Fornilda V RTC

DAVID P. FORNILDA vs.
REGIONAL TRIAL COURT

G.R No. 72306, January 24, 1989 
169 SCRA 351
FACTS:
The deceased, Julio M. Catolos formerly owned six (6) parcels of land located in Tanay, Rizal, which are the controverted
properties in the present litigation. His
estate was the subject of settlement inSpecialProceedings No. 3103 of the then Court of First Instance of Rizal. ForniIda and
Asuncion M. Pasamba were some of the legal heirs and were represented in the case by Atty. Sergio Amonoy (hereinafter
referred to as Respondent Amonoy). A Project of Partition was filed in the Intestate Court whereby the Controverted Parcels
were adjudicated to Alfonso I. Fornilda and Asuncion M. Pasamba.
On 12 January 1965, the Court approved the Project of Partition. It was not until 6 August 1969, however, that the estate was
declared closed and terminated after estate and inheritance taxes had been paid, the claims against the estate settled and all
properties adjudicated.
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 Respondent Amonoy as security for the payment of his attorney's fees for services rendered in the
aforementioned intestate proceedings.
Asuncion M. Pasamba died on 24 February 1969 while Alfonso 1. Fornilda passed away on 2 July 1969. Petitioners are some of
the heirs of Alfonso I.Fornilda.
Since the mortgage indebtedness was not paid, on 21 January 1970, Respondent Amonoy instituted foreclosure proceedings
before the Court of First
Instance of Rizal, at Pasig, Branch VIII entitled" Sergio I. Amonoy vs. Heirs of Asuncion M. Pasamba and Heirs of Alfonso Fornilda.
Petitioners, as defendants therein, alleged that the amount agreed upon as attorney's fees was only Pll,695.92 and that the sum
of P27,600.00 was unconscionable and unreasonable.
On 28 September 1972, the Trial Court 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, On 6 February 1973, the Controverted Parcels
were foreclosed and on 23 March 1973, an auction sale was held with Respondent Amonoy as the sole bidder
for P23,760.00. Said sale was confirmed by the Trial Court. To satisfy the deficiency, another execution sale was conducted with
Respondent Amonoy as the sole bidder for P12,137.50. On the basis of an Affidavit of Consolidation of Ownership by Respondent
Amonoy, the corresponding tax declarations covering the Controverted Parcels were consolidated in his name.
On 19 December 1973, or a year after the judgment in the Foreclosure Case, an action for Annulment of Judgment entitled "
Maria Penano et al. vs. Sergio Amonoy, et al ." squarely put in issue were the properiety of the mortgage, the validity of the
judgment of foreclosure sale and the tenability of aquisition by respondent Omonoy at the sheriff’s sale.
This petition mainly asserts that the mortgage and the sheriff sale are void for they are contrary to Art. 1491 of the Civil Code.
Under this provision, a lawyer is prohibited from acquiring either by purchase or assignment the property or rights involved
which are the object of the litigation in which they intervene by virtue oftheir profession.
ISSUE: Whether the mortgage constituted on the controverted parcels of land in favor of Amonoy comes within the scope of the
prohibition in Art. 1491 of the Civil Code?
HELD: Under Art. 1491 of the Civil Code: The following persons cannot acquire by purchase even at a public or judicial or auction,
either in person or through the mediation of another:
(5) Justices, judges, prosecuting attorneys, ... the property and rights in litigation or levied upon on execution before the court
within whose junction or territory they exercise their respective functions; this prohibition includes the act of acquitting by
assignment and shall apply to lawyers with respect to the property and rights which may be the object of any litigation in which
they may take part by virtue of their profession .
Under the aforequoted provision, a lawyer is prohibited from acquiring either by purchase or assignment the property or rights
involved which are the object of the litigation in which they intervene by virtue of their profession The prohibition on purchase
is all embracing to include not only sales to private individuals but also public or judicial sales The rationale advanced for the
prohibition is that public policy disallows the transactions in view of the fiduciary relationship involved i.e., the relation of trust
and confidence and the peculiar
control exercised by these persons.
In the instant case, it is undisputed that the Controverted Parcels were part of the estate of the late Julio M. Catolos subject of
intestate estate proceedings, wherein Respondent Amonoy acted as counsel for some of the heirs from 1959 until 1968 by his
own admission that these properties were adjudicated to Alfonso Fornilda and Asuncion M. Pasamba in the Project of Partition
approved by the Court on 12 January 1965; that on 20 January 1965, or only eight (8) days thereafter, and while he was still
intervening in the case as counsel, these properties were mortgaged by petitioners' predecessor-in-interest to Respondent
Amonoy to secure payment of the latter's attorney's fees in the amount of P27,600.00; that since the mortgage indebtedness
was not paid, Respondent Amonoy instituted an action for judicial foreclosure of mortgage on 21 January 1970; that the
mortgage was subsequently orderedforeclosed and auction sale followed where Respondent Amonoy was the sole bidder for
P23,600.00; and that being short of the mortgage indebtedness, he applied for and further obtained a deficiency judgment.
The fact that the properties were first mortgaged and only subsequently acquired in an auction sale long after the termination
of the intestate proceedings will not remove it from the scope of the prohibition. To rule otherwise would be to countenance
indirectly what cannot be done directly.
Being a void contract, the action or defense form the declaration of its inesistence is imprescriptible. The defect of a void or
inexistence contract is permanent.Mere lapse of time cannot give it efficacy. Neither can the right to set up the defense of
illegality be waived. The six (6) parcels of land herein controverted are hereby ordered returned to petitioners unless some of
them have been conveyed to innocent third persons.
With respect to petitioners' prayer for disbarment by reason of malpractice of Respondent Amonoy embodied in their pleading
entitled 'Mahigpit na Musiyung para Papanagutin Kaugnay ngPaglalapastangan' and 'Masasamang Gawain (Mal-Practices) 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, a new docket number will be assigned to the case.

Fornilda V RTC

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DAVID P. FORNILDA vs.

REGIONAL TRIAL COURT

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