MARIANO CARAGAY, PLAINTIFF AND APPELLEE, VS. FRANCISCO URQUIZA ET AL,, DEFENDANTS AND APPELLANTS.

From what appears of record, Francisco Urquiza contracted a second
marriage on August 16, 1883 with Escolastica Antonio, begetting two
sons, one of whom lived only one week, and the other, named Atanasio,
lived about twenty years without leaving any descendants, before the
death of Escolastica Antonio on December 8, 1918.

On February 20, 1919, a brother of the deceased Escolastica Antonio
began proceedings for the settlement of her intestate estate, under No.
539 of the Court of First Instance of Bataan. Francisco Urquiza was
appointed administrator of the estate of Escolastica Antonio, but was
removed from the office by an order dated March 11, 1924, Exhibit R,
and Mariano Caragay was appointed in his stead. Caragay filed the
present complaint against ex-administrator Francisco Urquiza and
others, alleging that the latter had made fraudulent transfers of the
property of the estate, and prayed that each and every one of the
transfers made by him and his codefendants with respect to the property
detailed in paragraph 3 of the complaint be declared null and void,
that they be ordered to deliver to the plaintiff all the property in
their possession, or the value thereof, plus the proper rents and
profits, and that each and every one of the defendants be sentenced to
pay P30,000 damages, and the costs of the action.

After demurring to the complaint, which demurrer was overruled by
the trial court, the defendants filed their answer, denying the
allegations contained in the complaint, and setting up six special
defences, and as counterclaim they prayed that the plaintiff be ordered
to pay them P2,500 damages, this being the amount incurred for
attorney’s fees and other judicial costs.

The plaintiff filed an amended complaint, which the court admitted,
giving the defendants a chance to amend their answer also. And after
the proper trial, the court below decided the case, absolving the
defendant Francisco Urquiza from the complaint in so far a& it
refers to the credits of Isabel Baluyot and Francisco Banzon, the boats
Filipinas, Matiaga and Libertad, and the nets of the boat Consuelo.
Defendants were also absolved with respect to parcel 6, described in
paragraph 3 of the amended complaint. The trial court held that the
boats Mirasol and Sampaguita with their respective
equipment and nets belong to the intestate estate of the deceased
Escolastica Antonio, and ordered that said boats, with their equipment
and nets, be delivered to the plaintiff, as administrator of the
intestate estate of the deceased Eseolastica Antonio, to form a part of
the property of said estate. The trial court likewise held that parcels
Nos. 1, 2, 3, 4, 5, 7, 8 and 9, described in paragraph 3 of the amended
complaint belong to the intestate estate of said deceased Eseolastica
Antonio, and ordered that the possession thereof be delivered to the
herein plaintiff, as judicial administrator, for the purposes mentioned.

As to the damages, the trial court ordered Francisco Urquiza, the
intestate estate of Anselma V. Angeles, Alberto Aquino, Estanislao
Urquiza and Silvino Rodriguez, to pay five hundred pesos (P500) per
annum, jointly and severally, to the intestate estate of the deceased
Eseolastica Antonio, for each of the boats Mirasol and Sampaguita, from the date of the filing of the complaint until said boats are delivered to the plaintiff herein.

By way of damages in connection with parcels Nos. 1, 2, 3, 4, 5, 7
and 8, the trial court also ordered Francisco Urquiza, the testate
estate of Mariano G. Angeles, Alberto Aquino, Estanislao Urquiza and
Silvino Rodriguez, to pay jointly and severally, the sum of four
thousand five hundred pesos (P4,500) per annum, from August 3, 1928,
when the complaint was filed, until said parcels of land are restored
to the possession of the plaintiff. Likewise as damages, and in
connection with the fishing portion of parcels 7 and 8, the trial
court, ordered Francisco Urquiza, the estate of Mariano G. Angeles,
Alberto Aquino, Estanislao Urquiza and Silvino Rodriguez, to pay
jointly and severally, the amount of seventy pesos (P70) per annum,
from the date when the complaint was filed until parcels 7 and 8 are
wholly delivered to the plaintiff’s possession for the purposes already
indicated. Lastly, the trial court ordered defendants Pedro Navarro and
Constancia Urquiza to pay to herein plaintiff jointly and severally,
the sum of sixty pesos (P60), as yearly rental for the occupation of
the lot where the two sheds in question are built, which are hereby
held to be the property of the spouses Pedro Navarro and Constancia
Urquiza, said annual rental of sixty pesos (P60) to be computed from
the month of January 1922, when said spouses began to occupy the said
lot, until it is finally decided in the proceedings for the settlement
of the estate of the deceased Escolastica Antonio, to whom the lot
where said sheds are located shall be apportioned.

As defendant Francisco Urquiza is the surviving spouse, the trial
court held that he may waive the portion of the rents which may accrue
to him exclusively, and from the damages, the amount or amounts
accruing to Francisco Urquiza are to be deducted, as his half of the
conjugal property, and his aliquot part in the widower’s usufruct, in
accordance with articles 837 and 838 of the Civil Code.

With respect to the defendants’ counterclaim, the trial court, absolved the plaintiff.

No special pronouncement as to costs is made.

From this judgment the defendants appealed through the proper bill
of exceptions, and in their brief now pray for its reversal on account
of the errors which, they allege, were committed by the court below.

The principal question raised by the appellants has reference to the
interpretation of Act No. 3176, passed by the Philippine Legislature on
November 24, 1924, amending section 685 of the Code of Civil Procedure.

The appellants allege that the present action was improperly brought
and contravenes the aforesaid Act, since, the proceedings for the
settlement of the intestate estate of the deceased Escolastica Antonio
having been instituted on February 20, 1919 (years before the passage
of Act No. 3176), the property left by her should not be governed by
this Act, which, being subsequent to the death of the deceased, cannot
have a retroactive effect.

In the case of Uy Coque vs. Navas L. Sioca (45 Phil., 430),
the majority of this court held that, “while a husband has the power to
dispose of property pertaining to the conjugal partnership either
during the life of his wife or afterwards, nevertheless where a
transfer of conjugal property is made by the husband upon a fictitious
consideration for the purpose of defrauding the wife and her collateral
heirs, such transfer is invalid, and its nullity will be declared in an
action instituted by the heirs of the wife after her death. But in such
case the nullity only extends to that interest in the property which
would have pertained to the heirs if the transfer had not been made.
The transferee under such a conveyance acquires the interest of the
husband as well as his usufructuary right in the share of his wife. An
action by the collateral heirs of the wife can be maintained against
the husband and his vendees to compel liquidation of the conjugal
estate in conjunction with an action to declare the nullity of the
conveyances made in fraud of their rights.”

It should now be noted, that even under the doctrine laid down in Nable Jose vs.
Nable Jose (41 Phil., 713), which recognizes unlimited powers in the
surviving, husband to dispose of the property of the conjugal
partnership, the hereditary right of the predeceased spouse’s relatives
was secured when it was required as a condition for the validity of the
transfers the husband may make of the common property, that said
transfer be not made in fraud of the rights of the deceased spouse.

And in order to give a greater protection to the rights of the
heirs, the Legislature deemed it proper to amend section 685 of Act No.
190 by Act No. 3176, which provides:

“SEC. 685. When the marriage is dissolved by the
death of the husband or wife, the community property shall be
inventoried, administered, and liquidated, and the debts thereof shall
be paid, in the testamentary or intestate proceedings of the deceased
spouse, in accordance with the provisions of this Code relative to the
administration and liquidation of the estates of deceased persons, or
in an ordinary liquidation and partition proceeding, unless the
parties, being all of age and legally capacitated, avail themselves of
the right granted to them by this Code of proceeding to an
extrajudicial partition and liquidation of said property.

“In
case it is necessary to sell any portion of said community property in
order to pay the outstanding debts and obligations* of the same, such
sale shall be made in the manner and with the formalities established
by this Code for the sale of the property of deceased persons. Any
sale, transfer, alienation or disposition of said property effected
without said formalities shall be null and void, except as regards the
portion that belonged to the vendor at the time the liquidation and
partition was made.”

In the case of Cruz vs. De Jesus (5& Phil., 870),
interpreting the same law, we said: “It is to be noted that this legal
provision establishes two methods of liquidating the property of a
conjugal partnership, if the marriage is dissolved by the death of one
of the spouses: the first by a testate or intestate proceeding
according to whether the deceased died with or without a will; and the
other by an ordinary proceeding for liquidation and partition.

“According to the legal provision quoted above, when
the marriage is dissolved by the death of the wife, the legal power of
management of the husband ceases, passing to the administrator
appointed by the court in the testate or intestate proceedings
instituted to that end if there be any debts to be paid, and when there
is no debt pending, the liquidation and partition may be made in an
ordinary proceeding for that purpose.”

It is thus seen that the amendment introduced by this Act consists
in authorizing the institution of testate or intestate proceedings for
the settlement of the estate of a deceased spouse, or of an ordinary
action for the liquidation and partition of the property of a conjugal
partnership. Prior to the amendment, the settlement of a conjugal
partnership was carried out in accordance with the provisions of the
Civil Code and section 685 of the Code of Civil Procedure (before it
was amended), as held in Alfonso vs. Natividad (6 Phil., £40); Falcon vs. Manzano (15 Phil., 441); Nable Jose vs.
Nable Jose (41 Phil., 713). But after the amendment, in addition to the
method provided in the former laws cited, the liquidation of the
conjugal property may also be made in the testate or intestate
proceeding concerning the estate of the deceased spouse.

It is true that Escolastica Antonio, the second wife of Francisco
Urquiza, died on December 8, 1918; but it is no less true that the
liquidation of that conjugal partnership to date is still pending, and,
being so, we believe that Act No. 3176, which establishes a new method
of makifeg said liquidation, is applicable to the present case, it
being no bar that Escolastica Antonio died before the passage of the
said law.

Wherefore, we are of the opinion that this case involving a law of a
procedural character such as Act No. 3176, the same is applicable to
the instant case of administration of the estate of the deceased wife
for the liquidation of the conjugal partnership; and we are further of
the opinion that when it is alleged that the husband transferred
property belonging to the conjugal partnership for a fictitious cause
or consideration for the purpose; of defrauding the deceased
Escolastica Antonio’s collateral heirs, the administrator appointed by
the court may ask for the annulment of said transfers in so far as they
relate to the property of the wife, as held in Uy Coque vs. Navas L. Sioca, supra.

As to whether the transfers of the conjugal property made by
defendant Francisco Urquiza are legal or illegal, the court below held
that said transfers are fraudulent. And in order to point out the
evidence it took into account in arriving at this conclusion, the trial
court says:

“But the facts which the court had particularly in mind in holding that the transfers both of the boats Mirasol and Sampaguita
and of parcels 1, 2, 3, 4; 5, 7 and 8, described in paragraph 3′ of the
amended complaint, are fictitious, were the following: Let it be noted
that on February 7, 1920, it occurred to Anselma V. Angeles to sell the
boats Mirasol and Sampaguita to Alberto Aquino, and
that on the same date, it also occurred to Mariano G. Angeles to sell
the realty acquired from Francisco Urquiza, to Alberto Aquino, in
separate instruments but before the same notary and with the same
witnesses. It is noteworthy that it did not occur either to Anselma V.
Angeles or Mariano G. Angeles to sell to Alberto Aquino, property other
than that acquired from Francisco Urquiza. On October 20, 1922, after
the general elections of that year, Alberto Atfuino sold all the boats
and realty that had come from Francisco Urquiza to Estanislao Urquiza,
the former’s son by his first marriage, separate instruments being also
prepared for the boats and the realty, drawn up and ratified also on
the same day before the same notary and the same witnesses. And on
April :1S, 1923, Estanislao Urquiza sold the boats and realty derived
originally from Francisco Urquiza, and again separate instruments were
executed, also on the same dates, and before the same notary and the
same witnesses.”

This court has repeatedly held that the findings of fact of the
trial judge shall not be disturbed, unless the case contains facts
which had escaped the notice of the judge and which, had they been
taken into account, would have changed the result of the judgment.

However, in the instant case, we find that the trial judge failed to
consider the fact that for several years, from 1906 or 1907, defendant
Urquiza had been supporting a son of his by the deceased JEscolastica,
named Atanasio Urquiza, afflicted with leprosy, who died in 1911, and
that during those same years, that is from 1908 or 1909, he was also
supporting his aforesaid wife Escolastica Antonio, who also suffered
from that illness which caused her death towards the close of the year
1918. The fact of having to take care of persons thus lafflicted, his
desire to conceal them from the vigilance of health and municipal
authorities, several times changing their residence from one town to
another, his anxiety to secure their cure outside of the leper
institutions; all these naturally occasioned Francisco Urquiza, the
father and the husband, much expense, which obliged him several times
to borrow money of those near to him, and to his then sick wife,
Escolastica Antonio. It does not positively appear in what degree
Francisco Urquiza was related to Anselma V. Angeles and Mariano
Angeles. But it seems that they are distant relatives of said Urquiza,
though near enough to Escolastica Antonio, Mariano Angeles being her
baptismal brother, and she used to call him “Kuya Ano”, a familiar term
used by Filipinos for their near relatives who are older than they.

Under such circumstances, we find nothing extraordinary in the fact
that, a little before and after the death of Escolastica Antonio, the
husband, Urquiza, should have to liquidate his debts to the point of
selling the property acquired during his marriage with the deceased
Escolastiea, the boats on November 10,1918, and the lands on February
8, 1919, crediting in payment, the debts he had previously incurred.

The plaintiff, who attempted to impeach the validity of the
transfers made by defendant Francisco Urquiza to Anselma V. Angeles and
Mariano G. Angeles, did not adduce any direct evidence to show the lack
of cause or consideration in the said transfers; while the latter, as
they are evidenced by public documents, bear the presumption of a just
cause. Again, defendant Francisco Urquiza testified, and his testimony
has not been contradicted, that when he sold the boats to Anselma V.
Angeles on November 10, 1918, he received P1,500 from her which,
together with the sum of P2,000 which he had previously received
gradually ever since 1907 in order to defray the expenses incurred in
the cure of his wife and child, constituted the price of the two boats Mirasol and Sampaguita,
that is, P3,500. In like manner, defendant Urquiza testified that when
he sold the lands in question to Mariano G. Angeles on February 8,
1919, he received P1,000 which, added to the P6,000 which he had
received from the same gradually ever since 1909 as a loan which he
used for the cure of his wife and child, made up the price of said
lands,that is, P7,000.

That these properties, boats and lands, had been successively
transferred by Anselma V. Angeles and Mariano G. Angeles to Alberto
Aquino, and by the latter to Estanislao Urquiza, and by him, finally,
to defendant Silvino Rodriguez, does not by itself alone show the
presence of any fraud imputable to defendant Francisco Urquiza, not
only because the latter has disclaimed all participation in these
successive transfers, but also because there is no conclusive evidence
that he took part therein. And above all, as these transactions have
been evidenced by public documents, and it appearing that the boats are
duly registered in the customhouse in the name of Silvino Rodriguez,
just as the lands are registered wifth a certificate of title in favor
of the said Silvino Rodriguez, we do not believe that by the simple
testimony of witnesses, such as were presented by the plaintiff, said
titles may be declared void, and the legal effects they “should
produce, invalidated. And it should be noted that, according to the
documents exhibited in the case, the last purchaser, Silvino Rodriguez,
acquired said property from a person who also appeared as the owner
thereof in the public registers. Besides this, Silvino Rodriguez
testified in the case that he paid Estanislao Urquiza, its vendor, the
price of the lands and boats at the time when the instrument was
executed, and his testimony has not been rebutted by any evidence to
the contrary.

No matter how suspicious the successive transfers of the property in
question until it reached defendant Silvino Rodriguez may seem, we are
of the opinion that, considering all the circumstances of the instant
case, it cannot be concluded that the existence of fraud which may be
ground for annulling the aforesaid transfers has been duly established.

Having arrived at this conclusion, we believe it is unnecessary to
discuss the other questions raised by the appellants. And by virtue of
the premises, we are of opinion and so hold, that the judgment appealed
from should be reversed, and the defendants should be, as they are
hereby, absolved from the complaint, without special pronouncement as
to costs. So ordered.

Johnson, Malcolm, Ostrand, Johns, Romualdez, and Villa-Real, JJ., concur.