G.R. No. L-27675 December 15, 1982
Zoila Dumanon, et al., plaintiffs-appellants, vs. Butuan City Rural Bank, et al., defendants-appellees.

FACTS

The plaintiffs-appellants, heirs of Rufo and Paula Dumanon, filed a complaint in 1965 seeking to recover a parcel of land. They alleged that a 1933 deed of donation over the property, executed by Rufo and Paula in favor of another heir, Felisa Azote Vda. de Dumanon, was void. Their grounds were that the donors were illiterate and could not have signed it, and that they could not have parted with the land as they later obtained an Original Certificate of Title for it in cadastral proceedings. The property was subsequently sold to the spouses Carlos Curilan and Rufina Naranjo, who mortgaged it to Butuan City Rural Bank. The appellants prayed for the declaration of nullity of the donation and all subsequent titles, reconveyance, possession, and damages.
Defendants Carlos Curilan and Rufina Naranjo filed a motion to dismiss the amended complaint on grounds including prescription and failure to state a cause of action. The Court of First Instance of Agusan granted the motion, holding the action was barred by laches and the statute of limitations. The plaintiffs’ motion for reconsideration was denied, prompting this appeal.

ISSUE

Whether the trial court correctly dismissed the complaint on the ground of prescription.

RULING

Yes, the trial court’s order of dismissal was correct. In resolving a motion to dismiss, the court examines the allegations of the complaint, which are deemed hypothetically admitted. The complaint sought the annulment of a deed of donation executed in 1933 on the ground of fraud, as it alleged the donors were illiterate and the signature was fraudulent. The action was filed only in 1965, or 32 years later.
An action to annul a voidable contract, such as one based on fraud, prescribes in four years from the discovery of the fraud. The appellants, by their own allegations, had constructive knowledge of the deed and the alleged fraud at the latest upon its registration. Registration constitutes notice to the whole world. Consequently, the action had long prescribed when the complaint was filed. Since the action prescribed against the original donee and her heirs, it likewise prescribed against the subsequent vendees, the Curilan spouses. The court also found that the motion to dismiss was timely filed within the reglementary period to answer the amended complaint. Therefore, the dismissal was proper.