### Facts:
Alfred Fritz Frenzel, an Australian citizen of German descent and a professional pilot, met Ederlina P. Catito, a Filipina, in Sydney, Australia, in 1983. Following their meeting, Frenzel persuaded Catito to move back to the Philippines and engage in business, promising to finance her ventures. Frenzel and Catito entered into various agreements for the acquisition of properties and establishment of a business in the Philippines, with investments made by Frenzel but the properties registered under Catito’s name, owing to the constitutional restriction against foreign ownership of land in the Philippines.
Despite Frenzel’s investments, it later surfaced that Catito was married to someone else, which put a strain on their relationship. Ultimately, Frenzel sought to recover the invested properties and finances after their relationship deteriorated. He filed complaints for recovery of properties and damages in different Regional Trial Courts (RTCs), all of which arrived through the appellate system to the Supreme Court for final judgment.
### Issues:
1. Whether the legal doctrine of “in pari delicto” applies, thus preventing Frenzel from recovering the properties or the money he used in their purchase.
2. Whether Frenzel is entitled to recover under the concept of unjust enrichment at the expense of another.
### Court’s Decision:
The Supreme Court dismissed Frenzel’s petition, affirming the appellate court’s decision. It found the doctrine of “in pari delicto” applicable, indicating that Frenzel cannot be permitted to recover the properties or the monies he expended as both parties were in equal fault for entering into transactions that violated the constitutional prohibitions against foreign land ownership in the Philippines. The Court held that the contracts for the purchase of lands were null and void ab initio due to this constitutional violation. Frenzel’s appeal to Article 1416 of the New Civil Code, arguing the sales were merely prohibited but not illegal per se and thus he should recover, was rejected since the sales were found to be illegal per se for being in direct violation of the Constitution.
### Doctrine:
– The doctrine of “in pari delicto” dictates that no legal remedy is available for parties equally at fault in entering into illegal contracts, leaving them as the law finds them.
– Transactions violating constitutional provisions, such as the acquisition of land by aliens, are null and void ab initio, creating no rights or obligations and having no legal effect.
### Class Notes:
– **Doctrine of “in pari delicto”**: Both parties to an illegal agreement are at fault, thus neither can seek legal remedies from each other.
– **Constitutional Prohibition on Land Acquisition by Aliens**: The 1973 Philippine Constitution prohibits aliens from acquiring ownership of lands in the Philippines.
– **Null and Void ab initio Contracts**: Contracts that directly violate the Constitution have no legal effect and do not confer any rights or obligations on the parties involved.
– **Article 1416, New Civil Code**: Does not apply to contracts that are void ab initio due to constitutional violation; it applies only to contracts that are merely prohibited to protect private interests.
### Historical Background:
The case significantly underscores the rigid stance of Philippine law regarding land ownership by foreign nationals, a policy entrenched to conserve the nation’s lands for Filipino citizens. Frenzel vs. Catito illustrates the complexities and pitfalls of circumventing this national policy, demonstrating the legal system’s disposition to uphold constitutional provisions over personal agreements, however financially significant they may be to the parties involved.
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