Source: https://bataspinoy.wordpress.com/2012/02/10/the-presumption-of-fraud-under-art-1387-of-the-civil-code-does-not-apply-to-registered-lands-if-the-judgment-or-attachment-made-is-not-also-registered/
Timestamp: 2018-06-24 13:05:42
Document Index: 280449561

Matched Legal Cases: ['Art. 1387', 'Art. 1387', 'Art. 1381', 'Art. 1387', 'Art. 1387', 'Art. 1387', 'Art. 1387', 'Art. 1387', 'Art. 1387', 'Art. 1387', 'Art. 1387']

The presumption of fraud under Art. 1387 of the Civil Code does not apply to registered lands if the judgment or attachment made is not also registered | Batas Pinoy
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As a general rule, whether the person, against whom a judgment was made or some writ of attachment was issued, acted with or without fraud, so long as the third person who is in legal possession of the property in question did not act with fraud and in bad faith, an action for rescission cannot prosper. →
The presumption of fraud under Art. 1387 of the Civil Code does not apply to registered lands if the judgment or attachment made is not also registered
Under Art. 1381(3) of the Civil Code, contracts, which were “undertaken in fraud of creditors when the latter cannot in any other manner collect the claims due them,” are rescissible. Art. 1387 of the Code states when an act is presumed to be fraudulent, thus:
The presumption of fraud established under Art. 1387 does not apply to registered lands IF “the judgment or attachment made is not also registered.”[46] In Abaya v. Enriquez,[47] Abaya was able to obtain a judgment against Enriquez for a sum of money, and the judgment was partially unsatisfied after Enriquez made a partial payment. The judgment and the writ of execution, however, was never annotated on the titles of the registered lands owned by Enriquez.[48] Subsequently, Enriquez sold the said lands. In an action for rescission instituted by Abaya, the Court ruled that the presumption of fraud does not apply as the judgment and the attachment have not been registered and annotated on the title.[49] The Court held:
Under Art. 1387 of the Code, fraud is presumed only in alienations by onerous title of a person against whom a judgment or attachment has been issued. The term, alienation, connotes the “transfer of the property and possession of lands, tenements, or other things, from one person to another.”[51] This term is “particularly applied to absolute conveyances of real property” and must involve a “complete transfer from one person to another.”[52] A mortgage does not contemplate a transfer or an absolute conveyance of a real property.[53] It is “an interest in land created by a written instrument providing security for the performance of a duty or the payment of a debt.”[54] When a debtor mortgages his property, he “merely subjects it to a lien but ownership thereof is not parted with.”[55] It is merely a lien that neither creates a title nor an estate.[56] It is, therefore, certainly not the alienation by onerous title that is contemplated in Art. 1387 where fraud is to be presumed.
In this very action, Bangkok Bank claims that when the spouses Lee executed the REM in favor of Asiatrust, the presumption of fraud under Art. 1387 became applicable. We hold in the negative. As We have plainly discussed, a mortgage is not that which is contemplated in the term “alienation” that would make the presumption of fraud under Art. 1387 apply. It requires a full and absolute conveyance or transfer of property from one person to another, such as that in the form of a sale. As elucidated earlier, a mortgage merely creates a lien on the property that would afford the mortgagee/creditor greater security in the obligation of the mortgagor/debtor. This being so, as the REM is not the alienation contemplated in Art. 1387 of the Code, the presumption of fraud cannot apply.
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