Administrators and Executors__________________________________________________________________________________________NAVAL vs. ENRIQUEZ (3 Phil 669); April 12, 1904

FACTS: Don Jorge Enriquez as heirs of his deceased parents (Don Antonio Enriquez and Dona Ciriaca Villanueva , whose estates were at that time still undistributed, by public document sold to Don Victoriano Reyes his interest in both estates. The deed was executed before Don Enrique Barrera, a notary public. Another instrument was executed before the same notary public where Don Victoriano Reyes sold to Dona Carmen the interest in the estates which he had acquired from Don Jorge Enriquez. The purchaser, Dona Carmen was the wife of Don Francisco Enriquez (defendant) who was the executor and administrator of the testamentary estate of Don Antonio Enriquez at the time the two deeds were executed.

The plaintiffs demand that these deeds be declared null and void, as well as the contracts evidenced thereby. Apparently solely so far as they refer to the estate of Don Antonio Enriquez, no mention being made of the estate of Dona Ciriaca Villanueva in the complaint.

The plaintiffs contended that the deeds in question were consummated and were executed for the purpose of deceiving and defrauding Don Jorge Enriquez and his family. The conclusion of the plaintiffs was that as such executor Don Francisco was unable to acquire by his own act or that of any intermediary the said hereditary portion of Don Jorge under the provisions of Article 1459, paragraph 3 of the Civil Code.

ISSUE: WON Don Francisco Enriquez as executor and administrator of estate of Don Antonio is incapacitated to acquire by purchase the hereditary right of Jorge Enriquez.

RULING: NO! The thing sold in the two contracts of sale mentioned in the complaint was the hereditary right of Don Jorge Enriquez, which evidently was not in charge of the executor Don Francisco Enriquez. Executors, even in those cases in which they administer the property pertaining to estate, do not administer the hereditary rights of any heirs. This right is vested entirely in the heirs who retain it or transmit it in whole or in part, as they may deem convenient, to some other person absolutely, whatever powers the testator may have desired to confer upon him, do not and cannot under any circumstances in the slightest degree limit the power of the heirs to dispose of the said right at will. That right does not form part of the property delivered to the executor for administration.

Further, Article 1459 of the Civil Code has no application to the present case. The prohibition which Article 145, paragraph 3 imposes upon executors refers to the property confided to their care and does not extend, therefore, to property not falling within this class. Consequently, even upon the supposition that the executor (Don Francisco) was the person who really acquired the hereditary rights of Don Jorge, the sale in question would not for that reason be invalid, the executor not being legally incapacitated of acquiring the hereditary right in question as the plaintiffs erroneously suppose.

The action brought by the plaintiffs is devoid of foundation.

Lawyers__________________________________________________________________________________________RUBIAS vs. BATILLER(51 SCRA 120); May 29, 1973

FACTS: Petitioner Domingo Rubias, a lawyer, filed a suit to recover the ownership and possession of certain portions of lot which he bought from his father-in-law (Francisco Militante) when he was counsel of the latter in a land registration case involving the lot in question against its present occupant respondent (Isaias Batiller). Respondent claimed that the complaint does not state a cause of action, the truth of the matter being that he and his predecessors-in-interest have always been in actual, open, and continuous possession since time immemorial under claim of ownership of the portions of the lot in question.

The trial court issued a pre-trial order which stated that during the pre-trial conference, the parties have agreed that the facts are attendant in the case and that they will no longer introduce any evidence, testimonial or documentary to prove them. (Pls. read the full text of the case to be guided on this portion.)

ISSUE: WON the contract of sale between the petitioner and his father-in-law 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

RULING: YES! Manifestly, 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.

The purchase by a lawyer of the property in litigation from his clients is categorically prohibited by Article 1491, paragraph 5 of the Civil Code, and that consequently, plaintiff’s purchase of the property in litigation from his client was void and could produce no legal effect by virtue of Article 1409, paragraph 7 of the Civil Code which provides that contracts “ expressly prohibited or declared void by law” are “ inexistent and void from the beginning” and that “these contracts cannot be ratified”.

The Court cited Director of Lands vs. Abagat (53 Phil 147; March 27, 1929), which 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 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.

Article 1491 of the 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 directly or indirectly and even at a public or judicial auction as follows: a.) guardians, b.) agents, c.) administrators, d.) public officers and employees, judicial officers and employees, prosecuting attorneys, and lawyers, and e.) others especially disqualified by law.

Lawyers__________________________________________________________________________________________MUNICIPAL COUNCIL OF ILOILO vs. EVANGELISTA(55 Phil 290); November 17, 1930

FACTS: The Court of First Instance of Iloilo rendered judgment wherein the appellant herein Tan Ong Sze Vda. De Tan Toco sought to recover the value of a strip of land belonging to said appellant taken by the petitioner herein to widen a public street. After the case was remanded to the court of origin and the judgment rendered therein had become final and executor, Atty. Evangelista in his own behalf and counsel for the administratrix of Jose Ma. Arroyo’s interest estate filed a claim in the same case for professional services rendered by him. At the hearing on the said claim various claimants appeared claiming the amount judgment.

After the hearing all the adverse claims on the amount of the judgment were recorded in favor of Atty. Evangelista, in his own behalf and as counsel for the administratrix of the deceased Arroyo and directed the Municipality of Iloilo to file an action of interpleading against the adverse claimants, the PNB, Antero Soriano, Mauricio Cruz & Co., Jose Evangelista and Jose Arroyo. Thereafter, the municipal treasurer of Iloilo paid the late Antero Soriano the amount of 6,000 in part payment of the judgment assigned to him by Tan Boon Tiong, acting as attorney-in-fact of Tan Ong Sze Vda. De Tan Toco. The amount of 6,000 in part as payment of the judgment was also delivered to Atty. Evangelista as counsel for the late Jose Ma. Arroyo. With these two payments of 6,000 each, the judgment for 42,966.44 against municipality of Iloilo was reduced to 30,966.40, which was adjudicated by said court to Mauricio Cruz & Co.

ISSUE: WON the assignment of credits, rights and interest belonging to Tan Ong Sze made by Tan Boon Tiong, as attorney-in-fact of Tan Ong Sze Vda. De Tan Toco to Atty. Antero Soriano by virtue of the judgment rendered in civil case in consideration of professional service rendred is in contravention of the prohibition contained in Article 1459, paragrapg 5 of the Civil Code.

RULING: No! The appellant’s contention that the amounts of P200 and P500 should be considred as payments made to Atty. Antero Soriano for professional services rendered by him personally to the interest of the widow of Tan Toco is untenable. In view of the fact that the amounts involved in the cases prosecuted by Atty. Soriano as counsel for Tan Toco’s widow, some of which cases have been appealed to this court, run into hundreds of thousands of peos, and considering that said attorney had won several of those cases for his clients, the sum of P10,000 to date paid to him for professional services is wholly inadequate, and even if indirectly, that the assignment of appellant’s rights and interests made to the late Atty. Soriano was made in consideration of the professional services rendered by the latter to the widow and her co-heirs.

Article 1459: The following persons cannot take by purchase, even at a public or judicial action, either in person or through the mediation of another:Xxxxxxxxxxxxxxxxxx 5. Justices, judges, members of the department of public prosecution, clerks of superior and inferior courts, and other officers of such courts, the property and rights in litigation before the court within whose jurisdiction or territory they perform their respective duties. This prohibition shall include the acquisition of such property by assignment.

The prohibition contained in this paragraph shall include lawyers and solicitors with respect to any property or rights involved in any litigation in which they may take part by virtue of their profession and office.”

In this case, it does not appear that Atty. Soriano was counsel for the appellant in civil case, which the appellant instituted against the Municipality of Iloilo for the recovery of the value of a strip of land expropriated by said municipality for the widening of a certain public street. The only lawyers who appear to have represented her in the case were Atty. Arroyo and Atty. Evangelista, who filed claim for their professional fees. There was no relation of attorney and client, then, between Antero Soriano and the appellant, in this case where the judgment was rendered, and therefore the assignment of her credit, right and interest to Atty. Soriano did not violate prohibition cited above.

Lawyers

__________________________________________________________________________________________DIRECTOR OF LANDS vs. ABABA(88 SCRA 513); February 27, 1979

FACTS: The adverse claimant Atty. Fernandez was retained as counsel by petitioner (Abarquez) in a civil a case for the annulment of a contract of sale with right of repurchase and for the recovery of the land which was the subject matter thereof. Unable to compensate his lawyer whom he also retained for his appeal, the petitioner executed a document whereby he obliged himself to give to his lawyer ½ of whatever he might recover from Lots 5600 and 5602 should the appeal prosper.

The real property sought to be recovered was actually the share of petitioner in Lots 5600 and 5602 which were part of the estate of his deceased parents and which were partitioned among the heirs, which included petitioner and his sister.

The case having been resolved and title having been issued to petitioner, adverse claimant waited for petitioner to comply with his obligation under the document executed by him by delivering the ½ portion of the said parcels of land. Petitioner refused to comply with his obligation and instead offered to sell the whole parcels of land to spouses Larrazabal. Then, adverse claimant immediately took steps to protect his interest by filing a motion to annotate his attorney’s lien and by notifying the prospective buyers of his claim over the ½ portion of the parcels of land.

The motion was granted. The annotation of adverse claim appeared on the new transfer certificate of title. This adverse claim became the subject of cancellation proceedings filed by petitioner-spouses. The trial court resolved the case in favor of the adverse claimant. On appeal, petitioners contended that a contract for a contingent fee violates Article 1491 because it involves an assignment of a property subject of litigation.

ISSUE: WON the contract for a contingent fee as basis of the interest of Atty. Fernandez is prohibited by Article 1491 of the Civil Code.

RULING: NO! The contention is without merit. Article 1491 prohibits only the sale or assignment between the lawyer and his client of property which is the subject of litigation. For the prohibition to operate, the sale or assignment of the property must take place during the pendency of the litigation involving the property.

Likewise, under American Law, the prohibition does not apply to “cases where after completion of litigation the lawyer accepts on account of his fee and interest in the assets realized by the litigation. There is clear distinction between such cases and one in which the lawyer speculates on the outcome of the matter in which he is employed.

Further, a contract for a contingent fee is not covered by Article 1491 because the transfer or assignment of the property in litigation takes effect only after the finality of a favorable judgment. In the instant case, the attorney’s fees of Atty. Fernandez, consisting of ½ of whatever the petitioner might recover from his share in the lots in question is contingent upon the success of the appeal. Hence, the payment of the attorney’s fees, that is, the transfer or assignment of ½ of the property in litigation will take place only if the appeal prospers. Therefore, the transfer actually takes effect after the finality of a favorable judgment rendered on appeal and not during the pendency of litigation involving the property in question. Consequently, the contract for a contingent fee is not covered by Article 1491 of the Civil Code.