FORNILDA vs RTC

DAVID P. FORNILDA, JUAN P. FORNILDA, EMILIA P. FORNILDA OLILI, LEOCADIA P. FORNILDA LABAYEN and ANGELA P. FORNILDA GUTIERREZ, petitioners, vs. THE BRANCH 164, REGIONAL TRIAL COURT IVTH JUDICIAL REGION, PASIG, JOAQUIN C. ANTONIO Deputy Sheriff, RTC, 4JR Tanay, Rizal and ATTY. SERGIO I. AMONOY respondents.

xxx xxx xxx (5) Justices, judges, prosecuting attorneys, ... the property and rights in litigation or levied upon on execution before the court within whose junction or territory they exercise their respective functions; this prohibition includes the act of acquitting by assignment and shall apply to lawyers with respect to the property and rights which may be the object of any litigation in which they may take part by virtue of their profession. (Emphasis supplied)

G.R. No. 72306 October 6, 1988 FACTS:

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The Controverted Parcels were part of the estate of the late Julio M. Catolos subject of intestate estate proceedings, wherein Respondent Amonoy acted as counsel for some of the heirs from 1959 until 1968 by his own admission. These properties were adjudicated to Alfonso Fornilda and Asuncion M. Pasamba in the Project of Partition approved by the Court on 12 January 1965 On 20 January 1965, or only eight (8) days thereafter, and while he was still intervening in the case as counsel, these properties were mortgaged by petitioners' predecessor-in-interest to Respondent Amonoy to secure payment of the latter's attorney's fees in the amount of P27,600.00

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Since the mortgage indebtedness was not paid, Respondent Amonoy instituted an action for judicial foreclosure of mortgage on 21 January 1970 The mortgage was subsequently ordered foreclosed and auction sale followed where Respondent Amonoy was the sole bidder for P23,600.00 Being short of the mortgage indebtedness, he applied for and further obtained a deficiency judgment.

ISSUE: Whether or not the mortgage constituted on the Controverted Parcels in favor of Respondent Amonoy comes within the scope of the prohibition in Article 1491 of the Civil Code. HELD: YES • The pertinent portions of the said Articles read: Art. 1491. The following persons cannot acquire by purchase even at a public or judicial or auction, either in person or through the mediation of another:

Zenaida Resuma Razon Disqualifications Sales and Lease

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Under the aforequoted provision, a lawyer is prohibited from acquiring either by purchase or assignment the property or rights involved which are the object of the litigation in which they intervene by virtue of their profession. The prohibition on purchase is all embracing to include not only sales to private individuals but also public or judicial sales At the time the mortgage was executed, therefore, the relationship of lawyer and client still existed, the very relation of trust and confidence sought to be protected by the prohibition, when a lawyer occupies a vantage position to press upon or dictate terms to a harassed client. From the time of the execution of the mortgage in his favor, Respondent Amonoy had already asserted a title adverse to his clients' interests at a time when the relationship of lawyer and client had not yet been severed. Considering that the mortgage contract, entered into in contravention of Article 1491 of the Civil Code is expressly prohibited by law, the same must be held inexistent and void ab initio.