Domingo Rubias v Isaias Batiller

G.R. No. L-35702 May 29, 1973

Teehankee, J

Doctrine:

Facts:

Francisco Militante claimed that he owned a parcel of land located in Iloilo. He filed with the CFI
of Iloilo an application for the registration of title of the land. This was opposed by the Director
of Lands, the Director of Forestry, and other oppositors. The case was docked as a land case,
and after trial the court dismissed the application for registration. Militante appealed to the
Court of Appeals. Pending that appeal, he sold to Rubias (his son-in-law and a lawyer) the land.
The CA rendered a decision, dismissing the application for registration. Rubias filed a Forcible
Entry and Detainer case against Batiller. In that case, the court held that Rubias has no cause of
action because the property in dispute which Rubias allegedly bought from Militante was the
subject matter of a land case, in which case Rubias was the counsel on record of Militante
himself. It thus falls under Article 1491 of the Civil Code. (Hence, this appeal.)

Issue: Whether the sale of the land is prohibited under Article 1491?

Held: YES. Article 1491 says that “The following persons cannot acquire any purchase, even at a
public or judicial auction, either in person or through the mediation of another.... (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 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 by assignment and shall
apply to lawyers, with respect to the property and rights which may be the object of any
litigation in which they may take part by virtue of their profession.” The present case clearly
falls under this, especially since the case was still pending appeal when the sale was made.

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

Issue: Legal effect of a sale falling under Article 1491?

Held: NULL AND VOID.CANNOT BE RATIFIED. Manresa considered such prohibited acquisitions
(which fell under the Spanish Civil Code) as merely voidable because the Spanish Code did not
recognize nullity. But our Civil Code does recognize the absolute nullity of contracts “whose
cause, object or purpose is contract 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.” 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 this 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 (under Art 1491). As to their transactions, it
has been opined that they may be “ratified” by means of and in “the form of a new contract, in
which case its validity shall be determined only by the circumstances at the time of execution of
such new contract.” In those cases, 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
intent, or the service which was impossible. The ratification or second contract would then be
valid from its execution; however, it does not retroact to the date of the first contract.

Decision affirmed.