Title
Taina Manigque-Stone vs. Cattleya Land, Inc.
Case
G.R. No. 195975
Decision Date
Sep 5, 2016
Cattleya Land, Inc. contested Taina Manigque-Stone's ownership, claiming she acted as a dummy for her foreign husband, violating the constitutional ban on foreign land ownership. The Supreme Court ruled the sale void, upholding Cattleya's claim.

Case Summary (G.R. No. 91307)

Subject Property and Title

The disputed property is an 8,805-square meter parcel in Doljo, Panglao, Bohol, originally registered under TCT No. 17655 in the names of spouses Troadio B. Tecson and Asuncion Tecson. A subsequent title, TCT No. 21771, was later issued in the name of Taina.

Transactions in Issue — Cattleya’s Contract and Deed

In November 1992 Cattleya entered into a Contract of Conditional Sale with the Tecson spouses covering multiple parcels including the subject property; the Contract was entered in the Register of Deeds’ Primary Book (Entry No. 83422). On August 30, 1993 the parties executed a Deed of Absolute Sale to Cattleya, entered in the Primary Book on October 4, 1993 (Entry No. 87549). Annotation of those instruments on TCT No. 17655 was initially refused by the Register of Deeds due to an existing writ of attachment related to Civil Case No. 3399 (Tantrade Corporation v. Bohol Resort Hotel, Inc., et al.), although the attachment was later lifted after settlement.

Transactions in Issue — Sale to Mike/Taina and Ownership Allegations

Taina alleged that in June 1, 1987 Col. Tecson executed a Deed of Absolute Sale in favor of her then common-law husband, Mike Stone, following initial downpayments beginning in 1985 and further payments through 1987. Taina later asserted that the owner’s copy of TCT No. 17655 was delivered to her in 1990 by Troadio Tecson, Jr. Taina and Mike married in October 1986. Taina filed a Notice of Adverse Claim on April 25, 1994 and, on February 8, 1995, presented the owner’s copy of TCT No. 17655 to register her Deed of Absolute Sale; the Registry issued TCT No. 21771 in Taina’s name on February 10, 1995.

Registration Difficulties and Conflicting Claims

Cattleya was unable to complete registration of its Deed of Absolute Sale and to secure transfer of title because the Tecson spouses allegedly would not surrender the owner’s copy of TCT No. 17655, claiming it had been destroyed by fire. Contrary to that claim, Cattleya’s counsel discovered that the owner’s copy and a Deed of Sale in Taina’s favor had been presented to the Register of Deeds by Taina.

Trial Court Proceedings and Judgment

Cattleya filed Civil Case No. 5782 (RTC, Bohol) for quieting of title and cancellation of title against Taina. The RTC found for Cattleya, ruling that the sale to Cattleya was valid and enforceable by virtue of prior registration (October 4, 1993, Entry No. 87549); ordered cancellation of TCT No. 21771 in Taina’s name and issuance of a new title in favor of Cattleya; and enjoined Taina from claiming ownership or possession. The RTC further held that the sale to Mike (purportedly in Taina’s name) was null and void as violative of the constitutional ban on aliens acquiring Philippine land, that Taina acted as Mike’s dummy, and that marriage to Mike did not validate the prohibited acquisition; the RTC nonetheless granted Taina recovery from the Tecson spouses on her third-party complaint (return of P77,000 with interest, P50,000 moral and exemplary damages, and P30,000 attorney’s fees).

Court of Appeals Ruling

On August 16, 2010 the CA affirmed the RTC with modifications, reiterating that the notarization and delivery surrounding Taina’s Deed were defective and dubious and emphasizing Taina’s admission that Mike paid for the property and that the Deed was placed in her name because a foreigner cannot buy land. The CA invoked Article 1498 and Article 1477 of the Civil Code regarding notarization and delivery, and cited jurisprudence that registration is not conclusive proof of true ownership (Borromeo v. Descallar). The CA concluded that the real buyer was Mike (an alien), that Taina acted as dummy to evade the constitutional prohibition, and that therefore the only valid sale was to Cattleya. The CA ordered cancellation of TCT No. 21771 and issuance of title to Cattleya, and maintained the RTC’s orders against the Tecson spouses in favor of Taina on her third-party claims.

Issues Advanced on Certiorari

Petitioner raised four principal issues: (1) whether the CA correctly found Taina to be Mike’s dummy; (2) whether the verbal sale to Mike transferred ownership to a foreigner in violation of the Constitution; (3) whether subsequent marriage to Mike and registration in Taina’s name cured any constitutional defect; and (4) whether double sale rules under Article 1544 of the Civil Code should have favored Taina.

Petitioner’s Arguments on Appeal

Taina argued that: (i) as a Filipino wife she had legal capacity and conjugal partnership interests to contract and thus was not a dummy; (ii) the verbal contract of sale to Mike was unenforceable and did not transfer ownership to a foreigner; (iii) marriage to Mike and subsequent registration in her name cured any constitutional infirmity; (iv) delivery of TCT No. 17655 to her was genuine despite CA’s doubts; and (v) Article 1544 on double sales favored her because her registration predated Cattleya’s.

Respondent Cattleya’s Position

Cattleya contended that the purported earlier sale to Mike was absolutely null and void for contravening the constitutional prohibition against alien acquisition of land; consequently there was no double sale and only the sale to Cattleya was valid.

Governing Constitutional Provision and Legal Principle

The Court applied Section 7, Article XII of the 1987 Constitution: “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 of the public domain.” The Court reiterated that aliens are disqualified from acquiring private lands and that the constitutional provision is absolute and designed to conserve national patrimony. The 1987 Constitution therefore governed the disposition.

Supreme Court’s Findings of Fact and Appellate Deference

The Supreme Court observed that Taina admitted in cross-examination that Mike paid the consideration and that the Deed was placed in her name because an American cannot buy land in the Philippines. The Court emphasized its limited role as an appellate trier of facts and note

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