G.R. No. 261292 . February 15, 2023.
Bohol Resort Development, Inc., Petitioner, vs. Doloreich Dumaluan, Respondent.

FACTS

Respondent Doloreich Dumaluan filed a Complaint for Declaration of Nullity of Transfer Certificate Title (TCT) No. 29414 and Reconveyance with Injunctive Relief. He alleged he bought a parcel of land (Lot No. 5682, 23,971 sqm) from the heirs of Juan Dumaluan, evidenced by Tax Declaration (TD) No. TM3-838, and was issued Original Certificate of Title (OCT) No. 75904 covering only 16,298 sqm. He later discovered that in 1983, the Lorejos (Geralda, Leonardo, Sotero) sold a portion (8,998 sqm) of Lot No. 5682 to Paulino Franco, which sale he claimed was void as the Lorejos were not owners and the area in their TD (No. 33-03-0281) was only 2,805 sqm. Franco subdivided Lot No. 5682, consolidated Lot 5682-A with other properties, and obtained OCT No. 56607 in 1986. This was further subdivided into Lot Nos. 3-A, 3-B, and 3-C. In 1993, Franco sold Lot 3-B to Spouses Uytengsu, who were issued TCT No. 20887. In 2002, the Spouses Uytengsu sold Lot 3-B to petitioner Bohol Resort Development, Inc. (BRDI), which was issued TCT No. 29414 in 2003. Dumaluan claimed ownership over Lot 3-B, arguing the Lorejos-Franco sale was void and Franco committed extrinsic fraud by merging lots to prevent tracing. He sought nullity of BRDI’s title and reconveyance.
BRDI, in its Answer, asserted it was an innocent purchaser for value, having bought Lot 3-B from the registered owners (Spouses Uytengsu) under TCT No. 20887. It claimed the Lorejos, as heirs of Valentin Dumaluan (father of Juan), owned undivided shares in the land described in TD No. 33-03-0281, and the area discrepancy was due to a pre-cadastral survey tax declaration; a 1983 survey revealed the actual area was 23,971 sqm. It argued Dumaluan’s action had prescribed and his purchase from the Juan Dumaluan Heirs was defective as the relevant TD had been cancelled in 1987.
The Regional Trial Court (RTC) initially dismissed the case for lack of cause of action, finding BRDI a purchaser in good faith relying on the face of the title. Upon Dumaluan’s motion for reconsideration, the RTC affirmed dismissal but on the ground of prescription, ruling the action for reconveyance based on fraud prescribed in ten years from Franco’s registration in 1986, and the void contract claim did not apply as the property was no longer with the original wrongdoer.
The Court of Appeals (CA) reversed the RTC, finding that the RTC erred in dismissing the case on prescription without a full-blown trial. The CA held that prescription, being a matter of defense, requires presentation of evidence, especially since Dumaluan’s complaint alleged a void contract and extrinsic fraud, which involve factual determinations. The CA also noted the RTC prematurely resolved the issue of BRDI’s status as an innocent purchaser, which is a factual issue requiring trial. The CA remanded the case for resolution of the injunctive relief, pre-trial, and trial.

ISSUE

Whether the Court of Appeals erred in reversing the RTC’s dismissal of the case on the ground of prescription and remanding it for trial.

RULING

No. The Supreme Court denied the petition and affirmed the CA Decision. The Court held that the RTC erred in dismissing the case on the ground of prescription without conducting a trial. Prescription is a factual matter that must be threshed out in a full-blown trial where both parties present evidence. The determination of whether Dumaluan’s action for reconveyance is based on a void contract or extrinsic fraud, and the computation of the prescriptive period, are factual issues requiring evidence. The RTC could not solely rely on the pleadings to conclude that the action had prescribed. Furthermore, the issue of whether BRDI is an innocent purchaser for value is also a question of fact that cannot be determined summarily. The RTC’s dismissal based on prescription and its earlier conclusion on BRDI’s good faith were premature. The case must be remanded for trial to allow the parties to present evidence on all factual issues, including the validity of the titles, the nature of the sale, the alleged fraud, and the defense of prescription and innocent purchaser for value.