Rescissible Contract:
Ruby owed Grace P200,000.00. Ruby did not have cash to pay Grace. Ruby’s property was a car
worth P200,000.00. Ruby anticipated that Grace would sue her soon for the unpaid debt and go
after her property, so she donated the car to Kaye to avoid paying Grace.
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In this case, Grace became a creditor of Ruby before the donation. Ruby donated
her one and only property to Kaye to avoid paying Grace. Under the law (Art. 1381),
those undertaken in fraud of creditors when the latter cannot in any other manner
collect the claims due them can be subject to rescission. Therefore, Grace cannot
collect the P200,000.00 from Ruby in any other manner.
Kath’s parents died. She inherited their land worth ₱10,000,000.00. Kath was still a minor so
Lyn was appointed as her guardian. Later, Len sold the mansion on behalf of Kath for
₱3,500,000.00.
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In this case, Lyn sold the land for a price lower by more than one-fourth (1/4) of its
market value, to the prejudice of Kath. Under the Law (Article 1381), those which are
entered into by guardians whenever the wards whom they represent suffer lesion by
more than one-fourth of the value of the things which are the object thereof can be
subject to rescission. Therefore, Kath can ask for the rescission of the sale.