Godinez vs. Navata

Where land sold by a Filipino to an alien in violation of the constitutional prohibition is subsequently conveyed to a Filipino citizen qualified to acquire real property, the original vendor's heirs cannot recover the land, the constitutional policy being satisfied by the property's restoration to qualified hands. The in pari delicto rule and the doctrine of laches further bar recovery by heirs who participated in or acquiesced in the void transaction for an unreasonable length of time.

Jose Godinez and Martina Alvarez Godinez were married in 1910 and during their marriage acquired Lot No. 94 of the Jolo townsite, a 3,665-square-meter parcel covered by Original Certificate of Title No. 179 (D-155) in Jose's name. Martina died in 1938, survived by her children—the herein plaintiffs. The sale at issue was executed under the 1935 Constitution, whose Section 5, Article XIII prohibited the transfer of private agricultural land to aliens not qualified to hold lands of the public domain. The constitutional provision had been construed in Krivenko vs. Register of Deeds of Manila to encompass residential as well as agricultural lands, establishing an imperative public policy to conserve Philippine lands for Filipinos.

Jose Godinez and Martina Alvarez Godinez were married in 1910. During their marriage, they acquired Lot No. 94 of the Jolo townsite, a parcel of 3,665 square meters covered by Original Certificate of Title No. 179 (D-155), registered in Jose's name. Martina died in 1938, leaving the plaintiffs—their children—as her sole surviving heirs. One-half of the property thus formed part of the conjugal partnership and, upon Martina's death, passed to her heirs.

On November 27, 1941, without the knowledge of the plaintiffs, Jose Godinez sold the entire parcel to Fong Pak Luen, a Chinese citizen residing in Hong Kong, for valuable consideration. Transfer Certificate of Title No. 884 was issued by the Register of Deeds in Fong Pak Luen's name. The sale was executed under the 1935 Constitution, which prohibited the transfer of private agricultural land to aliens not qualified to hold lands of the public domain—a prohibition construed in Krivenko vs. Register of Deeds of Manila to extend to residential lands.

On January 11, 1963, Fong Pak Luen executed a power of attorney in favor of Kwan Pun Ming, also an alien, who thereupon conveyed and sold the property to Trinidad S. Navata. Navata was alleged to have had full knowledge that both Fong Pak Luen and Kwan Pun Ming were Chinese citizens and thus disqualified from acquiring real property in the Philippines. Transfer Certificate of Title No. 1322 was issued in Navata's name. The plaintiffs contended that because Fong Pak Luen had acquired no valid title, Kwan Pun Ming could convey none, and Navata accordingly acquired nothing.

The plaintiffs filed their complaint on September 30, 1966—twenty-five years after the original sale—seeking annulment of both the 1941 sale and the subsequent transfer, declaration of their ownership, and cancellation of the titles issued to Fong Pak Luen and Navata. Navata answered with an affirmative defense of prescription under Article 1144(1) of the Civil Code, arguing that the action on the written contract of sale had accrued on November 27, 1941 and that the ten-year prescriptive period had long lapsed. Navata also asserted the indefeasibility of her Torrens title and filed a counterclaim for moral damages, attorney's fees, and litigation expenses. The trial court dismissed the complaint on the ground of prescription and denied the motion for reconsideration, prompting the appeal.

• Error in Applying Prescription: Petitioners contended that the trial court erred in dismissing the complaint on the ground of prescription, arguing that Article 1144(1) of the Civil Code was inapplicable because the sale to an alien was void ab initio for violating the Constitution, and prescription can never be invoked to defend that which the Constitution prohibits.
• Error in Denying Reconsideration: Petitioners maintained that the trial court erred in denying their motion for reconsideration of the order of dismissal.
• Right to Trial on the Merits: Petitioners argued that the trial court erred in not ordering the case to be tried on the merits, asserting that the affirmative defense of prescription should not have been resolved without a full hearing.

• Prescription: Respondent Navata argued that the cause of action had prescribed under Article 1144(1) of the Civil Code, the right of action having accrued on November 27, 1941, while the complaint was filed only on September 30, 1966—well beyond the ten-year period for actions based on written contracts.
• Indefeasibility of Torrens Title: Respondent maintained that her Torrens title was indefeasible, she having acquired the property from Fong Pak Luen, who had been in possession since 1941, and that her own possession, tacked to that of her predecessor, spanned twenty-five years.
• Lack of Cause of Action: Respondent asserted that the complaint stated no cause of action because the property was registered in Jose Godinez's name as his sole property, such that he was free to dispose of it.
• Counterclaim for Damages: Respondent alleged that the complaint was intended to harass her as a civic leader and respectable member of the community, claiming moral damages of ₱100,000, attorney's fees of ₱2,500, and litigation expenses of ₱500.

• Prescription of Void Contracts: Whether the action to annul the sale of land to an alien on constitutional grounds is barred by prescription under Article 1144(1) of the Civil Code.
• Recovery from a Subsequent Filipino Vendee: Whether the heirs of a vendor who sold land to an alien in violation of the Constitution may recover the property after it has been conveyed to a Filipino citizen qualified to own land.
• Laches: Whether the heirs are barred by laches from asserting their claim after an unreasonable period of inaction.

• Prescription of Void Contracts: No, as to the alien vendee. Prescription may never be invoked to defend that which the Constitution prohibits; however, the imprescriptibility of the void contract does not automatically entitle the vendor's heirs to recover.
• Recovery from a Subsequent Filipino Vendee: No. Where the alien vendee has subsequently conveyed the property to a Filipino citizen qualified to acquire real property, the original vendor's heirs cannot recover the land, the constitutional policy being satisfied by the property's restoration to qualified hands.
• Laches: Yes. The heirs slept on their rights for twenty-five years, and by their long inaction or inexcusable neglect, they are barred from asserting their claim.

• Prescription of Void Contracts: The 1941 sale by Jose Godinez to Fong Pak Luen, a Chinese citizen, violated Section 5, Article XIII of the 1935 Constitution, which prohibited the transfer of private agricultural land to aliens not qualified to hold lands of the public domain. As construed in Krivenko vs. Register of Deeds of Manila, this prohibition extended to residential lands and constituted an imperative constitutional policy. Because the sale offended a constitutional mandate, prescription could not be invoked by the alien vendee to defend his title. The trial court therefore erred in treating the case as a simple application of the statute of limitations. However, the imprescriptibility of the void contract operated only against the disqualified alien vendee; it did not automatically confer a right of recovery upon the vendor's heirs, particularly where the property had passed to a qualified transferee.

• Recovery from a Subsequent Filipino Vendee: The constitutional prohibition was designed to preserve the nation's lands for future generations of Filipinos. That purpose was not thwarted but achieved when the property passed to Navata, a Filipino citizen qualified to acquire real property. Applying the rationale of Vasquez vs. Li Seng Giap and Li Seng Giap & Sons, where an alien vendee later sold to a Filipino corporation, the sale to the subsequent Filipino vendee could not be impugned. The in pari delicto rule—under which both vendor and alien vendee are deemed to have committed the constitutional violation and the courts will afford protection to neither—further precluded the heirs from recovering. While Philippine Banking Corporation vs. Lui She had relaxed the pari delicto doctrine in appropriate cases, that relaxation did not avail the heirs where the property was already in the hands of a qualified person and no public policy would be served by allowing recovery. The Court found no necessity to determine whether the original contract was void ab initio, illegal per se, or merely prohibited, since the decisive fact was that the land was now owned by a Filipino citizen against whom the constitutional prohibition was never intended to apply.

• Laches: The heirs filed their complaint twenty-five years after the 1941 sale. Following Sarsosa vda. de Barsobia vs. Cuenco, where the Court held that a petitioner who slept on her rights for twenty-six years was barred by laches, the same doctrine applied here. Laches was defined as 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, warranting a presumption that the party entitled to assert a right either has abandoned it or declined to assert it. The heirs' long inaction and inexcusable neglect barred their claim independently of the constitutional analysis.

• In Pari Delicto in Constitutional Violations — Where both vendor and alien vendee participate in a sale that violates the constitutional prohibition against alien acquisition of land, they are deemed in pari delicto, and the courts will afford protection to neither party. The vendor cannot recover the property from the alien vendee on the ground of the latter's disqualification, since the vendor himself participated in the violation. The heirs of the vendor stand in no better position.

• Imprescriptibility of Constitutionally Prohibited Transactions — Prescription may never be invoked to defend that which the Constitution prohibits. A sale of land to an alien in violation of the constitutional prohibition is void, and the alien vendee cannot acquire title by prescription. However, imprescriptibility does not automatically entitle the vendor or his heirs to recover the property, especially where it has passed to a qualified transferee.

• Transfer to a Qualified Filipino Vendee Cures the Constitutional Defect — Where an alien vendee who acquired land in violation of the Constitution subsequently conveys the property to a Filipino citizen qualified to own land, the sale to the Filipino cannot be impugned. The constitutional policy of conserving land for Filipinos is satisfied by the property's restoration to qualified hands, and there is no public policy to be served in allowing the original vendor's heirs to recover.

• 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, warranting a presumption that the party entitled to assert a right has abandoned it or declined to assert it. Laches bars heirs who sleep on their rights for decades from later asserting claims to recover property sold to aliens.

• "prescription may never be invoked to defend that which the Constitution prohibits" — This formulation states the ratio decidendi regarding the imprescriptibility of constitutionally prohibited transactions, distinguishing the alien vendee's inability to invoke prescription from the vendor's inability to rely on imprescriptibility once the property has passed to a qualified Filipino.

• "But neither can the vendor or his heirs rely on an argument based on imprescriptibility because the land sold in 1941 is now in the hands of a Filipino citizen against whom the constitutional prescription was never intended to apply." — This passage defines the limiting principle: imprescriptibility protects against the alien vendee but does not create a recovery right against a subsequent Filipino owner, articulating the Court's central holding.

• "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 land 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." — Quoted from Vasquez vs. Li Seng Giap and Li Seng Giap & Sons, this passage articulates the policy rationale underlying the rule that transfer to a qualified Filipino satisfies the constitutional purpose and is frequently cited in subsequent jurisprudence on alien land acquisitions.

• Krivenko vs. Register of Deeds of Manila, 79 Phil. 461 — Controlling authority establishing that the constitutional prohibition on alien acquisition of private agricultural land extends to residential lands, declaring an imperative constitutional policy. Followed as the foundation for the voidness of the 1941 sale.

• Vasquez vs. Li Seng Giap and Li Seng Giap & Sons, 96 Phil. 447 — Controlling precedent for the proposition that where an alien vendee later sells to a Filipino or a Filipino corporation, the sale to the latter cannot be impugned. Applied directly to the facts of this case.

• Herrera vs. Luy Kim Guan, SCRA 406 — Reiterated the Vasquez ruling that where land is sold to a Chinese citizen who later sold it to a Filipino, the sale to the latter cannot be impugned. Followed.

• Sarsosa vda. de Barsobia vs. Cuenco, 113 SCRA 547 — Controlling precedent on a substantially similar factual situation, where the Court held that a petitioner who slept on her rights for twenty-six years was barred by laches and that the property in the hands of a naturalized Filipino could not be recovered. Applied directly.

• Philippine Banking Corporation vs. Lui She, 21 SCRA 52 — Cited for the relaxation of the pari delicto doctrine to allow heirs or successors-in-interest, in appropriate cases, to recover property sold to aliens. Distinguished, as the relaxation did not avail the heirs where the property was already in qualified hands.

• Tijam vs. Sibonghanoy, 23 SCRA 29 — Cited for the canonical definition of laches. Applied through Sarsosa and Sotto vs. Teves.

• Sotto vs. Teves, 86 SCRA 157 — Cited for the application of laches to bar recovery after long inaction. Followed.

• Section 5, Article XIII, 1935 Constitution — Provided that, save in cases of hereditary succession, no private agricultural land may be transferred or assigned except to individuals, corporations, or associations qualified to acquire or hold lands of the public domain. Applied to invalidate the 1941 sale to Fong Pak Luen, a Chinese citizen, as the constitutional prohibition extended to residential lots pursuant to Krivenko.

• Article 1144(1), Civil Code — Prescribes a ten-year period for actions upon a written contract. Invoked by Navata as an affirmative defense of prescription; held inapplicable to bar an action against a constitutionally prohibited transaction, though the heirs' recovery was denied on other grounds.

• Article 1411, Civil Code — Codifies the in pari delicto rule: when two parties are equally at fault, the courts will not afford protection to either. Applied to bar the vendor's heirs from recovering property sold in violation of the Constitution, both vendor and alien vendee having participated in the constitutional violation.

• Article 1416, Civil Code — Refers to agreements not illegal per se but merely prohibited, providing an exception to the pari delicto rule. Discussed in the footnote as the basis for the relaxation applied in Philippine Banking Corporation vs. Lui She, but held not to avail the heirs in this case.

• Article 1409(7), Civil Code — Declares void those contracts whose object or cause is contrary to law, morals, good customs, public order, or public policy. Cited in the footnote through Sarsosa as the basis for the voidness of a sale executed against the mandatory provision of the 1935 Constitution.

Teehankee (Chairman), Melencio-Herrera, Plana, Vasquez, and Relova, JJ., concurred.