CASE DIGEST

Topic: Rescissible Contracts

CASE TITLE: Cabaliw v. Sadorra

PETITIONER: ISIDORA L. CABALIW and SOLEDAD SADORRA

RESPONDENT: SOTERO SADORRA, ENCARNACION SADORRA, EMILIO ANTONIO, ESPERANZA

RANJO, ANSELMO RALA, BASION VELASCO, IGNACIO SALMAZAN, and THE
HONORABLE COURT OF APPEALS

DOCTRINE: Rescissible Contracts

Article 1381. The following contracts are rescissible:

(1) Those which are entered into by guardians whenever the wards whom they represent suffer
lesion by more than one-fourth of the value of the things which are the object thereof;
(2) Those agreed upon in representation of absentees, if the latter suffer the lesion stated in the
preceding number;
(3) Those undertaken in fraud of creditors when the latter cannot in any other manner collect
the claims due them;
(4) Those which refer to things under litigation if they have been entered into by the defendant
without the knowledge and approval of the litigants or of competent judicial authority;
(5) All other contracts specially declared by law to be subject to rescission. (1291a)

Note: Herein contract is rescissible by virtue of par. 3, Art. 1381 of the Civil Code.

RELEVANT FACTS:

 Petitioner Isidora Cabaliw was the second wife of Benigno Sadorra.

 They had a daughter named Soledad Sadorra, one of the petitioners in this case.
 The couple had acquired 2 parcels of land during their marriage.
 Later on, the husband abandoned the wife.
 Wife filed a case against the husband and the husband was ordered to provide monthly support to
his wife and daughter.
 Meaning, they were not in good terms anymore.
 Then, the husband secretly sold the said 2 lots to his son-in-law through 2 deeds of sale.
 This son-in-law was the husband of his daughter in his first marriage.
 Later on, Benigno Sadorra defaulted in his monthly obligation to support the petitioners.
 Petitioner sought court intervention, and the court authorized her to take possession of the two lots.
 That is when she discovered that the lost were already sold to his son-in-law in his first marriage.
 Petitioner filed a case again to her husband to recover the lands on the ground that the sale was
fictitious.
 But, Benigno died before the case was decided.
 Petitioner filed another case impleading Benigno’s children in the first marriage together with third-
parties who bought portions of the subject lots as respondents.
 In the latter case, petitioner prayed that:
o the deeds of sale executed by Benigno Sadorra be declared null and void
o defendant spouses Sotero and Encarnacion Sadorra be directed to yield the possession of
the lands in question
o said lands be ordered partitioned among plaintiffs and defendants who are children by the
first marriage of Benigno Sadorra in the proportions provided by law

Source of Contract: Two (2) Deeds of Sale

Was the Contract Rescinded? YES

ISSUES:
 1. WON there was fraud in the deeds of sale. – YES, there was fraud.
2. WON Art 1413 of the old Civil Code applies in this case. – NO, it does not apply.

ARGUMENTS

PETITIONER’S ARGUMENTS:
1.

RESPONDENT’S DEFENSES:
1.

RULING/S AS TO ISSUE/S

RTC’s COMMENTS:

CA’s COMMENTS:
Court of Appeals makes mention of Art. 1413 of the old Civil Code which authorizes the husband as
administrator to alienate and bind by onerous title the property of the conjugal partnership without the
consent of the wife, and by reason thereof, concludes that petitioner Isidora Cabaliw cannot now seek
annulment of the sale made by her husband.

SUPREME COURT’S RULING:

1. There was fraud. There was fraud even if the sale was made for a valuable consideration.

 Given that 7 months after the judgment for support, Benigno sold the lots to his son-in-law and he
never paid any part of his obligation to support the petitioners.
 Fraud was presumed in that circumstances.

The Court cited Article 1297 of the old Civil Code, the law applicable at that time:
“Contracts by virtue of which the debtor alienates property by gratuitous title are presumed to be
made in fraud of creditors. 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.”

SC: The presumption of fraud established by the law in favor of petitioners is bolstered by other indicia of
bad faith on the part of the vendor and vendee:
(1) The vendee is the son-in-law of the vendor. The close relationship between the vendor and the
vendee is one of the known badges of fraud (Regalado vs. Luchsinger & Co.).
(2) At the time of the conveyance, the vendee, Sotero, was living with his father-in-law, the vendor, and
he knew that there was a judgment directing the latter to give a monthly support to his wife Isidora
and that his father-in-law was avoiding payment and execution of the judgment.
(3) It was known to the vendee that his father-in-law had no properties other than those two parcels of
land which were being sold to him.
(4) Sotero secured the cancellation of the lis pendens on O.C.T. No. 1 and the issuance of a transfer
certificate of title in his favor, by executing an affidavit, wherein he referred to Isidora as "the late
Isidora Cabaliw” when he knew for a fact that she was alive.
(5) Sotero alleged that Civil Case 449 of the Court of First Instance of Nueva Vizcaya was decided in his
favor where in truth there was no such decision because the proceedings in said case were
 interrupted by the last world war.

2. Art 1413 of the old Civil Code does not apply. CA contends that Art. 1413 of the old Civil Code
authorizes the husband as administrator to alienate and bind by onerous title the property of the conjugal
partnership without the consent of the wife, and by reason thereof, concludes that petitioner Isidora Cabaliw
cannot now seek annulment of the sale made by her husband.

SC: Petitioners claims that the lack of consent of the wife to the conveyances made by her husband was
never invoked in the trial court.

 What was claimed was that the deeds of sale were executed to avoid payment of the monthly
support adjudged in her favor and to deprive her of the means to execute said judgment.
 Meaning, petitioner seeks relief not as an aggrieved wife but as a judgment creditor of Benigno.
 Therefore, Art. 1413 therefore is inapplicable.
 But even if it’s applicable, the result would be the same because the very article reserves to the wife
the right to seek redress in court for alienations which prejudice her or her heirs.

ADDITIONAL NOTES: