45 Cheng et.al.

v CA and Philam Insurance  Article 1389 of the Civil Code simply provides that, "The action to claim
G.R. No. 144169; 28 March 2001 rescission must be commenced within four years." Since this provision of
Topic: Remedies of Creditors, Accion Pauliana | Ponente: J. Kapunan | law is silent as to when the prescriptive period would commence, the
Author: Enriquez general rule, i.e., from the moment the cause of action accrues,
therefore, applies (Art. 1150).
Doctrine: 1) That the plaintiff asking for rescission has a credit prior to, the  Article 1383 of the Civil Code provides as follows:
alienation, although demandable later; 2) That the debtor has made a
subsequent contract conveying a patrimonial benefit to a third person; 3) That Art. 1383. An action for rescission is subsidiary; it cannot be instituted
the creditor has no other legal remedy to satisfy his claim, but would benefit except when the party suffering damage has no other legal means to
by rescission of the conveyance to the third person; 4) That the act being obtain reparation for the same.
impugned is fraudulent; 5) That the third person who received the property
conveyed, if by onerous title, has been an accomplice in the fraud.
 It is thus apparent that an action to rescind or an accion pauliana must
be of last resort, availed of only after all other legal remedies have been
Facts:
exhausted and have been proven futile. For an accion pauliana to
1. Petitioner Cheng is the owner of Butuan Shipping Lines. PH Agri Trading
accrue, the following requisites must concur: (SEE DOCTRINE)
Corp. shipped on board the vessel of Cheng 3,400 bags of copra. The said
 To count the 4 year prescriptive period to rescind an allegedly fraudulent
shipment is covered by a marine insurance policy issued by American
contract from the date of registration of the conveyance with the Register
Home Insurance Company (respondent Philam's assured).
of Deeds, as alleged by the Cheng, would run counter to Article 1383 as
2. However, it sank. Because of the loss, the insurer, American Home, paid
well as settled jurisprudence. It would likewise violate the third requisite.
the amount of P354,000.00 (the value of the copra) to the consignee.
 An accion pauliana thus presupposes the following: 1) A judgment; 2) the
3. Having been subrogated into the rights of the consignee, American Home
issuance by the trial court of a writ of execution for the satisfaction of the
instituted a Civil Case to recover the money paid to the consignee, based
judgment, and 3) the failure of the sheriff to enforce and satisfy the
on breach of contract of carriage. While the case was still pending or on
judgment of the court. It requires that the creditor has exhausted the
1989, Cheng executed deeds of donations of parcels of land in favor of
property of the debtor: The date of the decision of the trial court is
his children, herein co-petitioners.
immaterial. What is important is that the credit of the plaintiff antedates
4. On Dec. 1993, the RTC ruled against Cheng and a writ of execution was
that of the fraudulent alienation by the debtor of his property. After all, the
granted. When the sheriff, accompanied by counsel of respondent
decision of the trial court against the debtor will retroact to the time when
Philam, went to Butuan City on Jan. 1997, to enforce the alias writ of
the debtor became indebted to the creditor.
execution, they discovered that petitioner Khe Hong Cheng no longer
 Even if respondent Philam was aware, as of December 27, 1989, that
had any property and that he had conveyed the subject properties to his
petitioner Khe Hong Cheng had executed the deeds of donation in favor
children.
of his children, the complaint against Butuan Shipping Lines and/or
5. Thus, Philam filed a complaint for the rescission of the deeds of donation. It
petitioner Khe Hong Cheng was still pending before the trial court.
alleged that Cheng executed the aforesaid deeds in fraud of his
 Had respondent Philam filed his complaint on December 27, 1989, such
creditors, including respondent Philam.
complaint would have been dismissed for being premature. Not only were
6. Cheng filed a MTD on the ground that the action had already prescribed.
all other legal remedies for the enforcement of respondent Philam's claims
They posited that the registration of the deeds of donation on December
not yet exhausted at the time the needs of donation were executed and
27, 1989 constituted constructive notice and since the complaint a
registered. Respondent Philam would also not have been able to prove
quo was filed only on February 25, 1997, or more than four (4) years after
then that petitioner Khe Hong Cheng had no more property.
said registration, the action was already barred by prescription.
7. RTC and CA ruled against Cheng. Hence, this petition.

Issue/Held: When did the four (4) year prescriptive period as provided for in
Article 1389 of the Civil Code for respondent Philam to file its action for
rescission of the subject deeds of donation commence to run? From the
moment the cause of action accrues. Petition DENIED.

Ratio: