporation and Ayala Land, Inc. Facts: - 1965, MWSS (formerly known as NAWASA) leased around 128 hectares of its land to CHGCCI (formerly the International Sports Development Corporation) for 25 years, renewable for 15 years or until 2005, with a stipulation allowing CHGCCI a right of first refusal should the property be made open for sale, the terms and conditions of the sale to be subject to presidential approval. - 1976, Letter of Instruction (LOI) No. 440 was issued by the President Marcos directing MWSS to negotiate the cancellation of the said lease agreement for its disposition. Oscar Illustre, then General Manager of MWSS, informed CHGCCI, through its president Pablo Roman Jr., of its preferential right to buy the property. January 1981, Asian Appraisal Co., the appraisal company of MWSS' choice, pegged a fair market value of P40 per square meter or a total of P53,800,000.00 for the whole property. December 20, 1982, MWSS and CHGCCI agreed in principle on the purchase of the property and President Marcos expressed his approval of the sale. - The Board of Trustees of MWSS passed Resolution 36-83 approving the sale of the subject property to Silhouette Trading Co., as assignee of CHGCCI. The sales agreement pushed through, P 25M to be paid upon approval of Marcos of the contract and the balance to be paid within one year from the transfer of the title to Silhouette with 12% interest per annum. The balance was secured by an irrevocable letter of credit. A supplemental Agreement was made between MWSS and Silhouette to accurately identify the property. - Silhouette, under a deed of sale, sold to AYALA about 67 hectares of the property at P110 per square meter, for a total of P 74M. P 25M was to be paid by AYALA directly to MWSS for Silhouette's account and P 2M directly to Silhouette. P 11.6M was to be paid upon issuance of title in favor of AYALA, and the remaining balance payable within one year with 12% interest per annum. - AYALA developed the land into a prime residential area (Ayala Heights Subdivision). - March 26, 1993, MWSS filed an action seeking for the declaration of nullity if the MWSS-Silhouette sales agreement and all subsequent conveyances, and recovery of damages. AYALA filed its answer pleading the defenses of prescription, laches, waiver/estoppel/ratification, no cause of action, non-joinder of indispensable parties, and non-jurisdiction. - RTC dismissed the case: prescription, laches, estoppel and non-joinder of indispensable parties. MWSS' Motion for Reconsideration was also denied. CA affirmed the decision of RTC. Issue: Whether the sale of the property is valid Held: SC dismissed the case. The sale was valid due to both express and implied ratification by the Board of Trustees of MWSS. Ratio: - MWSS claims that the sale is invalid because Mr. Illustre was not given the authority by the Board of Trustees to enter into the agreement. However, this issue can be cured be ratification. Ratification can be made expressly or impliedly. In this case, there was both. There was express ratification when the Board passed Resolution 36-83 approving the sale. There was implied ratification from the acts of MWSS in sending three demand letters for the payment of the purchase price, for accepting the down payment of P 25M, and for accepting the letter of credit for balance. Neither did MWSS return the amounts paid to them. MWSS' acceptance and retention of the benefits from the sale is another form of implied ratification. Other issues: *Prescription: - MWSS consented to the sale, although they may have been unduly influenced by President Marcos. The vitiation of consent did not make the contract void, but merely voidable. The prescriptive period for voidable contracts under the New Civil Code is four years from the time the defect of the consent ceases. If Pres Marcos unduly influenced the sale, the prescriptive period would have begun on Feb 26, 1986 when Marcos was deposed, and prescribed by Feb 26, 1990, more than three years before the filing of the complaint.

- However, if the consent was vitiated by fraud, the prescriptive period begins upon discovery; either from the date of execution of the sale documents wherein the period would have begun in 1983 as MWSS knew of the sale, or from the date of registration of the deeds (as registration is constructive notice to the world) wherein the period would have begun in 1984. At the latest, the action would have prescribed in 1988, five years before the filing of the complaint. *Laches and Non-Joinder of Indispensable Parties: - Laches is distinguished from prescription, wherein prescription is concerned with the fact of delay and laches is concerned with the effect of delay. Laches is a question of inequity of permitting a claim to be enforced. Laches is not statutory. The elements of laches: conduct on the part of the defendant giving rise to the situation that led to the complaint, delay in asserting the complainant's rights, lack of knowledge or notice of the defendant that the complaint would assert the right on which he bases his suit, and injury or prejudice to the defendant in the event relief is accorded to the complainant. All elements were present in this case. - The lot owners of the residential area are indispensable parties in the case, without whom no relief is available and without whom the court can render no valid judgment. The absence of the parties renders all subsequent actions of the trial court null and void, and warrants the dismissal of the case.