Victoriano Gatchalian v. Mamerto Manalo

Summary

This case involves a dispute over ownership of a house in Manila. The original owners, spouses Juan Domingo and Ignacia Maigui, defaulted on land rent and Mamerto Manalo obtained a judgment against them. After the judgment but before execution, the spouses sold the house to Victoriano Gatchalian, who made proper inquiries and acted in good faith. When Manalo attempted to levy execution on the house, Gatchalian filed a third party claim asserting ownership. The Supreme Court affirmed the lower court's ruling in favor of Gatchalian, holding that while Article 1297 of the Civil Code creates a presumption of fraud for post-judgment alienations, this presumption is rebuttable. Since Gatchalian acted in good faith and the evidence showed legitimate ownership, the presumption was overcome and rescission was barred under Article 1295.