Camilo Borromeo v.

Antonietta Descallar
G.R. No. 159310, February 24, 2009
Puno, C.J

FACTS:
Petitioner appealed the reversal by the CA of the trial court’s ruling in his favor which
declared the titles of respondent as null and void.

Wilhelm Jambrich, an Austrian, and respondent fell in love and decided to live together.
Eventually, however, they went their separate ways as respondent found a new boyfriend
while Jambrich began to live with another woman. Jambrich met petitioner who was
engaged in the real estate business and built and repaired speedboats as a hobby.
Jambrich purchased an engine and some accessories for his boat from petitioner, for which
he became indebted to the latter. To pay for his debt, he sold his rights and interests in the
Agro-Macro properties to petitioner as evidenced by a “Deed of Absolute Sale/Assignment.”
When petitioner sought to register the deed of assignment, he discovered that titles to the
three lots have been transferred in the name of the respondent and that the subject
property has already been mortgaged.

Petitioner imputes error on the judgment of the CA for holding that Jambrich has no title to
the titles in question and may not, therefore, transfer and assign any rights or interests in
favor of the petitioner.

ISSUE:
Having found that the true buyer of the disputed house and lots was the Austrian Wilhelm
Jambrich, what now is the effect of registration of the properties in the name of
respondent?

HELD:
In the instant case, the transfer of land from Agro-Macro Development Corporation to
Jambrich, who is an Austrian, would have been declared invalid if challenged, had not
Jambrich conveyed the properties to the petitioner who is a Filipino citizen. While the
acquisition and the purchase by Wilhelm Jambrich of the properties under litigation were
void ab initio since they were contrary to the Constitution of the Philippines, the acquisition
of these properties by plaintiff who is a Filipino citizen from him, has cured the flaw in the
original transaction and the title of the transferee is valid. As the property in dispute is
already in the hands of a qualified person, a Filipino citizen, there would be no more public
policy to be protected. The objective of the constitutional provision to keep our lands in
Filipino hands has been achieved.
CAMILO F. BORROMEO vs. ANTONIETTA O. DESCALLAR (G.R. No. 159310, February 24, 2009)

FACTS:
Jambrich (Austrian) and respondent fell in love and decided to live together in a rented house in Hernan
Cortes, Mandaue City. Later, they transferred to their own house and lots at Agro-Macro Subdivision,
Cabancalan, Mandaue City. In the Contracts to Sell covering the properties, Jambrich and respondent
were referred to as the buyers. A Deed of Absolute Sale was likewise issued in their favor. However,
when the Deed of Absolute Sale was presented for registration before the Register of Deeds, registration
was refused on the ground that Jambrich was an alien and could not acquire alienable lands of the public
domain. Consequently, Jambrich’s name was erased from the document. Transfer Certificate of Title over
the properties were issued in respondent’s name alone. However, the idyll lasted only until April 1991.
By then, respondent found a new boyfriend while Jambrich began to live with another woman in Danao
City. Jambrich supported respondent’s sons for only two months after the break up. Jambrich met
petitioner Camilo F. Borromeo sometime in 1986. Petitioner was engaged in the real estate business. He
also built and repaired speedboats as a hobby. In 1989, Jambrich purchased an engine and some
accessories for his boat from petitioner, for which he became indebted to the latter for about P150,000.00.
To pay for his debt, he sold his rights and interests in the Agro-Macro properties to petitioner for
P250,000, as evidenced by a "Deed of Absolute Sale/Assignment." On July 26, 1991, when petitioner
sought to register the deed of assignment, he discovered that titles to the three lots have been transferred
in the name of respondent, and that the subject property has already been mortgaged. Petitioner filed a
complaint against respondent for recovery of real property before RTC of Mandaue City. Petitioner
alleged that the Contracts to Sell and the Deed of Absolute Sale over the properties which identified both
Jambrich and respondent as buyers do not reflect the true agreement of the parties since respondent did
not pay a single centavo of the purchase price and was not in fact a buyer; that it was Jambrich alone who
paid for the properties using his exclusive funds; that Jambrich was the real and absolute owner of the
properties; and, that petitioner acquired absolute ownership by virtue of the Deed of Absolute
Sale/Assignment dated July 11, 1991 which Jambrich executed in his favor.
ISSUE(S):
1. Who purchased the subject properties? 2. what now is the effect of registration of the properties in the
name of respondent?

HELD:
ISSUE #1 The evidence clearly shows, as pointed out by the trial court, who between respondent and
Jambrich possesses the financial capacity to acquire the properties in dispute. Thus, Jambrich has all
authority to transfer all his rights, interests and participation over the subject properties to petitioner by
virtue of the Deed of Assignment he executed on July 11, 1991. Further, the fact that the disputed
properties were acquired during the couple’s cohabitation also does not help respondent. The rule that co-
ownership applies to a man and a woman living exclusively with each other as husband and wife without
the benefit of marriage, but are otherwise capacitated to marry each other, does not apply. In the instant
case, respondent was still legally married to another when she and Jambrich lived together. In such an
adulterous relationship, no coownership exists between the parties. It is necessary for each of the partners
to prove his or her actual contribution to the acquisition of property in order to be able to lay claim to any
portion of it. Presumptions of co-ownership and equal contribution do not apply. ISSUE #2: It is settled
that registration is not a mode of acquiring ownership.It is only a means of confirming the fact of its
existence with notice to the world at large. Certificates of title are not a source of right . The mere
possession of a title does not make one the true owner of the property. Thus, the mere fact that respondent
has the titles of the disputed properties in her name does not necessarily, conclusively and absolutely
make her the owner. The rule on indefeasibility of title likewise does not apply to respondent. A
certificate of title implies that the title is quiet, and that it is perfect, absolute and indefeasible. However,
there are well-defined exceptions to this rule, as when the transferee is not a holder in good faith and did
not acquire the subject properties for a valuable consideration. This is the situation in the instant case.
Respondent did not contribute a single centavo in the acquisition of the properties. She had no income of
her own at that time, nor did she have any savings. She and her two sons were then fully supported by
Jambrich. Respondent argued that aliens are prohibited from acquiring private land. This is embodied in
Section 7, Article XII of the 1987 Constitution, which is basically a reproduction of Section 5, Article
XIII of the 1935 Constitution, and Section 14, Article XIV of the 1973 Constitution. The capacity to
acquire private land is dependent on the capacity "to acquire or hold lands of the public domain." Private
land may be transferred only to individuals or entities "qualified to acquire or hold lands of the public
domain." Only Filipino citizens or corporations at least 60% of the capital of which is owned by Filipinos
are qualified to acquire or hold lands of the public domain. Thus, as the rule now stands, the fundamental
law explicitly prohibits non-Filipinos from acquiring or holding title to private lands, except only by way
of legal succession or if the acquisition was made by a former natural-born citizen. Therefore, in the
instant case, the transfer of land from Agro-Macro Development Corporation to Jambrich, who is an
Austrian, would have been declared invalid if challenged, had not Jambrich conveyed the properties to
petitioner who is a Filipino citizen. In United Church Board for World Ministries v. Sebastian, the Court
reiterated the consistent ruling in a number of cases that if land is invalidly transferred to an alien who
subsequently becomes a Filipino citizen or transfers it to a Filipino, the flaw in the original transaction is
considered cured and the title of the transferee is rendered valid. Applying United Church Board for
World Ministries, the trial court ruled in favor of petitioner, viz.: [W]hile the acquisition and the purchase
of (sic) Wilhelm Jambrich of the properties under litigation [were] void ab initio since [they were]
contrary to the Constitution of the Philippines, he being a foreigner, yet, the acquisition of these
properties by plaintiff who is a Filipino citizen from him, has cured the flaw in the original transaction
and the title of the transferee is valid. SC AFFIRM THE RTC. The trial court upheld the sale by Jambrich
in favor of petitioner and ordered the cancellation of the TCTs in the name of respondent.