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G.R.No.72306

TodayisTuesday,July19,2016

RepublicofthePhilippines
SUPREMECOURT
Manila
SECONDDIVISION
G.R.No.72306October6,1988
DAVIDP.FORNILDA,JUANP.FORNILDA,EMILIAP.FORNILDAOLILI,LEOCADIAP.FORNILDALABAYEN
andANGELAP.FORNILDAGUTIERREZ,petitioners,
vs.
THEBRANCH164,REGIONALTRIALCOURTIVTHJUDICIALREGION,PASIG,JOAQUINC.ANTONIO
DeputySheriff,RTC,4JRTanay,RizalandATTY.SERGIOI.AMONOYrespondents.
IreneC.IshiwataforpetitionerA.Gutierrez.
SergioLAmonoyforandinhisownbehalf.

MELENCIOHERRERA,J.:
ThePetitionentitled"PetisiyungMakapagpasuriTaglayangPagpapapigilngUtos",translatedasoneforcertiorari
with Preliminary Injunction, was filed on 27 September 1985 by three (3) petitioners, namely David P. Fornilda,
EmiliaP.FornildaOliliandAngelaP.FornildaGutierrez.TheyseekthereversaloftheOrderofrespondentTrial
Court,dated25July1985,grantingaWritofPossession,aswellasitsOrders,dated25April1986and16May
1986 (p. 241, Rollo), directing and authorizing respondent Sheriff to demolish the houses of petitionersAngela
andLeocadiaFornilda(whoislistedasapetitionerbutwhodidnotsignthePetition).NeitherisJuanP.Fornildaa
signatory.
The facts disclose that the deceased, Julio M. Catolos formerly owned six (6) parcels of land located inTanay,
Rizal, which are the controverted properties in the present litigation. His estate was the subject of settlement in
SpecialProceedingsNo.3103ofthethenCourtofFirstInstanceofRizal,atPasig,Branch1.FrancescaCatolos
AgnesCatolosAlfonsoI.ForniIdaandAsuncionM.Pasambaweresomeofthelegalheirsandwererepresented
in the case byAtty. SergioAmonoy (hereinafter referred to as RespondentAmonoy).A Project of Partition was
filedintheIntestateCourtwherebytheControvertedParcelswereadjudicatedtoAlfonsoI.FornildaandAsuncion
M.Pasamba.
On12January1965,theCourtapprovedtheProjectofPartition.Itwasnotuntil6August1969,however,thatthe
estatewasdeclaredclosedandterminatedafterestateandinheritancetaxeshadbeenpaid,theclaimsagainst
theestatesettledandallpropertiesadjudicated.
Eight (8) days thereafter, or on 20 January 1965, Alfonso 1. Fornilda and Asuncion M. Pasamba executed a
Contract of Mortgage wherein they mortgaged the Controverted Parcels to RespondentAmonoy as security for
the payment of his attorney's fees for services rendered in the aforementioned intestate proceedings, in the
amountofP27,600.00(Annex"A",Comment).
Asuncion M. Pasamba died on 24 February 1969 while Alfonso 1. Fornilda passed away on 2 July 1969.
PetitionersaresomeoftheheirsofAlfonsoI.Fornilda.
Sincethemortgageindebtednesswasnotpaid,on21January1970,RespondentAmonoyinstitutedforeclosure
proceedingsbeforetheCourtofFirstInstanceofRizal,atPasig,BranchVIIIentitled"SergioI.Amonoyvs.Heirs
ofAsuncionM.PasambaandHeirsofAlfonso1.Fornilda"[CivilCaseNo.12726](Annex"B",Ibid.).Petitioners,
asdefendantstherein,allegedthattheamountagreeduponasattorney'sfeeswasonlyPll,695.92andthatthe
sum of P27,600.00 was unconscionable and unreasonable. Appearing as signatory counsel for Respondent
AmonoywasAtty.JoseS.Balajadia.
On 28 September 1972, the Trial Court 1 rendered judgement in the Foreclosure Case ordering the Pasamba and
Fornilda heirs to pay Respondent Amonoy, within ninety (90).days from receipt of the decision, the sums of P27,600.00
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representing the attorney's fees secured by the mortgage Pl l,880.00 as the value of the harvest from two (2) parcels of
land and 25% of the total of the two amounts, or P9,645.00, as attorney's fees, failing which the Controverted Parcels
wouldbesoldatpublicauction(Annex"C",Ibid.).

On6February1973,theControvertedParcelswereforeclosedandon23March1973,anauctionsalewasheld
with RespondentAmonoy as the sole bidder for P23,760.00 (Annex "D", Ibid.). Said sale was confirmed by the
TrialCourton2May1973(Annex"E",Ibid.).Tosatisfythedeficiency,anotherexecutionsalewasconductedwith
RespondentAmonoyasthesolebidderforP12,137.50.OnthebasisofanAffidavitofConsolidationofOwnership
byRespondentAmonoy,thecorrespondingtaxdeclarationscoveringtheControvertedParcelswereconsolidated
inhisname.
On 19 December 1973, or a year after the judgment in the Foreclosure Case, an action for Annulment of
Judgmententitled"MariaPenanoetal.vs.SergioAmonoy,etal."(CivilCaseNo.18731)wasfiledbeforethethen
CourtofFirstInstanceofRizal,atPasigtheAnnulmentCase(Annex"F", Ibid.)Petitionerswerealsoincludedas
plaintiffs. Appearing for the plaintiffs in that case was Atty. Jose F. Tiburcio. Squarely put in issue were the
propriety of the mortgage, the validity of the judgment in the Foreclosure Case, and the tenability of the
acquisitions by Respondent Amonoy at the Sheriffs sale. Of particular relevance to the instant Petition is the
contention that the mortgage and the Sheriffs sales were null and void as contrary to the positive statutory
injunction in Article 1491 (5) of the Civil Code, which prohibits attorneys from purchasing, even at a public or
judicial auction, properties and rights in litigation, and that the Trial Court, in the Foreclosure Case, had never
acquiredjurisdictionoverthesubjectmatteroftheaction,i.e.,theControvertedParcels.
On 7 November 1977, the Trial Court 2 dismissed the Annulment Case holding that the particular disqualification in
Article 1491 of the Civil Code is not of general application nor of universal effect but must be reconciled with the rule that
permits judgment creditors to be bidders at sheriffs sales, so that Respondent Amonoy was "clearly not prohibited from
biddinghisjudgmentandhisacquisitionsthereforearesanctionedbylaw"(Annex"G",Ibid.).

On 22 July 1981, the Court ofAppeals (in CAG.R. No. 63214R) (theAppealed Case) 3 affirmed the aforesaid
judgment predicated on three principal grounds: (1) that no legal impediment exists to bar an heir from encumbering his
shareoftheestateafteraprojectofpartitionhasbeenapproved,thatactbeingavalidexerciseofhisrightofownership(2)
res judicata, since petitioners never questioned the capacity of Respondent Amonoy to acquire the property in the
ForeclosureCaseand(3)thecomplaintintheAnnulmentCasedidnotallegeextrinsicfraudnorcollusioninobtainingthe
judgmentsothattheactionmustfail.

Upon remand of the Foreclusure Case to respondent Regional Trial Court, Branch 164, at Pasig, Respondent
Sheriff, on 26 August 1985, notified petitioners to vacate the premises (p. 17, Rollo), subject of the Writ of
Possessionissuedon25July1985(p.18,Rollo).
On 27 September 1985, petitioners came to this Court in a pleading entitled "Petisiyung MakapagpasuriTaglay
ang Pagpapapigil ng Utos". On 11 November 1985, we dismissed the petition for nonpayment of docket and
otherfees.However,uponpaymentthereof,theOrderofdismissalwassetasideandrespondentsweredirected
to submit their Comment. In his Comment, RespondentAmonoy denies that he had acquired the Controverted
Parcels through immoral and illegal means contending that "the question of attorney's fees, the mortgage to
securethesame,thesaleofthemortgagedpropertiesatpublicauction,whichwasconfirmedbytheCourt,and
ultimately,theownershipandpossessionoverthem,haveallbeenjudiciallyadjudicated(p.146,Rollo)
Wegaveduecoursetothepetitionandrequiredthefilingoftheparties'respectivememoranda.
Meanwhile, on motion of RespondentAmonoy, dated 24April 1986, respondentTrial Court, in the Foreclosure
Case, issued Orders dated 25 April and 16 May 1986 authorizing the demolition of the houses and other
structuresofpetitionersLeocadiaandAngelaFornilda(p.241,Rollo).
On1June1986thehouseofAngelaFornildawastotallydemolishedwhilethatofLeocadiawasspareddueto
the latter's assurance that she would seek postponement. On 1 June 1986, in a pleading entitled "Mahigpit na
Musiyung Para Papanagutin Kaugnay ng Paglalapastangan", followed by a Musiyung Makahingi ng Utos sa
Pagpapapigil ng Pagpapagiba at Papanagutin sa Paglalapastangan' petitioners applied for a Restraining Order,
which we granted on 2 June 1986, enjoining respondents and the Sheriff of Rizal from demolishing petitioners'
houses (p. 221, Rollo). In a pleading entitled 'Mahigpit na Musiyung para Papanagutin Kaugnay ng
Paglapastangan'and'MasasamangGawain(MalPractices)'and'Paninindigan(Memorandum)'bothfiledon16
June1988,petitionerslikewisechargedRespondentAmonoywithmalpracticeandprayedforhisdisbarment(pp.
224226,Rollo).
InRespondentAmonoy's"CommentandManifestations"filedon30June1986,heindicatedthattheRestraining
OrderreceivedbytheDeputySheriffofRizalonlyon6June1986hadalreadybecomemootandacademicas
AngelaFornilda'shousehadbeendemolishedon2June1986whileLeocadiaofferedtobuythesmallareaof
thelandwhereherhouseisbuiltandhehadrelented.
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Intheinterim,RespondentAmonoywasappointedasAssistantProvincialFiscalofRizal,andsubsequentlyasa
RegionalTrialCourtJudgeinPasayCity.
The threshold issue is whether or not the mortgage constituted on the Controverted Parcels in favor of
RespondentAmonoycomeswithinthescopeoftheprohibitioninArticle1491oftheCivilCode.
ThepertinentportionsofthesaidArticlesread:
Art.1491.Thefollowingpersonscannotacquirebypurchaseevenatapublicorjudicialorauction,
eitherinpersonorthroughthemediationofanother:
xxxxxxxxx
(5)Justices,judges,prosecutingattorneys,...thepropertyandrightsinlitigation or levied upon on
executionbeforethecourtwithinwhosejunctionorterritorytheyexercisetheirrespectivefunctions
thisprohibitionincludestheactofacquittingbyassignmentandshallapplytolawyerswithrespectto
thepropertyandrightswhichmaybetheobjectofanylitigationinwhichtheymaytakepartbyvirtue
oftheirprofession.(Emphasissupplied)
Under the aforequoted provision, a lawyer is prohibited from acquiring either by purchase or assignment the
propertyorrightsinvolvedwhicharetheobjectofthelitigationinwhichtheyintervenebyvirtueoftheirprofession
(PadillaVol.HCivilLaw,1974Ed.,p.230citingHernandezvs.Villanueva,40Phil.773andRubiasvs.Batiller51
SCRA130).Theprohibitiononpurchaseisallembracingtoincludenotonlysalestoprivateindividualsbutalso
publicorjudicialsales(ibid.,p.221).
The rationale advanced for the prohibition is that public policy disallows the transactions in view of the fiduciary
relationshipinvolvedi.e.,therelationoftrustandconfidenceandthepeculiarcontrolexercisedbythesepersons
(Paras,CivilCode,Vol.V,1973.,p.70).
In the instant case, it is undisputed that the Controverted Parcels were part of the estate of the late Julio M.
Catolossubjectofintestateestateproceedings,whereinRespondentAmonoyactedascounselforsomeofthe
heirsfrom1959until1968byhisownadmission(Comment,p.145,Rollo)thatthesepropertieswereadjudicated
toAlfonso Fornilda andAsuncion M. Pasamba in the Project of Partition approved by the Court on 12 January
1965thaton20January1965,oronlyeight(8)daysthereafter,andwhilehewasstillinterveninginthecaseas
counsel, these properties were mortgaged by petitioners' predecessorininterest to Respondent Amonoy to
securepaymentofthelatter'sattorney'sfeesintheamountofP27,600.00thatsincethemortgageindebtedness
wasnotpaid,RespondentAmonoyinstitutedanactionforjudicialforeclosureofmortgageon21January1970
that the mortgage was subsequently ordered foreclosed and auction sale followed where RespondentAmonoy
wasthesolebidderforP23,600.00andthatbeingshortofthemortgageindebtedness,heappliedforandfurther
obtainedadeficiencyjudgment.
Telling, therefore, is the fact that the transaction involved falls squarely within the prohibition against any
acquisition by a lawyer of properties belonging to parties they represent which are still in suit. For, while the
ProjectofPartitionwasapprovedon12January1965,itwasnotuntil6August1969thattheestatewasdeclared
closedandterminated(RecordonAppeal,CivilCaseNo.3103,p.44).Atthetimethemortgagewasexecuted,
therefore,therelationshipoflawyerandclientstillexisted,theveryrelationoftrustandconfidencesoughttobe
protected by the prohibition, when a lawyer occupies a vantage position to press upon or dictate terms to an
harassed client. What is more, the mortgage was executed only eight (8) days after approval of the Project of
Partition thereby evincing a clear intention on RespondentAmonoy's part to protect his own interests and ride
roughshod over that of his clients. From the time of the execution of the mortgage in his favor, Respondent
Amonoyhadalreadyassertedatitleadversetohisclients'interestsatatimewhentherelationshipoflawyerand
clienthadnotyetbeensevered.
Thefactthatthepropertieswerefirstmortgagedandonlysubsequentlyacquiredinanauctionsalelongafterthe
termination of the intestate proceedings will not remove it from the scope of the prohibition. To rule otherwise
wouldbetocountenanceindirectlywhatcannotbedonedirectly.
There is no gainsaying that petitioners' predecessorininterest, as an heir, could encumber the property
adjudicatedtohimthattheComplaintintheAnnulmentCasedidnotcontainanyspecificallegationoffraudor
collusioninobtainingthejudgmentappealedfromasopinedbytheCourtofappealsintheAppealedCaseand
that the auction sale of the properties to Respondent Amonoy was judicially confirmed and ownership and
possessionoftheControvertedParcelsultimatelytransferredtohim.
Nonetheless, considering that the mortgage contract, entered into in contravention of Article 1491 of the Civil
Code,supra,isexpresslyprohibitedbylaw,thesamemustbeheldinexistentandvoidabinitio(DirectorofLands
vs.Abagat,53Phil.147).
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Art.1409.Thefollowingcontractsareinexistentandvoidfromthebeginning:
(1)Thosewhosecause,objectorpurposeiscontrarytolaw,morals,goodcustoms,publicorderor
publicpolicy
xxxxxxxxx
(7)Those expressly prohibited or declared void by law.These contracts cannot be ratified. Neither
cantherighttosetupthedefenseofillegalitybewaived.(CivilCode)
Beingavoidcontract,theactionordefenseforthedeclarationofitsinesistenceisimprescriptible(Article1410,
CivilCode).Thedefectofavoidorinexistencecontractispermanent.Merelapseoftimecannotgiveitefficacy.
Neithercantherighttosetupthedefenseofillegalitybewaived(Article1409,CivilCode).
The Controverted Parcels could not have been the object of any mortgage contract in favor of Respondent
Amonoy and consequently neither of a foreclosure sale. By analogy, the illegality must be held to extend to
whatsoverresultsdirectlyfromtheillegalsource(Article1422,CivilCode).Suchbeingthecase,theTrialCourt
did not acquire any jurisdiction over the subject matter of the Foreclosure Case and the judgment rendered
thereincouldnothaveattainedanyfinalityandcouldbeattackedatanytime.Neithercouldithavebeenabarto
theactionbroughtbypetitionersforitsannulmentbyreasonofresjudicata.(MunicipalityofAntipolovs.Zapanta,
No.L65334,December26,1984,133SCRA820).Twooftherequisitesoftheruleofpriorjudgmentasabarto
a subsequent case, namely, (1) a final judgment and (2) that it must have been rendered by a Court having
jurisdictionoverthesubjectmatter,areconspicuouslyabsent.
And since the nullity of the transaction herein involved proceeds from the illegality of the cause or object of the
contract,andtheactdoesnotconstituteacriminaloffense,thereturntopetitionersoftheControvertedParcelsis
inorder.
Art.1412.Iftheactinwhichtheunlawfulorforbiddencauseconsistsdoesnotconstituteacriminal
offense,thefollowingrulesshallbeobserved:
xxxxxxxxx
(2) When only one of the contracting parties is at fault, he cannot recover what he has given by
reasonofthecontract,oraskforthefulfillmentofwhathasbeenpromisedhim.Theother,whoisnot
at fault, may demand the return of what he has given without any obligation to comply with his
promise.(CivilCode).
WHEREFORE,certiorariisgrantedtheOrderofrespondentTrialCourt,dated25July1985,grantingaWritof
Possession, as well as its Orders, dated 25April 1986 and 16 May 1986, directing and authorizing respondent
Sheriff to demolish the houses of petitioners Angela and Leocadia Fornilda are hereby set aside, and the
Temporary Restraining Order heretofore issued, is made permanent. The six (6) parcels of land herein
controverted are hereby ordered returned to petitioners unless some of them have been conveyed to innocent
thirdpersons.
Withrespecttopetitioners'prayerfordisbarmentbyreasonofmalpracticeofRespondentAmonoyembodiedin
their pleading entitled 'Mahigpit na Musiyung para Papanagutin Kaugnay ng Paglalapastangan' and
'Masasamang Gawain (MalPracrices) and "Paninindigan (Memorandum)" both filed on Sergio I. Amonoy is
hereby required, within fifteen (15) days from notice hereof, to submit an Answer thereto. After receipt of the
same,anewdocketnumberwillbeassignedtothecase.
Costsagainstrespondent,SergioI.Amonoy.
SOORDERED.
Paras,SarmientoandRegalado,JJ.,concur.
Padilla,J.,tooknopart.

Footnotes
1JudgeBenjaminH.Aquino,presiding.
2DecisionpennedbyJudgeSerafinE.Camilon.
3DecisionpennedbyJusticeGuillermoF.Villasor,andconcurredinbyJusticesMamaD.Busran
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Chairman,andJoseA.R.Melo,Members.
TheLawphilProjectArellanoLawFoundation

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