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Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

G.R. No. L-25152 February 26, 1968

THE PROVINCIAL SHERIFF OF PAMPANGA, CIRILO D. CABRAL and ZACARIAS PELAEZ, petit ioners, vs.HON. COURT OF APPEALS and MARCIANO AGUSTIN, respondents.

Amado B. Reyes for petitioners. Geminiano F. Yabut, Rafael Monterey and Marcelo C. Lagman for respondents.

BENGZON, J.P., J.:

An action f or recovery of a sum of money was f iled on June 4, 1960, by Cirilo D. Cabral and ZacariasPerez against Elpidio Agustin and Manuel Flores in the Court of First Instance of Bulacan. 1

At said t ime, Elpidio Agustin was then a f urniture dealer under the business name and style "ModernFurniture Store" in Masantol, Pampanga. A big f ire, however, broke out on January 9, 1961, and totally burnedsaid f urniture store of Elpidio Agustin and its contents of several pieces of f urniture. As a result, ElpidioAgustin, on January 12, 1961, surrendered to the municipal treasurer his license to operate the store.

Not long thereaf ter, said def endant's brother, Marciano Agustin, put on the same site a new f urniturestore, adopting the name and style "Modern Furniture Store". On February 20, 1961, f or business purposes,Marciano Agustin secured a new license and privilege tax to operate the store. And on the same date, ElpidioAgustin verbally transf erred "Modern Furniture Store" to his brother Marciano Agustin.

Subsequently, on July 13, 1961, the Court of First Instance of Bulacan, in the af orementioned case,rendered judgment against Elpidio Agustin (who had conf essed judgment) and Manuel Flores jointly andseverally, f or P10,685.15 plus interest and P500.00 attorney's f ees.

Subsequently, the Court of Appeals af f irmed the decision and it became f inal and executory. A writ ofexecution was issued on April 20, 1963. Acting thereon, the Provincial Sherif f of Pampanga, on May 3, 1963,levied on the pieces of f urniture f ound in "Modern Furniture Store." Stating that said properties do not belongto judgment debtor, Elpidio Agustin but to him, Marciano Agustin f iled a third party claim with the sherif f . Anindemnity bond, however, was posted by the judgment creditors in the sherif f 's f avor, so he issued notice thatthe properties levied upon will be sold at public auction on May 18, 1963.

A day bef ore that, on May 17, 1963, Marciano Agustin f iled in the Court of First Instance of Pampangathe present action, against judgment creditors Cabral and Perez and the sherif f , to be declared owner of thepieces of f urniture levied upon, with preliminary injunction and damages. A writ of preliminary injunction wasissued enjoining the sherif f f rom proceeding with the sale.

Af ter the def endants answered and trial, the Court of First Instance rendered a decision that dismissedthe complaint. Plaintif f appealed to the Court of Appeals. On July 29, 1965, the Appellate Court rendered adecision reversing the lower court, and declaring Marciano Agustin owner of the pieces of f urniture listed inthe complaint, ordering def endants to pay him jointly and severally P2,000.00 moral and actual damages, andP500.00 attorney's f ees, and rendering permanent the injunction issued.

Appeal theref rom was taken to Us by def endants. At issue here is: Does Article 1387 of the Civil Codeon presumption of f raud apply? 1 ä w p h ï1 .ñ ë t

Appellants invoke said Article, which reads:

Art. 1387. All contracts by virtue of which the debtor alienates property by gratuitous tit le arepresumed to have been entered into in f raud of creditors, when the donor did not reserve suf f icientproperty to pay all debts contracted bef ore the donation.

Alienations by onerous tit le are also presumed f raudulent when made by persons against whomsome judgment has been rendered in any instance or some writ of attachment has been issued. Thedecision or attachment need not ref er to the property alienated, and need not have been obtained bythe party seeking the rescission.

In addition to these presumptions, the design to def raud creditors may be proved in any other

l a w p h il

In addition to these presumptions, the design to def raud creditors may be proved in any othermanner recognized by the law of evidence.

The provision in question applies only when there has in f act been an alienation or transf er, whethergratuitously or by onerous tit le. In the present case, the f inding of the Court of Appeals, which is f actual andtheref ore not proper f or Us to alter in this appeal, is that the store of Marciano Agustin is a new and dif f erentone f rom that of Elpidio Agustin. True, Marciano Agustin testif ied that "Modern Furniture Store" wastransf erred, verbally to him by Elpidio Agustin on February 20, 1961. As the Court of Appeals f ound, however,this ref erred to the business name and style, not to the store or its contents, as the store and contents werecompletely new, coming f rom the capital of Marciano Agustin, whereas Elpidio's store and its contents off urniture were destroyed totally by the f ire of January 9, 1961.

Since there was in f act no transf er of the store or its f urniture, Article 1387 af orementioned f inds noapplication. And appellants do not contend that the transf er merely of the name and style "Modern FurnitureStore" would be f raudulent. Such transf er has in the circumstances no ef f ect on Marciano Agustin's ownershipof the pieces of f urniture in question.

WHEREFORE, the appealed judgment of the Court of Appeals is hereby af f irmed, with costs againstappellants. So ordered.

Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Sanchez, Castro and Fernando, JJ., concur.Angeles, J., took no part.

Footnotes

1Civil Case No. 2197.

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