Title
Fornilda vs. Branch 164, Regional Trial Court, 4th Judicial Region, Pasig
Case
G.R. No. 72306
Decision Date
Jan 24, 1989
Petitioners challenged the foreclosure and sale of properties to their former lawyer, Atty. Amonoy, arguing the mortgage violated Article 1491(5). The Supreme Court ruled the mortgage void, ordering property return unless sold to innocent third parties.

Case Summary (G.R. No. 72306)

Applicable Law

The decision is based on the 1987 Philippine Constitution, as it was rendered after 1990. Key provisions discussed include Article 1491 of the Civil Code regarding the prohibition against a lawyer acquiring property from a client under certain circumstances.

Decision Summary

On October 5, 1988, the Supreme Court rendered a decision granting a Certiorari that annulled the July 25, 1985 Order of the Regional Trial Court which had granted a Writ of Possession and ordered the demolition of petitioners' houses. The Court's decision ordered the return of six disputed parcels of land to the petitioners unless they had been conveyed to innocent third parties. The Court also addressed the prayer for disbarment against Amonoy due to alleged legal malpractice, instructing him to respond within fifteen days.

Respondent's Arguments

In a Motion for Reconsideration filed on October 25, 1988, Respondent Amonoy presented several arguments. He contended that the transaction in question constituted a mortgage, thus Article 1491(5) of the Civil Code was inapplicable. He argued that, as a judgment creditor, the foreclosure sale did not violate the prohibitions outlined in the law. Amonoy also claimed that the petition was barred by res judicata, asserting that the issues had already been resolved in a previous case.

Court's Analysis

The Court found Amonoy's submissions unconvincing. It clarified that while the Project of Partition was approved on January 12, 1965, the estate remained in litigation until it was declared closed on August 6, 1969, indicating that a fiduciary relationship existed at the time the mortgage was executed. This protection intended by Article 1491(5) was not circumvented merely by labeling the transaction a mortgage.

Invalidity of the Mortgage

The Court further elucidated that the mortgage was executed in infringement of Article 1491(5), which prohibits lawyers from obtaining property from clients under such conditions. Amonoy's position of being a judgment creditor did not grant him immunity from the obligations imposed by this provision, thus solidifying the mortgage's invalidity.

Res Judicata and Jurisdiction

Amonoy's arguments regarding res judicata were

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