Case Summary (G.R. No. 92442-43)
Petitioner and Respondents
Petitioner: Anchor Savings Bank, successor to Anchor Finance and Investment CorporationRespondents: Henry H. Furigay and Gelinda C. Furigay (debtors), and their children, Hegem C. Furigay and Herriette C. Furigay (donees of the alleged fraudulent donation)
Key Dates
• April 21, 1999 – ASB files complaint for sum of money and damages with application for replevin (RTC Makati, Branch 143)
• November 7, 2003 – RTC renders money‐judgment in favor of ASB (Php8,695,202.59 plus interest, penalties, liquidated damages, attorney’s fees and costs)
• March 8, 2001 – Date of Deed of Donation in favor of minors; registered April 4, 2001
• October 14, 2005 – ASB files complaint for rescission of donation and cancellation of titles (RTC Alaminos, Branch 55)
• September 29, 2006 & February 27, 2007 – RTC orders denying, then dismissing rescission complaint for wrong fees and prescription
• May 28, 2009 & January 22, 2010 – Court of Appeals decision and resolution dismissing ASB’s appeal
• March 13, 2013 – Supreme Court resolution denying review
Applicable Law
• 1987 Philippine Constitution (post-1990 decision)
• Rule 45, 1997 Rules of Civil Procedure (certiorari)
• Rule 14, Rule 2, Revised Rules of Court (service and cause of action)
• Articles 1177, 1381–1389, New Civil Code (accion pauliana, subsidiary rescission remedy)
• Jurisprudence on sufficiency of complaint and requirements for rescission
Procedural History in the RTC
ASB’s rescission complaint alleged that the donation was made in fraud of creditors under Article 1387, New Civil Code, and prayed for cancellation of four titles, damages, attorney’s fees and costs. Respondents moved to dismiss for lack of personal and subject matter jurisdiction (allegedly defective summons and unpaid docket fees) and prescription. The RTC initially denied dismissal but on reconsideration (February 27, 2007) dismissed for:
- Failure to pay correct filing fees—treated as real action based on fair market value, which ASB omitted;
- Prescription—action filed more than four years after registration (deemed notice) of donation.
CA’s Analysis and Ruling
The Court of Appeals reversed the RTC’s dismissal for defective docket fees, holding that omission of specific damage and attorney’s fees amounts did not prove bad faith, and ASB offered to pay additional fees. On prescription, however, the CA deemed ASB’s action premature, not barred. It emphasized that accion pauliana accrues only when the creditor has no other legal remedy to satisfy its claim (i.e., after final judgment, execution, levy attempts, and proof of futility). ASB’s complaint failed to allege exhaustion of remedies (e.g., whether the judgment was final, execution yielded no assets, sheriff’s attempts, skip tracing by sheriff), thus lacking the third requisite for rescission and warranting dismissal.
Supreme Court’s Legal Analysis on Cause of Action
The Supreme Court affirmed the CA’s dismissal, grounding its analysis on:
• Rule 2, Secs. 1–2, Revised Rules of Court—complaint must allege ultimate facts comprising a cause of action.
• Civil Code, Art. 1177 & 1383—accion pauliana is a subsidiary remedy, available only after creditor pursues debtor’s assets and exercises subrogatory rights.
• Jurisprudence—failure to allege all requisites in complaint is a fatal defect; inquiry is into the sufficiency of pleading, not merits.
Subsidiary Nature of Accion Pauliana
The Court reiterated that rescission for fraud against creditors is a last-resort remedy. Before filing, a creditor must have:
- Exhausted debtor
Case Syllabus (G.R. No. 92442-43)
Facts and Background
- On April 21, 1999, Anchor Savings Bank (ASB) filed Civil Case No. 99-865 in RTC Makati Branch 143 for sum of money and damages with application for replevin against Ciudad Transport Services, Inc., its president Henry H. Furigay, his wife Gelinda C. Furigay, and John Doe.
- On November 7, 2003, the RTC rendered judgment in favor of ASB, awarding:
• Principal of Php 8,695,202.59 as of April 12, 1999
• 12% per annum interest until fully paid
• 12% per annum penalty charge until fully paid
• 10% liquidated damages of the total amount due
• Php 100,000 for reasonable attorneys’ fees
• Costs of suit - While the first case was pending, spouses Henry and Gelinda Furigay executed a Deed of Donation (March 8, 2001) donating four registered properties in Alaminos, Pangasinan, to their minor children Herriette C. Furigay and Hegem C. Furigay, resulting in the issuance of TCT Nos. 21740–21743.
- On October 14, 2005, ASB filed Civil Case No. A-3040 in RTC Alaminos Branch 55 for rescission of the Deed of Donation, cancellation of titles, and damages, alleging:
• A valid credit in ASB’s favor prior to the donation and default by CTS and the Furigays
• The subsequent donation was intended to defraud ASB as creditor (Art. 1387, New Civil Code)
• The children as donees were minors and parties to a fraudulent conveyance
• Prayer to rescind the donations, cancel the TCTs, revert titles, award actual, moral (Php 1,000,000), and exemplary (Php 200,000) damages, 25% attorneys’ fees, and costs
RTC Proceedings
- Respondents moved to dismiss for lack of jurisdiction over their persons and subject matter, improper service of summons, and failure to pay docket fees.
- RTC Order (Sept. 29, 2006) denied the motion to dismiss.
- On reconsideration (Feb. 27, 2007), the RTC granted dismissal on two grounds:
• Failure to pay correct docket fees for a real action based on the fair market value of the properties, actual damages, and attorneys’ fees alleged
• Prescription under Art. 1389, New Civil Code—action filed more than four years after registration of the Deed of Donation (registered April 4, 2001; complaint filed October 14, 2005)
Court of Appeals Ruling
- On appea