Rellosa v.

Gaw
G.R. No. L-1411. September 29, 1953
J. Bautista Angelo

Topic: Void or Inexistent Contracts - Remedies

Petitioner: Dionisio Rellosa

Respondents: Gaw Chee Hun

Summary: The sale of a parcel of land to a Chinese national was declared void ff. the 1943
Constitution, yet the seller cannot recovery the properties in question because of
the in pare delicto rule.

FACTS:

Feb. 2, 1944 Dionisio Rellosa sold to Gaw Chee Hun (Chinese) a parcel of land along with the
house atop it for P 25,000. The house and lot was in Manila.

Rellosa remained in possession of the property by virtue of a contract of lease

subsequently entered into by the parties

No Date Rellosa filed a petition before the CFI of Manila in order to annul the contract of
sale and the lease arguing that,
- The sale was conditional. Gaw was supposed to obtain the approval of the
Japanese Military Administration in accordance with Seirei No. 6 so he could
take possession of the property. Gaw failed to do so.
- Even if the condition was met, the sale would still be void because of Art. VIII,
Sec. 5 of the 1943 Constitution1

Gaw answered by arguing that,

- The sale was absolute and unconditional
- It was binding as it was not contrary to law, morals, and public order
- Rellosa is estopped from questioning the validity of the sale. By having
executed a deed of lease, Rellosa recognized the title of Gaw over the property

No Date CFI-Manila ruled in favor of Gaw by declaring that the sale was valid
- It ordered Rellosa to turn over the property to Gaw and pay the rental of P 50
per month from August 1, 1945 until the property has been actually delivered

No Date The CA affirmed said ruling

Hence, this petition

ISSUES AND HOLDING:

W/N sale is null and void

YES

1
1943 CONST. Art VIII, Sec. 5, "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 Court ruled that it would be unnecessary to consider Seirei No. 6 since the law that should
govern this case is the 1943 Constitution (adopted on Sept. 4, 1943) specifically Art. VIII, Sec.
5.
- Citing said article and following Krivenko v. Register of Deeds, the phrase “private
agricultural land” includes public and private agricultural lands and residential lands.
- Since the case at bar involves a residential lot, it must be ruled that aliens such as Gaw are
not qualified to own the land in question, hence, the sale is null and void.

W/N Rellosa can recover the property sold

NO
- The In Pare Delicto (In Equal Fault) Rule applies.
- It cannot be denied that both Gaw and Rellosa knew of the constitutional prohibition (1)
following the presumption that citizens and aliens are acquainted with the law of country
they live and sojourn in, and (2) since Rellosa’s act of renting the land sold was probably made
to cover up the illegal sale.
- Since Rellosa’s guilty of bad faith, the property sold between both parties cannot go to
Rellosa. Following an action for reversion, or escheat to the state, the land goes back to the
ownership of the State since it is the original source of private titles.

Action for Reversion Escheat to the State

Based on Commonwealth Act No. 141 Rests on the principle of the ultimate
ownership by the state of all property
within its jurisdiction.
Any prohibited conveyance done by the The reversion of property to the state takes
grantee would annul the grant, title, patent, place when, (1) the title fails, (2) tenant is
or permit over the land conveyed an alien, (3) because a person has died
intestate without lawful heirs to take
his/her estate by succession, or (4) because
of some other disability to take or hold
property imposed by law.
Effect: The reversion of the property and its improvements to the State

RULING:

In view of the foregoing, we hold that the sale in question is null and void, but Rellosa is barred from
taking the present action under the principle of pari delicto.