G.R. No. 108228 (2004)
Topics:
Contract of repurchase, contract of sale, perfection of a contract of sale
Summary:
Petition for Review of CA Decision affirming RTC Decision which dismissed Frenzel’s complaint against Ederlina for recovery of real and personal properties located in Quezon City and Manila. In his complaint, Alfred alleged that Ederlina, without his knowledge and consent, managed to transfer funds from their joint account in HSBC Hong Kong, to her own account with the same bank. Using the said funds, Ederlina was able to purchase the properties subject of the complaints. He also alleged that the beauty parlor in Ermita was established with his own funds, and that the Quezon City property was likewise acquired by him with his personal funds.
Doctrines:
Ownership of any land in the Philippines is exclusive and limited only to Filipino citizens. This is enshrined in the 1987 Philippine Constitution.
Facts:
Alfred Frenzel is an Australian citizen of German descent. Sometime in 1983, he met Ederlina Catito, a Filipina and a native of Davao City. Subsequently, Alfred and Ederlina developed a relationship. Alfred persuaded Ederlina to return to the Philippines and engage in a business of her own. He also proposed that they meet in Manila. Within two weeks of Ederlina’s arrival in Manila, Alfred joined her and reiterated his proposal and even offered to finance her business venture. Ederlina was delighted at the idea and proposed to put up a beauty parlor, to which Alfred happily agreed. Alfred told Ederlina that he was married but that he was eager to divorce his wife in Australia. Alfred also proposed marriage to Ederlina.
Subsequently, Alfred purchased properties under Ederlina’s name. Since Alfred knew that as an alien he was disqualified from owning lands in the Philippines, he agreed that only Ederlina’s name would appear as vendee in the deeds of sale as the buyer of the property, as well as in the title covering the same. He believes that since he was planning to marry Ederlina, upon their marriage the two of them would jointly own the properties.
Meanwhile, Alfred learned of Ederlina’s marriage to Klaus. Ederlina assured him that they would eventually divorce and she would marry Alfred.
Eventually, the couple’s relationship stated deteriorating and Ederlina had not been able to secure her divorce. On October 15, 1985, Alfred wrote to Ederlina’s father, complaining that Ederlina had taken all his life savings and because of this, he was virtually penniless. He further accused the Catito family of acquiring for themselves the properties he had purchased with his own money and demanded the return of all the amounts that Ederlina and her family had “stolen” and turn over all the properties acquired by him and Ederlina during their coverture.
Issue:
Whether Frenzel’s defense of good faith may enable him to be declared as the owner of the purchased property and thus allow him to sell the same to recover his money
Ruling:
No. The Court iterates that a contract that violates the Constitution and the law, is null and void and vests no rights and creates no obligations. It produces no legal effect at all.
Also, lands of the public domain, which include private lands, may be transferred or conveyed only to individuals or entities qualified to acquire or hold private lands or lands of the public domain. Aliens, whether individuals or corporations, have been disqualified from acquiring lands of the public domain. Hence, they have also been disqualified from acquiring private lands.
In this case, even if, as claimed by the petitioner, the sales in question were entered into by him as the real vendee the said transactions are in violation of the Constitution; hence, are null and void ab initio.
Frenzel as a party to an illegal contract, cannot come into a court of law and ask to have his illegal objective carried out as the law will not aid either party to an illegal contract or agreement; it leaves the parties where it finds them. The law also provides under Article 1412 of the New Civil Code, that Frenzel cannot have the subject properties deeded to him or allow him to recover the money he had spent for the purchase. 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. Moreover, he cannot feign ignorance of the constitutional proscription, nor claim that he acted in good faith, let alone assert that he is less guilty than the respondent. The Court found that Frenzel was fully aware that he was disqualified from acquiring and owning lands under Philippine law even before he purchased the properties in question.