GR 215014; (February, 2016) (Digest)
G.R. No. 215014 February 29, 2016
REBECCA FULLIDO, Petitioner, vs. GINO GRILLI, Respondent.
FACTS
Gino Grilli, an Italian national, and Rebecca Fullido were in a common-law relationship. In 1995, Grilli financed the purchase of a lot in Fullido’s name and the construction of a house thereon. In 1998, they executed three documents: a Contract of Lease, a Memorandum of Agreement (MOA), and a Special Power of Attorney (SPA). The lease contract stipulated a 50-year term, automatically renewable for another 50 years, for a total rent of P10,000. The MOA stated that Grilli paid for the property, that ownership resided with him, and that Fullido was prohibited from selling it without his consent. Their relationship later soured. Grilli demanded that Fullido vacate the property and, upon her refusal, filed an unlawful detainer case.
ISSUE
The core issue is whether Grilli, as a foreign national, has a cause of action for unlawful detainer against Fullido based on the 1998 agreements, or whether said agreements are void for violating constitutional and statutory prohibitions on alien land ownership.
RULING
The Supreme Court ruled that the agreements are void and Grilli has no cause of action. The Court affirmed the dismissal of the unlawful detainer complaint. The legal logic is anchored on the principle that a contract whose cause or object is contrary to law, morals, good customs, public order, or public policy is void from the beginning. The 1998 Contract of Lease and MOA, when read together, reveal a scheme designed to circumvent the constitutional prohibition (Section 7, Article XII) and the Anti-Dummy Law ( Commonwealth Act No. 108 , as amended) against foreign ownership of private land. The nominal 50-year lease, with an automatic 50-year renewal for a paltry sum, coupled with the MOA’s provisions granting Grilli absolute ownership and control, effectively gave him a perpetual right equivalent to ownership. This is a patent violation of public policy. Being void ab initio, these contracts produce no legal effect. Consequently, Grilli cannot base his claim of a better right of possession—a requisite for unlawful detainer—on these invalid instruments. His possession was merely tolerated as a consequence of their personal relationship, not by virtue of a valid lease. The action for unlawful detainer was therefore correctly dismissed for lack of a substantive basis.