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1. The parcels of land in question are those under the name of Ramon Chiang
2. He claims that subject properties were sold to him by his wife, Merlinda as evidenced by a Deed of Absolute
Sale dated December 17, 1975,
3. However, CHIANG subsequently sold the land to petitioner Serafin Modina (MODINA),
4. MODINA brought a Complaint for Recovery of Possession with Damages against the private respondents,
Ernesto Hontarciego, Paul Figueroa and Teodoro Hipalla
5. Upon learning of the said sale, MERLINDA sought the declaration of nullity of the Deed of Sale between her
husband and MODINA on the ground that the titles of the parcels of land were never legally transferred to her
6. She claims that fraudulent acts were employed by him to obtain a Torrens Title in his favor. However, she
confirmed the validity of the lease contracts with the other private respondents.
7. These parcels of lands were those ordered sold by CFI Iloilo and these formed part of the Intestate Estate of
Nelson Plana her first husband.
8. RTC: decided in favor of MERLINDA. Declaring as void and inexistent the sale by Merlinda to as well as the
subsequent sale of CHIANG to MODINA
9. CA: affirmed
1) whether the sale of subject lots should be nullified-- YES
(2) whether petitioner was not a purchaser in good faith-- YES
(4) whether or not only three-fourths of subject lots should be returned to the private respondent.
Art. 1490. The husband and the wife cannot sell property to each other, except:
(1) when a separation of property was agreed upon in the marriage settlements; or
(2) when there has been a judicial separation of property under Art. 191.
The exceptions laid down did not exist with respect to the property relations of Chiang and Merlinda. Therefore, the
sale in question is invalid for being prohibited by law. Not being the owner of subject properties, Ramon Chiang could
not have validly sold the same to plaintiff Serafin Modina. The sale by Ramon Chiang in favor of Serafin Modina is,
likewise, void and inexistent.
Furthermore, the court found no sufficient evidence declaring there was fault on the part of MERLINDA, therefore, the
principle of in pari delicto is inapplicable and the sale was void for want of consideration. In effect, MERLINDA can
recover the lots sold by her husband to petitioner MODINA.
----The principle of in pari delicto denies all recovery to the guilty parties inter se. It applies to cases where the nullity
arises from the illegality of the consideration or the purpose of the contract. When two persons are equally at fault,
the law does not relieve them. The exception to this general rule is when the principle is invoked with respect to
inexistent contracts.---The Court debunked petitioners theory that MERLINDA intentionally gave away the bulk of her and her late husbands
estate to defendant CHIANG. Because Records show that when Merlinda filed a complaint-in-intervention, she did not
put up Article 1490 as a defense because that would be inconsistent to her claim that the sale was inexistent. Instead
she denied the existence of the Deed of Sale in favor of her husband and claimed no consideration in that deed of sale.
As a general rule, in a sale under the Torrens system, a void title cannot give rise to a valid title. The exception is when
the sale of a person with a void title is to a third person who purchased it for value and in good faith.
A purchaser in good faith is one who buys the property of another without notice that some other person has a right to
or interest in such property and pays a full and fair price at the time of the purchase or before he has notice of the claim
or interest of some other person in the property.

Petitioner cannot claim that he was a purchaser in good faith.

(1) He asked his nephew, to investigate the origin of the property and the latter learned that the same formed part of
the properties of MERLINDAs first husband;
(2)that the said sale was between the spouses;
(3) MODINA met all the lessees who informed that subject lands belong to MERLINDA and they had no knowledge that
the same lots were sold to the husband.
His mere refusal to believe that such defect exists, or his wilful closing of his eyes to the possibility of the existence
of a defect in his vendors title, will not make him an innocent purchaser for value
It is a settled doctrine that an issue which was neither averred in the Complaint nor raised during the trial before the
lower court cannot be raised for the first time on appeal, as such a recourse would be offensive to the basic rules of fair
play, justice, and due process.
The issue of whether only three-fourths of subject property will be returned was never an issue before the lower court
and therefore, the petitioner cannot do it now.
1. Francisco MIlitante claimed ownership of the land in dispute as it was formerly owned by Liberato Demontano
but was sold at a public auction of which Yap Pongco was the purchaser. He claimed that Yap Pongco sold this
land to him as evidenced by a notarial deed in 1934.
2. And before the war with Japan, he filed with the CFI Iloilo an application for the registration of the title of the
land which was opposed by the Director of Lands, the Director of Forestry and other oppositors.
3. However, during the war with Japan, the record of the case was lost before it was heard, later the record was
reconstituted and The CFI heard the land registration case which later dismissed the application for registration.
Francisco Militante, appealed to the CA.
4. However, pending the disposal of the appeal Francisco Militante sold to the plaintiff, Domingo Rubias. The sale
was duly recorded in the Office of the Register of
5. Later the CA affirmed the earlier decision and dismissed the application for Registration filed by Francisco
6. Domingo Rubias and Francisco Militante evern declared the land described for taxation purposes
7. In 1960, Rubias filed forcible Entry and Detainer case against Isaias Batiller but the court ruled in favor of
Batiller, as he has a better right to possess the land and he has been in the actual physical possession thereof
under a claim of title many years before Francisco Militante sold the land to the plaintiff
8. On August 31, 1964, plaintiff Domingo D. Rubias, a lawyer, filed a suit to recover the ownership and
possession of certain portions of lot in 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
9. Defendant claims the complaint of the plaintiff does not state a cause of action, the lot was originally owned
by Felipe Batiller (grandfather) and Isaias Batiller succeeded his father in the ownership and possession of the
land in the year 1930, and since then up to the present. He and his predecessors-in-interest have always been
in actual, open and continuous possession since time immemorial
10. Furthermore, the defendant filed a motion to dismiss invoking arts. 1409 and 1491. That the property in dispute
which Rubias allegedly bought from his father-in-law, was the subject matter of the case which was brought on
appeal of which the plaintiff stands also a counsel.
11. defendant claims that plaintiff could not have acquired any interest in the property in dispute as the contract
between him and Francisco Militante was inexistent and void.
12. Lower court sustained defendants claim
ISSUE: whether or not the contract of sale between appellant and his father-in-law, the late Francisco Militante over
the property subject 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--- YES

1. Article 1491 of our Civil Code (like Article 1459 of the Spanish Civil Code) prohibits 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.
2. In the 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
3. 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.
4. 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.
5. The causes of nullity which have ceased to exist cannot impair the validity of the new contract.
6. 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
7. 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:
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.
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).