Annex Republic of the Philippines REGIONAL TRIAL COURT Third Judicial Region Branch 74 Olongapo City Room 216 Hall of Justice, West Bajac-Bajac, Olongapo City Email Address: rtc1olq074@judiciary.gov.ph BLUEMAX TRADELINK, INC., CIV, CASE NO. 2021-0-24 Plaintiff, ~versus- YOUNG CHAE SEO, ef al., Defendants. . x ORDER This resolves the demurrer to the plaintiff's evidence filed by defendants Francis Lloyd Chua, Premium Megastructures, Inc. (“PMI”), and Premiumlands Corp. (*PLC”) (collectively and for brevity referred hereinafter as defendants Chua, et al.). ; There, defendants Chua, et al. moved for the immediate dismissal of the case on the ground that based on the complaint, the evidence, and applicable law, the plaintiff has shown no right to the rescission of the sale of the subject Property evidenced by the Deed of Sale dated 13 June 2019 between defendants Neoocean and PLC. Defendants Chua, et al., argue that the pieces of evidence presented by the plaintiff failed to show fraud and bad faith in the sale of the subject property. Specifically, the Judgment based on Compromise Agreement marked as Exhibit “H”, the email between Clark Zapata and Young Chae Seo marked as Exhibits “I” and at oe the Botolan Police Station Certification marked as Exhibit os the acknowledgment of defendant PLC in the assailed Deed of Absolute Sale marked as Exhibit “K”, the Letter dated 15 February 2018 of the plaintiff marked as Exhibit “N”, and the memorandum of the plaintiff's adverse claim on the TCT No. 044-2013001103 marked as Exhibit “Q” are insufficient to impute knowledge to defendant PLC of the issues or dispute on the subject property or of the plaintiff's interest thereon at the time of sale. Wes CB camscannerIn its comment, the plaintiff counters that defendant PLC is not an innocent purchaser for value for, at the time of the sale, it has knowledge of its dispute with defendant Neoocean (Comment, paragraph 15) and its adverse interest over the subject property (Comment, paragraph 29). Prior to resolving the merit of the demurrer, this court considers it material to categorically determine the nature of the instant action. This court agrees with defendant Chua, et al. when they suggest that even the plaintiff is perplexed at the nature of the instant action. Indeed, the plaintiff prayed for the “annulment of the Deed of Sale dated 13 June 2019” (Complaint dated 23 March 2021) while relying on the rules of rescission under Article 1381 of the Civil Code. Notably, the plaintiff, during pre-trial, submitted for resolution whether the “Deed of Absolute Sale was done in bad faith, hence, void and annullable (Pre-trial Brief dated 12 August 2021 and Pre-Trial Order dated 14 September 2021). After a review of the records, this court concludes that the action is not one for the annulment of Deed of Absolute Sale dated 13 June 2019 but to rescind a contract made in fraud of a creditor. The allegations of the complaint, the applicable law cited by the plaintiff, and the evidence presented point not to a defect in the assailed contract but to a design or scheme employed to defraud a creditor; hence, more compatible with an action to rescind contracts undertaken in fraud of creditors under Article 1381 of the Civil Code. Such procedural matter aside, this court now resolves)the merit of the matter at hand: whether upon the facts and law the plaintiff has shown right to the relief sought. Specifically, whether the plaintiff has shown right to the rescission of the Deed of Sale dated 13 June 2019. In seeking such relief, the plaintiff alleges in the Complaint: "XXX Neoocean fraudulently sold subject property to Premiumlands, thus, it must be rescinded. 22. Article 1381 (3) of the New Civil Code of the Philippines provided that contracts may be rescinded in the following instances: xx x (3) Those undertaken in fraud of creditors- when BP (59 CamScannerthe latter cannot in any manner collect the claims due them; 23. It bears to stress that Mr. Zapata and BT entered 2 separate agreements for the Purpose of terminating the JVA amongst them, Inded, the documents speaks for itself when its provisions involve the distribution of assets and liabilities between the parties, as well as the withdrawal of civil, criminal, and administrative cases filed against each other. 24. In good faith, BTI executed the compromise agreement, filed for its approval before the court, and performed the obligations therein. 25. Unfortunately, the parties tothe compromise failed to attach the referred agreements dated 08 July 2014, Instead of acknowledging the correlation ' of — the agreements. to the compromise agreement, Neoocean took advantage of the situation and reneged with their final obligation to sell Subject property to BTI. 26. When BTI moved to execute said agreement, RTC Br. 149 Makati City denied it a5 what was only approved according to the court was the compromise agreement (not Including the agreements despite its reference) and that the JVA was already terminated. In bad faith, Neoocean refused to comment on said agreement and they simply relied on the absence of the said document, 27. In addition, Neoocean surreptitiously disposed BTI of its possession over the subject Property in the early morning of 22 June 2018. As earlier mentioned, this became a subject of a different court case. Ironically, the fact of earlier possession by BTI was even acknowledge by no less than PMI’s project engineer. A copy of PMI’s letter dated 15 February 2018 is attached as Exhibit °N”. 28. When Neoocean acquired possession of the Subject property, it stated fencing-off the area thereby limiting entry points or access to BTI's Jetty port. Worse, Neoocean began encroaching and enclosing an area belonging to Mr. Discartin. Said encroachment issue Is now subject of the case pending before Iba- RTC 71, Zambales. 29. Worse, on 18 June 2019, PMI prevented BTI from accessing its jetty port by blocking and enclosing the remaining access point to BTI’s Jetty port. As mentioned, this incident. is Currently pending before Pasay-RTC Br. 112, For better appreciation of this Honorable Court, @ copy of the survey plan and we A CB camscannermaps with boundaries of the parties are attached herein as Exhibits “O” and “O-1" in Annex “A”, 30. On the other hand, Premiumlands and PMI. cannot feign-ignorance over BTI’s' rights over the subject land. Prior to the sale of the subject property on 13 June 2019, BTI had placed a notice of adverse claim with Entry No. 2016003938 over the same as early as 21 October 2016. Besides, Premiumlands acknowledged BTI’s claims in paragraph six of their deed of sale. 31. from the foregoing, Neoocean’s bad_faith consisted in defrauding BTI when 1) It entered Into an agreement to sell subject property to BILas part of the parties arrangement for the termination oftheir JVA when it ultimately had fg ntenian to-do sox 2yelanes-complance of ee ee ae noe able fa t suppost ion of. 7 ioush ossessi subject property to the detriment of BTI: 4) the i tation (4_in Makati Br._149; 5) enjoyin enefits_of_BTI's mpi the sald : 6) fencin and ultimately blocking all access points of BTI it and ‘subi i ve sessiol Therefor ocean an sremiumlands coni ist_be rescinded in favor of BTI (emphasis lies In support of the plaintiff's relief for the “(resolution) of the Deed of Sale (between) Neoocean and Premiumland, Inc. done maliciously and in bad faith), plaintiffs’ witnesses testified on and identified documents to prove that defendant Neoocean acted in bad faith a) for despite demands (Exhibits *I” and “I- 1”) it refused to comply with its agreement to sell the property; b) by taking the subject property by forcibly removing its personnel therefrom (Botolan Police Station Certification dated January 8, 2016 marked as Exhibit “3”); c) when it prevented the plaintiff from accessing the jetty port by fencing and erecting walls (“walling off”) the property; and, d) as it denied in court the existence of thelr agreement before the RTC Br. 149, Makati City. On the other hand, Zapata proffered evidence of defendant PLC’s knowledge of the plaintiff's interest on the property and, consequently, Its bad faith in purchasing the property, by identifying a) the annotation of adverse claim on defendant Neoocean’s “Px Bi camscannermade on October 21, 2016, or at least three years prior to the sale by Neoocean to PLC (Affidavit of Adverse Claim dated 19 October 2016 marked as Exhibit “CC” and Entry No. 2016003938 dated Qctober 21, 2016)-in TCT: No. 044- 2013001103 marked as Exhibit “Q”) and b) the statement made by them in the assailed Deed of Absolute Sale acknowledging that “the buyer [PLC] knows that the dispute is ongoing with Bluemax Trading Incorporation [the plaintiff herein] in the court regarding this land, and nothing about the seller is responsible for this” (Deed of Absolute Sale dated 13 June 2019 marked as Exhibit “K” and the statement quoted as Exhibit “K-1”). Based on the! féregoing, can the ‘court conclude a fraudulent transfer of the subject property? This court answers in the negative, For this court to deduce fraud, it is imperative for the plaintiff to show that attendant to the assailed sale are circumstances akin or at least approximate to the following badges of fraud: 1) the fact that the consideration of the conveyance Is fictitious or is inadequate; (2) a transfer made by a debtor after suit has begun and while it is pending against him; (3) a sale upon credit by an insolvent debtor; (4) evidence of large indebtedness or complete insolvency; (5) the transfer of all or nearly all of his property by a debtor, especially when he is insolvent or greatly embarrassed financially; (6) the fact that the transfer is made) between father and son, when there are present other. of the above circumstances; and (7) the failure of the vendee to take exclusive possession of all the property (Maria Antonia Siguan versus Rosa Lim, et al., G.R. No. 134685, November 19, 1999). This court found none in this case. Indeed, this court cannot imply fraud from the failure of defendant Neoocean to transfer the subject property to the plaintiff despite demands or in removing the plaintiff's personnel therefrom or even in enclosing its property. It is settled that fraudulent intent cannot be inferred’ from the debtor’s mere failure to comply with one’s obligation: (Security Bank Corporation versus Great Wall Commercial Press Company, Inc. G.R. No. 219345, January 30, 2017). Further, as the registered owner of the property, defendant Necocean has the right to enjoy and dispose of a thing (R.A. No. 386, Article 428), may exclude any person from the enjoyment and disposal of his property (R.A. No. 386, Article 429), and my 2 Ci camseannerenclose or fence his land or tenements by means of walls, ditches, live or dead hedges, or by any other means without detriment to servitudes constituted thereon (R.A. No. 386, Article 430). Neither can this court presume fraud in the transfer of the subject property. The law provides that unless evidence of some judgment has been rendered in any instance or some writ of attachment issued against, presumption of fraud does not arise (Article 1387 of the Civil Code). Absent proof of judgment or writ of attachment issued against defendant Neoocean, fraud in the transfer of the subject property cannot be presumed. The records aré also bereft of proof of complicity of defendant PLC to the alleged fraud committed by defendant Neoocean. Indeed, the plaintiff's burden is to adduce direct proof of such complicity to the fraud. To the mind of this court, Mere knowledge of the plaintiff's dispute with defendant Neoocean and its adverse interest over the subject property do not. warrant a finding of complicity. For, one, the Ecknowledgment of the dispute made by the parties in the Deed of Sale pertains to a negative warranty against eviction. Second, the notice of adverse claims, while seeking to. apprise third persons of an interest to the property adverse to the registered owner, issimply a device created by law, whose validity or efficaciousness remains subject to judicial determination in the proper forum (Section 70 of Presidential Decree No. 1520). Taken alone, and without the existence of other suspicious circumstances, the notice of the adverse claim in the Title of the subject property is insufficient to warrant a finding of complicity in the alleged fraudulent act. Notably, the plaintiff failed to allege the ultimate facts constituting its cause of action and the prerequisites that must be complied with before the institution of the action. Jurisprudence requires material averments and proof of the following requisites: (1) the plaintiff asking for rescission has a credit prior to the alienation, although demandable later; (2) the debtor has made a subsequent contract conveying a patrimonial benefit to a third person; (3) the creditor has no other legal remedy to satisfy his claim; (4) the act being impugned is fraudulent; (5) the third person who received the property conveyed, if it is by onerous title, has been .an accomplice in the fraud (Maria Antonia Siguan versus Rosa Lim, et al., G.R. No. 134685, November 19, 1999). we pe Ccamscamerand proof of the successive measures taken by the creditor must also be shown by the plaintiff (Anchor. Savings Bank versus Henry H. Furigay, et al., G.R. No. 191178, March 13, 2013). Failing which, the action for rescission-is-susceptible to dismissal either at the onset for failure to state a cause of action or after trial by demurrer. WHEREFORE, the demurrer to evidence filed by defendants Chua, et al. is granted, Accordingly, the action to Tescind the Deed of Absolute Sale dated 13 June 2019 is dismissed and severed from the action for specific performance and damages. SO ORDERED. |” Olongapo City, 02 November ta ROLINE Mt. (3 camScannerAnnex "B" Re off ‘public of the Philippi ippine: REGIONAL TRIAL court. Third Judicial Region Branch 74 Olongapo ci oe Room 216 Hall Of Justice, West Baas jac Email Address: rtclolaoy. ee City BLUEMAX TRADE Plaintiff, INK, INC, CIV. CASE NO, 2021-90-24 -versus- YOUNG CHAE SEO, et al, Defendants, X-. x ORDER This resolves the following: first, the Motion for Reconsideration dated 17 November 2022 filed by the plaintiff with the-comment of the defendants; and, the Motion for Clarification dated 22 November 2022 filed by defendants Chua, et al, sans the comment of the plaintiff and the other group of defendants. As the matters raised by the movant ih the Motion for Reconsideration were judicially passed upon in the assailed order, this court defers from disturbing its findings absent a substantial legitimate ground or reason justifying the reconsideration sought. On the other hand, the court sees no confusion requiring clarification in the said Order. Indeed, damages are recoverable from all types of obligations regardless of its source. WHEREFORE, the Motion for Reconsideration dated 17 November 2022 and Motion for Clarification dated 22 November 2022 are both denied for lack of merit. SO ORDERED. Olongapo City, 14 February 2023. CB camscanner