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G.R.No.134685

TodayisFriday,January23,2015

RepublicofthePhilippines
SUPREMECOURT
Manila
FIRSTDIVISION

G.R.No.134685November19,1999
MARIAANTONIASIGUAN,petitioner,
vs.
ROSALIM,LINDELIM,INGRIDLIMandNEILLIM,respondents.

DAVIDE,JR.,C.J.:
MaytheDeedofDonationexecutedbyrespondentRosaLim(hereafterLIM)infavorofherchildrenberescinded
forbeinginfraudofherallegedcreditor,petitionerMariaAntoniaSiguan?Thisisthepivotalissuetoberesolved
inthispetitionforreviewoncertiorariunderRule45oftheRevisedRulesofCourt.
Therelevantfacts,asborneoutoftherecords,areasfollows:
On 25 and 26 August 1990, LIM issued two Metrobank checks in the sums of P300,000 and P241,668,
respectively, payable to "cash." Upon presentment by petitioner with the drawee bank, the checks were
dishonoredforthereason"accountclosed."Demandstomakegoodthechecksprovedfutile.Asaconsequence,
acriminalcaseforviolationofBatasPambansaBlg.22,docketedasCriminalCasesNos.2212728,werefiledby
petitioner against LIM with Branch 23 of the Regional Trial Court (RTC) of Cebu City. In its decision 1 dated 29
December1992,thecourtaquoconvictedLIMascharged.ThecaseispendingbeforethisCourtforreviewanddocketed
asG.R.No.134685.

Italsoappearsthaton31July1990LIMwasconvictedofestafabytheRTCofQuezonCityinCriminalCaseNo.
Q8922162filedbyacertainVictoriaSuarez.ThisdecisionwasaffirmedbytheCourtofAppeals.Onappeal,however,
thisCourt,inadecision 3promulgatedon7April1997,acquittedLIMbutheldhercivillyliableintheamountofP169,000,
asactualdamages,pluslegalinterest.

Meanwhile,on2July1991,aDeedofDonation 4conveyingthefollowingparcelsoflandandpurportedlyexecutedby
LIM on 10 August 1989 in favor of her children, Linde, Ingrid and Neil, was registered with the Office of the Register of
DeedsofCebuCity:

(1)aparceloflandsituatedatBarrioLahug,CebuCity,containinganareaof563sq.m.
andcoveredbyTCTNo.93433
(2)aparceloflandsituatedatBarrioLahug,CebuCity,containinganareaof600sq.m.
andcoveredbyTCTNo.93434
(3)aparceloflandsituatedatCebuCitycontaininganareaof368sq.m.andcovered
byTCTNo.87019and
(4) a parcel of land situated at Cebu City, Cebu containing an area of 511 sq. m. and
coveredbyTCTNo.87020.
Newtransfercertificatesoftitlewerethereafterissuedinthenamesofthedonees.5
On23June1993,petitionerfiledanaccionpaulianaagainstLIMandherchildrenbeforeBranch18oftheRTCof
CebuCitytorescindthequestionedDeedofDonationandtodeclareasnullandvoidthenewtransfercertificates
oftitleissuedforthelotscoveredbythequestionedDeed.ThecomplaintwasdocketedasCivilCaseNo.CEB
14181. Petitioner claimed therein that sometime in July 1991, LIM, through a Deed of Donation, fraudulently
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transferred all her real property to her children in bad faith and in fraud of creditors, including her that LIM
conspiredandconfederatedwithherchildreninantedatingthequestionedDeedofDonation,topetitioner'sand
othercreditors'prejudiceandthatLIM,atthetimeofthefraudulentconveyance,leftnosufficientpropertiesto
payherobligations.
Ontheotherhand,LIMdeniedanyliabilitytopetitioner.SheclaimedthatherconvictionsinCriminalCasesNos.
2212728 were erroneous, which was the reason why she appealed said decision to the Court of Appeals. As
regardsthequestionedDeedofDonation,shemaintainedthatitwasnotantedatedbutwasmadeingoodfaithat
atimewhenshehadsufficientproperty.Finally,sheallegedthattheDeedofDonationwasregisteredonlyon2
July1991becauseshewasseriouslyill.
In its decision of 31 December 1994, 6 the trial court ordered the rescission of the questioned deed of donation (2)
declarednullandvoidthetransfercertificatesoftitleissuedinthenamesofprivaterespondentsLinde,IngridandNeilLim
(3)orderedtheRegisterofDeedsofCebuCitytocancelsaidtitlesandtoreinstatetheprevioustitlesinthenameofRosa
Limand(4)directedtheLIMstopaythepetitioner,jointlyandseverally,thesumofP10,000asmoraldamagesP10,000
asattorney'sfeesandP5,000asexpensesoflitigation.

Onappeal,theCourtofAppeals,inadecision 7 promulgated on 20 February 1998, reversed the decision of the trial

courtanddismissedpetitioner'saccionpauliana.Itheldthattwooftherequisitesforfilinganaccion pauliana were absent,
namely,(1)theremustbeacreditexistingpriortothecelebrationofthecontractand(2)theremustbeafraud,oratleast
theintenttocommitfraud,totheprejudiceofthecreditorseekingtherescission.

AccordingtotheCourtofAppeals,theDeedofDonation,whichwasexecutedandacknowledgedbeforeanotary
public,appearsonitsfacetohavebeenexecutedon10August1989.UnderSection23ofRule132oftheRules
ofCourt,thequestionedDeed,beingapublicdocument,isevidenceofthefactwhichgaverisetoitsexecution
andofthedatethereof.NoantedatingoftheDeedofDonationwasmade,therebeingnoconvincingevidenceon
recordtoindicatethatthenotarypublicandthepartiesdidantedateit.SinceLIM'sindebtednesstopetitionerwas
incurred in August 1990, or a year after the execution of the Deed of Donation, the first requirement for accion
paulianawasnotmet.
Anentpetitioner'scontentionthatassumingthattheDeedofDonationwasnotantedateditwasneverthelessin
fraudofcreditorsbecauseVictoriaSuarezbecameLIM'screditoron8October1987,theCourtofAppealsfound
thesameuntenable,fortheruleisbasicthatthefraudmustprejudicethecreditorseekingtherescission.
Hermotionforreconsiderationhavingbeendenied,petitionercametothisCourtandsubmitsthefollowingissue:
WHETHERORNOTTHEDEEDOFDONATION,EXH.1,WASENTEREDINTOINFRAUDOF[THE]
CREDITORSOFRESPONDENTROSA[LIM].
PetitionerarguesthatthefindingoftheCourtofAppealsthattheDeedofDonationwasnotinfraudofcreditorsis
contrarytowellsettledjurisprudencelaiddownbythisCourtasearlyas1912inthecaseofOriav.McMicking, 8
whichenumeratedthevariouscircumstancesindicatingtheexistenceoffraudinatransaction.Shereiteratesherarguments
below,andaddsthatanotherfactfoundbythetrialcourtandadmittedbythepartiesbutuntouchedbytheCourtofAppeals
is the existence of a prior final judgment against LIM in Criminal Case No. Q892216 declaring Victoria Suarez as LIM's
judgmentcreditorbeforetheexecutionoftheDeedofDonation.

PetitionerfurtherarguesthattheCourtofAppealsincorrectlyappliedorinterpretedSection23, 9 Rule 132 of the

RulesofCourt,inholdingthat"beingapublicdocument,thesaiddeedofdonationisevidenceofthefactwhichgaveriseto
its execution and of the date of the latter." Said provision should be read with Section 30 10 of the same Rule which
provides that notarial documents are prima facie evidence of their execution, not "of the facts which gave rise to their
executionandofthedateofthelatter."

Finally,petitioneraversthattheCourtofAppealsoverlookedArticle759oftheNewCivilCode,whichprovides:
"Thedonationisalwayspresumedtobeinfraudofcreditorswhenatthetimeoftheexecutionthereofthedonor
didnotreservesufficientpropertytopayhisdebtspriortothedonation."Inthiscase,LIMmadenoreservationof
sufficientpropertytopayhercreditorspriortotheexecutionoftheDeedofDonation.
On the other hand, respondents argue that (a) having agreed on the law and requisites of accion pauliana,
petitionercannottakeshelterunderadifferentlaw(b)petitionercannotinvokethecreditofVictoriaSuarez,who
isnotapartytothiscase,tosupportheraccionpauliana(c)theCourtofAppealscorrectlyappliedorinterpreted
Section23ofRule132oftheRulesofCourt(d)petitionerfailedtopresentconvincingevidencethattheDeedof
Donationwasantedatedandexecutedinfraudofpetitionerand(e)theCourtofAppealscorrectlystruckdown
theawardsofdamages,attorney'sfeesandexpensesoflitigationbecausethereisnofactualbasisthereforinthe
bodyofthetrialcourt'sdecision.
The primordial issue for resolution is whether the questioned Deed of Donation was made in fraud of petitioner
and,therefore,rescissible.Acorollaryissueiswhethertheawardsofdamages,attorney'sfeesandexpensesof
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litigationareproper.
Weresolvetheseissuesinthenegative.
TheruleiswellsettledthatthejurisdictionofthisCourtincasesbroughtbeforeitfromtheCourtofAppealsvia
Rule 45 of the Rules of Court is limited to reviewing errors of law. Findings of fact of the latter court are
conclusive,exceptinanumberofinstances.11Inthecaseatbar,oneoftherecognizedexceptionswarrantingareview
bythisCourtofthefactualfindingsoftheCourtofAppealsexists,towit,thefactualfindingsandconclusionsofthelower
courtandCourtofAppealsareconflicting,especiallyontheissueofwhethertheDeedofDonationinquestionwasinfraud
ofcreditors.

Art.1381oftheCivilCodeenumeratesthecontractswhicharerescissible,andamongthemare"thosecontracts
undertakeninfraudofcreditorswhenthelattercannotinanyothermannercollecttheclaimsduethem."
Theactiontorescindcontractsinfraudofcreditorsisknownasaccionpauliana. For this action to prosper, the
followingrequisitesmustbepresent:(1)theplaintiffaskingforrescissionhasacreditpriortothealienation, 12
althoughdemandablelater(2)thedebtorhasmadeasubsequentcontractconveyingapatrimonialbenefittoathirdperson
(3)thecreditorhasnootherlegalremedytosatisfyhisclaim 13 (4) the act being impugned is fraudulent 14 (5) the third
personwhoreceivedthepropertyconveyed,ifitisbyoneroustitle,hasbeenanaccompliceinthefraud.15

The general rule is that rescission requires the existence of creditors at the time of the alleged fraudulent
alienation,andthismustbeprovedasoneofthebasesofthejudicialpronouncementsettingasidethecontract.
16Withoutanypriorexistingdebt,therecanneitherbeinjurynorfraud.Whileitisnecessarythatthecreditoftheplaintiffin

theaccionpaulianamustexistpriortothefraudulentalienation,thedateofthejudgmentenforcingitisimmaterial.Evenif
thejudgmentbesubsequenttothealienation,itismerelydeclaratory,withretroactiveeffecttothedatewhenthecreditwas
constituted.17

Intheinstantcase,theallegeddebtofLIMinfavorofpetitionerwasincurredinAugust1990,whilethedeedof
donationwaspurportedlyexecutedon10August1989.
We are not convinced with the allegation of the petitioner that the questioned deed was antedated to make it
appear that it was made prior to petitioner's credit. Notably, that deed is a public document, it having been
acknowledgedbeforeanotarypublic. 18 As such, it is evidence of the fact which gave rise to its execution and of its
date,pursuanttoSection23,Rule132oftheRulesofCourt.

Petitioner's contention that the public documents referred to in said Section 23 are only those entries in public
recordsmadeintheperformanceofadutybyapublicofficerdoesnotholdwater.Section23reads:
Sec.23.Publicdocumentsasevidence.Documentsconsistingofentriesinpublicrecordsmadein
theperformanceofadutybyapublicofficerareprimafacieevidenceofthefactsthereinstated.All
otherpublicdocumentsareevidence,evenagainstathirdperson,ofthefactwhichgaverisetotheir
executionandofthedateofthelatter.(Emphasissupplied).
The phrase "all other public documents" in the second sentence of Section 23 means those public documents
otherthantheentriesinpublicrecordsmadeintheperformanceofadutybyapublicofficer.Andtheseinclude
notarialdocuments,likethesubjectdeedofdonation.Section19,Rule132oftheRulesofCourtprovides:
Sec.19.Classesofdocum/ents.Forthepurposeoftheirpresentationinevidence,documentsare
eitherpublicorprivate.
Publicdocumentsare:
(a)...
(b)Documentsacknowledgedbeforeanotarypublicexceptlastwillsandtestaments....
It bears repeating that notarial documents, except last wills and testaments, are public documents and are
evidenceofthefactsthatgaverisetotheirexecutionandoftheirdate.
In the present case, the fact that the questioned Deed was registered only on 2 July 1991 is not enough to
overcomethepresumptionastothetruthfulnessofthestatementofthedateinthequestioneddeed,whichis10
August1989.Petitioner'sclaimagainstLIMwasconstitutedonlyinAugust1990,orayearafterthequestioned
alienation.Thus,thefirsttworequisitesfortherescissionofcontractsareabsent.
Even assuming arguendo that petitioner became a creditor of LIM prior to the celebration of the contract of
donation,stillheractionforrescissionwouldnotfarewellbecausethethirdrequisitewasnotmet.UnderArticle
1381 of the Civil Code, contracts entered into in fraud of creditors may be rescinded only when the creditors
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cannotinanymannercollecttheclaimsduethem.Also,Article1383ofthesameCodeprovidesthattheaction
forrescissionisbutasubsidiaryremedywhichcannotbeinstitutedexceptwhenthepartysufferingdamagehas
nootherlegalmeanstoobtainreparationforthesame.Theterm"subsidiaryremedy"hasbeendefinedas"the
exhaustionofallremediesbytheprejudicedcreditortocollectclaimsduehimbeforerescissionisresortedto."19
It is, therefore, "essential that the party asking for rescission prove that he has exhausted all other legal means to obtain
satisfactionofhisclaim.20Petitionerneitherallegednorprovedthatshedidso.Onthisscore,heractionfortherescission
ofthequestioneddeedisnotmaintainableevenifthefraudchargedactuallydidexist."21

Thefourthrequisiteforanaccionpaulianatoprosperisnotpresenteither.
Art.1387,firstparagraph,oftheCivilCodeprovides:"Allcontractsbyvirtueofwhichthedebtoralienatesproperty
bygratuitoustitlearepresumedtohavebeenenteredintoinfraudofcreditorswhenthedonordidnotreserve
sufficientpropertytopayalldebtscontractedbeforethedonation.Likewise,Article759ofthesameCode,second
paragraph,statesthatthedonationisalwayspresumedtobeinfraudofcreditorswhenatthetimethereofthe
donordidnotreservesufficientpropertytopayhisdebtspriortothedonation.
For this presumption of fraud to apply, it must be established that the donor did not leave adequate properties
whichcreditorsmighthaverecourseforthecollectionoftheircreditsexistingbeforetheexecutionofthedonation.
Asearlierdiscussed,petitioner'sallegedcreditexistedonlyayearafterthedeedofdonationwasexecuted.She
cannot, therefore, be said to have been prejudiced or defrauded by such alienation. Besides, the evidence
disclosethatasof10August1989,whenthedeedofdonationwasexecuted,LIMhadthefollowingproperties:
(1) A parcel of land containing an area of 220 square meters, together with the house
constructedthereon,situatedinSto.NioVillage,MandaueCity,Cebu,registeredinthe
nameofRosaLimandcoveredbyTCTNo.1970622
(2)AparceloflandlocatedinBenrosSubdivision,Lawaan,Talisay,Cebu23
(3)Aparceloflandcontaininganareaof2.152hectares,withcoconuttreesthereon,situatedat
Hindagan,St.Bernard,SouthernLeyte,andcoveredbyTaxDeclarationNo.13572.24
(4) A parcel of land containing an area of 3.6 hectares, with coconut trees thereon, situated at
Hindagan,St.Bernard,SouthernLeyte,andcoveredbyTaxDeclarationNo.13571.25

Duringhercrossexamination,LIMdeclaredthatthehouseandlotmentionedinno.1wasboughtbyherinthe
amountofaboutP800,000toP900,000.26Thus:
ATTY.FLORIDO:
QThesepropertiesattheSto.NioVillage,howmuchdidyouacquirethisproperty?
AIncludingtheresidentialhouseP800,000.00toP900,000.00.
QHowaboutthelotwhichincludesthehouse.HowmuchwasthepriceintheDeedof
SaleofthehouseandlotatSto.NioViolage[sic]?
AIforgot.
QHowmuchdidyoupayforit?
AThatisP800,000.00toP900,000.00.
Petitionerdidnotadduceanyevidencethatthepriceofsaidpropertywaslower.Anentthepropertyinno.
2,LIMtestifiedthatshesolditin1990.27Astothepropertiesinnos.3and4,thetotalmarketvaluestatedinthe
tax declarations dated 23 November 1993 was P56,871.60. Aside from these tax declarations, petitioner did not
present evidence that would indicate the actual market value of said properties. It was not, therefore, sufficiently
establishedthatthepropertiesleftbehindbyLIMwerenotsufficienttocoverherdebtsexistingbeforethedonation
wasmade.Hence,thepresumptionoffraudwillnotcomeintoplay.

Nevertheless,acreditorneednotdependsolelyuponthepresumptionlaiddowninArticles759and1387ofthe
CivilCode.UnderthethirdparagraphofArticle1387,thedesigntodefraudmaybeprovedinanyothermanner
recognized by the law of evidence. Thus in the consideration of whether certain transfers are fraudulent, the
Court has laid down specific rules by which the character of the transaction may be determined. The following
havebeendenominatedbytheCourtasbadgesoffraud:
(1)Thefactthattheconsiderationoftheconveyanceisfictitiousorisinadequate
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(2)Atransfermadebyadebtoraftersuithasbegunandwhileitispendingagainsthim
(3)Asaleuponcreditbyaninsolventdebtor
(4)Evidenceoflargeindebtednessorcompleteinsolvency
(5) The transfer of all or nearly all of his property by a debtor, especially when he is
insolventorgreatlyembarrassedfinancially
(6)Thefactthatthetransferismadebetweenfatherandson,whentherearepresent
otheroftheabovecircumstancesand
(7)Thefailureofthevendeetotakeexclusivepossessionofalltheproperty.28
Theaboveenumeration,however,isnotanexclusivelist.Thecircumstancesevidencingfraudareasvariedas
themenwhoperpetratethefraudineachcase.ThisCourthasthereforedeclinedtodefineit,reservingtheliberty
todealwithitunderwhateverformitmaypresentitself.29
Petitioner failed to discharge the burden of proving any of the circumstances enumerated above or any other
circumstance from which fraud can be inferred. Accordingly, since the four requirements for the rescission of a
gratuitouscontractarenotpresentinthiscase,petitioner'sactionmustfail.
In her further attempt to support her action for rescission, petitioner brings to our attention the 31 July 1990
Decision30oftheRTCofQuezonCity,Branch92,inCriminalCaseNo.Q892216.LIMwasthereinheldguiltyofestafa
andwasorderedtopaycomplainantVictoriaSuarezthesumofP169,000fortheobligationLIMincurredon8October1987.
ThisdecisionwasaffirmedbytheCourtofAppeals.Uponappeal,however,thisCourtacquittedLIMofestafabutheldher
civillyliableforP169,000asactualdamages.

It should be noted that the complainant in that case, Victoria Suarez, albeit a creditor prior to the questioned
alienation,isnotapartytothisaccionpauliana.Article1384oftheCivilCodeprovidesthatrescissionshallonly
be to the extent necessary to cover the damages caused. Under this Article, only the creditor who brought the
actionforrescissioncanbenefitfromtherescissionthosewhoarestrangerstotheactioncannotbenefitfromits
effects. 31 And the revocation is only to the extent of the plaintiff creditor's unsatisfied credit as to the excess, the
alienationismaintained. 32 Thus, petitioner cannot invoke the credit of Suarez to justify rescission of the subject deed of
donation.

Now on the propriety of the trial court's awards of moral damages, attorney's fees and expenses of litigation in
favorofthepetitioner.Wehaveporedovertherecordsandfoundnofactualorlegalbasistherefor.Thetrialcourt
madetheseawardsinthedispositiveportionofitsdecisionwithoutstating,however,anyjustificationforthesame
intheratiodecidendi.Hence,theCourtofAppealscorrectlydeletedtheseawardsforwantofbasisinfact,lawor
equity.
WHEREFORE,thepetitionisherebyDISMISSEDandthechallengeddecisionoftheCourtofAppealsinCAG.R.
CV.No.50091isAFFIRMEDintoto.
Nopronouncementastocosts.
SOORDERED.
Puno,Kapunan,PardoandYnaresSantiago,JJ.,concur.
Footnotes
1OriginalRecord(OR),42.
2Id.,135.
3G.R.No.102784,271SCRA12[1997].
4OR,1012.
5Id.,69.
6OR,160Rollo,22.PerJudgeGalicanoC.Arriesgado.
7Rollo,31.PerTuquero,A.,J.,withImperial,J.,andVerzola,E.,JJ.,concurring.
821Phil.243[1912].
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9Sec.23.Publicdocumentsasevidence.Documentsconsistingofentriesinpublicrecordsmade
intheperformanceofadutybyapublicofficerareprimafacieevidenceofthefactsthereinstated.
Allotherpublicdocumentsareevidence,evenagainstathirdperson,ofthefactwhichgaveriseto
theirexecutionandofthedateofthelatter.
10Sec.30.Proofofnotarialdocuments.Everyinstrumentdulyacknowledgedorprovedand
certifiedasprovidedbylawmaybepresentedinevidencewithoutfurtherproof,thecertificateof
acknowledgmentbeingprimafacieevidenceoftheexecutionoftheinstrumentordocument
involved.
11InSta.Mariav.CourtofAppeals,285SCRA351[1998],theCourtenumeratedsomeofthe
instanceswhenthefactualfindingsoftheCourtofAppealsarenotdeemedconclusive,towit:(1)
whenthefindingsaregroundedentirelyonspeculation,surmises,orconjectures(2)whenthe
inferencemadeismanifestlymistaken,absurd,orimpossible(3)whenthereisgraveabuseof
discretion(4)whenthejudgmentisbasedonamisapprehensionoffacts(5)whenthefindingsof
factareconflicting(6)wheninmakingitsfindingstheCourtofAppealswentbeyondtheissuesof
thecase,oritsfindingsarecontrarytotheadmissionsofboththeappellantandtheappellee(7)
whenthefindingsarecontrarytothoseofthetrialcourt(8)whenthefindingsareconclusions
withoutcitationofspecificevidenceonwhichtheyarebased(9)whenthefactssetforthinthe
petitionaswellasinthepetitioner'smainandreplybriefsarenotdisputedbytherespondentand
(10)whenthefindingsoffactarepremisedonthesupposedabsenceofevidenceandcontradicted
bytheevidenceonrecord.
12Panliliov.Victoria,35Phil.706[1916]Solisv.ChuaPuaHermanos,50Phil.636[1927].
13Art.1383,CivilCode.
144TOLENTINO,ARTUROM.,CIVILCODEOFTHEPHILIPPINES576(1991),[hereafter4
TOLENTINO]citing8MANRESA756,2Castan543555,and3Camus207.
154TOLENTINO576,citing2Castan543555and3Camus107.
16Solisv.ChuaPuaHernanes,supranote12,at639.
174TOLENTINO576577,citingSentencia(Cuba)of7May1910and1Gasperi484485.
18Sec.19(b),Rule132,RulesofCourt.
19MORENO,FEDERICOB.,PHILIPPINELAWDICTIONARY915(1988).
20Art.1177,CivilCode.
21SeeGoquiolayv.Sycip,9SCRA663,677[1963]Solisv.ChuaPuaHermanos,supranote12,at
639640.
22Exhibit"M"Exhibit"2"OR,114.
23TSN,12November1993,4.
24Exhibit"N"OR,146.
25Exhibit"O"Id.,147.
26TSN,12November1993,7.
27Id.,6.
28Oriav.McMicking,supranote8.
29Riverav.Litam&Co.,4SCRA1072[1962].
30Exhibit"K"OR,135.
314PARAS,EDGARDOL.,CIVILCODEOFTHEPHILIPPINES,70(1994)4TOLENTINO586,
citing7Planiol&Ripert274275.
324TOLENTINO586,Citing7Planiol&Ripert271272.

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