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.

TEEHANKEE, J.:
In this appeal certified by the Court of Appeals to this Court as involving purely legal questions, we
affirm the dismissal order rendered by the Iloilo court of first instance after pre-trial and submittal of
the pertinent documentary exhibits.
Such dismissal was proper, plaintiff having no cause of action, since it was duly established in the
record that the application for registration of the land in question filed by Francisco Militante,
plaintiff's vendor and predecessor interest, had been dismissed by decision of 1952 of the land
registration court as affirmed by final judgment in 1958 of the Court of Appeals and hence, there was
no title or right to the land that could be transmitted by the purported sale to plaintiff.
As late as 1964, the Iloilo court of first instance had in another case of ejectment likewise upheld by
final judgment defendant's "better right to possess the land in question . having been in the actual
possession thereof under a claim of title many years before Francisco Militante sold the land to the
plaintiff."
Furthermore, even assuming that Militante had anything to sell, the deed of sale executed in 1956 by
him in favor of plaintiff at a time when plaintiff was concededly his counsel of record in the land
registration case involving the very land in dispute (ultimately decided adversely against Militante by
the Court of Appeals' 1958 judgment affirming the lower court's dismissal of Militante's application for
registration) was properly declared inexistent and void by the lower court, as decreed by Article 1409
in relation to Article 1491 of the Civil Code.
The appellate court, in its resolution of certification of 25 July 1972, gave the following backgrounder
of the appeal at bar:
On August 31, 1964, plaintiff Domingo D. Rubias, a lawyer, filed a suit to recover the
ownership and possession of certain portions of lot under Psu-99791 located in
Barrio General Luna, Barotac Viejo, Iloilo which he bought from his father-in-law,
Francisco Militante in 1956 against its present occupant defendant, Isaias Batiller,

who illegally entered said portions of the lot on two occasions in 1945 and in 1959.
Plaintiff prayed also for damages and attorneys fees. (pp. 1-7, Record on Appeal). In
his answer with counter-claim defendant claims the complaint of the plaintiff does not
state a cause of action, the truth of the matter being that he and his predecessors-ininterest have always been in actual, open and continuous possession since time
immemorial under claim of ownership of the portions of the lot in question and for the
alleged malicious institution of the complaint he claims he has suffered moral
damages in the amount of P 2,000.00, as well as the sum of P500.00 for attorney's
fees. ...
On December 9, 1964, the trial court issued a pre-trial order, after a pre-trial
conference between the parties and their counsel which order reads as follows..
'When this case was called for a pre-trial conference today, the
plaintiff appeared assisted by himself and Atty. Gregorio M. Rubias.
The defendant also appeared, assisted by his counsel Atty. Vicente
R. Acsay.
A. During the pre-trial conference, the parties have agreed that
the following facts are attendant in this case and that they will no
longer introduced any evidence, testimonial or documentary to prove
them:
1. That Francisco Militante claimed ownership of a parcel of land located in the Barrio
of General Luna, municipality of Barotac Viejo province of Iloilo, which he caused to
be surveyed on July 18-31, 1934, whereby he was issued a plan Psu-99791 (Exhibit
"B"). (The land claimed contained an area of 171:3561 hectares.)
2. Before the war with Japan, Francisco Militante filed with the Court of First Instance
of Iloilo an application for the registration of the title of the land technically described
in psu-99791 (Exh. "B")opposed by the Director of Lands, the Director of Forestry
and other oppositors. However, during the war with Japan, the record of the case
was lost before it was heard, so after the war Francisco Militante petitioned this court
to reconstitute the record of the case. The record was reconstituted on the Court of
the First Instance of Iloilo and docketed as Land Case No. R-695, GLRO Rec. No.
54852. The Court of First Instance heard the land registration case on November 14,
1952, and after the trial this court dismissed the application for registration. The
appellant, Francisco Militante, appealed from the decision of this Court to the Court
of Appeals where the case was docketed as CA-GR No. 13497-R..
3. Pending the disposal of the appeal in CA-GR No. 13497-R and more particularly
on June 18, 1956, Francisco Militante sold to the plaintiff, Domingo Rubias the
land technically described in psu-99791 (Exh. "A"). The sale was duly recorded in the
Office of the Register of Deeds for the province of Iloilo as Entry No. 13609 on July
11, 1960 (Exh. "A-1").
(NOTE: As per deed of sale, Exh. A, what Militante purportedly sold to plaintiffappellant, his son-in-law, for the sum of P2,000.00 was "a parcel of untitled land
having an area Of 144.9072 hectares ... surveyed under Psu 99791 ... (and) subject
to the exclusions made by me, under (case) CA-i3497, Land Registration Case No.
R-695, G.L.R.O. No. 54852, Court of First Instance of the province of Iloilo. These
exclusions referred to portions of the original area of over 171 hectares originally

claimed by Militante as applicant, but which he expressly recognized during the trial
to pertain to some oppositors, such as the Bureau of Public Works and Bureau of
Forestry and several other individual occupants and accordingly withdrew his
application over the same. This is expressly made of record in Exh. A, which is
the Court of Appeals' decision of 22 September 1958 confirming the land registration
court's dismissal of Militante's application for registration.)
4. On September 22,1958 the Court of appeals in CA-G.R. No. 13497-R promulgated
its judgment confirming the decision of this Court in Land Case No. R-695, GLRO
Rec. No. 54852 which dismissed the application for Registration filed by Francisco
Militante (Exh. "I").
5. Domingo Rubias declared the land described in Exh. 'B' for taxation purposes
under Tax Dec. No. 8585 (Exh. "C") for 1957; Tax Dec. Nos. 9533 (Exh. "C-1") and
10019 (Exh. "C-3")for the year 1961; Tax Dec. No. 9868 (Exh. "C-2") for the year
1964, paying the land taxes under Tax Dec. No. 8585 and 9533 (Exh. "D", "D-1", "G6").
6. Francisco Militante immediate predecessor-in-interest of the plaintiff, has also
declared the land for taxation purposes under Tax Dec. No. 5172 in 1940 (Exh. "E")
for 1945; under Tax Dec. No. T-86 (Exh. "E-1") for 1948; under Tax Dec. No. 7122
(Exh. "2"), and paid the land taxes for 1940 (Exhs. "G" and "G-7"), for 1945 46 (Exh.
"G-1") for 1947 (Exh. "G-2"), for 1947 & 1948 (Exh. "G-3"), for 1948 (Exh. "G-4"), and
for 1948 and 1949 (Exh. "G-5").
7. Tax Declaration No. 2434 in the name of Liberato Demontao for the land
described therein (Exh. "F") was cancelled by Tax. Dec. No. 5172 of Francisco
Militante (Exh. "E"). Liberato Demontao paid the land tax under Tax Dec. No. 2434
on Dec. 20, 1939 for the years 1938 (50%) and 1959 (Exh. "H").
8. The defendant had declared for taxation purposes Lot No. 2 of the Psu-155241
under Tax Dec. Not. 8583 for 1957 and a portion of Lot No. 2, Psu-155241, for 1945
under Tax Dec. No. 8584 (Exh. "2-A" Tax No. 8583 (Exh. "2") was revised by Tax
Dec. No. 9498 in the name of the defendant (Exh. "2-B") and Tax Dec. No. 8584
(Exh. "2-A") was cancelled by Tax Dec. No. 9584 also in the name of the defendant
(Exh. "2-C"). The defendant paid the land taxes for Lot 2, Psu-155241, on Nov. 9,
1960 for the years 1945 and 1946, for the year 1950, and for the year 1960 as shown
by the certificate of the treasurer (Exh. "3"). The defendant may present to the Court
other land taxes receipts for the payment of taxes for this lot.
9. The land claimed by the defendant as his own was surveyed on June 6 and
7,1956, and a planapproved by Director of Land on November 15, 1956 was issued,
identified as Psu 155241 (Exh. "5").
10. On April 22, 1960, the plaintiff filed forcible Entry and Detainer case against
Isaias Batiller in the Justice of the Peace Court of Barotac Viejo Province of Iloilo
(Exh. "4") to which the defendant Isaias Batiller riled his answer on August 29, 1960
(Exh. "4-A"). The Municipal Court of Barotac Viejo after trial, decided the case on
May 10, 1961 in favor of the defendant and against the plaintiff (Exh. "4-B"). The
plaintiff appealed from the decision of the Municipal Court of Barotac Viejo which was
docketed in this Court as Civil Case No. 5750 on June 3, 1961, to which the
defendant, Isaias Batiller, on June 13, 1961 filed his answer (Exh. "4-C"). And this

Court after the trial. decided the case on November 26, 1964, in favor of the
defendant, Isaias Batiller and against the plaintiff (Exh. "4-D").
(NOTE: As per Exh. 4-B, which is the Iloilo court of first instance decision of 26
November 1964dismissing plaintiff's therein complaint for ejectment against
defendant, the iloilo court expressly found "that plaintiff's complaint is unjustified,
intended to harass the defendant" and "that the defendant, Isaias Batiller, has a
better right to possess the land in question described in Psu 155241 (Exh. "3"),
Isaias Batiller having been in the actual physical possession thereof under a claim of
title many years before Francisco Militante sold the land to the plaintiff-hereby
dismissing plaintiff'scomplaint and ordering the plaintiff to pay the defendant
attorney's fees ....")
B. During the trial of this case on the merit, the plaintiff will prove by competent evidence the
following:
1. That the land he purchased from Francisco Militante under Exh. "A" was formerly
owned and possessed by Liberato Demontao but that on September 6, 1919 the
land was sold at public auction by virtue of a judgment in a Civil Case entitled "Edw
J. Pflieder plaintiff vs. Liberato Demontao Francisco Balladeros and Gregorio Yulo,
defendants", of which Yap Pongco was the purchaser (Exh. "1-3"). The sale was
registered in the Office of the Register of Deeds of Iloilo on August 4, 1920, under
Primary Entry No. 69 (Exh. "1"), and a definite Deed of Sale was executed by
Constantino A. Canto, provincial Sheriff of Iloilo, on Jan. 19, 1934 in favor of Yap
Pongco (Exh. "I"), the sale having been registered in the Office of the Register of
Deeds of Iloilo on February 10, 1934 (Exh. "1-1").
2. On September 22, 1934, Yap Pongco sold this land to Francisco Militante as
evidenced by a notarial deed (Exh. "J") which was registered in the Registry of
Deeds on May 13, 1940 (Exh. "J-1").
3. That plaintiff suffered damages alleged in his complaint.
C. Defendants, on the other hand will prove by competent evidence during the trial of this case the
following facts:
1. That lot No. 2 of the Psu-1552 it (Exh. '5') was originally owned and possessed by
Felipe Batiller, grandfather of the defendant Basilio Batiller, on the death of the
former in 1920, as his sole heir. Isaias Batiller succeeded his father , Basilio Batiller,
in the ownership and possession of the land in the year 1930, and since then up to
the present, the land remains in the possession of the defendant, his possession
being actual, open, public, peaceful and continuous in the concept of an owner,
exclusive of any other rights and adverse to all other claimants.
2. That the alleged predecessors in interest of the plaintiff have never been in the
actual possession of the land and that they never had any title thereto.
3. That Lot No. 2, Psu 155241, the subject of Free Patent application of the
defendant has beenapproved.
4. The damages suffered by the defendant, as alleged in his counterclaim."' 1

The appellate court further related the developments of the case, as follows:
On August 17, 1965, defendant's counsel manifested in open court that before any
trial on the merit of the case could proceed he would file a motion to dismiss plaintiff's
complaint which he did, alleging that plaintiff does not have cause of action against
him because the property in dispute which he (plaintiff) allegedly bought from his
father-in-law, Francisco Militante was the subject matter of LRC No. 695 filed in the
CFI of Iloilo, which case was brought on appeal to this Court and docketed as CAG.R. No. 13497-R in which aforesaid case plaintiff was the counsel on record of
his father-in-law, Francisco Militante. Invoking Arts. 1409 and 1491 of the Civil Code
which reads:
'Art. 1409. The following contracts are inexistent and void from the
beginning:
xxx xxx xxx
(7) Those expressly prohibited by law.
'ART. 1491. The following persons cannot acquire any purchase,
even at a public auction, either in person of through the mediation of
another: .
xxx xxx xxx
(5) Justices, judges, prosecuting attorneys, clerks of superior and inferior courts, and
other officers and employees connected with the administration of justice, the
property and rights of in litigation or levied upon an execution before the court within
whose jurisdiction or territory they exercise their respective functions; this prohibition
includes the act of acquiring an assignment and shall apply tolawyers, 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.'
defendant claims that plaintiff could not have acquired any interest in the property in
dispute as the contract he (plaintiff) had with Francisco Militante was inexistent and
void. (See pp. 22-31, Record on Appeal). Plaintiff strongly opposed defendant's
motion to dismiss claiming that defendant can not invoke Articles 1409 and 1491 of
the Civil Code as Article 1422 of the same Code provides that 'The defense of
illegality of contracts is not available to third persons whose interests are not directly
affected' (See pp. 32-35 Record on Appeal).
On October 18, 1965, the lower court issued an order disclaiming plaintiffs
complaint (pp. 42-49, Record on Appeal.) In the aforesaid order of dismissal the
lower court practically agreed with defendant's contention that the contract (Exh. A)
between plaintiff and Francism Militante was null and void. In due season plaintiff
filed a motion for reconsideration (pp. 50-56 Record on Appeal) which was denied by
the lower court on January 14, 1966 (p. 57, Record on Appeal).
Hence, this appeal by plaintiff from the orders of October 18, 1965 and January 14,
1966.

Plaintiff-appellant imputes to the lower court the following errors:

'1. The lower court erred in holding that the contract of sale between
the plaintiff-appellant and his father-in-law, Francisco Militante, Sr.,
now deceased, of the property covered by Plan Psu-99791, (Exh.
"A") was void, not voidable because it was made when plaintiffappellant was the counsel of the latter in the Land Registration case.
'2. The lower court erred in holding that the defendant-appellee is an
interested person to question the validity of the contract of sale
between plaintiff-appellant and the deceased, Francisco Militante, Sr.
'3. The lower court erred in entertaining the motion to dismiss of the
defendant-appellee after he had already filed his answer, and after
the termination of the pre-trial, when the said motion to dismiss raised
a collateral question.
'4. The lower court erred in dismissing the complaint of the plaintiffappellant.'
The appellate court concluded that plaintiffs "assignment of errors gives rise to two (2) legal posers
(1) whether or not the contract of sale between appellant and his father-in-law, the late Francisco
Militante over the property subject of Plan Psu-99791 was void because it was made when plaintiff
was counsel of his father-in-law in a land registration case involving the property in dispute; and (2)
whether or not the lower court was correct in entertaining defendant-appellee's motion to dismiss
after the latter had already filed his answer and after he (defendant) and plaintiff-appellant had
agreed on some matters in a pre-trial conference. Hence, its elevation of the appeal to this Court as
involving pure questions of law.
It is at once evident from the foregoing narration that the pre-trial conference held by the trial court at
which the parties with their counsel agreed and stipulated on the material and relevant facts and
submitted their respective documentary exhibits as referred to in the pre-trial
order, supra, 2 practically amounted to a fulldress trial which placed on record all the facts and exhibits
necessary for adjudication of the case.

The three points on which plaintiff reserved the presentation of evidence at the-trial dealing with the
source of the alleged right and title of Francisco Militante's predecessors, supra, 3 actually are already
made of record in thestipulated facts and admitted exhibits. The chain of Militante's alleged title and right
to the land as supposedly traced back to Liberato Demontao was actually asserted by Militante (and his
vendee, lawyer and son-in-law, herein plaintiff) in the land registration case and rejected by the Iloilo land
registration court which dismissed Militante's application for registration of the land. Such dismissal, as
already stated, was affirmed by the final judgment in 1958 of the Court of Appeals. 4

The four points on which defendant on his part reserved the presentation of evidence at the trial
dealing with his and his ancestors' continuous, open, public and peaceful possession in the concept
of owner of the land and the Director of Lands' approval of his survey plan thereof, supra, 5 are
likewise already duly established facts of record, in the land registration case as well as in the ejectment
case wherein the Iloilo court of first instance recognized the superiority of defendant's right to the land as
against plaintiff.

No error was therefore committed by the lower court in dismissing plaintiff's complaint upon
defendant's motion after the pre-trial.

1. The stipulated facts and exhibits of record indisputably established plaintiff's lack of cause of
action and justified the outright dismissal of the complaint. Plaintiff's claim of ownership to the land in
question was predicated on the sale thereof for P2,000.00 made in 1956 by his father-in- law,
Francisco Militante, in his favor, at a time when Militante's application for registration thereof had
already been dismissed by the Iloilo land registration court and was pending appeal in the Court of
Appeals.
With the Court of Appeals' 1958 final judgment affirming the dismissal of Militante's application for
registration, the lack of any rightful claim or title of Militante to the land was conclusively and
decisively judicially determined. Hence, there was no right or title to the land that could be
transferred or sold by Militante's purported sale in 1956 in favor of plaintiff.
Manifestly, then plaintiff's complaint against defendant, to be declared absolute owner of the land
and to be restored to possession thereof with damages was bereft of any factual or legal basis.
2. No error could be attributed either to the lower court's holding that the purchase by a lawyer of the
property in litigation from his client is categorically prohibited by Article 1491, paragraph (5) of the
Philippine Civil Code, reproduced supra; 6 and that consequently, plaintiff's purchase of the property in
litigation from his client (assuming that his client could sell the same since as already shown above, his
client's claim to the property was defeated and rejected) was void and could produce no legal effect, by
virtue of Article 1409, paragraph (7) of our Civil Code which provides that contracts "expressly prohibited
or declared void by law' are "inexistent and that "(T)hese contracts cannot be ratified. Neither can the
right to set up the defense of illegality be waived."

The 1911 case of Wolfson vs. Estate of Martinez 7 relied upon by plaintiff as holding that a sale of
property in litigation to the party litigant's lawyer "is not void but voidable at the election of the vendor"
was correctly held by the lower court to have been superseded by the later 1929 case of Director of
Lands vs. Abagat. 8 In this later case of Abagat, the Court expressly cited two antecedent cases involving
the same transaction of purchase of property in litigation by the lawyer which was expressly declared
invalid under Article 1459 of the Civil Code of Spain (of which Article 1491 of our Civil Code of the
Philippines is the counterpart) upon challenge thereof not by the vendor-client but by the adverse parties
against whom the lawyer was to enforce his rights as vendee thus acquired.

These two antecedent cases thus cited in Abagat clearly superseded (without so expressly stating
the previous ruling in Wolfson:
The spouses, Juan Soriano and Vicente Macaraeg, were the owners of twelve
parcels of land. Vicenta Macaraeg died in November, 1909, leaving a large number
of collateral heirs but no descendants. Litigation between the surviving husband,
Juan Soriano, and the heirs of Vicenta immediately arose, and the herein appellant
Sisenando Palarca acted as Soriano's lawyer. On May 2, 1918, Soriano executed a
deed for the aforesaid twelve parcels of land in favor of Sisenando Palarca and on
the following day, May 3, 1918, Palarca filed an application for the registration of the
land in the deed. After hearing, the Court of First Instance declared that the deed
was invalid by virtue of the provisions of article 1459 of the Civil Code, which
prohibits lawyers and solicitors from purchasing property rights involved in any
litigation in which they take part by virtue of their profession. The application for
registration was consequently denied, and upon appeal by Palarca to the Supreme
Court, the judgement of the lower court was affirmed by a decision promulgated
November 16,1925. (G.R. No. 24329, Palarca vs. Director of Lands, not reported.)
In the meantime cadastral case No. 30 of the Province of Tarlac was instituted, and
on August 21, 1923, Eleuteria Macaraeg, as administratrix of the estate of Vicente

Macaraeg, filed claims for the parcels in question. Buenaventura Lavitoria

administrator of the estate of Juan Soriano, did likewise and so did Sisenando
Palarca. In a decision dated June 21, 1927, the Court of First Instance, Judge
Carballo presiding, rendered judgment in favor of Palarea and ordered the
registration of the land in his name. Upon appeal to this court by the administration of
the estates of Juan Soriano and Vicente Macaraeg, the judgment of the court below
was reversed and the land adjudicated to the two estates as conjugal property of the
deceased spouses. (G.R. No. 28226, Director of Lands vs. Abagat, promulgated May
21, 1928, not reported.) 9
In the very case of Abagat itself, the Court, again affirming the invalidity and nullity of the lawyer's
purchase of the land in litigation from his client, ordered the issuance of a writ of possession for the
return of the land by the lawyer to the adverse parties without reimbursement of the price paid by
him and other expenses, and ruled that "the appellant Palarca is a lawyer and is presumed to know
the law. He must, therefore, from the beginning, have been well aware of the defect in his title and is,
consequently, a possessor in bad faith."
As already stated, Wolfson and Abagat were decided with relation to Article 1459 of the Civil Code of
Spain then adopted here, until it was superseded on August 30, 1950 by the Civil Code of the
Philippines whose counterpart provision is Article 1491.
Article 1491 of our Civil Code (like Article 1459 of the Spanish Civil Code) prohibits in its six
paragraphs certain persons, by reason of the relation of trust or their peculiar control over the
property, from acquiring such property in their trust or control either directly or indirectly and "even at
a public or judicial auction," as follows: (1) guardians; (2) agents; (3) administrators; (4) public
officers and employees; judicial officers and employees, prosecuting attorneys, and lawyers; and (6)
others especially disqualified by law.
In Wolfson which involved the sale and assignment of a money judgment by the client to the lawyer,
Wolfson, whose right to so purchase the judgment was being challenged by the judgment debtor, the
Court, through Justice Moreland, then expressly reserved decision on "whether or not the judgment
in question actually falls within the prohibition of the article" and held only that the sale's "voidability
can not be asserted by one not a party to the transaction or his representative," citing from
Manresa 10 that "(C)onsidering the question from the point of view of the civil law, the view taken by the
code, we must limit ourselves to classifying as void all acts done contrary to the express prohibition of the
statute. Now then: As the code does not recognize such nullity by the mere operation of law, the nullity of
the acts hereinbefore referred to must be asserted by the person having the necessary legal capacity to
do so and decreed by a competent
court." 11

The reason thus given by Manresa in considering such prohibited acquisitions under Article 1459 of
the Spanish Civil Code as merely voidable at the instance and option of the vendor and not void
"that the Code does not recognize such nullity de pleno derecho" is no longer true and applicable
to our own Philippine Civil Code which does recognize the absolute nullity of contracts "whose
cause, object, or purpose is contrary to law, morals, good customs, public order or public policy" or
which are "expressly prohibited or declared void by law" and declares such contracts "inexistent and
void from the beginning." 12
The Supreme Court of Spain and modern authors have likewise veered from Manresa's view of the
Spanish codal provision itself. In its sentencia of 11 June 1966, the Supreme Court of Spain ruled
that the prohibition of Article 1459 of the Spanish Civil Code is based on public policy, that violation
of the prohibition contract cannot be validated by confirmation or ratification, holding that:

... la prohibicion que el articulo 1459 del C.C. establece respecto a los
administradores y apoderados, la cual tiene conforme a la doctrina de esta Sala,
contendia entre otras, en S. de 27-5-1959, un fundamento de orden moral lugar la
violacion de esta a la nulidad de pleno derecho del acto o negocio celebrado, ... y
prohibicion legal, afectante orden publico, no cabe con efecto alguno la
aludida retification ... 13
The criterion of nullity of such prohibited contracts under Article 1459 of the Spanish Civil Code
(Article 1491 of our Civil Code) as a matter of public order and policy as applied by the Supreme
Court of Spain to administrators and agents in its above cited decision should certainly apply with
greater reason to judges, judicial officers, fiscals and lawyers under paragraph 5 of the codal article.
Citing the same decisions of the Supreme Court of Spain, Gullon Ballesteros, his "Curso de Derecho
Civil, (Contratos Especiales)" (Madrid, 1968) p. 18, affirms that, with respect to Article 1459, Spanish
Civil Code:.
Que caracter tendra la compra que se realice por estas personas? Porsupuesto no
cabe duda de que el caso (art.) 1459, 40 y 50, la nulidad esabsoluta porque el
motivo de la prohibicion es de orden publico. 14
Perez Gonzales in such view, stating that "Dado el caracter prohibitivo delprecepto, la consequencia
de la infraccion es la nulidad radical y ex lege." 15
Castan, quoting Manresa's own observation that.
"El fundamento do esta prohibicion es clarisimo. No sa trata con este precepto tan solo de guitar la
ocasion al fraude; persiguese, ademasel proposito de rodear a las personas que intervienen en la
administrcionde justicia de todos los retigios que necesitan pora ejercer su ministerio librandolos de
toda suspecha, que aunque fuere in fundada, redundura endescredito de la institucion." 16 arrives at
the contrary and now accepted view that "Puede considerace en nuestro derecho inexistente 'o
radicalmente nulo el contrato en los siguentes cases: a) ...; b) cuando el contrato se ha celebrado en
violacion de una prescripcion 'o prohibicion legal, fundada sobre motivos de orden publico(hipotesis del
art. 4 del codigo) ..." 17

It is noteworthy that Caltan's rationale for his conclusion that fundamental consideration of public
policy render void and inexistent such expressly prohibited purchase (e.g. by public officers and
employees of government property intrusted to them and by justices, judges, fiscals and lawyers of
property and rights in litigation and submitted to or handled by them, under Article 1491, paragraphs
(4) and (5) of our Civil Code) has been adopted in a new article of our Civil Code, viz, Article 1409
declaring such prohibited contracts as "inexistent and void from the beginning." 18
Indeed, the nullity of such prohibited contracts is definite and permanent and cannot be cured by
ratification. The public interest and public policy remain paramount and do not permit of compromise
or ratification. In his aspect, the permanent disqualification of public and judicial officers and lawyers
grounded on public policy differs from the first three cases of guardians, agents and administrators
(Article 1491, Civil Code), as to whose transactions it had been opined that they may be "ratified" by
means of and in "the form of a new contact, in which cases its validity shall be determined only by
the circumstances at the time the execution of such new contract. The causes of nullity which have
ceased to exist cannot impair the validity of the new contract. Thus, the object which was illegal at
the time of the first contract, may have already become lawful at the time of the ratification or second
contract; or the service which was impossible may have become possible; or the intention which
could not be ascertained may have been clarified by the parties. The ratification or second contract

would then be valid from its execution; however, it does not retroact to the date of the first
contract." 19
As applied to the case at bar, the lower court therefore properly acted upon defendant-appellant's
motion to dismiss on the ground of nullity of plaintiff's alleged purchase of the land, since its juridical
effects and plaintiff's alleged cause of action founded thereon were being asserted against
defendant-appellant. The principles governing the nullity of such prohibited contracts and judicial
declaration of their nullity have been well restated by Tolentino in his treatise on our Civil Code, as
follows:
Parties Affected. Any person may invoke the in existence of the contract
whenever juridical effects founded thereon are asserted against him. Thus, if there
has been a void transfer of property, the transferor can recover it by the accion
reinvindicatoria; and any prossessor may refuse to deliver it to the transferee, who
cannot enforce the contract. Creditors may attach property of the debtor which has
been alienated by the latter under a void contract; a mortgagee can allege the
inexistence of a prior encumbrance; a debtor can assert the nullity of an assignment
of credit as a defense to an action by the assignee.
Action On Contract. Even when the contract is void or inexistent, an action is
necessary to declare its inexistence, when it has already been fulfilled. Nobody can
take the law into his own hands; hence, the intervention of the competent court is
necessary to declare the absolute nullity of the contract and to decree the restitution
of what has been given under it. The judgment, however, will retroact to the very day
when the contract was entered into.
If the void contract is still fully executory, no party need bring an action to declare its
nullity; but if any party should bring an action to enforce it, the other party can simply
set up the nullity as a defense.20
ACCORDINGLY, the order of dismissal appealed from is hereby affirmed, with costs in all instances
against plaintiff-appellant. So ordered.