On the thesis that the sales made by petitioner to his wife were             TOTAL AMOUNT due & P3,325.

68
null and void pursuant to the provisions of Article 1490 of the collectible
ANTONIO MEDINA, petitioner, Civil Code of the Philippines (formerly, Art. 1458, Civil Code of
vs. 1889), the Collector considered the sales made by Mrs. Medina
Petitioner again requested for reconsideration, but respondent
COLLECTOR OF INTERNAL REVENUE and THE COURT OF TAX as the petitioner's original sales taxable under Section 186 of the
Collector, in his letter of April 4, 1955, denied the same.
APPEALS respondents. National Internal Revenue Code and, therefore, imposed a tax
assessment on petitioner, calling for the payment of P4,553.54
Petitioner appealed to the Court of Tax Appeals, which rendered
Eusebio D. Morales for petitioner. as deficiency sales taxes and surcharges from 1949 to 1952. This
judgment as aforesaid. The Court's decision was based on two
Office of the Solicitor General for respondents. same assessment of September 26, 1953 sought also the
main findings, namely, (a) that there was no premarital
collection of another sum of P643.94 as deficiency sales tax and
agreement of absolute separation of property between the
surcharge based on petitioner's quarterly returns from 1946 to
REYES, J.B.L. J.: Medina spouse; and (b) assuming that there was such an
1952.
agreement, the sales in question made by petitioner to his wife
Petition to review a decision of the Court of Tax Appeals were fictitious, simulated, and not bona fide.
On November 30, 1953, petitioner protested the assessment;
upholding a tax assessment of the Collector of Internal Revenue
however, respondent Collector insisted on his demand. On July
except with respect to the imposition of so-called compromise In his petition for review to this Court, petitioner raises several
9, 1954, petitioner filed a petition for reconsideration revealing
penalties, which were set aside. assignments of error revolving around the central issue of
for the first time the existence of an alleged premarital
whether or not the sales made by the petitioner to his wife could
agreement of complete separation of properties between him
The records show that on or about May 20, 1944, petitioning be considered as his original taxable sales under the provisions
and his wife, and contending that the assessment for the years
taxpayer Antonio Medina married Antonia Rodriguez. Before of Section 186 of the National Internal Revenue Code.
1946 to 1952 had already prescribed. After one hearing, the
1946, the spouses had neither property nor business of their Conference Staff of the Bureau of Internal Revenue eliminated
own. Later, however, petitioner acquired forest, concessions in Relying mainly on testimonial evidence that before their
the 50% fraud penalty and held that the taxes assessed against
the municipalities of San Mariano and Palanan in the Province of marriage, he and his wife executed and recorded a prenuptial
him before 1948 had already prescribed. Based on these
Isabela. From 1946 to 1948, the logs cut and removed by the agreement for a regime of complete separation of property, and
findings, the Collector issued a modified assessment, demanding
petitioner from his concessions were sold to different persons in that all trace of the document was lost on account of the war,
the payment of only P3,325.68, computed as follows:
Manila through his agent, Mariano Osorio. petitioner imputes lack of basis for the tax court's factual finding
that no agreement of complete separation of property was ever
  5% tax due on P7,209.83 -1949 P 360.49
Some time in 1949, Antonia R. Medina, petitioner's wife, started executed by and between the spouses before their marriage. We
to engage in business as a lumber dealer, and up to around   5% tax due on 16,945.55 - 1950 847.28 do not think so. Aside from the material inconsistencies in the
1952, petitioner sold to her almost all the logs produced in his   5% tax due on 16,874.52 - 1951 843.75 testimony of petitioner's witnesses pointed out by the trial
San Mariano, concession. Mrs. Medina, In turn, sold in Manila court, the circumstantial evidence is against petitioner's claim.
  5% tax due on 11,009.94 - 1952     550.50
the logs bought from her husband through the same agent, Thus, it appears that at the time of the marriage between
Mariano Osorio. The proceeds were, upon instructions from             TOTAL sales tax due P2,602.0 petitioner and his wife, they neither had any property nor
petitioner, either received by Osorio for petitioner or deposited 25% Surcharge thereon 650.51 business of their own, as to have really urged them to enter into
by said agent in petitioner's current account with the Philippine Short taxes per quarterly returns, 3rd 58.52 the supposed property agreement. Secondly, the testimony that
National Bank. quarter, 1950 the separation of property agreement was recorded in the
Registry of Property three months before the marriage, is
25% Surcharge thereon       14.63 patently absurd, since such a prenuptial agreement could not be
effective before marriage is celebrated, and would automatically did right in giving little or no credence to the secondary evidence even assuming arguendo the truth of petitioner's charge
be cancelled if the union was called off. How then could it be to prove the due execution and contents of the alleged regarding the seizure, it is now settled in this jurisdiction that
accepted for recording prior to the marriage? In the third place, document (see Comments on the Rules of Court, Moran, 1957 illegally obtained documents and papers are admissible in
despite their insistence on the existence of the ante nuptial Ed., Vol. 3, pp. 10.12). evidence, if they are found to be competent and relevant to the
contract, the couple, strangely enough, did not act in accordance case (see Wong & Lee vs. Collector of Internal Revenue, G.R. No.
with its alleged covenants. Quite the contrary, it was proved that The foregoing findings notwithstanding, the petitioner argues L-10155, August 30, 1958). In fairness to the Collector, however,
even during their taxable years, the ownership, usufruct, and that the prohibition to sell expressed under Article 1490 of the it should be stated that petitioner's imputation is vehemently
administration of their properties and business were in the Civil Code has no application to the sales made by said petitioner denied by him, and relying on Sections 3, 9, 337 and 338 of the
husband. And even when the wife was engaged in lumber to his wife, because said transactions are contemplated and Tax Code and the pertinent portions of Revenue Regulations No.
dealing, and she and her husband contracted sales with each allowed by the provisions of Articles 7 and 10 of the Code of V-1 and citing this Court's ruling in U.S. vs. Aviado, 38 Phil. 10,
other as aforestated, the proceeds she derived from her alleged Commerce. But said provisions merely state, under certain the Collector maintains that he and other internal revenue
subsequent disposition of the logs — incidentally, by and conditions, a presumption that the wife is authorized to engage officers and agents could require the production of books of
through the same agent of her husband, Mariano Osorio — were in business and for the incidents that flow therefrom when she accounts and other records from a taxpayer. Having arrived at
either received by Osorio for the petitioner or deposited by said so engages therein. But the transactions permitted are those the foregoing conclusion, it becomes unnecessary to discuss the
agent in petitioner's current account with the Philippine National entered into with strangers, and do not constitute exceptions to other issues raised, which are but premised on the assumption
Bank. Fourth, although petitioner, a lawyer by profession, the prohibitory provisions of Article 1490 against sales between that a premarital agreement of total separation of property
already knew, after he was informed by the Collector on or spouses. existed between the petitioner and his wife.
about September of 1953, that the primary reason why the sales
of logs to his wife could not be considered as the original taxable Petitioner's contention that the respondent Collector can not WHEREFORE, the decision appealed from is affirmed, with costs
sales was because of the express prohibition found in Article assail the questioned sales, he being a stranger to said against the petitioner.
1490 of the Civil Code of sales between spouses married under a transactions, is likewise untenable. The government, as correctly
community system; yet it was not until July of 1954 that he pointed out by the Tax Court, is always an interested party to all Padilla, Bautista Angelo, Labrador, Barrera, Gutierrez David and
alleged, for the first time, the existence of the supposed matters involving taxable transactions and, needless to say, Dizon, JJ., concur.
property separation agreement. Finally, the Day Book of the qualified to question their validity or legitimacy whenever
Register of Deeds on which the agreement would have been necessary to block tax evasion. Separate Opinions
entered, had it really been registered as petitioner insists, and
which book was among those saved from the ravages of the war,
Contracts violative of the provisions of Article 1490 of the Civil CONCEPCION, J.,  concurring:
did not show that the document in question was among those
Code are null and void (Uy Sui Pin vs. Cantollas, 70 Phil. 55; Uy
recorded therein.
Coque vs. Sioca 45 Phil. 43). Being void transactions, the sales I concur in the result. I do not share the view that documents
made by the petitioner to his wife were correctly disregarded by and papers illegally obtained are admissible in evidence, if
We have already ruled that when the credibility of witnesses is the Collector in his tax assessments that considered as the competent and relevant to the case. In this connection, I believe
the one at issue, the trial court's judgment as to their degree of taxable sales those made by the wife through the spouses' in the soundness of the following observations of the Supreme
credence deserves serious consideration by this Court (Collector common agent, Mariano Osorio. In upholding that stand, the Court of the United States in Weeks v. United States (232 US 383,
vs. Bautista, et al., G.R. Nos. L-12250 & L-12259, May 27, 1959). Court below committed no error. 58 L. ed. 652, 34 S. Ct. 341):1
This is all the more true in this case because not every copy of
the supposed agreement, particularly the one that was said to
It is also the petitioner's contention that the lower court erred in The effect of the Fourth Amendment is to put the
have been filed with the Clerk of Court of Isabela, was accounted
using illegally seized documentary evidence against him. But courts of the United States and Federal officials, in the
for as lost; so that, applying the "best evidence rule", the court
exercise of their power and authority, under limitations MERCEDES CALIMLIM- CANULLAS, petitioner, the house in dispute where she and her children were residing,
and restraints as to the exercise of such power and vs. including the coconut trees on the land, were built and planted
authority, an to forever secure the people, their HON. WILLELMO FORTUN, Judge, Court of First instance of with conjugal funds and through her industry; that the sale of
persons, houses, papers, and effects against all Pangasinan, Branch I, and CORAZON DAGUINES, respondents. the land together with the house and improvements to
unreasonable searches and seizures under the guise of DAGUINES was null and void because they are conjugal
law. This protection reaches all alike, whether accused MELENCIO-HERRERA, J.: properties and she had not given her consent to the sale,
of crime or not, and the duty of giving to it force and
effect is obligatory upon all entrusted under our Federal Petition for Review on certiorari assailing the Decision, dated In its original judgment, respondent Court principally declared
system with the enforcement of the laws. The tendency October 6, 1980, and the Resolution on the Motion for DAGUINES "as the lawful owner of the land in question as well as
of those who execute the criminal laws of the country Reconsideration, dated November 27, 1980, of the then Court of the one-half () of the house erected on said land." Upon
to obtain conviction by means of unlawful seizures and First Instance of Pangasinan, Branch I, in Civil Case No. 15620 reconsideration prayed for by MERCEDES, however, respondent
enforced confessions, the latter often obtained after entitled "Corazon DAGUINES vs. MERCEDES Calimlim-Canullas," Court resolved:
subjecting accused persons to unwarranted practices upholding the sale of a parcel of land in favor of DAGUINES but
destructive of rights secured by the Federal not of the conjugal house thereon' WHEREFORE, the dispositive portion of the
Constitution, should find no sanction in the judgments Decision of this Court, promulgated on
of the courts which are charged at all times with the October 6, 1980, is hereby amended to read as
The background facts may be summarized as follows: Petitioner
support of the Constitution and to which people of all follows:
MERCEDES Calimlim-Canullas and FERNANDO Canullas were
conditions have a right to appeal for the maintenance
married on December 19, 1962. They begot five children. They
of such fundamental rights.
lived in a small house on the residential land in question with an (1) Declaring plaintiff as the true and lawful
area of approximately 891 square meters, located at Bacabac, owner of the land in question and the 10
xxx     xxx     xxx Bugallon, Pangasinan. After FERNANDO's father died in 1965, coconut trees;
FERNANDO inherited the land.
If letters and private documents can thus be seized and (2) Declaring as null and void the sale of the
held and used in evidence, against a citizen accused of In 1978, FERNANDO abandoned his family and was living with conjugal house to plaintiff on April 15, 1980
an offense, the protection of the Fourth. Amendment private respondent Corazon DAGUINES. During the pendency of (Exhibit A) including the 3 coconut trees and
declaring his right to be secured against such searches this appeal, they were convicted of concubinage in a judgment other crops planted during the conjugal
and seizures is of no value, and, so far as those thus rendered on October 27, 1981 by the then Court of First Instance relation between Fernando Canullas (vendor)
placed are concerned well be stricken from the of Pangasinan, Branch II, which judgment has become final. and his legitimate wife, herein defendant
Constitution. The efforts of the courts and their officials Mercedes Calimlim- Canullas;
to bring the guilty to punishment, praiseworthy as they
On April 15, 1980, FERNANDO sold the subject property with the
are, are not to be aided by the sacrifice of those great
house thereon to DAGUINES for the sum of P2,000.00. In the xxx xxx xxx
principles established by years of endeavor and
document of sale, FERNANDO described the house as "also
suffering which have resulted in their embodiment in
inherited by me from my deceased parents." The issues posed for resolution are (1) whether or not the
the fundamental law of the land." as applied and
construction of a conjugal house on the exclusive property of the
amplified in Elkins v. United States (June 27, 1960), 4 L.
ed. 1669. Unable to take possession of the lot and house, DAGUINES husband ipso facto gave the land the character of conjugal
initiated a complaint on June 19, 1980 for quieting of title and property; and (2) whether or not the sale of the lot together
damages against MERCEDES. The latter resisted and claimed that
with the house and improvements thereon was valid under the is liquidated and indemnity paid to the owner of the land. We That sale was subversive of the stability of the family, a basic
circumstances surrounding the transaction. believe that the better rule is that enunciated by Mr. Justice social institution which public policy cherishes and protects. 5
J.B.L. Reyes in Padilla vs. Paterno, 3 SCRA 678, 691 (1961), where
The determination of the first issue revolves around the the following was explained: Article 1409 of the Civil Code states  inter alia that: contracts
interpretation to be given to the second paragraph of Article 158 whose cause, object, or purpose is contrary to law, morals, good
of the Civil Code, which reads: As to the above properties, their conversion customs, public order, or public policy are void and inexistent
from paraphernal to conjugal assets should be from the very beginning.
xxx xxx xxx deemed to retroact to the time the conjugal
buildings were first constructed thereon or at Article 1352 also provides that: "Contracts without cause, or
Buildings constructed at the expense of the the very latest, to the time immediately before with unlawful cause, produce no effect whatsoever. The cause is
partnership during the marriage on land the death of Narciso A. Padilla that ended the unlawful if it is contrary to law, morals, good customs, public
belonging to one of the spouses also pertain to conjugal partnership. They can not be order, or public policy."
the partnership, but the value of the land shall considered to have become conjugal property
be reimbursed to the spouse who owns the only as of the time their values were paid to Additionally, the law emphatically prohibits the spouses from
same. the estate of the widow Concepcion Paterno selling property to each other subject to certain
because by that time the conjugal partnership exceptions.6 Similarly, donations between spouses during
no longer existed and it could not acquire the marriage are prohibited. 7 And this is so because if transfers or
We hold that pursuant to the foregoing provision both the land
ownership of said properties. The acquisition con conveyances between spouses were allowed during
and the building belong to the conjugal partnership but the
by the partnership of these properties was, marriage, that would destroy the system of conjugal partnership,
conjugal partnership is indebted to the husband for the value of
under the 1943 decision, subject to the a basic policy in civil law. It was also designed to prevent the
the land. The spouse owning the lot becomes a creditor of the
suspensive condition that their values would exercise of undue influence by one spouse over the other,8 as
conjugal partnership for the value of the lot, 1 which value
be reimbursed to the widow at the liquidation well as to protect the institution of marriage, which is the
would be reimbursed at the liquidation of the conjugal
of the conjugal partnership; once paid, the cornerstone of family law. The prohibitions apply to a couple
partnership. 2
effects of the fulfillment of the condition living as husband and wife without benefit of marriage,
should be deemed to retroact to the date the otherwise, "the condition of those who incurred guilt would turn
In his commentary on the corresponding provision in the Spanish obligation was constituted (Art. 1187, New out to be better than those in legal union." Those provisions are
Civil Code (Art. 1404), Manresa stated: Civil Code) ... dictated by public interest and their criterion must be imposed
upon the wig of the parties. That was the ruling in Buenaventura
El articulo cambia la doctrine; los edificios The foregoing premises considered, it follows that FERNANDO vs. Bautista, also penned by Justice JBL Reyes (CA) 50 O.G. 3679,
construidos durante el matrimonio en suelo could not have alienated the house and lot to DAGUINES since and cited in Matabuena vs. Cervantes. 9 We quote hereunder the
propio de uno de los conjuges son gananciales, MERCEDES had not given her consent to said sale. 4 pertinent dissertation on this point:
abonandose el valor del suelo al conj uge a
quien pertenezca.
Anent the second issue, we find that the contract of sale was null We reach a different conclusion. While Art.
and void for being contrary to morals and public policy. The sale 133 of the Civil Code considers as void a
It is true that in the case of Maramba vs. Lozano,  3 relied upon was made by a husband in favor of a concubine after he had donation between the spouses during the
by respondent Judge, it was held that the land belonging to one abandoned his family and left the conjugal home where his wife marriage, policy considerations of the most
of the spouses, upon which the spouses have built a house, and children lived and from whence they derived their support. exigent character as wen as the dictates
becomes conjugal property only when the conjugal partnership
 of morality require that the same prohibition SO ORDERED. spouse of Marcelo Bernardo, and the stepmother of said
should apply to a common-law relationship. Mariano L. Bernardo.
Teehankee (Chairman), Plana, Relova, Gutierrez, Jr., and De la On July 27, 1947, Socorro Roldan filed in said guardianship
As announced in the outset of this opinion, a Fuente, JJ., concur. proceedings (Special Proceeding 2485, Manila), a motion asking
1954 Court of Appeals decision, Buenaventura for authority to sell as guardian the 17 parcels for the sum of
vs. Bautista, 50 OG 3679, interpreting a similar P14,700 to Dr. Fidel C. Ramos, the purpose of the sale being
provision of the old Civil Code speaks allegedly to invest the money in a residential house, which the
unequivocally. If the policy of the law is, in the THE PHILIPPINE TRUST COMPANY, as Guardian of the Property minor desired to have on Tindalo Street, Manila. The motion was
language of the opinion of the then Justice of the minor, MARIANO L. BERNARDO, Petitioner, vs. SOCORRO granted.
J.B.L. Reyes of that Court, 'to prohibit ROLDAN, FRANCISCO HERMOSO, FIDEL C. RAMOS and EMILIO
donations in favor of the other consort and his On August 5, 1947 Socorro Roldan, as guardian, executed the
CRUZ, Respondents.
descendants because of fear of undue proper deed of sale in favor of her brother-in-law Dr. Fidel C.
influence and improper pressure upon the   Ramos (Exhibit A-1), and on August 12, 1947 she asked for, and
donor, a prejudice deeply rooted in our ancient obtained, judicial confirmation of the sale. On August 13, 1947,
DECISION
law, ..., then there is every reason to apply the Dr. Fidel C. Ramos executed in favor of Socorro Roldan,
same prohibitive policy to persons living BENGZON, J.: personally, a deed of conveyance covering the same seventeen
together as husband and wife without benefit parcels, for the sum of P15,000 (Exhibit A-2). And on October 21,
As guardian of the property of the minor Mariano L. Bernardo,
of nuptials. For it is not to be doubted that 1947 Socorro Roldan sold four parcels out of the seventeen to
the Philippine Trust Company filed in the Manila court of first
assent to such irregular connection for thirty Emilio Cruz for P3,000, reserving to herself the right to
instance a complaint to annul two contracts regarding 17 parcels
years bespeaks greater influence of one party repurchase (Exhibit A-3).
of land:chanroblesvirtuallawlibrary (a) sale thereof by Socorro
over the other, so that the danger that the law Roldan, as guardian of said minor, to Fidel C. Ramos; chan The Philippine Trust Company replaced Socorro Roldan as
seeks to avoid is correspondingly increased'. roblesvirtualawlibraryand (b) sale thereof by Fidel C. Ramos to guardian, on August 10, 1948. And this litigation, started two
Moreover, as pointed out by Ulpian (in his lib Socorro Roldan personally. The complaint likewise sought to months later, seeks to undo what the previous guardian had
32 ad Sabinum, fr. 1), "It would not be just that annul a conveyance of four out of the said seventeen parcels by done. The step-mother in effect, sold to herself, the properties
such donations — should subsist, lest the Socorro Roldan to Emilio Cruz. of her ward, contends the Plaintiff, and the sale should be
conditions of those who incurred guilt should annulled because it violates Article 1459 of the Civil Code
turn out to be better." So long as marriage The action rests on the proposition that the first two sales were
prohibiting the guardian from purchasing “either in person or
remains the cornerstone of our family law, in reality a sale by the guardian to herself — therefore, null and
through the mediation of another” the property of her ward.
reason and morality alike demand that the void under Article 1459 of the Civil Code. As to the third
disabilities attached to marriage should conveyance, it is also ineffective, because Socorro Roldan had The court of first instance, following our decision in Rodriguez vs.
likewise attach to concubinage (Emphasis acquired no valid title to convey to Cruz. Mactal, 60 Phil. 13 held the article was not controlling, because
supplied), there was no proof that Fidel C. Ramos was a mere intermediary
The material facts of the case are not complicated. These 17
or that the latter had previously agreed with Socorro Roldan to
parcels located in Guiguinto, Bulacan, were part of the
WHEREFORE, the Decision of respondent Judge, dated October buy the parcels for her benefit.
properties inherited by Mariano L. Bernardo from his father,
6, 1980, and his Resolution of November 27, 1980 on petitioner's Marcelo Bernardo, deceased. In view of his minority, However, taking the former guardian at her word - she swore
Motion for Reconsideration, are hereby set aside and the sale of guardianship proceedings were instituted, wherein Socorro she had repurchased the lands from Dr. Fidel C. Ramos to
the lot, house and improvements in question, is hereby declared Roldan was appointed his guardian. She was the surviving preserve it and to give her protege opportunity to redeem — the
null and void. No costs.
court rendered judgment upholding the contracts but allowing ward’s property 1 we have no hesitation to declare that in this property through another person — because two years had
the minor to repurchase all the parcels by paying P15,000, within case, in the eyes of the law, Socorro Roldan took by purchase elapsed between the sales. Such period of time was sufficient to
one year. her ward’s parcels thru Dr. Ramos, and that Article 1459 of the dispel the natural suspicion of the guardian’s motives or actions.
Civil Code applies. In the case at bar, however, only one week had elapsed. And if
The Court of Appeals affirmed the judgment, adding that the
we were technical, we could say, only one day had elapsed from
minor knew the particulars of, and approved the transaction, She acted it may be true without malice; chan
the judicial approval of the sale (August 12), to the purchase by
and that “only clear and positive evidence of fraud or bad faith, roblesvirtualawlibrarythere may have been no previous
the guardian (Aug. 13).
and not mere insinuations and inferences will overcome the agreement between her and Dr. Ramos to the effect that the
presumptions that a sale was concluded in all good faith for latter would buy the lands for her. But the stubborn fact remains Attempting to prove that the transaction was beneficial to the
value”. that she acquired her protege’s properties, through her brother- minor, Appellee’s attorney alleges that the money (P14,700)
in-law. That she planned to get them for herself at the time of invested in the house on Tindalo Street produced for him rentals
At first glance the resolutions of both courts accomplished
selling them to Dr. Ramos, may be deduced from the very short of P2,400 yearly; chan roblesvirtualawlibrarywhereas the parcels
substantial justice:chanroblesvirtuallawlibrary the minor
time between the two sales (one week). The temptation which of land yielded to his step-mother only an average of P1,522 per
recovers his properties. But if the conveyances are annulled as
naturally besets a guardian so circumstanced, necessitates the year. 3 The argument would carry some weight if that house had
prayed for, the minor will obtain a better
annulment of the transaction, even if no actual collusion is been built out of the purchase price of P14,700 only.  4 One
deal:chanroblesvirtuallawlibrary he receives all the fruits of the
proved (so hard to prove) between such guardian and the thing is certain:chanroblesvirtuallawlibrary the calculation does
lands from the year 1947 (Article 1303 Civil Code) and will return
intermediate purchaser. This would uphold a sound principle of not include the price of the lot on which the house was erected.
P14,700, not P15,000.
equity and justice. 2 Estimating such lot at P14,700 only, (ordinarily the city lot is
To our minds the first two transactions herein described couldn’t more valuable than the building) the result is that the price paid
We are aware of course that in Rodriguez vs. Mactal, 60 Phil. p.
be in a better juridical situation than if this guardian had for the seventeen parcels gave the minor an income of only
13 wherein the guardian Mactal sold in January 1926 the
purchased the seventeen parcels on the day following the sale to P1,200 a year, whereas the harvest from the seventeen parcels
property of her ward to Silverio Chioco, and in March 1928 she
Dr. Ramos. Now, if she was willing to pay P15,000 why did she netted his step-mother a yearly profit of P1,522.00. The minor
bought it from Chioco, this Court
sell the parcels for less? In one day (or actually one week) the was thus on the losing end.
said:chanroblesvirtuallawlibrary
price could not have risen so suddenly. Obviously when, seeking
Hence, from both the legal and equitable standpoints these
approval of the sale she represented the price to be the best “In order to bring the sale in this case within the part of Article
three sales should not be
obtainable in the market, she was not entirely truthful. This is 1459, quoted above, it is essential that the proof submitted
sustained:chanroblesvirtuallawlibrary the first two for violation
one phase to consider. establish some agreement between Silverio Chioco and Trinidad
of article 1459 of the Civil Code; chan roblesvirtualawlibraryand
Mactal to the effect that Chioco should buy the property for the
Again, supposing she knew the parcels were actually worth the third because Socorro Roldan could pass no title to Emilio
benefit of Mactal. If there was no such agreement, either
P17,000; chan roblesvirtualawlibrarythen she agreed to sell Cruz. The annulment carries with is (Article 1303 Civil Code) the
express or implied, then the sale cannot be set aside cralaw .
them to Dr. Ramos at P14,700; chan roblesvirtualawlibraryand obligation of Socorro Roldan to return the 17 parcels together
(Page 16; chan roblesvirtualawlibraryItalics supplied.)”
knowing the realty’s value she offered him the next day P15,000 with their fruits and the duty of the minor, through his guardian
or P15,500, and got it. Will there be any doubt that she was However, the underlined portion was not intended to establish a to repay P14,700 with legal interest.
recreant to her guardianship, and that her acquisition should be general principle of law applicable to all subsequent litigations. It
Judgment is therefore rendered:chanroblesvirtuallawlibrary
nullified? Even without proof that she had connived with Dr. merely meant that the subsequent purchase by Mactal could not
Ramos. Remembering the general doctrine that guardianship is a be annulled in that particular case because there was no proof of a.  Annulling the three contracts of sale in question; chan
trust of the highest order, and the trustee cannot be allowed to a previous agreement between Chioco and her. The court then roblesvirtualawlibraryb. declaring the minor as the owner of the
have any inducement to neglect his ward’s interest and in line considered such proof necessary to establish that the two sales seventeen parcels of land, with the obligation to return to
with the court’s suspicion whenever the guardian acquires the were actually part of one scheme — guardian getting the ward’s Socorro Roldan the price of P14,700 with legal interest from
August 12, 1947; chan roblesvirtualawlibraryc. Ordering Socorro actual possession thereof under a claim of title many years the amount of P 2,000.00, as well as the sum
Roldan and Emilio Cruz to deliver said parcels of land to the before Francisco Militante sold the land to the plaintiff." of P500.00 for attorney's fees. ...
minor; chan roblesvirtualawlibraryd. Requiring Socorro Roldan
to pay him beginning with 1947 the fruits, which her attorney Furthermore, even assuming that Militante had anything to sell, On December 9, 1964, the trial court issued a
admits, amounted to P1,522 a year; chan the deed of sale executed in 1956 by him in favor of plaintiff at a pre-trial order, after a pre-trial conference
roblesvirtualawlibrarye. Authorizing the minor to deliver directly time when plaintiff was concededly his counsel of record in the between the parties and their counsel which
to Emilio Cruz, out of the price of P14,700 above mentioned, the land registration case involving the very land in dispute order reads as follows..
sum of P3,000; chan roblesvirtualawlibraryand f. (ultimately decided adversely against Militante by the Court of
charging Appellees with the costs. SO ORDERED. Appeals' 1958 judgment affirming the lower court's dismissal of 'When this case was called
Paras, C.J., Padilla, Montemayor, Reyes, A., Bautista Angelo, Militante's application for registration) was properly declared for a pre-trial conference
Concepcion, Reyes, J.B.L., and Endencia, JJ., concur. inexistent and void by the lower court, as decreed by Article today, the plaintiff appeared
1409 in relation to Article 1491 of the Civil Code. assisted by himself and Atty.
Gregorio M. Rubias. The
The appellate court, in its resolution of certification of 25 July defendant also appeared,
DOMINGO D. RUBIAS, plaintiff-appellant, 1972, gave the following backgrounder of the appeal at bar: assisted by his counsel Atty.
vs. Vicente R. Acsay.
ISAIAS BATILLER, defendant-appellee. On August 31, 1964, plaintiff Domingo D.
Rubias, a lawyer, filed a suit to recover the A. During the pre-trial
TEEHANKEE, J.: ownership and possession of certain portions conference, the parties have
of lot under Psu-99791 located in Barrio agreed that the  following
In this appeal certified by the Court of Appeals to this Court as General Luna, Barotac Viejo, Iloilo which he facts are attendant in this
involving purely legal questions, we affirm the dismissal order bought from his father-in-law, Francisco case and that they will no
rendered by the Iloilo court of first instance after pre-trial and Militante in 1956 against its present occupant longer introduced any
submittal of the pertinent documentary exhibits. defendant, Isaias Batiller, who illegally entered evidence, testimonial or
said portions of the lot on two occasions — in documentary to prove them:
Such dismissal was proper, plaintiff having no cause of action, 1945 and in 1959. Plaintiff prayed also for
since it was duly established in the record that the application damages and attorneys fees. (pp. 1-7, Record 1. That Francisco Militante claimed ownership
for registration of the land in question filed by Francisco on Appeal). In his answer with counter-claim of a parcel of land located in the Barrio of
Militante, plaintiff's vendor and predecessor interest, had been defendant claims the complaint of the plaintiff General Luna, municipality of Barotac Viejo
dismissed by decision of 1952 of the land registration court as does not state a cause of action, the truth of province of Iloilo, which he caused to be
affirmed by final judgment in 1958 of the Court of Appeals and the matter being that he and his predecessors- surveyed on July 18-31, 1934, whereby he was
hence, there was no title or right to the land that could be in-interest have always been in actual, open issued a plan Psu-99791 (Exhibit "B"). (The land
transmitted by the purported sale to plaintiff. and continuous possession since time claimed contained an area of 171:3561
immemorial under claim of ownership of the hectares.)
As late as 1964, the Iloilo court of first instance had in another portions of the lot in question and for the
case of ejectment likewise upheld by final judgment defendant's alleged malicious institution of the complaint 2. Before the war with Japan, Francisco
"better right to possess the land in question . having been in the he claims he has suffered moral damages in Militante filed with the Court of First Instance
of Iloilo an application for the registration of of Iloilo. These exclusions referred to portions taxes for 1940 (Exhs. "G" and "G-7"), for 1945
the title of the land technically described in of the original area of over 171 hectares 46 (Exh. "G-1") for 1947 (Exh. "G-2"), for 1947
psu-99791 (Exh. "B") opposed by the Director originally claimed by Militante as applicant, but & 1948 (Exh. "G-3"), for 1948 (Exh. "G-4"), and
of Lands, the Director of Forestry and other which he expressly recognized during the trial for 1948 and 1949 (Exh. "G-5").
oppositors. However, during the war with to pertain to some oppositors, such as the
Japan, the record of the case was lost before it Bureau of Public Works and Bureau of Forestry 7. Tax Declaration No. 2434 in the name of
was heard, so after the war Francisco Militante and several other individual occupants and Liberato Demontaño for the land described
petitioned this court to reconstitute the record accordingly withdrew his application over the therein (Exh. "F") was cancelled by Tax. Dec.
of the case. The record was reconstituted on same. This is expressly made of record in Exh. No. 5172 of Francisco Militante (Exh. "E").
the Court of the First Instance of Iloilo and A, which is the Court of Appeals' decision of 22 Liberato Demontaño paid the land tax under
docketed as Land Case No. R-695, GLRO Rec. September 1958 confirming the land Tax Dec. No. 2434 on Dec. 20, 1939 for the
No. 54852. The Court of First Instance heard registration court's dismissal of Militante's years 1938 (50%) and 1959 (Exh. "H").
the land registration case on November 14, application for registration.)
1952, and after the trial this court dismissed 8. The defendant had declared for taxation
the application for registration. The appellant, 4. On September 22,1958 the Court of appeals purposes Lot No. 2 of the Psu-155241 under
Francisco Militante, appealed from the in CA-G.R. No. 13497-R promulgated its Tax Dec. Not. 8583 for 1957 and a portion of
decision of this Court to the Court of Appeals judgment confirming the decision of this Court Lot No. 2, Psu-155241, for 1945 under Tax Dec.
where the case was docketed as CA-GR No. in Land Case No. R-695, GLRO Rec. No. 54852 No. 8584 (Exh. "2-A" Tax No. 8583 (Exh. "2")
13497-R.. which dismissed the application for was revised by Tax Dec. No. 9498 in the name
Registration filed by Francisco Militante (Exh. of the defendant (Exh. "2-B") and Tax Dec. No.
3. Pending the disposal of the appeal  in CA-GR "I"). 8584 (Exh. "2-A") was cancelled by Tax Dec.
No. 13497-R and more particularly on June 18, No. 9584 also in the name of the defendant
1956, Francisco Militante sold to the plaintiff, 5. Domingo Rubias declared the land described (Exh. "2-C"). The defendant paid the land taxes
Domingo Rubias the land  technically described in Exh. 'B' for taxation purposes under Tax Dec. for Lot 2, Psu-155241, on Nov. 9, 1960 for the
in psu-99791 (Exh. "A"). The sale was duly No. 8585 (Exh. "C") for 1957; Tax Dec. Nos. years 1945 and 1946, for the year 1950, and
recorded in the Office of the Register of Deeds 9533 (Exh. "C-1") and 10019 (Exh. "C-3")for the for the year 1960 as shown by the certificate of
for the province of Iloilo as Entry No. 13609 on year 1961; Tax Dec. No. 9868 (Exh. "C-2") for the treasurer (Exh. "3"). The defendant may
July 11, 1960 (Exh. "A-1"). the year 1964, paying the land taxes under Tax present to the Court other land taxes receipts
Dec. No. 8585 and 9533 (Exh. "D", "D-1", "G- for the payment of taxes for this lot.
(NOTE: As per deed of sale, Exh. A, what 6").
Militante purportedly sold to plaintiff- 9. The land claimed by the defendant  as his
appellant, his son-in-law,  for the sum of 6. Francisco Militante immediate predecessor- own was surveyed on June 6 and 7,1956, and a
P2,000.00  was "a parcel of untitled land having in-interest of the plaintiff, has also declared plan approved by Director of Land on
an area Of 144.9072 hectares ... surveyed the land for taxation purposes under Tax Dec. November 15, 1956 was issued, identified
under Psu 99791 ... (and) subject to the No. 5172 in 1940 (Exh. "E") for 1945; under Tax as Psu 155241 (Exh. "5").
exclusions made by me, under (case) CA-i3497, Dec. No. T-86 (Exh. "E-1") for 1948; under Tax
Land Registration Case No. R-695, G.L.R.O. No. Dec. No. 7122 (Exh. "2"), and paid the land
54852, Court of First Instance of the province
 10. On April 22, 1960, the  plaintiff filed forcible 1. That the land he purchased from Francisco possession of the land in the year 1930, and
Entry and Detainer case  against Isaias Batiller Militante under Exh. "A" was formerly owned since then up to the present, the land remains
in the Justice of the Peace Court of Barotac and possessed by Liberato Demontaño but in the possession of the defendant, his
Viejo Province of Iloilo (Exh. "4") to which the that on September 6, 1919 the land was sold at possession being actual, open, public, peaceful
defendant Isaias Batiller riled his answer on public auction by virtue of a judgment in a Civil and continuous in the concept of an owner,
August 29, 1960 (Exh. "4-A"). The Municipal Case entitled "Edw J. Pflieder plaintiff vs. exclusive of any other rights and adverse to all
Court  of Barotac Viejo after trial, decided the Liberato Demontaño Francisco other claimants.
case on May 10, 1961 in favor of the defendant Balladeros  and Gregorio Yulo, defendants", of
and against the plaintiff  (Exh. "4-B"). The which Yap Pongco was the purchaser (Exh. "1- 2. That the alleged predecessors in interest of
plaintiff appealed  from the decision of the 3"). The sale was registered in the Office of the the plaintiff have never been in the actual
Municipal Court of Barotac Viejo which was Register of Deeds of Iloilo on August 4, 1920, possession of the land and that they never had
docketed in this Court as Civil Case No. 5750 under Primary Entry No. 69 (Exh. "1"), and a any title thereto.
on June 3, 1961, to which the defendant, Isaias definite Deed of Sale was executed by
Batiller, on June 13, 1961 filed his answer (Exh. Constantino A. Canto, provincial Sheriff of 3. That Lot No. 2, Psu 155241, the subject
"4-C"). And this Court after the trial. decided Iloilo, on Jan. 19, 1934 in favor of Yap Pongco of Free Patent application of the defendant has
the case on November 26, 1964, in favor of the (Exh. "I"), the sale having been registered in been approved.
defendant, Isaias Batiller  and against the the Office of the Register of Deeds of Iloilo on
plaintiff (Exh. "4-D"). February 10, 1934 (Exh. "1-1").
4. The damages suffered by the defendant, as
alleged in his counterclaim."'1
(NOTE: As per Exh. 4-B, which is the Iloilo court 2. On September 22, 1934, Yap Pongco sold
of first instance decision of 26 November this land to Francisco Militante as evidenced by
The appellate court further related the developments of the
1964 dismissing  plaintiff's therein complaint a notarial deed (Exh. "J") which was registered
case, as follows:
for ejectment against defendant, the iloilo in the Registry of Deeds on May 13, 1940 (Exh.
court expressly found "that plaintiff's "J-1").
On August 17, 1965, defendant's counsel
complaint is unjustified, intended to harass the
manifested in open court that before any trial
defendant" and "that the defendant, Isaias 3. That plaintiff suffered damages alleged in his
on the merit of the case could proceed he
Batiller, has a better right to possess the land complaint.
would file a motion to dismiss plaintiff's
in question described in Psu 155241 (Exh. "3"),
complaint which he did, alleging that plaintiff
Isaias Batiller having been in the actual C. Defendants, on the other hand will prove by competent does not have cause of action against
physical possession  thereof under a claim of evidence during the trial of this case the following facts: him because the property in dispute which he
title many years before Francisco Militante
(plaintiff) allegedly bought from his father-in-
sold the land to the plaintiff-hereby dismissing
1. That lot No. 2 of the Psu-1552 it (Exh. '5') law, Francisco Militante was the subject matter
plaintiff's  complaint and ordering the plaintiff
was originally owned and possessed by Felipe of LRC No. 695 filed in the CFI of Iloilo, which
to pay the defendant attorney's fees ....")
Batiller, grandfather of the defendant Basilio case was brought on appeal to this Court and
Batiller, on the death of the former in 1920, as docketed as CA-G.R. No. 13497-R in which
B. During the trial of this case on the merit, the plaintiff will his sole heir. Isaias Batiller succeeded his aforesaid case  plaintiff was the counsel on
prove by competent evidence the following: father , Basilio Batiller, in the ownership and record of his  father-in-law, Francisco Militante.
Invoking Arts. 1409 and 1491 of the Civil Code Militante was inexistent and void. (See pp. 22- was made when plaintiff-
which reads: 31, Record on Appeal). Plaintiff strongly appellant was the counsel of
opposed defendant's motion to dismiss the latter in the Land
'Art. 1409. The following claiming that defendant can not invoke Articles Registration case.
contracts are inexistent and 1409 and 1491 of the Civil Code as Article 1422
void from the beginning: of the same Code provides that 'The defense of '2. The lower court erred in
illegality of contracts is not available to third holding that the defendant-
xxx xxx xxx persons whose interests are not directly appellee is an interested
affected' (See pp. 32-35 Record on Appeal). person to question the
(7) Those expressly prohibited by law. validity of the contract of
On October 18, 1965, the lower court issued sale between plaintiff-
an order disclaiming plaintiffs complaint (pp. appellant and the deceased,
'ART. 1491. The following
42-49, Record on Appeal.) In the aforesaid Francisco Militante, Sr.
persons cannot acquire any
order of dismissal the lower court practically
purchase, even at a public
agreed with defendant's contention that the '3. The lower court erred in
auction, either in person of
contract (Exh. A) between plaintiff and entertaining the motion to
through the mediation of
Francism Militante was null and void. In due dismiss of the defendant-
another: .
season plaintiff filed a motion for appellee after he had already
reconsideration (pp. 50-56 Record on Appeal) filed his answer, and after
xxx xxx xxx which was denied by the lower court on the termination of the pre-
January 14, 1966 (p. 57, Record on Appeal). trial, when the said motion
(5) Justices, judges, prosecuting attorneys, to dismiss raised a collateral
clerks of superior and inferior courts, and other Hence, this appeal by plaintiff from the orders question.
officers and employees connected with the of October 18, 1965 and January 14, 1966.
administration of justice, the property and
'4. The lower court erred in
rights of in litigation or levied upon an
Plaintiff-appellant imputes to the lower court dismissing the complaint of
execution before the court within whose
the following errors: the plaintiff-appellant.'
jurisdiction or territory they exercise their
respective functions; this prohibition includes
the act of acquiring an assignment and shall '1. The lower court erred in The appellate court concluded that plaintiffs "assignment of
apply to lawyers, with respect to the property holding that the contract of errors gives rise to two (2) legal posers — (1) whether or not the
and rights which may be the object of any sale between the plaintiff- contract of sale between appellant and his father-in-law, the late
litigation in which they may take part by virtue appellant and his father-in- Francisco Militante over the property subject of Plan Psu-99791
of their profession.' law, Francisco Militante, Sr., was void because it was made when plaintiff was counsel of his
now deceased, of the father-in-law in a land registration case involving the property in
property covered by Plan dispute; and (2) whether or not the lower court was correct in
defendant claims that plaintiff could not have
Psu-99791, (Exh. "A") was entertaining defendant-appellee's motion to dismiss after the
acquired any interest in the property in dispute
void, not voidable because it latter had already filed his answer and after he (defendant) and
as the contract he (plaintiff) had with Francisco
plaintiff-appellant had agreed on some matters in a pre-trial No error was therefore committed by the lower court in and that "(T)hese contracts cannot be ratified. Neither can the
conference. Hence, its elevation of the appeal to this Court as dismissing plaintiff's complaint upon defendant's motion after right to set up the defense of illegality be waived."
involving pure questions of law. the pre-trial.
The 1911 case of Wolfson vs. Estate of Martinez7 relied upon by
It is at once evident from the foregoing narration that the pre- 1. The stipulated facts and exhibits of record indisputably plaintiff as holding that a sale of property in litigation to the
trial conference held by the trial court at which the parties with established plaintiff's lack of cause of action and justified the party litigant's lawyer "is not void but voidable at the election of
their counsel agreed and stipulated on the material and relevant outright dismissal of the complaint. Plaintiff's claim of ownership the vendor" was correctly held by the lower court to have been
facts and submitted their respective documentary exhibits as to the land in question was predicated on the sale thereof for superseded by the later 1929 case of Director of Lands vs.
referred to in the pre-trial order, supra,2 practically amounted to P2,000.00 made in 1956 by his father-in- law, Francisco Abagat.8 In this later case of Abagat, the Court expressly cited
a fulldress trial which placed on record all the facts and exhibits Militante, in his favor, at a time when Militante's application for two antecedent cases involving the same transaction of
necessary for adjudication of the case. registration thereof had already been dismissed by the Iloilo purchase of property in litigation by the lawyer which was
land registration court and was pending appeal in the Court of expressly declared invalid under Article 1459 of the Civil Code of
The three points on which plaintiff reserved the presentation of Appeals. Spain (of which Article 1491 of our Civil Code of the Philippines is
evidence at the-trial dealing with the source of the alleged right the counterpart) upon challenge thereof not by the vendor-
and title of Francisco Militante's predecessors, supra,3 actually With the Court of Appeals' 1958 final judgment affirming client but by the adverse parties against whom the lawyer was to
are already made of record in the stipulated facts  and admitted the dismissal  of Militante's application for registration, the lack enforce his rights as vendee thus acquired.
exhibits. The chain of Militante's alleged title and right to the of any rightful claim or title of Militante to the land was
land as supposedly traced back to Liberato Demontaño conclusively and decisively judicially determined. Hence, there These two antecedent cases thus cited in Abagat clearly
was actually asserted by Militante (and his vendee, lawyer and was no right or title to the land that could be transferred or sold superseded (without so expressly stating the previous ruling
son-in-law, herein plaintiff) in the land registration case by Militante's purported sale in 1956 in favor of plaintiff. in Wolfson:
and rejected by the Iloilo land registration court
which dismissed Militante's application for registration of the Manifestly, then plaintiff's complaint against defendant, to be The spouses, Juan Soriano and Vicente
land. Such dismissal, as already stated, was affirmed by the final declared absolute owner of the land and to be restored to Macaraeg, were the owners of twelve parcels
judgment in 1958 of the Court of Appeals.4 possession thereof with damages was bereft of any factual or of land. Vicenta Macaraeg died in November,
legal basis. 1909, leaving a large number of collateral heirs
The four points on which defendant on his part reserved the but no descendants. Litigation between the
presentation of evidence at the trial dealing with his and his 2. No error could be attributed either to the lower court's surviving husband, Juan Soriano, and the heirs
ancestors' continuous, open, public and peaceful possession in holding that the purchase by a lawyer of the property in of Vicenta immediately arose, and the herein
the concept of owner of the land and the Director of Lands' litigation from his client is categorically prohibited by Article appellant Sisenando Palarca acted as Soriano's
approval of his survey plan thereof, supra,5 are likewise already 1491, paragraph (5) of the Philippine Civil Code, lawyer. On May 2, 1918, Soriano executed a
duly established facts of record, in the land registration case as reproduced supra;6 and that consequently, plaintiff's purchase of deed for the aforesaid twelve parcels of land in
well as in the ejectment case wherein the Iloilo court of first the property in litigation from his client (assuming that his client favor of Sisenando Palarca and on the
instance recognized the superiority of defendant's right to the could sell the same since as already shown above, his client's following day, May 3, 1918, Palarca filed an
land as against plaintiff. claim to the property was defeated and rejected) was void and application for the registration of the land in
could produce no legal effect, by virtue of Article 1409, the deed. After hearing, the Court of First
paragraph (7) of our Civil Code which provides that contracts Instance declared that the deed was invalid by
"expressly prohibited or declared void by law' are "inexistent virtue of the provisions of article 1459 of the
 Civil Code, which prohibits lawyers and lawyer and is presumed to know the law. He must, therefore, The reason thus given by Manresa in considering such prohibited
solicitors from purchasing property rights from the beginning, have been well aware of the defect in his acquisitions under Article 1459 of the Spanish Civil Code as
involved in any litigation in which they take title and is, consequently, a possessor in bad faith." merely voidable at the instance and option of the vendor and
part by virtue of their profession. The not void — "that the Code does not recognize such nullity de
application for registration was consequently As already stated, Wolfson and Abagat were decided with pleno derecho" — is no longer true and applicable to our own
denied, and upon appeal by Palarca to the relation to Article 1459 of the Civil Code of Spain then adopted Philippine Civil Code which does  recognize the absolute nullity of
Supreme Court, the judgement of the lower here, until it was superseded on August 30, 1950 by the Civil contracts "whose cause, object, or purpose is contrary to law,
court was affirmed by a decision promulgated Code of the Philippines whose counterpart provision is Article morals, good customs, public order or public policy" or which are
November 16,1925. (G.R. No. 24329, Palarca 1491. "expressly prohibited or declared void by law" and declares such
vs. Director of Lands, not reported.) contracts "inexistent and void from the beginning." 12
Article 1491 of our Civil Code (like Article 1459 of the Spanish
In the meantime cadastral case No. 30 of the Civil Code) prohibits in its six paragraphs certain persons, by The Supreme Court of Spain and modern authors have likewise
Province of Tarlac was instituted, and on reason of the relation of trust or their peculiar control over the veered from Manresa's view of the Spanish codal provision itself.
August 21, 1923, Eleuteria Macaraeg, as property, from acquiring such property in their trust or control In its sentencia of 11 June 1966, the Supreme Court of Spain
administratrix of the estate of Vicente either directly or indirectly and "even at a public or judicial ruled that the prohibition of Article 1459 of the Spanish Civil
Macaraeg, filed claims for the parcels in auction," as follows: (1) guardians; (2) agents; (3) administrators; Code is based on public policy, that violation of the prohibition
question. Buenaventura Lavitoria (4) public officers and employees; judicial officers and contract cannot be validated by confirmation or ratification,
administrator of the estate of Juan Soriano, did employees, prosecuting attorneys, and lawyers; and (6) others holding that:
likewise and so did Sisenando Palarca. In a especially disqualified by law.
decision dated June 21, 1927, the Court of First ... la prohibicion que el articulo 1459 del C.C.
Instance, Judge Carballo presiding, rendered In Wolfson which involved the sale and assignment of a money establece respecto a los administradores y
judgment in favor of Palarea and ordered the judgment by the client to the lawyer, Wolfson, whose right to so apoderados, la cual tiene conforme a la
registration of the land in his name. Upon purchase the judgment was being challenged by the judgment doctrina de esta Sala, contendia entre otras, en
appeal to this court by the administration of debtor, the Court, through Justice Moreland, then expressly S. de 27-5-1959, un fundamento de orden
the estates of Juan Soriano and Vicente reserved decision on "whether or not the judgment in question moral lugar la violacion de esta a la nulidad de
Macaraeg, the judgment of the court below actually falls within the prohibition of the article" and held only pleno derecho  del acto o negocio celebrado, ...
was reversed and the land adjudicated to the that the sale's "voidability can not be asserted by one not a party y prohibicion legal, afectante orden publico, no
two estates as conjugal property of the to the transaction or his representative," citing from cabe con efecto alguno la
deceased spouses. (G.R. No. 28226, Director of Manresa 10 that "(C)onsidering the question from the point of aludida retification ... 13
Lands vs. Abagat, promulgated May 21, 1928, view of the civil law, the view taken by the code, we must limit
not reported.)9 ourselves to classifying as void all acts done contrary to the The criterion of nullity of such prohibited contracts under Article
express prohibition of the statute. Now then: As the code does 1459 of the Spanish Civil Code (Article 1491 of our Civil Code) as
In the very case of Abagat itself, the Court, again affirming the not recognize such nullity by the mere operation of law, the a matter of public order and policy as applied by the Supreme
invalidity and nullity of the lawyer's purchase of the land in nullity of the acts hereinbefore referred to must be asserted by Court of Spain to administrators and agents in its above cited
litigation from his client, ordered the issuance of a writ of the person having the necessary legal capacity to do so and decision should certainly apply with greater reason to judges,
possession for the return of the land by the lawyer to the decreed by a competent judicial officers, fiscals and lawyers under paragraph 5 of the
adverse parties without reimbursement of the price paid by him court." 11 codal article.
and other expenses, and ruled that "the appellant Palarca is a
Citing the same decisions of the Supreme Court of Spain, Gullon adopted in a new article of our Civil Code, viz, Article 1409 against him. Thus, if there has been a void
Ballesteros, his "Curso de Derecho Civil, (Contratos Especiales)" declaring such prohibited contracts as "inexistent and void from transfer of property, the transferor can recover
(Madrid, 1968) p. 18, affirms that, with respect to Article 1459, the beginning." 18 it by the accion reinvindicatoria; and any
Spanish Civil Code:. prossessor may refuse to deliver it to the
Indeed, the nullity of such prohibited contracts is definite and transferee, who cannot enforce the contract.
Que caracter tendra la compra que se realice permanent and cannot be cured by ratification. The public Creditors may attach property of the debtor
por estas personas? Porsupuesto no cabe duda interest and public policy remain paramount and do not permit which has been alienated by the latter under a
de que el caso (art.) 1459, 40 y 50, la nulidad of compromise or ratification. In his aspect, the permanent void contract; a mortgagee can allege the
esabsoluta porque el motivo de la prohibicion disqualification of public and judicial officers and lawyers inexistence of a prior encumbrance; a debtor
es de orden publico. 14 grounded on public policy  differs from the first three cases of can assert the nullity of an assignment of credit
guardians, agents and administrators (Article 1491, Civil Code), as a defense to an action by the assignee.
Perez Gonzales in such view, stating that "Dado el caracter as to whose transactions it had been opined that they may be
prohibitivo delprecepto, la consequencia de la infraccion es la "ratified" by means of and in "the form of a new contact, in Action On Contract. — Even when the contract
nulidad radical y ex lege." 15 which cases its validity shall be determined only by the is void or inexistent, an action is necessary to
circumstances at the time the execution of such new contract. declare its inexistence, when it has already
Castan, quoting Manresa's own observation that. The causes of nullity which have ceased to exist cannot impair been fulfilled. Nobody can take the law into his
the validity of the new contract. Thus, the object which was own hands; hence, the intervention of the
illegal at the time of the first contract, may have already become competent court is necessary to declare the
"El fundamento do esta prohibicion es clarisimo. No sa trata con
lawful at the time of the ratification or second contract; or the absolute nullity of the contract and to decree
este precepto tan solo de guitar la ocasion al fraude; persiguese,
service which was impossible may have become possible; or the the restitution of what has been given under it.
ademasel proposito de rodear a las personas que intervienen en
intention which could not be ascertained may have been The judgment, however, will retroact to the
la administrcionde justicia de todos los retigios que necesitan
clarified by the parties. The ratification or second contract would very day when the contract was entered into.
pora ejercer su ministerio librandolos de toda suspecha, que
then be valid from its execution; however, it does not retroact to
aunque fuere in fundada, redundura endescredito de la
the date of the first contract." 19 If the void contract is still fully executory, no
institucion." 16 arrives at the contrary and now accepted view
that "Puede considerace en nuestro derecho inexistente 'o party need bring an action to declare its nullity;
radicalmente nulo  el contrato en los siguentes cases: a) ...; b) As applied to the case at bar, the lower court therefore properly but if any party should bring an action to
cuando el contrato se ha celebrado en violacion  de acted upon defendant-appellant's motion to dismiss on the enforce it, the other party can simply set up
una  prescripcion 'o prohibicion legal, fundada sobre motivos de ground of nullity of plaintiff's alleged purchase of the land, since the nullity as a defense. 20
orden publico  (hipotesis del art. 4 del codigo) ..." 17 its juridical effects and plaintiff's alleged cause of action founded
thereon were being asserted against defendant-appellant. The ACCORDINGLY, the order of dismissal appealed from is hereby
principles governing the nullity of such prohibited contracts and affirmed, with costs in all instances against plaintiff-appellant. So
It is noteworthy that Caltan's rationale for his conclusion that
judicial declaration of their nullity have been well restated by ordered.
fundamental consideration of public policy render void and
Tolentino in his treatise on our Civil Code, as follows:
inexistent such expressly prohibited purchase (e.g. by public
officers and employees of government property intrusted to Makalintal, Zaldivar, Castro,. Fernando, Barredo, Makasiar,
them and by justices, judges, fiscals and lawyers of property and Parties Affected. — Any person may invoke Antonio and Esguerra, JJ., concur.
rights in litigation and submitted to or handled by them, under the in existence of the contract whenever
Article 1491, paragraphs (4) and (5) of our Civil Code) has been juridical effects founded thereon are asserted