Primary Holding

The Agreement of Lease between Joselyn Taylor and Philip Matthews is valid because Benjamin Taylor, the alien husband, has no legal right to nullify the lease on property exclusively owned by his Filipino wife. Aliens are constitutionally prohibited from owning land in the Philippines, thus Benjamin's claim of ownership or need for consent is without legal basis.

Background

Benjamin Taylor, a British citizen, and Joselyn Taylor, a Filipina, were married. Joselyn purchased a property in Boracay using funds allegedly provided by Benjamin and developed it into a resort. Later, without Benjamin's express consent, Joselyn leased the property to Philip Matthews. Benjamin filed a case to nullify the lease agreement arguing it was void without his consent as the property was community property and his funds were used for its acquisition.

Facts

• 1. Joselyn Taylor, a Filipina, married Benjamin Taylor, a British citizen, in 1988.
• 2. In 1989, Joselyn purchased a Boracay property in her name. Benjamin claimed he financed the purchase and improvements.
• 3. Joselyn obtained permits and licenses for a resort on the property under her sister's name while she was a minor.
• 4. In 1992, Joselyn, using a Special Power of Attorney she had granted to Benjamin, entered into a 25-year lease agreement with Philip Matthews for the Boracay property. Benjamin signed as a witness.
• 5. Benjamin later claimed the lease was null and void as it was done without his consent and initiated a case to nullify it, arguing the property was community property and his funds were used for its acquisition.
• 6. Philip Matthews argued good faith in transacting with Joselyn, and that Benjamin's signature as witness implied consent.

Arguments of the Petitioners

• 1. Benjamin Taylor's marital consent was not required for the lease agreement.
• 2. Even if consent was needed, Benjamin was deemed to have given consent by signing as a witness in the lease agreement.
• 3. The Boracay property was Joselyn Taylor's exclusive property.
• 4. The lower courts erroneously applied Article 96 of the Family Code relating to absolute community of property instead of conjugal partnership of gains applicable to marriages before the Family Code.
• 5. The Court of Appeals ignored the presumption of regularity in the notarized lease agreement.
• 6. The Court of Appeals failed to rule on the counterclaim despite evidence.

Arguments of the Respondents

• 1. The lease agreement was null and void because it was entered into by Joselyn without Benjamin's consent.
• 2. Benjamin's funds were used to acquire and improve the Boracay property making it community property requiring his consent for any transaction.

Issues

• 1. Whether the marital consent of Benjamin Taylor was necessary to validate the Agreement of Lease entered into by his wife, Joselyn Taylor.
• 2. Whether Benjamin Taylor, as an alien who allegedly provided funds for the purchase of the property, had the right to seek nullification of the lease agreement.
• 3. Whether the Boracay property was community property requiring spousal consent or exclusive property of Joselyn Taylor.

Ruling

• 1. The Supreme Court ruled that the Agreement of Lease is valid.
• 2. The Court emphasized the constitutional prohibition on aliens owning land in the Philippines.
• 3. Even if Benjamin provided the funds, Joselyn, as a Filipino citizen, legally owned the property.
• 4. Benjamin, as an alien, cannot claim ownership or conjugal rights over the land in contravention of the Constitution.
• 5. The Court reasoned that allowing Benjamin to nullify the lease would indirectly grant him a right over the land, violating the constitutional prohibition against alien land ownership.
• 6. The Court deemed it unnecessary to address other issues raised by the petitioner as the constitutional issue was decisive.

Doctrines

• 1. Constitutional Prohibition on Alien Land Ownership: Aliens are prohibited from acquiring private or public lands in the Philippines, except in constitutionally recognized exceptions like hereditary succession. This is to conserve national patrimony.
• 2. Doctrine of Implied Trust (Rejected in this case): While Benjamin claimed to have funded the purchase, no implied trust was created in his favor because allowing it would circumvent the constitutional prohibition against alien land ownership.
• 3. Parity Amendment (Mentioned in passing): Relates to a historical exception for Americans, not applicable to the present case of a British citizen.

Key Excerpts

• 1. "The rule is clear and inflexible: aliens are absolutely not allowed to acquire public or private lands in the Philippines, save only in constitutionally recognized exceptions."
• 2. "This constitutional provision closes the only remaining avenue through which agricultural resources may leak into alien's 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."
• 3. "One who loses his money or property by knowingly engaging in an illegal contract may not maintain an action for his losses."

Precedents Cited

• 1. Krivenko v. Register of Deeds: Explained the constitutional prohibition on alien land ownership. Used to interpret the scope and purpose of the constitutional restriction.
• 2. Muller v. Muller: Reiterated the prohibition against aliens acquiring land and rejected reimbursement claims to circumvent the prohibition. Used to show precedent against allowing aliens to benefit from land ownership indirectly.
• 3. Ting Ho, Jr. v. Teng Gui: Showed a case where alien land ownership was rejected even through inheritance by heirs. Used to demonstrate consistent application of the prohibition.
• 4. Frenzel v. Catito: Similar to Muller, disallowed an alien from recovering property registered in a Filipina partner's name. Used to further solidify the precedent against indirect alien land ownership.
• 5. Cheesman v. Intermediate Appellate Court: Ruled against an alien husband's attempt to nullify the sale of property owned by his Filipina wife. Directly analogous to the present case and used as strong precedent.
• 6. Spouses Pelayo vs. Melki Perez: (Mentioned by Petitioner, but not actually used in SC reasoning against Petitioner). Cited by petitioner to argue for implied consent based on signing as a witness, but SC did not adopt this reasoning as it was not central to the constitutional issue.

Statutory and Constitutional Provisions

• 1. Section 7, Article XII of the 1987 Constitution: Primary constitutional provision prohibiting the transfer of private lands to individuals not qualified to acquire or hold lands of the public domain, thus prohibiting alien land ownership, except in cases of hereditary succession.
• 2. Section 5, Article XIII of the 1935 Constitution & Section 14, Article XIV of the 1973 Constitution: Cited to show the historical consistency of the constitutional prohibition on alien land ownership in previous constitutions.
• 3. Section 8, Article XII, Philippine Constitution: (Mentioned in passing re: exceptions) Relates to natural-born Filipinos who lost citizenship being able to acquire land within limitations.
• 4. Section 11, Article XVII, 1973 Constitution: (Mentioned in passing re: exceptions) Pertains to American citizens holding valid title to private lands due to the Parity Agreement.
• 5. Article 96 of the Family Code: (Mentioned by Petitioner as erroneously applied by lower courts). Deals with administration and enjoyment of community property, argued by petitioner as wrongly applied because conjugal partnership of gains under the Civil Code (pre-Family Code) was applicable. However, SC did not rule on this as the constitutional issue was decisive.