G.R. No. 216824 - Villa Gomez vs. People

On April 21, 1999, ASB filed a verified complaint for sum of money, damages, and replevin against Ciudad Transport Services, Inc. (CTS), its president Henry H. Furigay, his wife Gelinda C. Furigay, and a John Doe before RTC Makati (Civil Case No. 99-865).
On November 7, 2003, RTC Makati rendered judgment in favor of ASB ordering defendants to pay principal (₱8,695,202.59), interest (12% per annum), penalty (12% per annum), liquidated damages (10%), attorneys’ fees (₱100,000), and costs.

While Civil Case No. 99-865 was pending, spouses Henry and Gelinda Furigay donated four titled properties in Alaminos, Pangasinan, to their minor children Hegem C. Furigay and Herriette C. Furigay; new TCTs Nos. 21740–21743 were issued.
ASB filed Complaint for Rescission of Deed of Donation, Title and Damages (Civil Case No. A-3040) alleging the donation was made in fraud of creditors, invoking Articles 1381 and 1387 of the Civil Code, and prayed for cancellation of titles, damages (actual, moral, exemplary), attorneys’ fees, and costs.

September 29, 2006: RTC Alaminos denied respondents’ motion to dismiss. On reconsideration, February 27, 2007, it reversed itself and dismissed the complaint for (a) failure to pay correct docket fees (treating the action as real, based on zonal valuation or tax declaration) and (b) prescription—rescision action filed more than four years after registration of donation (April 4, 2001).
ASB’s motion for reconsideration was denied.

CA granted ASB relief on docket fees, finding lack of specified damages and attorneys’ fees does not prove bad faith.
CA nonetheless dismissed the action as premature for failure to allege in the complaint that ASB exhausted all legal remedies (levy, execution, subrogation) before seeking rescission (accion pauliana). Both motions for reconsideration were denied.

ASB filed a Rule 45 petition, challenging CA’s dismissal as a substantive error and due-process violation for not allowing presentation of evidence on exhaustion of remedies.

Whether the Court of Appeals erred in dismissing ASB’s action for rescission as premature on the ground that ASB failed to allege in its complaint the exhaustion of all legal remedies to satisfy its claim, and whether such dismissal deprived ASB of due process.