G.R. No. L-4594; March 26, 1952
Virgilio V. Villanueva and Angelita Villanueva Sanidad, plaintiffs-appellants, vs. Fidel Villanueva, defendant-appellee.

FACTS

On August 21, 1950, plaintiffs-appellants filed a complaint against defendant-appellee containing two causes of action seeking the rescission and annulment of two deeds of sale of real property, with copies attached. On October 15, 1950, the defendant filed a motion to dismiss, alleging the complaint’s averments were insufficient to constitute a cause of action and that one cause of action had prescribed. The plaintiffs contested this motion. On October 31, 1950, the Court of First Instance of Ilocos Sur issued an order sustaining the motion to dismiss regarding the second cause of action and ordered the plaintiffs to amend their complaint to exclude it within 15 days. The plaintiffs’ motion for reconsideration was denied, prompting this appeal. The second cause of action pertained to a deed of sale (Annex B) executed on May 4, 1940.

ISSUE

Whether the lower court erred in dismissing the second cause of action on the ground of prescription.

RULING

Yes. The Supreme Court reversed the lower court’s order. The action for annulment of the sale was based on fraud, not for specific performance. The prescriptive period should be computed from the date of discovery of the fraud, not from the date of the contract’s execution. The fraud was discovered on November 27, 1946, and the complaint was filed on August 21, 1950, which is within the four-year prescriptive period for actions based on fraud under Section 43(3) of the Code of Civil Procedure (and consistent with Article 1391 of the new Civil Code). The case was remanded to the lower court for further proceedings.