G.R. No. 158230 ; July 16, 2008
Republic of the Philippines, represented by the Director of Lands, Petitioner, vs. Register of Deeds of Roxas City, Elizabeth Lee, and Pacita Yu-Lee, Respondents.

FACTS

In March 1936, Lee Liong, a Chinese citizen, purchased Lot No. 398 in Roxas City. Upon his death in 1944, his heirs extrajudicially settled his estate, partitioning the lot. Through subsequent successions, the lot was transferred to the respondents, Elizabeth Lee and Pacita Yu-Lee, both Filipino citizens. In a 1956 case, the Supreme Court declared the original sale to Lee Liong null and void for violating the constitutional prohibition against alien ownership of land, but recovery by the sellers was barred under the doctrine of in pari delicto. A 1977 case further barred relitigation of the issue under res judicata.
In 1995, the Republic of the Philippines, through the Office of the Solicitor General, filed a Complaint for Reversion of Title, seeking to declare the sale void ab initio and revert the lot to the public domain. The trial court granted the petition, ordering reversion. On appeal, the Court of Appeals reversed, declaring the private respondents as absolute owners. The Republic’s motion for reconsideration was denied, prompting this petition for review.

ISSUE

Whether the Court of Appeals erred in declaring the private respondents as absolute owners despite the original sale to their alien predecessor-in-interest being constitutionally void.

RULING

The Supreme Court denied the petition and affirmed the Court of Appeals. The legal logic centers on the curative effect of subsequent transfer to qualified Filipino citizens. While the original 1936 sale to alien Lee Liong was constitutionally infirm, the property had, by the time the State initiated reversion proceedings in 1995, already passed by succession to the respondents, who are Filipino citizens. The Court applied the established principle that the constitutional flaw in the initial transaction is deemed cured once the land is transferred to a constitutionally qualified owner. This principle, reiterated in cases like De Castro v. Teng Queen Tan and Chavez v. Public Estates Authority, ensures that the ultimate objective of the constitutional prohibition—to keep land in Filipino hands—is fulfilled. The State’s action for reversion, which is an in rem proceeding, can no longer prosper when the property is already held by Filipino citizens. The prior invalid sale is rendered unassailable, and title is validated in the hands of the qualified transferees. Consequently, the respondents validly acquired ownership through succession.