G.R. No.
L-17587
September 12, 1967
CASTRO,
J.
Parties
of the Case:
PHILIPPINE BANKING CORPORATION, representing the estate of JUSTINA SANTOS Y CANON
FAUSTINO, deceased, (plaintiff-appellant)
LUI SHE in her own behalf and as administratrix
of the intestate estate of Wong Heng, deceased, (defendant-appellant)
Keyword: Leasing, lease for 50 years, lease for 99 years
Summary: Justina Santos leased her land in favor of Wong
for 50 years and an option to sell it to him once he acquired philippine
citizenship.
Facts: Justina Santos y Canon Faustino and her sister
Lorenzo were the owners in common of a piece of land in Manila. This parcel,
with an area of 2,582.30 square meters, is located on Rizal Avenue and opens
into Florentino Torres street at the back and Katubusan street on one side. In
it are two residential houses with entrance on Florentino Torres street and the
Hen Wah Restaurant with entrance on Rizal Avenue. The sisters lived in one of
the houses, while Wong Heng, a Chinese, lived with his family in the restaurant.
Wong had been a long-time lessee of a portion of the property, paying a monthly
rental of P2,620.
On September 22, 1957 Justina Santos became the
owner of the entire property as her sister died with no other heir. Then
already well advanced in years, being at the time 90 years old, blind, crippled
and an invalid, she was left with no other relative to live with. Her only
companions in the house were her 17 dogs and 8 maids. Her otherwise dreary existence
was brightened now and then by the visits of Wong's four children who had
become the joy of her life. Wong himself was the trusted man to whom she delivered
various amounts for safekeeping, including rentals from her property at the
corner of Ongpin and Salazar streets and the rentals which Wong himself paid as
lessee of a part of the Rizal Avenue property. Wong also took care of the payment;
in her behalf, of taxes, lawyers' fees, funeral expenses, masses, salaries of
maids and security guard, and her household expenses.
Justina Santos then executed on a contract of
lease in favor of Wong, covering the portion then already leased to him and
another portion fronting Florentino Torres street. The lease was for 50 years, although the lessee
was given the right to withdraw at any time from the agreement.
On December 21 she executed another contract
giving Wong the option to buy the leased premises for P120,000, payable within
ten years at a monthly installment of P1,000. The option, written in Tagalog,
imposed on him the obligation to pay for the food of the dogs and the salaries of
the maids in her household, the charge not to exceed P1,800 a month. The option
was conditioned on his obtaining Philippine citizenship, a petition for which
was then pending in the Court of First Instance of Rizal.
It appears, however, that this application for
naturalization was withdrawn when it was discovered that he was not a resident
of Rizal. On October 28, 1958 she filed a petition to adopt him and his
children on the erroneous belief that adoption would confer on them Philippine
citizenship. The error was discovered and the proceedings were abandoned.
In two wills executed on August 24 and 29, 1959,
she bade her legatees to respect the contracts she had entered into with Wong,
but in a codicil of a later date (November 4, 1959) she appears to have a
change of heart. Claiming that the various contracts were made by her because
of machinations and inducements practiced by him, she now directed her executor
to secure the annulment of the contracts.
Issue: Whether or not the contracts with Wong were
valid
Held: NO.
Ratio: the contracts show nothing that is
necessarily illegal, but considered collectively, they reveal an insidious pattern to subvert by indirection what the Constitution
directly prohibits. To be sure, a lease to an alien for a reasonable period
is valid. So is an option giving an alien the right to buy real property on
condition that he is granted Philippine citizenship.
But if an alien is given not
only a lease of, but also an option to buy, a piece of land, by virtue of which
the Filipino owner cannot sell or otherwise dispose of his property, this to
last for 50 years, then it becomes clear that the arrangement is a virtual transfer
of ownership whereby the owner divests himself in stages not only of the right
to enjoy the land but also of the right to dispose of it— rights the sum total
of which make up ownership. If this can be done, then the Constitutional ban against
alien landholding in the Philippines, is indeed in grave peril.
Ruling: ACCORDINGLY, the contracts in question (Plff Exhs.
3-7) are annulled and set aside; the land subject-matter of the contracts is
ordered returned to the estate of Justina Santos as represented by the Philippine
Banking Corporation; Wong Heng (as substituted by the defendant-appellant Lui She)
is ordered to pay the Philippine Banking Corporation the sum of P56,564.35,
with legal interest from the date of the filing of the amended complaint; and
the amounts consigned in court by Wong Heng shall be applied to the payment of
rental from November 15, 1959 until the premises shall have been vacated by his
heirs. Costs against the defendant-appellant.
Doctrine: Even if the contract appears to be valid, if
the provisions is against a constitutional prohibition, the same should be considered
null and void.
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