FRENZEL VS. CATITO

FACTS- Petitioner Alfred Fritz Frenzel is an Australian citizen of German descent.- He arrived in the Philippines in 1974, started engaging in business in the

country; two years thereafter, he married Teresita Santos, a Filipino citizen. - In 1981, Alfred and Teresita separated from bed and board without obtain-

ing a divorce.- In 1983, Alfred arrived in Sydney, Australia for a vacation. He went to

King’s Cross, a night spot in Sydney, for a massage where he met Ederlina Catito, a Filipina and a native of Bajada, Davao City - married to Klaus Muller, a German national.

- Alfred proposed for Ederlina to stay in the Philippines and engage in busi-ness, even offering to finance her business venture.

- Since Alfred knew that as an alien he was disqualified from owning lands in the Philippines, he agreed that only Ederlina’s name would appear in the deed of sale as the buyer of the property, as well as in the title covering the same.

- When Ederlina left for Germany to visit Klaus, she had her father Narciso Catito and her two sisters occupy the property.

- Klaus thereafter revealed their marriage to Alfred who confronted Ederlina.- Ederlina promised to divorce Klaus - Ederlina’s petition for divorce was de-

nied because Klaus opposed the same- Klaus wanted half of all the properties owned by Ederlina in the Philippines

before he would agree to a divorce. Worse, Klaus threatened to file a bigamy case against Ederlina

- Alfred and Ederlina’s relationship started deteriorating.- Alfred filed a Complaint dated October 28, 1985, against Ederlina, with the

Regional Trial Court of Quezon City, for recovery of real and personal prop-erties located in Quezon City and Manila.

- Alfred alleged, inter alia, that Ederlina, without his knowledge and consent, managed to transfer funds from their joint account in HSBC Hong Kong, to her own account with the same bank. Using the said funds, Ederlina was able to purchase the properties subject of the complaints.

ISSUE:WON Frenzel can recover the real and personal properties in question.

HELD: NO, affirmed RTC and CA’s Decision

- the said transactions are in violation of the Constitution; hence, are null and void ab initio

- A contract that violates the Constitution and the law, is null and void and vests no rights and creates no obligations. It produces no legal effect at all.

- The petitioner, being a party to an illegal contract, cannot come into a court of law and ask to have his illegal objective carried out. One who loses his money or property by knowingly engaging in a contract or transaction which involves his own moral turpitude may not maintain an action for his losses.

- Article 1412 of the New Civil Code, the petitioner cannot have the subject properties deeded to him or allow him to recover the money he had spent for the purchase thereof. Equity as a rule will follow the law and will not per-mit that to be done indirectly which, because of public policy, cannot be done directly.

- UNJUST ENRICHMENT PRINCIPLE cannot be availed - does not apply if, as in this case, the action is proscribed by the Constitution or by the appli -cation of the pari delicto doctrine.

MULLER VS. MULLER

FACTS:- Elena Buenaventura Muller and respondent Helmut Muller were married in

Hamburg, Germany- respondent had inherited the house in Germany from his parents which he

sold and used the proceeds for the purchase of a parcel of land in Antipolo - registered in the name of petitioner

- relationship went sour - filed a petition 6 for separation of properties before the Regional Trial Court of Quezon City

- Antipolo property - the court held that it was acquired using paraphernal funds of the respondent. However, it ruled that respondent cannot recover his funds because the property was purchased in violation of Constitution

- CA ordered for reimbursement as it was only the request of the respondent Muller and not for ownership therein

ISSUE:WON respondent Muller is entitled for reimbursement of the subject property.

HELD: NO- Aliens, whether individuals or corporations, are disqualified from acquiring

lands of the public domain. Hence, they are also disqualified from acquiring private lands.

- Respondent was aware of the constitutional prohibition and expressly ad-mitted his knowledge thereof to this Court.

- Court of Appeals erred in holding that an implied trust was created and re-sulted by operation of law in view of petitioner’s marriage to respondent.

- Not even an ownership in trust is allowed. Besides, where the purchase is made in violation of an existing statute and in evasion of its express provi-sion, no trust can result in favor of the party who is guilty of the fraud - To hold otherwise would allow circumvention of the constitutional prohibition.

- respondent cannot seek reimbursement on the ground of equity where it is clear that he willingly and knowingly bought the property despite the consti -tutional prohibition.

- To allow reimbursement would in effect permit respondent to enjoy the fruits of a property which he is not allowed to own. Thus, it is likewise pro-scribed by law.

YAP VS. GRAGEDA

FACTS:- Private respondent Jose Rico’s father, Maximo Rico sold for and behalf of

his minor children Lot no. 339 and a portion of Lot no. 327 to petitioner Do-nato Yap, who was then a Chinese national

- subsequently, petitioner Yap registered the instrument of sale, OCT was cancelled and a new one issued in his favor

- 15 years after the execution of the deed of absolute sale, petitioner Yap be-came a Filipino through naturalization

- Then petitioner ceded the majority portion of Lot no. 327 to his son, who was also a Filipino by virtue of petitioner’s naturalization and his wife’s Fil-ipino citizenship

- CFI declared the sale of the lots to petitioner Yap null and void on the ground that the sale was contrary to Section 5, Art. 18 of the 1935 Constitu-tion.

ISSUE:WON the transfer of the private land to petitioner Yap was null and void.

HELD: NO- litigated property is now in the hands of a naturalized Filipino - It is no

longer owned by a disqualified vendee.

- Respondent, as a naturalized citizen, was constitutionally qualified to own the subject property.

- There would be no more public policy to be served in recovering the land as it is already in the hands of a qualified person.

- ban on aliens from acquiring not only agricultural but also urban lands is to preserve the nation's lands for future generations of Filipinos, that aim or purpose would not be thwarted but achieved by making lawful the acquisi-tion of real estate by aliens who became Filipino citizens by naturalization.

GODINEZ VS. PAK LEUNGFACTS:- September 30, 1966 - plaintiffs filed a complaint in the Court of First In-

stance of Sulu alleging among others that they are the heirs of Jose Godinez - who was married to Martina Alvarez Godinez.

- during the marriage of their parents - acquired a parcel of land lot No. 94 of Jolo in the name of Jose Godinez

- without the knowledge of the plaintiffs, the said Jose Godinez, sold the aforesaid parcel of land to the defendant Fong Pak Luen, a Chinese citizen

- January 11, 1963, defendant Fong Pak Luen executed a power of attorney in favor of his co-defendant Kwan Pun Ming, also an alien

- Kwan Pun Ming conveyed and sold the above described parcel of land to co-defendant Trinidad S. Navata, who is aware of and with full knowledge that Fong Pak Luen is a Chinese citizen as well as Kwan Pun Ming

- defendant Navata filed her answer - property is registered in the name of Jose Godinez so that as his sole property he may dispose of the same

- defendant further averred that plaintiff’s cause of action has been barred by the statute of limitations - an action based upon a written contract must be brought within 10 years from the time the right of action accrues - right of action accrued on November 27, 1941 but the complaint was filed only on September 30, 1966

ISSUE:Whether or not the heirs of a person who sold a parcel of land to an alien in violation of a constitutional prohibition may recover the property if it had, in the meantime, been conveyed to a Filipino citizen qualified to own and pos-sess it.

HELD: NO- The rule is that in a sale of real estate to an alien disqualified to hold title

thereto the vendor divests himself of the title to such real estate and has no recourse against the vendee despite the latter's disability on account of

alienage to hold title to such real estate and the vendee may hold it against the whole world except as against the State.

- only the State that is entitled by proceedings in the nature of office found to have a forfeiture or escheat declared against the vendee who is incapable of holding title to the real estate.

- However, if the State does not commence such proceedings and in the meantime the alien becomes naturalized citizen, the State is deemed to have waived its right to escheat the real property and the title of the alien thereto becomes lawful and valid as of the date of its conveyance or trans-fer to him.

- Title was already conveyed to a Filipino, hence the Constitutional ban would no longer apply.

- ISSUE on prescription is without merit - prescription may not be used to de-fend a contract which the Constitution prohibits

LEE VS. DIRECTOR OF LANDS

FACTS:- March 1936 the Dinglasans sold to Lee Liong, a Chinese citizen, a parcel of

land- However, in 1948, the former owners filed with the Court of First Instance,

Capiz an action against the heirs of Lee Liong for annulment of sale and re-covery of land - assailed the validity of the sale because of the constitu-tional prohibition against aliens acquiring ownership of private agricultural land, including residential, commercial or industrial land - rebuffed in RTC, CA and SC

- July 1, 1968, the same former owners filed in CFI of Capiz an action for re-covery of the same parcel of land.

- September 23, 1968, the heirs of Lee Liong filed with the trial court a mo-tion to dismiss the case on the ground of res judicata.

- April 22, 1977, the Supreme Court annulled the orders of the trial court and directed it to dismiss the case, holding that the suit was barred by res judicata

- September 7, 1993, Elizabeth Manuel-Lee and Pacita Yu Lee filed with the Regional Trial Court, Roxas City a petition for reconstitution of title of Lot No. 398

- January 25, 1995, the Solicitor General filed with the Court of Appeals a pe-tition for annulment of judgment in Reconstitution Case No. 1928, alleging that the Regional Trial Court, Roxas City had no jurisdiction over the case

- Solicitor General contended that the petitioners were not the proper parties in the reconstitution of title, since their predecessor-in-interest Lee Liong did not acquire title to the lot because he was a Chinese citizen and was consti-tutionally not qualified to own the subject land.

ISSUE:WON the title can be reconstituted in favor of the heirs of Lee Liong.

HELD: YES- reconstitution of a certificate of title denotes restoration in the original form

and condition of a lost or destroyed instrument attesting the title of a person to a piece of land.

- Question as to whether Lee Liong has the qualification to own land in the Philippines.

- subsequent circumstances militate against escheat proceedings because the land is now in the hands of Filipinos. 

- The original vendee, Lee Liong, has since died and the land has been in-herited by his heirs and subsequently their heirs, petitioners herein. Peti-tioners are Filipino citizens, a fact the Solicitor General does not dispute.

- The constitutional proscription on alien ownership of lands of the public or private domain was intended to protect lands from falling in the hands of non-Filipinos.  In this case, however, there would be no more public policy violated since the land is in the hands of Filipinos qualified to acquire and own such land.

- must be mentioned that reconstitution of the original certificate of title must be based on an owner’s duplicate, secondary evidence thereof, or other valid sources of the title to be reconstituted.

- In this case, reconstitution was based on the plan and technical description approved by the Land Registration Authority - This renders the order of re-constitution void for lack of factual support - A judgment with absolutely nothing to support it is void.

- Thus, although petitioners are in possession of the land, a separate pro-ceeding is necessary to thresh out the issue of ownership of the land.

REPUBLIC VS. CA AND LAPINA

On June 17, 1978, respondent spouses 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 (Rollo, p. 41). At the time of the purchase, respondent spouses where then natural-born Filipino citizens.On February 5,

1987,the spouses filed an application for registration of title of the two (2) parcels of land before the RegionalTrial Court of San Pablo City, Branch XXXI. 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 respec-tive evidence, the court a quo rendered a decision confirming private respon-dents' title to the lots in question.On appeal, respondent court affirmed the decision of the trial court based on the following ratiocination: In the present case, it is undisputed that both appli-cants were still Filipino citizens when they bought the land in controversy from its former owner. For this reason, the prohibition against the acquisition of pri-vate lands by aliens could not apply.In justice and equity, they are the rightful owners of the subject realty considering also that they had paid for it quite a large sum of money.

Issue: Whether or not a foreign national can 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 regis-tration under the Public Land Act (CA 141).

Held: The Court disagreed on the petition to seek to defeat respondents' ap-plication for registration of title on the ground of foreign nationality. This Court, speaking through Justice Davide, Jr., stated: As could be gleaned from the evidence adduced, the private respondents do not rely on fee simple ownership based ona Spanish grant or possessory information title under Section 19 of the Land Registration Act; the private respondents did not present any proof that they or their predecessors-in-interest derived title from an old Spanish grant such as (a) the "titulo real" or royal grant (b) the "concession especial" or especial grant; (c)the "composicion con el estado" title or adjustment title; (d) the "titulo de compra" or title by purchase;and (e) the "informacion posesoria" or pos-sessory information title, which could become a "titulogratuito" or a gratuitous title (Director of Forestry v. Muñoz, 23 SCRA 1183 [1968]). The primary basis of their claim is possession, by themselves and their predecessors-in-interest,since time immemorial. Pursuant thereto, Batas Pambansa Blg. 185 was passed into law, the relevant provision of which provides:Sec. 2. Any nat-ural-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 to exceed the maximum

herein fixed.In case the transferee already owns urban or rural lands for resi-dential 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 al-ready owned by him, shall not exceed the maximum areas herein autho-rized.The Court is of the view that the requirements in Sec. 6 of BP 185 do not apply in the instant case since said requirements are primarily directed to the register of deeds before whom compliance therewith is to be submitted. Nowhere in the provision is it stated, much less implied, that the requirements must likewise be submitted before the land registration court prior to the ap-proval of an application for registration of title. An application for registration of title before a land registration court should not be confused with the is-suance of a certificate of title by the register of deeds. It is only when the judgment of the land registration court approving the application for registra-tion has become final that a decree of registration is issued. And that is the time when the requirements of Sec. 6, BP 185, before the register of deeds should be complied with by the applicants. This decree of registration is the one that is submitted tothe office of the register of deeds for issuance of the certificate of title in favor of the applicant. Prior to the issuance of the decree of registration, the register of deeds has no participation in the approval of theapplication for registration of title as the decree of registration is yet to be issued. The petition isDISMISSED and the decision appealed from is hereby AFFIRMED