G.R. No.

113539 March 12, 1998

CELSO R. HALILI and ARTHUR R. HALILI, petitioners, On February 5, 1991, David Rey Guzman sold said
vs.COURT OF APPEALS, HELEN MEYERS GUZMAN, parcel of land to defendant-appellee [also herein private
DAVID REY GUZMAN and EMILIANO CATANIAG, respondent] Emiliano Cataniag, upon which TCT No. T-
respondents. 120259 was cancelled and TCT No. T-130721(M) was
issued in the latter's name.4

PANGANIBAN, J.: Petitioners, who are owners of the adjoining lot, filed a
complaint before the Regional Trial Court of Malolos,
The factual findings of a trial court, when affirmed by the Bulacan, questioning the constitutionality and validity of
Court of Appeals, may no longer be reviewed and the two conveyances — between Helen Guzman and
reversed by this Court in a petition for review under Rule David Rey Guzman, and between the latter and Emiliano
45 of the Rules of Court. The transfer of an interest in a Cataniag — and claiming ownership thereto based on
piece of land to an alien may no longer be assailed on their right of legal redemption under Art. 1621 5 of the
constitutional grounds after the entire parcel has been Civil Code.
sold to a qualified citizen.
In its decision6 dated March 10, 1992,7 the trial court
The Case dismissed the complaint. It ruled that Helen Guzman's
waiver of her inheritance in favor of her son was not
These familiar and long-settled doctrines are applied by contrary to the constitutional prohibition against the sale
this Court in denying this petition under Rule 45 to set of land to an alien, since the purpose of the waiver was
aside the Decision 1 of the Court of Appeals 2 in CA-GR simply authorize David Rey Guzman to dispose of their
CV No. 37829 promulgated on September 14, 1993, the properties in accordance with the Constitution and the
dispositive portion of which states:3 laws of the Philippines, and not to subvert them. On the
second issue, it held that the subject land was urban;
WHEREFORE, and upon all the foregoing, the Decision hence, petitioners had no reason to invoke their right of
of the court below dated March 10, 1992 dismissing the redemption under Art. 1621 of the Civil Code.
complaint for lack of merit is AFFIRMED without
pronouncement as to costs. The Halilis sought a reversal from the Court of Appeals
which, however, denied their appeal. Respondent Court
The Facts affirmed the factual finding of the trial court that the
subject land was urban. Citing Tejido vs. Zamacoma,8
The factual antecedents, as narrated by Respondent and Yap vs. Grageda,9 it further held that, although the
Court, are not disputed by the parties. We reproduce transfer of the land to David Rey may have been invalid
them in part, as follows: for being contrary to the Constitution, there was no more
point in allowing herein petitioners to recover the
Simeon de Guzman, an American citizen, died sometime property, since it has passed on to and was thus already
in 1968, leaving real properties in the Philippines. His owned by a qualified person.
forced heirs were his widow, defendant appellee [herein
private respondent] Helen Meyers Guzman, and his son, Hence, this petition. 10
defendant appellee [also herein private respondent]
David Rey Guzman, both of whom are also American Issues
citizens. On August 9, 1989, Helen executed a deed of
quitclaim (Annex A-Complaint), assigning [,] transferring The petition submits the following assignment of errors:
and conveying to David Rey all her rights, titles and
interests in and over six parcels of land which the two of . . . the Honorable Court of Appeals —
them inherited from Simeon.
1. Erred in affirming the conclusion of the trial court that
Among the said parcels of land is that now in litigation, . . the land in question is urban, not rural
. situated in Bagbaguin, Sta. Maria, Bulacan, containing
an area of 6,695 square meters, covered by Transfer 2. Erred in denying petitioners' right of redemption under
Certificate of Title No. T-170514 of the Registry of Deeds Art. 1621 of the Civil Code
of Bulacan. The quitclaim having been registered, TCT
No. T-170514 was cancelled and TCT No. T-120259 was
issued in the name of appellee David Rey Guzman.
3. Having considered the conveyance from Helen doubt, therefore, that the community is a commercial
Meyers Guzman to her son David Rey Guzman illegal, area thriving in business activities. Only a short portion of
erred in not declaring the same null and void[.] 11 said road [is] vacant. It is to be noted that in the Tax
Declaration in the name of Helen Meyers Guzman[,] the
The Court's Ruling subject land is termed agricultural[,] while in the letter
addressed to defendant Emiliano Cataniag, dated
The petition has no merit. October 3, 1991, the Land Regulatory Board attested
that the subject property is commercial and the trend of
First Issue: The Land Is Urban; development along the road is commercial. The Board's
Thus, No Right of Redemption classification is based on the present condition of the
property and the community thereat. Said classification is
The first two errors assigned by petitioners being far more later [sic] than the tax declaration.14
interrelated — the determination of the first being a
prerequisite to the resolution of the second — shall be No Ground to Invoke
discussed together Right of Redemption

Subject Land Is Urban In view of the finding that the subject land is urban in
character, petitioners have indeed no right to invoke Art.
Whether the land in dispute is rural or urban is a factual 1621 of the Civil Code, which presupposes that the land
question which, as a rule, is not reviewable by this Court. sought to be redeemed is rural. The provision is clearly
12 Basic and long-settled is the doctrine that findings of worded and admits of no ambiguity in construction:
fact of a trial judge, when affirmed by the Court of
Appeals, are binding upon the Supreme Court. This Art. 1621. The owners of adjoining lands shall also have
admits of only a few exceptions, such as when the the right of redemption when a piece of rural land, the
findings are grounded entirely on speculation, surmises area of which does not exceed one hectare, is alienated,
or conjectures; when an inference made by the appellate unless the grantee does not own any rural land.
court from its factual findings is manifestly mistaken,
absurd or impossible; when there is grave abuse of Under this article, both lands — that sought to be
discretion in the appreciation of facts; when the findings redeemed and the adjacent lot belonging to the person
of the appellate court go beyond the issues of the case, exercising the right of redemption — must be rural. If one
run contrary to the admissions of the parties to the case or both are urban, the right cannot be invoked.15 The
or fail to notice certain relevant facts which, if properly purpose of this provision, which is limited in scope to
considered, will justify a different conclusion; when there rural lands not exceeding one hectare, is to favor
is a misappreciation of facts; when the findings of fact agricultural development.16 The subject land not being
are conclusions without mention of the specific evidence rural and, therefore, not agricultural, this purpose would
on which they are based, are premised on the absence not be served if petitioners are granted the right of
of evidence or are contradicted by evidence on record. redemption under Art. 1621. Plainly, under the
13 circumstances, they cannot invoke it.

The instant case does not fall within any of the aforecited Second Issue: Sale to Cataniag Valid
exceptions. In fact, the conclusion of the trial court —
that the subject property is urban land — is based on Neither do we find any reversible error in the appellate
clear and convincing evidence, as shown in its decision court's holding that the sale of the subject land to Private
which disposed thus: Respondent Cataniag renders moot any question on the
constitutionally of the prior transfer made by Helen
. . . As observed by the court, almost all the roadsides Guzman to her son David Rey.
along the national ghighway [sic] of Bagbaguin, Sta.
Maria, Bulacan, are lined up with residential, commercial True, Helen Guzman's deed of quitclaim — in which she
or industrial establishments. Lined up along the assigned, transferred and conveyed to David Rey all her
Bagbaguin Road are factories of feeds, woodcrafts [sic] rights, titles and interests over the property she had
and garments, commercial stores for tires, upholstery inherited from her husband — collided with the
materials, feeds supply and spare parts. Located therein Constitution, Article XII, Section 7 of which provides:
likewise were the Pepsi-Cola Warehouse, the Cruz
Hospital, three gasoline stations, apartment buildings for Sec. 7. Save in cases of hereditary succession, no
commercial purposes and construction firms. There is no private lands shall be transferred or conveyed except to
individuals, corporations, or associations qualified to only to individuals or entities "qualified to acquire lands of
acquire or hold lands of the public domain. the public domain" (II Bernas, The Constitution of the
Philippines 439-440 [1988 ed.]).
The landmark case of Krivenko vs. Register of Deeds 17
settled the issue as to who are qualified (and The 1935 Constitution reserved the right to participate in
disqualified) to own public as well as private lands in the the "disposition, exploitation, development and
Philippines. Following a long discourse maintaining that utilization" of all "lands of the public domain and other
the "public agricultural lands" mentioned in Section 1, natural resources of the Philippines" for Filipino citizens
Article XIII of the 1935 Constitution, include residential, or corporations at least sixty percent of the capital of
commercial and industrial lands, the Court then stated: which was owned by Filipinos. Aliens, whether
individuals or corporations, have been disqualified from
Under section 1 of Article XIII [now Sec. 2, Art. XII] of the acquiring public lands; hence, they have also been
Constitution, "natural resources, with the exception of disqualified from acquiring private lands. 20
public agricultural land, shall not be alienated," and with
respect to public agricultural lands, their alienation is In fine, non-Filipinos cannot acquire or hold title to private
limited to Filipino citizens. But this constitutional purpose lands or to lands of the public domain, except only by
conserving agricultural resources in the hands of Filipino way of legal succession. 21
citizens may easily be defeated by the Filipino citizens
themselves who may alienate their agricultural lands in But what is the effect of a subsequent sale by the
favor of aliens. It is partly to prevent this result that disqualified alien vendee to a qualified Filipino citizen?
section 5 is included in Article XIII, and it reads as This is not a novel question. Jurisprudence is consistent
follows: that "if land is invalidly transferred to an alien who
subsequently becomes a citizen or transfers it to a
Sec. 5. Save in cases of hereditary succession, no citizen, the flaw in the original transaction is considered
private agricultural land will be transferred or assigned cured and the title of the transferee is rendered valid." 22
except to individuals, corporations or associations
qualified to acquire or hold lands of the public domain in Thus, in United Church Board of Word Ministries vs.
the Philippines. Sebastian, 23 in which an alien resident who owned
properties in the Philippines devised to an American non-
This constitutional provision closes the only remaining stock corporation part of his shares of stock in a Filipino
avenue through which agricultural resources may leak corporation that owned a tract of land in Davao del Norte,
into aliens' hands. It would certainly be futile to prohibit the Court sustained the invalidity of such legacy.
the alienation of public agricultural lands to aliens if, after However, upon proof that ownership of the American
all, they may be freely so alienated upon their becoming corporation has passed on to a 100 percent Filipino
private agricultural lands in the hands of Filipino citizens. corporation, the Court ruled that the defect in the will was
Undoubtedly, as above indicated, section 5 [now Sec. 7] "rectified by the subsequent transfer of the property."
is intended to insure the policy of nationalization
contained in section 1 [now Sec. 2]. Both sections must, The present case is similar to De Castro vs. Tan. 24 In
therefore, be read together for they have the same that case, a residential lot was sold to a Chinese. Upon
purpose and the same subject matter. It must be noticed his death, his widow and children executed an
that the persons against whom the prohibition is directed extrajudicial settlement, whereby said lot was allotted to
in section 5 [now Sec. 7] are the very same persons who one of his sons who became a naturalized Filipino. The
under section 1 [now Sec. 2] are disqualified "to acquire Court did not allow the original vendor to have the sale
or hold lands of the public domain in the Philippines." annulled and to recover the property, for the reason that
And the subject matter of both sections is the same, the land has since become the property of a naturalized
namely, the non transferability of "agricultural land" to Filipino citizen who is constitutionally qualified to own
aliens . . . .18 land.

The Krivenko rule was recently reiterated in Ong Ching Likewise, in the cases of Sarsosa vs. Cuenco, 25
Po vs. Court of Appeals, 19 which involves a sale of land Godinez vs. Pak Luen, 26 Vasquez vs. Li Seng Giap 27
to a Chinese citizen. The Court sad: and Herrera vs. Luy Kim Guan, 28 which similarly
involved the sale of land to an alien who thereafter sold
The capacity to acquire private land is made dependent the same to a Filipino citizen, the Court again applied the
upon the capacity to acquire or hold lands of the public rule that the subsequent sale can no longer be impugned
domain. Private land may be transferred or conveyed on the basis of the invalidity of the initial transfer.
The rationale of this principle was explained in Vasquez
vs. Li Seng Giap thus:

. . . [I]f the ban on aliens from acquiring not only

agricultural but also urban lands, as construed by this
Court in the Krivenko case, is to preserve the nation's
lands for future generations of Filipinos, that aim or
purpose would not be thwarted but achieved by making
lawful the acquisition of real estate by aliens who
became Filipino citizens by naturalization.29

Accordingly, since the disputed land is now owned by

Private Respondent Cataniag, a Filipino citizen, the prior
invalid transfer can no longer be assailed. The objective
of the constitutional provision — to keep our land in
Filipino hands — has been served.

WHEREFORE, the petition is hereby DENIED. The

challenged Decision is AFFIRMED. Costs against
petitioner.

SO ORDERED.