LTD – MODULE 2 (MODES OF REGISTERING LAND
TITLES)
CITIZENSHIP REQUIREMENT
THINGS TO NOTE: CONSTI PROVISIONS REGARDING
CITIZENSHIP REQUIREMENTS FOR LAND OWNERSHIP
WHO ARE JURIDICAL PERSONS
WHO ARE NATURAL PERSONS
ARE THE RULES ABSOLUTE?
TOPIC: Krivenko Doctrine
KRIVENKO v. REGISTER OF DEEDS G.R. NO. L-630
Aliens may not acquire private or public agricultural lands,
including residential lands, and, accordingly.
FACTUAL ANTECEDENTS:
 Alexander A. Krivenko – Alien
o Bought a residential lot from Magdalena Estate (Dec
1941)
o The registration of which was interrupted by the war
o In 1945 he sought to accomplish it but he was denied
by the register od deeds since he was an alien and
cannot acquire land in this jurisdiction.
o He brought the case to court, and the CFI agreed with
the register of deeds.
Issue: whether or not an alien under our Constitution may acquire
residential land.
 Side note: a court should not pass upon a constitutional
question if its judgment may be made to rest upon other
grounds. There is, we believe, a confusion of ideas in this
reasoning. It cannot be denied that the constitutional question
is unavoidable if we choose to decide this case upon the
merits. Our judgment cannot to be made to rest upon other
grounds if we have to render any judgment at all. And we
cannot avoid our judgment simply because we have to avoid
a constitutional question. We cannot, for instance, grant the
motion withdrawing the appeal only because we wish to evade
the constitutional; issue. Whether the motion should be, or
should not be, granted, is a question involving different
considerations now to be stated.
PROCEDURAL: Rule 52, Section 4 of the Rules of Court - it is
discretionary upon this Court to grant a withdrawal of appeal after the
briefs have been presented. At the time the motion for withdrawal was
filed in this case, not only had the briefs been prensented, but the case
had already been voted and the majority decision was being prepared.
The motion for withdrawal stated no reason whatsoever, and the
Solicitor General was agreeable to it. While the motion was pending
in this Court, came the new circular of the Department of Justice,
instructing all register of deeds to accept for registration all transfers
of residential lots to aliens.
The herein respondent-appellee was naturally one of the registers
of deeds to obey the new circular, as against his own stand in this
case which had been maintained by the trial court and firmly
defended in this Court by the Solicitor General. If we grant the
withdrawal, the the result would be that petitioner-appellant
Alexander A. Krivenko wins his case, not by a decision of this
Court, but by the decision or circular of the Department of Justice,
issued while this case was pending before this Court.
PROCEDURAL ISSUE: whether or not we should allow
interference with the regular and complete exercise by this Court of its
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constitutional functions, and whether or not after having held long
deliberations and after having reached a clear and positive conviction
as to what the constitutional mandate is, we may still allow our
conviction to be silenced, and the constitutional mandate to be ignored
or misconceived, with all the harmful consequences that might be
brought upon the national patromony.
CONSEQUENCES OF THE NEW CIRCULAR:
 Might be taken advantage of
 the constitutional question may never come up again before
this court, because both vendors and vendees will have no
interest but to uphold the validity of their transactions, and
very unlikely will the register of deeds venture to disobey the
orders of their superior.
 Thus, the possibility for this court to voice its conviction in a
future case may be remote, with the result that our indifference
of today might signify a permanent offense to the
Constitution.
COURT’S DISCUSSIONS:
Article XIII, Section 1 (Constitution)
Article XIII. — Conservation and utilization of natural
resources.
SECTION 1. All agricultural, timber, and mineral lands of
the public domain, water, minerals, coal, petroleum, and
other mineral oils, all forces of potential energy, and other
natural resources of the Philippines belong to the State, and
their disposition, exploitation, development, or utilization
shall be limited to citizens of the Philippines, or to
corporations or associations at least sixty per centum of the
capital of which is owned by such citizens, subject to any
existing right, grant, lease, or concession at the time of the
inauguration of the Government established under this
Constitution. Natural resources, with the exception of public
agricultural land, shall not be alienated, and no license,
concession, or lease for the exploitation, development, or
utilization of any of the natural resources shall be granted for
a period exceeding twenty-five years, renewable for another
twenty-five years, except as to water rights for irrigation,
water supply, fisheries, or industrial uses other than the
development of water "power" in which cases beneficial use
may be the measure and the limit of the grant.
Scope of this provision: according to its heading and its
language, embraces all lands of any kind of the public domain,
its purpose being to establish a permanent and fundamental
policy for the conservation and utilization of all natural
resources of the Nation.
When, therefore, this provision, with reference to lands of the
public domain, makes mention of only agricultural, timber
and mineral lands, it means that all lands of the public domain
are classified into said three groups, namely, agricultural,
timber and mineral.
 This classification finds corroboration in the circumstance
that at the time of the adoption of the Constitution, that was
the basic classification existing in the public laws and judicial
decisions in the Philippines, and the term "public agricultural
lands" under said classification had then acquired a technical
meaning that was well-known to the members of the
Constitutional Convention.
Mapa vs. Insular Government (1908) - this Court said that the
phrase "agricultural public lands" as defined in the Act of
Congress of July 1, 1902, which phrase is also to be found in
several sections of the Public Land Act (No. 926), means "those
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public lands acquired from Spain which are neither mineral for
timber lands."
This definition has been followed in long line of decisions of this
Court.
 With respect to residential lands, it has been held that since
they are neither mineral nor timber lands, of necessity they
must be classified as agricultural.
Ibañez de Aldecoa vs. Insular Government- any parcel of land or
building lot is susceptible of cultivation, and may be converted
into a field, and planted with all kinds of vegetation; for this
reason, where land is not mining or forestal in its nature, it must
necessarily be included within the classification of agricultural
land, not because it is actually used for the purposes of agriculture,
but because it was originally agricultural and may again become
so under other circumstances; besides, the Act of Congress
contains only three classification, and makes no special provision
with respect to building lots or urban lands that have ceased to be
agricultural land.
The Court ruled that in determining whether a parcel of land
is agricultural, the test is not only whether it is actually
agricultural, but also its susceptibility to cultivation for
agricultural purposes.
 But whatever the test might be the fact remains that at the
time the Constitution was adopted, lands of the public domain
were classified in our laws and jurisprudence into agricultural,
mineral, and timber, and that the term "public agricultural
lands" was construed as referring to those lands that were not
timber or mineral, and as including residential lands. It may
safely be presumed, therefore, that what the members of the
Constitutional Convention had in mind when they drafted the
Constitution was this well-known classification and its
technical meaning then prevailing.
Construing terms in the constitution - It is a fundamental rule
that, in construing constitutions, terms employed therein shall be
given the meaning which had been put upon them, and which they
possessed, at the time of the framing and adoption of the
instrument. If a word has acquired a fixed, technical meaning in
legal and constitutional history, it will be presumed to have been
employed in that sense in a written Constitution.
 a technical sense and have been judicially construed to have a
certain meaning, and have been adopted by the legislature as
having a certain meaning prior to a particular statute in which
they are used, the rule of construction requires that the words
used in such statute should be construed according to the sense
in which they have been so previously used, although the
sense may vary from strict literal meaning of the words.
o Therefore, the phrase "public agricultural lands"
appearing in section 1 of Article XIII of the
Constitution must be construed as including
residential lands, and this is in conformity with a
legislative interpretation given after the adoption of
the Constitution.
o "where the Legislature has revised a statute after a
Constitution has been adopted, such a revision is to be
regarded as a legislative construction that the statute
so revised conforms to the Constitution." (59 C.J.,
1102.) Soon after the Constitution was adopted, the
National Assembly revised the Public Land Law and
passed Commonwealth Act No. 141, and sections 58,
59 and 60 thereof permit the sale of residential lots to
Filipino citizens or to associations or corporations
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 controlled by such citizens, which is equivalent to a
solemn declaration that residential lots are considered
as agricultural lands, for, under the Constitution, only
agricultural lands may be alienated.
Section 9 of said Commonwealth Act No. 141, "alienable or
disposable public lands" which are the same "public agriculture lands"
under the Constitution, are classified into agricultural, residential,
commercial, industrial and for other puposes. This simply means that
the term "public agricultural lands" has both a broad and a particular
meaning.
 Under its broad or general meaning, as used in the
Constitution, it embraces all lands that are neither timber nor
mineral.
 This broad meaning is particularized in section 9 of
Commonwealth Act No. 141 which classifies "public
agricultural lands" for purposes of alienation or disposition,
into lands that are stricly agricultural or actually devoted to
cultivation for agricultural puposes; lands that are residential;
commercial; industrial; or lands for other purposes. The fact
that these lands are made alienable or disposable under
Commonwealth Act No. 141, in favor of Filipino citizens, is
a conclusive indication of their character as public agricultural
lands under said statute and under the Constitution.
NOTE: in this connection that prior to the Constitution, under
Section 24 of Public Land Act No. 2874, aliens could acquire
public agricultural lands used for industrial or residential
purposes, but after the Constitution and under section 23 of
Commonwealth Act No. 141, the right of aliens to acquire such
kind of lands is completely stricken out, undoubtedly in pursuance
of the constitutional limitation. And, again, prior to the Constitution,
under section 57 of Public Land Act No. 2874, land of the public
domain suitable for residence or industrial purposes could be sold or
leased to aliens, but after the Constitution and under section 60 of
Commonwealth Act No. 141, such land may only be leased, but not
sold, to aliens, and the lease granted shall only be valid while the land
is used for the purposes referred to. The exclusion of sale in the new
Act is undoubtedly in pursuance of the constitutional limitation, and
this again is another legislative construction that the term "public
agricultural land" includes land for residence purposes.
Such legislative interpretation is also in harmony with the
interpretation given by the Executive Department of the
Government. Way back in 1939, Secretary of Justice Jose Abad
Santos, in answer to a query as to "whether or not the phrase
'public agricultural lands' in section 1 of Article XII (now XIII) of
the Constitution may be interpreted to include residential,
commercial, and industrial lands for purposes of their
disposition," rendered the following short, sharp and crystal-clear
opinion:
Section 2 , Article XII the Constitution classifies lands of
the public domain in the Philippines into agricultural,
timber and mineral. This is the basic classification
adopted since the enactment of the Act of Congress of July
1, 1902, known as the Philippine Bill. At the time of the
adoption of the Constitution of the Philippines, the term
'agricultural public lands' and, therefore, acquired a
technical meaning in our public laws. The Supreme Court
of the Philippines in the leading case of Mapa vs. Insular
Government held that the phrase 'agricultural public
lands' means those public lands acquired from
Spain which are neither timber nor mineral lands. This
definition has been followed by our Supreme Court in
many subsequent case.
Residential commercial, or industrial lots forming part of
the public domain must have to be included in one or more
of these classes. Clearly, they are neither timber nor
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 mineral, of necessity, therefore, they must be classified as
agricultural.
 it has been held that in determining whether lands are
agricultural or not, the character of the land is the test In other
words, it is the susceptibility of the land to cultivation for
agricultural purposes by ordinary farming methods which
determines whether it is agricultural or not
Furthermore, as said by the Director of Lands, no reason is
seen why a piece of land, which may be sold to a person if he
is to devote it to agricultural, cannot be sold to him if he
intends to use it as a site for his home.
PROVISIONS (CURRENT CONSTITUTION)
Section 2. All lands of the public domain, waters, minerals, coal,
petroleum, and other mineral oils, all forces of potential energy,
fisheries, forests or timber, wildlife, flora and fauna, and other natural
resources are owned by the State. With the exception of agricultural
lands, all other natural resources shall not be alienated. The
exploration, development, and utilization of natural resources shall be
under the full control and supervision of the State. The State may
directly undertake such activities, or it may enter into co-production,
joint venture, or production-sharing agreements with Filipino citizens,
or corporations or associations at least sixty per centum of whose
capital is owned by such citizens. Such agreements may be for a period
not exceeding twenty-five years, renewable for not more than twenty-
five years, and under such terms and conditions as may be provided
by law. In cases of water rights for irrigation, water supply fisheries,
or industrial uses other than the development of water power,
beneficial use may be the measure and limit of the grant.
The State shall protect the nation’s marine wealth in its archipelagic
waters, territorial sea, and exclusive economic zone, and reserve its
use and enjoyment exclusively to Filipino citizens.
The Congress may, by law, allow small-scale utilization of natural
resources by Filipino citizens, as well as cooperative fish farming,
with priority to subsistence fishermen and fishworkers in rivers, lakes,
bays, and lagoons.
The President may enter into agreements with foreign-owned
corporations involving either technical or financial assistance for
large-scale exploration, development, and utilization of minerals,
petroleum, and other mineral oils according to the general terms and
conditions provided by law, based on real contributions to the
economic growth and general welfare of the country. In such
agreements, the State shall promote the development and use of local
scientific and technical resources.
The President shall notify the Congress of every contract entered into
in accordance with this provision, within thirty days from its
execution.
Section 3. Lands of the public domain are classified into agricultural,
forest or timber, mineral lands and national parks. Agricultural lands
of the public domain may be further classified by law according to the
uses to which they may be devoted. Alienable lands of the public
domain shall be limited to agricultural lands. Private corporations or
associations may not hold such alienable lands of the public domain
except by lease, for a period not exceeding twenty-five years,
renewable for not more than twenty-five years, and not to exceed one
thousand hectares in area. Citizens of the Philippines may lease not
more than five hundred hectares, or acquire not more than twelve
hectares thereof, by purchase, homestead, or grant.
Taking into account the requirements of conservation, ecology, and
development, and subject to the requirements of agrarian reform, the
Congress shall determine, by law, the size of lands of the public
domain which may be acquired, developed, held, or leased and the
conditions therefor
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This opinion is important not alone because it comes from a
Secratary of Justice who later became the Chief Justice of this
Court, but also because it was rendered by a member of the
cabinet of the late President Quezon who actively participated in
the drafting of the constitutional provision under consideration
And the opinion of the Quezon administration was reiterated by
the Secretary of Justice under the Osmeña administration, and it
was firmly maintained in this Court by the Solicitor General of
both administrations.
It is thus clear that the three departments of the Government —
judicial, legislative and executive — have always maintained that
lands of the public domain are classified into agricultural, mineral
and timber, and that agricultural lands include residential lots.
Section 2 of Article XII of the Constitution - "natural resources,
with the exception of public agricultural land, shall not be
aliented," and with respect to public agricultural lands, their
alienation is limited to Filipino citizens. (OLD CONSSTI)
 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 7 is included in Article XII,
and it reads as follows:
Sec.7. 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 aliens' 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. Undoubtedly, as above indicated,
section 5 is intended to insure the policy of nationalization
contained in section 1. Both sections must, therefore, be read
together for they have the same purpose and the same subject
matter. It must be noticed that the persons against whom the
prohibition is directed in section 5 are the very same persons
who under section 1 are disqualified "to acquire or hold lands
of the public domain in the Philippines." And the subject
matter of both sections is the same, namely, the non-
transferability of "agricultural land" to aliens. Since
"agricultural land" under section 2 includes residential lots,
the same technical meaning should be attached to "agricultural
land under section 7 It is a rule of statutory construction that
"a word or phrase repeated in a statute will bear the same
meaning throughout the statute, unless a different intention
appears The only difference between "agricultural land" under
section 7, is that the former is public and the latter private. But
such difference refers to ownership and not to the class of
land. The lands are the same in both sections, and, for the
conservation of the national patrimony, what is important is
the nature or class of the property regardless of whether it is
owned by the State or by its citizens.
OPINION
Hon. Teofilo Sison -- then Secretary of Justice, to the effect that
residential lands of the public domain may be considered as
agricultural lands, whereas residential lands of private ownership
cannot be so considered. No reason whatsoever is given in the opinion
for such a distinction, and no valid reason can be adduced for such a
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discriminatory view, particularly having in mind that the purpose of
the constitutional provision is the conservation of the national
patrimony, and private residential lands are as much an integral part
of the national patrimony as the residential lands of the public domain.
Specially is this so where, as indicated above, the prohibition as to the
alienable of public residential lots would become superflous if the
same prohibition is not equally applied to private residential lots.
Indeed, the prohibition as to private residential lands will eventually
become more important, for time will come when, in view of the
constant disposition of public lands in favor of private individuals,
almost all, if not all, the residential lands of the public domain shall
have become private residential lands.
It is maintained that in the first draft of section 5, the words "no land
of private ownership" were used and later changed into "no
agricultural land of private ownership," and lastly into "no private
agricultural land" and from these changes it is argued that the word
"agricultural" introduced in the second and final drafts was intended
to limit the meaning of the word "land" to land actually used for
agricultural purposes. The implication is not accurate. The wording
of the first draft was amended for no other purpose than to clarify
concepts and avoid uncertainties. The words "no land" of the first
draft, unqualified by the word "agricultural," may be mistaken to
include timber and mineral lands, and since under section 1, this kind
of lands can never be private, the prohibition to transfer the same
would be superfluous. Upon the other hand, section 5 had to be drafted
in harmony with section 1 to which it is supplementary, as above
indicated. Inasmuch as under section 1, timber and mineral lands can
never be private, and the only lands that may become private are
agricultural lands, the words "no land of private ownership" of the
first draft can have no other meaning than "private agricultural land."
And thus the change in the final draft is merely one of words in order
to make its subject matter more specific with a view to avoiding the
possible confusion of ideas that could have arisen from the first draft.
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 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.
One of the fundamental principles underlying the provision of
Article XIII of the Constitution and which was embodied in the
report of the Committee on Nationalization and Preservation of
Lands and other Natural Resources of the Constitutional
Convention: is "that lands, minerals, forests, and other natural
resources constitute the exclusive heritage of the Filipino nation. They
should, therefore, be preserved for those under the sovereign authority
of that nation and for their posterity
"The exclusion of aliens from the privilege of acquiring public
agricultural lands and of owning real estate is a necessary part of
the Public Land Laws of the Philippines to keep pace with the idea
of preserving the Philippines for the Filipinos."
Professor Aruego says that since the opening days of the
Constitutional Convention one of its fixed and dominating
objectives was the conservation and nationalization of the natural
resources of the country.
If under Article XIV, Section 8, of the Constitution, an alien may not
even operate a small jitney for hire, it is certainly not hard to
understand that neither is he allowed to own a piece of land.
This constitutional intent is made more patent and is strongly
implemented by an act of the National Assembly passed soon after the
Constitution was approved -- Commonwealth Act No. 141. Prior to
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the Constitution, there were in the Public Land Act No. 2874 sections
120 and 121 which granted aliens the right to acquire private only by
way of reciprocity.
The phrase "no land" used in these section refers to all private
lands, whether strictly agricultural, residential or otherwise, there
being practically no private land which had not been acquired by
any of the means provided in said two sections. Therefore, the
prohibition contained in these two provisions was, in effect, that no
private land could be transferred to aliens except "upon express
authorization by the Philippine Legislature, to citizens of Philippine
Islands the same right to acquire, hold, lease, encumber, dispose of, or
alienate land." In other words, aliens were granted the right to acquire
private land merely by way of reciprocity. Then came the Constitution
and Commonwealth Act No. 141 was passed, sections 122 and 123.
These two sections are almost literally the same as sections 120 and
121 of Act No. 2874.
 The only difference: in the new provisions, the right to
reciprocity granted to aliens is completely stricken out.
 This, undoubtedly, is to conform to the absolute policy
contained in section 5 of Article XIII of the Constitution
which, in prohibiting the alienation of private agricultural
lands to aliens, grants them no right of reciprocity. This
legislative construction carries exceptional weight, for
prominent members of the National Assembly who approved
the new Act had been members of the Constitutional
Convention.
It is said that the lot question does not come within the purview of
sections 122 and 123 of Commonwealth Act No. 141, there being no
proof that the same had been acquired by one of the means provided
in said provisions.
THIS CASE WAS NOT DECIDING UNDER THE PROVISIONS
OF THE PUBLIC LAND ACT which have to refer to land that had
been formerly of the public domain, otherwise their constitutionality
may be doubtful.
THIS CASE WAS DECIDED under Section 5 of Article XIII of
the Constitution - more comprehensive and more absolute in the
sense that it prohibits the transfer to alien of any private agricultural
land including residential land whatever its origin might have been.
And, finally, on June 14, 1947, the Congress approved Republic Act
No. 133 which allows mortgage of "private real property" of any kind
in favor of aliens but with a qualification consisting of expressly
prohibiting aliens to bid or take part in any sale of such real property
as a consequence of the mortgage (check if still applicable).
 This prohibition makes no distinction between private
lands that are strictly agricultural and private lands that
are residential or commercial. The prohibition embraces
the sale of private lands of any kind in favor of aliens,
which is again a clear implementation and a legislative
interpretation of the constitutional prohibition. Had the
Congress been of opinion that private residential lands
may be sold to aliens under the Constitution, no legislative
measure would have been found necessary to authorize
mortgage which would have been deemed also permissible
under the Constitution. But clearly it was the opinion of
the Congress that such sale is forbidden by the
Constitution and it was such opinion that prompted the
legislative measure intended to clarify that mortgage is not
within the constitutional prohibition.
Since their (aliens) 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
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here forever and share our fortunes and misfortunes, Filipino
citizenship is not impossible to acquire.
Aliens may not acquire private or public agricultural lands,
including residential lands, and, accordingly.
Halili v. CA G.R. NO.113539
The transfer of an interest in a piece of land to an alien may no
longer be assailed on constitutional grounds after the entire parcel
has been sold to a qualified citizen.
FACTUAL ANTECEDENTS
 Simeon de Guzman - an American citizen, died sometime in
1968, leaving real properties in the Philippines. His forced
heirs were his widow, defendant appellee [herein private
respondent] Helen Meyers Guzman, and his son, defendant
appellee [also herein private respondent] David Rey Guzman,
both of whom are also American citizens. On August 9, 1989,
Helen executed a deed of quitclaim transferring and
conveying to David Rey all her rights, titles and interests in
and over six parcels of land which the two of them inherited
from Simeon.
 Among the said parcels of land is that now in litigationsituated
in Bagbaguin, Sta. Maria, Bulacan, containing an area of
6,695 square meters, covered by Transfer Certificate of Title
No. T-170514 of the Registry of Deeds of Bulacan.
 The quitclaim having been registered, TCT No. T-170514 was
cancelled and TCT No. T-120259 was issued in the name of
appellee David Rey Guzman.
 On February 5, 1991, David Rey Guzman sold said parcel of
land to defendant-appellee [also herein private respondent]
Emiliano Cataniag, upon which TCT No. T-120259 was
cancelled and TCT No. T-130721(M) was issued in the latter's
name.
 Petitioners, who are owners of the adjoining lot, filed a
complaint before the Regional Trial Court, questioning the
constitutionality and validity of the two conveyances —
between Helen Guzman and David Rey Guzman, and between
the latter and Emiliano Cataniag — and claiming ownership
thereto based on their right of legal redemption under Art.
1621 of the Civil Code.
ISSUES: Is the land in question urban or rural? Urban.
Do the petitioners have a right of redemption? No.
Are the conveyances null and void? Sale/Conveyances were valid.
LEGAL REDEMPTION: the right to be subrogated upon the same
terms and conditions stipulated in a contract, in the place of one who
acquires the thing by purchase or by dacion in payment or by other
transaction whereby ownership is transmitted by onerous title.
ARTICLE 1621 - The owners of adjoining lands shall also have
the right of redemption when a piece of rural land, the area of
which does not exceed one hectare, is alienated, unless the grantee
does not own any rural land.
 This article expresses that the right of redemption it grants to
an adjoining owner of the property conveyed may be defeated
if it can be shown that the buyer or grantee does not own any
other rural land.
RTC - dismissed the complaint. It ruled that Helen Guzman's waiver
of her inheritance in favor of her son was not contrary to the
constitutional prohibition against the sale of land to an alien, since the
purpose of the waiver was simply authorize David Rey Guzman to
dispose of their properties in accordance with the Constitution and the
laws of the Philippines, and not to subvert them. On the second issue,
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it held that the subject land was urban; hence, petitioners had no reason roadsides along the national highway of Bagbaguin, Sta. Maria,
to invoke their right of redemption under Art. 1621 of the Civil Code. Bulacan, are lined up with residential, commercial or industrial
establishments. Lined up along the Bagbaguin Road are factories
COURT’S DISCUSSION of feeds, woodcrafts [sic] and garments, commercial stores for
tires, upholstery materials, feeds supply and spare parts. Meron
First Issue: The Land Is Urban; rin: buildings for commercial purposes
Thus, No Right of Redemption
 There is no doubt, therefore, that the community is a
Whether the land in dispute is rural or urban is a factual question commercial area thriving in business activities. Only a
which, as a rule, is not reviewable by this Court. short portion of said road [is] vacant. It is to be noted that
in the Tax Declaration in the name of Helen Meyers
 Basic and long-settled is the doctrine that findings of fact Guzman, the subject land is termed agricultural, while in
of a trial judge, when affirmed by the Court of Appeals, the letter addressed to defendant Emiliano Cataniag,
are binding upon the Supreme Court. dated October 3, 1991, the Land Regulatory Board
attested that the subject property is commercial and the
This admits of only a few exceptions such as: trend of development along the road is commercial. The
Board's classification is based on the present condition of
the property and the community thereat. Said
(1) when an inference made by the appellate court from its factual
classification is far more later [sic] than the tax declaration
findings is manifestly mistaken, absurd or impossible;
No Ground to Invoke
(2) when there is grave abuse of discretion in the appreciation of
Right of Redemption
facts;
In view of the finding that the subject land is urban in character,
(3) when the findings of the appellate court go beyond the issues
petitioners have indeed no right to invoke Art. 1621 of the Civil Code.
of the case, run contrary to the admissions of the parties to the case
The provision is clearly worded and admits of no ambiguity in
or fail to notice certain relevant facts which, if properly
construction.
considered, will justify a different conclusion;
Under this article, both lands — that sought to be redeemed and the
(4) when there is a misappreciation of facts; when the findings of
adjacent lot belonging to the person exercising the right of redemption
fact are conclusions without mention of the specific evidence on
— must be rural.
which they are based, are premised on the absence of evidence or
are contradicted by evidence on record. 
If one or both are urban = right cannot be invoked.
CLEAR AND CONVINCING EVIDENCE THAT THE
LAND IS URBAN (FOUND BY THE RTC) : almost all the PURPOSE OF THE PROVISION: which is limited in
scope to rural lands not exceeding one hectare, is to favor

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 agricultural development. The subject land not being rural
and, therefore, not agricultural, this purpose would not be
served if petitioners are granted the right of redemption under
Art. 1621. Plainly, under the circumstances, they cannot
invoke it.
Second Issue: Sale to Cataniag Valid
Helen Guzman's deed of quitclaim — in which she assigned,
transferred and conveyed to David Rey all her rights, titles and
interests over the property she had inherited from her husband —
collided with the Constitution, Article XII, Section 7 of which
provides:
Sec. 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.
Krivenko vs. Register of Deeds settled the issue as to who are
qualified (and disqualified) to own public as well as private lands
in the Philippines. Following a long discourse maintaining that the
"public agricultural lands" mentioned in Section 1, Article XIII
of the 1935 Constitution, include residential, commercial and
industrial lands.
SEE KRIVENKO DISCUSSION ABOVE
The Krivenko rule was recently reiterated in Ong Ching Po
vs. Court of Appeals, which involves a sale of land to a Chinese
citizen. The Court sad:
BERNAS: The capacity to acquire private land is made dependent
upon the capacity to acquire or hold lands of the public domain.
Private land may be transferred or conveyed only to individuals or
entities "qualified to acquire lands of the public domain"
The 1935 Constitution reserved the right to participate in the
"disposition, exploitation, development and utilization" of all
"lands of the public domain and other natural resources of the
Philippines" for Filipino citizens or corporations at least sixty
percent of the capital of which was owned by Filipinos. Aliens,
whether individuals or corporations, have been disqualified from
acquiring public lands; hence, they have also been disqualified
from acquiring private lands.
TL;DR non-Filipinos cannot acquire or hold title to private lands
or to lands of the public domain, except only by way of legal
succession.
Effect of a subsequent sale by the disqualified alien vendee to a
qualified Filipino citizen Jurisprudence is consistent that if land is
invalidly transferred to an alien who subsequently becomes a citizen
or transfers it to a citizen, the flaw in the original transaction is
considered cured and the title of the transferee is rendered valid."
United Church Board of Word Ministries vs. Sebastian - in which
an alien resident who owned properties in the Philippines devised to
an American non-stock corporation part of his shares of stock in a
Filipino corporation that owned a tract of land in Davao del Norte, the
Court sustained the invalidity of such legacy. However, upon proof
that ownership of the American corporation has passed on to a 100
percent Filipino corporation, the Court ruled that the defect in the will
was "rectified by the subsequent transfer of the property."
The present case is similar to De Castro vs. Tan. 2In that case, a
residential lot was sold to a Chinese. Upon his death, his widow
and children executed an extrajudicial settlement, whereby said
lot was allotted to one of his sons who became a naturalized
Filipino. The Court did not allow the original vendor to have the
sale annulled and to recover the property, for the reason that the
land has since become the property of a naturalized Filipino
citizen who is constitutionally qualified to own land.
FLORES 2S BE BETTER EVERYDAY 11
RATIONALE: Vasquez vs. Li Seng Giap thus:
[I]f the ban on aliens from acquiring not only agricultural but also
urban lands, as construed by this Court in the Krivenko case, is to
preserve the nation's lands for future generations of Filipinos, that
aim or purpose would not be thwarted but achieved by making
lawful the acquisition of real estate by aliens who became Filipino
citizens by naturalization.
Accordingly, since the disputed land is now owned by Private
Respondent Cataniag, a Filipino citizen, the prior invalid transfer can
no longer be assailed. The objective of the constitutional provision —
to keep our land in Filipino hands — has been served.
- End of topics -
TOPIC: Aliens may lease private land
Llantino v. Co Liong Chong, G.R. No. 292663
A lease to an alien for a reasonable period is valid. So is an option
giving an alien the right to buy real property on condition that he is
granted Philippine citizenship.
Note to self: see updates on foreign ownership.
FACTUAL ANTECEDENTS:
 Plaintiffs (petitioners herein) aver that they are the owners of
a commercial-residential land situated in the municipality of
Virac, Catanduanes, dwhich sometime in 1954 they leased to
the defendant (private respondent) who was then a Chinese
national and went by the name of Co Liong Chong.
o Leased the land to Chong for 13 years for a sum of
6150 pesos (whole period).
o The defendant was placed in possession of the
property but knowing that the period of the least
would end with the year 1967, petitioners requested
private respondent for a conference but the latter did
not honor the request and instead he informed the
petitioners that he had already constructed a
commercial building on the land worth P50,000.00;
that the lease contract was for a period of sixty (60)
years, counted from 1954; and that he is already a
Filipino citizen. The claim of Chong came as a
surprise to the Llantinos because they did not
remember having agreed to a sixty-year lease
agreement as that would virtually make Chong the
owner of the realty which, as a Chinese national, he
had no right to own and neither could he have
acquired such ownership after naturalization
subsequent to 1954.
o On December 16, 1967, in order to avoid a court
litigation the Llantinos once more invited Chong to a
conference about the matter but again Chong ignored
the invitation.
o Hence, on January 10, 1968, the Llantinos filed their
complaint to quiet title with damages before the Court
of First Instance.
NOTE: It was also admitted that Chong had in fact constructed a
building of strong materials on the land worth P40,000.00 (Rollo, p.
12; Record on Appeal, p. 15); that Chong has become a naturalized
Filipino citizen in 1961 and that his name is no longer Co Liong Chong
but Juan Molina.
RTC: dismissed the complaint
 The Court, however, feels that there is no sufficient ground to
award moral damages or attorney's fees as claimed by the
defendant because the Court is fairly convinced that the
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 institution of the suit sprung from an honest conviction on the
part of the plaintiffs that on account of the period fixed in the
contract of lease and the fact that the defendant was a Chinese
national at the time of its celebration constituted valid grounds
for annulment.
ISSUE: whether or not the contract of lease entered into by and
between the petitioners including Virgilio Llantino now deceased and
private on October 5, 1954 for a period of sixty (60) years is valid.
COURT’S DISCUSSION
Petitioner’s contentions: the contract which is sought to be declared
void was entered into by and between the parties, private respondent
was still a Chinese national
However, petitioners did not dispute the right of private respondent to
hold the landholding in dispute under a contract of lease but they
cannot fathom how Congress could have thought of a lease contract
which shall be for an indefinite period and yet say that the period to
be valid should not exceed 99 years.
Respondent’s contentions: argued that even though he was still an
alien when he entered into the contract of lease he was not prohibited
by law to do so. In fact, prior to his becoming a naturalized Filipino
citizen in 1961, the appellants did not question his right to enter into
that contract so that the parties are in pari delicto. He constructed a
building on the property worth P40,000.00 and prays that he be
awarded P30,000.00 for moral damages and P2,000.00 for Attorney's
fees.
JURISPRUDENCE: 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.
The lower court correctly ruled that the defendant-appellee
Chong had at the time of the execution of the contract, the right to
hold by lease the property involved in the case although at the time
of the execution of the contract, he was still a Chinese national in
the present case, it has been established that there is only one
contract and there is no option to buy the leased property in favor
of Chong.
There is nothing in the record, either in the lease contract or in the
complaint itself, to indicate any scheme to circumvent the
constitutional prohibition. Admittedly under the terms of the
contract there is nothing to prevent the Llantinos from disposing
of their title to the land to any qualified party but subject to the
rights of the lessee Chong. Neither is there under the terms of the
said contract to indicate that the ownership of the Llantinos of the
leased premises has been virtually transferred to the lessee
NOTE: Under the circumstances, a lease to an alien for a reasonable
period is valid. So is an option giving an alien the right to buy real
property on condition that he is granted Philippine citizenship. Aliens
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 The only instance where a
contract of lease may be considered invalid is, if there are
circumstances attendant to its execution, which are used as a scheme
to circumvent the constitutional prohibition.
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 (jus possidendi, jus utendi, jus fruendi, and jus
FLORES 2S BE BETTER EVERYDAY 13
abutendi) — rights, the sum of which make up ownership. It is just as
if today the possession is transferred, tomorrow the use, the next day
the disposition, and so on, until ultimately all the rights of which
ownership is made up are consolidated in an alien.
Assuming, arguendo, that the subject contract is prohibited, the same
can no longer be questioned presently upon the acquisition by the
private respondent of Filipino citizenship. It was held that sale of a
residential land to an alien which is now in the hands of a naturalized
Filipino citizen is valid.
Contract = the law between the contracting parties, and when there is
nothing in it which is contrary to law, morals, good customs, public
policy or public order, the validity of the contract must be sustained
The issue of the nature of the contract in the case at bar was never
raised in the basic pleadings or in the pre-trial. It is too late to raise an
issue on appeal in the Supreme Court when it has not been raised in
the lower court
Moreover, contracts which are not ambiguous are to be interpreted
according to their literal meaning and should not be interpreted beyond
their obvious intendment.
TOPIC: A corporation sole may acquire and register private
agricultural land.
Roman Catholic Apostolic Administrator of Davao v. Land
Registration Commission
The vendee (petitioner) is not qualified to acquire lands in the
Philippines in the absence of proof that at least 60 per centum of
the capital, properties or assets of the Roman Catholic Apostolic
Administrator of Davao, Inc. is actually owned or controlled by
Filipino citizens, and denying the registration of the deed of sale
in the absence of proof of compliance with such requisite, is hereby
reversed
NOTE TO SELF: See amendments in corporation code
FACTUAL ANTECEDENTS:
 On October 4, 1954, Mateo L. Rodis, a Filipino citizen and
resident of the City of Davao, executed a deed of sale of a
parcel of land located in the same city covered by Transfer
Certificate No. 2263, in favor of the Roman Catholic
Apostolic Administrator of Davao Inc., s corporation sole
organized and existing in accordance with Philippine Laws,
with Msgr. Clovis Thibault, a Canadian citizen, as actual
incumbent. When the deed of sale was presented to Register
of Deeds of Davao for registration, the latter. having in mind
a previous resolution of the Fourth Branch of the Court of First
Instance of Manila wherein the Carmelite Nuns of Davao were
made to prepare an affidavit to the effect that 60 per cent of
the members of their corporation were Filipino citizens when
they sought to register in favor of their congregation of deed
of donation of a parcel of land—required said corporation sole
to submit a similar affidavit declaring that 60 per cent of the
members thereof were Filipino citizens.
 The vendee in the letter dated June 28, 1954, expressed
willingness to submit an affidavit, both not in the same tenor
as that made the Progress of the Carmelite Nuns because the
two cases were not similar, for whereas the congregation of
the Carmelite Nuns had five incorporators, the corporation
sole has only one; that according to their articles of
incorporation, the organization of the Carmelite Nuns became
the owner of properties donated to it, whereas the case at bar,
the totality of the Catholic population of Davao would become
the owner of the property bought to be registered.
 As the Register of Deeds entertained some doubts as to the
registerability if the document, the matter was referred to the
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 Land Registration Commissioner en consulta for resolution in
accordance with section 4 of Republic Act No. 1151.
 Proper hearing on the matter was conducted by the
Commissioner and after the petitioner corporation had
filed its memorandum, a resolution was rendered on
September 21, 1954, holding that in view of the provisions
of Section 1 and 5 of Article XIII of the Philippine
Constitution, the vendee was not qualified to acquire
private lands in the Philippines in the absence of proof that
at least 60 per centum of the capital, property, or assets of
the Roman Catholic Apostolic Administrator of Davao,
Inc., was actually owned or controlled by Filipino citizens,
there being no question that the present incumbent of the
corporation sole was a Canadian citizen.
 It was also the opinion of the Land Registration
Commissioner that section 159 of the corporation Law relied
upon by the vendee was rendered operative by the
aforementioned provisions of the Constitution with respect to
real estate, unless the precise condition set therein — that at
least 60 per cent of its capital is owned by Filipino citizens —
be present, and, therefore, ordered the Registered Deeds of
Davao to deny registration of the deed of sale in the absence
of proof of compliance with such condition.
 In its resolution of November 15, 1954, this Court gave due
course to this petition providing that the procedure prescribed
for appeals from the Public Service Commission of the
Securities and Exchange Commissions (Rule 43), be
followed.
MAIN ISSUE: wwhether the Universal Roman Catholic Apostolic
Church in the Philippines, or better still, the corporation sole named
the Roman Catholic Apostolic Administrator of Davao, Inc., is
qualified to acquire private agricultural lands in the Philippines
pursuant to the provisions of Article XIII of the Constitution
COURT’S DISCUSSION
Section 5 of Article XIII of the Philippine Constitution: 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.
Section 1 of the same Article also provides the following:
SECTION 1. All agricultural, timber, and mineral lands of the public
domain, water, minerals, coal, petroleum, and other mineral oils, all
forces of potential energy, and other natural resources of the
Philippines belong to the State, and their disposition, exploitation,
development, or utilization shall be limited to citizens of the
Philippines, or to corporations or associations at least sixty per
centum of the capital of which is owned by such citizens, SUBJECT
TO ANY EXISTING RIGHT, grant, lease, or concession AT THE
TIME OF THE INAUGURATION OF THE GOVERNMENT
ESTABLISHED UNDER CONSTITUTION. Natural resources, with
the exception of public agricultural land, shall not be alienated, and no
license, concession, or leases for the exploitation, development, or
utilization of any of the natural resources shall be granted for a period
exceeding twenty-five years, renewable for another twenty-five years,
except as to water rights for irrigation, water supply, fisheries, or
industrial uses other than the development of water power, in which
cases other than the development and limit of the grant.
Who are considered "qualified" to acquire and hold agricultural
lands in the Philippines? What is the effect of these constitutional
prohibitions of the right of a religious corporation recognized by
our Corporation Law and registered as a corporation sole, to
possess, acquire and register real estates in its name when the
Head, Manager, Administrator or actual incumbent is an alien?
 Respondents, on the other hand, averred that although it might
be true that petitioner is not the owner of the land purchased,
yet he has control over the same, with full power to
FLORES 2S BE BETTER EVERYDAY 15
 administer, take possession of, alienate, transfer, encumber,
sell or dispose of any or all lands and their improvements
registered in the name of the corporation sole and can collect,
receive, demand or sue for all money or values of any kind
that may be kind that may become due or owing to said
corporation, and vested with authority to enter into
agreements with any persons, concerns or entities in
connection with said real properties, or in other words,
actually exercising all rights of ownership over the properties.
 It was their stand that the theory that properties registered in
the name of the corporation sole are held in true for the benefit
of the Catholic population of a place, as of Davao in the case
at bar should be sustained because a conglomeration of
persons cannot just be pointed out as the cestui que trust or
recipient of the benefits from the property allegedly
administered in their behalf. Neither can it be said that the
mass of people referred to as such beneficiary exercise ant
right of ownership over the same. This set-up, respondents
argued, falls short of a trust. The respondents instead tried to
prove that in reality, the beneficiary of ecclesiastical
properties are not members or faithful of the church but
someone else, by quoting a portion a portion of the ought of
fidelity subscribed by a bishop upon his elevation to the
episcopacy wherein he promises to render to the Pontificial
Father or his successors an account of his pastoral office and
of all things appertaining to the state of this church.
Respondents likewise advanced the opinion that in construing the
constitutional provision calling for 60 per cent of Filipino citizenship,
the criterion of the properties or assets thereof.
COURT’S DISCUSSION
CORPORATION SOLE - corporation sole is a special form of
corporation usually associated with the clergy. Conceived and
introduced into the common law by sheer necessity, this legal creation
which was referred to as "that unhappy freak of English law" was
designed to facilitate the exercise of the functions of ownership carried
on by the clerics for and on behalf of the church which was regarded
as the property
 A corporation sole consists of one person only, and his
successors (who will always be one at a time), in some
particular station, who are incorporated by law in order to give
them some legal capacities and advantages, particularly that
of perpetuity, which in their natural persons they could not
have had. In this sense, the king is a sole corporation; so is a
bishop, or dens, distinct from their several chapters.
The provisions of our Corporation law on religious corporations
are illuminating and sustain the stand of petitioner. Section 154
thereof provides:
SEC. 154. — For the administration of the temporalities of any
religious denomination, society or church and the management of the
estates and the properties thereof, it shall be lawful for the bishop,
chief priest, or presiding either of any such religious denomination,
society or church to become a corporation sole, unless inconsistent
wit the rules, regulations or discipline of his religious denomination,
society or church or forbidden by competent authority thereof.
SEC. 155. In order to become a corporation sole the bishop, chief
priest, or presiding elder of any religious denomination, society or
church must file with the Securities and Exchange Commissioner
articles of incorporation setting forth the following facts:
(3) That as such bishop, chief priest, or presiding elder he
is charged with the administration of the temporalities and
the management of the estates and properties of his religious
denomination, society, or church within its territorial
jurisdiction, describing it;
FLORES 2S BE BETTER EVERYDAY 16
(As amended by Commonwealth Act No. 287).
SEC. 157. From and after the filing with the Securities and
Exchange Commissioner of the said articles of incorporation,
which verified by affidavit or affirmation as aforesaid and
accompanied by the copy of the commission, certificate of
election, or letters of appointment of the bishop, chief priest,
or presiding elder, duly certified as prescribed in the section
immediately preceding such the bishop, chief priest, or
presiding elder, as the case may be, shall become a
corporation sole and all temporalities, estates, and properties
the religious denomination, society, or church therefore
administered or managed by him as such bishop, chief priest,
or presiding elder, shall be held in trust by him as a
corporation sole, for the use, purpose, behalf, and sole benefit
of his religious denomination, society, or church, including
hospitals, schools, colleges, orphan, asylums, parsonages, and
cemeteries thereof. For the filing of such articles of
incorporation, the Securities and Exchange Commissioner
shall collect twenty-five pesos. (As amended by
Commonwealth Act. No. 287); and.
SEC. 163. The right to administer all temporalities and all property
held or owned by a religious order or society, or by the diocese, synod,
or district organization of any religious denomination or church shall,
on its incorporation, pass to the corporation and shall be held in trust
for the use, purpose behalf, and benefit of the religious society, or
order so incorporated or of the church of which the diocese, or district
organization is an organized and constituent part.
CANON LAW - provisions regarding the duties of the corporation
or ordinary as administrator.
That leaves no room for doubt that the bishops or archbishops, as the
case may be, as corporation's sole are merely administrators of the
church properties that come to their possession, in which they hold in
trust for the church. It can also be said that while it is true that church
properties could be administered by a natural persons, problems
regarding succession to said properties can not be avoided to rise upon
his death. Through this legal fiction, however, church properties
acquired by the incumbent of a corporation sole pass, by operation of
law, upon his death not his personal heirs but to his successor in office.
It could be seen, therefore, that a corporation sole is created not only
to administer the temporalities of the church or religious society where
he belongs but also to hold and transmit the same to his successor in
said office.
If the ownership or title to the properties do not pass to the
administrators, who are the owners of church properties?.
AUTHORITIES IN CANON LAW: In matters regarding property
belonging to the Universal Church and to the Apostolic See, the
Supreme Pontiff exercises his office of supreme administrator through
the Roman Curia; in matters regarding other church property, through
the administrators of the individual moral persons in the Church
according to that norms, laid down in the Code of Cannon Law. This
does not mean, however, that the Roman Pontiff is the owner of all the
church property; but merely that he is the supreme guardian.
Trinidad vs. Roman Catholic Archbishop of Manila:
The second question to be decided is in whom the ownership of the
properties constituting the endowment of the ecclesiastical or
collative chaplaincies is vested.
Canonists entertain different opinions as to the persons in
whom the ownership of the ecclesiastical properties is vested,
with respect to which we shall, for our purpose, confine
ourselves to stating with Donoso that, while many doctors
cited by Fagnano believe that it resides in the Roman Pontiff
as Head of the Universal Church, it is more probable that
ownership, strictly speaking, does not reside in the latter, and,
FLORES 2S BE BETTER EVERYDAY 17
 consequently, ecclesiastical properties are owned by the
churches, institutions and canonically established private
corporations to which said properties have been donated.
Considering that nowhere can We find any provision conferring
ownership of church properties on the Pope although he appears to be
the supreme administrator or guardian of his flock, nor on the
corporation sole or heads of dioceses as they are admittedly
mere administrators of said properties, ownership of these
temporalities logically fall and develop upon the church, diocese or
congregation acquiring the same. Although this question of ownership
of ecclesiastical properties has off and on been mentioned in several
decisions of the Court yet in no instance was the subject of citizenship
of this religious society been passed upon.
JUSTICE PERFECTO ( DISSENTING OPINION) - Agustines
vs. Court of First Instance of Bulacan, "the Roman Catholic
Archbishop of Manila is only a branch of a universal church by the
Pope, with permanent residence in Rome, Italy". There is no question
that the Roman Catholic Church existing in the Philippines is a
tributary and part of the international religious organization, for the
word "Roman" clearly expresses its unity with and recognizes the
authority of the Pope in Rome. However, lest We become hasty in
drawing conclusions, We have to analyze and take note of the nature
of the government established in the Vatican City, of which it was said:
GOVERNMENT. In the Roman Catholic Church supreme authority
and jurisdiction over clergy and laity alike as held by the pope who
(since the Middle Ages) is elected by the cardinals assembled in
conclave, and holds office until his death or legitimate abdication. . .
While the pope is obviously independent of the laws made, and the
officials appointed, by himself or his predecessors, he usually
exercises his administrative authority according to the code of canon
law and through the congregations, tribunals and offices of the Curia
Romana. In their respective territories (called generally dioceses) and
over their respective subjects, the patriarchs, metropolitans or
archbishops and bishops exercise a jurisdiction which is called
ordinary (as attached by law to an office given to a person.
While it is true and We have to concede that in the profession of their
faith, the Roman Pontiff is the supreme head; that in the religious
matters, in the exercise of their belief, the Catholic congregation of
the faithful throughout the world seeks the guidance and direction of
their Spiritual Father in the Vatican, yet it cannot be said that there is
a merger of personalities resultant therein. Neither can it be said that
the political and civil rights of the faithful, inherent or acquired under
the laws of their country, are affected by that relationship with the
Pope. The fact that the Roman Catholic Church in almost every
country springs from that society that saw its beginning in Europe and
the fact that the clergy of this faith derive their authorities and receive
orders from the Holy See do not give or bestow the citizenship of the
Pope upon these branches.
Citizenship is a political right which cannot be acquired by a sort of
"radiation". We have to realize that although there is a fraternity
among all the catholic countries and the dioceses therein all over the
globe, the universality that the word "catholic" implies, merely
characterize their faith, a uniformity in the practice and the
interpretation of their dogma and in the exercise of their belief, but
certainly they are separate and independent from one another in
jurisdiction, governed by different laws under which they are
incorporated, and entirely independent on the others in the
management and ownership of their temporalities. To allow theory
that the Roman Catholic Churches all over the world follow the
citizenship of their Supreme Head, the Pontifical Father, would lead
to the absurdity of finding the citizens of a country who embrace the
Catholic faith and become members of that religious society, likewise
citizens of the Vatican or of Italy. And this is more so if We consider
that the Pope himself may be an Italian or national of any other
country of the world. The same thing be said with regard to the
nationality or citizenship of the corporation sole created under the
FLORES 2S BE BETTER EVERYDAY 18
laws of the Philippines, which is not altered by the change of
citizenship of the incumbent bishops or head of said corporation sole.
We must therefore, declare that although a branch of the Universal
Roman Catholic Apostolic Church, every Roman Catholic Church in
different countries, if it exercises its mission and is lawfully
incorporated in accordance with the laws of the country where it is
located, is considered an entity or person with all the rights and
privileges granted to such artificial being under the laws of that
country, separate and distinct from the personality of the Roman
Pontiff or the Holy See, without prejudice to its religious relations with
the latter which are governed by the Canon Law or their rules and
regulations.
"Friar Estates- already acquired by our government and not to
properties held by corporations sole which, are properties held in trust
for the benefit of the faithful residing within its territorial jurisdiction.
Though that same feeling probably precipitated and influenced to a
large extent the doctrine laid down in the celebrated Krivenco
decision, We have to take this matter in the light of legal provisions
and jurisprudence actually obtaining, irrespective of sentiments.
ANSWERING THE ISSUE
DATA GATHERED FROM SEC: Roman Catholic Bishop of
Zamboanga was incorporated (as a corporation sole) in September,
1912, principally to administer its temporalities and manage its
properties.
 Probably due to the ravages of the last war, its articles of
incorporation were reconstructed in the Securities and
Exchange Commission on April 8, 1948. At first, this
corporation sole administered all the temporalities of the
church existing or located in the island of Mindanao. Later on,
however, new dioceses were formed and new corporations
sole were created to correspond with the territorial jurisdiction
of the new dioceses, one of them being petitioner herein, the
Roman Catholic Apostolic Administrator of Davao, Inc.,
which was registered with the Securities and Exchange
Commission on September 12, 1950, and succeeded in the
administrative for all the "temporalities" of the Roman
Catholic Church existing in Davao.
Corporation Law, Public Act No. 1549, approved April 1, 1906 - a
corporation sole. is organized and composed of a single individual, the
head of any religious society or church, for the
ADMINISTRATION of the temporalities of such society or church. *
 By "temporalities" is meant estate and properties not used
exclusively for religious worship. The successor in office of
such religious head or chief priest incorporated as a
corporation sole shall become the corporation sole on
ascension to office, and shall be permitted to transact business
as such on filing with the Securities and Exchange
Commission a copy of his commission, certificate of election
or letter of appointment duly certified by any notary public or
clerk of court of record.
CORPORATION LAW (PROVISIONS): SECTION 159. Any
corporation sole may purchase and hold real estate and personal;
property for its church, charitable, benevolent, or educational
purposes, and may receive bequests or gifts of such purposes.
Such corporation may mortgage or sell real property held by it
upon obtaining an order for that purpose from the Court of First
Instance of the province in which the property is situated; but
before making the order proof must be made to the satisfaction of
the Court that notice of the application for leave to mortgage or
sell has been given by publication or otherwise in such manner
and for such time as said Court or the Judge thereof may have
directed, and that it is to the interest of the corporation that leave
to mortgage or sell must be made by petition, duly verified by the
bishop, chief priest, or presiding elder acting as corporation sole,
FLORES 2S BE BETTER EVERYDAY 19
 and may be opposed by any member of the religious
denomination, society or church represented by the corporation
sole: Provided, however, That in cases where the rules,
regulations, and discipline of the religious denomination, society
or church concerned represented by such corporation sole
regulate the methods of acquiring, holding, selling and
mortgaging real estate and personal property, such rules,
regulations, and discipline shall control and the intervention of
the Courts shall not be necessary.
NOTE: the power of a corporation sole to purchase real property, like
the power exercised in the case at bar, it is not restricted although the
power to sell or mortgage sometimes is, depending upon the rules,
regulations, and discipline of the church concerned represented by said
corporation sole.
If corporations sole can purchase and sell real estate for its
church, charitable, benevolent, or educational purposes, can they
register said real properties? As provided by law, lands held in trust
for specific purposes me be subject of registration (section 69, Act
496), and the capacity of a corporation sole, like petitioner herein, to
register lands belonging to it is acknowledged, and title thereto may
be issued in its name (Bishop of Nueva Segovia vs. Insular
Government).
Indeed it is absurd that while the corporations sole that might be in
need of acquiring lands for the erection of temples where the faithful
can pray, or schools and cemeteries which they are expressly
authorized by law to acquire in connection with the propagation of the
Roman Catholic Apostolic faith or in furtherance of their freedom of
religion they could not register said properties in their name.
 Under the circumstances of this case, We might safely state
that even before the establishment of the Philippine
Commonwealth and of the Republic of the Philippines every
corporation sole then organized and registered had by express
provision of law the necessary power and qualification to
purchase in its name private lands located in the territory in
which it exercised its functions or ministry and for which it
was created, independently of the nationality of its incumbent
unique and single member and head, the bishop of the
dioceses. It can be also maintained without fear of being
gainsaid that the Roman Catholic Apostolic Church in the
Philippines has no nationality and that the framers of the
Constitution, as will be hereunder explained, did not have in
mind the religious corporations sole when they provided that
60 per centum of the capital thereof be owned by Filipino
citizens.
There could be no controversy as to the fact that a duly registered
corporation sole is an artificial being having the right of succession
and the power, attributes, and properties expressly authorized by
law or incident to its existence (section 1, Corporation Law). In
outlining the general powers of a corporation. Public Act. No. 1459
provides among others:
SEC. 13. Every corporation has the power:
(5) To purchase, hold, convey, sell, lease, lot, mortgage,
encumber, and otherwise deal with such real and personal
property as the purpose for which the corporation was formed
may permit, and the transaction of the lawful business of the
corporation may reasonably and necessarily require, unless
otherwise prescribed in this Act: . . .
In implementation of the same and specially made applicable to a
form of corporation recognized by the same law, Section 159
expressly allowed the corporation sole to purchase and hold real
as well as personal properties necessary for the promotion of the
objects for which said corporation sole is created. Respondent
Land Registration Commissioner, however, maintained that since
the Philippine Constitution is a later enactment than public Act
FLORES 2S BE BETTER EVERYDAY 20
No. 1459, the provisions of Section 159 in amplification of Section
13 thereof, as regard real properties, should be considered
repealed by the former.
There is a reason to believe that when the specific provision of the
Constitution invoked by respondent Commissioner was under
consideration, the framers of the same did not have in mind or
overlooked this particular form of corporation. It is undeniable
that the naturalization and conservation of our national resources
was one of the dominating objectives of the Convention and in
drafting the present Article XII of the Constitution, the delegates
were goaded by the desire (1) to insure their conservation for
Filipino posterity; (2) to serve as an instrument of national
defense, helping prevent the extension into the country of foreign
control through peaceful economic penetration; and (3) to prevent
making the Philippines a source of international conflicts with the
consequent danger to its internal security and independence
DELAGATE ARUEGO ( CONCOM): At the time of the framing of
Philippine Constitution, Filipino capital had been to be rather shy.
Filipinos hesitated as a general rule to invest a considerable sum of
their capital for the development, exploitation and utilization of the
natural resources of the country. They had not as yet been so used to
corporate as the peoples of the west. This general apathy, the
delegates knew, would mean the retardation of the development of the
natural resources, unless foreign capital would be encouraged to
come and help in that development. They knew that the naturalization
of the natural resources would certainly not encourage
the INVESTMENT OF FOREIGN CAPITAL into them. But there was
a general feeling in the Convention that it was better to have such a
development retarded or even postpone together until such time when
the Filipinos would be ready and willing to undertake it rather than
permit the natural resources to be placed under the ownership or
control of foreigners in order that they might be immediately be
developed, with the Filipinos of the future serving not as owners but
utmost as tenants or workers under foreign masters. By all means, the
delegates believed, the natural resources should be conserved for
Filipino posterity.
FRAMERS OF THE CONSTITUTION: intended said provisions
as barrier for foreigners or corporations financed by such foreigners to
acquire, exploit and develop our natural resources, saving these
undeveloped wealth for our people to clear and enrich when they are
already prepared and capable of doing so.
 But that is not the case of corporations sole in the Philippines,
for, We repeat, they are mere administrators of the
"temporalities" or properties titled in their name and for
the benefit of the members of their respective religion
composed of an overwhelming majority of Filipinos. No
mention nor allusion whatsoever is made in the
Constitution as to the prohibition against or the liability of
the Roman Catholic Church in the Philippines to acquire
and hold agricultural lands. Although there were some
discussions on landholdings, they were mostly confined in
the inclusion of the provision allowing the Government to
break big landed estates to put an end to absentee
landlordism.
Assuming arguendo: that the above referred to inhibitory clause of
Section 1 of Article XIII of the constitution does have bearing on the
petitioner's case; even so the clause requiring that at least 60 per
centum of the capital of the corporation be owned by Filipinos is
subordinated to the petitioner's aforesaid right already existing at the
time of the inauguration of the Commonwealth and the Republic of
the Philippines. In the language of Mr. Justice Jose P. Laurel (a
delegate to the Constitutional Convention), in his concurring opinion
of the case of Gold Creek mining Corporation, petitioner vs. Eulogio
Rodriguez, Secretary of Agriculture and Commerce, and Quirico
Abadilla, Director of the Bureau of Mines, respondent, 66 Phil. 259:
FLORES 2S BE BETTER EVERYDAY 21
 The saving clause in the section involved of the Constitution
was originally embodied in the report submitted by the
Committee on Naturalization and Preservation of Land and
Other Natural Resources to the Constitutional Convention on
September 17, 1954. It was later inserted in the first draft of
the Constitution as section 13 of Article XIII thereof, and
finally incorporated as we find it now. Slight have been the
changes undergone by the proviso from the time when it
comes out of the committee until it was finally adopted. When
first submitted and as inserted to the first draft of the
Constitution it reads: 'subject to any right, grant, lease, or
concession existing in respect thereto on the date of the
adoption of the Constitution'. As finally adopted, the proviso
reads: 'subject to any existing right, grant, lease, or
concession at the time of the inauguration of the Government
established under this Constitution'. This recognition is not
mere graciousness but springs form the just character of the
government established. The framers of the Constitution were
not obscured by the rhetoric of democracy or swayed to
hostility by an intense spirit of nationalism. They well knew
that conservation of our natural resources did not mean
destruction or annihilation of acquired property rights.
Withal, they erected a government neither episodic nor
stationary but well-nigh conservative in the protection of
property rights. This notwithstanding nationalistic and
socialistic traits discoverable upon even a sudden dip into a
variety of the provisions embodied in the instrument.
The writer of this decision wishes to state at this juncture that during
the deliberation of this case he submitted to the consideration of the
Court the question that may be termed the "vested right saving clause"
contained in Section 1, Article XII of the Constitution, but some of the
members of this Court either did not agree with the theory of the
writer, or were not ready to take a definite stand on the particular point
I am now to discuss deferring our ruling on such debatable question
for a better occasion, inasmuch as the determination thereof is not
absolutely necessary for the solution of the problem involved in this
case. In his desire to face the issues squarely, the writer will endeavor,
at least as a disgression, to explain and develop his theory, not as a
lucubration of the Court, but of his own, for he deems it better and
convenient to go over the cycle of reasons that are linked to one
another and that step by step lead Us to conclude as We do in the
dispositive part of this decision.
It will be noticed that Section 1 of Article XIII of the Constitution
provides, among other things, that "all agricultural lands of the public
domain and their disposition shall be limited to citizens of the
Philippines or to corporations at least 60 per centum of the capital of
which is owned by such citizens, SUBJECT TO ANY EXISTING
RIGHT AT THE TIME OF THE INAUGURATION OF THE
GOVERNMENT ESTABLISHED UNDER THIS
CONSTITUTION."
As recounted by Mr. Justice Laurel in the aforementioned case of
Gold Creek Mining Corporation vs. Rodriguez et al., 66 Phil. 259,
"this recognition (in the clause already quoted), is not mere
graciousness but springs from the just character of the government
established. The farmers of the Constitution were not obscured by
the rhetoric of democracy or swayed to hostility by an intense spirit
of nationalism. They well knew that conservation of our natural
resources did not mean destruction or annihilation of ACQUIRED
PROPERTY RIGHTS".
But respondents' counsel may argue that the preexisting right of
acquisition of public or private lands by a corporation which does not
fulfill this 60 per cent requisite, refers to purchases of the Constitution
and not to later transactions. This argument would imply that even
assuming that petitioner had at the time of the enactment of the
Constitution the right to purchase real property or right could not be
exercised after the effectivity of our Constitution, because said power
or right of corporations sole, like the herein petitioner, conferred in
virtue of the aforequoted provisions of the Corporation Law, could no
FLORES 2S BE BETTER EVERYDAY 22
longer be exercised in view of the requisite therein prescribed that at
least 60 per centum of the capital of the corporation had to be Filipino.
It has been shown before that: (1) the corporation sole, unlike the
ordinary corporations which are formed by no less than 5
incorporators, is composed of only one persons, usually the head or
bishop of the diocese, a unit which is not subject to expansion for the
purpose of determining any percentage whatsoever; (2) the
corporation sole is only the administrator and not the owner of the
temporalities located in the territory comprised by said corporation
sole; (3) such temporalities are administered for and on behalf of the
faithful residing in the diocese or territory of the corporation sole; and
(4) the latter, as such, has no nationality and the citizenship of the
incumbent Ordinary has nothing to do with the operation, management
or administration of the corporation sole, nor effects the citizenship of
the faithful connected with their respective dioceses or corporation
sole.
In view of these peculiarities of the corporation sole, it would seem
obvious that when the specific provision of the Constitution invoked
by respondent Commissioner (section 1, Art. XIII), was under
consideration, the framers of the same did not have in mind or
overlooked this particular form of corporation. If this were so, as the
facts and circumstances already indicated tend to prove it to be so, then
the inescapable conclusion would be that this requirement of at least
60 per cent of Filipino capital was never intended to apply to
corporations sole, and the existence or not a vested right becomes
unquestionably immaterial.
ASSUMING ARGUENDO: the questioned proviso is material. yet
We might say that a reading of said Section 1 will show that it does
not refer to any actual acquisition of land up to the right, qualification
or power to acquire and hold private real property. The population of
the Philippines, Catholic to a high percentage, is ever increasing. In
the practice of religion of their faithful the corporation sole may be in
need of more temples where to pray, more schools where the children
of the congregation could be taught in the principles of their religion,
more hospitals where their sick could be treated, more hallow or
consecrated grounds or cemeteries where Catholics could be buried,
many more than those actually existing at the time of the enactment of
our Constitution.
This being the case, could it be logically maintained that because the
corporation sole which, by express provision of law, has the power to
hold and acquire real estate and personal property of its churches,
charitable benevolent, or educational purposes (section 159,
Corporation Law) it has to stop its growth and restrain its necessities
just because the corporation sole is a non-stock corporation composed
of only one person who in his unity does not admit of any percentage,
especially when that person is not the owner but merely an
administrator of the temporalities of the corporation sole? The writer
leaves the answer to whoever may read and consider this portion of
the decision.
Anyway, as stated before, this question is not a decisive factor in
disposing the case, for even if We were to disregard such saving clause
of the Constitution, which reads: subject to any existing right, grant,
etc., at the same time of the inauguration of the Government
established under this Constitution, yet We would have, under the
evidence on record, sufficient grounds to uphold petitioner's
contention on this matter.
In this case of the Register of Deeds of Rizal vs. Ung Sui Si Temple
wherein this question was considered from a different angle, this Court
through Mr. Justice J.B.L. Reyes, said:
The fact that the appellant religious organization has no
capital stock does not suffice to escape the Constitutional
inhibition, since it is admitted that its members are of foreign
nationality. The purpose of the sixty per centum requirement
is obviously to ensure that corporation or associations allowed
to acquire agricultural land or to exploit natural resources shall
FLORES 2S BE BETTER EVERYDAY 23
 be controlled by Filipinos; and the spirit of the Constitution
demands that in the absence of capital stock, the controlling
membership should be composed of Filipino citizens.
In that case respondent-appellant Ung Siu Si Temple was not a
corporation sole but a corporation aggregate, i.e., an unregistered
organization operating through 3 trustees, all of Chinese nationality,
and that is why this Court laid down the doctrine just quoted. With
regard to petitioner, which likewise is a non-stock corporation, the
case is different, because it is a registered corporation sole, evidently
of no nationality and registered mainly to administer the temporalities
and manage the properties belonging to the faithful of said church
residing in Davao. But even if we were to go over the record to inquire
into the composing membership to determine whether the citizenship
requirement is satisfied or not, we would find undeniable proof that
the members of the Roman Catholic Apostolic faith within the
territory of Davao are predominantly Filipino citizens. As indicated
before, petitioner has presented evidence to establish that the clergy
and lay members of this religion fully covers the percentage of Filipino
citizens required by the Constitution. These facts are not controverted
by respondents and our conclusion in this point is sensibly obvious.
Of course We fully agree, as stated by Professor Aruego, that the
framers of our Constitution had at heart to insure the conservation of
the natural resources of Our motherland of Filipino posterity; to serve
them as an instrument of national defense, helping prevent the
extension into the country of foreign control through peaceful
economic penetration; and to prevent making the Philippines a source
of international conflicts with the consequent danger to its internal
security and independence. But all these precautions adopted by the
Delegates to Our Constitutional Assembly could have not been
intended for or directed against cases like the one at bar.
The emphasis and wonderings on the statement that once the capacity
of a corporation sole to acquire private agricultural lands is admitted
there will be no limit to the areas that it may hold and that this will
pave the way for the "revival or revitalization of religious landholdings
that proved so troublesome in our past", cannot even furnish the
"penumbra" of a threat to the future of the Filipino people. In the first
place, the right of Filipino citizens, including those of foreign
extraction, and Philippine corporations, to acquire private lands is not
subject to any restriction or limit as to quantity or area, and We
certainly do not see any wrong in that. The right of Filipino citizens
and corporations to acquire public agricultural lands is already limited
by law. In the second place, corporations sole cannot be considered as
aliens because they have no nationality at all. Corporations sole are,
under the law, mere administrators of the temporalities of the Roman
Catholic Church in the Philippines. In the third place, every
corporation, be it aggregate or sole, is only entitled to purchase,
convey, sell, lease, let, mortgage, encumber and otherwise deal with
real properties when it is pursuant to or in consonance with the
purposes for which the corporation was formed, and when the
transactions of the lawful business of the corporation reasonably and
necessarily require such dealing — section 13-(5) of the Corporation
Law, Public Act No. 1459 — and considering these provisions in
conjunction with Section 159 of the same law which provides that a
corporation sole may only "purchase and hold real estate and personal
properties for its church, charitable, benevolent or educational
purposes", the above mentioned fear of revitalization of religious
landholdings in the Philippines is absolutely dispelled. The fact that
the law thus expressly authorizes the corporations sole to receive
bequests or gifts of real properties (which were the main source that
the friars had to acquire their big haciendas during the Spanish
regime), is a clear indication that the requisite that bequests or gifts of
real estate be for charitable, benevolent, or educational purposes, was,
in the opinion of the legislators, considered sufficient and adequate
protection against the revitalization of religious landholdings.
Finally, and as previously stated, We have reason to believe that when
the Delegates to the Constitutional Convention drafted and approved
Article XIII of the Constitution they do not have in mind the
corporation sole. We come to this finding because the Constitutional
FLORES 2S BE BETTER EVERYDAY 24
Assembly, composed as it was by a great number of eminent lawyers
and jurists, was like any other legislative body empowered to enact
either the Constitution of the country or any public statute, presumed
to know the conditions existing as to particular subject matter when it
enacted a statute (Board of Commerce of Orange Country vs. Bain, 92
S.E. 176; N. C. 377).
The Legislative is presumed to have a knowledge of the state
of the law on the subjects upon which it legislates. (Clover
Valley Land and Stock Co. vs. Lamb et al., 187, p. 723,726.)
The Court in construing a statute, will assume that the
legislature acted with full knowledge of the prior legislation
on the subject and its construction by the courts. (Johns vs.
Town of Sheridan, 89 N. E. 899, 44 Ind. App. 620.).
The Legislature is presumed to know principles of statutory
construction. (People vs. Lowell, 230 N. W. 202, 250 Mich.
349, followed in P. vs. Woodworth, 230 N.W. 211, 250 Mich.
436.).
Consequently, the Constitutional Assembly must have known:
1. That a corporation sole is organized by and composed of
a single individual, the head of any religious society or church
operating within the zone, area or jurisdiction covered by said
corporation sole (Article 155, Public Act No. 1459);
2. That a corporation sole is a non-stock corporation;
3. That the Ordinary ( the corporation sole proper) does not
own the temporalities which he merely administers;
4. That under the law the nationality of said Ordinary or of
any administrator has absolutely no bearing on the nationality
of the person desiring to acquire real property in the
Philippines by purchase or other lawful means other than by
hereditary succession, who according to the Constitution must
be a Filipino (sections 1 and 5, Article XIII).
5. That section 159 of the Corporation
Law expressly authorized the corporation sole to purchase
and hold real estate for its church, charitable, benevolent or
educational purposes, and to receive bequests or gifts for such
purposes;
6. That in approving our Magna Carta the Delegates to the
Constitutional Convention, almost all of whom were Roman
Catholics, could not have intended to curtail the propagation
of the Roman Catholic faith or the expansion of the activities
of their church, knowing pretty well that with the growth of
our population more places of worship, more schools where
our youth could be taught and trained; more hallow grounds
where to bury our dead would be needed in the course of time.
Long before the enactment of our Constitution the law authorized the
corporations sole even to receive bequests or gifts of real estates and
this Court could not, without any clear and specific provision of the
Constitution, declare that any real property donated, let as say this
year, could no longer be registered in the name of the corporation sole
to which it was conveyed. That would be an absurdity that should not
receive our sanction on the pretext that corporations sole which have
no nationality and are non-stock corporations composed of only one
person in the capacity of administrator, have to establish first that at
least sixty per centum of their capital belong to Filipino citizens. The
new Civil Code even provides:
ART. 10. — In case of doubt in the interpretation or
application of laws, it is presumed that the lawmaking body
intended right and justice to prevail.
FLORES 2S BE BETTER EVERYDAY 25
 Moreover, under the laws of the Philippines, the administrator
of the properties of a Filipino can acquire, in the name of the
latter, private lands without any limitation whatsoever, and that
is so because the properties thus acquired are not for and would
not belong to the administrator but to the Filipino whom he
represents. But the dissenting Justice inquires: If the Ordinary
is only the administrator, for whom does he administer? And
who can alter or overrule his acts? We will forthwith proceed
to answer these questions. The corporations sole by reason of
their peculiar constitution and form of operation have no
designed owner of its temporalities, although by the terms of
the law it can be safely implied that the Ordinary holds them in
trust for the benefit of the Roman Catholic faithful to their
respective locality or diocese. Borrowing the very words of the
law, We may say that the temporalities of every corporation
sole are held in trust for the use, purpose, behalf and benefit of
the religious society, or order so incorporated or of the church
to which the diocese, synod, or district organization is an
organized and constituent part (section 163 of the Corporation
Law).
In connection with the powers of the Ordinary over the temporalities
of the corporation sole, let us see now what is the meaning and scope
of the word "control". According to the Merriam-Webster's New
International Dictionary, 2nd ed., p. 580, on of the acceptations of the
word "control" is:
4. To exercise restraining or directing influence over; to
dominate; regulate; hence, to hold from action; to curb;
subject; also, Obs. — to overpower.
SYN: restrain, rule, govern, guide, direct; check, subdue.
It is true that under section 159 of the Corporation Law, the
intervention of the courts is not necessary, to mortgage or sell real
property held by the corporation sole where the rules, regulations and
discipline of the religious denomination, society or church concerned
presented by such corporation sole regulates the methods of acquiring,
holding, selling and mortgaging real estate, and that the Roman
Catholic faithful residing in the jurisdiction of the corporation sole has
no say either in the manner of acquiring or of selling real property. It
may be also admitted that the faithful of the diocese cannot govern or
overrule the acts of the Ordinary, but all this does not mean that the
latter can administer the temporalities of the corporation sole without
check or restraint. We must not forget that when a corporation sole is
incorporated under Philippine laws, the head and only member thereof
subjects himself to the jurisdiction of the Philippine courts of justice
and these tribunals can thus entertain grievances arising out of or with
respect to the temporalities of the church which came into the
possession of the corporation sole as administrator. It may be alleged
that the courts cannot intervene as to the matters of doctrine or
teachings of the Roman Catholic Church. That is correct, but the courts
may step in, at the instance of the faithful for whom the temporalities
are being held in trust, to check undue exercise by the corporation sole
of its power as administrator to insure that they are used for the
purpose or purposes for which the corporation sole was created.
American authorities have these to say:
It has been held that the courts have jurisdiction over an
action brought by persons claiming to be members of a
church, who allege a wrongful and fraudulent diversion of the
church property to uses foreign to the purposes of the church,
since no ecclesiastical question is involved and equity will
protect from wrongful diversion of the property (Hendryx vs.
Peoples United Church, 42 Wash. 336, 4 L.R.A. — n.s. —
1154).
The courts of the State have no general jurisdiction and
control over the officers of such corporations in respect to the
performance of their official duties; but as in respect to the
property which they hold for the corporation, they stand in
FLORES 2S BE BETTER EVERYDAY 26
 position of TRUSTEES and the courts may exercise the same
supervision as in other cases of trust (Ramsey vs. Hicks, 174
Ind. 428, 91 N.E. 344, 92 N.E. 164, 30 L.R.A. — n.s. — 665;
Hendryx vs. Peoples United Church, supra.).
Courts of the state do not interfere with the administration of
church rules or discipline unless civil rights become involved
and which must be protected (Morris St., Baptist Church vs.
Dart, 67 S.C. 338, 45 S.E. 753, and others). (All cited in Vol.
II, Cooley's Constitutional Limitations, p. 960-964.).
It seems from the foregoing that the main problem We are
confronted with in this appeal, hinges around the necessity of a
proper and adequate interpretation of sections 1 and 5 of Article
XIII of the Constitution.
STATCON: The most important single factor in determining the
intention of the people from whom the constitution emanated is the
language in which it is expressed. The words employed are to be taken
in their natural sense, except that legal or technical terms are to be
given their technical meaning. The imperfections of language as a
vehicle for conveying meanings result in ambiguities that must be
resolved by result to extraneous aids for discovering the intent of the
framers. Among the more important of these are a consideration of the
history of the times when the provision was adopted and of the
purposes aimed at in its adoption. The debates of constitutional
convention, contemporaneous construction, and practical construction
by the legislative and executive departments, especially if long
continued, may be resorted to resolve, but not to create, ambiguities. .
. . Consideration of the consequences flowing from alternative
constructions of doubtful provisions constitutes an important
interpretative device. . . . The purposes of many of the broadly phrased
constitutional limitations were the promotion of policies that do not
lend themselves to definite and specific formulation. The courts have
had to define those policies and have often drawn on natural law and
natural rights theories in doing so. The interpretation of constitutions
tends to respond to changing conceptions of political and social values.
The extent to which these extraneous aids affect the judicial
construction of constitutions cannot be formulated in precise rules, but
their influence cannot be ignored in describing the essentials of the
process (Rottschaeffer on Constitutional Law, 1939 ed., p. 18-19).
There are times that when even the literal expression of legislation
may be inconsistent with the general objectives of policy behind it,
and on the basis of equity or spirit of the statute the courts rationalize
a restricted meaning of the latter. A restricted interpretation is usually
applied where the effect of literal interpretation will make for injustice
and absurdity or, in the words of one court, the language must be so
unreasonable 'as to shock general common sense'. (Vol. 3, Sutherland
on Statutory Construction, 3rd ed., 150.).
A constitution is not intended to be a limitation on the development of
a country nor an obstruction to its progress and foreign relations
(Moscow Fire Ins. Co. of Moscow, Russia vs. Bank of New York and
Trust Co., 294 N. Y. S.648; 56 N.E. 2d. 745, 293 N.Y. 749).
Although the meaning or principles of a constitution remain fixed and
unchanged from the time of its adoption, a constitution must be
construed as if intended to stand for a great length of time, and it is
progressive and not static. Accordingly, it should not receive too
narrow or literal an interpretation but rather the meaning given it
should be applied in such manner as to meet new or changed
conditions as they arise (U.S. vs. Lassic, 313 U.S. 299, 85 L. Ed.,
1368).
Effect should be given to the purpose indicated by a fair interpretation
of the language used and that construction which effectuates, rather
than that which destroys a plain intent or purpose of a constitutional
provision, is not only favored but will be adopted (State ex rel.
Randolph Country vs. Walden, 206 S.W. 2d 979).
FLORES 2S BE BETTER EVERYDAY 27
It is quite generally held that in arriving at the intent and purpose the
construction should be broad or liberal or equitable, as the better
method of ascertaining that intent, rather than technical (Great
Southern Life Ins. Co. vs. City of Austin, 243 S.W. 778).
All these authorities uphold our conviction that the framers of the
Constitution had not in mind the corporations sole, nor intended
to apply them the provisions of section 1 and 5 of said Article XIII
when they passed and approved the same. And if it were so as We
think it is, herein petitioner, the Roman Catholic Apostolic
Administrator of Davao, Inc., could not be deprived of the right to
acquire by purchase or donation real properties for charitable,
benevolent and educational purposes, nor of the right to register
the same in its name with the Register of Deeds of Davao, an
indispensable requisite prescribed by the Land Registration Act for
lands covered by the Torrens system.
VESTED RIGHT SAVING CLAUSE
VESTED RIGHT - . It is “the privilege to enjoy property
legally vested, to enforce contracts, and enjoy the rights of property
conferred by existing law”
"the vested right saving clause" contained in section 1, Article XIII of
the Constitution. The dissenting Justice hurls upon the personal
opinion expressed on the matter by the writer of the decision the most
pointed darts of his severe criticism. We think, however, that this
strong dissent should have been spared, because as clearly indicated
before, some members of this Court either did not agree with the
theory of the writer or were not ready to take a definite stand on that
particular point, so that there being no majority opinion thereon there
was no need of any dissension therefrom. But as the criticism has been
made the writer deems it necessary to say a few words of explanation.
The writer fully agrees with the dissenting Justice that ordinarily "a
capacity to acquire (property) in futuro, is not in itself a vested or
existing property right that the Constitution protects from impairment.
For a property right to be vested (or acquired) there must be a
transition from the potential or contingent to the actual, and the
proprietary interest must have attached to a thing; it must have become
'fixed and established'" (Balboa vs. Farrales, 51 Phil. 498). But the
case at bar has to be considered as an exception to the rule because
among the rights granted by section 159 of the Corporation Law was
the right to receive bequests or gifts of real properties for charitable,
benevolent and educational purposes. And this right to receive such
bequests or gifts (which implies donations in futuro), is not a mere
potentiality that could be impaired without any specific provision in
the Constitution to that effect, especially when the impairment would
disturbingly affect the propagation of the religious faith of the
immense majority of the Filipino people and the curtailment of the
activities of their Church. That is why the writer gave us a basis of his
contention what Professor Aruego said in his book "The Framing of
the Philippine Constitution" and the enlightening opinion of Mr.
Justice Jose P. Laurel, another Delegate to the Constitutional
Convention, in his concurring opinion in the case of Goldcreek Mining
Co. vs. Eulogio Rodriguez et al., 66 Phil. 259. Anyway the majority
of the Court did not deem necessary to pass upon said "vested right
saving clause" for the final determination of this case.
JUDGMENT
Wherefore, the resolution of the respondent Land Registration
Commission of September 21, 1954, holding that in view of the
provisions of sections 1 and 5 of Article XIII of the Philippine
Constitution the vendee (petitioner) is not qualified to acquire lands in
the Philippines in the absence of proof that at least 60 per centum of
the capital, properties or assets of the Roman Catholic Apostolic
Administrator of Davao, Inc. is actually owned or controlled by
Filipino citizens, and denying the registration of the deed of sale in the
absence of proof of compliance with such requisite, is hereby reversed.
Consequently, the respondent Register of Deeds of the City of Davao
is ordered to register the deed of sale executed by Mateo L. Rodis in
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favor of the Roman Catholic Apostolic Administrator of Davao, Inc.,
which is the subject of the present litigation.
TOPIC: Donation in favor of a religious corporation controlled
by non-Filipinos non registrable
Register of Deeds of Rizal v. Ung Sui Si Temple
To permit religious associations controlled by non-Filipinos to
acquire agricultural lands would be to drive the opening wedge to
revive alien religious land holdings in this country. We can not
ignore the historical fact that complaints against land holdings of
that kind were among the factors that sparked the revolution of
1896.
FACTUAL ANTECEDENTS
 The Register of Deeds for the province of Rizal refused to
accept for record a deed of donation executed in due form on
January 22, 1953, by Jesus Dy, a Filipino citizen, conveying
a parcel of residential land, in Caloocan, Rizal, in favor of the
unregistered religious organization "Ung Siu Si Temple",
operating through three trustees all of Chinese nationality.
 The donation was duly accepted by Yu Juan, of Chinese
nationality, founder and deaconess of the Temple, acting in
representation and in behalf of the latter and its trustees.
CFI - upheld the action of the Rizal Register of Deeds.
The question raised by the Register of Deeds in the above transcribed
consulta is whether a deed of donation of a parcel of land executed
in favor of a religious organization whose founder, trustees and
administrator are Chinese citizens should be registered or not.
COURT’S DISCUSSION
CONTENTIONS OF THE DONEE: (1) that the acquisition of the
land in question, for religious purposes, is authorized and permitted by
Act No. 271 of the old Philippine Commission, providing as follows:
SECTION 1. It shall be lawful for all religious associations,
of whatever sort or denomination, whether incorporated in the
Philippine Islands or in the name of other country, or not
incorporated at all, to hold land in the Philippine Islands upon
which to build churches, parsonages, or educational or
charitable institutions.
SEC. 2. Such religious institutions, if not incorporated, shall
hold the land in the name of three Trustees for the use of such
associations; . . .. (Printed Rec. App. p. 5.)
and (2) that the refusal of the Register of Deeds violates the freedom
of religion clause of our Constitution [Art. III, Sec. 1(7)].
We are of the opinion that the Court below has correctly held that
in view of the absolute terms of section 5, Title XIII, of the
Constitution, the provisions of Act No. 271 of the old Philippine
Commission must be deemed repealed since the Constitution was
enacted, in so far as incompatible therewith. In providing 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 Constitution makes no exception in favor of
religious associations. Neither is there any such saving found
in sections 1 and 2 of Article XIII, restricting the acquisition
of public agricultural lands and other natural resources to
"corporations or associations at least sixty per centum of the
FLORES 2S BE BETTER EVERYDAY 29
 capital of which is owned by such citizens" (of the
Philippines).
NOTE: The fact that the appellant religious organization has no
capital stock does not suffice to escape the Constitutional inhibition,
since it is admitted that its members are of foreign nationality.
Purpose of the sixty per centum requirement: to ensure that
corporations or associations allowed to acquire agricultural land or to
exploit natural resources shall be controlled by Filipinos; and the spirit
of the Constitution demands that in the absence of capital stock, the
controlling membership should be composed of Filipino citizens.
To permit religious associations controlled by non-Filipinos to
acquire agricultural lands would be to drive the opening wedge to
revive alien religious land holdings in this country. We can not
ignore the historical fact that complaints against land holdings of
that kind were among the factors that sparked the revolution of
1896.
As to the complaint that the disqualification under article XIII is
violative of the freedom of religion guaranteed by Article III of the
Constitution, we are by no means convinced (nor has it been shown)
that land tenure is indispensable to the free exercise and enjoyment of
religious profession or worship; or that one may not worship the Deity
according to the dictates of his own conscience unless upon land held
in fee simple.
Costs against appellant.
TOPIC: Land sold to an alien which is now in the hands of a
Filipino may no longer be annulled.
De Castro v. Tan Gr. No. L- 31956
If the ban on aliens from acquiring not only agricultural but also
urban lands, as construed by this Court in the Krivenko case, is to
preserve the nation's lands for future generations of Filipinos, that
aim or purpose would not be thwarted but achieved by making
lawful the acquisition of real estate by aliens who became Filipino
citizens by naturalization.
FACTUAL ANTECEDENTS
 In 1938, petitioner Filomena Gerona de Castro sold a 1,258
sq. m. residential lot in Bulan, Sorsogon to Tan Tai, a Chinese.
Hiap, and children Joaquin Teng Queen Tan, Tan Teng Bio,
Dolores Tan and Rosario Tan Hua Ing.
 Before the death of Tan Tai or on August 11, 1956, one of his
sons, Joaquin, became a naturalized Filipino. Six years after
Tan Tai's death, or on November 18, 1962, his heirs executed
an extra-judicial settlement of estate with sale, whereby the
disputed lot in its entirety was allotted to Joaquin.
 On July 15, 1968, petitioner commenced suit against the heirs
of Tan Tai for annulment of the sale for alleged violation of
the 1935 Constitution prohibiting the sale of land to aliens.
 Except for respondent Tan Teng Bio who filed an answer to
the complaint, respondents moved to dismiss the complaint on
the grounds of (a) lack of cause of action, the plaintiff being
in pari delicto with the vendee, and the land being already
owned by a Philippine citizen; (b) laches; and (c) acquisitive
prescription.
TRIAL COURT – DISMISSED THE COMPLAINT
COURT’S DICUSSION
 Independently of the doctrine of pari delicto, the petitioner
cannot have the sale annulled and recover the lot she herself
has sold. While the vendee was an alien at the time of the sale,
the land has since become the property, of respondent Joaquin
FLORES 2S BE BETTER EVERYDAY 30
 Teng, a naturalized Philippine citizen, who is constitutionally
qualified to own land.
... The litigated property is now in the hands of a naturalized Filipino.
It is no longer owned by a disqualified vendee. Respondent, as a
naturalized citizen, was constitutionally qualified to own the subject
property. There would be no more public policy to be served in
allowing petitioner Epifania to recover the land as it is already in the
hands of a qualified person.
Vasquez vs. Giap and Li Seng Giap & Sons:
... if the ban on aliens from acquiring not only agricultural but also
urban lands, as construed by this Court in the Krivenko case, is to
preserve the nation's lands for future generations of Filipinos, that aim
or purpose would not be thwarted but achieved by making lawful the
acquisition of real estate by aliens who became Filipino citizens by
naturalization.
Laches also militates against petitioner's cause. She sold the disputed
lot in 1938. She instituted the action to annul the sale only on July 15,
1968.
LACHES - the failure or neglect for an unreasonable and
unexplained length of time, to do that which by exercising due
diligence could or should have been done earlier; it is negligence
or omission to assert a right within a reasonable time, warranting
a presumption that the party entitled to assert it either has
abandoned it or declined to assert it
SOTTO v. TEVES - petitioner Epifania had slept on her rights for
26 years from 1936 to 1962. By her long inaction of inexcusable
neglect, she should be held barred from asserting her claim to the
litigated property Respondent, therefore, must be declared to be the
rightful owner of the property.
REPUBLIC v. IAC and GONZALES G.R. No. 74170
The Trial Court's description of the factual background is largely
undisputed. The case principally concerns Chua Kim @ Uy Teng Be,
who became a naturalized Filipino citizen, taking his oath as such, on
January 7,1977. He was the adopted son of Gregorio Reyes Uy Un.
The case involved three (3) parcels of land (quezon province) , which
were among those included in Land Registration Cases These were
respectively adjudicated in said land registration cases to two persons,
as follows:
1) Lots 1 and 2, Psu-57676, to the Spouses Benigno Mañosca and Julia
Daguison (in Opposition No. 51 ); and
2) Lot 549, AP-7521 (Psu-54565), to Gaspar Marquez, married to
Marcela Masaganda (in opposition No. 155). However, no decree of
confirmation and registration was entered at the time.
Lots 1 and 2, Psu-57676, were sold by the owners, the Mañosca
Spouses, to Gregorio Reyes Uy Un on Dec. 30, 1934. Lot 549, Psu-
54565, was also sold by the Marquez Spouses to Gregorio Reyes Uy
Un on December 27, 1934.
Subsequently, Gregorio Reyes Uy Un died, and his adopted son, Chua
Kim Uy Teng, took possession of the property.
The three (3) parcels of land above mentioned, together with several
others, later became subject of a compromise agreement in a litigation
in the Court of First Instance of Quezon Provinc
The compromise agreement was executed not only by the parties in
the case (plaintiffs Domingo Reyes and Lourdes Abustan, and the
defendants, So Pick, et al.) — respectively described as "First Parties"
and "Second Parties"-but also Chua Kim @ Ting Be Uy, designated
therein as "Third Party," although he had not been impleaded as a
FLORES 2S BE BETTER EVERYDAY 31
party to the case. In the agreement, in consideration of Chua Kim's
renunciation (a) of "any right or claim of whatever nature in .. (certain
specifically identified) parcels of land" and (b) of any other claim
against the First Parties and Second Parties, both the latter, in turn
waived "any claim of ownership or other right in or to the parcels of
land, or the improvements thereon, in Buenavista, Quezon covered by
OCT Nos. 3697, 3696, 3439 and 4382 of the Registry of Deeds of
Quezon," in the name of Gregorio Reyes Uy Un, Chua Kim's adoptive
father, and that they (the First and Second Parties) "will not oppose
the transfer, by means not contrary to law, of the ownership thereof to
the Third Party," said Chua Kim. The compromise agreement was
afterwards submitted to the Cour which rendered judgment on July
29,1970 (amended by Order dated July 31, 1970), approving the
same.
Chua Kim then filed a petition for issuance of decree of confirmation
and registration in Land Registration Case No. 405 (LRC Rec. No.
14817) of the Court of First Instance of Quezon Province.
CFI: WHEREFORE, premises considered, this Court finds that herein
petitioner Chua Kim alias Uy Teng Be has duly established his
registerable title over the properties in question in this land registration
case in so far as Oppositions Nos. 51 and 155 are concerned, and
hereby GRANTS his petition. The decision rendered on January 14,
1933 in so far as Opposition Nos. 51 and 155 are concerned, is hereby
amended adjudicating the said properties, better known now as Lots 1
and 2 of plan Psu-57676 in Opposition No. 51 and as Lot.549 of plan
Ap-7521, which is Identical to plan Psu-54565 in Opposition No. 155,
to herein petitioner Chua Kim alias Uy Teng Be. Upon this order
becoming final, let the corresponding decrees of confirmation and
registration be entered and thereafter upon payment of the fees
required by law, let the corresponding certificate of titles be issued in
the name of petitioner, Chua Kim alias Uy Teng Be, married to Amelia
Tan, of legal age, a naturalized Filipino citizen, and a resident of the
Municipality of Buenavista, Province of Quezon, as his own exclusive
properties, free from all liens and encumbrances.
COURT’S DISCUSSION:
The Republic of the Philippines, through the Solicitor General,
challenged the correctness of the Order and appealed it to the Court of
Appeals. That Court, however, affirmed the Order "in all respects," in
a decision promulgated on March 25,1986.
Still not satisfied, the Republic has come to this Court on appeal
by certiorari, in a final attempt to prevent the adjudication of the
property in question to Chua Kim. The Solicitor General argues that
—
1) the deeds and instruments presented by Chua Kim to prove the
conveyance to him of the lands in question by the successor-in-
interest of the original adjudicates are inadequate for the purpose; and
2) Chua Kim has not proven his qualification to own private
agricultural land at the time of the alleged acquisition of the property
in question.
The Republic's theory is that the conveyances to Chua Kim were made
while he was still an alien, i.e., prior to his taking oath as a naturalized
Philippine citizen on January 7, 1977, at a time when he was
disqualified to acquire ownership of land in the Philippines (ART XIII,
SEC. 5, 1935 Constitution; ART. XIV, Sec. 14, 1973 Constitution);
hence, his asserted titles are null and void. It is also its contention that
reliance on the decision and amendatory order in Civil Case No. C-
385 of the CFI, Rizal is unavailing, since neither document declares
that the property in question was adjudicated to Chua Kim as his
inheritance from his adoptive father, Gregorio Reyes Uy Un.
The conclusions of fact of the Intermediate Appellate Court,
sustaining those of the Land Registration Court, reached after analysis
and assessment of the evidence presented at a formal hearing by the
parties, are by firmly entrenched rule binding and may not be
FLORES 2S BE BETTER EVERYDAY 32
reviewed by this Court. Those facts thus found to exist, and the legal
principles subsumed in them, impel rejection of the Republic's appeal.
It is a fact that the lands in dispute were properly and formally
adjudicated by a competent Court to the Spouses Gaspar and to the
Spouses Marquez in fee simple, and that the latter had afterwards
conveyed said lands to Gregorio Reyes Uy Un, Chua Kim's adopting
parent, by deeds executed in due form on December 27, 1934 and
December 30, 1934, respectively. Plainly, the conveyances were made
before the 1935 Constitution went into effect, i.e., at a time when there
was no prohibition against acquisition of private agricultural lands by
aliens. Gregorio Reyes Uy Un therefore acquired good title to the
lands thus purchased by him, and his ownership was not at all affected
either (1) by the principle subsequently enunciated in the 1935
Constitution that aliens were incapacitated to acquire lands in the
country, since that constitutional principle has no retrospective
application, or (2) by his and his successor's omission to procure the
registration of the property prior to the coming into effect of the
Constitution.
It is a fact, furthermore, that since the death of Gregorio Reyes Uy Un
in San Narciso, Quezon, in 1946, Chua Kim @ Uy Teng Be had been
in continuous possession of the lands in concept of owner, as the
putative heir of his adoptive father, said Gregorio Reyes; this, without
protest whatever from any person. It was indeed Chua Kim's being in
possession of the property in concept of owner, and his status as
adopted son of Gregorio Reyes, that were the factors that caused his
involvement in Civil Case No. C-385 of the CFI at Calauag, Quezon,
at the instance of the original parties thereto, and his participation in
the Compromise Agreement later executed by all parties. As already
mentioned, that compromise agreement, approved by judgment
rendered on July 29, 1970, implicity recognized Chua Kim's title to
the lands in question.
Sarsosa Vda. de Barsobia v. Cuenco The litigated property is now in
the hands of a naturalized Filipino. It is no longer owned by a
disqualified vendee. Respondent, as a naturalized citizen, was
constitutionally qualified to own the subject property. There would be
no more public policy to be served in allowing petitioner Epifania to
recover the land as it is already in the hands of a qualified person.
WHEREFORE, the petition is DISMISSED, and the judgment of the
Intermediate Appellate Court subject thereof AFFIRMED in toto
TOPIC: Recovery of land sold to an alien
There are two ways now open to our government whereby it could
implement the doctrine of this Court in the Krivenko case thereby
putting in force and carrying to its logical conclusion the mandate of
our Constitution. By following either of these remedies, or by
approving an implementary law as above suggested, we can enforce
the fundamental policy of our Constitution regarding our natural
resources without doing violence to the principle of pari delicto. With
these remedies open to us, we see no justifiable reason for pursuing
the extreme unusual remedy now vehemently urged by the amici
curiae.
Rellosa v. Gaw Chee Hun G.R. NO. L-1411
FACTUAL ANTECEDENTS
 On February 2, 1944, Dionisio Rellosa sold to Gaw Chee Hun
a parcel of land, together with the house erected thereon,
situated in the City of Manila, Philippines, for the sum of
P25,000. The vendor remained in possession of *the property
under a contract of lease entered into on the same date
between the same parties.
 Alleging that the sale was executed subject to the condition
that the vendee. being a Chinese citizen, would obtain the
approval of the Japanese Military Administration in
FLORES 2S BE BETTER EVERYDAY 33
 accordance with (seirei) No. 6 issued on April 2, 1943, by the
Japanese authorities, and said approval has not been obtained,
and that, even if said requirement were met, the sale would at
all events be void under article XIII, section 5, of our
Constitution, the vendor instituted the present action in the
Court of First Instance of Manila seeking the annulment of the
sale as well as the lease covering the land and the house above
mentioned, and praying that, once the sale and the lease are
declared null and void, the vendee be ordered to return to
vendor the duplicate of the title covering the property, and be
restrained from in any way dispossessing the latter of said
property.
 Defendant answered the complaint setting up as special
defense that the sale referred to in the complaint was absolute
and unconditional and was in every respect valid and binding
between the parties, it being not contrary to law, morals and
public order, and that plaintiff is guilty of estoppel in that, by
having executed a deed of lease over the property, he thereby
recognized the title of defendant to that property.
CFI - the court declared both the sale and the lease valid and binding
and dismissed the complaint. The court likewise ordered plaintiff to
turn over the property to defendant and to pay a rental of P50 a month
from August 1, 1945 until the property has been actually delivered. As
this decision was affirmed in toto by the Court of Appeals, plaintiff
sued out the present petition for review.
One of the issues raised by petitioner refers to the validity of Seirei
No. 6 issued on April 2, 1943 by the Japanese authorities which
prohibits an alien from acquiring any private land not agricultural in
nature during the occupation unless the necessary approval is obtained
from the Director General of the Japanese Military Administration.
Petitioner contends that the sale in question cannot have any validity
under the above military directive in view of the failure of respondent
to obtain the requisite approval and it was error for the Court of
Appeals to declare said directive without any binding effect because
the occupation government could not have issued it under article 43 of
the Hague Regulations which command that laws that are municipal
in character of an occupied territory should be respected and cannot
be ignored unless prevented by military necessity.
We do not believe it necessary to consider now the question
relative to the validity of Seirei No. 6 of the Japanese Military
Administration for the simple reason that in our opinion the law
that should govern the particular transaction is not the above
directive but the Constitution adopted by the then Republic of the
Philippines on September 4, 1943, it appearing that the aforesaid
transaction was executed on February 2, 1944.
 Said Constitution, in its article VIII, section 5, provides that
"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", which provisions are similar to those contained
in our present Constitution. As to whether the phrase "private
agricultural land" employed in said Constitution includes
residential lands, as the one involved herein, there can be no
doubt because said phrase has already been interpreted in the
affirmative sense by this court in the recent case of Krivenko
vs. Register of Deeds, wherein this court held that "under the
Constitution aliens may not acquire private or public
agricultural lands, including residential lands." This matter
has been once more submitted to the court for deliberation,
but the ruling was reaffirmed. This ruling fully disposes of the
question touching on the validity of the sale of the property
herein involved.
The sale in question having been entered into a violation of the
Constitution, the next question to be determined is, can petition have
the sale declared null and void and recover the property considering
the effect of the law governing rescission of contracts? Our answer
must of necessity be in the negative.
FLORES 2S BE BETTER EVERYDAY 34
WHY? Trinidad Gonzaga de Cabauatan, et al. vs. Uy Hoo, et al.,
"We can, therefore, say that even if the plaintiffs can still invoke the
Constitution, or the doctrine in the Krivenko Case, to set aside the sale
in question, they are now prevented from doing so if their purpose is
to recover the lands that they have voluntarily parted with, because of
their guilty knowledge that what they were doing was in violation of
the Constitution. They cannot escape this conclusion because they are
presumed to know the law. As this court well said: 'A party to an illegal
contract cannot come into a court of law and ask to have his illegal
objects carried out. The law will not aid either party to an illegal
agreement; it leaves the parties where it finds them.' The rule is
expressed in the maxims: 'Ex dolo malo non oritur actio,' and 'In pari
delicto potior est conditio defendentis'
IN PARI DELICTO
The doctrine above adverted to is the one known as In Pari Delicto.
This is well known not only in this jurisdiction but also in the United
States where common law prevails. In the latter jurisdiction, the
doctrine is state thus: "The propsosition is universal that no action
arises, in equity or at law, from an illegal contract; no suit can be
maintained for its specific performance, or to recover the property
agreed to be sold or delivered, or the money agreed to be paid, or
damages for its violation.
The rule has sometimes been laid down as though it were equally
universal, that where the parties are in pari delicto, no affirmative
relief of any kind will be given to one against the other."
LIMITATION:
It is true that this doctrine is subject to one important limitation,
namely, "whenever public policy is considered as advanced by
allowing either party to use for relief against the transaction.” . But not
all contracts which are illegal because opposed to public policy come
under this limitation. The cases in which this limitation may apply
only "include the class of contracts which are intrinsically contrary to
public policy, — contracts in which the illegality itself consists in their
opposition to public policy, and any other species of illegal contracts
in which, from their particular circumstances, incidental and collateral
motives of public policy require relief." Examples of this class of
contracts are usurious contracts, marriage-brokerage contracts and
gambling contracts.
IN THIS CASE:, the contract in question does not come under this
exception because it is not intrinsically contrary to public policy, nor
one where the illegality itself consist in its opposition to public policy.
It is illegal not because it is against public policy but because it is
against the Constitution. Nor may it be contended that to apply the
doctrine of pari delicto would be tantamount to contravening the
fundamental policy embodied in the constitutional prohibition in that
it would allow an alien to remain in the illegal possession of the land,
because in this case the remedy is lodged elsewhere. To adopt the
contrary view would be merely to benefit petitioner and not to enhance
public interest.
The danger foreseen by counsel in the application of the doctrine
above adverted to is more apparent than real. If we go deeper in the
analysis of our situation we would not fail to see that the best policy
would be for Congress to approve a law laying down the policy and
the procedure to be followed in connection with transactions affected
by our doctrine in the Krivenko case. We hope that this should be done
without much delay. And even if this legislation be not forthcoming
in the near future, we do not believe that public interest would suffer
thereby if only our executive department would follow a more militant
policy in the conservation of our natural resources as ordained by our
Constitution. And we say so because there are at present two ways by
which this situation may be remedied, to wit, (1) action for reversion,
and (2) escheat to the state. An action for reversion is slightly different
from escheat proceeding, but in its effects they are the same. They only
differ in procedure. Escheat proceedings may be instituted as a
FLORES 2S BE BETTER EVERYDAY 35
consequence of a violation of article XIII, section 5 of our
Constitution, which prohibits transfers of private agricultural lands to
aliens, whereas an action for reversion is expressly authorized by the
Public Land Act (sections 122, 123, and 124 of Commonwealth Act
No. 141).
In the United States, as almost everywhere else, the doctrine which
imputes to the sovereign or to the government the ownership of all
lands and makes such sovereign or government the original source of
private titles, is well recognized
 Lawrence vs. Garduno - which underlies all titles in the
Philippines, (See Ventura, Land Registration and Mortgages,
2nd ed., pp. 2-3) has been enshrined in our Constitution
(Article XIII). The doctrine regarding the course of all titles
being the same here as in the United States, it would seem that
if escheat lies against aliens holding lands in those states of
the Union where common law prevails or where similar
constitutional or statutory prohibitions exists, no cogent
reason is perceived why similar proceedings may not be
instituted in this jurisdiction.
Escheat - is an incident or attribute of sovereignty, and rests
on the principle of the ultimate ownership by the state of all
property within its jurisdiction.... In American escheats
belongs universally to the state or some corporation thereof as
the ultimate proprietor of land within its Jurisdiction. (19 Am.
Jur., 382.)
As applied to the right of the state to lands purchased by an
alien, it would more properly be termed a "forfeiture" at
common law. (19 Am. Jur., 381.)
In modern law escheat denotes a falling of the estate into the
general property of the state because the tenant is an alien or
because he has died intestate without lawful heirs to take his
estate by successions, or because of some other disability to
take or hold property imposed by law. (19 Am. Jur., 381.)
With regard to an action for reversion, the following sections of
commonwealth Act No. 141 are pertinent:
Sec. 122. No land originally acquired in any manner under the
provisions of this Act, nor any permanent improvement on such land,
shall be encumbered, alienated, or transferred, except to persons,
corporations, associations, or partnerships who may acquire lands of
the public domain under this Act or to corporations organized in the
Philippines authorized therefor by their charters.
Sec. 123. No land originally acquired in any manner under the
provisions of any previous Act, ordinance, royal decree, royal order,
or any other provision of law formerly in force in the Philippines with
regards to public lands, terrenos baldios y realengos, or lands of any
other denomination that were actually or presumptively of the public
domain or by royal grant or in any other form, nor any permanent
improvement on such land, shall be encumbered, alienated, or
conveyed, except to persons, corporation or associations who may
acquire land of the public domain under this Act or to corporate bodies
organized in the Philippines whose charters authorize them to do
so: Provided, however, That this prohibition shall not be applicable to
the conveyance or acquisition by reason or hereditary succession duly
acknowledged and legalized by competent courts; Provided, further,
That in the event of the ownership of the lands and improvements
mentioned in this section and in the last preceding section being
transferred by judicial decree to persons, corporations or associations
not legally capacitated to acquire the same under the provisions of this
Act, such persons, corporation, or associations shall be obliged to
alienate said lands or improvements to others so capacitated within the
precise period of five years; otherwise, such property shall revert to
the Government.
FLORES 2S BE BETTER EVERYDAY 36
Sec. 124. Any acquisition, conveyance, alienation, transfer, or other In view of the foregoing, we hold that the sale in question is null and
contract made or executed in violation of any of the provisions of void, but plaintiff is barred from taking the present action under the
sections one hundred and eighteen, one hundred and twenty, one principle of pari delicto.
hundred and twenty-one, one hundred and twenty-two, and one
hundred and twenty-three of this Act shall be unlawful and null and PHILIPPINE BANKING CORPOATION v. LUI SHE G.R. NO.
void from its execution and shall produce the effect of annulling and L-17587
cancelling the grant, title, patent, or permit originally issued,
recognized or confirmed, actually or presumptively, and cause the
reversion of the property and its improvements to the State.
Exception to in pari delicto
Note that the last quoted provision declared any prohibited
conveyance not only unlawful but null and void ab initio. More
important yet, it expressly provided that such conveyances will
produce "the effect of annulling and cancelling the grant, title, patent,
FACTUAL ANTECEDENTS
or permit, originally issued, recognized of confirmed, actually or
presumptively", and of causing "the reversion of the property and its
improvements to the State." The reversion would seems to be but a
consequence of the annulment and cancellation of the original grant or
title, and this is so for in the event of such annulment or cancellation  Justina Santos y Canon Faustino and her sister Lorenzo were
no one else could legitimately claim the property except its original the owners in common of a piece of land in Manila. This
owner or grantor — the state. parcel, with an area of 2,582.30 square meters, is located on
Rizal Avenue and opens into Florentino Torres street at the
back and Katubusan street on one side. In it are two residential
houses with entrance on Florentino Torres street and the Hen
Wah Restaurant with entrance on Rizal Avenue. The sisters
There are two ways now open to our government whereby it could
lived in one of the houses, while Wong Heng, a Chinese, lived
implement the doctrine of this Court in the Krivenko case thereby
with his family in the restaurant. Wong had been a long-time
putting in force and carrying to its logical conclusion the mandate of
lessee of a portion of the property, paying a monthly rental of
our Constitution. By following either of these remedies, or by
P2,620.
approving an implementary law as above suggested, we can enforce
 On September 22, 1957 Justina Santos became the owner of
the fundamental policy of our Constitution regarding our natural
the entire property as her sister died with no other heir. Then
resources without doing violence to the principle of pari delicto. With
already well advanced in years, being at the time 90 years old,
these remedies open to us, we see no justifiable reason for pursuing
blind, crippled and an invalid, she was left with no other
the extreme unusual remedy now vehemently urged by the amici
relative to live with. Her only companions in the house were
curiae.
her 17 dogs and 8 maids. Her otherwise dreary existence was
brightened now and then by the visits of Wong's four children
who had become the joy of her life.

FLORES 2S BE BETTER EVERYDAY 37

 Wong himself was the trusted man to whom she delivered
various amounts for safekeeping, including rentals from her
property at the corner of Ongpin and Salazar streets and the
rentals which Wong himself paid as lessee of a part of the
Rizal Avenue property. Wong also took care of the payment;
in her behalf, of taxes, lawyers' fees, funeral expenses, masses,
salaries of maids and security guard, and her household
expenses.
 "In grateful acknowledgment of the personal services of the
lessee to her," Justina Santos executed on November 15, 1957
a contract of lease (Plff Exh. 3) in favor of Wong, covering
the portion then already leased to him and another portion
fronting Florentino Torres street. The lease was for 50 years,
although the lessee was given the right to withdraw at any time
from the agreement; the monthly rental was P3,120. The
contract covered an area of 1,124 square meters. Ten days
later (November 25), the contract was amended (so as to make
it cover the entire property, including the portion on which the
house of Justina Santos stood, at an additional monthly rental
of P360.
 For his part Wong undertook to pay, out of the rental due
from him, an amount not exceeding P1,000 a month for the
food of her dogs and the salaries of her maids.
 On December 21 she executed another contract giving Wong
the option to buy the leased premises for P120,000, payable
within ten years at a monthly installment of P1,000. The
option, written in Tagalog, imposed on him the obligation to
pay for the food of the dogs and the salaries of the maids in
her household, the charge not to exceed P1,800 a month. The
option was conditioned on his obtaining Philippine
citizenship, a petition for which was then pending in the Court
of First Instance of Rizal. It appears, however, that this
application for naturalization was withdrawn when it was
discovered that he was not a resident of Rizal. On October 28,
1958 she filed a petition to adopt him and his children on the
erroneous belief that adoption would confer on them
Philippine citizenship. The error was discovered and the
proceedings were abandoned.
 On November 18, 1958 she executed two other contracts, one
extending the term of the lease to 99 years, and another fixing
the term of the option of 50 years. Both contracts are written
in Tagalog.
 In two wills executed on August 24 and 29, she bade her
legatees to respect the contracts she had entered into with
Wong, but in a codicil of a later date (November 4, 1959) she
appears to have a change of heart. Claiming that the various
contracts were made by her because of machinations and
inducements practiced by him, she now directed her executor
to secure the annulment of the contracts.
CFI - In his answer, Wong admitted that he enjoyed her trust and
confidence as proof of which he volunteered the information that, in
addition to the sum of P3,000 which he said she had delivered to him
for safekeeping, another sum of P22,000 had been deposited in a joint
account which he had with one of her maids. But he denied having
taken advantage of her trust in order to secure the execution of the
contracts in question. As counterclaim he sought the recovery of
P9,210.49 which he said she owed him for advances.
Wong's admission of the receipt of P22,000 and P3,000 was the cue
for the filing of an amended complaint. Thus on June 9, 1960, aside
from the nullity of the contracts, the collection of various amounts
allegedly delivered on different occasions was sought. These amounts
and the dates of their delivery are P33,724.27 (Nov. 4, 1957);
P7,344.42 (Dec. 1, 1957); P10,000 (Dec. 6, 1957); P22,000 and
P3,000 (as admitted in his answer). An accounting of the rentals from
the Ongpin and Rizal Avenue properties was also demanded.
In the meantime as a result of a petition for guardianship filed in the
Juvenile and Domestic Relations Court, the Security Bank & Trust Co.
FLORES 2S BE BETTER EVERYDAY 38
was appointed guardian of the properties of Justina Santos, while
Ephraim G. Gochangco was appointed guardian of her person.
In his answer, Wong insisted that the various contracts were freely and
voluntarily entered into by the parties. He likewise disclaimed
knowledge of the sum of P33,724.27, admitted receipt of P7,344.42
and P10,000, but contended that these amounts had been spent in
accordance with the instructions of Justina Santos; he expressed
readiness to comply with any order that the court might make with
respect to the sums of P22,000 in the bank and P3,000 in his
possession.
The case was heard, after which the lower court rendered judgment as
follows:
[A]ll the documents mentioned in the first cause of action,
with the exception of the first which is the lease contract of 15
November 1957, are declared null and void; Wong Heng is
condemned to pay unto plaintiff thru guardian of her property
the sum of P55,554.25 with legal interest from the date of the
filing of the amended complaint; he is also ordered to pay the
sum of P3,120.00 for every month of his occupation as lessee
under the document of lease herein sustained, from 15
November 1959, and the moneys he has consigned since then
shall be imputed to that; costs against Wong Heng.
COURT DISCUSSION
Justina Santos maintained — now reiterated by the Philippine Banking
Corporation — that the lease contract (should have been annulled
along with the four other contracts (Plff Exhs. 4-7) because it lacks
mutuality; because it included a portion which, at the time, was
in custodia legis; because the contract was obtained in violation of the
fiduciary relations of the parties; because her consent was obtained
through undue influence, fraud and misrepresentation; and because the
lease contract, like the rest of the contracts, is absolutely simulated.
Paragraph 5 of the lease contract states that "The lessee may at any
time withdraw from this agreement." It is claimed that this stipulation
offends article 1308 of the Civil Code which provides that "the
contract must bind both contracting parties; its validity or compliance
cannot be left to the will of one of them."
SCOPE OF ARTICLE 1308: Taylor v. Uy Tieng Piao.
Article 1256 [now art. 1308] of the Civil Code in our opinion creates
no impediment to the insertion in a contract for personal service of a
resolutory condition permitting the cancellation of the contract by one
of the parties. Such a stipulation, as can be readily seen, does not make
either the validity or the fulfillment of the contract dependent upon the
will of the party to whom is conceded the privilege of cancellation; for
where the contracting parties have agreed that such option shall exist,
the exercise of the option is as much in the fulfillment of the contract
as any other act which may have been the subject of agreement.
Indeed, the cancellation of a contract in accordance with conditions
agreed upon beforehand is fulfillment.
Melencio v. Dy Tiao Lay - that a "provision in a lease contract that
the lessee, at any time before he erected any building on the land,
might rescind the lease, can hardly be regarded as a violation of article
1256 [now art. 1308] of the Civil Code."
Singson Encarnacion v. Baldomar - cannot be cited in support of the
claim of want of mutuality, because of a difference in factual setting.
In that case, the lessees argued that they could occupy the premises as
long as they paid the rent. This is of course untenable, for as this Court
said, "If this defense were to be allowed, so long as defendants elected
to continue the lease by continuing the payment of the rentals, the
owner would never be able to discontinue it; conversely, although the
owner should desire the lease to continue the lessees could effectively
thwart his purpose if they should prefer to terminate the contract by
the simple expedient of stopping payment of the rentals." Here, in
contrast, the right of the lessee to continue the lease or to terminate it
FLORES 2S BE BETTER EVERYDAY 39
is so circumscribed by the term of the contract that it cannot be said
that the continuance of the lease depends upon his will. At any rate,
even if no term had been fixed in the agreement, this case would at
most justify the fixing of a period but not the annulment of the contract.
IN THIS CASE: Nor is there merit in the claim that as the portion of
the property formerly owned by the sister of Justina Santos was still
in the process of settlement in the probate court at the time it was
leased, the lease is invalid as to such portion. Justina Santos became
the owner of the entire property upon the death of her sister Lorenzo
on September 22, 1957 by force of article 777 of the Civil Code.
Hence, when she leased the property on November 15, she did so
already as owner thereof. As this Court explained in upholding the sale
made by an heir of a property under judicial administration:
That the land could not ordinarily be levied upon while
in custodia legis does not mean that one of the heirs may not
sell the right, interest or participation which he has or might
have in the lands under administration. The ordinary
execution of property in custodia legis is prohibited in order
to avoid interference with the possession by the court. But the
sale made by an heir of his share in an inheritance, subject to
the result of the pending administration, in no wise stands in
the way of such administration.
AGENCY?
It is next contended that the lease contract was obtained by Wong in
violation of his fiduciary relationship with Justina Santos, contrary to
article 1646, in relation to article 1941 of the Civil Code, which
disqualifies "agents (from leasing) the property whose administration
or sale may have been entrusted to them." But Wong was never an
agent of Justina Santos. The relationship of the parties, although
admittedly close and confidential, did not amount to an agency so as
to bring the case within the prohibition of the law.
Just the same, it is argued that Wong so completely dominated her life
and affairs that the contracts express not her will but only his. Counsel
for Justina Santos cites the testimony of Atty. Tomas S. Yumol who
said that he prepared the lease contract on the basis of data given to
him by Wong and that she told him that "whatever Mr. Wong wants
must be followed
 Wong practically dictated the terms of the contract. What this
witness said was:
Wong might indeed have supplied the data which Atty. Yumol
embodied in the lease contract, but to say this is not to detract from the
binding force of the contract. For the contract was fully explained to
Justina Santos by her own lawyer. One incident, related by the same
witness, makes clear that she voluntarily consented to the lease
contract. This witness said that the original term fixed for the lease
was 99 years but that as he doubted the validity of a lease to an alien
for that length of time, he tried to persuade her to enter instead into a
lease on a month-to-month basis. She was, however, firm and
unyielding. Instead of heeding the advice of the lawyer, she ordered
him, "Just follow Mr. Wong Heng." Recounting the incident, Atty.
Yumol declared on cross examination:
Considering her age, ninety (90) years old at the time and her
condition, she is a wealthy woman, it is just natural when she
said "This is what I want and this will be done." In particular
reference to this contract of lease, when I said "This is not
proper," she said — "You just go ahead, you prepare that, I
am the owner, and if there is any illegality, I am the only one
that can question the illegality."10
Atty. Yumol further testified that she signed the lease contract in the
presence of her close friend, Hermenegilda Lao, and her maid,
Natividad Luna, who was constantly by her side. Any of them could
have testified on the undue influence that Wong supposedly wielded
over Justina Santos, but neither of them was presented as a witness.
FLORES 2S BE BETTER EVERYDAY 40
The truth is that even after giving his client time to think the matter
over, the lawyer could not make her change her mind. This persuaded
the lower court to uphold the validity of the lease contract against the
claim that it was procured through undue influence.
Indeed, the charge of undue influence in this case rests on a mere
inference drawn from the fact that Justina Santos could not read (as
she was blind) and did not understand the English language in which
the contract is written, but that inference has been overcome by her
own evidence.
Nor is there merit in the claim that her consent to the lease contract, as
well as to the rest of the contracts in question, was given out of a
mistaken sense of gratitude to Wong who, she was made to believe,
had saved her and her sister from a fire that destroyed their house
during the liberation of Manila. For while a witness claimed that the
sisters were saved by other persons (the brothers Edilberto and
Mariano Sta. Ana)it was Justina Santos herself who, according to her
own witness, Benjamin C. Alonzo, said "very emphatically" that she
and her sister would have perished in the fire had it not been for
Wong.Hence the recital in the deed of conditional option (that "[I]tong
si Wong Heng ang siyang nagligtas sa aming dalawang magkapatid sa
halos ay tiyak na kamatayan", and the equally emphatic avowal of
gratitude in the lease contract
As it was with the lease contract, so it was with the rest of the contracts
— the consent of Justina Santos was given freely and voluntarily. As
Atty. Alonzo, testifying for her, said:
[I]n nearly all documents, it was either Mr. Wong Heng or
Judge Torres and/or both. When we had conferences, they
used to tell me what the documents should contain. But, as I
said, I would always ask the old woman about them and
invariably the old woman used to tell me: "That's okay. It's all
right."
But the lower court set aside all the contracts, with the exception of
the lease contract of November 15, 1957, on the ground that they are
contrary to the expressed wish of Justina Santos and that their
considerations are fictitious. Wong stated in his deposition that he did
not pay P360 a month for the additional premises leased to him,
because she did not want him to, but the trial court did not believe him.
Neither did it believe his statement that he paid P1,000 as
consideration for each of the contracts (namely, the option to buy the
leased premises, the extension of the lease to 99 years, and the fixing
of the term of the option at 50 years), but that the amount was returned
to him by her for safekeeping. Instead, the court relied on the
testimony of Atty. Alonzo in reaching the conclusion that the contracts
are void for want of consideration.
Atty. Alonzo declared that he saw no money paid at the time of the
execution of the documents, but his negative testimony does not rule
out the possibility that the considerations were paid at some other time
as the contracts in fact recite. What is more, the consideration need not
pass from one party to the other at the time a contract is executed
because the promise of one is the consideration for the other.
With respect to the lower court's finding that in all probability Justina
Santos could not have intended to part with her property while she was
alive nor even to lease it in its entirety as her house was built on it,
suffice it to quote the testimony of her own witness and lawyer who
prepared the contracts in question, Atty. Alonzo:
The ambition of the old woman, before her death, according
to her revelation to me, was to see to it that these properties be
enjoyed, even to own them, by Wong Heng because Doña
Justina told me that she did not have any relatives, near or far,
and she considered Wong Heng as a son and his children her
grandchildren; especially her consolation in life was when she
would hear the children reciting prayers in Tagalog.
FLORES 2S BE BETTER EVERYDAY 41
 She was very emphatic in the care of the seventeen (17) dogs
and of the maids who helped her much, and she told me to see
to it that no one could disturb Wong Heng from those
properties. That is why we thought of the ninety-nine (99)
years lease; we thought of adoption, believing that thru
adoption Wong Heng might acquire Filipino citizenship;
being the adopted child of a Filipino citizen.
This is not to say, however, that the contracts are valid. For the
testimony just quoted, while dispelling doubt as to the intention of
Justina Santos, at the same time gives the clue to what we view as a
scheme to circumvent the Constitutional prohibition against the
transfer of lands to aliens. "The illicit purpose then becomes the
illegal causa"rendering the contracts void.
NOTE: Taken singly, the contracts show nothing that is necessarily
illegal, but considered collectively, they reveal an insidious pattern to
subvert by indirection what the Constitution directly prohibits. To be
sure, a lease to an alien for a reasonable period is valid. So is an option
giving an alien the right to buy real property on condition that he is
granted Philippine citizenship. As this Court said in Krivenko v.
Register of Deeds:
[A]liens are not completely excluded by the Constitution
from the 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 fortunes and
misfortunes, Filipino citizenship is not impossible to
acquire.
But 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 ( jus possidendi, jus utendi, jus
fruendi and jus abutendi) but also of the right to dispose of it ( jus
disponendi) — rights the sum total of which make up ownership.
It is just as if today the possession is transferred, tomorrow, the
use, the next day, the disposition, and so on, until ultimately all the
rights of which ownership is made up are consolidated in an alien.
And yet this is just exactly what the parties in this case did within
the space of one year, with the result that Justina Santos'
ownership of her property was reduced to a hollow concept. If this
can be done, then the Constitutional ban against alien landholding
in the Philippines, as announced in Krivenko v. Register of Deeds,is
indeed in grave peril.
It does not follow from what has been said, however, that because the
parties are in pari delicto they will be left where they are, without
relief. For one thing, the original parties who were guilty of a violation
of the fundamental charter have died and have since been substituted
by their administrators to whom it would be unjust to impute their
guilt.
EXCEPTION TO IN PARI DELICTO – RELIEF
Article 1416 of the Civil Code provides, as an exception to the rule
on pari delicto, that "When the agreement is not illegal per se but
is merely prohibited, and the prohibition by law is designed for
the protection of the plaintiff, he may, if public policy is thereby
enhanced, recover what he has paid or delivered." The
Constitutional provision 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" is an expression of public policy to conserve lands for
the Filipinos.
KRIVENKO:
FLORES 2S BE BETTER EVERYDAY 42
It is well to note at this juncture that in the present case we have no
choice. We are construing the Constitution as it is and not as we may
desire it to be. Perhaps the effect of our construction is to preclude
aliens admitted freely into the Philippines from owning sites where
they may build their homes. But if this is the solemn mandate of the
Constitution, we will not attempt to compromise it even in the name
of amity or equity . . . .
For all the foregoing, we hold that under the Constitution aliens may
not acquire private or public agricultural lands, including residential
lands, and, accordingly, judgment is affirmed, without costs.
That policy would be defeated and its continued violation sanctioned
if, instead of setting the contracts aside and ordering the restoration of
the land to the estate of the deceased Justina Santos, this Court should
apply the general rule of pari delicto. To the extent that our ruling in
this case conflicts with that laid down in Rellosa v. Gaw Chee Hun and
subsequent similar cases, the latter must be considered as pro
tanto qualified.
The claim for increased rentals and attorney's fees, made in behalf
of Justina Santos, must be denied for lack of merit.
And what of the various amounts which Wong received in trust from
her? It appears that he kept two classes of accounts, one pertaining to
amount which she entrusted to him from time to time, and another
pertaining to rentals from the Ongpin property and from the Rizal
Avenue property, which he himself was leasing.
With respect to the first account, the evidence shows that he received
P33,724.27 on November 8, 1957 ; P7,354.42 on December 1, 1957
P10,000 on December 6, 1957 ; and P18,928.50 on August 26, 1959
or a total of P70,007.19. He claims, however, that he settled his
accounts and that the last amount of P18,928.50 was in fact payment
to him of what in the liquidation was found to be due to him.
He made disbursements from this account to discharge Justina Santos'
obligations for taxes, attorneys' fees, funeral services and security
guard services, but the checks drawn by him for this purpose amount
to only P38,442.84. Besides, if he had really settled his accounts with
her on August 26, 1959, we cannot understand why he still had
P22,000 in the bank and P3,000 in his possession, or a total of
P25,000. In his answer, he offered to pay this amount if the court so
directed him. On these two grounds, therefore, his claim of liquidation
and settlement of accounts must be rejected.
After subtracting P38,442.84 (expenditures) from P70,007.19
(receipts), there is a difference of P31,564 which, added to the amount
of P25,000, leaves a balance of P56,564.35 in favor of Justina Santos.
As to the second account, the evidence shows that the monthly income
from the Ongpin property until its sale in Rizal Avenue July, 1959 was
P1,000, and that from the Rizal Avenue property, of which Wong was
the lessee, was P3,120. Against this account the household expenses
and disbursements for the care of the 17 dogs and the salaries of the 8
maids of Justina Santos were charged. This account is contained in a
notebook which shows a balance of P9,210.49 in favor of Wong. But
it is claimed that the rental from both the Ongpin and Rizal Avenue
properties was more than enough to pay for her monthly expenses and
that, as a matter of fact, there should be a balance in her favor. The
lower court did not allow either party to recover against the other. Said
the court:
[T]he documents bear the earmarks of genuineness; the
trouble is that they were made only by Francisco Wong and
Antonia Matias, nick-named Toning, — which was the way
she signed the loose sheets, and there is no clear proof that
Doña Justina had authorized these two to act for her in such
liquidation; on the contrary if the result of that was a deficit as
alleged and sought to be there shown, of P9,210.49, that was
not what Doña Justina apparently understood for as the Court
understands her statement to the Honorable Judge of the
FLORES 2S BE BETTER EVERYDAY 43
 Juvenile Court . . . the reason why she preferred to stay in her
home was because there she did not incur in any debts . . . this
being the case, . . . the Court will not adjudicate in favor of
Wong Heng on his counterclaim; on the other hand, while it
is claimed that the expenses were much less than the rentals
and there in fact should be a superavit, . . . this Court must
concede that daily expenses are not easy to compute, for this
reason, the Court faced with the choice of the two alternatives
will choose the middle course which after all is permitted by
the rules of proof, Sec. 69, Rule 123 for in the ordinary course
of things, a person will live within his income so that the
conclusion of the Court will be that there is neither deficit nor
superavit and will let the matter rest here.

Both parties on appeal reiterate their respective claims but we agree

with the lower court that both claims should be denied. Aside from the
reasons given by the court, we think that the claim of Justina Santos
totalling P37,235, as rentals due to her after deducting various
expenses, should be rejected as the evidence is none too clear about
the amounts spent by Wong for foodmasses and salaries of her
maids.His claim for P9,210.49 must likewise be rejected as his
averment of liquidation is belied by his own admission that even as
late as 1960 he still had P22,000 in the bank and P3,000 in his
possession.

ACCORDINGLY, the contracts in question () are annulled and set

aside; the land subject-matter of the contracts is ordered returned to
the estate of Justina Santos as represented by the Philippine Banking
Corporation; Wong Heng (as substituted by the defendant-appellant
Lui She) is ordered to pay the Philippine Banking Corporation the sum
of P56,564.35, with legal interest from the date of the filing of the
amended complaint; and the amounts consigned in court by Wong
Heng shall be applied to the payment of rental from November 15,
1959 until the premises shall have been vacated by his heirs. Costs
against the defendant-

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