Rescissible Contracts: Oria vs McMicking

G.R. No. L-7003

Facts:
Gutierrez Hermanos filed an action for recovery of a sum of money against Oria
Hermanos & Co. and herein plaintiff filed an action for recovery also for the same
defendant. Before the institution of the suits, members of the Company dissolved
their relations and entered into a liquidation. Tomas Oria y Balbas acting in behalf
of his co-owners entered into a contract with the herein plaintiff for the purpose of
transferring and selling all the property which the Oria Hermanos & Co. owned
and among the goods stated on that instrument was the steamship Serpantes and
which the subject of this litigation. When the Trail Court resolved the action for
recovery filed by Gutierrez Hermanos and jugdment was in his favor, The sheriff
demanded to Tomas Oria y Balbas to make payment but the latter said there were
no funds to pay the same. The sheriff then levied on the steamer, took possession
of the same and announced it for public auction. Herein plaintiff claimed that he is
the owner of the steamer by virtue of the selling of all the properties of the said
Company.

Issue(s):
1. Whether or not there was a valid sale between Oria Hermanos & Co. to Manuel
Oria y Gonzales as against the creditors of the company.
2. Whether or not the sale was fraudulent.

Held:
At the time of said sale the value of the assets of Oria Hermanos & Co., as stated by
the partners themselves, was P274,000. The vendee of said sale was a son of
Tomas Oria y Balbas and a nephew of the other two persons heretofore mentioned
which said three brothers together constituted all of the members of said
company.The plaintiff is a young man of 25 years old and has no property before
the said selling. The court had laid down the rules in determining whether a there
has been fraud prejudicing creditors: 1) consideration of conveyance is fictitious;
2) transfer was made while the suit against him (Tomas Oria y Balbas) was
pending; 3) sale by insolvent debtor; 4) evidence of insolvency; 5) transfer of all
properties; 6) the sale was made between father and son; 7) and the failure of the
vendee to take exclusive possession of the property. The case at bar shows every
one of the badges of fraud.

Oria Vs McMicking
Source: www.lawphil.net

Art. 1387. All contracts by virtue of which the debtor alienates property by
gratuitous title are presumed to have been entered into in fraud of creditors, when
the donor did not reserve sufficient property to pay all debts contracted before the
donation.

FACTS
Gutierrez Hermanos filed an action for recovery of a sum of money against Oria
Hermanos & Co. and herein plaintiff filed an action for recovery also for the same
defendant. Before the institution of the suits, members of the Company dissolved
their relations and entered into liquidation. Tomas Oria y Balbas acting in behalf
of his co-owners entered into a contract with the herein plaintiff for the purpose of
transferring and selling all the property which the Oria Hermanos & Co. owned
and among the goods stated on that instrument was the steamship Serpantes and
which the subject of this litigation. When the Trail Court resolved the action for
recovery filed by Gutierrez Hermanos and jugdment was in his favor, The sheriff
demanded to Tomas Oria y Balbas to make payment but the latter said there were
no funds to pay the same. The sheriff then levied on the steamer, took possession
of the same and announced it for public auction. Herein plaintiff claimed that he is
the owner of the steamer by virtue of the selling of all the properties of the said
Company.

ISSUES
is the sale from Oria Hermanos to Manuel Oria y Gonzalez fraudulent against the
creditors of Oria Hermanos, making the transfer of the steamship void as to the
creditors, and as to Gutierrez Hermanos in particular?

HELD
At the time of said sale the value of the assets of Oria Hermanos & Co., as stated by
the partners themselves, was P274,000. The vendee of said sale was a son of
Tomas Oria y Balbas and a nephew of the other two persons heretofore mentioned
which said three brothers together constituted all of the members of said
company.The plaintiff is a young man of 25 years old and has no property before
the said selling. The court had laid down the rules in determining whether a there
has been fraud prejudicing creditors: 1) consideration of conveyance is fictitious;
2) transfer was made while the suit against him (Tomas Oria y Balbas) was
pending; 3) sale by insolvent debtor; 4) evidence of insolvency; 5) transfer of all
properties; 6) the sale was made between father and son; 7) and the failure of the
vendee to take exclusive possession of the property. The case at bar shows every
one of the badges of fraud.