Facts:

The case involves Eladio Alpuerto as the plaintiff and Jose Perez Pastor, along with Manuel Roa, the Provincial Sheriff of Cebu, as defendants. The dispute revolves around three parcels of real property that originally belonged to Juan Llenos. Eladio Alpuerto claims ownership through a contract of sale with a "pacto de retro," asserting he has possession of the property. Conversely, the defendants claim ownership as a result of a public sale executed by the sheriff under an execution against Llenos. Alpuerto seeks a declaratory judgment affirming his outright ownership of the properties and demands that the sale to Pastor be annulled. Pastor counters by disputing Alpuerto's claims, alleging that the sale was a sham designed to defraud creditors, specifically aimed at protecting Llenos's assets from Pastor’s claims. The case was initiated in the Court of First Instance of Cebu, which ultimately ruled in favor of Alpuerto. Upon appeal, Pastor passed away, and Eus

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Facts:

Parties and Property Background

• The subject matter involves three parcels of real property originally owned by Juan Llenos.
• Two parties claim title derived from Juan Llenos:
• Plaintiff Eladio Alpuerto, who asserts ownership through possession under a contract of sale with pacto de retro.
• Defendant Jose Perez Pastor, who acquired the property at a public sale conducted by Sheriff Manuel Roa pursuant to an execution against Juan Llenos.
• The property was valued at more than twice the amount allegedly paid by the plaintiff.

The Transaction and Execution of the Contract

• The plaintiff’s claim is based on a document (Exhibit A) purporting to be a contract of sale with privilege of repurchase.
• Key details of Exhibit A include:
• A consideration of PHP 2,500, partially paid in cash and partially by settling a PHP 500 debt owed by Juan Llenos to the plaintiff.
• The contract provides a repurchase right limited to two years.
• Although the document bears the date July 3, 1912, it was not notarized until December 3, 1914.
• The document was attested by two subscribing witnesses.
• At the time the alleged contract was executed, there was pending litigation in the Court of First Instance of Cebu where:
• Jose Perez Pastor had instituted an action against Juan Llenos to recover a substantial sum of money.
• A judgment was rendered in favor of Pastor on January 27, 1913, affirming the debt and subsequently confirmed by the Supreme Court on November 20, 1914.
• An execution ordered on April 12, 1915, led to the property being levied and later sold at public sale, despite a prior notice by Alpuerto claiming ownership.

Procedural History and Contested Claims

• A judgment in the Court of First Instance favored Eladio Alpuerto.
• The defendants (including Pastor and Sheriff Roa) appealed from the lower court’s decision.
• During the pendency of the proceedings, defendant Pastor died, and his interests were subsequently represented by Administrator Eustaquio Lopez.
• Both parties faced competing claims:
• Alpuerto contended he was the true owner and that the public sale was void.
• Pastor (represented by Lopez) argued that the sale was valid and that the contract under which Alpuerto claimed title was either simulated or fictitious to defraud creditors.

Issue:

Determination of the Effective Date of the Private Document

• Should the contract of sale be regarded as effective from its alleged execution date (July 3, 1912) or the later notarization date (December 3, 1914)?
• How does the effective date influence the applicability of the legal presumption of fraud under Civil Code provisions (especially articles 1225, 1227, and 1297)?

Presumption and Demonstration of Fraud in the Transaction

• Was the transaction executed in fraud of creditors?
• Does the fact that the property was sold for considerably less than its market value and during pending litigation suffice to establish a presumption of fraud?
• What is the burden of proof required for the vendee to demonstrate the bona fides of the transaction?

Evidentiary and Procedural Considerations

• Can attesting witnesses or other secondary evidence be admitted to confirm the true execution date reflected in the private document?
• What weight should be given to the absence of testimony from certain key witnesses (e.g., Juan Llenos and one subscribing witness) in establishing the facts surrounding the transaction?

Public Policy and the Protection of Creditors’ Rights

• Does allowing the transaction to stand undermine the ability of creditors to satisfy judgments against the debtor?
• How should the court balance private contractual autonomy with the need to prevent fraudulent transfers that place a debtor’s property beyond reach of creditors?

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Doctrine:

• (Subscriber-Only)