Facts:

The case, G.R. No. 28496, titled Asia Banking Corporation vs. Maria Luisa Corcuera, et al., arises from transactions involving real estate and financial obligations. The plaintiff, Asia Banking Corporation, is a foreign corporation registered to conduct business in the Philippines. The primary defendant, Maria Luisa Corcuera, is the widow of Galo Lichauco and serves as the guardian for their minor children, who are also named as defendants along with Lichauco & Co., Inc., a domestic corporation. The events transpired between October 15, 1921, and April 23, 1923, concerning a property known as the Matabig hacienda.

The case stems from a claim by Asia Banking Corporation regarding an alleged fraudulent conveyance orchestrated by the Lichauco Corporation and Maria Luisa Corcuera. On January 16, 1922, the Lichauco Corporation purportedly executed a deed of transfer of a portion of real estate to Corcuera, claiming a consideration of P124,000, supposedly owed by the Lichauco Corp

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Facts:

Parties and Background

• Asia Banking Corporation, a foreign corporation duly licensed to transact business in the Philippine Islands, is the plaintiff and appellant.
• Defendants include Maria Luisa Corcuera—widow of Galo Lichauco and administratrix of his estate—and others who are either guardians of minor heirs or representatives of Lichauco & Co., Inc., a domestic corporation.
• The dispute involves issues related to the real estate (the Matabig hacienda) and the respective legal rights of the parties over the property.

The Deed of Conveyance and Alleged Fraud

• On January 16, 1922, the Lichauco Corporation, in apparent conspiracy with Maria Luisa Corcuera and other parties, executed and recorded a deed of conveyance.
• The deed purportedly transferred, for a consideration of P24,000, a portion of the property (specifically described in the complaint) from the Lichauco Corporation to Maria Luisa Corcuera, acting as administratrix.
• It was alleged that this transaction was orchestrated to defraud and delay the plaintiff in the collection of its indebtedness against the Lichauco Corporation.

Underlying Financial Transactions and Debts

• The deed recited that on January 9, 1920, the Lichauco Corporation had received P24,000 in cash as a loan from the late Galo Lichauco, with interest computed at 12% per annum (as evidenced by a deed acknowledged on January 20, 1920).
• This loan was secured by a mortgage on sixteen bancas, which, upon release with the consent of Galo Lichauco, became the basis for the security of a transaction with the China Banking Corporation.
• The deed was executed to secure the repayment of that preexisting, enforceable debt.

Discrepancies in Valuation and Comparisons with Prior Cases

• The property conveyed in the instant case comprised only 88 hectares, valued on the corporate books at P50,000, whereas a similar case (G.R. No. 28495) involved 410 hectares with a true consideration of P34,000.
• The central issue examined was whether the consideration of P24,000 was grossly inadequate in relation to the real value of the conveyed property, thereby constituting a fraud upon the creditors of the Lichauco Corporation.

Procedural History and Lower Court Decisions

• The lower court initially rendered judgment declaring the conveyance null and void, cancelled the certificate of title (Transfer Certificate No. 455) issued in favor of Maria Luisa Corcuera, and ordered a certificate of title to be issued in favor of the plaintiff.
• The counterclaim of Maria Luisa Corcuera was dismissed with costs against her.
• Subsequently, on a motion for reconsideration by Maria Luisa Corcuera, the lower court set aside its earlier judgment against her and affirmed her as the sole and exclusive owner of 23/25 parts of the hacienda Matabig.

Evidentiary Record and Corporate Accounts

• Evidence from the corporate account book (“suspense account”) showed transactions involving charges against and credit balances for Galo Lichauco, reinforcing the existence of the preexisting debt.
• The deed’s recitals and the corporate entries established that both the receipt of the loan and its security were integral parts of the transaction executed on January 16, 1922.

Issue:

Validity of the Deed

• Whether the deed executed by the Lichauco Corporation to Maria Luisa Corcuera, acting as administratrix, is legally valid or null and void due to a lack of proper consideration.
• Whether the deed constitutes a fraud upon the creditors of the Lichauco Corporation.

Adequacy of Consideration and Fraud Allegations

• Whether the consideration of P24,000, tied to a preexisting and enforceable debt, was grossly inadequate in relation to the true value of the conveyed property (88 hectares).
• Whether the inadequacy of the consideration can be legally assessed as evidence of fraudulent intent or if it merely reflects an honest difference of opinion as to price.

Impact of Preexisting Debt on the Transaction

• Whether the fact that the debt was due and payable at the time of the deed's execution exempts the transaction from being deemed a fraud under Article 1292 of the Civil Code.
• The legal implications of executing a deed to secure a debt that is already due and the consequent effect on its validity.

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Doctrine:

• (Subscriber-Only)