CASE DIGEST 6: LAND TITLES AND DEEDS (CITIZENSHIP)

LEE VS REPUBLIC, G.R. No. 128195. October 3, 2001

FACTS OF THE CASE: Sometime in March 1936, Rafael, Carmen, Francisco, Jr., Ramon, Lourdes, Mercedes, Concepcion, Mariano, Jose,
Loreto, Manuel, Rizal and Jimmy, all surnamed Dinglasan sold to Lee Liong, a Chinese citizen, a parcel of land with an approximate area of 1,631
square meters, and covered by Original Certificate of situated at the corner of Roxas Avenue and Pavia Street, Roxas City. However, in 1948, the
former owners filed with the Court of First Instance, Capiz an action against the heirs of Lee Liong for annulment of sale and recovery of land. The
plaintiffs assailed the validity of the sale because of the constitutional prohibition against aliens acquiring ownership of private agricultural land,
including residential, commercial or industrial land.
The same former owners filed with the CFI, Capiz an action for recovery of the same parcel of land. Citing the case of Philippine
Banking Corporation v. Lui She, they submitted that the sale to Lee Liong was null and void for being violative of the Constitution . Elizabeth
Manuel-Lee and Pacita Yu Lee filed with the RTC, Roxas City a petition for reconstitution of title of the lot. They alleged that they were the
widows of the deceased Lee Bing Hoo and Lee Bun Ting, who were the heirs of Lee Liong, the owner of the lot.  Petitioner Elizabeth Lee acquired
her share in Lot through an extra-judicial settlement and donation executed in her favor by her deceased husband Lee Bing Hoo . Petitioner Pacita
Yu Lee acquired her share in the same lot by succession from her deceased husband Lee Bun Ting , as evidenced by a deed of extra-judicial
settlement.
RTC ordered the reconstitution of the lost or destroyed certificate of title in the name of Lee Liong on the basis of an approved plan and
technical description, which were burned during the war. The Solicitor General filed with CA a petition for annulment of judgment in
Reconstitution Case, alleging that the RTC had no jurisdiction over the case. The Solicitor General contended that the petitioners were not the
proper parties in the reconstitution of title, since their predecessor-in-interest Lee Liong did not acquire title to the lot because he was a Chinese
citizen and was constitutionally not qualified to own the subject land. CA declared that the reconstitution is void.

ISSUE: Whether or not Lee Liong predecessors-in-interest has the qualification to own land in the Philippines. YES

RULING: The sale of the land in question was consummated sometime in March 1936, during the effectivity of the 1935 Constitution. Under the
1935 Constitution, aliens could not acquire private agricultural lands, save in cases of hereditary succession. Thus, Lee Liong, a Chinese citizen,
was disqualified to acquire the land in question.
The fact that the Court did not annul the sale of the land to an alien did not validate the transaction, for it was still contrary to the
constitutional proscription against aliens acquiring lands of the public or private domain. However, the proper party to assail the illegality of the
transaction was not the parties to the transaction. In sales of real estate to aliens incapable of holding title thereto by virtue of the provisions of
the Constitution both the vendor and the vendee are deemed to have committed the constitutional violation and being thus  in pari delictothe courts
will not afford protection to either party. The proper party to assail the sale is the Solicitor General. This was what was done in this case when the
Solicitor General initiated an action for annulment of judgment of reconstitution of title. While it took the Republic more than sixty years to assert
itself, it is not barred from initiating such action. Prescription never lies against the State.
Although ownership of the land cannot revert to the original sellers, because of the doctrine of pari delicto, the Solicitor General may
initiate an action for reversion or escheat ( power of a state to acquire title to property for which there is no owner ) of the land to the State , subject to
other defenses, as hereafter set forth. In this case, subsequent circumstances militate against escheat proceedings because the land is now in the
hands of Filipinos. The original vendee, Lee Liong, has since died and the land has been inherited by his heirs and subsequently their heirs,
petitioners herein. Petitioners are Filipino citizens, a fact the Solicitor General does not dispute.