GR 143958; (July, 2003) (Digest)
G.R. No. 143958 ; July 11, 2003
Alfred Fritz Frenzel, petitioner, vs. Ederlina P. Catito, respondent.
FACTS
Petitioner Alfred Fritz Frenzel, an Australian citizen, met respondent Ederlina Catito, a Filipina married to a German national, in Australia. An intimate relationship developed. Alfred, though married himself, proposed marriage to Ederlina and financed her business and living expenses in the Philippines. Knowing his constitutional disqualification from owning land, Alfred purchased a house and lot in Quezon City but had the title placed solely in Ederlina’s name, believing they would jointly own it after their marriage. He also transferred substantial funds to bank accounts under her name. The relationship soured when Alfred discovered Ederlina was still married. Ederlina subsequently sold the Quezon City property. Alfred filed a complaint for reconveyance and accounting, claiming he was the true owner and that Ederlina merely held the property and funds in trust for him.
ISSUE
Whether the petitioner is entitled to the reconveyance of the subject property and an accounting of the funds he transferred to the respondent.
RULING
No. The Supreme Court denied the petition, affirming the lower courts’ dismissal. The legal logic is anchored on the principle of pari delicto and the prohibition against aliens owning land. The arrangement where Alfred, an alien, paid for the property but had it titled in Ederlina’s name was a deliberate scheme to circumvent the constitutional ban. Both parties were in equal fault (in pari delicto) for entering into an illegal contract. Under Article 1412 of the Civil Code, when both parties are at fault, neither can recover what he has given. The court will leave them as they are, as it cannot aid either party to an illegal agreement. Alfred cannot invoke the equitable principle of a resulting trust to recover the property, as no trust can arise from an illegal act. To grant reconveyance would, in effect, allow him to enjoy the ownership of land, which the law expressly forbids. The same logic applies to the monetary transfers, which were inextricably linked to their illicit relationship and the illegal property scheme. The court cannot enforce such claims.