FACTS:

Cattleya Land, Inc. entered into a contract of conditional sale with the Tecson spouses for a parcel of land in Doljo, Panglao, Bohol. However, the deeds of sale could not be registered due to an attachment in connection with a civil case. After the attachment was lifted, Cattleya still encountered problems with obtaining the owner's copy of the certificate of title, which was in the possession of Taina Manigque-Stone. Taina claimed ownership of a portion of the land and filed a notice of adverse claim. She sought to have her deed of sale registered with the Register of Deeds, presenting the owner's copy of the certificate of title.

Subsequently, Cattleya filed a civil case against Taina for quieting of title and recovery of ownership. Taina then filed a motion for leave to admit a third-party complaint against the Tecson spouses, claiming that they were responsible for her predicament. The Regional Trial Court ruled in favor of Cattleya, declaring the sale in its favor as valid and ordering the cancellation of Taina's title. The RTC also ordered Taina to stop claiming ownership of the land. The court also granted Taina's third-party complaint against the Tecson spouses and ordered them to return the purchase amount to Taina, as well as pay damages and attorney's fees.

The Court of Appeals affirmed the RTC's decision, declaring the sale in favor of Cattleya as valid and ordering the cancellation of Taina's title. The court also ordered the registration of the deed of sale in favor of Cattleya and the issuance of a new title to them. It directed Taina to refrain from claiming ownership of the property. The Tecson spouses were ordered to return the purchase amount to Taina with interest and pay damages and attorney's fees. The court found that the notarization of the deed of sale in Taina's name was defective and that she was only a dummy for a foreign buyer, rendering the sale invalid.

ISSUES:

1. Whether the petitioner is a mere dummy of Mike.

2. Whether the verbal contract of sale between spouses Tecson and Mike transferred ownership to a foreigner, which falls within the constitutional ban on sales of land to foreigners.

3. Whether, assuming that the sale of land to Mike violated the Constitution, the same has been cured by the subsequent marriage of the petitioner to Mike and by the registration of the land in the name of the petitioner, a Filipino citizen.

4. Whether the rules on double sale apply and favor the petitioner.

5. Whether the sale of land to Mike Stone violated the Constitutional ban on foreign ownership of lands and if it was cured by petitioner's subsequent marriage to Mike Stone.

6. Whether the delivery of the owner's copy of TCT 17655 to petitioner Taina is dubious.

7. Whether the trial court and the Court of Appeals erred by not applying the rules on double sale which favor petitioner Taina.

8. Whether the defendant-appellant was a dummy for a foreigner in the purchase of the property.

9. Whether there was a double sale of the property.

10. Whether the sale between the spouses Tecson and the defendant-appellant was invalid due to the forged signature.

11. Whether an alien husband can question his wife's lease of a property in the Philippines, which the husband is prohibited from acquiring.

12. Whether an implied trust should be created in favor of the alien husband if he provided funds for the acquisition of the property.

13. Whether the property should be considered conjugal/community property of the spouses.

RULING:

1. The Court held that the petitioner was indeed a mere dummy of Mike Stone. The appellant herself admitted in court that the buyer was Mike Stone and not herself. The Deed of Sale may be in her name, but it does not change the fact that the real buyer was a foreigner.

2. The Court ruled that the verbal contract of sale between spouses Tecson and Mike transferred ownership to a foreigner, which violates the constitutional ban on sales of land to foreigners. The constitutional prohibition against aliens from holding title or acquiring private lands applies, except in cases of legal succession or if the acquisition was made by a former natural-born citizen.

3. The Court held that the subsequent marriage of the petitioner to Mike and the registration of the land in the petitioner's name does not cure the violation of the constitutional ban on foreigners owning land. The acquisition of the property is still illegal because it was made by a foreigner.

4. The Court did not discuss the application of the rules on double sale as it was not raised as an issue by the petitioner.

5. The sale of land to Mike Stone violated the Constitutional ban on foreign ownership of lands and it was not cured by petitioner's subsequent marriage to Mike Stone. The delivery of the owner's copy of TCT 17655 to petitioner Taina is dubious. The trial court and the Court of Appeals erred by not applying the rules on double sale which favor petitioner Taina.

6. The defendant-appellant was found to be a dummy for a foreigner in the purchase of the property. The trial court held that the real buyer was the foreigner, as admitted by the appellant herself. The sale in the appellant's name was a circumvention of the law prohibiting foreigners from owning land.

7. There was no double sale of the property. Art. 1544 of the Civil Code, which applies to double sales, only applies when the same property is validly sold to different buyers. In this case, there was only one valid sale, which is the sale between the spouses Tecson and the respondent.

8. The sale between the spouses Tecson and the defendant-appellant was declared invalid due to the forged signature of one of the sellers.

9. The alien husband cannot question his wife's lease of the property. The husband, being an alien, is absolutely prohibited from acquiring private and public lands in the Philippines. His participation in the transaction would indirectly violate the constitutional prohibition.

10. No implied trust should be created in favor of the alien husband. By knowingly entering into an illegal contract, no reimbursement for his expenses can be allowed.

11. The property should not be considered conjugal/community property of the spouses. Even if the alien husband provided funds for the acquisition, the property is deemed to be solely owned by the Filipino wife who appeared as the designated "vendee" in the deed of sale.

PRINCIPLES:

• Aliens, whether individuals or corporations, are prohibited from acquiring lands in the Philippines, both public and private, except in cases of hereditary succession. This constitutional provision aims to conserve the national patrimony.

• The rules on double sale, governed by Article 1544 of the Civil Code, apply when the same immovable property is sold to different buyers. The buyer who registers the sale and acquires the property in good faith and for value prevails over the buyer who failed to register the sale.

• The law prohibits foreigners from directly or indirectly owning land in the Philippines.

• The Civil Law provision on double sale does not apply when one of the sales is found to be fraudulent.

• If a sale is made in violation of an existing statute and in evasion of its express provision, no trust can result in favor of the party who is guilty of the fraud.

• An alien husband is absolutely prohibited from acquiring private and public lands in the Philippines.

• The violation of the constitutional prohibition on land ownership by an alien spouse cannot be indirectly sanctioned through the exercise of prerogatives related to conjugal property.

• Implied trust cannot be created in favor of an alien who knowingly enters into an illegal contract.

• Ownership and disposition rights over land in the Philippines are not extended to alien spouses to prevent a violation of constitutional provisions.