SECOND DIVISION
That the LESSOR and the LESSEE hereby agree as they have agreed to be bound by the following terms
G.R. No. 215014, February 29, 2016
REBECCA FULLIDO, Petitioner, v. GINO GRILLI, Respondent.
DECISION
MENDOZA, J.:
This is a petition for review on certiorari seeking to reverse and set aside the May 31, 2013 Decision1 and
the September 24, 20142 Resolution of the Court of Appeals (CA) in CA-G.R. CEB-SP No. 06946, which
affirmed the April 26, 2012 Decision3 of the Regional Trial Court, Branch 47, Tagbilaran City (RTC) in
Civil Case No. 7895, reversing the March 31, 2011 Decision4 of the Municipal Circuit Trial Court, Dauis,
Bohol (MCTC) in Civil Case No. 244, a case for unlawful detainer filed by Gino Grilli (Grilli) against
Rebecca Fullido (Fullido).
The Facts
Sometime in 1994, Grilli, an Italian national, met Fullido in Bohol and courted her. In 1995, Grilli decided
to build a residential house where he and Fullido would stay whenever he would be vacationing in the
country.
Grilli financially assisted Fullido in procuring a lot located in Biking I, Dauis, Bohol, from her parents
which was registered in her name under Transfer Certificate of Title (TCT) No. 30626.5 On the said
property, they constructed a house, which was funded by Grilli. Upon completion, they maintained a
common-law relationship and lived there whenever Grilli was on vacation in the Philippines twice a year.
In 1998, Grilli and Fullido executed a contract of lease, 6 a memorandum of agreement7 (MOA) and a
special power of attorney8 (SPA), to define their respective rights over the house and lot.
The lease contract stipulated, among others, that Grilli as the lessee, would rent the lot, registered in the
name of Fullido, for a period of fifty (50) years, to be automatically renewed for another fifty (50) years
upon its expiration in the amount of P10,000.00 for the whole term of the lease contract; and that Fullido as
the lessor, was prohibited from selling, donating, or encumbering the said lot without the written consent of
Grilli. The pertinent provisions of the lease contract over the house and lot are as follows:
That for and in consideration of the total amount of rental in the amount of TEN THOUSAND (P10,000.00)
PESOS, Philippine Currency, paid by the LESSEE to the LESSOR, receipt of which is hereby
acknowledged, the latter hereby leases to the LESSEE a house and lot, and all the furnishings found therein,
land situated at Biking I, Dauis, Bohol, Philippines, absolutely owned and belonging to the LESSOR and
particularly described as follows, to wit:
xxxx
and conditions, to wit:
l. That the term of the lease shall be FIFTY (50) YEARS from August 16, 1998 to August 15, 2048,
automatically renewed for the same term upon the expiration thereof;
xxx
lease to any third person, without the written consent of the LESSEES.9
The said lease contract was duly registered in the Register of Deeds of Bohol.
The MOA, on the other hand, stated, among others, that Grilli paid for the purchase price of the house and
lot; that ownership of the house and lot was to reside with him; and that should the common-law relationship
be terminated, Fullido could only sell the house and lot to whomever Grilli so desired. Specifically, the
pertinent terms of the MOA read:
NOW WHEREFORE, FOR AND IN CONSIDERATION of the foregoing premises, the parties hereto agree
as they hereby covenant to agree that the FIRST PARTY (Grilli) shall permanently reside on the property as
above-mentioned, subject to the following terms and conditions:
1. That ownership over the above-mentioned properties shall reside absolutely with herein FIRST PARTY,
and the SECOND PARTY (Fullido) hereby acknowledges the same;
2. That the SECOND PARTY is expressly prohibited to sell the above-stated property, except if said sale is
with the conformity of the FIRST PARTY;
3. That the SECOND PARTY hereby grants the FIRST PARTY, the absolute and irrevocable right, to reside
in the residential building so constructed during his lifetime, or any time said FIRST PARTY may so desire;
4. That in the event the common-law relationship terminates, or when the SECOND PARTY marries
another, or enters into another common-law relationship with another, said SECOND PARTY shall be
obliged to execute a DEED OF ABSOLUTE SALE over the above-stated parcel of land and residential
building, in favor of whomsoever the FIRST PARTY may so desire, and be further obliged to turn over the
entire consideration of the said sale to the FIRST PARTY , or if the law shall allow, the FIRST PARTY
shall retain ownership of the said land, as provided for in paragraph 7 below;
xxx
7. That if the cases referred to in paragraph 4 shall occur and in the event that a future law shall be passed
allowing foreigners to own real properties in the Philippines, the ownership of the above-described real
properties shall pertain to the FIRST PARTY, and the herein undersigned SECOND PARTY undertakes to
execute all the necessary deeds, documents, and contracts to effect the transfer of title in favor of the FIRST
PARTY;
1

XXX.10
Lastly, the SPA allowed Grilli to administer, manage, and transfer the house and lot on behalf of Fullido.
Initially, their relationship was harmonious, but it turned sour after 16 years of living together. Both charged
each other with infidelity. They could not agree who should leave the common property, and Grilli sent
formal letters to Fullido demanding that she vacate the property, but these were unheeded. On September 8,
2010, Grilli filed a complaint for unlawful detainer with prayer for issuance of preliminary injunction
against Fullido before the MCTC, docketed as Civil Case No. 244.
Grilli's Position
The complaint stated that the common-law relationship between Grilli and Fullido began smoothly, until
Grilli discovered that Fullido was pregnant when he arrived in the Philippines in 2002. At first, she told him
that the child she was carrying was his. After the delivery of the child, however, it became apparent that the
child was not his because of the discrepancy between the child's date of birth and his physical presence in
the Philippines and the difference between the baby's physical features and those of Grilli. Later on, she
admitted that the child was indeed sired by another man.
Grilli further claimed that he was so devastated that he decided to end their common-law relationship.
Nevertheless, he allowed Fullido to live in his house out of liberality and generosity, but this time, using
another room. He did not demand any rent from Fullido over the use of his property.
After a year, Fullido became more hostile and difficult to handle. Grilli had to make repairs with his house
every time he arrived in the Philippines because she was not maintaining it in good condition. Fullido also
let her two children, siblings and parents stay in his house, which caused damage to the property. He even
lost his personal belongings inside his house on several occasions. Grilli verbally asked Fullido to move out
of his house because they were not getting along anymore, but she refused. He could no longer tolerate the
hostile attitude shown to him by Fullido and her family, thus, he filed the instant complaint.
Fullido's Position
Fullido countered that she met Grilli sometime in 1993 when she was still 17 years old working as a cashier
in Alturas Supermarket. Grilli was then a tourist in Bohol who persistently courted her.
At first, Fullido was hesitant to the advances of Grilli because she could not yet enter into a valid marriage.
When he assured her and her parents that they would eventually be married in three years, she eventually
agreed to have a relationship with him and to live as common-law spouses. Sometime in 1995, Grilli offered
to build a house for her on a parcel of land she exclusively owned which would become their conjugal
abode. Fullido claimed that their relationship as common-law spouses lasted for more than 18 years until she
discovered that Grilli had found a new and younger woman in his life. Grilli began to threaten and
physically hurt her by knocking her head and choking her.
When Fullido refused to leave their house even after the unlawful detainer case was filed, Grilli again
harassed, intimidated and threatened to hurt her and her children. Thus, she filed a petition for Temporary
Protection Order (TPO) and Permanent Protection Order (PPO) against Grilli under Republic Act (R.A.) No.
9262 before the Regional Trial Court, Branch 3, Bohol (RTC-Branch 3). In an Order,11 dated February 23,
2011, the RTC-Branch 3 granted the TPO in favor of Fullido and directed that Grilli must be excluded from
their home.
Fullido finally asserted that, although it was Grilli who funded the construction of the house, she exclusively
owned the lot and she contributed to the value of the house by supervising its construction and maintaining
their household.
The MCTC Ruling
In its decision, dated March 31, 2011, the MCTC dismissed the case after finding that Fullido could not be
ejected from their house and lot. The MCTC opined that she was a co-owner of the house as she contributed
to it by supervising its construction. Moreover, the MCTC respected the TPO issued by RTC-Branch 3
which directed that Grilli be removed from Fullido's residence. The dispositive portion of the MCTC
decision reads:
WHEREFORE, judgment is hereby rendered:
1. Dismissing the instant case;
2. Ordering the Plaintiff to pay to Defendant the amount of Fifty Thousand Pesos
(P50,000.00) as moral damages, and Twenty Thousand Pesos (P20,000.00) as exemplary
damages, and Twenty Thousand Pesos (P20,000.00) as Attorney's Fees; and
3. Denying the prayer for the issuance of Preliminary Mandatory Injunction.
SO ORDERED.12ChanRoblesVirtualawlibrary
Not in conformity, Grilli elevated the matter before the RTC.
The RTC Ruling
In its decision, dated April 26, 2012, the RTC reversed and set aside the MCTC decision. The RTC was of
the view that Grilli had the exclusive right to use and possess the house and lot by virtue of the contract of
lease executed by the parties. Since the period of lease had not yet expired, Fullido, as lessor, had the
obligation to respect the peaceful and adequate enjoyment of the leased premises by Grilli as lessee. The
RTC opined that absent a judicial declaration of nullity of the contract of lease, its terms and conditions
were valid and binding. As to the TPO, the RTC held that the same had no bearing in the present case which
merely involved the possession of the leased property.
Aggrieved, Fullido instituted an appeal before the CA alleging that her land was unlawfully transferred by
Grilli to a certain Jacqueline Guibone (Guibone), his new girlfriend, by virtue of the SPA earlier executed by
Fullido.
The CA Ruling
2

In its assailed decision, dated May 31, 2013, the CA upheld the decision of the RTC emphasizing that in an
ejectment case, the only issue to be resolved would be the physical possession of the property. The CA was
also of the view that as Fullido executed both the MOA and the contract of lease, which gave Grilli the
possession and use of the house and lot, the same constituted as a judicial admission that it was Grilli who
had the better right of physical possession. The CA stressed that, if Fullido would insist that the said
documents were voidable as her consent was vitiated, then she must institute a separate action for annulment
of contracts. Lastly, the CA stated that the TPO issued by the RTC-Branch 3 under Section 21 of R.A. No.
9262 was without prejudice to any other action that might be filed by the parties.
Fullido filed a motion for reconsideration,13 but she failed to attach the proofs of service of her motion. For
said reason, it was denied by the CA in its assailed resolution, dated September 24, 2014.
Hence, this present petition raising the following:
ISSUES
I
THE HONORABLE COURT OF APPEALS GRAVELY ERRED AND DEPARTED FROM
ESTABLISHED LAW AND JURISPRUDENCE IN DENYING THE PETITION FOR REVIEW
AND IN AFFIRMING THE DECISION OF RTC BOHOL BRANCH 47 EJECTING PETITIONER
FROM THE SUBJECT PROPERTIES, WHICH EJECTMENT ORDER IS ANCHORED ON
PATENTLY NULL AND VOID CONTRACTS.
II
THE HONORABLE COURT OF APPEALS GRAVELY ERRED AND DEPARTED FROM
ESTABLISHED LAW IN AFFIRMING THE DECISION OF THE RTC BOHOL BRANCH 47
EJECTING PETITIONER FROM THEIR CONJUGAL ABODE WHERE RESPONDENT HAS
BEEN EARLIER ORDERED TO VACATE BY VIRTUE OF A PERMANENT PROTECTION
ORDER THUS EFFECTIVELY SETTING ASIDE, NEGATING AND/OR VIOLATING AN
ORDER ISSUED BY A COURT OF CO-EQUAL JURISDICTION.
III
THE HONORABLE COURT OF APPEALS LIKEWISE ERRED AND DEPARTED FROM
ESTABLISHED LAW AND JURISPRUDENCE IN DENYING THE PETITIONER'S MOTION
FOR RECONSIDERATION, AMONG OTHERS, FOR NON-COMPLIANCE WITH SECTION 1
RULE 52 VIS-A-VIS SECTION 13, RULE 13 OF THE 1997 RULES OF CIVIL
PROCEDURE.14ChanRoblesVirtualawlibrary
Fullido argues that she could not be ejected from her own lot based on the contract of lease and the MOA
because those documents were null and void for being contrary to the Constitution, the law, public policy,
morals and customs; that the MOA prevented her from disposing or selling her own land, while the contract
of lease favoring Grilli, a foreigner, was contrary to the Constitution as it was a for a period of fifty (50)
years, and, upon termination, was automatically renewable for another fifty (50) years; that the TPO, which
became a PPO by virtue of the July 5, 2011 Decision15 of RTC-Branch 3, should not be defeated by the
ejectment suit; and that the CA should have liberally applied its procedural rules and allowed her motion for
reconsideration.
In his Comment,16 Grilli countered that he was the rightful owner of the house because a foreigner was not
prohibited from owning residential buildings; that the lot was no longer registered in the name of Fullido as
it was transferred to Guibone, covered by TCT No. 101-2011000335; that if Fullido wanted to assail the
lease contract, she should have first filed a separate action for annulment of the said contract, which she did
in Civil Case No. 8094, pending before the Regional Trial Court of Bohol; and that by signing the contracts,
Fullido fully agreed with their terms and must abide by the same.
In her Reply,17 Fullido insisted that the contract of lease and the MOA were null and void, thus, these could
not be the source of Grilli's de facto possession.
The Court's Ruling
The Court finds the petition meritorious.
Unlawful detainer is an action to recover possession of real property from one who unlawfully withholds
possession thereof after the expiration or termination of his right to hold possession under any contract,
express or implied. The possession of the defendant in unlawful detainer is originally legal but became
illegal due to the expiration or termination of the right to possess. The only issue to be resolved in an
unlawful detainer case is the physical or material possession of the property involved, independent of any
claim of ownership by any of the parties.18
In this case, Fullido chiefly asserts that Grilli had no right to institute the action for unlawful detainer
because the lease contract and the MOA, which allegedly gave him the right of possession over the lot, were
null and void for violating the Constitution. Contrary to the findings of the CA, Fullido was not only
asserting that the said contracts were merely voidable, but she was consistently invoking that the same
were completely void.19 Grilli, on the other hand, contends that Fullido could not question the validity of
the said contracts in the present ejectment suit unless she instituted a separate action for annulment of
contracts. Thus, the Court is confronted with the issue of whether a contract could be declared void in a
summary action of unlawful detainer.
Under the circumstances of the case, the Court answers in the affirmative.
A void contract cannot be
the source of any right; it
cannot be utilized in an
ejectment suit
A void or inexistent contract may be defined as one which lacks, absolutely either in fact or in law, one or
some of the elements which are essential for its validity.20 It is one which has no force and effect from the
very beginning, as if it had never been entered into; it produces no effect whatsoever either against or in
favor of anyone.21Quod nullum est nullum producit effectum. Article 1409 of the New Civil Code explicitly
3
states that void contracts also cannot be ratified; neither can the right to set up the defense of illegality be
waived.22 Accordingly, there is no need for an action to set aside a void or inexistent contract.23
A review of the relevant jurisprudence reveals that the Court did not hesitate to set aside a void contract
even in an action for unlawful detainer. In Spouses Alcantara v. Nido,24 which involves an action for
unlawful detainer, the petitioners therein raised a defense that the subject land was already sold to them by
the agent of the owner. The Court rejected their defense and held that the contract of sale was void because
the agent did not have the written authority of the owner to sell the subject land.
Similarly, in Roberts v. Papio,25 a case of unlawful detainer, the Court declared that the defense of
ownership by the respondent therein was untenable. The contract of sale invoked by the latter was void
because the agent did not have the written authority of the owner. A void contract produces no effect either
against or in favor of anyone.
In Ballesteros v. Abion,26 which also involves an action for unlawful detainer, the Court disallowed the
defense of ownership of the respondent therein because the seller in their contract of sale was not the owner
of the subject property. For lacking an object, the said contract of sale was void ab initio.
Clearly, contracts may be declared void even in a summary action for unlawful detainer because, precisely,
void contracts do not produce legal effect and cannot be the source of any rights. To emphasize, void
contracts may not be invoked as a valid action or defense in any court proceeding, including an ejectment
suit. The next issue that must be resolved by the Court is whether the assailed lease contract and MOA are
null and void.
The lease contract and the MOA
circumvent the constitutional
restraint against foreign
ownership of lands.
Under Section 1 of Article XIII of the 1935 Constitution, natural resources shall not be alienated, except
with respect to public agricultural lands and in such cases, the alienation is limited to Filipino citizens.
Concomitantly, Section 5 thereof states 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 prohibition on the transfer of lands to aliens was
adopted in the present 1987 Constitution, under Sections 2, 3 and 7 of Article XII thereof. Agricultural
lands, whether public or private, include residential, commercial and industrial lands. The purpose of
prohibiting the transfer of lands to foreigners is to uphold the conservation of our national patrimony and
ensure that agricultural resources remain in the hands of Filipino citizens.27cralawred
The prohibition, however, is not limited to the sale of lands to foreigners. It also covers leases of lands
amounting to the transfer of all or substantially all the rights of dominion. In the landmark case
of Philippine Banking Corporation v. Lui She,28 the Court struck down a lease contract of a parcel of land in
favor of a foreigner for a period of ninety-nine (99) years with an option to buy the land for fifty (50) years.
Where a scheme to circumvent the Constitutional prohibition against the transfer of lands to aliens is readily
revealed as the purpose for the contracts, then the illicit purpose becomes the illegal cause rendering the
contracts void. Thus, 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 but also of the right to dispose of it — rights
which constitute ownership. If this can be done, then the Constitutional ban against alien landholding in the
Philippines, is indeed in grave peril.29
In Llantino v. Co Liong Chong,30 however, the Court clarified that a lease contract in favor of aliens for a
reasonable period was valid as long as it did not have any scheme to circumvent the constitutional
prohibition, such as depriving the lessors of their right to dispose of the land. The Court explained that
"[a]liens are not completely excluded by the Constitution from 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 fortune
and misfortune, Filipino citizenship is not impossible to acquire."31 The lessee-foreigner therein eventually
acquired Filipino citizenship.
Consequently, Presidential Decree (P.D.) No. 471 was enacted to regulate the lease of lands to aliens. It
provides that the maximum period allowable for the duration of leases of private lands to aliens or alien-
owned corporations, associations, or entities not qualified to acquire private lands in the Philippines shall be
twenty-five (25) years, renewable for another period of twenty-five (25) years upon mutual agreement of
both lessor and lessee.32 It also provides that any contract or agreement made or executed in violation
thereof shall be null and void ab initio.33
Based on the above-cited constitutional, legal and jurisprudential limitations, the Court finds that the lease
contract and the MOA in the present case are null and void for virtually transferring the reigns of the land to
a foreigner.
As can be gleaned from the contract, the lease in favor of Grilli was for a period of fifty (50) years,
automatically extended for another fifty (50) years upon the expiration of the original period. Moreover, it
strictly prohibited Fullido from selling, donating, or encumbering her land to anyone without the written
consent of Grilli. For a measly consideration of PI 0,000.00, Grilli would be able to absolutely occupy the
land of Fullido for 100 years, and she is powerless to dispose the same. The terms of lease practically
deprived Fullido of her property rights and effectively transferred the same to Grilli.
Worse, the dominion of Grilli over the land had been firmly cemented by the terms of the MOA as it
reinforced Grilli's property rights over the land because, first, it brazenly dictated that ownership of the land
and the residential building resided with him. Second, Fullido was expressly prohibited from transferring the
same without Grilli's conformity. Third, Grilli would permanently reside in the residential
building. Fourth, Grilli may capriciously dispose Fullido's property once their common-law relationship is
terminated. This right was recently exercised when the land was transferred to Guibone. Lastly, Fullido shall
be compelled to transfer the land to Grilli if a law would be passed allowing foreigners to own real
properties in the Philippines.
Evidently, the lease contract and the MOA operated hand-in-hand to strip Fullido of any dignified right over
her own property. The term of lease for 100 years was obviously in excess of the allowable periods under
P.D. No. 471. Even Grilli admitted that "this is a case of an otherwise valid contract of lease that went
beyond the period of what is legally permissible."34 Grilli had been empowered to deprive Fullido of her
land's possession, control, disposition and even its ownership. The jus possidendi, jus utendi, jus fruendi, jus
abutendi and, more importantly, the jus disponendi - the sum of rights which composes ownership - of the
4
property were effectively transferred to Grilli who would safely enjoy the same for over a century. The title
of Fullido over the land became an empty and useless vessel, visible only in paper, and was only meant as a
dummy to fulfill a foreigner's desire to own land within our soils.
It is disturbing how these documents were methodically formulated to circumvent the constitutional
prohibition against land ownership by foreigners. The said contracts attempted to guise themselves as a
lease, but a closer scrutiny of the same revealed that they were intended to transfer the dominion of a land to
a foreigner in violation of Section 7, Article XII of the 1987 Constitution. Even if Fullido voluntary
executed the same, no amount of consent from the parties could legalize an unconstitutional agreement. The
lease contract and the MOA do not deserve an iota of validity and must be rightfully struck down as null and
void for being repugnant to the fundamental law. These void documents cannot be the source of rights and
must be treated as mere scraps of paper.
Grilli does not have a
cause of action for unlawful
detainer
Ultimately, the complaint filed by Grilli was an action for unlawful detainer. Section 1 of Rule 70 of the
Rules of Court lays down the requirements for filing a complaint for unlawful detainer, to wit:
Who may institute proceedings, and when. - Subject to the provision of the next succeeding section, a person
deprived of the possession of any land or building by force, intimidation, threat, strategy, or stealth, or
a lessor, vendor, vendee, or other person against whom the possession of any land or building is
unlawfully withheld after the expiration or termination of the right to hold possession, by virtue of any
contract, express or implied, or the legal representatives or assigns of any such lessor, vendor, vendee, or
other person, may, at any time within one (l) year after such unlawful deprivation or withholding of
possession, bring an action in the proper Municipal Trial Court against the person or persons unlawfully
withholding or depriving of possession, or any person or persons claiming under them, for the restitution of
such possession, together with damages and costs.
[Emphasis Supplied]
A complaint sufficiently alleges a cause of action for unlawful detainer if it recites the following: (1)
initially, possession of property by the defendant was by contract with or by tolerance of the plaintiff; (2)
eventually, such possession became illegal upon notice by plaintiff to defendant of the termination of the
latter's right of possession; (3) thereafter, the defendant remained in possession of the property and deprived
the plaintiff of the enjoyment thereof; and (4) within one year from the last demand on defendant to vacate
the property, the plaintiff instituted the complaint for ejectment.35
The Court rules that Grilli has no cause of action for unlawful detainer against Fullido. As can be gleaned
from the discussion above, the complainant must either be a lessor, vendor, vendee, or other person against
whom the possession of any land or building is unlawfully withheld. In other words, the complainant in an
unlawful detainer case must have some right of possession over the property.
In the case at bench, the lease contract and the MOA, from which Grilli purportedly drew his right of
possession, were found to be null and void for being unconstitutional. A contract that violates the
Constitution and the law is null and void ab initio and vests no rights and creates no obligations. It produces
no legal effect at all.36 Hence, as void contracts could not be the source of rights, Grilli had no possessory
right over the subject land. A person who does not have any right over a property from the beginning cannot
eject another person possessing the same. Consequently, Grilli's complaint for unlawful detainer must be
dismissed for failure to prove his cause of action.
In Pari Delicto Doctrine
is not applicable
On a final note, the Court deems it proper to discuss the doctrine of in pari delicto. Latin for "in equal fault,"
in pari delicto connotes that two or more people are at fault or are guilty of a crime. Neither courts of law
nor equity will interpose to grant relief to the parties, when an illegal agreement has been made, and both
parties stand in pari delicto.37
The application of the doctrine of in pari delicto is not always rigid. An accepted exception arises when its
application contravenes well-established public policy. In this jurisdiction, public policy has been defined as
that principle of the law which holds that no subject or citizen can lawfully do that which has a tendency to
be injurious to the public or against the public good.38 Thus, whenever public policy is advanced by either
party, they may be allowed to sue for relief against the transaction.39
In the present case, both Grilli and Fullido were undoubtedly parties to a void contract. Fullido, however,
was not barred from filing the present petition before the Court because the matters at hand involved an
issue of public policy, specifically the Constitutional prohibition against land ownership by aliens. As
pronounced in Philippine Banking Corporation v. Lui She, the said constitutional provision would be
defeated and its continued violation sanctioned if the lands continue to remain in the hands of a
foreigner.40 Thus, the doctrine of in pari delicto shall not be applicable in this case.chanrobleslaw
WHEREFORE, the petition is GRANTED. The May 31, 2013 Decision of the Court of Appeals and its
September 24, 2014 Resolution in CA-G.R. CEB-SP No. 06946 are hereby REVERSED and SET ASIDE. 
The complaint filed by Gino Grilli before the Municipal Circuit Trial Court, Dauis-Panglao, Dauis, Bohol,
docketed as Civil Case No. 244, is DISMISSED for lack of cause of action.
SO ORDERED.
5
G.R. No. 202932               October 23, 2013
EDILBERTO U. VENTURA JR., Petitioner,
vs.
SPOUSES PAULINO and EVANGELINE ABUDA, Respondents.
DECISION
CARPIO, J.:
The Case
This petition for review on certiorari seeks to annul the Decision1 dated 9 March 2012 of the Court of
Appeals (CA) in CA-G.R. CV No. 92330 and the Resolution2 dated 3 August 2012 denying the motion for
reconsideration. The Decision and Resolution dismissed the Appeal dated 23 October 2009 and affirmed
with modification the Decision3 dated 24 November 2008 of the Regional Trial Court of Manila, Branch 32
(RTC-Manila).
The Facts
The RTC-Manila and the CA found the facts to be as follows:
Socorro Torres (Socorro) and Esteban Abletes (Esteban) were married on 9 June 1980. Although Socorro
and Esteban never had common children, both of them had children from prior marriages: Esteban had a
daughter named Evangeline Abuda (Evangeline), and Socorro had a son, who was the father of Edilberto U.
Ventura, Jr. (Edilberto), the petitioner in this case.
Evidence shows that Socorro had a prior subsisting marriage to Crispin Roxas (Crispin) when she married
Esteban. Socorro married Crispin on 18 April 1952. This marriage was not annulled, and Crispin was alive
at the time of Socorro’s marriage to Esteban.
Esteban’s prior marriage, on the other hand, was dissolved by virtue of his wife’s death in 1960. According
to Edilberto, sometime in 1968, Esteban purchased a portion of a lot situated at 2492 State Alley, Bonifacio
Street, Vitas, Tondo, Manila (Vitas property). The remaining portion was thereafter purchased by
Evangeline on her father’s behalf sometime in 1970.4 The Vitas property was covered by Transfer
Certificate of Title No. 141782, dated 11 December 1980, issued to "Esteban Abletes, of legal age, Filipino,
married to Socorro Torres."5
Edilberto also claimed that starting 1978, Evangeline and Esteban operated small business establishments
located at 903 and 905 Delpan Street, Tondo, Manila (Delpan property).6
On 6 September 1997, Esteban sold the Vitas and Delpan properties to Evangeline and her husband, Paulino
Abuda (Paulino).7 According to Edilberto:
when Esteban was diagnosed with colon cancer sometime in 1993, he decided to sell the Delpan and Vitas
properties to Evangeline. Evangeline continued paying the amortizations on the two (2) properties situated
in Delpan Street. The amortizations, together with the amount of Two Hundred Thousand Pesos (Php
200,000.00), which Esteban requested as advance payment, were considered part of the purchase price of the
Delpan properties. Evangeline likewise gave her father Fifty Thousand Pesos (Php 50,000.00) for the
purchase of the Vitas properties and she shouldered his medical expenses.8
Esteban passed away on 11 September 1997, while Socorro passed away on 31 July 1999.
Sometime in 2000, Leonora Urquila (Leonora), the mother of Edilberto, discovered the sale. Thus,
Edilberto, represented by Leonora, filed a Petition for Annulment of Deeds of Sale before the RTC-Manila.
Edilberto alleged that the sale of the properties was fraudulent because Esteban’s signature on the deeds of
sale was forged. Respondents, on the other hand, argued that because of Socorro’s prior marriage to Crispin,
her subsequent marriage to Esteban was null and void. Thus, neither Socorro nor her heirs can claim any
right or interest over the properties purchased by Esteban and respondents.9
The Ruling of the RTC-Manila
The RTC-Manila dismissed the petition for lack of merit.
The RTC-Manila ruled that the marriage between Socorro and Esteban was void from the
beginning.10 Article 83 of the Civil Code, which was the governing law at the time Esteban and Socorro
were married, provides:
Art. 83. Any marriage subsequently contracted by any person during the lifetime of the first spouse of such
person shall be illegal and void from its performance unless:
1. The first marriage was annulled or dissolved; or
2. The first spouse had been absent for seven consecutive years at the time of the second marriage
without the spouse present having news of the absentee being alive, or if the absentee, though he
has been absent for less than seven years, is generally considered as dead and believed to be so by
the spouse present at the time of contracting such subsequent marriage, or if the absentee is
presumed dead according to articles 390 and 391. The marriage so contracted shall be valid in any
of the three cases until declared null and void.
During trial, Edilberto offered the testimony of Socorro’s daughter-in-law Conchita Ventura (Conchita). In
her first affidavit, Conchita claimed that Crispin, who was a seaman, had been missing and unheard from for
35 years. However, Conchita recanted her earlier testimony and executed an Affidavit of Retraction.11
6
The RTC-Manila ruled that the lack of a judicial decree of nullity does not affect the status of the union. It
applied our ruling in Niñal v. Badayog:12
Jurisprudence under the Civil Code states that no judicial decree is necessary in order to establish the nullity
of a marriage. x x x
Under ordinary circumstances, the effect of a void marriage, so far as concerns the conferring of legal rights
upon the parties, is as though no marriage had ever taken place. And therefore, being good for no legal
purpose, its invalidity can be maintained in any proceeding in which [the] fact of marriage may be material,
either direct or collateral, in any civil court between any parties at any time, whether before or after the
death of either or both the husband and the wife, and upon mere proof of the facts rendering such marriage
void, it will be disregarded or treated as non-existent by the courts.13
According to the RTC-Manila, the Vitas and Delpan properties are not conjugal, and are governed by
Articles 144 and 485 of the Civil Code, to wit:
Art. 144. When a man and a woman live together as husband and wife, but they are not married, or their
marriage is void from the beginning, the property acquired by either or both of them through their work or
industry or their wages and salaries shall be governed by the rules on co-ownership.
Art. 485. The share of the co-owners, in the benefits as well as in the charges, shall be proportional to their
respective interests. Any stipulation in a contract to the contrary shall be void.
The portions belonging to the co-owners in the co-ownership shall be presumed equal, unless the contrary is
proved.
The RTC-Manila then determined the respective shares of Socorro and Esteban in the properties. It found
that:
with respect to the property located at 2492 State Alley, Bonifacio St. Vitas, Tondo, Manila covered by TCT
No. 141782, formerly Marcos Road, Magsaysay Village, Tondo, Manila, [Evangeline] declared that part of
it was first acquired by her father Esteban Abletes sometime in 1968 when he purchased the right of
Ampiano Caballegan. Then, in 1970, she x x x bought the right to one-half of the remaining property
occupied by Ampiano Caballegan. However, during the survey of the National Housing Authority, she
allowed the whole lot to be registered in her father’s name. As proof thereof, she presented Exhibits "8" to
"11" x x x. These documents prove that that she has been an occupant of the said property in Vitas, Tondo
even before her father and Socorro Torres got married in June, 1980.14
Anent the parcels of land and improvements thereon 903 and 905 Del Pan Street, Tondo, Manila, x x x
Evangeline professed that in 1978, before her father met Socorro Torres and before the construction of the
BLISS Project thereat, her father [already had] a bodega of canvas (lona) and a sewing machine to sew the
canvas being sold at 903 Del Pan Street, Tondo Manila. In 1978, she was also operating Vangie’s Canvas
Store at 905 Del Pan Street, Tondo, Manila, which was evidenced by Certificate of Registration of Business
Name issued in her favor on 09 November 1998 x x x. When the BLISS project was constructed in 1980, the
property became known as Units D-9 and D-10. At first, her father [paid] for the amortizations for these two
(2) parcels of land but when he got sick with colon cancer in 1993, he asked respondents to continue paying
for the amortizations x x x. [Evangeline] paid a total of ₱195,259.52 for Unit D-9 as shown by the 37 pieces
of receipts x x x and the aggregate amount of ₱188,596.09 for Unit D-10, as evidenced by 36 receipts x x
x.15
The RTC-Manila concluded that Socorro did not contribute any funds for the acquisition of the properties.
Hence, she cannot be considered a co-owner, and her heirs cannot claim any rights over the Vitas and
Delpan properties.16
Aggrieved, Edilberto filed an appeal before the CA.
The Ruling of the CA
In its Decision17 dated 9 March 2012, the CA sustained the decision of the RTC-Manila. The dispositive
portion of the CA Decision reads:
WHEREFORE, the Appeal is hereby DENIED and the challenged Decision of the court a quo STANDS.
SO ORDERED.18
The CA ruled, however, that the RTC-Manila should have applied Article 148 of the Family Code, and not
Articles 144 and 485 of the Civil Code. Article 148 of the Family Code states that in unions between a man
and a woman who are incapacitated to marry each other:
x x x only the properties acquired by both of the parties through their actual joint contribution of money,
property, or industry shall be owned by them in common in proportion to their respective contributions. In
the absence of proof to the contrary, their contributions and corresponding shares are presumed to be equal.
The same rule and presumption shall apply to joint deposits of money and evidences of credit.
If one of the parties is validly married to another, his or her share in the co-ownership shall accrue to the
absolute community or conjugal partnership existing in such valid marriage. If the party who acted in bad
faith is not validly married to another, his or her share shall be forfeited in the manner provided in the last
paragraph of the preceding Article.
The foregoing rules on forfeiture shall likewise apply even if both parties are in bad faith.
The CA applied our ruling in Saguid v. Court of Appeals,19 and held that the foregoing provision applies
"even if the cohabitation or the acquisition of the property occurred before the effectivity of the Family
Code."20 The CA found that Edilberto failed to prove that Socorro contributed to the purchase of the Vitas
and Delpan properties. Edilberto was unable to provide any documentation evidencing Socorro’s alleged
contribution.21
7
On 2 April 2012, Edilberto filed a Motion for Reconsideration,22 which was denied by the CA in its
Resolution dated 3 August 2012.23
Hence, this petition.
The Ruling of this Court
We deny the petition.
Edilberto admitted that in unions between a man and a woman who are incapacitated to marry each other,
the ownership over the properties acquired during the subsistence of that relationship shall be based on the
actual contribution of the parties. He even quoted our ruling in Borromeo v. Descallar24 in his petition:
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.25
This is a reiteration of Article 148 of the Family Code, which the CA applied in the assailed decision:
Art 148. In cases of cohabitation [wherein the parties are incapacitated to marry each other], only the
properties acquired by both of the parties through their actual joint contribution of money, property, or
industry shall be owned by them in common in proportion to their respective contributions. In the absence of
proof to the contrary, their contributions and corresponding shares are presumed to be equal. The same rule
and presumption shall apply to joint deposits of money and evidences of credit.
If one of the parties is validly married to another, his or her share in the co-ownership shall accrue to the
absolute community or conjugal partnership existing in such valid marriage. If the party who acted in bad
faith is not validly married to another, his or her share shall be forfeited in the manner provided in the last
paragraph of the preceding Article.
The foregoing rules on forfeiture shall likewise apply even if both parties are in bad faith.
Applying the foregoing provision, the Vitas and Delpan properties can be considered common property if:
(1) these were acquired during the cohabitation of Esteban and Socorro; and (2) there is evidence that the
properties were acquired through the parties’ actual joint contribution of money, property, or industry.
Edilberto argues that the certificate of title covering the Vitas property shows that the parcel of land is co-
owned by Esteban and Socorro because: (1) the Transfer Certificate of Title was issued on 11 December
1980, or several months after the parties were married; and (2) title to the land was issued to "Esteban
Abletes, of legal age, married to Socorro Torres."26
We disagree. The title itself shows that the Vitas property is owned by Esteban alone.1âwphi1 The phrase
"married to Socorro Torres" is merely descriptive of his civil status, and does not show that Socorro co-
owned the property.27 The evidence on record also shows that Esteban acquired ownership over the Vitas
property prior to his marriage to Socorro, even if the certificate of title was issued after the celebration of the
marriage. Registration under the Torrens title system merely confirms, and does not vest title. This was
admitted by Edilberto on page 9 of his petition wherein he quotes an excerpt of our ruling in Borromeo:
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 respondent 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 title likewise does not apply to respondent. 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.
Edilberto claims that Esteban s actual contribution to the purchase of the Delpan property was not
sufficiently proven since Evangeline shouldered some of the amortizations.28 Thus, the law presumes that
Esteban and Socorro jointly contributed to the acquisition of the Del pan property.
We cannot sustain Edilberto s claim. Both the RTC-Manila and the CA found that the Delpan property was
acquired prior to the marriage of Esteban and Socorro.29 Furthermore, even if payment of the purchase price
of the Delpan property was made by Evangeline, such payment was made on behalf of her father. Article
1238 of the Civil Code provides:
Art. 1238. Payment made by a third person who does not intend to be reimbursed by the debtor is deemed to
be a donation, which requires the debtor s consent. But the payment is in any case valid as to the creditor
who has accepted it.
Thus, it is clear that Evangeline paid on behalf of her father, and the parties intended that the Delpan
property would be owned by and registered under the name of Esteban.
During trial, the Abuda spouses presented receipts evidencing payments of the amortizations for the Delpan
property.1âwphi1 On the other hand, Edilberto failed to show any evidence showing Socorro s alleged
monetary contributions. As correctly pointed out by the CA:
settled is the rule that in civil cases x x x the burden of proof rests upon the party who, as determined by the
pleadings or the nature of the case, asserts the affirmative of an issue. x x x. Here it is Appellant who is duty
bound to prove the allegations in the complaint which undoubtedly, he miserably failed to do so.30
WHEREFORE, the petition is DENIED. The Decision dated 9 March 2012 of the Court of Appeals in CA-
G.R. CV No. 92330 is AFFIRMED.
SO ORDERED.
8
G.R. No. 195670               December 3, 2012
WILLEM BEUMER, Petitioner,
vs.
AVELINA AMORES, Respondent.
DECISION
PERLAS-BERNABE, J.:
Before the Court is a Petition for Review on Certiorari1 under Rule 45 of the Rules of CoLlli assailing the
October 8, 2009 Decision2 and January 24, 2011 Resolution3 of the court of Appeals (CA) in CA-G.R. CV
No. 01940, which affirmed the February 28, 2007 Decision4 of the Regional Trial Court (RTC) of Negros
Oriental, Branch 34 in Civil Case No. I 2884. The foregoing rulings dissolved the conjugal partnership of
gains of Willem Beumer (petitioner) and Avelina Amores (respondent) and distributed the properties
forming part of the said property regime.
The Factual Antecedents
Petitioner, a Dutch National, and respondent, a Filipina, married in March 29, 1980. After several years, the
RTC of Negros Oriental, Branch 32, declared the nullity of their marriage in the Decision5 dated November
10, 2000 on the basis of the former’s psychological incapacity as contemplated in Article 36 of the Family
Code.
Consequently, petitioner filed a Petition for Dissolution of Conjugal Partnership6 dated December 14, 2000
praying for the distribution of the following described properties claimed to have been acquired during the
subsistence of their marriage, to wit:
By Purchase:
a. Lot 1, Block 3 of the consolidated survey of Lots 2144 & 2147 of the Dumaguete Cadastre,
covered by Transfer Certificate of Title (TCT) No. 22846, containing an area of 252 square meters
(sq.m.), including a residential house constructed thereon.
b. Lot 2142 of the Dumaguete Cadastre, covered by TCT No. 21974, containing an area of 806
sq.m., including a residential house constructed thereon.
c. Lot 5845 of the Dumaguete Cadastre, covered by TCT No. 21306, containing an area of 756
sq.m.
d. Lot 4, Block 4 of the consolidated survey of Lots 2144 & 2147 of the Dumaguete Cadastre,
covered by TCT No. 21307, containing an area of 45 sq.m.
By way of inheritance:
e. 1/7 of Lot 2055-A of the Dumaguete Cadastre, covered by TCT No. 23567, containing an area
of 2,635 sq.m. (the area that appertains to the conjugal partnership is 376.45 sq.m.).
f. 1/15 of Lot 2055-I of the Dumaguete Cadastre, covered by TCT No. 23575, containing an area
of 360 sq.m. (the area that appertains to the conjugal partnership is 24 sq.m.).7
In defense,8 respondent averred that, with the exception of their two (2) residential houses on Lots 1 and
2142, she and petitioner did not acquire any conjugal properties during their marriage, the truth being that
she used her own personal money to purchase Lots 1, 2142, 5845 and 4 out of her personal funds and Lots
2055-A and 2055-I by way of inheritance.9 She submitted a joint affidavit executed by her and petitioner
attesting to the fact that she purchased Lot 2142 and the improvements thereon using her own
money.10 Accordingly, respondent sought the dismissal of the petition for dissolution as well as payment for
attorney’s fees and litigation expenses.11
During trial, petitioner testified that while Lots 1, 2142, 5845 and 4 were registered in the name of
respondent, these properties were acquired with the money he received from the Dutch government as his
disability benefit12 since respondent did not have sufficient income to pay for their acquisition. He also
claimed that the joint affidavit they submitted before the Register of Deeds of Dumaguete City was contrary
to Article 89 of the Family Code, hence, invalid.13
For her part, respondent maintained that the money used for the purchase of the lots came exclusively from
her personal funds, in particular, her earnings from selling jewelry as well as products from Avon, Triumph
and Tupperware.14 She further asserted that after she filed for annulment of their marriage in 1996, petitioner
transferred to their second house and brought along with him certain personal properties, consisting of drills,
a welding machine, grinders, clamps, etc. She alleged that these tools and equipment have a total cost of
P500,000.00.15
The RTC Ruling
On February 28, 2007, the RTC of Negros Oriental, Branch 34 rendered its Decision, dissolving the parties’
conjugal partnership, awarding all the parcels of land to respondent as her paraphernal properties; the tools
and equipment in favor of petitioner as his exclusive properties; the two (2) houses standing on Lots 1 and
2142 as co-owned by the parties, the dispositive of which reads:
WHEREFORE, judgment is hereby rendered granting the dissolution of the conjugal partnership of gains
between petitioner Willem Beumer and respondent Avelina Amores considering the fact that their marriage
was previously annulled by Branch 32 of this Court. The parcels of land covered by Transfer Certificate of
Titles Nos. 22846, 21974, 21306, 21307, 23567 and 23575 are hereby declared paraphernal properties of
respondent Avelina Amores due to the fact that while these real properties were acquired by onerous title
during their marital union, Willem Beumer, being a foreigner, is not allowed by law to acquire any private
land in the Philippines, except through inheritance.
9
The personal properties, i.e., tools and equipment mentioned in the complaint which were brought out by
Willem from the conjugal dwelling are hereby declared to be exclusively owned by the petitioner.
The two houses standing on the lots covered by Transfer Certificate of Title Nos. 21974 and 22846 are
hereby declared to be co-owned by the petitioner and the respondent since these were acquired during their
marital union and since there is no prohibition on foreigners from owning buildings and residential units.
Petitioner and respondent are, thereby, directed to subject this court for approval their project of partition on
the two houses aforementioned.
The Court finds no sufficient justification to award the counterclaim of respondent for attorney’s fees
considering the well settled doctrine that there should be no premium on the right to litigate. The prayer for
moral damages are likewise denied for lack of merit.
No pronouncement as to costs.
SO ORDERED.16
It ruled that, regardless of the source of funds for the acquisition of Lots 1, 2142, 5845 and 4, petitioner
could not have acquired any right whatsoever over these properties as petitioner still attempted to acquire
them notwithstanding his knowledge of the constitutional prohibition against foreign ownership of private
lands.17 This was made evident by the sworn statements petitioner executed purporting to show that the
subject parcels of land were purchased from the exclusive funds of his wife, the herein
respondent.18 Petitioner’s plea for reimbursement for the amount he had paid to purchase the foregoing
properties on the basis of equity was likewise denied for not having come to court with clean hands.
The CA Ruling
Petitioner elevated the matter to the CA, contesting only the RTC’s award of Lots 1, 2142, 5845 and 4 in
favor of respondent. He insisted that the money used to purchase the foregoing properties came from his
own capital funds and that they were registered in the name of his former wife only because of the
constitutional prohibition against foreign ownership. Thus, he prayed for reimbursement of one-half (1/2) of
the value of what he had paid in the purchase of the said properties, waiving the other half in favor of his
estranged ex-wife.19
On October 8, 2009, the CA promulgated a Decision20 affirming in toto the judgment rendered by the RTC
of Negros Oriental, Branch 34. The CA stressed the fact that petitioner was "well-aware of the constitutional
prohibition for aliens to acquire lands in the Philippines."21 Hence, he cannot invoke equity to support his
claim for reimbursement.
Consequently, petitioner filed the instant Petition for Review on Certiorari assailing the CA Decision due to
the following error:
UNDER THE FACTS ESTABLISHED, THE COURT ERRED IN NOT SUSTAINING THE
PETITIONER’S ATTEMPT AT SUBSEQUENTLY ASSERTING OR CLAIMING A RIGHT OF HALF
OR WHOLE OF THE PURCHASE PRICE USED IN THE PURCHASE OF THE REAL PROPERTIES
SUBJECT OF THIS CASE.22 (Emphasis supplied)
The Ruling of the Court
The petition lacks merit.
The issue to be resolved is not of first impression. In In Re: Petition For Separation of Property-Elena
Buenaventura Muller v. Helmut Muller23 the Court had already denied a claim for reimbursement of the
value of purchased parcels of Philippine land instituted by a foreigner Helmut Muller, against his former
Filipina spouse, Elena Buenaventura Muller. It held that Helmut Muller cannot seek reimbursement on the
ground of equity where it is clear that he willingly and knowingly bought the property despite the
prohibition against foreign ownership of Philippine land24 enshrined under Section 7, Article XII of the 1987
Philippine Constitution which reads:
Section 7. 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.
Undeniably, petitioner openly admitted that he "is well aware of the above-cited constitutional
prohibition"25 and even asseverated that, because of such prohibition, he and respondent registered the
subject properties in the latter’s name.26 Clearly, petitioner’s actuations showed his palpable intent to skirt
the constitutional prohibition. On the basis of such admission, the Court finds no reason why it should not
apply the Muller ruling and accordingly, deny petitioner’s claim for reimbursement.
As also explained in Muller, the time-honored principle is that he who seeks equity must do equity, and he
who comes into equity must come with clean hands. Conversely stated, he who has done inequity shall not
be accorded equity. Thus, a litigant may be denied relief by a court of equity on the ground that his conduct
has been inequitable, unfair and dishonest, or fraudulent, or deceitful.27
In this case, petitioner’s statements regarding the real source of the funds used to purchase the subject
parcels of land dilute the veracity of his claims: While admitting to have previously executed a joint
affidavit that respondent’s personal funds were used to purchase Lot 1,28 he likewise claimed that his
personal disability funds were used to acquire the same. Evidently, these inconsistencies show his
untruthfulness. Thus, as petitioner has come before the Court with unclean hands, he is now precluded from
seeking any equitable refuge.
In any event, the Court cannot, even on the grounds of equity, grant reimbursement to petitioner given that
he acquired no right whatsoever over the subject properties by virtue of its unconstitutional purchase. It is
well-established that equity as a rule will follow the law and will not permit that to be done indirectly which,
because of public policy, cannot be done directly.29 Surely, a contract that violates the Constitution and the
law is null and void, vests no rights, creates no obligations and produces no legal effect at all.30 Corollary
thereto, under Article 1412 of the Civil Code,31 petitioner cannot have the subject properties deeded to him
or allow him to recover the money he had spent for the purchase thereof. The law will not aid either party to
an illegal contract or agreement; it leaves the parties where it finds them.32 Indeed, one cannot salvage any
rights from an unconstitutional transaction knowingly entered into.
10
Neither can the Court grant petitioner’s claim for reimbursement on the basis of unjust enrichment.33 As held
in Frenzel v. Catito, a case also involving a foreigner seeking monetary reimbursement for money spent on
purchase of Philippine land, the provision on unjust enrichment does not apply if the action is proscribed by
the Constitution, to wit:

Futile, too, is petitioner's reliance on Article 22 of the New Civil Code which reads:

Art. 22. Every person who through an act of performance by another, or any other means, acquires or comes
into possession of something at the expense of the latter without just or legal ground, shall return the same to
him.1âwphi1

The provision is expressed in the maxim: "MEMO CUM ALTERIUS DETER DETREMENTO PROTEST"
(No person should unjustly enrich himself at the expense of another). An action for recovery of what has
been paid without just cause has been designated as an accion in rem verso. This provision does not apply if,
as in this case, the action is proscribed by the Constitution or by the application of the pari delicto doctrine.
It may be unfair and unjust to bar the petitioner from filing an accion in rem verso over the subject
properties, or from recovering the money he paid for the said properties, but, as Lord Mansfield stated in the
early case of Holman v. Johnson: "The objection that a contract is immoral or illegal as between the plaintiff
and the defendant, sounds at all times very ill in the mouth of the defendant. It is not for his sake, however,
that the objection is ever allowed; but it is founded in general principles of policy, which the defendant has
the advantage of, contrary to the real justice, as between him and the plaintiff."34 (Citations omitted)

Nor would the denial of his claim amount to an injustice based on his foreign citizenship.35 Precisely, it is the
Constitution itself which demarcates the rights of citizens and non-citizens in owning Philippine land. To be
sure, the constitutional ban against foreigners applies only to ownership of Philippine land and not to the
improvements built thereon, such as the two (2) houses standing on Lots 1 and 2142 which were properly
declared to be co-owned by the parties subject to partition. Needless to state, the purpose of the prohibition
is to conserve the national patrimony36 and it is this policy which the Court is duty-bound to protect.

WHEREFORE, the petition is DENIED. Accordingly, the assailed October 8, 2009 Decision and January
24, 2011 Resolution of the Court of Appeals in CA-G.R. CV No. 01940 are AFFIRMED.

SO ORDERED.

11
G.R. No. 164584               June 22, 2009
PHILIP MATTHEWS, Petitioner,
vs.
BENJAMIN A. TAYLOR and JOSELYN C. TAYLOR, Respondents.
DECISION
NACHURA, J.:
Assailed in this petition for review on certiorari are the Court of Appeals (CA) December 19, 2003
Decision1 and July 14, 2004 Resolution2 in CA-G.R. CV No. 59573. The assailed decision affirmed and
upheld the June 30, 1997 Decision3 of the Regional Trial Court (RTC), Branch 8, Kalibo, Aklan in Civil
Case No. 4632 for Declaration of Nullity of Agreement of Lease with Damages.
On June 30, 1988, respondent Benjamin A. Taylor (Benjamin), a British subject, married Joselyn C. Taylor
(Joselyn), a 17-year old Filipina.4 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 ₱129,000.00.5 The sale was allegedly financed by
Benjamin.6 Joselyn and Benjamin, also using the latter’s funds, constructed improvements thereon and
eventually converted the property to a vacation and tourist resort known as the Admiral Ben Bow Inn.7 All
required permits and licenses for the operation of the resort were obtained in the name of Ginna Celestino,
Joselyn’s sister.8
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.9
On July 20, 1992, Joselyn as lessor and petitioner Philip Matthews as lessee, entered into an Agreement of
Lease10 (Agreement) involving the Boracay property for a period of 25 years, with an annual rental of
₱12,000.00. 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.1avvphi1
Claiming that the Agreement was null and void since it was entered into by Joselyn without his
(Benjamin’s) consent, Benjamin instituted an action for Declaration of Nullity of Agreement of Lease with
Damages11 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 Joselyn’s husband, any
transaction involving said property required his consent.
No Answer was filed, hence, the RTC declared Joselyn and the petitioner in defeault. On March 14, 1994,
the RTC rendered judgment by default declaring the Agreement null and void.12 The decision was, however,
set aside by the CA in CA-G.R. SP No. 34054.13 The CA also ordered the RTC to allow the petitioner to file
his Answer, and to conduct further proceedings.
In his Answer,14 petitioner 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.
There being no amicable settlement during the pre-trial, trial on the merits ensued.
On June 30, 1997, the RTC disposed of the case in this manner:
WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiff and against the
defendants as follows:
1. The Agreement of Lease dated July 20, 1992 consisting of eight (8) pages (Exhibits "T", "T-1",
"T-2", "T-3", "T-4", "T-5", "T-6" and "T-7") entered into by and between Joselyn C. Taylor and
Philip Matthews before Notary Public Lenito T. Serrano under Doc. No. 390, Page 79, Book I,
Series of 1992 is hereby declared NULL and VOID;
2. Defendants are hereby ordered, jointly and severally, to pay plaintiff the sum of SIXTEEN
THOUSAND (₱16,000.00) PESOS as damages representing unrealized income for the residential
building and cottages computed monthly from July 1992 up to the time the property in question is
restored to plaintiff; and
3. Defendants are hereby ordered, jointly and severally, to pay plaintiff the sum of TWENTY
THOUSAND (₱20,000.00) PESOS, Philippine Currency, for attorney’s fees and other incidental
expenses.
SO ORDERED.15
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. Benjamin’s right over
the Boracay property was bolstered by the court’s 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.
On appeal to the CA, petitioner still failed to obtain a favorable decision. In its December 19, 2003
Decision,16 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
12
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.
Aggrieved, petitioner now comes before this Court in this petition for review on certiorari based on the
following grounds:
4.1. THE MARITAL CONSENT OF RESPONDENT BENJAMIN TAYLOR IS NOT
REQUIRED IN THE AGREEMENT OF LEASE DATED 20 JULY 1992. GRANTING
ARGUENDO THAT HIS CONSENT IS REQUIRED, BENJAMIN TAYLOR IS DEEMED TO
HAVE GIVEN HIS CONSENT WHEN HE AFFIXED HIS SIGNATURE IN THE
AGREEMENT OF LEASE AS WITNESS IN THE LIGHT OF THE RULING OF THE
SUPREME COURT IN THE CASE OF SPOUSES PELAYO VS. MELKI PEREZ, G.R. NO.
141323, JUNE 8, 2005.
4.2. THE PARCEL OF LAND SUBJECT OF THE AGREEMENT OF LEASE IS THE
EXCLUSIVE PROPERTY OF JOCELYN C. TAYLOR, A FILIPINO CITIZEN, IN THE LIGHT
OF CHEESMAN VS. IAC, G.R. NO. 74833, JANUARY 21, 1991.
4.3. THE COURTS A QUO ERRONEOUSLY APPLIED ARTICLE 96 OF THE FAMILY CODE
OF THE PHILIPPINES WHICH IS A PROVISION REFERRING TO THE ABSOLUTE
COMMUNITY OF PROPERTY. THE PROPERTY REGIME GOVERNING THE PROPERTY
RELATIONS OF BENJAMIN TAYLOR AND JOSELYN TAYLOR IS THE CONJUGAL
PARTNERSHIP OF GAINS BECAUSE THEY WERE MARRIED ON 30 JUNE 1988 WHICH
IS PRIOR TO THE EFFECTIVITY OF THE FAMILY CODE. ARTICLE 96 OF THE FAMILY
CODE OF THE PHILIPPINES FINDS NO APPLICATION IN THIS CASE.
4.4. THE HONORABLE COURT OF APPEALS IGNORED THE PRESUMPTION OF
REGULARITY IN THE EXECUTION OF NOTARIAL DOCUMENTS.
4.5. THE HONORABLE COURT OF APPEALS FAILED TO PASS UPON THE
COUNTERCLAIM OF PETITIONER DESPITE THE FACT THAT IT WAS NOT CONTESTED
AND DESPITE THE PRESENTATION OF EVIDENCE ESTABLISHING SAID CLAIM.17
The petition is impressed with merit.
In fine, we are called upon to determine the validity of an Agreement of Lease of a parcel of land entered
into by a Filipino wife without the consent of her British husband. In addressing the matter before us, we are
confronted not only with civil law or conflicts of law issues, but more importantly, with a constitutional
question.
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.
The trial and appellate courts both focused on the property relations of petitioner and respondent in light of
the Civil Code and Family Code provisions. They, however, failed to observe the applicable constitutional
principles, which, in fact, are the more decisive.
Section 7, Article XII of the 1987 Constitution states:18
Section 7. 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.1avvphi1
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.19 The primary purpose of this constitutional provision is the conservation of the national
patrimony.20 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.21
In Krivenko v. Register of Deeds,22 cited in Muller v. Muller,23 we had the occasion to explain the
constitutional prohibition:
Under Section 1 of Article XIII of the Constitution, "natural resources, with the exception of public
agricultural land, shall not be alienated," and with respect to public agricultural lands, their alienation is
limited to Filipino citizens. But this constitutional purpose conserving agricultural resources in the hands of
Filipino citizens may easily be defeated by the Filipino citizens themselves who may alienate their
agricultural lands in favor of aliens. It is partly to prevent this result that Section 5 is included in Article
XIII, and it reads as follows:
"Section 5. Save in cases of hereditary succession, no private agricultural land will be transferred or
assigned except to individuals, corporations, or associations qualified to acquire or hold lands of the public
domain in the Philippines."
This constitutional provision closes the only remaining avenue through which agricultural resources may
leak into alien’s hands. It would certainly be futile to prohibit the alienation of public agricultural lands to
aliens if, after all, they may be freely so alienated upon their becoming private agricultural lands in the hands
of Filipino citizens. x x x
xxxx
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
13
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.24
The rule is clear and inflexible: aliens are absolutely not allowed to acquire public or private lands in the
Philippines, save only in constitutionally recognized exceptions.25 There is no rule more settled than this
constitutional prohibition, as more and more aliens attempt to circumvent the provision by trying to own
lands through another. In a long line of cases, we have settled issues that directly or indirectly involve the
above constitutional provision. We had cases where aliens wanted that a particular property be declared as
part of their father’s estate;26 that they be reimbursed the funds used in purchasing a property titled in the
name of another;27 that an implied trust be declared in their (aliens’) favor;28 and that a contract of sale be
nullified for their lack of consent.29
In Ting Ho, Jr. v. Teng Gui,30 Felix Ting Ho, a Chinese citizen, acquired a parcel of land, together with the
improvements thereon. Upon his death, his heirs (the petitioners therein) claimed the properties as part of the
estate of their deceased father, and sought the partition of said properties among themselves. We, however,
excluded the land and improvements thereon from the estate of Felix Ting Ho, precisely because he never
became the owner thereof in light of the above-mentioned constitutional prohibition.
In Muller v. Muller,31 petitioner Elena Buenaventura Muller and respondent Helmut Muller were married in
Germany. During the subsistence of their marriage, respondent purchased a parcel of land in Antipolo City
and constructed a house thereon. The Antipolo property was registered in the name of the petitioner. They
eventually separated, prompting the respondent to file a petition for separation of property. Specifically,
respondent prayed for reimbursement of the funds he paid for the acquisition of said property. In deciding
the case in favor of the petitioner, the Court held that respondent was aware that as an alien, he was
prohibited from owning a parcel of land situated in the Philippines. He had, in fact, declared that when the
spouses acquired the Antipolo property, he had it titled in the name of the petitioner because of said
prohibition. Hence, we denied his attempt at subsequently asserting a right to the said property in the form of
a claim for reimbursement. Neither did the Court declare that an implied trust was created by operation of
law in view of petitioner’s marriage to respondent. We said that to rule otherwise would permit
circumvention of the constitutional prohibition.
In Frenzel v. Catito,32 petitioner, an Australian citizen, was married to Teresita Santos; while respondent, a
Filipina, was married to Klaus Muller. Petitioner and respondent met and later cohabited in a common-law
relationship, during which petitioner acquired real properties; and since he was disqualified from owning
lands in the Philippines, respondent’s name appeared as the vendee in the deeds of sale. When their
relationship turned sour, petitioner filed an action for the recovery of the real properties registered in the
name of respondent, claiming that he was the real owner. Again, as in the other cases, the Court refused to
declare petitioner as the owner mainly because of the constitutional prohibition. The Court added that being
a party to an illegal contract, he could not come to court and ask to have his illegal objective carried out.
One who loses his money or property by knowingly engaging in an illegal contract may not maintain an
action for his losses.
Finally, in Cheesman v. Intermediate Appellate Court,33 petitioner (an American citizen) and Criselda
Cheesman acquired a parcel of land that was later registered in the latter’s name. Criselda subsequently sold
the land to a third person without the knowledge of the petitioner. The petitioner then sought the
nullification of the sale as he did not give his consent thereto. The Court held that assuming that it was his
(petitioner’s) intention that the lot in question be purchased by him and his wife, he acquired no right
whatever over the property by virtue of that purchase; and in attempting to acquire a right or interest in land,
vicariously and clandestinely, he knowingly violated the Constitution; thus, the sale as to him was null and
void.
In light of the foregoing jurisprudence, 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 Benjamin’s 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.34
In fine, the Agreement of Lease entered into between Joselyn and petitioner cannot be nullified on the
grounds advanced by Benjamin. Thus, we uphold its validity.
With the foregoing disquisition, we find it unnecessary to address the other issues raised by the petitioner.
WHEREFORE, premises considered, the December 19, 2003 Decision and July 14, 2004 Resolution of the
Court of Appeals in CA-G.R. CV No. 59573, are REVERSED and SET ASIDE and a new one is entered
DISMISSING the complaint against petitioner Philip Matthews.
SO ORDERED.
14
G.R. No. 159310               February 24, 2009
CAMILO F. BORROMEO, Petitioner,
vs.
ANTONIETTA O. DESCALLAR, Respondent.
DECISION
PUNO, C.J.:
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?
The facts are as follows:
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 National Power Corporation. There, he met
respondent Antonietta Opalla-Descallar, a separated mother of two boys who was working as a waitress at
St. Moritz Hotel. Jambrich befriended respondent and asked her to tutor him in English. In dire need of
additional income to support her children, respondent agreed. The tutorials were held in Antonietta’s
residence at a squatters’ area in Gorordo Avenue.
Jambrich and respondent 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 lots at Agro-Macro Subdivision, Cabancalan,
Mandaue City. In the Contracts to Sell dated November 18, 19851 and March 10, 19862 covering the
properties, Jambrich and respondent were referred to as the buyers. A Deed of Absolute Sale dated
November 16, 19873 was likewise issued in their favor. However, when the Deed of Absolute Sale was
presented for registration before the Register of Deeds, registration was refused on the ground that Jambrich
was an alien and could not acquire alienable lands of the public domain. Consequently, Jambrich’s name
was erased from the document. But it could be noted that his signature remained on the left hand margin of
page 1, beside respondent’s 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
respondent’s name alone.
Jambrich also formally adopted respondent’s two sons in Sp. Proc. No. 39-MAN,4 and per Decision of the
Regional Trial Court of Mandaue City dated May 5, 1988.5
However, the idyll lasted only until April 1991. By then, respondent found a new boyfriend while Jambrich
began to live with another woman in Danao City. Jambrich supported respondent’s sons for only two
months after the break up.
Jambrich met petitioner Camilo F. Borromeo sometime in 1986. Petitioner 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 petitioner, for which he became indebted to the latter for about ₱150,000.00.
To pay for his debt, he sold his rights and interests in the Agro-Macro properties to petitioner for ₱250,000,
as evidenced by a "Deed of Absolute Sale/Assignment."6 On July 26, 1991, when petitioner sought to
register the deed of assignment, he discovered that titles to the three lots have been transferred in the name
of respondent, and that the subject property has already been mortgaged.
On August 2, 1991, petitioner filed a complaint against respondent for recovery of real property before the
Regional Trial Court of Mandaue City. Petitioner 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 respondent as buyers do not reflect the true agreement of the parties
since respondent 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 petitioner 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, respondent 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, respondent presented evidence showing her alleged financial capacity to buy the disputed
property with money from a supposed copra business. Petitioner, 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.
In its decision, the court a quo found—
Evidence on hand clearly show that at the time of the purchase and acquisition of [the] properties under
litigation that Wilhelm Jambrich was still working and earning much. This fact of Jambrich earning much is
not only supported by documentary evidence but also by the admission made by the defendant Antoniet[t]a
Opalla. So that, Jambrich’s financial capacity to acquire and purchase the properties . . . is not disputed.7
xxx
On the other hand, evidence . . . clearly show that before defendant met Jambrich sometime in the latter part
of 1984, she was only working as a waitress at the St. Moritz Hotel with an income of ₱1,000.00 a month
and was . . . renting and living only in . . . [a] room at . . . [a] squatter area at Gorordo Ave., Cebu City; that
Jambrich took pity of her and the situation of her children that he offered her a better life which she readily
accepted. In fact, this miserable financial situation of hers and her two children . . . are all stated and
reflected in the Child Study Report dated April 20, 1983 (Exhs. "G" and "G-1") which facts she supplied to
the Social Worker who prepared the same when she was personally interviewed by her in connection with
the adoption of her two children by Wilhelm Jambrich. So that, if such facts were not true because these are
15
now denied by her . . . and if it was also true that during this time she was already earning as much as
₱8,000.00 to ₱9,000.00 as profit per month from her copra business, it would be highly unbelievable and
impossible for her to be living only in such a miserable condition since it is the observation of this Court that
she is not only an extravagant but also an expensive person and not thrifty as she wanted to impress this
Court in order to have a big saving as clearly shown by her actuation when she was already cohabiting and
living with Jambrich that according to her . . . the allowance given . . . by him in the amount of $500.00 a
month is not enough to maintain the education and maintenance of her children.8
This being the case, it is highly improbable and impossible that she could acquire the properties under
litigation or could contribute any amount for their acquisition which according to her is worth more than
₱700,000.00 when while she was working as [a] waitress at St. Moritz Hotel earning ₱1,000.00 a month as
salary and tips of more or less ₱2,000.00 she could not even provide [for] the daily needs of her family so
much so that it is safe to conclude that she was really in financial distress when she met and accepted the
offer of Jambrich to come and live with him because that was a big financial opportunity for her and her
children who were already abandoned by her husband.9
xxx
The only probable and possible reason why her name appeared and was included in [the contracts to sell
dated November 18, 1985 and March 10, 1986 and finally, the deed of absolute sale dated November 16,
1987] as buyer is because as observed by the Court, she being a scheming and exploitive woman, she has
taken advantage of the goodness of Jambrich who at that time was still bewitched by her beauty, sweetness,
and good attitude shown by her to him since he could still very well provide for everything she needs, he
being earning (sic) much yet at that time. In fact, as observed by this Court, the acquisition of these
properties under litigation was at the time when their relationship was still going smoothly and
harmoniously.10 [Emphasis supplied.]
The dispositive portion of the Decision states:
WHEREFORE, . . . Decision is hereby rendered in favor of the plaintiff and against the defendant
Antoniet[t]a Opalla by:
1) Declaring plaintiff as the owner in fee simple over the residential house of strong materials and
three parcels of land designated as Lot Nos. 1, 3 and 5 which are covered by TCT Nos. 24790,
24791 and 24792 issued by the Register of Deeds of Mandaue City;
2) Declaring as null and void TCT Nos. 24790, 24791 and 24792 issued in the name of defendant
Antoniet[t]a Descallar by the Register of Deeds of Mandaue City;
3) Ordering the Register of Deeds of Mandaue City to cancel TCT Nos. 24790, 24791 and 24792
in the name of defendant Antoniet[t]a Descallar and to issue new ones in the name of plaintiff
Camilo F. Borromeo;
4) Declaring the contracts now marked as Exhibits "I," "K" and "L" as avoided insofar as they
appear to convey rights and interests over the properties in question to the defendant Antoniet[t]a
Descallar;
5) Ordering the defendant to pay plaintiff attorney’s fees in the amount of ₱25,000.00 and
litigation expenses in the amount of ₱10,000.00; and,
6) To pay the costs.11
Respondent appealed to the Court of Appeals. In a Decision dated April 10, 2002,12 the appellate court
reversed the decision of the trial court. In ruling for the respondent, the Court of Appeals held:
We disagree with the lower court’s 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 (Godinez et al., vs. Fong Pak Luen et
al., 120 SCRA 223 citing Krivenko vs. Register of Deeds of Manila, 79 Phils. 461; United Church Board for
World Ministries vs. Sebastian, 159 SCRA 446, citing the case of Sarsosa Vda. De Barsobia vs. Cuenco,
113 SCRA 547; Tejido vs. Zamacoma, 138 SCRA 78). 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. Thus, Jambrich could not have
transferred a property he has no title thereto.13
Petitioner’s motion for reconsideration was denied.
Hence, this petition for review.
Petitioner assigns the following errors:
I. THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN DISREGARDING
RESPONDENT’S JUDICIAL ADMISSION AND OTHER OVERWHELMING EVIDENCE
ESTABLISHING JAMBRICH’S PARTICIPATION, INTEREST AND OWNERSHIP OF THE
PROPERTIES IN QUESTION AS FOUND BY THE HONORABLE TRIAL COURT.
II. THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN HOLDING THAT JAMBRICH
HAS NO TITLE TO THE PROPERTIES IN QUESTION AND MAY NOT THEREFORE TRANSFER
AND ASSIGN ANY RIGHTS AND INTERESTS IN FAVOR OF PETITIONER.
III. THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN REVERSING THE WELL-
REASONED DECISION OF THE TRIAL COURT AND IN IMPOSING DOUBLE COSTS AGAINST
HEREIN PETITIONER (THEN, PLAINTIFF-APPELLEE).14
First, who purchased the subject properties?
16
The evidence clearly shows, as pointed out by the trial court, who between respondent and Jambrich
possesses the financial capacity to acquire the properties in dispute. At the time of the acquisition of the
properties in 1985 to 1986, Jambrich was gainfully employed at Simmering-Graz Panker A.G., an Austrian
company. He was earning an estimated monthly salary of ₱50,000.00. Then, Jambrich was assigned to Syria
for almost one year where his monthly salary was approximately ₱90,000.00.
On the other hand, respondent was employed as a waitress from 1984 to 1985 with a monthly salary of not
more than ₱1,000.00. 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 unsubstantiated.
The supposed copra business was actually the business of her mother and their family, with ten siblings. She
has no license to sell copra, and had not filed any income tax return. All the motorized bancas of her mother
were lost to fire, and the last one left standing was already scrap. Further, the Child Study Report15 submitted
by the Department of Social Welfare and Development (DSWD) in the adoption proceedings of
respondent’s two sons by Jambrich disclosed that:
Antonietta tried all types of job to support the children until she was accepted as a waitress at St. Moritz
Restaurant in 1984. At first she had no problem with money because most of the customers of St. Moritz are
(sic) foreigners and they gave good tips but towards the end of 1984 there were no more foreigners coming
because of the situation in the Philippines at that time. Her financial problem started then. She was even
renting a small room in a squatters area in Gorordo Ave., Cebu City. It was during her time of great financial
distress that she met Wilhelm Jambrich who later offered her a decent place for herself and her children.16
The DSWD Home Study Report17 further disclosed that:
[Jambrich] was then at the Restaurant of St. Moritz when he saw Antonietta Descallar, one of the waitresses
of the said Restaurants. He made friends with the girl and asked her to tutor him in [the] English language.
Antonietta accepted the offer because she was in need of additional income to support [her] 2 young
children who were abandoned by their father. Their session was agreed to be scheduled every afternoon at
the residence of Antonietta in the squatters area in Gorordo Avenue, Cebu City. The Austrian was observing
the situation of the family particularly the children who were malnourished. After a few months sessions,
Mr. Jambrich offered to transfer the family into a decent place. He told Antonietta that the place is not good
for the children. Antonietta who was miserable and financially distressed at that time accepted the offer for
the sake of the children.18
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) Respondent Descallar herself affirmed under oath, during her re-direct examination and during
the proceedings for the adoption of her minor children, 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. Respondent has never opened any account with any bank. Receipts of the
installment payments were also in the name of Jambrich and respondent.
(3) In 1986-1987, respondent 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 respondent.
Thus, Jambrich has all authority to transfer all his rights, interests and participation over the subject
properties to petitioner by virtue of the Deed of Assignment he executed on July 11, 1991.
Well-settled is the rule that this Court is not a trier of facts. The findings of fact of the trial court are
accorded great weight and respect, if not finality by this Court, subject to a number of exceptions. In the
instant case, we find no reason to disturb the factual findings of the trial court. Even the appellate court did
not controvert the factual findings of the trial court. They differed only in their conclusions of law.
Further, the fact that the disputed properties were acquired during the couple’s cohabitation also does not
help respondent. 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.19 In the instant case, respondent 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.20
Second, we dispose of the issue of registration of the properties in the name of respondent alone. Having
found that the true buyer of the disputed house and lots was the Austrian Wilhelm 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.21 It is only a means of confirming the fact
of its existence with notice to the world at large.22 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 respondent
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 title likewise does not apply to respondent. A certificate of title
implies that the title is quiet,23 and that it is perfect, absolute and indefeasible.24 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.25 This is the situation in the instant case. Respondent 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.
Respondent argued that aliens are prohibited from acquiring private land. This is embodied in Section 7,
Article XII of the 1987 Constitution,26 which is basically a reproduction of Section 5, Article XIII of the
1935 Constitution,27 and Section 14, Article XIV of the 1973 Constitution.28 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
17
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.29

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 petitioner who is a Filipino citizen. In United Church Board for World Ministries v.
Sebastian,30 the Court reiterated the consistent ruling in a number of cases31 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. Applying United
Church Board for World Ministries, the trial court ruled in favor of petitioner, viz.:

[W]hile the acquisition and the purchase of (sic) Wilhelm Jambrich of the properties under litigation [were]
void ab initio since [they were] contrary to the Constitution of the Philippines, he being a foreigner, yet, the
acquisition of these properties by plaintiff who is a Filipino citizen from him, has cured the flaw in the
original transaction and the title of the transferee is valid.

The trial court upheld the sale by Jambrich in favor of petitioner and ordered the cancellation of the TCTs in
the name of respondent. It declared petitioner 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 trial court likewise ordered respondent to
pay petitioner ₱25,000 as attorney’s fees and ₱10,000 as litigation expenses, as well as the costs of suit.

We affirm the Regional Trial Court.

The rationale behind the Court’s ruling in United Church Board for World Ministries, as reiterated in
subsequent cases,32 is this – since the ban on aliens is intended to preserve the nation’s 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 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.

SO ORDERED.

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