ELADIO ALPUERTO, plaintiff-appelle, Llenos, was aware of this litigation from the beginning.

On January 27, 1913, or about six

vs. months after the alleged sale of the property in question to Eladio Alpuerto judgment was
JOSE PEREZ PASTOR and MANUEL ROA, provincial sheriff of Cebu, defendants- rendered in said action in favor of the plaintiff for the sum of P3,789.13, with interest and
appellants. costs. This judgment was affirmed upon appeal to the Supreme Court on November 20,
1914. 1 An execution was thereafter issued on April 12, 1915, from the Court of First Instance
Jose Martinez de San Agustin for appellants. upon said judgment was levied upon the property in question as the property of Juan Llenos.
Gullas & Briones for appellee. Before the sale was effected the plaintiff herein, Eladio Alpuerto, notified the sheriff that he
claimed the property as his own. Nevertheless, the sheriff proceeded under indemnification
and sold the property at public sale to Jose Perez Pastor for the sum of P1,100.
STREET, J.:

The case stated in the cross-complaint as a ground of relief to the defendant has its basis in
The three parcels of real property which constitutes the subject matter of the contention in
the rule stated in subsection 3 of article 1291 of the Civil Code, which declares generally
this case formerly belonged to Juan Llenos, and both the interested parties in this action
that a contract executed in fraud of creditors is subject of rescission; and upon this
claim titled under, the plaintiff as party in possession under a contract of sale with pacto de
issue the burden of proof is of course upon Pastor, as the party assailing the transaction,
retro, and the defendant as purchaser at a public sale under an execution directed against
to show that the transfer was fraudulent; though it should here be remembered that proof on
Llenos. the plaintiff, Eladio Alpuerto, asks the court to make a declaration against the
this point may be accomplished by the aid of presumptions, as in other cases.
defendant, Jose Perez Pastor, to the effect that the plaintiff is the owner thereof in full and
absolute dominion. He also prays that the sale of the property effected by the sheriff, Manuel
Roa, to said defendant be declared null. The argument against the validity of the conveyance from Juan Llenos to Eladio Alpuerto is
based on two propositions, namely: (1) that said conveyance must, under the second
paragraph of article 1297, in connection with article 1227, of the Civil Code, be presumed to
The defendant Pastor denies the right of the plaintiff to the relief sought, and asserts that the
be fraudulent; and (2) that furthermore is shown by the evidence to have been fraudulent in
transaction by which the plaintiff claims to have acquired title was simulated or fictitious and
fact.
that the supposed conveyance was effected for the purpose of defrauding the defendant as
creditor of Juan Llenos. This defendant therefore in turn prays the court to declare that he
himself is the true owner of the property and that a judgment be entered condemning the The second paragraph of article 1297 of the Civil Code says that a transfer of property made
plaintiff to surrender possession to him. From a judgment entered in the Court of First by one against whom a condemnatory judgment has been pronounced in either instance is to
Instance of Cebu in favor of the plaintiff , the defendants have appealed. It appears that, be presumed fraudulent. The cardinal question on this branch of the case is therefore this.
pending the proceedings, the defendant Pastor has died and an administrator, Eustaquio Was the transfer in question made after a judgment had been entered against Juan Llenos in
Lopez, has been substituted in his stead. Throughout the opinion, however, Pastor, the name either instance? This in turn depends upon the question whether the contract of sale shall be
of the original party defendant, will be used in referring to the interest now represented by the considered effective as from the date upon which it purports to have been executed (July 3,
administrator. 1912) or from the date when it was acknowledge before a notary public (December 3, 1914)
for in the interval between these two dates final judgment had been rendered against Juan
Llenos both in the Court of First Instance and in the Supreme Court.
The plaintiff claims by virtue of the document (Exhibit A), which purports to be a contract of
sale with the privilege of repurchase. It recites a consideration of P2,500 the payment of
which is acknowledged; and the stipulated period within which is acknowledge; and the The solution of the problem thus presented requires us to consider the combined effect of
stipulated period within which the vendor may repurchase the property is fixed at two years. articles 1225 and 1227 of the Civil Code. Article 1225 declares that a private document
This documents is signed by the two contracting parties (Juan Llenos and Eladio Alpuerto) legally recognized shall have, with regard to those who sign it and their privies
and is attested by two subscribing witnesses. It purports on its face to have been executed on (causahabientes), the same force as a public instrument.
July 3, 1912; just it was not acknowledged before a notary until December 3, 1914. The
property in question is assessed for the purposes of taxation at P5,000 or P6,000; and is The expression "legally recognized" (reconocido legamente), as here used, must be taken to
worth more than twice the amount which the plaintiff claims to have paid for it. mean recognized, or acknowledged by the person or persons, executing or emitting the
document-in this case the vendor, Juan Llenos, and the vendee-Eladio Alpuerto. The act of
At the time of the supposed sale to Eladio Alpuerto there had been pending for nearly two legal recognition occurred, we assume, when the document was signed by parties and
years, in the Court of First Instance of Cebu, an action in which Jose Perez Pastor was delivered in the presence of the attesting witnesses, who were called upon to bear witness to
plaintiff and Juan Llenos was defendant. In this action the plaintiff sought to recover from the transaction.
Juan Llenos a considerable sum of money; and Eladio Alpuerto, as son-in-law of Juan
Concerning the meaning of the expression "privies" (causabientes), in this article, the died upon a certain dated subsequent to that upon which the instrument purports to have
following passage is found in the Commentary of Manresa: been executed. In this case the instrument can take effect, as against third persons, only from
the death of the deceased signatory party. In this case the instrument can take effect, as
The said word denotes the idea of succession, not only be right of heirship and against third persons, only from the date when the document was filed in court, this being
testamentary legacy, but also that of succession by singular title, derived form considered to be delivery to a public official by virtue of his office.
acts inter vivos, and for special purposes; hence, an assignee of a credit, and one
subrogated to it, etc., will be privies; in short, he, who by succession is placed in the All of these illustrations have reference to the situation where the document itself contains
position of one of those who contracted the juridical relation and executed the private only evidence before the court bearing upon the date of its original execution; and the
document and appears to be substituting him in his personal rights and obligations, is execution of the instrument is supposed to be proved by force of the act of notarial
a privy. (Manresa, Codigo Civil, pp. 492 and 492.) acknowledgment or by proof that the names of the parties signed to the document are
genuine. It must be borne in mind in this connection that article 1227 is not primarily or
Under the interpretation thus placed upon the meaning of the term "privies", it is clear that exclusively concerned with instruments which after being executed originally as private
Jose Perez Pastor, the purchaser at the public sale under an execution directed against Juan documents are at a later date elevated to the status of public documents. On the contrary, it
Llenos, must be considered a privy or successor in interest of the execution debtor. He is deals primarily with private documents, and the instrument in question may at all times
therefore undoubtedly bound by the instrument which conveyed the property to Eladio remain a private document is not converted into a public document either by the death of one
Alpuerto — and this from the date of the execution of that instrument as a private document- of the signatory parties or by the fact that it is delivered to a public official by virtue of his
unless this result is prohibited by article 1227 of the Civil Code, which reads as follows: office. The due execution of such instruments must therefore be proved when they are
introduced in court, if not made self-proving by notarial acknowledgment, which operate to
raise them to the status of public documents.
The date of a private instrument shall be considered, with regard to third persons,
only from the date on which it may have been filed or entered in a public registry,
from the date on which it may have been delivered to a public official by virtue of his The commentator Manresa, discussing article 1227, observes with discernment that there
office. may be other facts than those mentioned in said article which be received as determinative of
the date from which the instrument should be considered to be effective against third person.
Thus, if it should appear that, subsequent to the date upon which the document purports to
In considering this article it is important to bear in mind that it has reference merely to the
have been executed, one of the signatory parties had lost his penhand by amputation, this
probative value of the document with respect to the date of its execution, and is not intended
should be accepted as being fully conclusive that the instrument was in fact executed before
to lay down any rule concerning the efficacy of the act or acts evidenced by the document.
such occurrence. (Manresa, Codigo Civil, vol. 8 p. 503.) In the same connection Manresa
(Manresa, Codigo Civil, vol. 8, p. 501.) The importance of the rule here declared is therefore
says that if a third person is affected with notice of the existence of a private document or by
most conspicuously revealed in the situation where the document itself contains the only
any act of his own recognizes its existence, it will have effect, as against him, from the date of
competent evidence before the court bearing upon the date upon which the instrument in
such notice or recognition. (Opus citat., id.) These observations all go to show that article
question was executed as a private document.
1227 states a presumption which may be rebutted.
This can be most conveniently exhibited by means of illustrations based on the language of
The question then arises. Is there anything in article 1227, or elsewhere, which prohibits the
the text itself. For instance, let it be supposed that a document is produced bearing the
introduction of the testimony of attesting witnesses, or other persons who may be present
signatures of the parties who participated in it and purporting to have been executed upon a
when a private document is executed, to prove that the act was accomplished upon the date
certain date, prior to the date upon which the document was filed or inscribed in a public
stated therein to be date of its execution? We are of the opinion that such testimony is
register. In such case the instrument can take effect, as against third persons, only from the
admissible, even as against third parties.
date when it was so filed or inscribed in a public register. It is, however, proved that one of
the signatory parties has died upon a certain date subsequent to that upon which case the
instrument can take effect, as against third persons, only from the date of the death of the This conclusion is fully supported by the opinion of the supreme court of Spain in the case of
deceased signatory party. Again, be it supposed, a document is produced in court bearing the Alvarez vs. Yañez. (177 Juris, Civil, 663, decided April 16, 1910). The facts in that case were
signatures of the parties and purporting to have been executed upon a certain date. The that by private documents dated respectively August 2 and August 3, 1908, Alvarez
instrument has at no time been elevated into a public document and it is not shown that either purchased four tracts of land. On August 17, of the same year Carlos Vega sold, by public
of the signatory parties is dead. In this case the instrument can take effect, as against instrument, to Yañez several tracts were adjacent to part of the land purchased by Alvarez
third persons, only from the date of the death of the deceased signatory party. Again, who, upon learning of the sale, brought his action, under article 1523 of Civil Code, to be
be it supposed, a document is produced in court bearing the signatures of the parties has subrogated to the buyer, exercising his right of retracto legal. The defendant answered that
on August 17, 1908, plaintiff was not the owner of any land adjacent to that acquired on that
date by defendant the contention being that the private documents upon which the complaint document, might lose those rights by reason of the happening of some one of the
was based, in addition to the fact that they are not proof of ownership, were not presented for occurrences mentioned in article 1227. The contrary conclusion is evidently the proper one,
the payment of the tax on real estate, which was fourteen days after defendant purchased the that is, that if a party has rights under an instrument, provable as a private document, and it is
properties in contest . . . . so proved, it will prevail from the true and proven date of its execution with all the effect
attributable to it under article 1225.
The trial court permitted plaintiff to produce witnesses for the purpose of proving that the
private documents relied upon by him were in fact executed and delivered upon the dates The expression "third parties" (terceros) as used in article 1227, evidently means persons
therein recited and that plaintiff went into possession under them, and upon that evidence who have not intervened in the execution of the document. It has been so interpreted by the
made finding in accordance with plaintiff's contentions, and held that the right to take over the supreme court of Spain and by this court. (Lao Simbieng vs. Palencia, 18 Phil. Rep., 325,
purchase retracto existed. The defendant appealed to the supreme court of Spain, and 328; Easton vs. E. Diaz & Co. and Sheriff of Albay, 32 Phil. Rep., 181; decision of the
argued that by its ruling the Audiencia had disregarded article 1227 of the Civil Code, the supreme court of Spain of April 16, 1910, already cited.) Manresa is therefore in error in
specific contention being that as against persons who are not parties to them private supposing that it has the more limited meaning of persons who have not intervened in the
documents must be treated as though their existence commenced only from the date upon execution of the document and are neither heirs nor successors in interest of those who
which they are made of public record. This contention was overruled, the Court saying: signed the same. (Manresa, Codigo Civil, vol. 8, p. 501.)

It cannot be denied that the appellant Constantino Vega is to be regarded as a third In the case now before us the two witnesses examined with reference to the execution of the
person, because he was not a party to the two contracts of sale by virtue of which document in question testify that it was originally executed and delivered on July 13, 1912,
Vicente Alvarez acquired from Ildefonso Alvarez the ownership of the three tracts of the date stated upon its face. For the purpose of disposing of this branch of the case without
country real estate from which he derives his right to be subrogated as purchaser of further discussion, we provisionally accept this statement as true and deduce the conclusion
our other tracts adjacent thereto sold, with others, by Carlos Vega to the defendant that he presumption stated in paragraph 2 of article 1297 of the Civil Code is not applicable.
by public instrument dated August 17, 1908. Nevertheless, it is not to be inferred from
this fact as appellant contends, that the legal dates of the two first contracts, This brings us to the question whether the transaction evidenced by Exhibit A should be
evidenced by private documents, are not those which are recited therein, but that as pronounced fraudulent in fact. Upon turning to the evidence for the purpose of determining
regards third persons, in accordance with Art. 1227 of the Civil Code, they must be this question, the following circumstances are revealed, namely; (1) the grantee is the son-in-
regarded as dated on the day . . . on which they were noted in the tax office. That law of the grantor; (2) at the time conveyance is made an action is pending against the
article established a legal presumption which must yield to contrary evidence, and the grantor to recover several thousand pesos of money; and of the pendency of this action the
trial court, basing its conclusion on the testimony of the witnesses, has established grantee has full knowledge; (3) the debtor has no other satisfied (4) the consideration for the
the finding, which we cannot disturb, that the dates recited in these documents are transfer is less than half of the value of the property in question. These circumstances are
the true dates upon which the contracts were made. familiar badges of fraud, and their combined effect is such, we think, as to raise a
presumption of fraud, even apart from the legal presumption expressed in article 1297, and to
Clearly articles 1225 and 1227 should be construed in such manner as to harmonize with impose upon the vendee the burden of proving the bona fides of the transaction by a
each other and to give effect, so far as possible, to the legislative intent expressed in each; preponderance of evidence and to the satisfaction of the court.1awph!l.net
and the only interpretation of article 1227 which can be adopted consistently with the
meaning of article 1225 is that the rule announced in article 1227 has reference exclusively to We are of the opinion that the proof adduced not only fails to remove the imputation of fraud
the situation where there is no accredited evidence before the court, independent of the thus cast upon the transaction but strongly tends to engender the suspicion that the
recitals of the document itself, showing the date upon which it was in fact executed. transaction was wholly fictitious. It is true that both the plaintiff himself and Simon Batuigas,
one of the subscribing witnesses, declared in the clearest terms that the transaction took
It has been settled in many decisions that a document which originates as private document place on July 3, 1912, as claimed; that two thousand pesos of the money charged hands in
and never arises above that status will, under article 1225, be given full effect as such. the act; and that the balance of the consideration consisted in the satisfaction and released of
(Samson vs. Salvilla and Sierra, 12 Phil. Rep., 497, 505; Tanguinot vs. Municipality of Tanay, the debt for five hundred pesos owing from Juan Llenos to Eladio Alpuerto. It should not
9 Phil. Rep., 369, 401; Guillermo vs. Mantiezo, 8 Phil. Rep., 368, 372; Irureta, escape notice that neither Juan Llenos nor the other attesting witness, Geronimo Godinez,
Goyena vs. Tambunting, 1 Phil. Rep., 490, 493.) It follows that article 1227 does not, as were examined as to the circumstances attending the transaction; and no explanation is
against the signatory parties and their successors in interest, postpone the operation of an given as to why these witnesses were not produced.
instrument, proved as private document, if it is shown by competent evidence that it was in
fact executed upon the date recited therein as the date of its execution. If this were not true,
the result would be that a person having rights under an instrument, probable as a private
Where the law imposes the burden of proof upon the party to established the bona fides  of retro could be as an instrument to shield parties in their efforts to defraud creditors. this
such a transaction as this, against the presumption of the fraud, it is his duty, if the experts to cannot be permitted.
be believed, to lay before the court, so far as is within his power, a complete and true
revelation of all circumstances surrounding the affair; and where he supresses evidence or In the connection reliance is placed by the appellee upon the case of Chiong Veloso vs. Ro
negligently falls to call a witness supposed to know the facts, it may be presumed that the and Levering (37 Phil. Rep., 63); and it is urged that this decision affords support for the view
testimony of the witness, if adduced, would be unfavorable. that the transaction in question, having been accomplished by means of contract of sale with
facto de retro, cannot be considered fraudulent. It must be remember, however, that the
The plaintiff did not try to show where or how he acquired the two thousand pesos of ready original sale to contract of  pacto de retro was made in the case last cited to a purchaser for
money with which the purchased was made, and it does not appear that his resource are value and in good faith; and the question was not so much whether the original transaction
sufficient to enable him readily to command that sum. The proof of the existence of the debt was fraudulent as whether the failure of the debtor to redeem was fraudulent as whether, it
of five hundred pesos which Juan Llenos is supposed to have owed to the plaintiff and which being the theory of the defendant that the plaintiff had colluded with the debtor (who as a
constituted the balance of the purchase price over and above the amount which was paid in sister) and had redeemed the property with her money or for her benefit. Moreover, it was
cash rests almost exclusively in the statement of the plaintiff himself. Upon these important found in that case that at the time of the original conveyance the debtor had other property
points the testimony of Juan Llenos, if adduced, might possibly have shed something about more than sufficient to satisfy any judgment that might be recovered in the pending action.
what become of the money. the effect of these observations cannot be evaded by saying that
the defendant might himself have summoned Juan Llenos and examined him in court. The The conclusion to which we come is that the questioned transaction, if actually any simulated,
burden of the proof was on the plaintiff; and the defendant could not be expected to call of the was made in fraud of creditors and must be annulled. The judgment entered in this cause in
principles in the transaction which was impeached. the court below must accordingly be reversed; and judgment will be here entered dismissing
the complaint of Eladio Alpuerto and requiring in the complaint to Eustaquio Lopez, as
It is the course somewhat perplexing to a court to weight the uncontradicted testimony of a administrator to be a declared that the documents (Exhibit A), purporting to be a contract of
witness against mere presumption of fraud stands as a witness, thought mute, pointing the sale conveying the property in question from Juan Llenos to Eladio Alpuerto, acknowledged
finger of denunciation at the questioned transaction, and the imputation thus cast upon it can before a notary public upon December 3, 1914, was executed in fraud of creditors and the
only be removed by a full and honest revelation sufficient to convince the court that the same is hereby annulled. No special adjudication as to costs will be made. So ordered.
fraudulent intent did not exist.
Torres, Johnson, Carson and Avanceña, JJ., concur.
It is not to be denied that the secretary of a transaction like that now under consideration,
arising from the fact that the conveyance was affected by a private document, is a
circumstance tending to cast suspicion upon it. strong consideration of public policy require
that in such case the parties should held to strict proof of good faith; and this court cannot
give it approval to a doctrine which would permit the property of a failing and impleaded
debtor to be put beyond the reach of this creditors by a trick such as we believe was
attempted in this case. When a legal proceeding is ended and the sheriff goes to take
property of the debtor in execution, he is not infrequently met with the statutory that the
property now belongs to some other persons; and a document is produced to prove it which
nobody, except the immediate parties, ever heard of before. The courts must be executed if
they refused to listen with childish credulity to mentions of this character.

We do not overlook the circumstances that the supposed sale in this case was effected by a
contract with  pacto de retro; and where such a sale is made, as frequently occurs, to secure
money intended as a mere loan, the consideration is naturally less than the true value of the
property. In such case, if the bona fides  of the original contract is not under suspicion, the
fact that the consideration for the sale is less than the value of the property is not indicative of
fraud. But where the original sale is presumptively tained with fraud. But where the original
sale is presumptively tained with fraud, the entire transaction from the time of the making of
the contract until the consolidation of the title in the purchaser should be considered as a
whole, and absolutely transferred at once. otherwise the contract of sale with pacto de