CHARRY LISING, PLAINTIFF-APPELLANT, VS. SPS. BERNARDO MANANSALA, JR., AND OFELIA MANANSALA, DEFENDANTS-APPELLEES.
DIMAAMPAO, J.:
This is a squabble among family relatives. The records unveil that Lising extended a loan in the amount of US $23,600 to the spouses Manansala. Lising is the niece of appellee Ofelia Manansala (Ofelia). The obligation was secured by the contentious Mortgage Agreement whereby the spouses Manansala agreed to encumber two parcels of land covered by Transfer Certificate of Title (TCT) No. T-5694[4] and TCT No. T-4229.[5] Upon failure of the spouses Manansala to pay the balance of the loan amounting to US $20,600, Lising sought to foreclose the mortgage insofar as TCT No. T-5694 was concerned as it appeared that TCT No. T-4229 was registered in the name of one Josefina Casao (Josefina), sister of Ofelia. Inevitably, Lising filed a Complaint for Foreclosure of Real Estate Mortgage before the court a quo.
The spouses Manansala did not take the grouse sitting down. They disclosed that Lising was no longer a Filipino citizen as she became an American citizen on account of her marriage to one Steven Desobich, an American citizen.[6] They theorized that Lising, an alien and a permanent resident of the United States of America, had no right to own land in the Philippines.
Further, the spouses Manansala narrated that they first obtained a loan of US $15,000 from Lising.[7] This obligation was secured by TCT No. T-4229, the realty previously sold by Josefina to Ofelia. The title, however, remained registered in the name of Josefina. Due to financial difficulties, the spouses Manansala failed to pay the debt prompting them to request for another loan of US $5,000. Lising agreed upon the condition that TCT No. T-5694 would be made as additional collateral. The obligation by then amounted to US $23,600, inclusive of interests.
Through fraud and machination, Ofelia sold to Lising the land covered by TCT No. T-4229.[8] Lising was able to cause the issuance of TCT No. T-17217[9] in her own name. The spouses Manansala hypothesized that the transfer of the real estate to Lising obliterated the obligation of US $15,000. They claimed that they paid Lising US $3,000. Thereafter, they consigned with the court a quo a check amounting to P58,000.00. They asserted that these payments fully paid the mortgage debt.[10]
In due course, the court a quo rendered the assailed Decision, disposing—
“WHEREFORE, premises considered, Judgment is hereby rendered as follows:
- DECLARING the subject Deed of Mortgage as NULL and VOID for being contrary to law and public policy;
- ORDERING the (appellant) to return the subject titles in the name of herein (appellees) to the latter;
- ORDERING the (appellees) to return the amount of $20,000.00 they borrowed from herein (appellant) based on Mortgage Agreement less the partial -payments made but with legal interest of 12% per annum from the time of filing of this instant case; and
- TO PAY THE COST.
SO ORDERED.“[11]
In decreeing this disposition, the court a quo ratiocinated that Lising, an American citizen, was disqualified to acquire the realty subject of the Mortgage Agreement, on account of the proscription against alien ownership of private lands in the Philippines.
Both parties then moved for reconsideration. The spouses Manansala lamented that the judgment of the court a quo must declare categorically that they had already paid the amount of US $5,900, and that Lising must be made to shoulder the costs of suit.[12]
Upon the other hand, Lising argued that she was a Filipino citizen as evidenced by her Citizenship Retention and Re-Acquisition[13] dated 11 February 2005 as well as her passport[14] issued in November 2000.
Weighing the diverse contentions of the parties, the court a quo issued the challenged Order, thusly—
“WHEREFORE, Order is hereby issued denying the (appellant’s) Motion for Reconsideration for lack of merit. The Decision dated January 25, 2013 is hereby modified to the following extent, viz:
- ORDERING the Register of Deeds, San Jose, Occidental Mindoro to CANCEL TCT No. T-17217 and to REINSTATE TCT NO. T-4229 AND REGIS-TER it in the name of herein (appellees) upon full compliance with its pertinent rules and regulations and payment of fees as required by law;
- ORDERING the herein (appellees) to RETURN the amount of $20,000.00 to herein (appellant) LESS the amount of $14,500.00 already paid to the latter with twelve percent (12%) interest from the time of filing this case until fully paid.
SO ORDERED.“[15]
Undeterred, Lising (now, appellant) seeks recourse before Us anchored on the following assigned errors:
ITHE LOWER COURT ERRED IN RULING THAT THE DEED OF MORTGAGE BETWEEN THE PARTIES IS NULL AND VOID.
IITHE LOWER COURT ERRED IN ORDERING THE REGIS-TER OF DEEDS OF SAN JOSE, OCCIDENTAL MINDORO TO CANCEL TCT NO. T-17217 AND TO REINSTATE TCT NO. T-4229 AND TO REGISTER THE SAME IN THE NAME OF THE SPS. MANANSALA.
IIITHE LOWER COURT ERRED IN RULING THAT (SPS. MANANSALA) ONLY OWED (LISING) THE SUM OF US$5,500.00 ARRIVED AT BY THE DEDUCTING US$ 14,500 FROM US $20,600.00 CLAIMED BY LISING.
The Appeal carries weight and conviction.
The issues shall be resolved in one fell swoop. Apparently, the linchpin of this Appeal revolves around the issue of whether or not Lising (now, appellant), a former Filipino citizen who later re-acquired her Filipino citizenship, is allowed to own private lands in the Philippines.
We are not unmindful that the court a quo disqualified appellant from owning the land covered by TCT No. T- 17217, and from foreclosing the mortgage constituted on the property covered by TCT No. T-5694, upon the strength of Sections 7 and 8, Article XII of the 1987 Constitution which provide—
“Sec 7. 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.
Sec. 8. Notwithstanding the provisions of Section 7 of this Article, a natural-born citizen of the Philippines who has lost his Philippine citizenship may be a transferee of private lands, subject to limitations provided by law.”
Albeit it is settled that aliens, whether individuals or corporations, have been disqualified from acquiring lands of the public domain,[16] still and all, the doctrinal principle laid down in United Church Board For World Ministries v. Sebastian[17] is decisive in resolving this legal scuffle—
“If land is invalidly transferred to an alien who subsequently becomes a citizen or transfers it to a citizen, the flaw in the original transaction is considered cured and the title of the transferee is rendered valid.” (Emphasis supplied)
No less than appellant admitted that she lost her Filipino citizenship upon her marriage to an American citizen.[18] At the time the mortgage was executed in her favor by the spouses Manansala (now, appellees), she was already an alien. But then, during the pendency of her Motion for Reconsideration, she adduced the Citizenship Retention and Re-Acquisition[19] dated 11 February 2005 as well as her Philippine passport,[20] both of which stand as incontrovertible proof that she carries a dual citizenship.
Given these documents, there lies no prohibition for appellant to acquire the realty covered by TCT No. T-17217. This Torrens title must be upheld as indefeasible and incontrovertible, unless cancelled in a proper proceeding directly attacking its validity before a court of law.
By the same token, appellant’s plea to foreclose the mortgage involving the property covered by TCT No. T-5694 is well-taken. We discern no compelling reason why the court a quo refused to proceed with the foreclosure of real estate mortgage when the question on whether appellant would acquire ownership over the property is quite premature. Appellees have an equity of redemption, which is their right, as mortgagors, to extinguish the mortgage and retain ownership of the property by paying the secured debt prior to the confirmation of the foreclosure sale.[21] As above adumbrated, appellant is not disqualified to acquire ownership over the subject lot in the event that appellees fail to exercise their right of redemption.
Indubitably, the constitutional proscription on alien ownership of lands of the public or private domain was intended to protect lands from falling in the hands of non-Filipinos. In this case, however, there would be no more public policy violated since the land is in the hands of a Filipino qualified to acquire and own such land. The objective of the constitutional provision to keep our lands in Filipino hands has been achieved.[22]
On computation of mortgage debt. The obligation of appellees stands at US $20,600.[23] However, the amount of US $15,000 must be deducted therefrom as this amount represents the first loan which must be considered paid upon the issuance of TCT No. T-17217 in appellant’s name. Appropriately, the amount of P58,000.00 must likewise be subtracted as this represents the value of the check consigned by appellees. The aggregate difference is the mortgage debt that remains unpaid and becomes subject of the foreclosure proceedings. Appellees’ bare allegation that they paid the amount of US $3,000, is devoid of credence.
With these disquisitions, We deem it necessary to remand the case to the court a quo for foreclosure of the subject real estate mortgage.
WHEREFORE, the Appeal is hereby GRANTED. The Decision dated 25 January 2013 and Order dated 4 March 2013 of the Regional Trial Court, Fourth Judicial Region, San Jose, Occidental Mindoro, Branch 46, are REVERSED and SET ASIDE and a new one is entered GRANTING the Complaint for Foreclosure of Real Estate Mortgage in SP. PROC. No. R-814. The court a quo is ORDERED to COMMENCE the proceedings on foreclosure of real estate mortgage, pursuant to Rule 68 of the Rules of Court and such other applicable laws.
SO ORDERED.
Ybañez, and Manahan, JJ., concur.
[1] Original Records, Vol. II, pp. 437-440.
[2] Id., pp. 451-452.
[3] Id., Vol. I, pp. 4-5.
[4] Original Records, Vol. I, pp. 6-7.
[5] The parties as well as the court a quo identified this property as TCT No. T-4229. However, the title as appearing in TCT No. T-17217 is TCT No. T-4220, and not TCT No. T-4229. See Original Records, Vol. II, p. 406.
[6] TSN, 16 July 2004, p. 11.
[7] Original Records, Vol. II, pp. 403.
[8] Id., p. 404.
[9] Id., p. 406.
[10] Original Records, Vol. II, pp. 384-385.
[11] Id., p. 440.
[12] Id., pp. 442-444.
[13] Original Records, Vol. II, p. 447.
[14] Id., p. 448.
[15] Id., p. 452.
[16] See Matthews v. Taylor, 590 SCRA 394, 401 3(22 June 2009).
[17] See 159 SCRA 446, 451-452 (30 March 1998)
[18] TSN, 16 July 2004, p. 12.
[19] Original Records, Vol. II, p. 447.
[20] Id., p. 448.
[21] See Rosales v. Suba, 408 SCRA 664, 670 (12 August 2003).
[22] See Republic v. Register of Deeds of Roxas City, 558 SCRA 450, 456-457 (16 July 2008), citing Lee v. Republic of the Philippines, 366 SCRA 524, 533 (3 October 2001).
[23] Original Records, Vol. I, p. 2.