Krivenko v.
The Register of Deeds, City of Manila
GR L-630 November 15, 1947
Moran, C.J.:
PRINCIPLE: Citizenship requirement; Individuals;
Alien
Facts: Alexander A. Krivenko, an alien, bought a residential
lot from the Magdalena Estate, Inc., in December of 1941, the
registration of which was interrupted by the war. In May, 1945,
he sought to accomplish said registration but was denied by
the register of deeds of Manila on the ground that, being an
alien, he cannot acquire land in this jurisdiction. Krivenko then
brought the case to the Court of First Instance of Manila and
rendered judgment sustaining the refusal of the register of
deeds, from which Krivenko appealed to this Court.
Issue: Whether Krivenko, an alien, may acquire residential
land here in the Philippines.
Held: (Note: This case was decided under 1935
Constitution)
No.
The SC decided the case under the Constitution (rather than
the Public Land Act) which is more comprehend and more
absolute in the sense that it prohibits the transfer to alien of
nay private agricultural land including residential whatever its
origin might have.
Under Article XII, Section 1, it states that:
All agricultural, timber, and
mineral lands of the public domain, water,
minerals, coal, petroleum, and other
mineral oils, all forces of potential energy,
and other natural resources of the
Philippines belong to the State, and
their disposition, exploitation,
development, or utilization shall be
limited to citizens of the Philippines,
xxx Natural resources, with the
exception of public agricultural land, shall
not be alienated, and no license,
concession, or lease for the exploitation,
development, or utilization of any of the
natural resources shall be granted for a
period exceeding twenty-five years,
renewable for another twenty-five years,
except as to water rights for irrigation,
water supply, fisheries, or industrial uses
other than the development of water
"power" in which cases beneficial use
may be the measure and the limit of the
grant.
The exclusion of aliens from the privilege of acquiring public
agricultural lands and of owning real estate is a necessary part
of the Public Land Laws of the Philippines to keep pace with
the idea of preserving the Philippines for the Filipinos.
Xxx that lands, minerals, forests, and other natural resources
constitute the exclusive heritage of the Filipino nation. They
should, therefore, be preserved for those under the sovereign
authority of that nation and for their posterity.
According to Montilla, a delegate of the Constitution said:
"With the complete nationalization of our
lands and natural resources it is to be understood that
our God-given birthright should be one hundred per
cent in Filipino hands . . .. Lands and natural
resources are immovables and as such can be
compared to the vital organs of a person's body, the
lack of possession of which may cause instant death
or the shortening of life. If we do not completely
nationalize these two of our most important
belongings, I am afraid that the time will come when
we shall be sorry for the time we were born. Our
independence will be just a mockery, for what kind of
independence are we going to have if a part of our
country is not in our hands but in those of foreigners?
(additional) Regarding whether the issue whether public
agricultural land includes residential lands, the court stated
that since they are neither mineral nor timber lands, of
necessity they must be classified as agricultural.
Hence, any parcel of land or
building lot is susceptible of cultivation, and
may be converted into a field, and planted
with all kinds of vegetation; for this reason,
where land is not mining or forestall in its
nature, it must necessarily be included within
the classification of agricultural land, not
because it is actually used for the purposes
of agriculture, but because it was originally
agricultural and may again become so under
other circumstances; besides, the Act of
Congress contains only three classification,
and makes no special provision with respect
to building lots or urban lands that have
ceased to be agricultural land.
In short, the Court ruled that in determining whether a parcel of
land is agricultural, the test is not only whether it is actually
agricultural, but also its susceptibility to cultivation for
agricultural purposes.
Section 9 of said CA No. 141, "alienable or disposable public
lands" which are the same "public agriculture lands" under the
Constitution, are classified into agricultural, residential,
commercial, industrial and for other purposes. This simply
means that the term "public agricultural lands" has both a
broad and a particular meaning. Under its broad or general
meaning, as used in the Constitution, it embraces all lands that
are neither timber nor mineral.
If the term "private agricultural
lands" is to be construed as not including
residential lots or lands not strictly
agricultural, the result would be that "aliens
may freely acquire and possess not only
residential lots and houses for themselves
but entire subdivisions, and whole towns and
cities," and that "they may validly buy and
hold in their names lands of any area for
building homes, factories, industrial plants,
fisheries, hatcheries, schools, health and
vacation resorts, markets, golf courses,
playgrounds, airfields, and a host of other
uses and purposes that are not, in
appellant's words, strictly agricultural."
(Solicitor General's Brief, p. 6.) That this is
obnoxious to the conservative spirit of the
Constitution is beyond question.
1
Specifically under CA No. 141 , the right of aliens to acquire
public agricultural kind of lands is completely stricken out,
undoubtedly in pursuance of the constitutional limitation, and
such land may only be leased, but not sold, to aliens, and the
lease granted shall only be valid while the land is used for the
purposes referred to. The exclusion of sale in the new Act is
undoubtedly in pursuance of the constitutional limitation, and
this again is another legislative construction that the term
"public agricultural land" includes land for residence purposes.
Aliens are not completely excluded by the Constitution from the
use of lands for residential purposes. Since their residence in
the Philippines is temporary, they may be granted temporary
rights such as a lease contract which is not forbidden by the
Constitution. Should they desire to remain here forever and
share our fortunes and misfortunes, Filipino citizenship is not
impossible to acquire.
DISPOSITIVE PORTION: Court held that under the
Constitution aliens may not acquire private or public
agricultural lands, including residential lands, and, accordingly,
judgment is affirmed, without costs.
THE REGISTER OF DEEDS OF RIZAL v. UNG SIU SI
TEMPLE May 21, 1995 Citizenship Requirement
ART XII SECTION 2 CONSTI: All lands of the public domain,
waters, minerals, coal, petroleum, and other mineral oils, all
forces of potential energy, fisheries, forests or timber, wildlife,
flora and fauna, and other natural resources are owned by the
State. With the exception of agricultural lands, all other natural
resources shall not be alienated. The exploration,
development, and utilization of natural resources shall be
under the full control and supervision of the State. The State
may directly undertake such activities, or it may enter into co-
production, joint venture, or production-sharing agreements
with Filipino citizens, or corporations or associations at least
sixty per centum of whose capital is owned by such citizens.
Such agreements may be for a period not exceeding twenty-
five years, renewable for not more than twenty-five years, and
under such terms and conditions as may be provided by law. In
cases of water rights for irrigation, water supply, fisheries, or
industrial uses other than the development of water power,
beneficial use may be the measure and limit of the grant.***
FACTS:
Register of Deedd Rizal (RD) refused to accept for
record a deed of donation executed n due form on
January 22, 1953, by Jesus Dy, a Filipino citizen,
conveying a parcel of residential land, in Caloocan,
Rizal, known as lot No. 2, block 48-D, PSD-4212,
G.L.R.O. Record No. 11267, in favor of the
unregistered religious organization "Ung Siu Si
Temple" (Temple), operating through three trustees all
of Chinese nationality. The donation was duly
accepted by Yu Juan, of Chinese nationality, founder
and deaconess of the Temple.
The refusal of the Registrar was elevated en
Consultato the IVth Branch of the Court of First
Instance of Manila. On March 14, 1953, the Court
upheld the action of the Rizal Register of Deeds.
CFI:
Upheld the action of RD.
UNG SIU SI TEMPLE is a religious organization
whose deaconess, founder, trustees and
administrator are all Chinese citizens, this Court is of
the opinion and so hold that in view of the provisions
of the sections 1 and 5 of Article XIII of the
Constitution of the Philippines limiting the acquisition
of land in the Philippines to its citizens, or to
corporations or associations at least sixty per centum
of the capital stock of which is owned by such citizens
adopted after the enactment of said Act No. 271, the
deed of donation in question should not be admitted
for admitted for registration.
ISSUE: Whether a deed of donation of a parcel of land
executed in favor of a religious organization whose founder,
trustees and administrator are Chinese citizens should be
registered or not.
- Temple appealed to this Court, claiming that the acquisition
of the land in question, for religious purposes, is authorized
and permitted by Act No. 271 of the old Philippine Commission
and that the refusal of the RD violates the freedom of religion
clause in the Constitution.
SC:
Upheld CFI and RD.
Section 5, Title XIII, of the Constitution, the provisions
of Act No. 271 of the old Philippine Commission must
be deemed repealed since the Constitution was
enacted, in so far as incompatible therewith. In
providing that,
Save in cases of hereditary succession, no
private agricultural land shall be transferred
or assigned except to individuals,
corporations or associations qualified to
acquire or hold lands of the public domain in
the Philippines,
the Constitution makes no exception in favor of
religious associations. Neither is there any such
saving found in sections 1 and 2 of Article XIII,
restricting the acquisition of public agricultural lands
and other natural resources to "corporations or
associations at least sixty per centum of the capital of
which is owned by such citizens" (of the Philippines).
The fact that the appellant religious organization has
no capital stock does not suffice to escape the
Constitutional inhibition, since it is admitted that its
members are of foreign nationality. The purpose of the
sixty per centum requirement is obviously to ensure
that corporations or associations allowed to acquire
agricultural land or to exploit natural resources shall
be controlled by Filipinos; and the spirit of the
Constitution demands that in the absence of capital
stock, the controlling membership should be
composed of Filipino citizens.
To permit religious associations controlled by non-
Filipinos to acquire agricultural lands would be to
drive the opening wedge to revive alien religious land
holdings in this country.
TITLE: THE ROMAN CATHOLIC APOSTOLIC
ADMINISTRATOR OF DAVAO, INC., petitioner, vs. THE
LAND REGISTRATION COMMISSION and THE REGISTER
OF DEEDS OF DAVAO CITY, respondents.
G.R. No and DATE: G.R. No. L-8451 December 20, 1957
2
PRINCIPLE: Citizenship Requirement - CORPORATION
PONENTE: Felix, J:
CASE BACKGROUND: This is a petition for mandamus filed
by the Roman Catholic Apostolic Administrator of Davao
seeking the reversal of a resolution by the Land Registration
Commissioner in L.R.C. Consulta No. 14. The facts of the case
are as follows: \
FACTS: Mateo L. Rodis, executed a deed of sale of a parcel
of land located in Davao city in favor of the Roman Catholic
Apostolic Administrator of Davao Inc., a corporation sole,
with Msgr. Clovis Thibault, a Canadian citizen, as actual
incumbent. When the deed of sale was presented to
Register of Deeds of Davao for registration, the latter
required said corporation sole to submit an affidavit
declaring that 60 per cent of the members thereof were
Filipino citizens. Msgr. Clovis Thibault, expressed
willingness to submit an affidavit, but said that the totality of the
Catholic population of Davao would become the owner of the
property bought to be registered, not the corporation sole. The
matter was referred to the Land Registration Commissioner
which held that in view of the provisions of Section 1 and 5 of
Article XIII of the Philippine Constitution, the vendee was not
qualified to acquire private lands in the Philippines in the
absence of proof that at least 60 per centum of the capital,
property, or assets of the Roman Catholic Apostolic
Administrator of Davao, Inc., was actually owned or controlled
by Filipino citizens, there being no question that the present
incumbent of the corporation sole was a Canadian citizen. It
was also the opinion of the Land Registration Commissioner
that section 159 of the corporation Law relied upon by the
vendee was rendered operative by the aforementioned
provisions of the Constitution with respect to real estate, unless
the precise condition set therein that at least 60 per cent of
its capital is owned by Filipino citizens be present, and,
therefore, ordered the Registered Deeds of Davao to deny
registration of the deed of sale in the absence of proof of
compliance with such condition. After the motion to
reconsider said resolution was denied, an action for
mandamus was instituted with this Court by said corporation
sole, alleging that under the Corporation Law as well as the
settled jurisprudence on the matter, the deed of sale executed
by Mateo L. Rodis in favor of petitioner is actually a deed of
sale in favor of the Catholic Church which is qualified to
acquire private agricultural lands for the establishment and
maintenance of places of worship. In its resolution of
November 15, 1954, this Court gave due course to this
petition.
ISSUE:
In virtue of the foregoing mandates of the Constitution,
"Section 5 of Article XIII of the Philippine Constitution
reads as follows: SEC. 5. Save in cases of hereditary
succession, no private agricultural land shall be transferred or
assigned except to individuals, corporations, or
associations qualified to acquire or hold lands of the
public domain in the Philippines. Section 1 of the same Article
also provides the following:
SECTION 1. All agricultural, timber, and mineral lands
of the public domain, water, minerals, coal, petroleum,
and other mineral oils, all forces of potential energy, and other
natural resources of the Philippines belong to the
State, and their disposition, exploitation, development,
or utilization shall be limited to cititzens of the Philippines, or
to corporations or associations at least sixty per
centum of the capital of which is owned by such citizens,
SUBJECT TO ANY EXISTING RIGHT, grant, lease, or
concession AT THE TIME OF THE INAUGURATION
OF THE GOVERNMENT ESTABLISHED UNDER
CONSTITUTION. Natural resources, with the
exception of public agricultural land, shall not be
alienated, and no license, concession, or leases
for the exploitation, development, or utilization of any of the
natural resources shall be granted for a period
exceeding twenty-five years, renewable for another twenty-
five years, except as to water rights for irrigation,
water supply, fisheries, or industrial uses other than the
development of water power, in which cases other than the
development and limit of the grant."
what is the effect of these constitutional prohibition of the right
of a religious corporation recognized by our Corporation Law
and registered as a corporation sole, to possess, acquire and
register real estates in its name when the Head, Manager,
Administrator or actual incumbent is an alien?
PETITIONERS CONTENTION:
Petitioner consistently maintained that a corporation sole,
irrespective of the citizenship of its incumbent, is not prohibited
or disqualified to acquire and hold real properties. The
Corporation Law and the Canon Law are explicit in their
provisions that a corporation sole or "ordinary" is not the owner
of the of the properties that he may acquire but merely the
administrator thereof. The Canon Law also specified that
church temporalities are owned by the Catholic Church as a
"moral person" or by the diocess as minor "moral persons" with
the ordinary or bishop as administrator.
COURTS RULING:
A corporation sole consists of one person only, and his
successors (who will always be one at a time), in some
particular station, who are incorporated by law in order to give
them some legal capacities and advantages, particularly that of
perpetuity, which in their natural persons they could not have
had.
The bishops or archbishops, as the case may be, as
corporation's sole are merely administrators of the church
properties that come to their possession, in which they hold in
trust for the church. It could be seen that a corporation sole is
created not only to administer the temporalities of the church or
religious society where he belongs but also to hold and
transmit the same to his successor in said office. If the
ownership or title to the properties do not pass to the
administrators, who are the owners of church properties?.
Considering that nowhere can We find any provision conferring
ownership of church properties on the Pope although he
appears to be the supreme administrator or guardian of his
flock, nor on the corporation sole or heads of dioceses as they
are admittedly mere administrators of said properties,
ownership of these temporalities logically fall and develop upon
the church, diocese or congregation acquiring the same.
To allow theory that the Roman Catholic Churches all over the
world follow the citizenship of their Supreme Head, the
Pontifical Father, would lead to the absurdity of finding the
citizens of a country who embrace the Catholic faith and
become members of that religious society, likewise citizens of
the Vatican or of Italy. And this is more so if We consider that
the Pope himself may be an Italian or national of any other
country of the world. The same thing be said with regard to the
nationality or citizenship of the corporation sole created under
the laws of the Philippines, which is not altered by the change
of citizenship of the incumbent bishops or head of said
corporation sole.
We must therefore, declare that although a branch of the
Universal Roman Catholic Apostolic Church, every Roman
Catholic Church in different countries, if it exercises its
mission and is lawfully incorporated in accordance with
the laws of the country where it is located, is considered
an entity or person with all the rights and privileges
granted to such artificial being under the laws of that
country, separate and distinct from the personality of the
Roman Pontiff or the Holy See, without prejudice to its
religious relations with the latter which are governed by the
Canon Law or their rules and regulations.
The question now left for our determination is whether the
Universal Roman Catholic Apostolic Church in the Philippines,
or better still, the corporation sole named the Roman Catholic
Apostolic Administrator of Davao, Inc., is qualified to acquire
3
private agricultural lands in the Philippines pursuant to the
provisions of Article XIII of the Constitution.
The power of a corporation sole to purchase real property, like
the power exercised in the case at bar, it is not restricted
although the power to sell or mortgage sometimes is,
depending upon the rules, regulations, and discipline of the
church concerned represented by said corporation sole. If
corporations sole can purchase and sell real estate for its
church, charitable, benevolent, or educational purposes, can
they register said real properties?
It has been shown before that: (1) the corporation sole, unlike
the ordinary corporations which are formed by no less than 5
incorporators, is composed of only one persons, usually the
head or bishop of the diocese, a unit which is not subject to
expansion for the purpose of determining any percentage
whatsoever; (2) the corporation sole is only the administrator
and not the owner of the temporalities located in the territory
comprised by said corporation sole; (3) such temporalities are
administered for and on behalf of the faithful residing in the
diocese or territory of the corporation sole; and (4) the latter, as
such, has no nationality and the citizenship of the incumbent
Ordinary has nothing to do with the operation, management or
administration of the corporation sole, nor effects the
citizenship of the faithful connected with their respective
dioceses or corporation sole.
In view of these peculiarities of the corporation sole, it would
seem obvious that when the specific provision of the
Constitution invoked by respondent Commissioner (section 1,
Art. XIII), was under consideration, the framers of the same did
not have in mind or overlooked this particular form of
corporation. If this were so, as the facts and circumstances
already indicated tend to prove it to be so, then the
inescapable conclusion would be that this requirement of at
least 60 per cent of Filipino capital was never intended to apply
to corporations sole.
Even if we were to go over the record to inquire into the
composing membership to determine whether the citizenship
requirement is satisfied or not, we would find undeniable proof
that the members of the Roman Catholic Apostolic faith within
the territory of Davao are predominantly Filipino citizens. As
indicated before, petitioner has presented evidence to
establish that the clergy and lay members of this religion fully
covers the percentage of Filipino citizens required by the
Constitution. These facts are not controverted by respondents
and our conclusion in this point is sensibly obvious.
DISCUSSION ON DISSENTING OPINION:
Long before the enactment of our Constitution the law
authorized the corporations sole even to receive bequests or
gifts of real estates and this Court could not, without any clear
and specific provision of the Constitution, declare that any real
property donated, let as say this year, could no longer be
registered in the name of the corporation sole to which it was
conveyed. That would be an absurdity that should not receive
our sanction on the pretext that corporations sole which have
no nationality and are non-stock corporations composed of
only one person in the capacity of administrator, have to
establish first that at least sixty per centum of their capital
belong to Filipino citizens.
Moreover, under the laws of the Philippines, the administrator
of the properties of a Filipino can acquire, in the name of the
latter, private lands without any limitation whatsoever, and that
is so because the properties thus acquired are not for and
would not belong to the administrator but to the Filipino whom
he represents.
The corporations sole by reason of their peculiar constitution
and form of operation have no designed owner of its
temporalities, although by the terms of the law it can be safely
implied that the Ordinary holds them in trust for the benefit of
the Roman Catholic faithful to their respective locality or
diocese. Borrowing the very words of the law, We may say that
the temporalities of every corporation sole are held in trust for
the use, purpose, behalf and benefit of the religious society, or
order so incorporated or of the church to which the diocese,
synod, or district organization is an organized and constituent
part.
DISPOSITION:
Wherefore, the resolution of the respondent Land Registration
Commission holding that in view of the provisions of sections 1
and 5 of Article XIII of the Philippine Constitution the vendee
(petitioner) is not qualified to acquire lands in the Philippines in
the absence of proof that at least 60 per centum of the capital,
properties or assets of the Roman Catholic Apostolic
Administrator of Davao, Inc. is actually owned or controlled by
Filipino citizens, and denying the registration of the deed of
sale in the absence of proof of compliance with such requisite,
is hereby reversed. Consequently, the respondent Register of
Deeds of the City of Davao is ordered to register the deed of
sale executed by Mateo L. Rodis in favor of the Roman
Catholic Apostolic Administrator of Davao, Inc., which is the
subject of the present litigation. No pronouncement is made as
to costs. It is so ordered.
PHIL. BANKING CORP v. LUI SHE
G.R. No. L-17587Sept. 12, 1967
CASTRO, J.:
PRINCIPLE
Aliens are not completely excluded by the
Constitution from the use of lands for residential purposes.
Since their residence in the Philippines is temporary, they may
be granted temporary rights such as a lease contract which is
not forbidden by the Constitution. Should they desire to remain
here forever and share our fortunes and misfortunes, Filipino
citizenship is not impossible to acquire.
But if an alien is given not only a lease of, but also an
option to buy, a piece of land, by virtue of which the Filipino
owner cannot sell or otherwise dispose of his property, this to
last for 50 years, then it becomes clear that the arrangement is
a virtual transfer of ownership whereby the owner divests
himself in stages not only of the right to enjoy the land ( jus
possidendi, jus utendi, jus fruendi and jus abutendi) but also of
the right to dispose of it ( jus disponendi).
FACTS
4
 Justina Santos y Canon Faustino and her sister
Lorenzo were the owners in common of a piece of land in
Manila. This parcel, with an area of 2,582.30 square meters, is
located on Rizal Avenue and opens into Florentino Torres
street at the back and Katubusan street on one side. In it are
two residential houses with entrance on Florentino Torres
street and the Hen Wah Restaurant with entrance on Rizal
Avenue. The sisters lived in one of the houses, while Wong
Heng, a Chinese, lived with his family in the restaurant. Wong
had been a long-time lessee of a portion of the property,
paying a monthly rental of P2,620.
On September 22, 1957 Justina Santos became the
owner of the entire property as her sister died with no other
heir. Then already well advanced in years, being at the time 90
years old, blind, crippled and an invalid, she was left with no
other relative to live with. Her otherwise dreary existence was
brightened now and then by the visits of Wong's four children
who had become the joy of her life. Wong himself was the
trusted man to whom she delivered various amounts for
safekeeping, including rentals from her property at the corner
of Ongpin and Salazar streets and the rentals which Wong
himself paid as lessee of a part of the Rizal Avenue property.
Wong also took care of the payment; in her behalf, of taxes,
lawyers' fees, funeral expenses, masses, salaries of maids and
security guard, and her household expenses.
In grateful acknowledgment of the personal services
of the lessee to her, Justina executed several contracts in
favor of Wong first a contract of lease for 50 years; later a
contract giving Wong the option to buy the leased premises
conditioned on his obtaining Filipino citizenship; then two other
contracts extending the lease to 99 years and option to
purchase for 50 years.
On December 21 she executed another contract
giving Wong the option to buy the leased premises for
P120,000, payable within ten years at a monthly installment of
P1,000. The option was conditioned on his obtaining Philippine
citizenship, a petition for which was then pending in the Court
of First Instance of Rizal. It appears, however, that this
application for naturalization was withdrawn when it was
discovered that he was not a resident of Rizal. On October 28,
1958 she filed a petition to adopt him and his children on the
erroneous belief that adoption would confer on them Philippine
citizenship. The error was discovered and the proceedings
were abandoned.
Justina later executed urged her legatees to respect
the contracts but in a codicil of later date, claiming that the
various contracts were made by her because of machinations
and inducements practiced by him, she now directed her
executor to secure the annulment of the contracts. On
November 18 the present action was filed in the Court of First
Instance of Manila. The complaint alleged that the contracts
were obtained by Wong "through fraud, misrepresentation,
inequitable conduct, undue influence and abuse of confidence
and trust of and (by) taking advantage of the helplessness of
the plaintiff and were made to circumvent the constitutional
provision prohibiting aliens from acquiring lands in the
Philippines and also of the Philippine Naturalization Laws."
In his answer, Wong insisted that the various
contracts were freely and voluntarily entered into by the
parties. Paragraph 5 of the lease contract states that The
lessee may at any time withdraw from this agreement.
Petitioner Phil. Banking Corp. claims that this stipulation
offends article 1308 of the Civil Code which provides that the
contract must bind both contracting parties; its validity or
compliance cannot be left to the will of one of them.
LOWER COURT
All the documents mentioned in the first cause of
action, with the exception of the first which is the lease contract
of 15 November 1957, are declared null and void; Wong Heng
is condemned to pay unto plaintiff thru guardian of her property
the sum of P55,554.25 with legal interest from the date of the
filing of the amended complaint; he is also ordered to pay the
sum of P3,120.00 for every month of his occupation as lessee
under the document of lease herein sustained, from 15
November 1959, and the moneys he has consigned since then
shall be imputed to that; costs against Wong Heng.
ISSUE
WON the lease contract should have been annulled
because it lacks mutuality and was obtained in violation of the
fiduciary relations of the parties and her consent was obtained
through undue influence, fraud and misrepresentations. Thus,
citizenship of Wong is being questioned as well and the
Constitutional prohibition against the transfer of lands to
aliens.
RATIO
Article 1256 [now art. 1308] of the Civil Code in our
opinion creates no impediment to the insertion in a contract for
personal service of a resolutory condition permitting the
cancellation of the contract by one of the parties. Such a
stipulation, as can be readily seen, does not make either the
validity or the fulfillment of the contract dependent upon the will
of the party to whom is conceded the privilege of cancellation;
for where the contracting parties have agreed that such option
shall exist, the exercise of the option is as much in the
fulfillment of the contract as any other act which may have
been the subject of agreement. Indeed, the cancellation of a
contract in accordance with conditions agreed upon
beforehand is fulfillment.
Aliens are not completely excluded by the
Constitution from the use of lands for residential purposes.
Since their residence in the Philippines is temporary, they may
be granted temporary rights such as a lease contract which is
not forbidden by the Constitution. Should they desire to remain
here forever and share our fortunes and misfortunes, Filipino
citizenship is not impossible to acquire.
But if an alien is given not only a lease of, but also an
option to buy, a piece of land, by virtue of which the Filipino
owner cannot sell or otherwise dispose of his property, this to
last for 50 years, then it becomes clear that the arrangement is
a virtual transfer of ownership whereby the owner divests
himself in stages not only of the right to enjoy the land ( jus
possidendi, jus utendi, jus fruendi and jus abutendi) but also of
the right to dispose of it ( jus disponendi).
It does not follow from what has been said, however,
that because the parties are in pari delicto they will be left
where they are, without relief. For one thing, the original parties
who were guilty of a violation of the fundamental charter have
died and have since been substituted by their administrators to
whom it would be unjust to impute their guilt. For another thing,
and this is not only cogent but also important, article 1416 of
the Civil Code provides, as an exception to the rule on pari
delicto, that "When the agreement is not illegal per se but is
merely prohibited, and the prohibition by law is designed for
the protection of the plaintiff, he may, if public policy is thereby
enhanced, recover what he has paid or delivered." The
Constitutional provision that "Save in cases of hereditary
succession, no private agricultural land shall be transferred or
5
assigned except to individuals, corporations, or associations
qualified to acquire or hold lands of the public domain in the
Philippines" is an expression of public policy to conserve lands
for the Filipinos.
DISPOSITIVE PORTION
WHEREFORE, the contracts in question are annulled
and set aside; the land subject-matter of the contracts is
ordered returned to the estate of Justina Santos as
represented by the Philippine Banking Corporation; Wong
Heng (as substituted by the defendant-appellant Lui She) is
ordered to pay the Philippine Banking Corporation the sum of
P56,564.35, with legal interest from the date of the filing of the
amended complaint; and the amounts consigned in court by
Wong Heng shall be applied to the payment of rental from
November 15, 1959 until the premises shall have been vacated
by his heirs. Costs against the defendant-appellant.
G.R. No. 108998 August 24, 1994
REPUBLIC OF THE PHILIPPINES vs. THE COURT OF
APPEALS AND SPOUSES MARIO B. LAPIA AND FLOR
DE VEGA
Ponente:BIDIN, J
Fats:
On June 17, 1978, spouses Mario Lapia and Flor De Vega
bought Lots 347 and 348, Cad. s38-D, as their residence with
a total area of 91.77 sq. m. situated in San Pablo City, from
one Cristeta Dazo Belen. At the time of the purchase,
respondent spouses were then natural-born Filipino citizens.
On February 5, 1987, the spouses filed an application for
registration of title of the 2 parcels of land before the RTC of
San Pablo City, Branch 31. This time, however, they were no
longer Filipino citizens and have opted to embrace Canadian
citizenship through naturalization.
An opposition was filed by the Republic and after the parties
have presented their respective evidence, the court rendered a
decision confirming spouses Mario Lapia and Flor De Vegas
title to the lots in question.
On appeal, CA affirmed the decision of the RTC based on the
following ratiocination: both applicants were still Filipino
citizens when they bought the land in controversy from its
former owner. For this reason, the prohibition against the
acquisition of private lands by aliens could not apply.
The Republic submits that private respondents have not
acquired proprietary rights over the subject properties before
they acquired Canadian citizenship through naturalization to
justify the registration thereof in their favor. It maintains that
even privately owned unregistered lands are presumed to be
public lands under the principle that lands of whatever
classification belong to the State under the Regalian doctrine.
Thus, before the issuance of the certificate of title, the
occupant is not in the juridical sense the true owner of the land
since it still pertains to the State. The Republic further argued
that it is only when the court adjudicates the land to the
applicant for confirmation of title would the land become
privately owned land, for in the same proceeding, the court
may declare it public land, depending on the evidence.
The Republic disagrees with the CAs concept of possession
and argues that the land was declared for taxation purposes in
the name of respondent spouses only since 1979. However,
tax declarations or realty tax payments of property are not
conclusive evidence of ownership. And that CA found that
spouses Mario Lapia and Flor De Vega and their
predecessors-in-interest had been in possession of the land for
more than 30 years prior to the filing of the application for
registration. This is not, however, the same as saying that
respondents have been in possession since June 12, 1945.
So there is a void in respondents possession. They fall short of
the required possession since June 12, 1945 or prior thereto.
Moreover, the republic seeks to defeat respondents application
for registration of title on the ground of foreign nationality.
Issues:
1. W/N spouses Mario Lapia and Flor De Vega have
been in an open, continuous and exclusive
possession of the lands.
2. W/N spouses Mario Lapia and Flor De Vegamay
apply for registration of title over parcel of lands even
though they are already foreign citizens.
Ruling:
1. Possession and occupation of the alienable and
disposable lands
It must be noted that with respect to possession and
occupation of the alienable and disposable lands of the public
domain, the law employs the terms by themselves, the
applicant himself or through his predecessor-in-interest. Thus,
it matters not whether the vendee/applicant has been in
possession of the subject property for only a day so long as the
period and/or legal requirements for confirmation of title has
been complied with by his predecessor-in-interest, the said
period is tacked to his possession. In the case at bar,
respondents predecessors-in-interest have been in open,
continuous, exclusive and notorious possession of the disputed
land not only since June 12, 1945, but even as early as 1937.
Petitioner does not deny this except that respondent spouses,
in its perception, were in possession of the land sought to be
registered only in 1978 and therefore short of the required
length of time. As aforesaid, the disputed parcels of land were
acquired by private respondents through their predecessors-in-
interest, who, in turn, have been in open and continued
possession thereof since 1937. Private respondents stepped
into the shoes of their predecessors-in-interest and by virtue
thereof, acquired all the legal rights necessary to confirm what
could otherwise be deemed as an imperfect title.
The weight of authority is that open, exclusive and undisputed
possession of alienable public land for the period prescribed by
law creates the legal fiction whereby the land, upon completion
of the requisite period ipso jure and without the need of judicial
or other sanction, ceases to be public land and becomes
private property.
Cases have hewed to the above pronouncement such that
open, continuous and exclusive possession for at least 30
years of alienable public land ipso jure converts the same to
private property.
The Public Land Act requires that the applicant must prove that
(a) the land is alienable public land and (b) his possession, in
the concept above stated, must be either since time
immemorial or for the period prescribed in the Public Land.
When the conditions set by law are complied with, the
possessor of the land, by operation of law, acquires a right to a
grant, a government grant, without the necessity of a certificate
of title being issued. As such, the land ceases to be a part of
the public domain and goes beyond the authority of the
Director of Lands to dispose of.
In other words, the Torrens system was not established as a
means for the acquisition of title to private land. It merely
confirms, but does not confer ownership. As could be gleaned
from the evidence adduced, spouses were able to establish the
nature of possession of their predecessors-in-interest.
Evidence was offered to prove that their predecessors-in-
interest had paid taxes on the subject land and introduced
improvements thereon. Likewise, a report from the Bureau of
Lands was presented in evidence together with a letter from
the Bureau of Forest Development, to prove that the
6
questioned lots were part of the alienable and disposable zone
of the government and that no forestry interest was affected.
2. Nationality
Spouses Mario Lapia and Flor De Vega were undoubtedly
natural-born Filipino citizens at the time of the acquisition of the
properties and by virtue thereof, acquired vested rights
thereon, tacking in the process, the possession in the concept
of owner and the prescribed period of time held by their
predecessors-in-interest under the Public Land Act. In addition,
spouses Mario Lapia and Flor De Vega have constructed a
house of strong materials on the contested property, now
occupied by Lapias mother.
But what should not be missed in the disposition of this case is
the fact that the Constitution itself allows private respondents
to register the contested parcels of land in their favor. Sections
7 and 8 of Article XII of the Constitution.
Pursuant thereto, Batas Pambansa Blg. 185 was passed into
law, the relevant provision of which provides:
Sec. 2. Any natural-born citizen of the Philippines who has lost
his Philippine citizenship and who has the legal capacity to
enter into a contract under Philippine laws may be a transferee
of a private land up to a maximum area of one thousand
square meters, in the case of urban land, or one hectare in the
case of rural land, to be used by him as his residence. In the
case of married couples, one of them may avail of the privilege
herein granted; Provided, that if both shall avail of the same,
the total area acquired shall not exceed the maximum herein
fixed.
In case the transferee already owns urban or rural lands for
residential purposes, he shall still be entitled to be a transferee
of an additional urban or rural lands for residential purposes
which, when added to those already owned by him, shall not
exceed the maximum areas herein authorized.
From the adoption of the 1987 Constitution up to the present,
no other law has been passed by the legislature on the same
subject. Thus, what governs the disposition of private lands in
favor of a natural-born Filipino citizen who has lost his
Philippine citizenship remains to be BP 185.
The law provides that a natural-born citizen of the Philippines
who has lost his Philippine citizenship may be a transferee of a
private land up to a maximum area of 1,000 sq. m., if urban, or
one (1) hectare in case of rural land, to be used by him as his
residence (BP 185).
Dispositive Portion: Petition dismissed, appealed decision
affirmed.
Concept:
It matters not whether the vendee/applicant has been
in possession of the subject property for only a day so
long as the period and/or legal requirements for
confirmation of title has been complied with by his
predecessor-in-interest, the said period is tacked to
his possession.
Open, continuous and exclusive possession for at
least 30 years of alienable public land ipso jure
converts the same to private property.
The Torrens system was not established as a means
for the acquisition of title to private land, as it merely
confirms, but does not confer ownership.
The Public Land Act requires that the applicant must
prove that (a) the land is alienable public land and (b)
his possession, in the concept above stated, must be
either since time immemorial or for the period
prescribed in the Public Land Act.
BP 185 governs the disposition of private lands in
favor of natural-born Filipino citizens who have lost
their Philippine citizenship.
A foreign national may apply for registration of title
over a parcel of land which he acquired by purchase
while still a citizen of the Philippines from a vendor
who has complied with the requirements for
registration under the law.
REPUBLIC OF THE PHILIPPINES v. T.A.N. PROPERTIES,
INC.,
G.R. No. 154953CARPIO, J.:
Facts:
The testimonies of respondents witnesses showed that
Prospero Dimayuga had peaceful, adverse, open, and
continuous possession of the land in the concept of an owner
since 1942, was succeeded by his son Antonio Dimayuga
(Antonio) executed a Deed of Donation covering the land in
favor of one of his children, Fortunato Dimayuga (Fortunato).
Later, however, Antonio gave Fortunato another piece of land.
Hence, on 26 April 1961, Antonio executed a Partial
Revocation of Donation, and the land was adjudicated to one
of Antonios children, Prospero Dimayuga (Porting). On 8
August 1997, Porting sold the land to T.A.N. Properties, Inc.
Respondent presented three witnesses: Anthony Dimayuga
Torres (Torres), respondents Operations Manager and its
authorized representative in the case; Primitivo Evangelista
(Evangelista), a 72-year old resident of San Bartolome, Sto.
Tomas, Batangas since birth; and Regalado Marquez, Records
Officer II of the Land Registration Authority (LRA), Quezon City.
An Application for Original Registration of Title filed by T.A.N.
Properties, Inc. coveringland, with an area of 564,007 square
meters, or 56.4007 hectares, is located at San Bartolome, Sto.
Tomas, Batangas.
The Notice of Initial Hearing was published in the Official
Gazette, issue ofPeoples Journal Taliba, a newspaper of
general circulation in the Philippines and conspicuous place on
the bulletin board of the Municipal Building of Sto. Tomas,
Batangas where all adjoining owners and all government
agencies and offices concerned were notified of the initial
hearing. When the trial court called the case for initial hearing,
there was no oppositor other than that of the Republic of the
Philippines represented by the Director of Lands (petitioner).
The trial court issued an Order of General Default against the
whole world except as against petitioner. Also
CeferinoCarandang (Carandang) appeared as oppositor, within
which to file his written opposition but failed to file his written
opposition and to appear in the succeeding hearings, Trial
Court reinstated the Order of General Default.
The trial court ruled that a juridical person or a corporation
could apply for registration of land provided such entity and its
predecessors-in-interest have possessed the land for 30 years
or more. The trial court ruled that the facts in cognizane with
paragraph 1 section 14 of Property Registration Decree.
Petitioner appealed. Petitioner alleged that the trial court erred
in granting the application for registration absent clear
evidence that the applicant and its predecessors-in-interest
have complied with the period of possession and occupation
as required by law. Petitioner alleged that the testimonies of
Evangelista and Torres are general in nature. Considering the
area involved, petitioner argued that additional witnesses
should have been presented to corroborate Evangelistas
testimony.
7
The Court of Appeals ruled that Evangelistas knowledge of the
possession and occupation of the land stemmed not only from
the fact that he worked there for three years but also because
he and KabesangPuroy were practically neighbors. On
Evangelistas failure to mention the name of his uncle who
continuously worked on the land, the Court of Appeals ruled
that Evangelista should not be faulted as he was not asked to
name his uncle when he testified. The Court of Appeals also
ruled that at the outset, Evangelista disclaimed knowledge of
Fortunatos relation to KabesangPuroy, but this did not affect
Evangelistas statement that Fortunato took over the
possession and cultivation of the land after KabesangPuroys
death. The Court of Appeals further ruled that the events
regarding the acquisition and disposition of the land became
public knowledge because San Bartolome was a small
community. On the matter of additional witnesses, the Court of
Appeals ruled that petitioner failed to cite any law requiring the
corroboration of the sole witness testimony.
The Court of Appeals further ruled that Torres was a
competent witness since he was only testifying on the fact that
he had caused the filing of the application for registration and
that respondent acquired the land from Porting.Petitioner
argues that anyone who applies for registration has the burden
of overcoming the presumption that the land forms part of the
public domain. Petitioner insists that respondent failed to prove
that the land is no longer part of the public domain.
ISSUE: Whether or not Absence of showing that it or its
predecessors-in-interest had open, continuous, exclusive, and
notorious possession and occupation in the concept of an
owner since 12 June 1945 or earlier; and Disqualification of
applicant corporation to acquire the subject tract of land
(controlling)?
RATIO:1. Land not alienable and disposableRespondent
submitted two certifications issued by the Department of
Environment and Natural Resources (DENR). First: CENRO
that the land falls within the ALIENABLE AND DISPOSABLE
ZONE and Second: In the form of a memorandum to the trial
court, which was issued by the Regional Technical Director
stated that the subject area falls within an alienable and
disposable land. The certifications are not sufficient.DENR
Administrative Order stating that the CENRO issues
certificates of land classification status for areas below 50
hectares. The Provincial Environment and Natural Resources
Offices (PENRO) issues certificate of land classification status
for lands covering over 50 hectares. The CENRO certificate
covered the entire Lot 10705 with an area of 596,116 square
meters which, as per DAO No. 38, series of 1990, is beyond
the authority of the CENRO to certify as alienable and
disposable. Also, the certification issued by the Regional
Technical Director, FMS-DENR, in the form of a
memorandum to the trial court, has no probative value.
Torres, a private individual and respondents representative,
identified the certifications but the government officials who
issued the certifications did not testify on the contents of the
certifications.Even if the certifications are presumed duly
issued and admissible in evidence, they have no probative
value in establishing that the land is alienable and disposable.
Petitioner also points out the discrepancy as to when the land
allegedly became alienable and disposable. The DENR
Secretary certified that based on Land Classification Map No.
582, the land became alienable and disposable on 31
December 1925. However, the certificate on the blue print plan
states that it became alienable and disposable on 31
December 1985.
2. Not in Possession and Occupation in the Concept
of an Owner
Petitioner alleges that the trial courts reliance on the
testimonies of Evangelista and Torres was misplaced.
Petitioner alleges that Evangelistas statement that the
possession of respondents predecessors-in-interest was open,
public, continuous, peaceful, and adverse to the whole world
was a general conclusion of law rather than factual evidence of
possession of title.
In a small community such as that of San Bartolome, Sto.
Tomas, Batangas, because of such familiarity with each other,
news or events regarding the acquisition or disposition for that
matter, of a vast tract of land spreads like wildfire, thus, the
reason why such an event became of public knowledge to
them.[33]
Evangfelistaadmitted that he did not know the exact
relationship between KabesangPuroy and Fortunato, which is
rather unusual for neighbors in a small community. He did not
also know the relationship between Fortunato and Porting. In
fact, Evangelistas testimony is contrary to the factual finding of
the trial court that KabesangPuroy was succeeded by his son
Antonio, not by Fortunato who was one of Antonios children.
Antonio was not even mentioned in Evangelistas testimony.We
cannot consider the testimony of Torres as sufficient
corroboration. Torres testified primarily on the fact of
respondents acquisition of the land.
3. Land Application by a Corporation
Petitioner asserts that respondent, a private corporation,
cannot apply for registration of the land of the public domain in
this case. Courts agrees with petitioner.Under Section 3, Article
XII of the 1987 Constitution .
The 1987 Constitution absolutely prohibits private
corporations from acquiring any kind of alienable land of
the public domain. In Chavez v. Public Estates Authority, the
Court traced the law on disposition of lands of the public
domain. The1987 Constitution continues the prohibition against
private corporations from acquiring any kind of alienable land
of the public domain. The Court explained in Chavez:
The 1987 Constitution continues the State policy in the 1973
Constitution banning private corporations from acquiring any
kind of alienable land of the public domain. Like the 1973
Constitution, the 1987 Constitution allows private corporations
to hold alienable lands of the public domain only through
lease.
In actual practice, the constitutional ban strengthens the
constitutional limitation on individuals from acquiring more than
the allowed area of alienable lands of the public domain.
Without the constitutional ban, individuals who already
acquired the maximum area of alienable lands of the public
domain could easily set up corporations to acquire more
alienable public lands.
The determinative for the doctrine in Director of Lands to apply
is for the corporate applicant for land registration to establish
that when it acquired the land, the same was already private
land by operation of law because the statutory acquisitive
prescriptive period of 30 years had already lapsed. The length
of possession of the land by the corporation cannot be tacked
on to complete the statutory 30 years acquisitive prescriptive
period. Only an individual can avail of such acquisitive
prescription since both the 1973 and 1987 Constitutions
prohibit corporations from acquiring lands of the public domain.
8
 Admittedly, a corporation can at present still apply for original
registration of land under the doctrine in Director of Lands.
Republic Act No. 9176[42] (RA 9176) further amended the
Public Land Act[43] and extended the period for the filing of
applications for judicial confirmation of imperfect and
incomplete titles to alienable and disposable lands of the public
domain until 31 December 2020. Thus:
Sec. 2. Section 47, Chapter VIII of the same Act, as amended,
is hereby further amended to read as follows:
Sec. 47. The persons specified in the next following section are
hereby granted time, not to extend beyond December 31, 2020
within which to avail of the benefits of this Chapter: Provided,
That this period shall apply only where the area applied for
does not exceed twelve (12) hectares: Provided, further, That
the several periods of time designated by the President in
accordance with Section Forty-five of this Act shall apply also
to the lands comprised in the provisions of this Chapter, but
this Section shall not be construed as prohibiting any of said
persons from acting under this Chapter at any time prior to the
period fixed by the President.
Sec. 3. All pending applications filed before the effectivity of
this amendatory Act shall be treated as having been filed in
accordance with the provisions of this Act.
Under RA 9176, the application for judicial confirmation is
limited only to 12 hectares, consistent with Section 3, Article XII
of the 1987 Constitution that a private individual may only
acquire not more than 12 hectares of alienable and disposable
land. Hence, respondent, as successor-in-interest of an
individual owner of the land, cannot apply for registration of
land in excess of 12 hectares. Since respondent applied for
56.4007 hectares, the application for the excess area of
44.4007 hectares is contrary to law, and thus void ab initio. In
applying for land registration, a private corporation cannot have
any right higher than its predecessor-in-interest from whom it
derived its right. This assumes, of course, that the corporation
acquired the land, not exceeding 12 hectares, when the land
had already become private land by operation of law. In the
present case, respondent has failed to prove that any portion
of the land was already private land when respondent acquired
it from Porting in 1997.
RATIO:WHEREFORE, we SET ASIDE the 21 August 2002
Decision of the Court of Appeals in CA-G.R. CV No. 66658 and
the 16 December 1999 Decision of the Regional Trial Court of
Tanauan, Batangas, Branch 6 in Land Registration Case No. T-
635. We DENY the application for registration filed by T.A.N.
Properties, Inc.
G.R. No. 156364, 3 September 2007
JACOBUS BERNHARD HULST v. PR BUILDERS, INC.
J. Austria-Martinez
Hulst in this case is a Dutch national entered into a Contract to
Sell with PR Builders, for the purchase of 210-sq m residential
unit in respondents townhouse project in Laurel Batangas. PR
Builders failed to comply with its verbal promise to complete
the project by June 1995, and Hulst filed before the Housing
and Land Use Regulatory Board (HLURB) a complaint for
rescission of contract with interest, damages, and attorneys
fees.
On 22 April 1997, HLURB Arbiter rendered a decision in favor
of Hulst, rescinding the Contract to Sell (ordering
reimbursement of the sum of Php 3.1 million representing the
purchase price paid by the complainants and such other
claims). On 21 August 1997, Arbiter issued a Writ of Execution
and required the Sheriff to levy first on respondents personal
properties comprising of 15 parcels of land covered by 13
Transfer Certificates of Title.
Before the public auction was held, respondent filed a Motion
to Quash Writ of Levy with the HLURB on the ground that the
Sheriff made an over levy since the aggregate appraised
value of the levied properties is Php 83 million, based on
an independent appraisal, which is over and above the
judgment award.The Sheriff proceeded to sell the 15 parcels
of land and Holly Properties Realty Corporation was the
winning bidder for the total amount of Php 5.4 million. Said
amount was turned over to the petitioner in satisfaction of the
judgment award after deducting the legal fees. Right after the
auction, on the same day, the Sheriff received an order to
suspend the proceedings on the matter, which was
permanently ordered by the HLURB after four months to
set aside the auction. The Order contains the disagreement
of the HLURB on the aggregate value of the said levied
property is only Php 6 million and that there is a disparity
between the two valuations, there is a difference of Php 77
million and there is only a sole bidder which was questionable.
The issue is not the value of the subject properties as
determined during the auction sale, but the determination
of the value of the properties levied upon by the Sheriff.
The HLURB set aside the levy on the subject properties made
by the Sheriff and directed to levy instead Respondents real
properties that are reasonably sufficient as well as to take into
consideration not only the value of the properties in their tax
declaration but also the other determinants at arriving at a fair
market value.CA dismissed the petition, since the issue at
hand is not mere inadequacy of price, but an inadequacy
the shocks the senses of the court (the aggregate value
shockingly exceeded the judgment debt of only Php 6
million)
Issue: Whether or not the CA seriously erred in affirming the
HLURB Order setting the levy made by the Sheriff on the
subject properties.
Ratio: The Court find that the HLURB and the CA did not
noticed that the petitioner in this case are foreign
nationals who are disqualified under the Constitution from
owning a real property in their names. Sec. 7 or Art. 12 of
the 1987 Constitution provides that: Save in cases of
hereditary succession, no private lands shall be
transferred or conveyed except to individuals,
corporations, or associations qualified to acquire or hold
lands of the public domain.
The capacity to acquire private land is made dependent upon
the capacity to acquire or hold lands of the public domain.
Private land may be transferred or conveyed only to individuals
or entities qualified to acquire lands of the public domain.
The 1987 Constitution reserved the right to participate in the
disposition, exploitation, development and utilization of lands of
the public domain for Filipino citizens or corporations at least
60% of the capital of which is owned by Filipinos. Aliens,
whether individuals or corporations, have been disqualified
from acquiring public lands; hence, they have also been
disqualified from acquiring private lands. Therefore, the
contract to sell entered by the petitioner is void (contrary to
law and public policy). Generally, parties to avoid agreement
cannot expect the aid of the law; the courts leave them as they
are, because they are deemed in pari delicto or in equal fault.
In pari delicto, it is a universal doctrine which holds that no
action arises, in equity or at law, from an illegal contract; no
suit can be maintained for its specific performance, or to
9
recover the property agreed to be sold or delivered, or the
money agreed to be paid, or damages for its violation; and
where the parties are in pari delicto, no affirmative relief of any
kind will be given to one against the other.
It is significant to note that the agreement executed by the
parties in this case is a Contract to Sell and not a Contract of
Sale. A distinction between the two is material in determination
of when ownership is deemed to have been transferred to the
buyer or vendee and, ultimately, the resolution of the question
on whether the constitutional proscription has been breached.
Since the contract involved here is a Contract to Sell,
ownership has not yet transferred to the petitioner when
he filed the suit for rescission. Such violation of the law
did not materialize because petitioner caused the
rescission of the contract before the execution of the final
deed transferring ownership.
Thus, exception finds application in this case. Under Article
1414 (Civil Code), one who repudiates the agreement and
demands his money before the illegal act has taken place is
entitled to recover. Petitioner is therefore entitled to
recover what he has paid, although the bases of his claim
for rescission, which was granted by the HLURB, was not
the fact that he is not allowed to acquire private land
under the Philippine Constitution he is entitled only to
the amount of Php 3.1 million. No damages may be
recovered on the basis of a void contract; being none
existent, the agreement produces no juridical tie between
the parties involved.
The petition is impressed with merit. If the judgment is for
money, the sheriff or other authorized officer must execute the
same pursuant to the provision of Section 9, Rule 39 of the
Revised Rules of Court. Under this rule, in executing a money
judgment against the property of the judgment debtor, the
Sheriff shall levy on all property belonging to the judgment
debtor as is amply sufficient to satisfy the judgment and costs,
and sell the same paying to the judgment creditor so much of
the proceeds as will satisfy the amount of the judgment debt
and costs. Any excess in the proceeds shall be delivered to
the judgment to the debtor unless otherwise directed by the
judgment or order of the court.
The object of a levy is to take property into the custody of
the law, and thereby render it liable to the lien of the
execution, and put it out of the power of the judgment
debtor to divert it to any other use or purpose. In the
present case, the HLURB gravely abused their discretion in
setting aside the levy conducted by the Sheriff for the reason
that the auction sale conducted by the Sheriff rendered moot
and academic the motion to quash to levy. The arbiter lost
jurisdiction to act on the motion to quash the levy by virtue of
the consummation of the auction sale. Absent any order
from the HLURB suspending the auction sale, the sheriff
rightfully proceeded with the auction sale.
A mere inadequacy of price which was the complaint
allegation is not sufficient ground to annul the sale. It is
only where such inadequacy shocks the conscience that
the courts will intervene. Where there is the right to redeem,
inadequacy of price should not be material because the
judgment debtor may reacquire the property or else sell his
right to redeem and thus recover any loss he claims to have
suffered by reason of the price obtained at the execution sale.
When there is a right to redeem, inadequacy of price should
not be material because the judgment debtor may re-acquire
the property or else sell his right to redeem and thus recover
any loss he claims to have suffered by reason of the price
obtained in the execution sale.
The Sheriff complied with the mandate of the Rules of Court, to
sell only a sufficient portion of the levied properties as sufficient
to satisfy the judgment and lawful fees. Second, the Rules of
Court does not require that the value of the property levied be
exactly the same as the judgment debt; it can be less or more
than the amount of debt. Third, in determining what amount of
property is sufficient out of which to secure satisfaction of the
execution, the Sheriff is left to his own judgment. He may
exercise a reasonable discretion, and must exercise the care
which a reasonably prudent person would exercise under like
conditions and circumstances, endeavoring on the one hand to
obtain sufficient property to satisfy the purpose of the writ, and
on the other hand not to make an unreasonable and
unnecessary levy. The fact that the Sheriff levies upon a
title more than is necessary to satisfy the execution does
not render his actions improper.
The HLURB had no sufficient factual basis to determine
the value of the levied property. Respondent only submitted
an appraisal report based merely on surmises. The report was
based on the projected value of the townhouse project aster it
shall have been fully developed, that is, on the assumption that
the residential units appraised had already been built. Since it
is undisputed that the townhouse project did not push
through, the projected value did not become a reality.
Dispo: Petition is granted. Decision of CA is reversed and Set
Aside. Arbiter Decision is declared Null and Void. The latter is
directed to issue certificates of sale to the winning bidder.
Petitioner is ordered to return to respondent the amount of Php
2.1 million in excess of the proceeds of the auction sale
delivered to petitioner.
CAMILO F. BORROMEO, Petitioner vs. ANTONIETTA O.
DESCALLAR, Respondent
G.R. No. 159310, February 24, 2009
CJ REYNATO S. PUNO
PRINCIPLE: What are the rights of an alien (and his
successor-in-interest) who acquired real properties in the
country as against his former Filipina girlfriend in whose sole
name the properties were registered under the Torrens
system?
FACTS: Wilhelm Jambrich, an Austrian, arrived in the
Philippines in 1983 after he was assigned by his employer,
Simmering-Graz Panker A.G., an Austrian company, to work at
a project in Mindoro. In 1984, he transferred to Cebu and
worked at the Naga II Project of the NAPOCOR. There, he met
respondent Descallar, a separated mother of two boys who
was working as a waitress at St. Moritz Hotel. Jambrich
befriended Descallar and asked her to tutor him in English. In
dire need of additional income to support her children,
Descallar agreed. The tutorials were held in Descallars
residence at a squatters area in Gorordo Avenue. Jambrich
and Descallar fell in love and decided to live together in a
rented house in Hernan Cortes, Mandaue City. Later, they
transferred to their own house and lot in Cabancalan, Mandaue
City (Agro-Macro prop). In the Contracts to Sell dated
November 18, 1985 and March 10, 1986 covering the
properties, Jambrich and Descallar were referred to as the
buyers. A Deed of Absolute Sale dated November 16, 1987
was likewise issued in their favor. However, when the Deed of
Absolute Sale was presented for registration before the
Register of Deeds, it was refused on the ground that Jambrich
was an alien and could not acquire alienable lands of the
public domain. Consequently, Jambrichs name was erased
10
from the document. But it could be noted that his signature
remained on the left hand margin of page 1, beside Descallars
signature as buyer on page 3, and at the bottom of page 4
which is the last page. Transfer Certificate of Title (TCT) Nos.
24790, 24791 and 24792 over the properties were issued in
Descallars name alone. Jambrich also formally adopted
Descallars two sons.
However, the idyll lasted only until April 1991. By then,
Descallar found a new boyfriend while Jambrich began to live
with another woman in Danao City. Jambrich supported
Descallars sons for only two months after the break up.
Jambrich met petitioner Camilo F. Borromeo sometime in 1986.
Borromeo was engaged in the real estate business. He also
built and repaired speedboats as a hobby. In 1989, Jambrich
purchased an engine and some accessories for his boat from
Borromeo, for which he became indebted to the latter for about
P150,000.00. To pay for his debt, he sold his rights and
interests in the Agro-Macro properties to Borromeo for
P250,000, as evidenced by a Deed of Absolute
Sale/Assignment. On July 26, 1991, when Borromeo sought to
register the deed of assignment, he discovered that titles to the
three lots have been transferred in the name of Descallar, and
that the subject property has already been mortgaged.
On August 2, 1991, Borromeo filed a complaint against
Descallar for recovery of real property before the Regional Trial
Court of Mandaue City. Borromeo alleged that the Contracts to
Sell dated November 18, 1985 and March 10, 1986 and the
Deed of Absolute Sale dated November 16, 1987 over the
properties which identified both Jambrich and Descallar as
buyers do not reflect the true agreement of the parties since
Descallar did not pay a single centavo of the purchase price
and was not in fact a buyer; that it was Jambrich alone who
paid for the properties using his exclusive funds; that Jambrich
was the real and absolute owner of the properties; and, that
Borromeo acquired absolute ownership by virtue of the Deed
of Absolute Sale/Assignment dated July 11, 1991 which
Jambrich executed in his favor.
In her Answer, Descallar belied the allegation that she did not
pay a single centavo of the purchase price. On the contrary,
she claimed that she solely and exclusively used her own
personal funds to defray and pay for the purchase price of the
subject lots in question, and that Jambrich, being an alien, was
prohibited to acquire or own real property in the Philippines.
At the trial, Descallar presented evidence showing her alleged
financial capacity to buy the disputed property with money from
a supposed copra business. Borromeo, in turn, presented
Jambrich as his witness and documentary evidence showing
the substantial salaries which Jambrich received while still
employed by the Austrian company, Simmering-Graz Panker
A.G.
RTC RULING: The regional trial court ruled in favor of
Borromeo. It pointed out who between Jambrich and Descallar
had the financial capacity to acquire the disputed properties.
CA RULING: On the other hand, the Court of Appeals ruled in
favor of Descallar. The Court of Appeals ruled: We disagree
with the lower courts conclusion. The circumstances involved
in the case cited by the lower court and similar cases decided
on by the Supreme Court which upheld the validity of the title
of the subsequent Filipino purchasers are absent in the case at
bar. It should be noted that in said cases, the title to the subject
property has been issued in the name of the alien transferee.
In the case at bar, the title of the subject property is not in the
name of Jambrich but in the name of defendant-appellant
(Descallar). Thus, Jambrich could not have transferred a
property he has no title thereto.
ISSUE/s: 1. Whether Jambrich has the right to transfer the
properties to Borromeo.
2. Whether there is violation on the Constitutional
prohibition on aliens acquiring land in the Philippines.
SC RULING: CA reversed. Ruled to reinstate the RTC
Decision in favor of Borromeo.
FIRST ISSUE: To arrive at its Decision, the SC answered the
question of who purchased the properties?
It reasoned that at the time of the acquisition of the properties
in 1985 to 1986, Jambrich was gainfully employed at an
Austrian company earning an estimated monthly salary of
P50,000.00. Then, Jambrich was assigned to Syria for almost
one year where his monthly salary was approximately
P90,000.00. On the other hand, Descallar was employed as a
waitress from 1984 to 1985 with a monthly salary of not more
than P1,000.00. In 1986, when the parcels of land were
acquired, she was unemployed, as admitted by her during the
pre-trial conference. Her allegations of income from a copra
business were actually unsubstantiated. Further, the Child
Study Report submitted by the DSWD in the adoption
proceedings of her two sons by Jambrich disclosed that she
tried all types of job to support the children but to no avail (they
live in the squatters area, she was a waitress earning only at
least 1k a month, her children were already malnourished). It
was during her time of great financial distress that she met
Jambrich who later offered her a decent place for herself and
her children after she agreed to be a tutor for a fee. After a few
months sessions, Jambrich offered to transfer the family into a
decent place. Further, the following additional pieces of
evidence point to Jambrich as the source of fund used to
purchase the three parcels of land, and to construct the house
thereon:
(1) Descallar herself affirmed under oath that Jambrich was the
owner of the properties in question, but that his name was
deleted in the Deed of Absolute Sale because of legal
constraints. Nonetheless, his signature remained in the deed of
sale, where he signed as buyer.
(2) The money used to pay the subject parcels of land in
installments was in postdated checks issued by Jambrich.
Descallar has never opened any account with any bank.
Receipts of the installment payments were also in the name of
Jambrich and Descallar.
(3) In 1986-1987, Descallar lived in Syria with Jambrich and
her two children for ten months, where she was completely
under the support of Jambrich.
(4) Jambrich executed a Last Will and Testament, where he, as
owner, bequeathed the subject properties to Descallar.
Thus, Jambrich has all authority to transfer all his rights,
interests and participation over the subject properties to
Borromeo by virtue of the Deed of Assignment he executed on
July 11, 1991.
SECOND ISSUE: Having found that the true buyer of the
disputed house and lots was Jambrich, what now is the effect
of registration of the properties in the name of respondent? It is
settled that registration is not a mode of acquiring ownership. It
is only a means of confirming the fact of its existence with
notice to the world at large. Certificates of title are not a source
of right. The mere possession of a title does not make one the
true owner of the property.
Thus, the mere fact that Descallar has the titles of the disputed
properties in her name does not necessarily, conclusively and
absolutely make her the owner. The rule on indefeasibility of
11
title likewise does not apply to Descallar. A certificate of title
implies that the title is quiet, and that it is perfect, absolute and
indefeasible. However, there are well-defined exceptions to this
rule, as when the transferee is not a holder in good faith and
did not acquire the subject properties for a valuable
consideration. This is the situation in the instant case.
Descallar did not contribute a single centavo in the acquisition
of the properties. She had no income of her own at that time,
nor did she have any savings. She and her two sons were then
fully supported by Jambrich.
Descallar argued that aliens are prohibited from acquiring
private land. This is embodied in Section 7, Article XII of
the 1987 Constitution, which is basically a reproduction of
Section 5, Article XIII of the 1935 Constitution, and Section
14, Article XIV of the 1973 Constitution. The capacity to
acquire private land is dependent on the capacity to
acquire or hold lands of the public domain. Private land
may be transferred only to individuals or entities qualified
to acquire or hold lands of the public domain. Only
Filipino citizens or corporations at least 60% of the capital
of which is owned by Filipinos are qualified to acquire or
hold lands of the public domain. Thus, as the rule now
stands, the fundamental law explicitly prohibits non-
Filipinos from acquiring or holding title to private lands,
except only by way of legal succession or if the
acquisition was made by a former natural-born citizen.
Therefore, in the instant case, the transfer of land from
Agro-Macro Development Corporation to Jambrich, who is
an Austrian, would have been declared invalid if
challenged, had not Jambrich conveyed the properties to
Borromeo who is a Filipino citizen. In United Church
Board for World Ministries v. Sebastian, the Court
reiterated the consistent ruling in a number of cases that if
land is invalidly transferred to an alien who subsequently
becomes a Filipino citizen or transfers it to a Filipino, the
flaw in the original transaction is considered cured and
the title of the transferee is rendered valid.
This is the case applied by RTC. It upheld the sale by
Jambrich in favor of Borromeo and ordered the
cancellation of the TCTs in the name of Descallar. It
declared Borromeo as owner in fee simple of the
residential house of strong materials and three parcels of
land designated as Lot Nos. 1, 3 and 5, and ordered the
Register of Deeds of Mandaue City to issue new
certificates of title in his name.
The rationale behind the Courts ruling in United Church
Board for World Ministries, as reiterated in subsequent
cases, is this since the ban on aliens is intended to
preserve the nations land for future generations of
Filipinos, that aim is achieved by making lawful the
acquisition of real estate by aliens who became Filipino
citizens by naturalization or those transfers made by
aliens to Filipino citizens. As the property in dispute is
already in the hands of a qualified person, a Filipino
citizen, there would be no more public policy to be
protected. The objective of the constitutional provision to
keep our lands in Filipino hands has been achieved.
In case, Atty. Luch asks why Descallars contention on co-
ownership failed: The fact that the disputed properties were
acquired during the couples cohabitation also does not help
Descallar. The rule that co-ownership applies to a man and a
woman living exclusively with each other as husband and wife
without the benefit of marriage, but are otherwise capacitated
to marry each other, does not apply. In the instant case,
Descallar was still legally married to another when she and
Jambrich lived together. In such an adulterous relationship, no
co-ownership exists between the parties. It is necessary for
each of the partners to prove his or her actual contribution to
the acquisition of property in order to be able to lay claim to
any portion of it. Presumptions of co-ownership and equal
contribution do not apply.
DISPOSITIVE PORTION: IN VIEW WHEREOF, the petition is
GRANTED. The Decision of the Court of Appeals in C.A. G.R.
CV No. 42929 dated April 10, 2002 and its Resolution dated
July 8, 2003 are REVERSED and SET ASIDE. The Decision of
the Regional Trial Court of Mandaue City in Civil Case No.
MAN-1148 is REINSTATED.
Matthews v. Taylor GR No. 164584 June 22, 2009
Citizenship Requirement in Acquiring Property
FACTS:
1. On June 30, 1988, respondent Benjamin A. Taylor
(Benjamin), a British, married Joselyn C. Taylor
(Joselyn), a 17-year old Filipina. On June 9, 1989,
while their marriage was subsisting, Joselyn bought
from Diosa M. Martin a 1,294 square-meter lot
(Boracay property) situated at Manoc-Manoc,
Boracay Island, Malay, Aklan, for and in consideration
of P129,000.00. The sale was allegedly financed by
Benjamin. Joselyn and Benjamin, also using the
latters funds, constructed improvements thereon and
eventually converted the property to a vacation and
tourist resort known as the Admiral Ben Bow Inn.
2. However, Benjamin and Joselyn had a falling out, and
Joselyn ran away with Kim Philippsen. On June 8,
1992, Joselyn executed a Special Power of Attorney
(SPA) in favor of Benjamin, authorizing the latter to
maintain, sell, lease, and sub-lease and otherwise
enter into contract with third parties with respect to
their Boracay property.
3. On July 20, 1992, Joselyn as lessor and petitioner
Philip Matthews as lessee, entered into an Agreement
of Lease (Agreement) involving the Boracay property
for a period of 25 years, with an annual rental of
P12,000.00. The agreement was signed by the
parties and executed before a Notary Public.
Petitioner thereafter took possession of the property
and renamed the resort as Music Garden Resort.
4. Claiming that the Agreement was null and void since it
was entered into by Joselyn without his (Benjamins)
consent, Benjamin instituted an action for Declaration
of Nullity of Agreement of Lease with Damages
against Joselyn and the petitioner. Benjamin claimed
that his funds were used in the acquisition and
improvement of the Boracay property, and coupled
with the fact that he was Joselyns husband, any
transaction involving said property required his
consent.
5. In his Answer,Matthews claimed good faith in
transacting with Joselyn. Since Joselyn appeared to
be the owner of the Boracay property, he found it
unnecessary to obtain the consent of Benjamin.
Moreover, as appearing in the Agreement, Benjamin
signed as a witness to the contract, indicating his
knowledge of the transaction and, impliedly, his
conformity to the agreement entered into by his wife.
Benjamin was, therefore, estopped from questioning
the validity of the Agreement.
DECISION OF THE COURTS
12
RTC: In favour of Taylor. Contract of Lease is null and void.
The RTC considered the Boracay property as community
property of Benjamin and Joselyn; thus, the consent of the
spouses was necessary to validate any contract involving the
property. Benjamins right over the Boracay property was
bolstered by the courts findings that the property was
purchased and improved through funds provided by Benjamin.
Although the Agreement was evidenced by a public document,
the trial court refused to consider the alleged participation of
Benjamin in the questioned transaction primarily because his
signature appeared only on the last page of the document and
not on every page thereof.
Court of Appeals: The CA affirmed the conclusions made by
the RTC. The appellate court was of the view that if, indeed,
Benjamin was a willing participant in the questioned
transaction, the parties to the Agreement should have used the
phrase with my consent instead of signed in the presence
of. The CA noted that Joselyn already prepared an SPA in
favor of Benjamin involving the Boracay property; it was
therefore unnecessary for Joselyn to participate in the
execution of the Agreement. Taken together, these
circumstances yielded the inevitable conclusion that the
contract was null and void having been entered into by Joselyn
without the consent of Benjamin.
ISSUE: Whether a British husband has the power to own a
property in the Philippines and has to power to nullify a
Contract of Lease entered into by the Filipina wife with a
private lessee
RATIO DECIDENDIOF SUPREME COURT
It is undisputed that Joselyn acquired the Boracay property in
1989. Said acquisition was evidenced by a Deed of Sale with
Joselyn as the vendee. The property was also declared for
taxation purposes under her name. When Joselyn leased the
property to petitioner, Benjamin sought the nullification of the
contract on two grounds: first, that he was the actual owner of
the property since he provided the funds used in purchasing
the same; and second, that Joselyn could not enter into a valid
contract involving the subject property without his consent.
Section 7, Article XII of the 1987 Constitution states:
Section7.Save in cases of hereditary succession, no
private lands shall be transferred or conveyed except to
individuals, corporations, or associations qualified to
acquire or hold lands of the public domain.
Aliens, whether individuals or corporations, have been
disqualified from acquiring lands of the public domain. Hence,
by virtue of the aforecited constitutional provision, they are also
disqualified from acquiring private lands. The primary purpose
of this constitutional provision is the conservation of the
national patrimony. Our fundamental law cannot be any
clearer. The right to acquire lands of the public domain is
reserved only to Filipino citizens or corporations at least sixty
percent of the capital of which is owned by Filipinos.
We find and so hold that Benjamin has no right to nullify the
Agreement of Lease between Joselyn and petitioner.
Benjamin, being an alien, is absolutely prohibited from
acquiring private and public lands in the Philippines.
Considering that Joselyn appeared to be the designated
vendee in the Deed of Sale of said property, she acquired
sole ownership thereto. This is true even if we sustain
Benjamins claim that he provided the funds for such
acquisition. By entering into such contract knowing that it was
illegal, no implied trust was created in his favor; no
reimbursement for his expenses can be allowed; and no
declaration can be made that the subject property was part of
the conjugal/community property of the spouses. In any event,
he had and has no capacity or personality to question the
subsequent lease of the Boracay property by his wife on the
theory that in so doing, he was merely exercising the
prerogative of a husband in respect of conjugal property. To
sustain such a theory would countenance indirect
controversion of the constitutional prohibition. If the property
were to be declared conjugal, this would accord the alien
husband a substantial interest and right over the land, as he
would then have a decisive vote as to its transfer or
disposition. This is a right that the Constitution does not permit
him to have.
The Agreement of Lease entered into between Joselyn and
petitioner cannot be nullified on the grounds advanced by
Benjamin. Thus, we uphold its validity. Matthews vs. Taylor,
590 SCRA 394, G.R. No. 164584 June 22, 2009
DISPOSITIVE PORTION
The Agreement of Lease entered into between Joselyn and
petitioner cannot be nullified on the grounds advanced by
Benjamin. Thus, we uphold its validity.
13