G.R. No. L-28905. July 22, 1975.
Tiu Po, plaintiff-appellant, vs. Lily Lim Tan and Anita Lim Gosiaco, assisted by her husband, Felipe Gosiaco, defendants-appellees.

FACTS

The dispute originated from a sale of a business, the Standard Box and Printing Press, by Tiu Po to Lily Lim Tan, Anita Lim Gosiaco, and Lydia Diaz Yao. The buyers allegedly failed to fulfill the payment terms. This led to two lawsuits. First, Lily Lim Tan sued Tiu Po in Quezon Province (Civil Case No. 6919) for damages, claiming Tiu Po reneged on the sale and refused to return two checks. Tiu Po counterclaimed, seeking enforcement or rescission of the contract and damages, and applied for a writ of preliminary attachment against Lily Lim Tan’s properties.
Subsequently, Tiu Po discovered that Lily Lim Tan had sold a parcel of land in Pasay City to her sister and co-defendant, Anita Lim Gosiaco. Tiu Po then filed a second action (Civil Case No. 2770-P) in Pasay City against the sisters, seeking annulment of that land sale. She alleged the transfer was a fraudulent simulation designed to conceal Lily Lim Tan’s asset from the potential writ of attachment in the Quezon case. The Pasay court dismissed this second complaint on the ground of litis pendentia, citing the pending Quezon case, prompting Tiu Po’s direct appeal to the Supreme Court.

ISSUE

Whether the appeal from the dismissal of the action for annulment of sale (Civil Case No. 2770-P) has been rendered moot and academic.

RULING

Yes, the appeal is moot and academic. The Supreme Court required and received a status update on the Quezon case (Civil Case No. 6919). The records showed it had been decided with finality. The Quezon court ordered the rescission of the business sale and held Lily Lim Tan and Anita Lim Gosiaco jointly and severally liable to pay Tiu Po a sum of money. This final judgment fundamentally altered the legal landscape, nullifying the basis for the Pasay annulment case.
The Court’s legal logic is clear: the annulment suit’s sole purpose was to preserve the Pasay property for the enforcement of a preliminary attachment from the Quezon case. However, with the rendition of a final money judgment in that case, Tiu Po’s status changed from a claimant seeking provisional remedy to a judgment creditor. As a judgment creditor, she no longer needs to annul the allegedly fraudulent transfer to execute on the property. Under the Rules of Court, a judgment creditor may levy execution on property fraudulently transferred by the judgment debtor. Furthermore, since the judgment holds both transferor and transferee jointly liable, Tiu Po can execute against the property regardless of the transfer’s validity to satisfy the joint obligation. Therefore, the question of the sale’s annulment has lost practical legal significance, rendering the appeal moot. The Supreme Court dismissed the appeal.