G.R. No. L-11964; April 28, 1962
REGISTER OF DEEDS OF MANILA, petitioner-appellee, vs. CHINA BANKING CORPORATION, respondent-appellant.

FACTS

Alfonso Pangilinan, an employee, was charged with qualified theft from his employer, China Banking Corporation, an alien-owned bank. To settle his admitted civil liability arising from this criminal offense, Pangilinan and his wife executed a Deed of Transfer on September 18, 1956, ceding a residential lot registered in the wife’s name to the bank. The Register of Deeds of Manila, upon presentation of the deed for registration, refused registration, citing the constitutional prohibition against aliens acquiring private lands. The matter was elevated to the Land Registration Commission for resolution.
The Land Registration Commission issued a resolution declaring the deed unregisterable for contravening Section 5, Article XIII of the 1935 Constitution, which prohibits the transfer of private agricultural land to individuals or corporations not qualified to acquire public lands, meaning aliens. China Banking Corporation appealed this resolution to the Supreme Court.

ISSUE

Whether an alien-owned banking corporation can acquire ownership of private land in the Philippines through a deed of transfer executed in satisfaction of a civil liability arising from a crime, notwithstanding the constitutional prohibition.

RULING

The Supreme Court affirmed the resolution of the Land Registration Commission, holding the deed of transfer unregisterable. The Court rejected the bank’s arguments. First, it found that the acquisition did not fall under the exceptions in Section 25 of the General Banking Act ( Republic Act No. 337 ), which permits commercial banks to hold real estate for specific purposes. The “debts” referenced in the law pertain only to those arising from ordinary banking transactions like loans, not civil liabilities from criminal acts. Therefore, the bank’s acquisition was not authorized by statute.
More fundamentally, the Court ruled that no statute could amend or create an exception to the absolute constitutional prohibition. The 1935 Constitution makes no exception for temporary ownership or acquisition by aliens. The Court, citing Ong Sui Si Temple vs. Register of Deeds of Manila, emphasized the provision’s absolute terms. Even a temporary transfer of dominion or ownership is prohibited, as distinguished from a mere leasehold right which involves no transfer of title. The constitutional intent is to preserve land ownership in the hands of Filipino citizens to ensure national integrity. Any alienation, however brief, contravenes this fundamental policy. The Court’s duty is to enforce this mandate without qualifications that would render it futile.