Case Summary (G.R. No. 149615)
Key Dates
– Marriage: September 22, 1989
– Permanent move to the Philippines: 1992
– Petition for separation of property filed: September 26, 1994
– RTC decision: August 12, 1996
– Court of Appeals decision: February 26, 2001
– Supreme Court decision: August 29, 2006
Applicable Law
1987 Philippine Constitution, Article XII, Section 7 (prohibiting alien acquisition of private lands); Family Code, Article 92 (exclusion of properties acquired by gratuitous title from community property).
Procedural History
The Regional Trial Court of Quezon City (Branch 86) terminated the spouses’ absolute community of property and ordered equal partition of personal properties, excluding gratuitous acquisitions. It held the Antipolo property was acquired with respondent’s paraphernal funds but denied his reimbursement because the acquisition violated Article XII, Section 7 of the Constitution. On appeal, the Court of Appeals modified the decision, recognizing a resulting trust in favor of respondent and ordering petitioner to reimburse him or to sell the property and divide any surplus. Petitioner elevated the case to the Supreme Court by certiorari.
Legal Issue
Whether respondent, an alien, may recover the funds he expended to acquire and improve the Antipolo property registered in petitioner’s name, when such acquisition was deliberately structured to circumvent the constitutional ban on alien land ownership.
Court of Appeals’ Ruling
The appellate court held that respondent sought only reimbursement, not ownership, and that petitioner held the property in trust for respondent. Consequently, it ordered reimbursement of the purchase and construction costs, offset by respondent’s maintenance and development expenses, or, alternatively, sale of the property to satisfy the reimbursement.
Petitioner’s Arguments
Petitioner contended that respondent, fully aware of the constitutional prohibition against alien landholding, clandestinely caused title to be placed in her name and that his true aim was to gain exclusive possession and control of the property. She argued that allowing reimbursement or any financial benefit would effectively vest in respondent the fruit of property he was disqualified to own.
Respondent’s Position
Respondent maintained he sought only equitable reimbursement of personal funds advanced in consideration of marriage. He asserted that petitioner held the property on trust and that equity and the law of unjust enrichment entitled him to restitution of his investment.
Supreme Court’s Analysis: Constitutional Proscription
Applying the 1987 Constitution, the Court emphasized that Article XII, Section 7 absolutely bars aliens from acquiring private lands, save by hereditary succession. The primary purpose is conservation of national patrimony. Respondent’s knowledge of the prohibition and his deliberate evasion rendered his claim void. No form of indirect acquisition—trust, reimbursement, or equitable restitution—can circumvent the constitutional ban.
Supreme Court’s An
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Procedural History
- Petition for separation of property filed by respondent Helmut Muller in the Regional Trial Court of Quezon City, Branch 86 (Civil Case No. Q-94-21862) on September 26, 1994.
- RTC rendered its Decision on August 12, 1996 terminating the regime of absolute community of property, decreeing separation of properties, and ordering equal partition of personal properties in the Philippines.
- Court of Appeals, in CA-G.R. CV No. 59321, issued its Decision on February 26, 2001 affirming with modification the RTC Decision—specifically ordering reimbursement to respondent or sale of the Antipolo property.
- Motion for reconsideration denied by CA Resolution dated August 13, 2001.
- Petition for review on certiorari filed with the Supreme Court, assailing both the CA Decision and Resolution.
Facts
- Parties married in Hamburg, Germany on September 22, 1989; resided in Germany until 1992.
- Respondent inherited a house in Germany, sold it, and used proceeds to acquire land in Antipolo, Rizal for ₱528,000 and construct a house costing ₱2,300,000.
- Antipolo property titled in petitioner’s name under TCT No. 219438 of Marikina Register of Deeds.
- Marriage soured due to alleged womanizing, drinking, and maltreatment by respondent; spouses separated thereafter.
RTC Decision (August 12, 1996)
- Terminated the absolute community of property and ordered separation.
- Directed equal partition of all personal properties in the Philippines, excluding those acquired by gratuitous title during marriage.
- Held Antipolo property was bought with respondent’s paraphernal funds but denied him recovery because its acquisition violated Section 7, Article XII of the Constitution.
- Recognized petitioner’s inherited German real property and proceeds as excluded from community property under Article 92, Family Code.
- Declined to rule on constitutional grounds regarding Antipolo property title.
CA Decision (February 26, 2001)
- Modified RTC Decision: ruled respondent prayed only for reimbursement, not for transfer of ownership.
- Found an i