Short answer. Generally no. Rescission of this kind is a last resort: the Civil Code bars the action where the party who suffered the damage still has another legal means of obtaining reparation. If a collection suit, a security you hold, or a claim against a co-debtor can make you whole, that route comes first.
What the law says
The action for rescission is subsidiary; it cannot be instituted except when the party suffering damage has no other legal means to obtain reparation for the same.
Civil Code, Article 1383 — Rescission Is Subsidiary. Read the full provision →
What "subsidiary" means here
Article 1383 of the Civil Code states that The action for rescission is subsidiary; it cannot be instituted except when the party suffering damage has no other legal means to obtain reparation for the same. The key word is subsidiary. Rescission of this sort is not an option you may pick because it looks faster or more dramatic than the alternatives; it sits behind every other remedy the law gives you. A court asked to rescind will look first at what else was open to you, and a creditor who had a straightforward way to be paid and skipped it can expect the action to fail on that ground alone.
Which rescission this article is about
This is worth pinning down, because one word is used for two different things. Article 1383 belongs to the rescission of otherwise valid contracts that cause economic damage — most commonly transfers a debtor makes in fraud of his creditors. It is not the same as the remedy a party invokes when the other side simply fails to perform a reciprocal obligation; that one arises from breach and is not subsidiary in this sense. Confusing them leads people to file the wrong case and to be told, after a long wait, that the remedy they chose was never available to them.
What counts as another legal means
The article does not list them, and it does not need to. Anything realistically capable of repairing the same damage counts: suing on the debt and executing against assets the debtor still holds, enforcing a mortgage or pledge, pursuing a guarantor or a solidary co-debtor, or attaching property still within reach. The test is practical rather than theoretical. A remedy that exists on paper but cannot in fact produce payment, because there is nothing left to levy on, is no answer. That is why creditors are usually expected to have attempted collection first — the failed attempt is the proof that nothing else remains.
How this shapes the way you proceed
Order of operations matters more than eloquence. Establish the credit, demand payment, and pursue ordinary collection before reaching for rescission, keeping a record of every step, because that record is what shows a court you had nowhere else to go. Watch the calendar as well: the period for bringing an action to rescind is limited and short, so a creditor who exhausts his other remedies slowly may find the door shut by the time he gets there. None of this promises that rescission will be granted. It describes the sequence a court expects to see, and the sequence is usually where these cases are won or lost.
Cases citing this provision
These Supreme Court decisions cite the provision above. We list them so you can read them yourself; the summaries of what each decided are not ours to give.
- Khe Hong Cheng, et al. vs. Court of Appeals, et al, G.R. No. 144169, March 28, 2001 — read the decision on LawPhil →
- Congregation of the Religious of the Virgin Mary, etc. vs. Emilio Orola, et al, G.R. No. 169790, April 30, 2008 — read the decision on LawPhil →
- Anchor Savings Bank (formerly Anchor Finance and Investment Corporation) vs. Henry H. Furigay, et al, G.R. No. 191178, March 13, 2013 — read the decision on LawPhil →
- Dr. Restituto C. Buenviaje vs. Spouses Jovito R. and Lydia B. Salonga, et al, G.R. No. 216023, October 5, 2016 — read the decision on LawPhil →