ISIDORA L.
CABALIW and SOLEDAD SADORRA, petitioners,
vs.
SOTERO SADORRA, ENCARNACION SADORRA, EMILIO ANTONIO, ESPERANZA RANJO,
ANSELMO RALA, BASION VELASCO, IGNACIO SALMAZAN, and THE HONORABLE COURT
OF APPEALS, respondents.
FACTS:
- Isidora Cabaliw was the wife of Benigno Sadorra by his second marriage solemnized on May
5, 1915, where they had a daughter named Soledad Sadorra.
- During their marriage, the spouses acquired two (2) parcels of land.
- Having been abandoned by her husband, Isidora Cabaliw instituted an action for support.
- Judgment was rendered requiring Benigno Sadorra to pay his wife, Isidora Cabaliw, in
terms of support.
- Unknown to Isidora Cabaliw, on August 19, 1933, Benigno Sadorra executed two (2) deeds
of sale over the two parcels of land in favor of his son-in-law, Sotero Sadorra, the latter being
married to Encarnacion Sadorra, a daughter of Benigno Sadorra by his first marriage.
- Because of failure to support, Isidora Cabaliw filed a motion to cite Benigno Sadorra for
contempt, authorizing Isidora to take possession of the conjugal property, to administer the same,
and to avail herself of the fruits thereof in payment of the monthly support in arrears.
- Isidora proceeded to take possession of the parcels of land, and it was then that she discovered
that her husband had sold them to his son-in-law, Sotero.
- On February 1, 1940, Isidora filed a case against her husband and Sotero Sadorra for the recovery
of the lands in question on the ground that the sale was fictitious.
- In May of 1940, Benigno Sadorra died.
- On June 7, 1948, the above-mentioned notice of lis pendens was cancelled upon the filing of an
affidavit by Sotero Sadorra that he was adjudged the owner of the land, but that his copy of the
decision was lost during the war.
- On October 1, 1954, Isidora and her daughter Soledad filed a case to recover from the spouses
Sotero and Encarnacion Sadorra the aforementioned two parcels of land.
- The lower court declared that (1) the deeds of sale executed by Benigno Sadorra to be
simulated and fictitious; and (2) ordered the partition of the remaining unsold lands between
the petitioner and respondents.
- Upon appeal, the CA sustained the validity and efficacy of the deeds of sale executed by
Benigno Sadorra in favor of his son-in-law on the ground that these are public documents and
as such are presumed by law to have been fair and legal.
- It also ruled that the vendee Sotero Sadorra, is presumed to have acted in good faith, and
that fraud is never presumed, and it is settled in this jurisdiction that strong and
convincing evidence is necessary to overthrow the validity of an existing public
instrument.
- Hence, the petition.
ISSUE:
- W/N the CA erred in holding that the fraud could not be presumed on the ground that these are
public documents and presumed to be fair and legal.
RULING:
- The judgment of the Court of Appeals cannot be sustained.
- The conveyances made by Benigno Sadorra in favor of his son-in-law were fraudulent.
- Benigno Sadorra sold the only two parcels of land belonging to the conjugal partnership to
his son-in-law.
- Such a sale even if made for a valuable consideration is presumed to be in fraud of the
judgment creditor who in this case happens to be the offended wife.
- Article 1297 of the old Civil Code which was the law in force at the time of the
transaction provides:
Contracts by virtue of which the debtor alienates property by gratuitous
title are presumed to be made in fraud of creditors.
Alienations by onerous title are also presumed fraudulent when made by
persons against whom some judgment has been rendered in any instance
or some writ of attachment has been issued. The decision or attachment
need not refer to the property alienated and need not have been obtained
by the party seeking rescission. (emphasis supplied)
- We agree with petitioners that the parties here do not stand in equipoise, for the petitioners have
in their favor, by a specific provision of law, the presumption of a fraudulent transaction
which is not overcome by the mere fact that the deeds of sale in question were in the nature
of public instruments.
- The Supreme Court ruled that to destroy the validity of an existing public document, "strong
and convincing evidence is necessary", operates "where the action was brought by one party
against the other to impugn the contract ... but that rule can not operate and does not, where
the case is one wherein the suit is not between the parties inter se but is one instituted by a
third person, not a party to the contract but precisely the victim of it because executed to his
prejudice and behind his back;”
- Furthermore, the presumption of fraud established by the law is bolstered by other indicia of bad
faith on the part of the vendor and vendee.
- The vendee is the son-in-law of the vendor, and was living with his father-in-law, the
vendor, and he knew that there was a judgment directing the latter to give monthly
support to his wife Isidora and that his father-in-law was avoiding payment and execution
of the judgment.
- It was known to the vendee that his father-in-law had no properties other than those two
parcels of land which were being sold to him.
- The fact that a vendor transfers all of his property to a third person when there is a judgment
against him is a strong indication of a scheme to defraud one who may have a valid interest over
his properties.
- PREMISES CONSIDERED, We find merit to this Petition for Review and We set aside the
decision of the appellate court for being contrary to the law applicable to the facts of the case.
