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  • Art 1177 Anchor Savings Bank (Formerly Anchor Finance and Investment Corporation) vs. Henry H. Furigay, ET AL.

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    The Supreme Court of the Philippines ruled that Anchor Savings Bank's (ASB) action to file a complaint for rescission of a fraudulent property donation was premature. According to Article 1177, creditors must first pursue and exhaust all available debtor property and rights to satisfy claims before pursuing rescission of fraudulent acts. The Court found that ASB failed to allege that it had taken successive measures required before filing for rescission, including exhausting available debtor properties and rights through attachment and execution. Specifically, ASB did not avail of remedies to exhaust properties of the debtors, Henry and Genilda Furigay, before directly filing for annulment of their donation. As such, ASB's complaint for rescission was premature and did

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    Art 1177 Anchor Savings Bank (Formerly Anchor Finance and Investment Corporation) vs. Henry H. Furigay, ET AL.,

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    The Supreme Court of the Philippines ruled that Anchor Savings Bank's (ASB) action to file a complaint for rescission of a fraudulent property donation was premature. According to Article 1177, creditors must first pursue and exhaust all available debtor property and rights to satisfy claims before pursuing rescission of fraudulent acts. The Court found that ASB failed to allege that it had taken successive measures required before filing for rescission, including exhausting available debtor properties and rights through attachment and execution. Specifically, ASB did not avail of remedies to exhaust properties of the debtors, Henry and Genilda Furigay, before directly filing for annulment of their donation. As such, ASB's complaint for rescission was premature and did

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    25 views2 pages

    Art 1177 Anchor Savings Bank (Formerly Anchor Finance and Investment Corporation) vs. Henry H. Furigay, ET AL.

    Uploaded by

    chris
    The Supreme Court of the Philippines ruled that Anchor Savings Bank's (ASB) action to file a complaint for rescission of a fraudulent property donation was premature. According to Article 1177, creditors must first pursue and exhaust all available debtor property and rights to satisfy claims before pursuing rescission of fraudulent acts. The Court found that ASB failed to allege that it had taken successive measures required before filing for rescission, including exhausting available debtor properties and rights through attachment and execution. Specifically, ASB did not avail of remedies to exhaust properties of the debtors, Henry and Genilda Furigay, before directly filing for annulment of their donation. As such, ASB's complaint for rescission was premature and did

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    of 2

    G.R. No.

    191178 March 13, 2013 


    Anchor Savings Bank (Formerly Anchor Finance and Investment Corporation) vs.
    Henry H. Furigay, ET AL., 
    Article 1177: The creditors, after having pursued the property in possession of the debtor to satisfy their
    claims, may exercise all the right and bring all the actions of the latter for the same purpose, save those
    which are inherent in his person; they may also impugn the acts which the debtor may have done to
    defraud them.

    Facts:
     Anchor Savings Bank filed a complaint for a sum of money and damages with replevin against
    Ciudad Transport Services et al
     RTC ruled in favor of ASB
     Respondent donated the registered properties to their children
     Anchor Savings Bank filed a complaint for Rescission of deed of donation, Title and Damages
    assailed that it was made in fraud
     The CTS did not answer instead question the jurisdiction of the court
     RTC ruled that the action for rescission had already prescribed and should be filed within 4 years
    from discovery of fraud
     RTC dismissed the case on the ground of lack of jurisdiction
     CA agreed with ASB that its complaint should not have been dismissed on the ground that it
    failed to pay the correct docket fees
     CA found that the action of ASB had not yet prescribed

    Issue:
    Is the action of ASB to file a complaint for rescission premature?

    Held:
    YES, The creditors, after having pursued the property in possession of the debtor to satisfy their claims,
    may exercise all the rights and bring all the actions of the latter for the same purpose, save those which
    are inherent in his person; they may also impugn the actions which the debtor may have done to
    defraud them.

    Consequently, following the subsidiary nature of the remedy of rescission, a creditor would have a cause
    of action to bring an action for rescission, if it is alleged that the following successive measures have
    already been taken: (1) exhaust the properties of the debtor through levying by attachment and
    execution upon all the property of the debtor, except such as are exempt by law from execution; (2)
    exercise all the rights and actions of the debtor, save those personal to him (accion subrogatoria); and
    (3) seek rescission of the contracts executed by the debtor in fraud of their rights (accion pauliana).

    With respect to an accion pauliana, it is required that the ultimate facts constituting the following
    requisites must all be alleged in the complaint, viz.:

    1) That the plaintiff asking for rescission, has credit prior to the alienation, although demandable later;

    2) That the debtor has made a subsequent contract conveying a patrimonial benefit to a third person;

    3) That the creditor has no other legal remedy to satisfy his claim, but would benefit by rescission of the
    conveyance to the third person;

    4) That act being impugned is fraudulent; and


    5) That the third person who received the property conveyed, if by onerous title, has been an
    accomplice in the fraud.

    A cursory reading of the allegations of ASB’s complaint would show that it failed to allege the ultimate
    facts constituting its cause of action and the prerequisites that must be complied before the same may
    be instituted. ASB, without availing of the first and second remedies, that is, exhausting the properties of
    CTS, Henry H. Furigay and Genilda C. Furigay or their transmissible rights and actions, simply undertook
    the third measure and filed an action for annulment of the donation. This cannot be done. The Court
    hereby quotes with approval the thorough discourse of the CA on this score

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