Siguan V Lim Case Digest
Siguan V Lim Case Digest
Facts:
1. On 25 and 26 August 1990, Rosa Lim (respondent, LIM) issued two Metrobank checks to satisfy her
debts to Maria Antonia Siguan (petitioner, SIGUAN).
2. Upon presentment by SIGUAN with the drawee bank, the checks were dishonoured for the reason
account closed.
3. Criminal case for violation of BP 22 was filed by SIGUAN against LIM.
4. On December 29 1992, RTC convicted LIM as charged. The case is pending before this Court for
review.
5. On August 10, 1989, LIM executed a Deed of Donation in favour of her children, and the same was
registered with the Office of the Register of Deeds on July 2, 1991.
6. June 23, 193, SIGUAN filed an accion pauliana against LIM and her children, to rescind the
questioned Deed of Donation and to declare as null and void the new transfer certificates of title.
Issue/s:
1. Whether or not the questioned Deed of Donation was made in fraud of petitioner and, therefore,
rescissible.
Ruling:
1. No. The rescission required the existence of creditors at the time of alleged fraudulent alienation, and
this must be proved as one of the bases of the judicial pronouncement setting aside the contract.
Without prior existing debt, there can neither be injury nor fraud. While it is necessary that the credit
of the plaintiff in the accion pauliana must exist prior to the fraudulent alienation, the date of the
judgment enforcing it is immaterial.
Since LIMs indebtedness to SIGUAN was incurred in August 1990, or a year after the execution of
the Deed of Donation, the first requirement of accion pauliana was not met.
Even assuming arguendo that petitioner became a creditor of LIM prior to the celebration of the
contract of donation, still her action for rescission would not fare well because the third requisite was
not met. It is essential that the party asking for rescission prove that he has exhausted all other legal
means to obtain satisfaction of his claim. SIGUAN neither alleged nor proved that she did so. On his
score, her action for rescission of the questioned deed is not maintainable even if the fraud charged
actually did exist.
The fourth requisite for an accion pauliana to prosper is not present either. (4) the act being impugned
is fraudulent. It was not sufficiently established that the properties left behind by LIM were not
sufficient to cover her debts existing before the donation was made.
Note / Doctrine:
1. Plaintiff asking for rescission has a credit prior to the alienation, although demandable later.
2. Debtor has made a subsequent contract conveying a patrimonial benefit to a third persons.
3. Creditor has no other legal remedy to satisfy his claim, but would benefit by rescission of the
conveyance to the person.
4. Act being impugned is fraudulent.
5. The third parsons who received the property conveyed, if by onerous title, has been an accomplice in
the fraud.
(New Civil Code) Article 1381. Contracts entered into in fraud of creditors may be rescinded only
when the creditors cannot in any manner collect the claims due to them.
(New Civil Code) Article 1383. The action for rescission is but a subsidiary remedy which cannot be
instituted except when the party suffering damage has no other legal means to obtain reparation for
the same.
(New Civil Code) Article 1387(1). All contracts by virtue of which the debtor alienates property by
gratuitous title are presumed to have been entered into in fraud of creditors when donor did not
reserve sufficient property to pay all debts contracted before the donation.
(New Civil Code) Article 759. Donation is always presumed to be in fraud of creditors when at the
time thereof the donor did not reserve sufficient property to pay his debts prior to the donation.
(New Civil Code) Article 1384. Rescission shall only be to the extent necessary to cover the
damages caused.
Only the creditor who brought the action for rescission can benefit from the rescission; those who
are strangers to the action cannot benefit from its effects.
Revocation is only to the extent of the plaintiff creditors unsatisfied debts; as to the excess,
alienation is maintained.