under the Constitution aliens may not acquire private or public agricultural lands, including residential lands…
– Mr. Chief Justice Manuel V. Moran, Krivenko vs. Register of Deeds
By Realttorney®
No, we will not be discussing those non-earth beings. We are going to talk about aliens who are earthly beings belonging to a foreign country or nation. Plainly speaking, non-Filipino citizens.
A colleague of mine sent an email requesting advice regarding her client. The part of the email is quoted as follows:
“I would want to consult with you regarding the concern of my client. The husband is a foreigner and the wife is a Filipina. The husband’s concern is that: in case his wife passes away ahead of him, what will happen to the property (house and lot in Las Piñas City) they are buying. What is the remedy that the family of his wife will not demand right to the property leaving him helpless, they don’t have any kid.”
I first lectured on the topic “Foreign Ownership of Land and Real Estate” in February 2011. Since more than a decade has passed, let us revisit the topic of foreign ownership of land in the Philippines and one of its exceptions.
We’ll also revisit a 40-year-old jurisprudence promulgated by the Supreme Court and shed a new interpretation that is not commonly discussed in various online articles posted on various websites. Of course, an in-depth discussion on the Law on Succession under the Civil Code of the Philippines and how it affects the transfer of real property to foreigners who are legally married to Filipino spouses via last will and testament.
It is a common occurrence that when an alien spouse marries a Filipino citizen, the former is the main source of funds for the purchase of a house and lot in the Philippines. Thereafter, the real property will be registered in the name of the Filipino spouse.
As real estate brokers, we know the answer to the question: Can aliens buy land in the Philippines? As a general rule, only Filipino citizens (natural or juridical) can own land in this country. Accordingly, foreigners are not allowed to own land in the Philippines. This is a constitutional prohibition that will not be changed anytime soon.
But every general rule has exceptions. One particular exception to the general rule written above is Section 7, Article XII of the 1987 Philippine Constitution, which is quoted hereunder:
“Section 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.”
The case of Krivenko vs. Register of Deeds (G.R. No. L-630, November 15, 1947) eloquently discussed the purpose for the same provision in the 1935 Philippine Constitution – then Section 5, Article XIII, to wit:
“…section 5 is intended to insure (sic) the policy of nationalization contained in section 1 [Article XIII of the 1935 Constitution]. Both sections must, therefore, be read together for they have the same purpose and the same subject matter. It must be noticed that the persons against whom the prohibition is directed in section 5 are the very same persons who under section 1 are disqualified ‘to acquire or hold lands of the public domain in the Philippines.’ And the subject matter of both sections is the same, namely, the non-transferability of ‘agricultural land’ to aliens.” (boldfacing ours, for emphasis)
In the end, the Krivenko doctrine clearly held that “under the Constitution, aliens may not acquire private or public agricultural lands, including residential lands.” However, because of Section 7 [then Section 5, Article XIII of the 1935 Constitution] aliens are given a chance to own real estate in the Philippines. It is clear that aliens can own real estate in the Philippines through hereditary succession.
To answer the question stated above, if the Filipina passes away before the alien spouse then the latter will be able to own a part of the real estate registered in the name of the Filipina wife through hereditary succession. Of course, this is under the assumption that the marriage between the Filipina and the alien spouse is considered legal under Philippine laws.
But, what does “hereditary succession” actually mean? Can the foreigner own the land if it was bequeathed to him/her by the Filipino spouse through a last will and testament? And, what part of the property will the alien spouse own in the end, after the estate of the Filipino spouse has been settled?
In layman’s terms, hereditary succession is the passing or division of an estate when a person dies without a will. It is also known as intestate succession. Therefore, the 1987 Constitution is clear that the only way an alien spouse can own real estate in the Philippines is through intestate succession. Hence, the Filipina spouse must not execute any will (notarial or holographic) during her lifetime bequeathing her real property to her alien spouse. She must die intestate. That is the constitutional edict.
And according to various lawyer-authors, bequeathing the real property to alien spouses through a will shall be contrary to the dictates of the Supreme Court of the Philippines in the case of The Testate Estate of Jose Eugenio Ramirez vs. Marcelle Vda. De Ramirez, et al. (G.R. No. L-27952, February 15, 1982).
However, as an estate planning attorney, I would never recommend that a Filipino pass away intestate. The default estate plan of the State is contained in the provisions of the Law of Intestate Succession – Articles 960 to 1014, and numerous provisions in Chapter 4 [Provisions Common to Testate and Intestate Successions], Title IV of Book III of the Civil Code of the Philippines. Following the estate plan of the State is not the best way to dispose of one’s properties after passing away.
Hence, if a Filipino spouse passes away intestate and there are no other legitimate descendant, ascendant, or sibling who survives with the alien spouse, the latter will inherit the entire estate of the former. Article 995 of the Civil Code mandates this.
According to Article 997 “When the widow or widower survives with legitimate parents or ascendants, the surviving spouse shall be entitled to one-half of the estate, and the legitimate parents or ascendants to the other half.”
However, “should brothers and sisters or their children survive with the widow or widower, the latter shall be entitled to one-half of the inheritance and the brothers and sisters or their children to the other half.” This is provided by Article 1001 of the Civil Code.
So, let us revisit Ramirez vs. Vda. De Ramirez to get a fresh perspective as to what other successional rights an alien spouse has based on his valid marriage to a Filipino spouse. Keep in mind that Jose Eugenio Ramirez is a Filipino, while Marcelle Vda. De Ramirez is the widow who is a French citizen. And, they had no children between them.
The part of the decision that has been quoted numerous times by lawyer-authors in the case of Ramirez vs. Vda. De Ramirez is this:
“We are of the opinion that the Constitutional provision which enables aliens to acquire private lands does not extend to testamentary succession for otherwise the prohibition will be for naught and meaningless. Any alien would be able to circumvent the prohibition by paying money to a Philippine landowner in exchange for a devise of a piece of land.”
When read plainly, it seems that the Supreme Court prohibits the acquisition of land by an alien through testamentary succession for the simple reason that if allowed “the prohibition will be for naught and meaningless.” However, this is a mere obiter dictum of our Supreme Court.
For the laymen, an obiter dictum is an opinion “uttered by the way, not upon the point or question pending, as if turning aside from the main topic of the case to collateral subjects,” or the opinion of the court upon any point or principle which it is not required to decide, or an opinion of the court which does not embody its determination and is made without argument or full consideration of the point and is not professed deliberate determinations of the judge himself. (People of the Philippines vs. Hon. Higinio Macadaeg, et al., G.R. No. L-4316, May 28, 1952)
Why do I say that this pronouncement of the Court is a mere obiter dictum? The pronouncement was made while the Court was discussing the “appellants claim that the usufruct over real properties of the estate in favor of Wanda [the companion of Jose Eugenio Ramirez, who is an Austrian] is void because it violates the constitutional prohibition against the acquisition of lands by aliens.”
The next paragraph in the decision is very telling, and I quote:
“This opinion notwithstanding, We uphold the usufruct in favor of Wanda because a usufruct, albeit a real right, does not vest title to the land in the usufructuary and it is the vesting of title to land in favor of aliens which is proscribed by the Constitution.”
So, the ruling of the Supreme Court as regards the usufructuary rights bequeathed to Wanda via testamentary dispositions of the testator (Jose Eugenio Ramirez) was upheld. And in the own words of the Court, that often-quoted pronouncement stated above is a mere opinion. And thus, it is a mere obiter dictum.
Another reason why the often-quoted pronouncement is an obiter dictum is the final distribution of the estate of Jose Eugenio Ramirez in the dispositive portion of the decision of the case. The testamentary disposition of Jose Eugenio Ramirez to his wife (Respondent Marcelle D. Vda. De Ramirez) was increased to one-half of the estate (which included land and its improvements) in full ownership because the testator’s original disposition impaired the widow’s legitime.
Article 886 of the Civil Code states that a legitime is that part of the testator’s property which he cannot dispose of because the law has reserved it for certain heirs who are, therefore, called compulsory heirs. Meanwhile, Article 887 (3) identifies the widow or widower as a compulsory heir of a testator.
So, we can correctly state that the Supreme Court allowed the testamentary disposition of the testator to his alien legal wife, who is a compulsory heir, and upheld that the legitime of the alien wife (as compulsory heir) over the entire estate should not be impaired based on Article 904, first paragraph of the Civil Code.
Article 900 of the Civil Code of the Philippines states: “If the only survivor is the widow or widower, she or he shall be entitled to one-half of the hereditary estate of the deceased spouse, and the testator may freely dispose of the other half.”
And, since the alien spouse survived the deceased, he shall be entitled to one-half of the estate over which the Filipina spouse cannot impose a burden, encumbrance, condition, or substitution of any whatsoever. Why is this so? Based on Article 904, paragraph 2, the testator cannot impose upon the compulsory heir “any burden, encumbrance, condition, or substitution of any kind whatsoever.”
Also, take note that the brother and/or sister is not a compulsory heir of the Filipino spouse. But, the legitimate ascendants (parents and/or grandparents) are compulsory heirs pursuant to Article 887 (2) of the Civil Code.
As a consequence, “if the testator leaves no legitimate descendants, but leaves legitimate ascendants, the surviving spouse shall have a right to ¼ of the hereditary estate.” (Article 893, Civil Code) The one-fourth shall be taken from the free portion of the estate. Meanwhile, according to Article 889, “the legitime of legitimate parents or ascendants consists of ½ of the hereditary estate of their children and descendants.”
Therefore, if the alien spouse and a legitimate parent survive the testator then the former is allowed to have ¼ of the estate as legitime and the legitimate parent is entitled to ½ of the estate as legitime as well.
Hence, regardless of what is the legitime of the alien spouse, we should be aware that an alien can own land in the Philippines through a testamentary disposition from a Filipino spouse, whose marriage is valid under Philippine laws. I dare say that this is an addition to the constitutional exception to the general rule discussed above.
And if I may posit an obiter of my own, any testamentary disposition of a Filipino testator to an alien who is NOT a compulsory heir of the testator comes under the ambit of the constitutional prohibition disallowing aliens from owning lands in the Philippines.
In summary, we learn from the case of Ramirez vs. Vda. De Ramirez, that any testamentary disposition by the Filipino spouse to the alien spouse should not be less than one-half of the entire estate if they have no child. Remember, the legitime of the alien spouse, as compulsory heir, should not be impaired.
But, what about the free portion of the estate of the testator? Can the Filipino spouse bequeath the free portion, in this case, the remaining one-half of the estate to the alien spouse? Or the remaining one-fourth if the widower survives with the parents of the Filipino spouse?
That would be another discussion at some point in the future.
I hope I have fully answered the question of my colleague and sincerely hope that their buying decision can be guided by this article. And I end by quoting the decision in the same Krivenko case mentioned above, to wit:
“aliens are not completely excluded by the Constitution from the use of lands for residential purposes. Since their residence in the Philippines is temporary, they may be granted temporary rights such as a lease contract which is not forbidden by the Constitution. Should they desire to remain here forever and share our fortunes and misfortunes, Filipino citizenship is not impossible to acquire.”
Happy selling to my fellow CRBs of the Real Estate Brokers Association of the Philippines, Inc. (REBAP). God bless all licensed and accredited Real Estate Service Practitioners in the Philippines.
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Atty. Jojo is a real estate attorney, an estate planning attorney, a licensed real estate broker, and a PRC-accredited Lecturer/ Speaker for Training Programs in Real Estate. He is a Chartered Trust and Estate Planning (CTEP®) professional who is committed to educating Filipinos about the value and importance of having an estate plan in their lives.
Realttorney® 