MANUEL ORIA Y GONZALES, plaintiff-appellant,
vs.
JOSE McMICKING, as sheriff of the city of Manila,
GUTIERREZ HERMANOS, MIGUEL GUTIERREZ DE CELIS, DANIEL PEREZ, and LEOPOLDO
CRIADO, defendants-appellees.
FACTS:
- In 1909, Gutierrez Hermanos brought actions against Oria Hermanos & Co. for the recovery of
P147,204.28, and P12,318.57.
- Eventually, the members of the company of Oria Hermanos & Co. dissolved their relations and
entered into liquidation.
- Tomas Oria y Balbas, as managing partner in liquidation, entered into a contract with the
plaintiff, Manuel Orio Gonzales, which said that the contract was for the purpose of selling and
transferring to the plaintiff all of the property of which the said Oria Hermanos & Co. was owner.
- Among the goods transferred by this instrument was the steamship Serantes, which is the subject
of litigation.
- In September 1910, the CFI ruled in favor of Gutierrez Hermanos and against Oria Hermanos &
Co. for the sum demanded in the complaint.
- The sheriff immediately demanded that Tomas Oria, as liquidator of the firm of Oria Hermanos &
Co. make payment of the said judgment, to which he replied that there were no funds with which
to pay the same.
- Thereupon, the sheriff levied upon the said steamer Serantes, took possession of the same, and
announced it for sale at public auction.
- Manuel Oria presented to the sheriff a written statement claiming to be the owner of the said
steamship, and to have the right of possession of the same by reason of the sale to him by Oria
Hermanos & Co. of all of the property belonging to said company, including the said steamer
Serantes.
- The sheriff thereupon required Gutierrez Hermanos to present a bond for his protection, which
having been done, the sheriff proceeded to the sale of the steamship.
- At the sale Gutierrez Hermanos became the purchaser, said company being the highest bidder,
and the sum which it paid being the highest sum bidden for the same.
- The plaintiff began the present action to the issuance of a preliminary injunction to prevent the
sale of the steamship, and the declaration that the plaintiff is the owner of said steamship and is
entitled to the possession of the same.
- Upon the trial, judgment was found in favor of the defendant and against the plaintiff.
- It is the contention of Gutierrez Hermanos that said sale is fraudulent as against the creditors of
Oria Hermanos & Co., and that the transfer thereby consummated of the steamship in question
was void as to said creditors and as to Gutierrez Hermanos in particular.
- Hence, the petition.
ISSUE:
- W/N the sale from Oria Hermanos & Co. to Manuel Oria y Gonzalez as against the creditors of
said company is valid.
RULING:
- The SC affirms the decision of the trial court.
- Nothing of value seems to have been delivered by the plaintiff in consideration of said sale and no
security whatsoever was given for the payments therein provided for.
- When the sale took place, the petitioner was merely a student without assets and without gainful
occupation.
- To turn over a business worth P274,000 to an "impecunious and vocationless youth" who knew
absolutely nothing about the business he received, is a proceeding so unusual.
- In determining whether or not a certain conveyance is fraudulent the question in every case is
whether the conveyance was a bona fide transaction or a trick and contrivance to defeat creditors,
or whether it conserves to the debtor a special right.
- It is not sufficient that it is founded on good consideration or is made with bona fide intent: it
must have both elements.
- If defective in either of these particulars, although good between the parties, it is voidable as to
creditors.
- The case at bar presents the following badges:
1. The fact that the consideration of the conveyance is fictitious or is inadequate.
2. A transfer made by a debtor after suit has been 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.
7. The failure of the vendee to take exclusive possession of all the property.
- The result is clear that the sale is executed to prejudice the rights of the creditors.
- Since the records show that there was no property with which the judgment in question could be
paid, the defendants were obliged to resort to and levy upon the steamer in suit.
- The court below was correct in finding the sale fraudulent and void as to Gutierrez Hermanos in
so far as was necessary to permit the collection of its judgment.
- For these reasons the judgment is affirmed, without special finding as to costs.
