**Facts:**
1. **Marriage and Property Acquisition:**
– Isidora L. Cabaliw and Benigno Sadorra were married on May 5, 1915.
– They had a daughter, Soledad Sadorra.
– They acquired two parcels of land in Iniangan, Dupax, Nueva Vizcaya during their marriage.
2. **Court Case for Support:**
– Isidora sued Benigno for support in Civil Case No. 43193.
– On January 30, 1933, Benigno was ordered to pay P75.00 per month for support and P150.00 for attorney’s fees.
3. **Property Sale:**
– Without Isidora’s knowledge, Benigno sold the lands to Sotero Sadorra, his son-in-law, on August 19, 1933.
– The deeds were registered, titles transferred, and T.C.T. No. 522 issued in Sotero’s name.
4. **Action for Contempt:**
– Due to non-payment, Isidora filed for contempt against Benigno. The Manila Court authorized her to take possession of the lands on May 12, 1937.
5. **Discovery and Lawsuit:**
– In February 1940, upon finding the sale, Isidora filed Civil Case No. 449 against Benigno and Sotero for land recovery, filing a notice of lis pendens.
6. **Death of Benigno:**
– Benigno passed away in May 1940.
7. **Subsequent Legal Actions:**
– In 1948, Sotero filed an affidavit falsely claiming the decision in his favor to cancel the lis pendens and secure T.C.T. No. 522.
– On October 1, 1954, Isidora and Soledad filed Civil Case No. 634 for recovery of the land and filed another lis pendens.
8. **Amended Complaint and Court Judgment:**
– Additional defendants were included, seeking nullification of the sale, possession, and partition of the lands.
– The lower court ruled the sales were fraudulent, upheld partition, recognizing rights of good faith purchasers before 1954 lis pendens.
9. **Appeal and Reversal:**
– The defendants appealed, and the Court of Appeals reversed the ruling, dismissing Isidora’s amended complaint.
10. **Petition for Review:**
– Isidora and Soledad petitioned the Supreme Court to review the Court of Appeals decision.
**Issues:**
1. **Presumption of Fraud:**
– Whether the sale of the lands by Benigno Sadorra to Sotero Sadorra shortly after a judgment for support was presumptively fraudulent under Article 1297 of the Old Civil Code.
2. **Validity of Sale:**
– Whether the sale, conducted in the absence of the wife’s consent, was valid and binding.
3. **Burden of Proof:**
– Who carries the burden to prove or disprove the presumption of fraud in the contested transaction?
**Court’s Decision:**
1. **Presumption of Fraud:**
– The Supreme Court found that the sales were indeed fraudulent as per Article 1297 of the Old Civil Code, which presumes fraud in alienation subsequent to a judgment against the debtor.
– The close relation between the vendor (Benigno) and vendee (Sotero) aligned with the badges of fraud doctrine established in Regalado vs. Luchsinger & Co.
2. **Validity of Sale:**
– Despite the public nature of the sale, the Court held it was intended to circumvent Isidora’s legal rights as a creditor under a support judgment.
– Benigno’s sale without wife’s consent violated her entitlement to enforce the judgment.
3. **Burden of Proof:**
– Sotero, as the vendee, failed to rebut the presumption of fraud effectively, providing no compelling evidence otherwise.
– The Supreme Court highlighted that the fraudulent nature of the deeds remained prevailing since good faith was not demonstrated.
**Doctrine:**
– **Presumption of Fraud (Old Civil Code, Article 1297):**
– Contracts where debtors alienate properties under judgment or attachment presumption fraud against creditors.
– **Badges of Fraud:** Close relationships and actions indicating making real property beyond a creditor’s reach support fraud presumption.
– **Third-party Victims:** When third parties like judgment creditors challenge property transactions, public document status alone fails to protect fraudulent conveyances.
**Class Notes:**
– **Elements of Fraud in Alienation:**
1. Debtor alienated properties after judgment/order.
2. Alienation presumed fraudulent if no rebutting evidence.
3. Close relations between parties signal bad faith.
4. Cases where creditor’s rights are prejudiced can invoke these presumptions.
– **Key Provisions:**
– **Old Civil Code, Article 1297 and New Civil Code, Article 1387:** Presumptions and invalidity of fraudulent contract alienation.
– **Old Civil Code, Article 1413:** Husband’s power to dispose conjugal property, subject to not defrauding the wife’s rights.
**Historical Background:**
– The 1930s legal framework allowed some latitude to the husband in managing conjugal property, highlighting the gendered norms influencing asset control.
– The case elucidates evolving property jurisprudence protecting conjugal partnerships and creditor rights, emphasizing legal reforms securing spouses’ and creditors’ interests.
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