HULST vs. PR Builders, Inc.

FACTS: Jacobus Bernhard Hulst (petitioner) and his spouse Ida, both Dutch nationals, entered into a
Contract to Sell with PR Builders, Inc. (respondent) to purchase a residential unit in the respondent’s
townhouse project in Batangas. After the respondent’s failure to complete the project by June 1995 as
verbally promised, spouses Hulst filed a complaint for rescission of contract with interest, damages and
attorney’s fees before the Housing and Land Use Regulatory Board (HLURB). The HLURB Arbiter ruled in
favor of the petitioner, thereby ordering the return of the price paid for the residential unit, as well as
actual, moral, and exemplary damages, and attorney’s fees. A Writ of Execution was thereafter issued to
execute the HLURB Arbiter’s judgment. The respondent filed a complaint with the CA on a Petition for
Certiorari and Prohibition. The CA dismissed the Petition for Certiorari and Prohibition.

ISSUE: WON petitioner, being an alien, can enter a contract to acquire lands in the Philippines and acquire
damages resulting from conflict of such contract.

HELD: The Supreme Court, before acting upon the main issue brought forth by the petitioner, found the
matter to be of public and national importance, taking into consideration that Hulst, being an alien, is
disqualified from acquiring public and private lands. Hence, the Contract to Sell from which the conflict
stems from is unequivocally void. Generally, parties deemed in pari delicto are left alone by the court, but
the petitioner in this case falls under the exception to the rule provided by Article 1414 of the Civil Code.
It provides that one who repudiates the agreement and demands his money before the illegal act has
taken place is entitled to recover. Thus petitioner is entitled to the recovery of the purchase price paid to
respondent, but not entitled to damages based on the void contract.