Victoria Moreño-Lentfer, et.al. vs Hans Jurgen Wolff

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Victoria Moreño-Lentfer, et.al. vs Hans Jurgen Wolff
G.R. No. 152317
November 10, 2004

Facts:

The petitioners are Gunter Lentfer, a German citizen; his Filipina wife, Victoria Moreño-Lentfer; and John Craigie Young Cross, an Australian citizen, all residing in Sabang, Puerto Galera, Oriental Mindoro. Respondent Hans Jurgen Wolff is a German citizen, residing in San Lorenzo Village, Makati City.

Petitioners alleged that with respondent, on March 6, 1992, they engaged the notarial services of Atty. Rodrigo C. Dimayacyac for: (1) the sale of a beach house owned by petitioner Cross in Sabang, Puerto Galera, Oriental Mindoro, and (2) the assignment of Cross' contract of lease on the land where the house stood. The sale of the beach house and the assignment of the lease right would be in the name of petitioner Victoria Moreño-Lentfer, but the total consideration of 220,000 Deutschmarks (DM) would be paid by respondent Hans Jurgen Wolff. A promissory note was executed by said respondent in favor of petitioner Cross.

According to respondent, however, the Lentfer spouses were his confidants who held in trust for him, a time deposit account in the amount of DM 200,000 at Solid Bank Corporation. Apprised of his interest to own a house along a beach, the Lentfer couple urged him to buy petitioner Cross' beach house and lease rights in Puerto Galera. Respondent agreed and through a bank-to-bank transaction, he paid Cross the amount of DM 221,700 as total consideration for the sale and assignment of the lease rights. However, Cross, Moreño-Lentfer and Atty. Dimayacyac surreptitiously executed a deed of sale whereby the beach house was made to appear as sold to Moreño-Lentfer for only P100,000. The assignment of the lease right was likewise made in favor of Moreño-Lentfer. Upon learning of this, respondent filed a Complaint docketed as Civil Case No. R-4219 with the lower court for annulment of sale and reconveyance of property with damages and prayer for a writ of attachment.

After the trial, the court a quo dismissed the complaint for failure to establish a cause of action, where the judgment was in favor of the defendants. However, the aggrieved respondent appealed to the Court of Appeals.

Issues:

a) W/N Art 1238 of the New Civil Code applies in the case at bar?

b) Does the principle of solution indebiti under Art 2154 of the NCC, the principle of justice and equity, also apply in the case at bar?

Held:

The judgment appealed from is hereby REVERSED and a new one is hereby rendered, as follows: (1) Defendants-appellees spouses Genter and Victoria Moreno-Lentfer and John Craigie Young Cross are jointly and severally held liable to pay plaintiff-appellant the amount of 220,000.00 DM German Currency or its present peso equivalent plus legal interest starting from March 8, 1993, the date of the last final demand letter; (2) The above defendants-appellees are jointly and severally held liable to pay plaintiff-appellant the amount of P200,000.00 Philippine Currency, representing the amount of expenses incurred in the repairs and maintenance of the property plus legal interest starting from October 28, 1992, the date the amount was received by defendant-appellee Victoria Moreno-Lentfer; and (3) The case against defendant-appellee Rodrigo Dimayacyac is dismissed.

The Court of Appeals held that respondent was not entitled to the reconveyance of the properties because, inter alia, of the express prohibition under the Constitution that non-Filipino citizens cannot acquire land in the Philippines. We note, however, that subject properties consist of a beach house and the lease right over the land where the beach house stands. The constitutional prohibition against aliens from owning land in the Philippines has no actual bearing in this case. A clear distinction exists between the ownership of a piece of land and the mere lease of the land where the foreigner's house stands. Thus, we see no legal reason why reconveyance could not be allowed.

WHEREFORE, the petition is hereby DENIED. The assailed Decision, dated June 14, 2001 and Resolution dated February 22, 2002, of the Court of Appeals in CA-G.R. CV No. 48272 reversing the lower court's judgment are AFFIRMED with MODIFICATION. Petitioners--particularly the spouses Gunter Lentfer and Victoria Moreño-Lentfer--are hereby ORDERED to: (1) RECONVEY to respondent Hans Jurgen Wolff the beach house and the lease right over the land on which it is situated; and (2) PAY respondent Wolff nominal damages in the amount of P50,000.00. Costs against petitioners. SO ORDERED.