Case Digest: Sadorra vs Sotero Sadorra, et. al., GR No. L-25650

Isidro L. Cabaliw and Soledad Sadorra vs Sotero Sadorra, et. al., GR No. L-25650, June 11, 1975

Subject: Obligations and Contracts

FACTS

Isidora Cabaliw was the wife of Benigno Sadorra by his second marriage and together, had a daughter named Soledad. During their marriage, the spouses acquired two (2) parcels of land and one of the land is issued in the name of Benigno. Having been abandoned by her husband, Isidora Cabaliw instituted an action for support and was granted.

Unknown to Isidora, Benigno executed two (2) deeds of sale over the parcels of land to his son-in-law Sotero. Because of her husband's failure to support, she filed a Civil Case and the Court authorized her to take possession of the parcels of land in payment for the support.

On February 1, 1940, Isidora filed with the CFI 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 hewas adjudged the owner of the land. Isidora filed their counter claim. But the appellate court dismissed the amended complaint of Isidora.

ISSUE

Whether or not the sale can be rescinded.

RULING

Yes, the sale can be rescinded.

Under Article 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 or attachment need not refer to the property alienated and need not have been obtained by the party seeking rescission.

In this case, the sale should be invalidated because it is presumed to have been made in fraud of the judgement creditor who happens to be the wife, the sale having been made to avoid payment of the judgement debt for support. The presumption of a fraudulent transaction established by specific provision of law cannot be overcome by the mere fact that the deed of sale in question is in the nature of a public instrument. The principle that strong and convincing evidence is necessary to overthrow an existing public document does not apply to third persons (who might be adversely prejudiced) but only to the parties to a contract. Close relationship between the vendor and the vendee is one of the known badges of fraud. The burden of rebutting the presumption of fraud established by law rests on the transferee who claims otherwise. Article 1413 of the old civil code does not apply because here the aggrieved party was prejudiced as a judgement creditor, but even were it to apply, still a prejudiced wife may seek redress in court.