G.R. No. L-7196 August 31, 1954
BENITO ARAMBULO, plaintiff-appellant, vs. CUA SO and CUA PO CHOOH, defendants-appellees.

FACTS

Before the Pacific War, plaintiff Benito Arambulo, a Filipino citizen, was the owner of two parcels of land in Manila. On February 23, 1943, during the Japanese occupation, he sold these parcels to the defendants, Cua So and Cua Po Chooh, who are Chinese citizens. On January 28, 1948, Arambulo initiated proceedings to revoke the sale and recover the properties, invoking the Supreme Court’s decision in Krivenko vs. Register of Deeds, which declared that the Constitution prohibits the sale of urban lands to foreigners. The Manila Court of First Instance dismissed the complaint, applying the ruling in Cabauatan vs. Uy Hoo, which refused to annul a similar conveyance made in March 1943 by Filipinos to Chinese aliens on two grounds: (1) the Constitutional prohibition was not in force during the Japanese occupation, and (2) even if it was binding, the seller could not recover because the law should not aid either party to an illegal transaction.

ISSUE

The main issue is whether the plaintiff-appellant, a Filipino citizen, can recover land sold to alien defendants during the Japanese occupation, based on the constitutional prohibition against aliens acquiring land.

RULING

The Supreme Court, en banc, affirmed the dismissal of the complaint, thereby denying recovery to the plaintiff-appellant. The Court held that the doctrine established in Cabauatan vs. Uy Hoo, which denies recovery in such cases, has been subsequently affirmed and reaffirmed in several decisions (Ricamara vs. Ngo Ki; Rellosa vs. Gaw Chee Hun; Caoile vs. Yu Chiao; Cortes vs. O. Po Poe; Talento and Talento vs. Makiki, et al.). The Cabauatan ruling was based on the grounds that the constitutional prohibition was not in force during the occupation and, alternatively, that the parties were in pari delicto (in equal fault), so the law would not aid either. The Court deemed this issue settled.
Separate Opinions:
Justice Reyes concurred only in the result, citing reasons stated in his dissent in Rellosa vs. Gaw Chee Hun.
Justice Pablo dissented. He argued that the sale was null and void ab initio because it violated the constitutional prohibition (Article XIII, Section 5), as held in Krivenko. He contended that the constitutional prohibition remained in force during the Japanese occupation, as the occupant generally respects municipal laws affecting private rights unless absolutely prevented. He cited Japanese Military Administration Order No. 3, which directed that administrative and judicial activities be based on existing statutes and ordinances unless inconsistent with the circumstances. He further argued that since there was no proof of bad faith by the parties, the in pari delicto doctrine should not apply. Therefore, the null contract obligated mutual restitution, and the plaintiff, as an interested party, could seek the return of the land. He would have reversed the decision and ordered restitution.