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310 SUPREME COURT REPORTS ANNOTATED
Cabaliw vs. Sadorra
*
No. L-25650. June 11, 1975.
ISIDORA L. CABALIW and SOLEDAD SADORRA, petitioners,
vs. SOTERO SADORRA, ENCARNACION
_______________
* FIRST DIVISION.
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VOL. 64, JUNE 11, 1975 311
Cabaliw vs. Sadorra
SADORRA, EMILIO ANTONIO, ESPERANZA RANJO,
ANSELMO RALA, BASION VELASCO, IGNACIO
SALMAZAN, and THE HONORABLE COURT OF APPEALS,
respondents.
Sale; Contracts; A sale of a parcel of land by the husband is deemed
fraudulent if made about seven months after a judgment was rendered
against the vendor for support of his wife and the vendor has not paid any
part of the judgment.—For the heart of the matter is that about seven
months after a judgment was rendered against him in Civil Case No. 43192
of the Court of First Instance of Manila and without paying any part of that
judgment, 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.
Same; Same; Circumstances indicating sale of a parcel of land
belonging to conjugal partnership is void.—Furthermore, the presumption
established by the law in favor of petitioners is bolstered by other indicia of
bad faith on the part of the vendor and vendee. Thus (1) the vendee is the
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son-in-law of the vendor. x x x close relationship between the vendor and
the vendee is one of the known badges of fraud. (2) At the time of the
conveyance, the vendee, Sotero, was living with his father-in-law, the
vendor, and he knew that there was a judgment directing the latter to give a
monthly support to his wife Isidora and that his father-in-law was avoiding
payment and execution of the judgment. (3) 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.
Same; Same; Fraud; Where sale of land is presumed fraudulent,
transferee has burden of proving otherwise.—On the part of the transferee,
he did not present satisfactory and convincing evidence sufficient to
overthrow the presumption and evidence of a fradulent transaction. His is
the burden of rebutting the presumption of fraud established by law, and
having failed to do so, the fraudulent nature of the conveyance in question
prevails.
Sale; Contracts; Conjugal assets; Wife may seek redress in courts for
alienations prejudicial to her.—The decision of the Court of Appeals makes
mention of Art. 1413 of the old Civil Code which
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312 SUPREME COURT REPORTS ANNOTATED
Cabaliw vs. Sadorra
authorizes the husband as administrator to alienate and bind by onerous title
the property of the conjugal partnership without the consent of the wife. x x
x On this point, counsel for petitioners rightly claims that the lack of
consent of the wife to the conveyances made by her husband was never
invoked nor placed in issue before the trial court. What was claimed all
along by plaintiff-petitioner was that the conveyances or deeds of sale were
executed by her husband to avoid payment of the monthly support adjudged
in her favor and to deprive her of the means to execute said judgment. In
other words, petitioner seeks relief not so much as an aggrieved wife but
more as a judgment creditor. Art. 1413 therefore is inapplicable; but even if
it were, the result would be the same because the very article reserves to the
wife the right to seek redress in court for alienations which prejudice her or
her heirs.
PETITION for review of the decision of the Court of Appeals.
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The facts are stated in the opinion of the Court.
Jose W. Diokno for petitioners.
Angel A. Sison for respondents.
MUÑOZ PALMA, J.:
Isidora Cabaliw was the wife of Benigno Sadorra by his second
marriage solemnized on May 5, 1915, before the Justice of the Peace
of Bayambang, Pangasinan. This couple had a daughter named
Soledad Sadorra. During their marriage, the spouses acquired two
(2) parcels of land situated in Iniangan, Dupax, Nueva Vizcaya. One
parcel with an area of 14.4847 hectares was acquired by a Sales
Patent and covered by Original Certificate of Title No. 1 of the Land
Records of Nueva Vizcaya issued in the name of Benigno Sadorra.
The other piece of land of about 1-1/2 hectares and covered by Tax
Declaration Nos. 6209 and 6642 was secured through purchase.
Having been abandoned by her husband, Isidora Cabaliw
instituted an action for support with the Court of First Instance of
Manila, entitled “Isodora Cabaliw de Orden versus Benigno
Sadorra” docketed therein as Civil Case No. 43193. On January 30,
1933, judgment was rendered requiring Benigno Sadorra to pay his
wife, Isidora Cabaliw, the amount of P75.00 a month in terms of
support as of January 1, 1933, and P150.00 in concept of attorney’s
fees and the costs.
Unknown to Isidora Cabaliw, on August 19, 1933, Benigno
Sadorra executed two (2) deeds of sale over the two parcels of
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VOL. 64, JUNE 11, 1975 313
Cabaliw vs. Sadorra
land above described 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. These deeds were duly registered and
Original Certificate of Title No. 1 was cancelled and replaced with
T.C.T. No. 522 of the Register of Deeds of Nueva Vizcaya.
Because of the failure of her husband to comply with the
judgment of support, Isidora Cabaliw filed in Civil Case 43192 a
motion to cite Benigno Sadorra for contempt and the Court of First
Instance of Manila in its Order of May 12, 1937, authorized 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. With this order of the Court, Isidora proceeded to
Nueva Vizcaya to take possession of the aforementioned parcels of
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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 with the Court of First
Instance of Nueva Vizcaya Civil Case No. 449 against her husband
and Sotero Sadorra for the recovery of the lands in question on the
ground that the sale was fictitious; at the same time a notice of lis
pendens was filed with the Register of Deeds of Nueva Vizcaya.
In May of 1940, Benigno Sadorra died.
On June 7, 1948, the above-mentioned notice of lis pendens was
cancelled by the Register of Deeds of Nueva Vizcaya upon the filing
of an affidavit by Sotero Sadorra to the effect that Civil Case No.
449 had been decided in his favor and that he was adjudged the
owner of the land covered by T.C.T. No. 522, but that his copy of
the decision was lost during the war.
On October 1, 1954, Isidora and her daughter Soledad filed with
the Court of First Instance of Nueva Vizcaya Civil Case 634 to
recover from the spouses Sotero and Encarnacion Sadorra the
aforementioned two parcels of land; they also caused the annotation
1
of a cautionary notice and notice of lis pendens over T.C.T. 522.
On November 22, 1955, the complaint was amended and named
additional party-defendants were the children of Benigno Sadorra by
his first marriage. The amended complaint prayed among others: (1)
that the deeds of sale executed by
_______________
1 Record on Appeal, CA-G.R. 26956-R pp. 1-11
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314 SUPREME COURT REPORTS ANNOTATED
Cabaliw vs. Sadorra
Benigno Sadorra be declared null and void; (2) that defendant-
spouses Sotero and Encarnacion Sadorra be directed to yield the
possession of the lands in question; and (3) that said lands be
ordered partitioned among plaintiffs and defendants who are
children by the first
2
marriage of Benigno Sadorra in the proportions
provided by law.
During the pendency of civil case 634 certain parties intervened
claiming that they had purchased parts of the land covered by T.C.T.
522.
After trial, the lower court rendered judgment and among other
things: (1) declared the deeds of sale executed by Benigno Sadorra
to be simulated and fictitious; (2) recognized and upheld the rights
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of the intervenor-purchasers who acquired their portions prior to the
registration of the notice of lis pendens on October 1, 1954, but
dismissed the claims of the intervenors who allegedly bought parts
of the land subsequent thereto; and (3) ordered the partition of the
remaining unsold lands between Isidora Cabaliw, Sotero Sadorra, on
one hand and the children by the first marriage of Benigno Sadorra
3
on the other.
From the foregoing decision of the lower court in civil case 634
spouses Sotero and Encarnacion Sadorra appealed to the Court of
Appeals and so did the intervenors whose claims were dismissed.
(CA-G.R. No. 26956-R) On November 29, 1965, the appellate court
by a vote of 3 to 2 reversed the decision of the trial 4
court, and
dismissed the amended complaint of Isidora Cabaliw.
Hence, this petition filed by Isidora Cabaliw and her daughter,
Soledad Sadorra, for the Court to review the adverse judgment of the
Court of Appeals.
Several errors have been assigned by petitioners, but the vital
question upon which depends the outcome of this appeal is given in
Error I, to wit:
The Honorable Court of Appeals gravely erred in holding that the
fraud could not be presumed in the transfer of the lots in question by
the late Benigno Sadorra to his son-in-law Sotero Sadorra, even if
this
________________
2 pp. 30-41, ibid.
3 pp. 145-184, ibid.
4 Nicasio Yatco, J. ponente with Antonio G. Lucero and Hermogenes Concepcion,
Jr., JJ. concurring; Gregorio S. Narvasa and Magno Gatmaitan, JJ. dissenting
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VOL. 64, JUNE 11, 1975 315
Cabaliw vs. Sadorra
transfer was done shortly after judgment was rendered against the
former and in favor of your petitioner Isidora Cabaliw. (p. 1,
Petitioner’s Brief)
The Court of Appeals sustained the validity and efficacy of the
deeds of sale executed by Benigno Sadorra in favor of his son-in-
law (Exhibits I and I-1) on the ground that these are public
documents and as such are presumed by law to have been fair and
legal; that the vendee Sotero Sadorra, is presumed to have acted in
good faith, citing Art. 44, Spanish Civil Code, Art. 627 New Civil
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Code; 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. The
appellate court continued that inasmuch as under the old Civil Code
in force at the time of the sale, the husband was empowered to
dispose of the conjugal property without the consent of the wife, the
sales made by Benigno Sadorra were valid, and the wife Isidora
cannot now recover the property from the vendee.
The judgment of the Court of Appeals cannot be sustained.
The facts narrated in the first portion of this Decision which are
not disputed, convincingly show or prove that the conveyances made
by Benigno Sadorra in favor of his son-in-law were fraudulent. For
the heart of the matter is that about seven months after a judgment
was rendered against him in Civil Case No. 43192 of the Court of
First Instance of Manila and without paying any part of that
judgment, 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 Code5
which was the law in force at
the time of the transaction provides:
_____________
5 See also Art. 1387 of the new Civil Code which states:
“Art. 1387. All contracts by virtue of which the debtor alienates property by gratuitous title are
presumed to have been entered into in fraud of creditors, when the donor did not reserve
sufficient property to pay all debts contracted before the donation.
“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
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Cabaliw vs. Sadorra
“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
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the party seeking rescission.” (emphasis supplied)
The above-quoted legal provision was totally disregarded by the
appellate court, and there lies its basic error. 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. As well said in the dissenting opinion of Justice
Magno Gatmaitan, the principle invoked by the majority opinion
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; neither law, nor justice, nor reason, nor logic, should so
permit, otherwise, in such a suit, the courts would be furnishing a
most effective shield of defense to the aggressor.” (pp. 30-31, CA
Decision)
Furthermore, the presumption of fraud established by the law in
favor of petitioners is bolstered by other indicia of bad faith on the
part of the vendor and vendee. Thus (1) the vendee is the son-in-law
of the vendor. In the early case of Regalado vs. Luchsinger & Co., 5
Phil. 625, this Court held that the close relationship between the
vendor and the vendee is one of the known badges of fraud..(2) At
the time of the conveyance, the vendee, Sotero, was living with his
father-in-law, the vendor,
______________
or attachment need not refer to the property alienated, and need not have been
obtained by the party seeking the rescission.
“In addition to these presumptions, the design to defraud creditors may be proved
in any other manner recognized by the law of evidence.”
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VOL. 64, JUNE 11, 1975 317
Cabaliw vs. Sadorra
and he knew that there was a judgment directing the latter to give a
monthly support to his wife Isidora and that his 6 father-in-law was
avoiding payment and execution of the judgment. (3) It was known
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to the vendee that his father-in-law had no properties other7
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
8
to
defraud one who may have a valid interest over his properties.
Added to the above circumstances is the undisputed fact that the
vendee Sotero Sadorra secured the cancellation of the lis pendens on
O.C.T. No. 1, which was annotated in 1940 at the instance of Isidora
Cabaliw, and the issuance of a transfer certificate of title in his
favor, by executing an affidavit, Exhibit H, on June 7, 1948, wherein
he referred to Isidora as “the late Isidora Cabaliw” when he knew for
a fact that she was alive, and alleged that Civil Case 449 of the
Court of First Instance of Nueva Vizcaya was decided in his favor
where in truth there was no such decision because the proceedings in
said case were interrupted by the last world war. Such conduct of
Sotero Sadorra reveals, as stated by the lower court, an “utter lack of
sincerity and truthfulness” and belies his pretensions of good faith.
On the part of the transferee, he did not present satisfactory and
convincing evidence sufficient to overthrow the presumption and
evidence of a fraudulent transaction. His is the burden of rebutting
the presumption of fraud established by law, and having failed to 9
do
so, the fraudulent nature of the conveyance in question prevails.
The decision of the Court of Appeals makes mention of Art.
1413 of the old Cjvil Code which authorizes the husband as
administrator to alienate and bind by onerous title the property of the
conjugal partnership without the consent of the wife, and by reason
thereof, concludes that petitioner Isidora Cabaliw can not now seek
annulment of the sale made by her husband. On this point, counsel
for petitioners rightly claims
_______________
6 See dissenting opinion of Justice Gatmaitan p. 28, CA Decision
7 p. 29, ibid.
8 Oria vs. McMicking, 21 Phil. 243
9 Bachrach vs. Peterson, et al. 7 Phil. 571; Panlilio vs. Victorio, 35 Phil. 706;
Alpuerto vs. Perez Pastor, et al. 38 Phil. 785; National Exchange Co. vs. Katigbak, 54
Phil. 599
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Cabaliw vs. Sadorra
that the lack of consent of the wife to the conveyances made by her
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husband was never invoked nor placed in issue before the trial court.
What was claimed all along by plaintiff, Isidora Cabaliw now
petitioner, was that the conveyances or deeds of sale were executed
by her husband to avoid payment of the monthly support adjudged
in her favor and to deprive her of the means to execute said
judgment. In other words, petitioner seeks relief not so much as an
aggrieved wife but more as a judgment creditor of Benigno Sadorra.
Art. 1413 therefore is inapplicable; but even if it were, the result
would be the same because the very article reserves to the wife the
right to seek redress in court for alienations which prejudice her or
10
her heirs. The undisputed facts before Us clearly show that the
sales made by the husband were merely a scheme to place beyond
the reach of the wife the only properties belonging to the conjugal
partnership and deprive her of what rightly belongs to her and her
only daughter Soledad.
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. The
decision of the trial court stands affirmed with costs against private
respondents.
So Ordered.
Castro (Chairman), Makasiar, Esguerra and Martin, JJ.,
concur.
Teehankee, J., took no part.
Notes.—The wife cannot invoke her own failure to get the
consent of her husband in order to invalidate a sale she had
consummated. (Novino vs. Court of Appeals, 8 SCRA 279).
The husband’s sale of the conjugal house without his wife’s
consent is void under Article 166 of the new Civil Code. (Tolentino
vs. Cardenas, 16 SCRA 720; Lanuza vs. De Leon, 20 SCRA 369).
_______________
10 Article 1413. In addition to the powers which the husband has as administrator
he may alienate and bind by onerous title the property of the conjugal partnership
without the consent of the wife. Nevertheless, every alienation or compromise which
the husband may make in respect to said property in violation of this Code or in fraud
of the wife a shall not prejudice her or her heirs, (old Civil Code)
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VOL. 64, JUNE 11, 1975 319
People vs. Samonte, Jr.
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A pacto de retro sale of conjugal real property, effected by the
husband without the wife’s consent, was considered ratified by her
when she gave her conformity to the extension of the period of
redemption by signing the Annotation on the margin of the deed.
(Lanuza vs. De Leon, 20 SCRA 269).
A contract of sale is entirely null and void where it purports to
sell properties of which the sellers were not the only owners and the
prestation involved was indivisible, and therefore incapable of
partial annulment. (Mindanao Academy, Inc. vs. Yap, 13 SCRA 190;
Estoque vs. Pajimula, 24 SCRA 59).
The sale of land to a Chinese citizen before the adoption of the
Constitution cannot be assailed on account of his citizenship; where
the land was later sold by the Chinese to a Filipino, the sale to the
latter cannot likewise be impugned. (Herrera vs. Luy Kim Guan, 1
SCRA 406).
When the sale of real property is made in a public instrument, the
execution thereof is equivalent to the delivery of the thing object of
the contracts, if from the deed the contrary does not appear or cannot
clearly be inferred. (Phil. Suburban Dev. Corp. vs. The Auditor
General, 63 SCRA 398).
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