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MULLER VS MULLER

Gr 149615

FACTS

Elena and Helmut,a German national were married in Germany and resided there in a house owned by
RHelmut’s parents but later permanently resided in the Philippines.

Helmut had inherited the house in Germany from his parents which he sold and used the proceeds for the
purchase of a parcel of land in Antipolo and in the construction of a house. The Antipolo property was
registered in the name of Elena.

After they separated, Helmut filed a motion for separation of properties for reimbursement of the property in
Antipolo.

ISSUE: WON respondent is entitled to reimbursement of the funds used for the acquisition of the Antipolo property?

NO. Save for the exception provided in cases of hereditary succession, Helmut’s disqualification from owning lands in
the Philippines is absolute.

Where the purchase is made in violation of an existing statute and in evasion of its express provision, no trust can result in favor
of the party who is guilty of the fraud.

Helmut cannot seek reimbursement on the ground of equity where it is clear that he willingly and knowingly bought the property
despite the constitutional prohibition.

IN RE: PETITION FOR SEPARATION OF PROPERTY; MULLER VS. MULLER

G.R. No. 149615, August 29, 2006

Doctrine:

He who seeks equity must do equity, and he who comes into equity must come with clean hands.

Facts:

Petitioner Elena Buenaventura Muller and respondent Helmut Muller were married in Hamburg, Germany on
September 22, 1989. The couple resided in Germany at a house owned by respondent’s parents but decided to
move and reside permanently in the Philippines in 1992. By this time, respondent had inherited the house in
Germany from his parents which he sold and used the proceeds for the purchase of a parcel of land in Antipolo,
Rizal at the cost of P528,000.00 and the construction of a house amounting to P2,300,000.00. The Antipolo
property was registered in the name of petitioner, Elena Buenaventura Muller.

Due to incompatibilities and respondents alleged womanizing, drinking, and maltreatment, the spouses
eventually separated.

On September 26, 1994, respondent filed a petition for separation of properties before the Regional Trial Court
of Quezon City. The court granted said petition. It also decreed the separation of properties between them and
ordered the equal partition of personal properties located within the country, excluding those acquired by
gratuitous title during the marriage. With regard to the Antipolo property, the court held that it was acquired
using paraphernal funds of the respondent. However, it ruled that respondent cannot recover his funds because
the property was purchased in violation of Section 7, Article XII of the Constitution.
The respondent elevated the case to the Court of Appeals, which reversed the decision of the RTC. It held that
respondent merely prayed for reimbursement for the purchase of the Antipolo property, and not acquisition or
transfer of ownership to him. It ordered the respondent to REIMBURSE the petitioner the amount of
P528,000.00 for the acquisition of the land and the amount of P2,300,000.00 for the construction of the house
situated in Antipolo, Rizal.

Elena Muller then filed a petition for review on certiorari.

Issue:

Whether or not respondent Helmut Muller is entitled to reimbursement.

Ruling:

No, respondent Helmut Muller is not entitled to reimbursement.

Ratio Decidendi:

There is an express prohibition against foreigners owning land in the Philippines.

Art. XII, Sec. 7 of the 1987 Constitution provides: “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.”

In the case at bar, the respondent willingly and knowingly bought the property despite a constitutional
prohibition. And to get away with that constitutional prohibition, he put the property under the name of his
Filipina wife. He tried to do indirectly what the fundamental law bars him to do directly.

With this, the Supreme Court ruled that respondent cannot seek reimbursement on the ground of equity. It has
been held that equity as a rule will follow the law and will not permit that to be done indirectly which, because
of public policy, cannot be done directly.
PHILIPPINE BANKING CORPORATION v. LUI SHE G.R. No. L-17587. September 12, 1967

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.

FACTS:
Justina Santos 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 the contracts involving Wong were valid
HELD:
No, 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.