ASIA BANKING CORPORATION, PLAINTIFF AND APPELLANT, VS. MARIA LUISA CORCUERA, FOR HERSELF AND AS GUARDIAN OF THE PERSONS AND PROPERTY OF LINA, GERMAN AND RAMON N. F. LICHAUCO Y C…

STATEMENT

The plaintiff is a foreign corporation duly licensed to
transact business in the Philippine Islands. Lichauco & Co., Inc., is a
domestic corporation, and the defendant, Maria Luisa Corcuera, is the widow of
Galo Lichauco, deceased, and the mother of the minor heir defendants. She was
also administratrix of the estate of Galo Lichauco from October 15, 1921, to
April 23, 1923, when she was discharged. The allegations in the complaint as to
the real estate are identical with those made by the plaintiff in G. R. No.
28495,^[1] and the same is true as to the
execution of Exhibit A.

It is then alleged that on January 16, 1922, the Lichauco
Corporation, conspiring with the defendant, Maria Luisa Corcuera, et al., and
for the purpose of defrauding and delaying the plaintiff in the collection of
its indebtedness against the Lichauco Corporation, executed and caused to be
recorded an illegal and fictitious deed of conveyance from the Lichauco
Corporation to the defendant, Maria Luisa Corcuera, as administratrix, of that
portion of the property described in clauses 4, 5 and 6 of paragraph IV of the
complaint, a copy of which deed is attached to, and made a part of, the
complaint, in which it was falsely recited that there was a consideration of
P124,000, with interest from January 20, 1920, at 12 per cent per annum due and
owing from the Lichauco Corporation to the estate of Galo Lichauco; that the
Lichauco Corporation was not indebted to the estate in that or any other amount;
that the conveyance was not included in, and made a part of, the assets of the
estate of Galo Lichauco. That the property conveyed had a reasonable value of at
least P100,000, with a yearly income of P7,000, and that the consideration of
P24,000, was grossly inadequate, even if it had ever been paid; that even though
the deed was not legally executed, it was on August 12, 1922, registered with
the registry of property for the Province of Pampanga, and certificate of title
No. 455 was issued in favor of the Galo Lichauco Estate. Like allegations are
made as to obtaining of the judgment against the Lichauco Corporation, the sale
of the property by the sheriff, and the bidding in by the bank for P16,000, as
those made in G. R. No. 28495, and the refusal of the register of property to
receive and record plaintiff’s sheriff’s deed because the deed to Maria Luisa
Corcuera was previously recorded. Plaintiff prays that the deed to her be
declared fraudulent and void, and that the certificate of title No. 455 be
ordered cancelled, and that the sheriff’s deed to plaintiff be ordered
registered in the registry of property for the Province of Pampanga. As in G. R.
No. 28495, the corresponding Exhibits A and B are attached to, and made a part
of, the complaint.

For answer the defendants made a general and specific denial,
and as an affirmative defense alleged the execution of the deed to the land in
question on January 16, 1922, for a consideration of P24,000 which was then due
and owing from the Lichauco Corporation to the Galo Lichauco estate, the
recording of the deed as alleged, and that the heirs of Galo Lichauco are the
sole and exclusive owners of the property.

The defendant Lichauco & Co., Inc., made a default.

The evidence was taken upon such issues, and the lower court
first rendered judgment that the conveyance of the Matabig hacienda to
Maria Luisa Corcuera, as administratrix, was null and void, and ordered that
transfer certificate No. 455 issued in her name be cancelled, and that a
certificate of title be issued in favor of the plaintiff bank, and dismissed the
counterclaim of Maria Luisa Corcuera, with costs against her. Upon the rendition
of the judgment, Maria Luisa Corcuera filed a motion for consideration which the
court granted and set aside its judgment against her, and entered another in
which she was absolved from the complaint, and declared her to be the sole and
exclusive owner of 23/25 parts of the hacienda Matabig, from which the
bank appeals and contends in substance that the deed from the Lichauco
Corporation to Maria Luisa Corcuera, administratrix, was without consideration,
is null and void, and a fraud upon the creditors of the Lichauco Corporation,
and the bank, in particular.

JOHNS, J.:

The underlying basic facts in this case are almost identical
with those in G. R. No. 28495. There, as here, the deed in question was executed
on January 16, 1922, and the evidence is conclusive that the Lichauco
Corporation was then insolvent. The deed is also signed and acknowledged in the
same manner and by the same persons as the deed to Asuncion Nable Jose and in
the instant case, as the appellant contends, it appears from Exhibit PP, the
account book of the corporation, on page 39, under the head of “suspense
account,” that there is a charge against Galo Lichauco of P86,707.30, and on
page 43 of the same book, there is an entry which shows that Galo Lichauco has a
balance of P34,819.01. The deed in question among other things recites that on
January 9, 1920, the Lichauco Corporation received from the late Galo Lichauco
P24,000 in cash as a loan, with interest at 12 per cent per annum as shown by a
deed acknowledged on January 20, 1920, and that to secure its payment, the
corporation executed a mortgage on sixteen of its bancas in favor of Galo
Lichauco, and that with the consent of Galo Lichauco, the mortgage in his favor
was released, so that the bancas in question could be given as security to the
China Banking Corporation. The release having been executed, and on January 16,
1922, for a purported consideration of P24,000, the deed in question was
executed and accepted and the mortgage of January 9, 1920, in favor of Galo
Lichauco was released. That is to say, by the terms and provisions of the deed,
the property in question was conveyed to secure a preexisting debt of P24,000,
which Galo Lichauco loaned to the corporation on January 9, 1920. Be that as it
may, there is a very important distinction between the remaining facts. The
amount of land conveyed for the consideration of P24,000 in the instant case was
88 hectares. In the other case the true consideration for the deed was P34,000,
and the amount of land conveyed was 410 hectares.

In the instant case, outside of the fact that the 88 hectares
was carried on the corporate books at a valuation of P50,000, there is but
little other evidence as to its value.

As stated in Ruling Case Law, volume 12, page 479:

“The courts will not weigh the value of the goods sold and the
price received in very nice scales, but all circumstances considered, there
should be a reasonable and fair proportion between the one and the other.
Inadequacy of price does not mean an honest difference of opinion as to price,
but a consideration so far short of the real value of the property as to startle
a correct mind.”

The amount of land involved in the instant case being 88
hectares only, and the consideration for the deed being P24,000, in view of the
findings of fact made by the lower court, and for want of any other evidence as
to the actual value of the land, all things considered, we cannot say, as a
matter of law, that the consideration of P24,000 was inadequate or that the
conveyance was a fraud upon the creditors of the Lichauco Corporation.

There is another important distinction between the two cases.
Although in this case it is also true that the consideration for the deed was a
preexisting debt, yet the record is conclusive that the debt was due and owing
and enforcible at the time the deed in question was executed, and, hence, the
conveyance does not come under the terms and provisions of article 1292 of the
Civil Code.

The appellant vigorously contends that the original judgment in
the lower court in this case was right, and that the last and final judgment was
wrong. But the record is conclusive that the consideration for the deed of the
Lichauco Corporation was P24,000, and the fact that thereafter Faustino Lichauco
conveyed other and different properties to the estate of Galo Lichauco for a
consideration of P22,500 would not impair or destroy the validity of the deed
made by the Lichauco Corporation to the Galo Lichauco estate on January 16,
1922.

We freely admit that this case is not free from doubt, but in
this case the question of inadequacy of consideration is not so clear or
convincing as in G. R. No. 28495; neither do the facts bring it within article
1292 of the Civil Code.

All things considered, the judgment of the lower court is
affirmed, with costs. So ordered.

Avanceña, C. J., Villamor, Ostrand, Romualdez, and
Villa-Real, JJ., concur.