Case Summary (G.R. No. 164584)
Key Dates
• June 30, 1988 – Marriage of Benjamin and Joselyn Taylor.
• June 9, 1989 – Joselyn’s acquisition of the Boracay property.
• June 8, 1992 – Joselyn grants Benjamin a Special Power of Attorney over the property.
• July 20, 1992 – Lease agreement executed between Joselyn and Matthews.
• June 30, 1997 – RTC decision declaring the lease null.
• December 19, 2003 & July 14, 2004 – CA decision and resolution affirming RTC.
• June 22, 2009 – Supreme Court decision reversing CA.
Applicable Law
• 1987 Philippine Constitution, Article XII, Section 7 (alien land-ownership prohibition).
• Civil Code and Family Code provisions on spousal consent and property regimes.
Procedural History
Benjamin sued for nullity of lease and damages, asserting that (a) he financed the property’s acquisition and improvement, and (b) as spouse, Joselyn required his consent to lease community property. Joselyn and Matthews failed to answer, prompting a default judgment in favor of Benjamin (March 14, 1994). The CA set aside that judgment, allowed Matthews to answer, and remanded for trial. The RTC again nullified the lease and awarded damages; the CA affirmed. Matthews sought certiorari relief before the Supreme Court.
Trial Court Ruling
The RTC held that the Boracay land formed part of the couple’s community property, funded by Benjamin; thus, Joselyn needed his consent to bind the estate. It struck Benjamin’s signature as witness because it did not appear on every page of the lease. The lease was declared null and void; Joselyn and Matthews were jointly liable for damages and attorney’s fees.
Court of Appeals Decision
The CA affirmed the RTC on two grounds:
- Marital consent under Article 96 of the Family Code (absolute community) was absent.
- Benjamin’s signature “as witness” did not equate to “with my consent.”
It found the SPA granted Benjamin no need to participate in the lease’s execution, reinforcing invalidity.
Issues on Certiorari
Matthews urged that:
- Spousal consent was unnecessary or, if required, Benjamin gave consent by witnessing the lease (citing Spouses Pelayo v. Melki Perez).
- The lot was Joselyn’s exclusive property (citing Cheesman v. IAC).
- The Family Code’s absolute community regime did not apply to their 1988 marriage; conjugal partnership of gains was the governing regime.
- Notarial documents enjoy a presumption of regularity.
- The CA overlooked petitioner’s uncontested counterclaim.
Supreme Court’s Constitutional Analysis
Under Section 7, Article XII of the 1987 Constitution, aliens are absolutely prohibited from acquiring private or public lands, save for hereditary succession or constitutionally recognized exceptions. This measure conserves the national patrimony and precludes indirect or clandestine acquisition by foreign nationals.
Precedent on Alien Land Ownership
• Krivenko v. Register of Deeds (1947) – Constitutional ban prevents alien acquisition of private agricultural lands.
• Muller v. Muller (2006) – Alien husband’s funding does not confer ownership or reimbursement rights.
• Frenzel v. Catito (2003) – Alien cannot recover properties titled under a Filipina’s name.
• Cheesman v. IAC (1991) – Alien
Case Syllabus (G.R. No. 164584)
Background and Factual Circumstances
- On June 30, 1988, British subject Benjamin A. Taylor married 17-year-old Filipina Joselyn C. Taylor.
- On June 9, 1989, Joselyn purchased from Diosa M. Martin a 1,294-sq. m. lot in Manoc-Manoc, Boracay Island, for P129,000.00, financed by Benjamin.
- The Taylors, using Benjamin’s funds, constructed and improved the lot into the Admiral Ben Bow Inn; permits were secured under Joselyn’s sister’s name due to Joselyn’s minority.
- After a quarrel, Joselyn fled with a third party; on June 8, 1992, she granted Benjamin a Special Power of Attorney to manage, sell, lease, sublease, or contract over the Boracay property.
- On July 20, 1992, Joselyn (lessor) and petitioner Philip Matthews (lessee) executed a 25-year lease of the Boracay property at an annual rent of P12,000.00; Matthews renamed the resort Music Garden Resort.
Trial Court Proceedings and Ruling
- Benjamin filed a complaint for Declaration of Nullity of Agreement of Lease with Damages, alleging lack of his spousal consent and his proprietary interest from funding the purchase and improvements.
- Joselyn and Matthews filed no answer; the RTC declared them in default and, on March 14, 1994, rendered judgment nullifying the lease.
- The Court of Appeals set aside the default judgment, ordered Matthews to answer, and reinstated proceedings.
Merits Decision of the Regional Trial Court
- Matthews asserted good faith reliance on Joselyn’s apparent ownership and Benjamin’s signature as witness.
- The RTC held the Boracay lot as community property of the spouses; defective spousal consent rendered the lease void.
- Judgment awarded Benjamin P16,000.00 for unrealized income (July 1992 until restoration) and P20,000.00 for attorney’s fees and incidental expenses.
- The RTC refused to credit Benjamin’s signature on the last page as evidence of consent to the lease.