Republic of the Philippines

SUPREME COURT
Manila
EN BANC

G.R. No. L-35702 May 29, 1973
DOMINGO D. RUBIAS, plaintiff-appellant,
vs.
ISAIAS BATILLER, defendant-appellee.
Gregorio M. Rubias for plaintiff-appellant.
Vicente R. Acsay for defendant-appellee.

TEEHANEE, J.:
In this appeal certified by the Court of Appeals to this Court as involvin purely leal
!uestions, "e affir# the dis#issal order rendered by the Iloilo court of first instance
after pre-trial and sub#ittal of the pertinent docu#entary e$hibits.
%uch dis#issal "as proper, plaintiff havin no cause of action, since it "as duly
established in the record that the application for reistration of the land in !uestion filed
by &rancisco Militante, plaintiff's vendor and predecessor interest, had been dis#issed
by decision of ()*+ of the land reistration court as affir#ed by final ,ud#ent in ()*-
of the Court of Appeals and hence, there "as no title or riht to the land that could be
trans#itted by the purported sale to plaintiff.
As late as ()./, the Iloilo court of first instance had in another case of e,ect#ent
li0e"ise upheld by final ,ud#ent defendant's 1better riht to possess the land in
!uestion . havin been in the actual possession thereof under a clai# of title #any
years before &rancisco Militante sold the land to the plaintiff.1
&urther#ore, even assu#in that Militante had anythin to sell, the deed of sale
e$ecuted in ()*. by hi# in favor of plaintiff at a ti#e "hen plaintiff "as concededly his
counsel of record in the land reistration case involvin the very land in dispute
2ulti#ately decided adversely aainst Militante by the Court of Appeals' ()*- ,ud#ent
affir#in the lo"er court's dis#issal of Militante's application for reistration3 "as
properly declared ine$istent and void by the lo"er court, as decreed by Article (/4) in
relation to Article (/)( of the Civil Code.
5he appellate court, in its resolution of certification of +* 6uly ()7+, ave the follo"in
bac0rounder of the appeal at bar8
9n Auust :(, ()./, plaintiff ;o#ino ;. Rubias, a la"yer, filed a suit to recover the
o"nership and possession of certain portions of lot under Psu-))7)( located in Barrio
<eneral =una, Barotac >ie,o, Iloilo "hich he bouht fro# his father-in-la", &rancisco
Militante in ()*. aainst its present occupant defendant, Isaias Batiller, "ho illeally
entered said portions of the lot on t"o occasions ? in ()/* and in ()*). Plaintiff
prayed also for da#aes and attorneys fees. 2pp. (-7, Record on Appeal3. In his
ans"er "ith counter-clai# defendant clai#s the co#plaint of the plaintiff does not state
a cause of action, the truth of the #atter bein that he and his predecessors-in-interest
have al"ays been in actual, open and continuous possession since ti#e i##e#orial
under clai# of o"nership of the portions of the lot in !uestion and for the alleed
#alicious institution of the co#plaint he clai#s he has suffered #oral da#aes in the
a#ount of P +,444.44, as "ell as the su# of P*44.44 for attorney's fees. ...
9n ;ece#ber ), ()./, the trial court issued a pre-trial order, after a pre-trial conference
bet"een the parties and their counsel "hich order reads as follo"s..
'@hen this case "as called for a pre-trial conference today, the plaintiff appeared
assisted by hi#self and Atty. <reorio M. Rubias. 5he defendant also appeared,
assisted by his counsel Atty. >icente R. Acsay.
A. ;urin the pre-trial conference, the parties have areed that the following facts are
attendant in this case and that they "ill no loner introduced any evidence, testi#onial
or docu#entary to prove the#8
(. 5hat &rancisco Militante clai#ed o"nership of a parcel of land located in the Barrio
of <eneral =una, #unicipality of Barotac >ie,o province of Iloilo, "hich he caused to be
surveyed on 6uly (--:(, ():/, "hereby he "as issued a plan Psu-))7)( 2E$hibit 1B13.
25he land clai#ed contained an area of (7(8:*.( hectares.3
+. Before the "ar "ith 6apan, &rancisco Militante filed "ith the Court of &irst Instance of
Iloilo an application for the reistration of the title of the land technically described in
psu-))7)( 2E$h. 1B13 opposed by the Director of Lands, the Director of Forestry and
other oppositors. Ao"ever, durin the "ar "ith 6apan, the record of the case "as lost
1
before it "as heard, so after the "ar &rancisco Militante petitioned this court to
reconstitute the record of the case. 5he record was reconstituted on the Court of the
&irst Instance of Iloilo and doc0eted as Land ase !o. R-"#$, GLR% Rec. !o. $&'$(.
5he Court of &irst Instance heard the land reistration case on Nove#ber (/, ()*+,
and after the trial this court dis)issed the application for registration. 5he appellant,
&rancisco Militante, appealed fro# the decision of this Court to the Court of Appeals
"here the case "as doc0eted as CA-<R No. (:/)7-R..
:. *ending the disposal of the appeal in CA-<R No. (:/)7-R and #ore particularly on
+une ,', ,#$", Francisco Militante sold to the plaintiff, Do)ingo Rubias the land
technically described in psu-))7)( 2E$h. 1A13. 5he sale "as duly recorded in the 9ffice
of the Reister of ;eeds for the province of Iloilo as Entry No. (:.4) on 6uly ((, ().4
2E$h. 1A-(13.
2N95E8 As per deed of sale, E$h. A, "hat Militante purportedly sold to plaintiff-
appellant, his son-in-la", for the su) of *(,---.-- "as 1a parcel of untitled land havin
an area 9f (//.)47+ hectares ... surveyed under Psu ))7)( ... 2and3 sub,ect to the
e$clusions #ade by #e, under 2case3 A-i.&#/, Land Registration ase !o. R-"#$,
G.L.R.%. !o. $&'$(, Court of &irst Instance of the province of Iloilo. 5hese e$clusions
referred to portions of the oriinal area of over (7( hectares oriinally clai#ed by
Militante as applicant, but "hich he e$pressly reconiBed durin the trial to pertain to
so#e oppositors, such as the Bureau of Public @or0s and Bureau of &orestry and
several other individual occupants and accordinly "ithdre" his application over the
sa#e. 5his is e$pressly #ade of record in E$h. A, "hich is the ourt of Appeals0
decision of (( 1epte)ber ,#$' confir)ing the land reistration court's dis)issal of
Militante's application for reistration.3
/. 9n %epte#ber ++,()*- the Court of appeals in CA-<.R. No. (:/)7-R pro#ulated
its ,ud#ent confir#in the decision of this Court in =and Case No. R-.)*, <=R9 Rec.
No. */-*+ "hich dis#issed the application for Reistration filed by &rancisco Militante
2E$h. 1I13.
*. ;o#ino Rubias declared the land described in E$h. 'B' for ta$ation purposes under
5a$ ;ec. No. -*-* 2E$h. 1C13 for ()*7C 5a$ ;ec. Nos. )*:: 2E$h. 1C-(13 and (44()
2E$h. 1C-:13for the year ().(C 5a$ ;ec. No. )-.- 2E$h. 1C-+13 for the year ()./, payin
the land ta$es under 5a$ ;ec. No. -*-* and )*:: 2E$h. 1;1, 1;-(1, 1<-.13.
.. &rancisco Militante i##ediate predecessor-in-interest of the plaintiff, has also
declared the land for ta$ation purposes under 5a$ ;ec. No. *(7+ in ()/4 2E$h. 1E13 for
()/*C under 5a$ ;ec. No. 5--. 2E$h. 1E-(13 for ()/-C under 5a$ ;ec. No. 7(++ 2E$h.
1+13, and paid the land ta$es for ()/4 2E$hs. 1<1 and 1<-713, for ()/* /. 2E$h. 1<-(13
for ()/7 2E$h. 1<-+13, for ()/7 D ()/- 2E$h. 1<-:13, for ()/- 2E$h. 1<-/13, and for ()/-
and ()/) 2E$h. 1<-*13.
7. 5a$ ;eclaration No. +/:/ in the na#e of =iberato ;e#ontaEo for the land described
therein 2E$h. 1&13 "as cancelled by 5a$. ;ec. No. *(7+ of &rancisco Militante 2E$h.
1E13. =iberato ;e#ontaEo paid the land ta$ under 5a$ ;ec. No. +/:/ on ;ec. +4, ():)
for the years ():- 2*4F3 and ()*) 2E$h. 1A13.
-. 5he defendant had declared for ta$ation purposes =ot No. + of the Psu-(**+/(
under 5a$ ;ec. Not. -*-: for ()*7 and a portion of =ot No. +, Psu-(**+/(, for ()/*
under 5a$ ;ec. No. -*-/ 2E$h. 1+-A1 5a$ No. -*-: 2E$h. 1+13 "as revised by 5a$ ;ec.
No. )/)- in the na#e of the defendant 2E$h. 1+-B13 and 5a$ ;ec. No. -*-/ 2E$h. 1+-A13
"as cancelled by 5a$ ;ec. No. )*-/ also in the na#e of the defendant 2E$h. 1+-C13.
5he defendant paid the land ta$es for =ot +, Psu-(**+/(, on Nov. ), ().4 for the years
()/* and ()/., for the year ()*4, and for the year ().4 as sho"n by the certificate of
the treasurer 2E$h. 1:13. 5he defendant #ay present to the Court other land ta$es
receipts for the pay#ent of ta$es for this lot.
). 5he land clai)ed by the defendant as his o"n "as surveyed on 6une . and 7,()*.,
and a plan appro2ed by Director of Land on !o2e)ber ,$, ,#$" "as issued, identified
as *su ,$$(&, 345h. 6$67.
(4. 9n April ++, ().4, the plaintiff filed forcible 4ntry and Detainer case aainst Isaias
Batiller in the 6ustice of the Peace Court of Barotac >ie,o Province of Iloilo 2E$h. 1/13 to
"hich the defendant Isaias Batiller riled his ans"er on Auust +), ().4 2E$h. 1/-A13.
5he Municipal ourt of Barotac >ie,o after trial, decided the case on May ,-, ,#", in
fa2or of the defendant and against the plaintiff 2E$h. 1/-B13. 5he plaintiff appealed fro#
the decision of the Municipal Court of Barotac >ie,o "hich "as doc0eted in this Court
as Civil Case No. *7*4 on 6une :, ().(, to "hich the defendant, Isaias Batiller, on
6une (:, ().( filed his ans"er 2E$h. 1/-C13. And this ourt after the trial. decided the
case on !o2e)ber (", ,#"&, in fa2or of the defendant, 8saias 9atiller and aainst the
plaintiff 2E$h. 1/-;13.
2N95E8 As per E$h. /-B, "hich is the Iloilo court of first instance decision of +.
Nove#ber ()./ dis)issing plaintiff's therein co#plaint for e,ect#ent aainst defendant,
the iloilo court e$pressly found 1that plaintiff's co#plaint is un:ustified, intended to
harass the defendant1 and 1that the defendant, Isaias Batiller, has a better right to
possess the land in !uestion described in Psu (**+/( 2E$h. 1:13, Isaias Batiller havin
been in the actual physical possession thereof under a clai) of title )any years before
Francisco Militante sold the land to the plaintiff-hereby dis)issing plaintiff0s co#plaint
and orderin the plaintiff to pay the defendant attorney's fees ....13
B. ;urin the trial of this case on the #erit, the plaintiff "ill prove by co#petent
evidence the follo"in8
2
(. 5hat the land he purchased fro# &rancisco Militante under E$h. 1A1 "as for#erly
o"ned and possessed by =iberato ;e#ontaEo but that on %epte#ber ., ()() the land
"as sold at public auction by virtue of a ,ud#ent in a Civil Case entitled 64dw +.
*flieder plaintiff 2s. Liberato De)onta;o Francisco 9alladeros and Gregorio <ulo,
defendants6, of "hich Gap Ponco "as the purchaser 2E$h. 1(-:13. 5he sale "as
reistered in the 9ffice of the Reister of ;eeds of Iloilo on Auust /, ()+4, under
Pri#ary Entry No. .) 2E$h. 1(13, and a definite ;eed of %ale "as e$ecuted by
Constantino A. Canto, provincial %heriff of Iloilo, on 6an. (), ():/ in favor of Gap
Ponco 2E$h. 1I13, the sale havin been reistered in the 9ffice of the Reister of
;eeds of Iloilo on &ebruary (4, ():/ 2E$h. 1(-(13.
+. 9n %epte#ber ++, ():/, Gap Ponco sold this land to &rancisco Militante as
evidenced by a notarial deed 2E$h. 1613 "hich "as reistered in the Reistry of ;eeds
on May (:, ()/4 2E$h. 16-(13.
:. 5hat plaintiff suffered da#aes alleed in his co#plaint.
C. ;efendants, on the other hand "ill prove by co#petent evidence durin the trial of
this case the follo"in facts8
(. 5hat lot No. + of the Psu-(**+ it 2E$h. '*'3 "as oriinally o"ned and possessed by
&elipe Batiller, randfather of the defendant Basilio Batiller, on the death of the for#er
in ()+4, as his sole heir. Isaias Batiller succeeded his father , Basilio Batiller, in the
o"nership and possession of the land in the year ():4, and since then up to the
present, the land re#ains in the possession of the defendant, his possession bein
actual, open, public, peaceful and continuous in the concept of an o"ner, e$clusive of
any other rihts and adverse to all other clai#ants.
+. 5hat the alleed predecessors in interest of the plaintiff have never been in the
actual possession of the land and that they never had any title thereto.
:. 5hat =ot No. +, Psu (**+/(, the sub,ect of Free *atent application of the defendant
has been appro2ed.
/. 5he da#aes suffered by the defendant, as alleed in his counterclai#.1'
1
5he appellate court further related the develop#ents of the case, as follo"s8
9n Auust (7, ().*, defendant's counsel #anifested in open court that before any trial
on the #erit of the case could proceed he "ould file a )otion to dis)iss plaintiff's
co#plaint "hich he did, allein that plaintiff does not ha2e cause of action against hi)
because the property in dispute "hich he 2plaintiff3 alleedly bouht fro# his father-in-
la", &rancisco Militante "as the sub,ect #atter of =RC No. .)* filed in the C&I of Iloilo,
"hich case "as brouht on appeal to this Court and doc0eted as CA-<.R. No. (:/)7-R
in "hich aforesaid case plaintiff was the counsel on record of his father-in-la",
&rancisco Militante. Invo0in Arts. (/4) and (/)( of the Civil Code "hich reads8
'Art. (/4). 5he follo"in contracts are ine$istent and void fro# the beinnin8
$$$ $$$ $$$
273 5hose e$pressly prohibited by la".
'AR5. (/)(. 5he follo"in persons cannot ac!uire any purchase, even at a public
auction, either in person of throuh the #ediation of another8 .
$$$ $$$ $$$
2*3 +ustices, :udges, prosecuting attorneys, cler=s of superior and inferior courts, and
other officers and e)ployees connected with the ad)inistration of :ustice, the property
and rihts of in litiation or levied upon an e$ecution before the court "ithin "hose
,urisdiction or territory they e$ercise their respective functionsC this prohibition includes
the act of ac!uirin an assin#ent and shall apply to lawyers, "ith respect to the
property and rihts "hich #ay be the ob,ect of any litiation in "hich they #ay ta0e part
by virtue of their profession.'
defendant clai#s that plaintiff could not have ac!uired any interest in the property in
dispute as the contract he 2plaintiff3 had "ith &rancisco Militante "as ine$istent and
void. 2%ee pp. ++-:(, Record on Appeal3. Plaintiff stronly opposed defendant's #otion
to dis#iss clai#in that defendant can not invo0e Articles (/4) and (/)( of the Civil
Code as Article (/++ of the sa#e Code provides that '5he defense of illeality of
contracts is not available to third persons "hose interests are not directly affected' 2%ee
pp. :+-:* Record on Appeal3.
%n %ctober ,', ,#"$, the lo"er court issued an order disclai)ing plaintiffs co)plaint
2pp. /+-/), Record on Appeal.3 In the aforesaid order of dis#issal the lo"er court
practically areed "ith defendant's contention that the contract 2E$h. A3 bet"een
plaintiff and &rancis# Militante "as null and void. In due season plaintiff filed a #otion
for reconsideration 2pp. *4-*. Record on Appeal3 "hich "as denied by the lo"er court
on 6anuary (/, ().. 2p. *7, Record on Appeal3.
Aence, this appeal by plaintiff fro# the orders of 9ctober (-, ().* and 6anuary (/,
()...
3
Plaintiff-appellant i#putes to the lo"er court the follo"in errors8
'(. 5he lo"er court erred in holdin that the contract of sale bet"een the plaintiff-
appellant and his father-in-la", &rancisco Militante, %r., no" deceased, of the property
covered by Plan Psu-))7)(, 2E$h. 1A13 "as void, not voidable because it "as #ade
"hen plaintiff-appellant "as the counsel of the latter in the =and Reistration case.
'+. 5he lo"er court erred in holdin that the defendant-appellee is an interested person
to !uestion the validity of the contract of sale bet"een plaintiff-appellant and the
deceased, &rancisco Militante, %r.
':. 5he lo"er court erred in entertainin the #otion to dis#iss of the defendant-appellee
after he had already filed his ans"er, and after the ter#ination of the pre-trial, "hen the
said #otion to dis#iss raised a collateral !uestion.
'/. 5he lo"er court erred in dis#issin the co#plaint of the plaintiff-appellant.'
5he appellate court concluded that plaintiffs 1assin#ent of errors ives rise to t"o 2+3
leal posers ? 2(3 "hether or not the contract of sale bet"een appellant and his father-
in-la", the late &rancisco Militante over the property sub,ect of Plan Psu-))7)( "as
void because it "as #ade "hen plaintiff "as counsel of his father-in-la" in a land
reistration case involvin the property in disputeC and 2+3 "hether or not the lo"er
court "as correct in entertainin defendant-appellee's #otion to dis#iss after the latter
had already filed his ans"er and after he 2defendant3 and plaintiff-appellant had areed
on so#e #atters in a pre-trial conference. Aence, its elevation of the appeal to this
Court as involvin pure !uestions of la".
It is at once evident fro# the foreoin narration that the pre-trial conference held by
the trial court at "hich the parties "ith their counsel areed and stipulated on the
#aterial and relevant facts and sub#itted their respective docu#entary e$hibits as
referred to in the pre-trial order, supra,
2
practically a#ounted to a fulldress trial "hich
placed on record all the facts and e$hibits necessary for ad,udication of the case.
5he three points on "hich plaintiff reserved the presentation of evidence at the-trial
dealin "ith the source of the alleed riht and title of &rancisco Militante's
predecessors, supra,
3
actually are already #ade of record in the stipulated facts and
ad)itted e5hibits. 5he chain of Militante's alleed title and riht to the land as
supposedly traced bac0 to =iberato ;e#ontaEo "as actually asserted by Militante 2and
his vendee, la"yer and son-in-la", herein plaintiff3 in the land reistration case and
re:ected by the Iloilo land reistration court "hich dis)issed Militante's application for
reistration of the land. %uch dis#issal, as already stated, "as affir#ed by the final
,ud#ent in ()*- of the Court of Appeals.
!

5he four points on "hich defendant on his part reserved the presentation of evidence at
the trial dealin "ith his and his ancestors' continuous, open, public and peaceful
possession in the concept of o"ner of the land and the ;irector of =ands' approval of
his survey plan thereof, supra,
5
are li0e"ise already duly established facts of record, in
the land reistration case as "ell as in the e,ect#ent case "herein the Iloilo court of
first instance reconiBed the superiority of defendant's riht to the land as aainst
plaintiff.
No error "as therefore co##itted by the lo"er court in dis#issin plaintiff's co#plaint
upon defendant's #otion after the pre-trial.
(. 5he stipulated facts and e$hibits of record indisputably established plaintiff's lac0 of
cause of action and ,ustified the outriht dis#issal of the co#plaint. Plaintiff's clai# of
o"nership to the land in !uestion "as predicated on the sale thereof for P+,444.44
#ade in ()*. by his father-in- la", &rancisco Militante, in his favor, at a ti#e "hen
Militante's application for reistration thereof had already been dis)issed by the Iloilo
land reistration court and "as pendin appeal in the Court of Appeals.
@ith the Court of Appeals' ()*- final ,ud#ent affir#in the dis)issal of Militante's
application for reistration, the lac0 of any rihtful clai# or title of Militante to the land
"as conclusively and decisively ,udicially deter#ined. Aence, there "as no right or title
to the land that could be transferred or sold by Militante's purported sale in ()*. in
favor of plaintiff.
Manifestly, then plaintiff's co#plaint aainst defendant, to be declared absolute o"ner
of the land and to be restored to possession thereof "ith da#aes "as bereft of any
factual or leal basis.
+. No error could be attributed either to the lo"er court's holdin that the purchase by a
la"yer of the property in litiation fro# his client is cateorically prohibited by Article
(/)(, pararaph 2*3 of the Philippine Civil Code, reproduced supraC
"
and that
conse!uently, plaintiff's purchase of the property in litiation fro# his client 2assu#in
that his client could sell the sa#e since as already sho"n above, his client's clai# to
the property "as defeated and re,ected3 "as void and could produce no leal effect, by
virtue of Article (/4), pararaph 273 of our Civil Code "hich provides that contracts
1e$pressly prohibited or declared void by la"' are 1ine$istent and that 1253hese
contracts cannot be ratified. Neither can the riht to set up the defense of illeality be
"aived.1
5he ()(( case of >olfson 2s. 4state of Martine?
7
relied upon by plaintiff as holdin that
a sale of property in litiation to the party litiant's la"yer 1is not void but voidable at the
election of the vendor1 "as correctly held by the lo"er court to have been superseded
by the later ()+) case of Director of Lands 2s. Abagat.
#
In this later case of Abaat, the
4
Court e$pressly cited t"o antecedent cases involvin the sa#e transaction of purchase
of property in litiation by the la"yer "hich "as e$pressly declared invalid under Article
(/*) of the Civil Code of %pain 2of "hich Article (/)( of our Civil Code of the
Philippines is the counterpart3 upon challene thereof not by the vendor-client but by
the adverse parties aainst "ho# the la"yer "as to enforce his rihts as vendee thus
ac!uired.
5hese t"o antecedent cases thus cited in Abaat clearly superseded 2"ithout so
e$pressly statin the previous rulin in >olfson8
5he spouses, 6uan %oriano and >icente Macarae, "ere the o"ners of t"elve parcels
of land. >icenta Macarae died in Nove#ber, ()4), leavin a lare nu#ber of collateral
heirs but no descendants. =itiation bet"een the survivin husband, 6uan %oriano, and
the heirs of >icenta i##ediately arose, and the herein appellant %isenando Palarca
acted as %oriano's la"yer. 9n May +, ()(-, %oriano e$ecuted a deed for the aforesaid
t"elve parcels of land in favor of %isenando Palarca and on the follo"in day, May :,
()(-, Palarca filed an application for the reistration of the land in the deed. After
hearing, the ourt of First 8nstance declared that the deed was in2alid by 2irtue of the
pro2isions of article ,&$# of the i2il ode, which prohibits lawyers and solicitors fro)
purchasing property rights in2ol2ed in any litigation in which they ta=e part by 2irtue of
their profession. @he application for registration was conseAuently denied, and upon
appeal by *alarca to the 1upre)e ourt, the :udge)ent of the lower court was affir)ed
by a decision pro)ulgated !o2e)ber ,",,#($. 2<.R. No. +/:+), Palarca vs. ;irector of
=ands, not reported.3
In the #eanti#e cadastral case No. :4 of the Province of 5arlac "as instituted, and on
Auust +(, ()+:, Eleuteria Macarae, as ad#inistratri$ of the estate of >icente
Macarae, filed clai#s for the parcels in !uestion. Buenaventura =avitoria ad#inistrator
of the estate of 6uan %oriano, did li0e"ise and so did %isenando Palarca. In a decision
dated 6une +(, ()+7, the Court of &irst Instance, 6ude Carballo presidin, rendered
,ud#ent in favor of Palarea and ordered the reistration of the land in his na#e. Bpon
appeal to this court by the ad)inistration of the estates of +uan 1oriano and Vicente
Macaraeg, the :udg)ent of the court below was re2ersed and the land ad:udicated to
the two estates as con:ugal property of the deceased spouses. 2<.R. No. +-++.,
;irector of =ands vs. Abaat, pro#ulated May +(, ()+-, not reported.3
9

In the very case of Abagat itself, the Court, aain affir#in the invalidity and nullity of
the la"yer's purchase of the land in litiation fro# his client, ordered the issuance of a
"rit of possession for the return of the land by the la"yer to the adverse parties "ithout
rei#burse#ent of the price paid by hi# and other e$penses, and ruled that 1the
appellant Palarca is a la"yer and is presu#ed to 0no" the la". Ae #ust, therefore,
fro# the beinnin, have been "ell a"are of the defect in his title and is, conse!uently,
a possessor in bad faith.1
As already stated, >olfson and Abagat "ere decided "ith relation to Article (/*) of the
Civil Code of %pain then adopted here, until it "as superseded on Auust :4, ()*4 by
the Civil Code of the Philippines "hose counterpart provision is Article (/)(.
Article (/)( of our Civil Code 2li0e Article (/*) of the %panish Civil Code3 prohibits in
its si$ pararaphs certain persons, by reason of the relation of trust or their peculiar
control over the property, fro# ac!uirin such property in their trust or control either
directly or indirectly and 1even at a public or ,udicial auction,1 as follo"s8 2(3 uardiansC
2+3 aentsC 2:3 ad#inistratorsC 2/3 public officers and e#ployeesC ,udicial officers and
e#ployees, prosecutin attorneys, and la"yersC and 2.3 others especially dis!ualified
by la".
In >olfson "hich involved the sale and assin#ent of a #oney ,ud#ent by the client
to the la"yer, @olfson, "hose riht to so purchase the ,ud#ent "as bein challened
by the ,ud#ent debtor, the Court, throuh 6ustice Moreland, then e$pressly reserved
decision on 1"hether or not the ,ud#ent in !uestion actually falls "ithin the prohibition
of the article1 and held only that the sale's 1voidability can not be asserted by one not a
party to the transaction or his representative,1 citin fro# Manresa
10
that 12C3onsiderin
the !uestion fro# the point of vie" of the civil la", the vie" ta0en by the code, "e #ust
li#it ourselves to classifyin as void all acts done contrary to the e$press prohibition of
the statute. No" then8 As the code does not reconiBe such nullity by the #ere
operation of la", the nullity of the acts hereinbefore referred to #ust be asserted by the
person havin the necessary leal capacity to do so and decreed by a co#petent
court.1
11

5he reason thus iven by Manresa in considerin such prohibited ac!uisitions under
Article (/*) of the %panish Civil Code as #erely voidable at the instance and option of
the vendor and not void ? 1that the Code does not reconiBe such nullity de pleno
derecho1 ? is no loner true and applicable to our o"n Philippine Civil Code "hich
does reconiBe the absolute nullity of contracts 1"hose cause, ob,ect, or purpose is
contrary to la", #orals, ood custo#s, public order or public policy1 or "hich are
1e5pressly prohibited or declared 2oid by law1 and declares such contracts 1ine5istent
and 2oid fro) the beginning.1
12

5he %upre#e Court of %pain and #odern authors have li0e"ise veered fro# Manresa's
vie" of the %panish codal provision itself. In its sentencia of (( 6une ().., the
%upre#e Court of %pain ruled that the prohibition of Article (/*) of the %panish Civil
Code is based on public policy, that violation of the prohibition contract cannot be
validated by confir#ation or ratification, holdin that8
... la prohibicion !ue el articulo (/*) del C.C. establece respecto a los ad#inistradores
y apoderados, la cual tiene confor#e a la doctrina de esta %ala, contendia entre otras,
en %. de +7-*-()*), un funda#ento de orden )oral lugar la 2iolacion de esta a la
5
nulidad de pleno derecho del acto o neocio celebrado, ... y prohibicion leal, afectante
orden publico, no cabe con efecto aluno la aludida retification ...
13

5he criterion of nullity of such prohibited contracts under Article (/*) of the %panish
Civil Code 2Article (/)( of our Civil Code3 as a #atter of public order and policy as
applied by the %upre#e Court of %pain to ad#inistrators and aents in its above cited
decision should certainly apply "ith reater reason to ,udes, ,udicial officers, fiscals
and la"yers under pararaph * of the codal article.
Citin the sa#e decisions of the %upre#e Court of %pain, <ullon Ballesteros, his
1Curso de ;erecho Civil, 2Contratos Especiales31 2Madrid, ().-3 p. (-, affir#s that,
"ith respect to Article (/*), %panish Civil Code8.
Hue caracter tendra la co#pra !ue se realice por estas personasI Porsupuesto no
cabe duda de !ue el caso 2art.3 (/*), /4 y *4, la nulidad esabsoluta por!ue el #otivo
de la prohibicion es de orden publico.
1!

PereB <onBales in such vie", statin that 1;ado el caracter prohibitivo delprecepto, la
conse!uencia de la infraccion es la nulidad radical y e$ lee.1
15

Castan, !uotin Manresa's o"n observation that.
1El funda#ento do esta prohibicion es clarisi#o. No sa trata con este precepto tan solo
de uitar la ocasion al fraudeC persiuese, ade#asel proposito de rodear a las
personas Aue inter2ienen en la ad)inistrcionde :usticia de todos los retigios Aue
necesitan pora e:ercer su )inisterio librandolos de toda suspecha, Aue aunAue fuere in
fundada, redundura endescredito de la institucion.1
1"
arrives at the contrary and no"
accepted vie" that 1Puede considerace en nuestro derecho ine5istente 0o radical)ente
nulo el contrato en los siuentes cases8 a3 ...C b3 cuando el contrato se ha celebrado en
2iolacion de una prescripcion 0o prohibicion legal, fundada sobre )oti2os de orden
publico 2hipotesis del art. / del codio3 ...1
17

It is note"orthy that Caltan's rationale for his conclusion that funda#ental consideration
of public policy render void and ine$istent such e$pressly prohibited purchase 2e.. by
public officers and e#ployees of overn#ent property intrusted to the# and by ,ustices,
,udes, fiscals and la"yers of property and rihts in litiation and sub#itted to or
handled by the#, under Article (/)(, pararaphs 2/3 and 2*3 of our Civil Code3 has
been adopted in a ne" article of our Civil Code, viB, Article (/4) declarin such
prohibited contracts as 1ine5istent and 2oid fro) the beginning.1
1#

Indeed, the nullity of such prohibited contracts is definite and per#anent and cannot be
cured by ratification. 5he public interest and public policy re#ain para#ount and do not
per#it of co#pro#ise or ratification. In his aspect, the per#anent dis!ualification of
public and ,udicial officers and la"yers rounded on public policy differs fro# the first
three cases of uardians, aents and ad#inistrators 2Article (/)(, Civil Code3, as to
"hose transactions it had been opined that they #ay be 1ratified1 by #eans of and in
1the for# of a ne" contact, in "hich cases its validity shall be deter#ined only by the
circu#stances at the ti#e the e$ecution of such ne" contract. 5he causes of nullity
"hich have ceased to e$ist cannot i#pair the validity of the ne" contract. 5hus, the
ob,ect "hich "as illeal at the ti#e of the first contract, #ay have already beco#e
la"ful at the ti#e of the ratification or second contractC or the service "hich "as
i#possible #ay have beco#e possibleC or the intention "hich could not be ascertained
#ay have been clarified by the parties. 5he ratification or second contract "ould then
be 2alid fro) its e5ecutionC ho"ever, it does not retroact to the date of the first
contract.1
19

As applied to the case at bar, the lo"er court therefore properly acted upon defendant-
appellant's #otion to dis#iss on the round of nullity of plaintiff's alleed purchase of
the land, since its ,uridical effects and plaintiff's alleed cause of action founded thereon
"ere bein asserted aainst defendant-appellant. 5he principles overnin the nullity of
such prohibited contracts and ,udicial declaration of their nullity have been "ell restated
by 5olentino in his treatise on our Civil Code, as follo"s8
Parties Affected. ? Any person #ay invo0e the in e5istence of the contract "henever
,uridical effects founded thereon are asserted aainst hi#. 5hus, if there has been a
void transfer of property, the transferor can recover it by the accion rein2indicatoriaC and
any prossessor #ay refuse to deliver it to the transferee, "ho cannot enforce the
contract. Creditors #ay attach property of the debtor "hich has been alienated by the
latter under a void contractC a #ortaee can allee the ine$istence of a prior
encu#branceC a debtor can assert the nullity of an assin#ent of credit as a defense to
an action by the assinee.
Action 9n Contract. ? Even "hen the contract is void or ine$istent, an action is
necessary to declare its ine$istence, "hen it has already been fulfilled. Nobody can
ta0e the la" into his o"n handsC hence, the intervention of the co#petent court is
necessary to declare the absolute nullity of the contract and to decree the restitution of
"hat has been iven under it. 5he ,ud#ent, ho"ever, "ill retroact to the very day
"hen the contract "as entered into.
If the void contract is still fully e$ecutory, no party need brin an action to declare its
nullityC but if any party should brin an action to enforce it, the other party can si#ply
set up the nullity as a defense.

ACC9R;IN<=G, the order of dis#issal appealed fro#
is hereby affir#ed, "ith costs in all instances aainst plaintiff-appellant. %o ordered.
6