Ong Ching Po vs. Court of Appeals

A sale of private land to an alien who is disqualified to acquire public lands is null and void, and an alien buyer cannot rely on an alleged dummy or trust arrangement to defeat the registered title of a Filipino transferee. An express trust over immovable property cannot be proved by parole evidence, while an implied trust may be proved orally only through trustworthy evidence received with extreme caution.

Petitioners Ong Ching Po, his wife Yu Siok Lian, and his children David and Jimmy Ong were aligned against private respondent Soledad Parian, the wife of Ong Yee and sister-in-law of Ong Ching Po. The dispute implicated the constitutional prohibition against alien ownership of private land, specifically the 1935, 1973, and 1987 Constitutions’ reservation of private land acquisition to persons qualified to acquire public domain. Ong Ching Po was a Chinese citizen, and the land in question was located at Fundidor Street, San Nicolas.

On July 23, 1947, Ong Joi Jong sold a parcel of land located at Fundidor Street, San Nicolas, to private respondent Soledad Parian, the wife of Ong Yee and sister-in-law of petitioner Ong Ching Po. The sale was evidenced by a notarized Deed of Sale written in English. The document was subsequently registered with the Register of Deeds of Manila, which issued Transfer Certificate of Title No. 9260 dated September 2, 1947 in the name of private respondent. Ong Yee died in January 1983, while Ong Ching Po died in October 1986.

According to private respondent, she entrusted the administration of the lot and building to petitioner Ong Ching Po when she and her husband settled in Iloilo. When her husband died, she demanded that the lot be vacated because she was going to sell it, but petitioners refused to vacate the premises. On March 19, 1984, private respondent filed a case for unlawful detainer against petitioner Ong Ching Po before the Metropolitan Trial Court of Manila, Branch 26. The inferior court dismissed her case; the dismissal was affirmed by the Regional Trial Court, Branch 10, Manila; and the Court of Appeals affirmed the Regional Trial Court and dismissed the petition, with the decision becoming final and executory.

Petitioners, on the other hand, claimed that on July 23, 1946, petitioner Ong Ching Po bought the same parcel of land from Ong Joi Jong. The sale was evidenced by a photocopy of a Deed of Sale written in Chinese with the letterhead “Sincere Trading Co.” (Exh. “B”). An English translation (Exh. “C”) stated that Ong Joi Jong sold the lot at No. 4 Fundidor Street, San Nicolas, with an area of 213 square meters including a one-story house erected thereon, to Ong Ching Po for P6,000.00, the receipt of which was acknowledged, and that the government registered title and the house erected thereon belonged to Ong Ching Po. The translation also contained an addendum in which Ong Joi Jong stated that he had acceded to Ong Ching Po’s request to sign another document in favor of Soledad Parian, the Filipino wife of Ong Yee, brother of Ong Ching Po, for the purpose of facilitating the issuance of a new title by the City Register of Deeds because Ong Ching Po was not yet a Filipino, and he certified to the truthfulness of that fact.

On December 6, 1983, petitioner Ong Ching Po executed a Deed of Absolute Sale conveying to his children, petitioners Jimmy and David Ong, the same property sold by Ong Joi Jong to private respondent in 1947. On December 12, 1985, petitioners Ong Ching Po, Jimmy Ong, and David Ong filed an action for reconveyance and damages against private respondent in the Regional Trial Court, Branch 53, Manila, docketed as Case No. 85-33962. On July 26, 1986, private respondent filed an action for quieting of title against petitioners Ong Ching Po and his wife, petitioner Yu Siok Lian, in the Regional Trial Court, Branch 58, Manila, docketed as Civil Case No. 86-36818. Upon her motion, the case was consolidated with Civil Case No. 85-33962.

On May 30, 1990, the trial court rendered a decision in favor of private respondent. On appeal by petitioners to the Court of Appeals, the said court affirmed the decision of the Regional Trial Court. The trial court rejected Yu Siok Lian’s testimony that she was present when Exhibit “B” was executed, noting that she did not sign the document even as a witness, that her oral testimony was easy to concoct or fabricate, and that she married Ong Ching Po only on September 6, 1946 in Baguio City, after the deed of sale was executed. The Court of Appeals did not give credence to Exhibit “B” and its translation, Exhibit “C”, because they had not been properly authenticated. It also observed that petitioners’ acts, even if true, were not necessarily reflective of dominion, as a mere administrator or manager may lawfully perform them, and noted that the tax receipts were in the name of private respondent and her husband while the rental receipts were in the name of her husband.

• Weight of Conflicting Deeds: Petitioners argued that the Court of Appeals erred in giving full faith and credit to the notarized Deed of Sale in favor of private respondent (Exh. “A”) instead of the Deed of Sale in favor of Ong Ching Po (Exh. “B” and its translation, Exh. “C”).
• Dummy Arrangement / Alien Ownership: Petitioners maintained that the real buyer was Ong Ching Po, who was an alien, and that the land was registered in private respondent’s name only as a subterfuge to avoid legal complications and facilitate registration and transfer, under an agreement that she would hold the title in trust for him or his successors-in-interest.
• Acts of Ownership: Petitioners contended that the Court of Appeals erred in concluding that their acts were not acts of ownership, pointing to their possession of tax receipts, tax declarations, rental receipts, the deed of sale (Exh. “B”), and the transfer certificate of title.
• Express or Implied Trust: Petitioners argued that the Court of Appeals erred in ruling that no express or implied trust existed between them and private respondent; they asserted that if an express trust could not be proved in writing, an implied trust could be proved orally.
• Consideration / Payment: Petitioners claimed that private respondent admitted she did not pay any consideration for the sale in her favor and implied that it was her husband who paid for the property.

• Validity of Alien Purchase / Dummy Arrangement: Whether the alleged 1946 sale of the disputed lot to Ong Ching Po, a Chinese citizen, could be sustained as the true conveyance, with private respondent merely holding title as a dummy in trust for him.
• Weight of Conflicting Deeds: Whether the Court of Appeals erred in giving full faith and credit to the notarized 1947 Deed of Sale in favor of private respondent instead of the photocopied Chinese Deed of Sale and translation in favor of Ong Ching Po.
• Authentication and Secondary Evidence: Whether the photocopied Chinese Deed of Sale and its translation were admissible and entitled to credit absent proof of the genuineness and due execution of the original.
• Acts of Ownership: Whether petitioners’ acts, including possession of tax receipts, tax declarations, rental receipts, the deed of sale, and the transfer certificate of title, constituted acts of ownership.
• Express or Implied Trust: Whether an express or implied trust existed between petitioners and private respondent over the disputed lot.

• Validity of Alien Purchase / Dummy Arrangement: No. A sale of private land to an alien disqualified to acquire public lands is null and void; the alleged dummy arrangement cannot be sustained because it would give a premium to a violation of nationalization laws.
• Weight of Conflicting Deeds: No error. The notarized 1947 Deed of Sale in favor of private respondent stands, while the photocopied Chinese Deed of Sale and translation were not properly authenticated and were not entitled to credit.
• Authentication and Secondary Evidence: No. Secondary evidence was inadmissible absent proof of the original’s existence, execution, loss, and contents; petitioners failed to establish the genuineness and due execution of Exhibit “B”.
• Acts of Ownership: No. Possession of tax receipts, tax declarations, rental receipts, and title documents did not establish dominion, as a mere administrator or manager may lawfully perform such acts.
• Express or Implied Trust: No. No express trust was shown in writing as required for immovables, and the alleged implied trust was not supported by trustworthy evidence.

• Validity of Alien Purchase / Dummy Arrangement: The Court refused to sustain the claim that Ong Ching Po used private respondent as a dummy because he was an alien disqualified to own real property. It cited Section 5, Article XIII of the 1935 Constitution; Section 14, Article XIV of the 1973 Constitution; and Section 7, Article XII of the 1987 Constitution, all of which restrict transfer or conveyance of private land to individuals, corporations, or associations qualified to acquire or hold lands of the public domain. Because aliens were disqualified from acquiring public lands, they were likewise disqualified from acquiring private lands. Ong Ching Po was a Chinese citizen. Thus, even assuming Exhibit “B” existed and was duly executed, the sale to him was null and void as contrary to law.
• Weight of Conflicting Deeds: The notarized Deed of Sale in favor of private respondent (Exhibit “A”) carried the mantle of validity. Petitioners’ claim that private respondent admitted she paid no consideration did not destroy it; the evidence indicated that the sale was financed out of conjugal funds and that her husband handled the transaction, a common practice in Filipino-family affairs. Possession was transferred to her by the notarized deed under Article 1498 of the Civil Code, which provides that execution of a public instrument is equivalent to delivery of the object of the contract if the contrary does not appear or cannot clearly be inferred. Her failure to live in the building was explained by her family’s settlement in Iloilo.
• Authentication and Secondary Evidence: The Court of Appeals did not give credence to Exhibit “B” and its translation, Exhibit “C”, because they had not been properly authenticated. Under Section 4, Rule 130 of the Revised Rules of Court, secondary evidence is admissible when the original writing has been lost or destroyed, but the proponent must first establish the former existence of the document. The correct order of proof is existence, execution, loss, and contents, subject to the court’s discretion to change the order. Petitioners failed to adduce evidence on the genuineness and due execution of Exhibit “B”. Due execution may be established by the persons who executed it, the person before whom it was acknowledged, a person present and saw it executed or who after execution saw and recognized the signatures, or a person to whom the parties had previously confessed execution. Yu Siok Lian claimed she was present, but the trial court rejected her testimony because she did not sign as a witness, her oral testimony was easy to fabricate, and she married Ong Ching Po only on September 6, 1946, after the deed was supposedly executed.
• Acts of Ownership: The Court found that petitioners’ possession of tax receipts, tax declarations, rental receipts, the deed of sale, and the transfer certificate of title did not necessarily reflect dominion. As the Court of Appeals observed, even a mere administrator or manager may lawfully perform such acts pursuant to appointment or employment. Private respondent explained that she and her husband entrusted the lot and building to petitioners when they moved to Iloilo. Moreover, the tax receipts were in the name of private respondent and her husband, and the rental receipts were in the name of her husband.
• Express or Implied Trust: No document showed an express trust with Ong Ching Po as trustor and private respondent as trustee. Exhibit “B” could not serve as such a document because private respondent, the registered owner, was not a party to it. Article 1443 of the Civil Code provides that no express trust concerning an immovable or any interest therein may be proved by parole evidence. While an implied trust may be proved orally under Article 1457, the evidence must be trustworthy and received with extreme caution because it may easily be fabricated. It cannot rest on vague, uncertain, loose, equivocal, or indefinite declarations. Petitioners did not claim that Ong Yee was not financially able to acquire the land and introduce improvements; Yu Siok Lian admitted that Ong Yee was a stockholder of Lam Sing Corporation and engaged in business. Thus, the alleged implied trust was not established.

• Constitutional Disqualification of Aliens from Private Land Ownership — Under Section 5, Article XIII of the 1935 Constitution, Section 14, Article XIV of the 1973 Constitution, and Section 7, Article XII of the 1987 Constitution, private land may be transferred or conveyed only to individuals, corporations, or associations qualified to acquire or hold lands of the public domain. Because aliens are disqualified from acquiring public lands, they are also disqualified from acquiring private lands. The Court applied this to hold that the alleged sale to Ong Ching Po, a Chinese citizen, was null and void even if the deed existed and was duly executed.
• Dummy Arrangement Cannot Validate Alien Land Acquisition — A claim that a Filipino registered owner merely acted as a dummy for an alien cannot be sustained, as it would give a high premium to a violation of nationalization laws. The Court rejected petitioners’ assertion that private respondent held title in trust for Ong Ching Po to circumvent his disqualification.
• Express Trust Over Immovables Requires Written Evidence — Article 1443 of the Civil Code provides that no express trust concerning an immovable or any interest therein may be proved by parole evidence. The Court found no written document establishing an express trust and held that Exhibit “B” could not serve as one because private respondent was not a party to it.
• Implied Trust May Be Proved Orally but with Extreme Caution — Under Article 1457 of the Civil Code, an implied trust may be proved orally, but the evidence must be trustworthy and received with extreme caution because it may easily be fabricated. It cannot rest on vague, uncertain, loose, equivocal, or indefinite declarations. The Court found petitioners’ evidence insufficient, especially since Ong Yee was financially capable and engaged in business.
• Secondary Evidence Requisites — Under Section 4, Rule 130 of the Revised Rules of Court, when the original writing is lost or destroyed, its contents may be proved by a copy, recital in an authentic document, or recollection of witnesses. Before such evidence is admitted, the proponent must establish the former existence of the document, following the order of existence, execution, loss, and contents. The Court held that Exhibit “B” was not properly authenticated and that petitioners failed to prove its genuineness and due execution.
• Delivery in Sale Through a Public Instrument — Article 1498 of the Civil Code provides that when a sale is made through a public instrument, its execution is equivalent to delivery of the object of the contract if the contrary does not appear or cannot clearly be inferred. The Court applied this to the notarized deed in favor of private respondent, holding that possession was transferred to her despite her not living on the property.
• Acts of Administration Are Not Necessarily Acts of Ownership — Possession of tax receipts, tax declarations, rental receipts, and title documents does not necessarily reflect dominion, because a mere administrator or manager may lawfully perform such acts pursuant to appointment or employment. The Court used this to reject petitioners’ claim that their acts established ownership.

• "To sustain such an outrageous contention would be giving a high premium to a violation of our nationalization laws." — The passage rejects petitioners’ claim that private respondent merely acted as a dummy for Ong Ching Po, an alien disqualified from owning land.
• "Assuming that the genuineness and due execution of Exhibit "B" has been established, the same is null and void, it being contrary to law." — This states the core ruling that even a duly executed sale of private land to an alien is void under the constitutional prohibition.
• "No express trust concerning an immovable or any interest therein may be proved by parole evidence." — This quotes Article 1443 of the Civil Code, which the Court applied to reject the alleged express trust absent a written document.
• "While an implied trust may be proved orally (Civil Code of the Philippines, Art. 1457), the evidence must be trustworthy and received by the courts with extreme caution, because such kind of evidence may be easily fabricated (Salao v. Salao, 70 SCRA 65 [1976])." — This defines the exacting standard for proving an implied trust orally, which petitioners failed to meet.

• Salao vs. Salao, 70 SCRA 65 [1976] — Cited for the rule that an implied trust may be proved orally, but the evidence must be trustworthy and received with extreme caution because it may easily be fabricated. The Court relied on this to reject petitioners’ alleged implied trust.
• De Leon vs. Molo-Peckson, et al., 116 Phil. 1267 [1962] — Cited for the rule that an implied trust cannot be made to rest on vague and uncertain evidence or on loose, equivocal, or indefinite declarations. The Court applied this in finding petitioners’ evidence insufficient.
• De Vera vs. Aguilar, 218 SCRA 602 [1993] — Cited for the requisites of secondary evidence and the manner of proving due execution of a document. The Court used it to hold that Exhibit “B” was inadmissible absent proof of genuineness and due execution.

• Section 5, Article XIII, 1935 Constitution — Provides 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 Court cited it to disqualify Ong Ching Po, a Chinese citizen, from acquiring the disputed private land.
• Section 14, Article XIV, 1973 Constitution — Provides that, save in cases of hereditary succession, no private land shall be transferred or conveyed except to individuals, corporations, or associations qualified to acquire or hold lands in the public domain. The Court cited it as part of the constitutional bar against alien ownership of private land.
• Section 7, Article XII, 1987 Constitution — Provides that, 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 in the public domain. The Court cited it as the current constitutional expression of the same prohibition.
• Article 1498, Civil Code — Provides that when the sale is made through a public instrument, the execution thereof shall be equivalent to the delivery of the object of the contract, if from the deed the contrary does not appear or cannot clearly be inferred. The Court applied it to hold that the notarized deed transferred possession to private respondent.
• Article 1443, Civil Code — Provides that no express trust concerning an immovable or any interest therein may be proved by parole evidence. The Court applied it to reject the alleged express trust absent a written document.
• Article 1457, Civil Code — Provides that an implied trust may be proved orally. The Court applied it but held that the evidence must be trustworthy and received with extreme caution, and that petitioners failed to meet this standard.
• Section 4, Rule 130, Revised Rules of Court — Provides for secondary evidence when the original writing has been lost or destroyed, or cannot be produced in court, upon proof of its execution and loss or destruction, or unavailability. The Court applied it to hold that Exhibit “B” was not admissible absent proof of the original’s existence, execution, loss, and contents.

Justices Padilla, Davide, Jr., Bellosillo, and Kapunan concurred.