G.R. No. L-17884 - Gaspar vs. Dorado

A residential lot identified as No. 170-H of subdivision plan Psu-39949 in the district of Tanque, City of Roxas, covering an area of 391 square meters, was originally partly owned by Vicente Alamodin.
On January 4, 1956, Alamodin sold his undivided half interest in the lot to Adolfo Gaspar, which was duly inscribed in the land registry and annotated on Transfer Certificate of Title T-1942 on February 15, 1956.

Prior to the finalization of the land transactions, a complaint for collection of a sum of money was filed in November 1955 in the Municipal Court of Iloilo City by C. N. Hodges against Alamodin and co-defendants.
Judgment in favor of Hodges was rendered on February 27, 1956, which led to an order for execution by the Municipal Court on August 3, 1956.

On October 17, 1956, following the execution order, the Provincial Sheriff of Capiz, Leopoldo Dorado, conducted a public sale of the undivided half portion of lot No. 170-H, still titled in Alamodin’s name, and sold it to C. N. Hodges for P2,614.53.
The Sheriff’s certificate of sale was executed on October 29, 1956, and was later confirmed by a definite deed on January 9, 1959, both in favor of Hodges.
Adolfo Gaspar, after the levy on execution, filed a third-party claim with the Provincial Sheriff on October 8, 1956, despite Hodges having secured an indemnity bond through Visayan Surety & Insurance Co.

On February 14, 1957, Gaspar commenced the present action, initially claiming exclusive ownership based on the prior registered sale and requesting modest damages (expenses, attorney’s fees, and moral damages).
Prior to trial, Gaspar was permitted by the trial court to amend his complaint—which originally sought damages—to instead expressly pray for the annulment of the Sheriff’s sale in favor of Hodges.
On February 25, 1959, the Court of First Instance of Capiz ruled that the prior sale to Gaspar was valid, and that the Sheriff’s sale executed in favor of Hodges was null and void.

Whether the Court of First Instance had proper jurisdiction despite the original complaint seeking recovery of damages for an amount reportedly less than P2,000.00 (a sum typically reserved for the Justice of the Peace or Municipal Courts).
Whether the subsequent amendment of the complaint, which altered the prayer from damages to annulment of sale, affected the inherent jurisdiction of the court.

Whether the prior sale to Gaspar should be set aside on the basis that it was allegedly executed in fraud of Hodges pursuant to Article 1387 of the Civil Code.
Whether the single circumstance (the sale being effected after suit had been commenced against Alamodin) was sufficient to establish fraud under the enumerated badges in Oria vs. McMicking.

Whether the valid registration of the sale in favor of Gaspar prior to the levy on execution negated any claim regarding a fraudulent sheriff’s sale in favor of Hodges.