Case Digest (G.R. No. 144169)
Facts:
Petitioner Khe Hong Cheng, alias Felix Khe, owner of Butuan Shipping Lines, transported 3,400 bags of copra aboard the M/V Prince Eric on October 4, 1985 from Masbate to Dipolog. When the vessel sank, American Home Insurance (subrogated to the consignee’s rights and respondent of this petition) paid P354,000.00 and sued Cheng in Civil Case No. 13357 before the RTC of Makati City, Branch 147, for breach of contract of carriage. While this case was pending, on December 20, 1989, Cheng executed deeds of donation of two parcels of land in Butuan City in favor of his children, Sandra Joy and Ray Steven Khe, with titles duly registered. On December 29, 1993, the trial court rendered judgment in favor of American Home for P354,000.00 plus costs, but service of the writ of execution in 1995 and its alias writ in 1996 failed to discover any attachable property owned by Cheng. On January 17, 1997, the sheriff accompanied by Philam Insurance counsel discovered that the lands had been donat...Case Digest (G.R. No. 144169)
Facts:
- Parties and Procedural History
- Petitioners: Khe Hong Cheng (alias Felix Khe), owner of Butuan Shipping Lines, and his children Sandra Joy Khe and Ray Steven Khe.
- Respondents: Philam Insurance Co., Inc.; Court of Appeals; RTC Makati, Branch 147.
- Underlying civil action (Civil Case No. 13357) filed by American Home Insurance (assured of Philam) to recover P354,000.00 paid for lost copra under breach of contract of carriage.
- Shipment and Loss
- October 4, 1985: 3,400 bags of copra loaded on M/V PRINCE ERIC (owned by petitioner) sank en route from Masbate to Dipolog.
- American Home Insurance paid consignee P354,000.00 and, by subrogation, sued petitioner for reimbursement.
- Donations by Petitioner
- December 20, 1989: Khe Hong Cheng executed two donations in favor of his children:
- Petitioner declared reservation of sufficient property to cover prior debts.
- Judgment and Execution in Civil Case No. 13357
- December 29, 1993: RTC rendered judgment for P354,000.00 plus interest, attorney’s fees and costs.
- Writ of execution issued September 14, 1995; alias writ in October 1996. Sheriff failed to levy assets.
- Accion Pauliana (Civil Case No. 97-415)
- January 17, 1997: Sheriff and counsel discovered no assets in petitioner’s name due to the 1989 donations.
- February 25, 1997: Philam filed complaint for rescission of the 1989 deeds of donation as fraudulent conveyances.
- Petitioners moved to dismiss on prescription grounds; trial court and CA denied the motion, holding the action was timely.
Issues:
- Whether the four-year prescriptive period under Article 1389 of the Civil Code for an accion pauliana begins at the registration of the donations in December 1989 or upon exhaustion of legal remedies (i.e., discovery in January 1997).
- Whether constructive notice via registration (PD 1529, Sec. 52) triggers the running of prescription against a fraudulent conveyance action.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)