6.

What constitutes ACP, FC 91

(d) Presumption of ACP, FC 93 of NCC 160

MULLER vs MULLER (2006; Ynares-Santiago)

F:

Sept. 22, 1989: Petitioner (P) Elena Buenaventura Muller and Respondent (R) Helmet Muller
were married in Hamburg, Germany.
o Couple resided in Germany at a house owned by R’s parents but decided to move
and reside permanently in the Phils. in 1992.
o By this time, R had inherited the house in Germany from his family which he sold
and used the proceeds for the purchase of a parcel of land in Antipolo at the cost
of P528,000.00 and the construction of a house amounting P2.3M The property was
registered in the name of the petitioner.

Due to incompatibilities and R’s alleged womanizing, drinking and maltreatment, spouses
eventually separated.

Sept. 26, 1994: R filed a petition for separation of properties before the RTC (QC).

Aug. 12, 1996: Trial Court’s Decision:

o terminated the regime of absolute community of property between the petitioner and
respondent;
o decreed the separation of properties between them; and
o ordered the equal partition of personal properties located within the country,
excluding those acquired by gratuitous title during the marriage.
 With regard to the Antipolo property, the court held that it was acquired
using paraphernal funds of the respondent. However, it ruled that
respondent cannot recover his funds because the property was purchased
in violation of Sec. 7, Article XII of the Constitution.

Note:
Paraphernal:

Art. XII, Sec. 7. Save in cases of hereditary succession, no private lands shall be transferred or conveyed except
to individuals, corporations, or associations qualified to acquire or hold lands of the public domain.

Respondent appealed to the CA; CA modified TC’s decision

o CA held that respondent merely prayed for reimbursement for the purchase of the
Antipolo property, and not acquisition or transfer of ownership to him.
o It also considered petitioner’s ownership over the property in trust for the
respondent.
o As regards the house, the CA ruled that there is nothing in the Constitution which
prohibits respondent from acquiring the same.

Hence, the instant petition for review.

Petitioner’s contentions: Respondent, being an alien, is disqualified to own private lands in

the Philippines; he was aware of the constitutional prohibition but circumvented the same;
and that his purpose for filing an action for separation of property is to obtain exclusive
possession, control and disposition of the Antipolo property.
Respondent’s contentions: He is not praying for transfer of ownership of the Antipolo
property but merely reimbursement; that the funds paid by him for the said property were
in consideration of his marriage to P; that the funds were given to P in trust; and that equity
demands that he should be reimbursed of his personal funds.

(Note: I included their contentions for a better understanding of the case. )

ISSUE: WON R is entitled to reimbursement of the funds used for the acquisition of the
Antipolo property

RULING: NO. Petition is GRANTED.

A.) Re: constitutional prohibition

Aliens, whether individuals or corporations, are disqualified from acquiring lands of the
public domain. Hence, they are also disqualified from acquiring private lands.

In this case, R was aware of the constitutional prohibition and expressly admitted his
knowledge thereof to this Court. He declared that he had the Antipolo property titled in the
name of petitioner because of the said prohibition. His attempt at subsequently asserting or
claiming a right on the said property cannot be sustained.

B.) Re: “an implied trust was created”

CA erred in holding that an implied trust was created and resulted by operation of law in
view of petitioner’s marriage to respondent. Save for the exception provided in cases of
hereditary succession, respondent’s disqualification from owning lands in
the Philippines is ABSOLUTE. Not even an ownership in trust is allowed.

C.) Re: equity

Equity as a rule will follow the law and will not permit that to be done indirectly which,
because of public policy, cannot be done directly. In the instant case, respondent cannot seek
reimbursement on the ground of equity where it is clear that he willingly and knowingly
bought the property despite the constitutional prohibition.

D.) Re: “mere reimbursement; not transfer of ownership”

The distinction made between transfer of ownership as opposed to recovery of funds is a
futile exercise on respondent’s part. To allow reimbursement would in effect permit
respondent to enjoy the fruits of a property which he is not allowed to own.