Thursday, October 1, 2015

Land ownership and conveyance by an alien who was later naturalized as a Filipino; legal effects..

[G.R. No. 113539. March 12, 1998]

"x x x.

Neither do we find any reversible error in the appellate court’s holding that the sale of the subject land to Private Respondent Cataniag renders moot any question on the constitutionality of the prior transfer made by Helen Guzman to her son David Rey.
True, 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.”
The landmark case of Krivenko vs. Register of Deeds[17] 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, the Court then stated:
“Under section 1 of Article XIII [now Sec. 2, Art. XII] of the Constitution, ‘natural resources, with the exception of public agricultural land, shall not  be alienated,’ and with respect to public agricultural lands, their alienation is limited to Filipino citizens.  But this constitutional purpose conserving agricultural resources in the hands of Filipino citizens may easily be defeated by the Filipino citizens themselves who may alienate their agricultural lands in favor of aliens.  It is partly to prevent this result that section 5 is included in Article XIII, and it reads as follows:
‘Sec. 5.  Save in cases of hereditary succession, no private agricultural land will be transferred or assigned except to individuals, corporations or associations qualified to acquire or hold lands of the public domain in the Philippines.’
This constitutional provision closes the only remaining avenue through which agricultural resources may leak into 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 [now Sec. 7] is intended to insure the policy of nationalization contained in section 1 [now Sec. 2]. 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 [now Sec. 7] are the very same persons who under section 1 [now Sec. 2] 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.  x x x”[18]
The Krivenko  rule was recently reiterated in  Ong  Ching  Po  vs. Court of Appeals,[19] which involves a sale of land to a Chinese citizen.  The Court said:
“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’ (II Bernas, The Constitution of the Philippines 439-440 [1988 ed.]).
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.”[20]
In fine, non-Filipinos cannot acquire or hold title to private lands or to lands of the public domain, except only by way of legal succession.[21]
But what is the effect of a subsequent sale by the disqualified alien vendee to a qualified Filipino citizen?  This is not a novel question.  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.”[22]
Thus, in United Church Board of World Ministries vs. Sebastian,[23] 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.[24] In 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.
Likewise, in the cases of Sarsosa vs. Cuenco,[25] Godinez vs. Pak Luen,[26] Vasquez vs. Li Seng Giap[27] and Herrera vs. Luy Kim Guan,[28] which similarly involved the sale of land to an alien who thereafter sold the same to a Filipino citizen, the Court again applied the rule that the subsequent sale can no longer be impugned on the basis of the invalidity of the initial transfer.
The rationale of this principle was explained in Vasquez vs. Li Seng Giap thus:
“x x x  [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.”[29]
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.
x x x."