GR L 67145; (December, 1984) (Digest)
G.R. No. L-67145, December 26, 1984
AUREA M. NERONA, et al., petitioners, vs. HONORABLE INTERMEDIATE APPELLATE COURT, et al., respondents.
FACTS
Petitioners, the heirs of the deceased Francisco Nerona, sought to rescind a deed of sale executed by respondent Alejandro Sueño in favor of his half-brother, Fausto Hortizuela. Sueño had been convicted of homicide for Nerona’s death and was ordered to pay P12,000.00 as indemnity. A writ of execution to enforce this indemnity was returned unsatisfied, as it was discovered Sueño had sold two parcels of land to Hortizuela.
The deed of sale was executed on April 26, 1974, and registered on April 29, 1974. This occurred after the criminal decision against Sueño was promulgated on March 29, 1974. The respondents defended the sale by presenting a private document dated May 27, 1972, purporting to show an earlier sale. Both the trial court and the Intermediate Appellate Court upheld the validity of the sale, denying the petition for rescission.
ISSUE
Whether the deed of sale executed by Alejandro Sueño in favor of Fausto Hortizuela is fraudulent and should be rescinded for being in fraud of creditors.
RULING
The Supreme Court granted the petition, reversed the appellate decision, and declared the sale null and void. The legal logic centers on the principles of fraudulent conveyance under the Civil Code. The Court found the timing of the formal sale and its registration, immediately following the finality of a judgment debt against the seller, to be highly suspicious and indicative of bad faith. The relationship between the parties as half-brothers further supported the inference of a collusive transaction designed to place the property beyond the reach of a legitimate creditor.
The Court explicitly rejected the defense based on the ante-dated private document, noting such documents can be easily fabricated and are not credible evidence of a prior transaction, especially when the formal acts of sale and registration conveniently followed the accrual of the judgment obligation. The ruling establishes that conveyances made under such circumstances, where the intent to defraud creditors is manifest from the sequence of events and the relationship of the parties, are void. The legal effect is to restore the property to the debtor’s estate for the benefit of the defrauded creditor.