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A contract that violates laws is void...

A contract that violates laws is void
"I met my boyfriend in Boracay in April 2017. He is a British staying here in the Philippines for almost five years now. I am living with him at his condominium unit. He now wants to rent my house and lot located in Nasugbu, Batangas. He went to a lawyer and executed a contract of lease stipulating that I, as the lessor, would allow him to rent the house and lot for a period of 50 years in the amount of P100,000 with an option to buy the said property after two years. Furthermore, the lease contract stipulated that I cannot sell, mortgage, donate, encumber and dispose the house and lot without his written consent. Was the contract executed by my foreigner boyfriend valid? I will wait for your answer. Thank you in advance. ArneeDear Arnee, To answer your question, we shall refer to Presidential Decree 471, which fixes the maximum period for the duration of leases of private lands to aliens, to wit:“Section 1. The maximum period allowable for the duration of leases of private lands to aliens or alien-owned corporations, associations, or entities not qualified to acquire private lands in the Philippines shall be twenty-five years, renewable for another period of twenty-five years upon mutual agreement of both lessor and lessee. Section 2. Any contract or agreement made or executed in violation of this decree shall be null and void ab initio. xxx xxx xxx” (Emphasis supplied)The prohibition on foreigners to own Philippine lands is likewise embodied in Article XII, Section 7 of the 1987 Philippine Constitution which provides that “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.” It means that private land may only be transferred to Filipino citizens, corporations at least 60 percent of the capital of which is owned by Filipinos. “Notwithstanding the provisions of Section 7 of this Article, a natural-born citizen of the Philippines who has lost his Philippine citizenship may be a transferee of private lands, subject to limitations provided by law” (Section 8, Ibid.). The Supreme Court in the case of Rebeca Fullido vs Gino Grilli (GR 215014, Feb. 29, 2016), through Associate Justice Jose Mendoza elucidated:“The purpose of prohibiting the transfer of lands to foreigners is to uphold the conservation of our national patrimony and ensure that agricultural resources remain in the hands of Filipino citizens. The prohibition, however, is not limited to the sale of lands to foreigners. It also covers leases of lands amounting to the transfer of all or substantially all the rights of dominion. xxx xxx xxx Thus, if an alien is given not only a lease of, but also an option to buy, a piece of land by virtue of which the Filipino owner cannot sell or otherwise dispose of his property, this to last for 50 years, then it becomes clear that the arrangement is a virtual transfer of ownership whereby the owner divests himself in stages not only of the right to enjoy the land but also of the right to dispose of it — rights which constitute ownership. If this can be done, then the Constitutional ban against alien landholding in the Philippines, is indeed in grave peril. xxx xxx xxx The Court explained that “[a]liens are not completely excluded by the Constitution from 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. xxx xxx xxx (Emphasis Supplied)Article 1409 of the Civil Code states that contracts whose cause, object or purpose is contrary to law, morals, good customs, public order or public policy are inexistent and void from the beginning. In the case of Fullido vs Grilli, a void or inexistent contract was defined as one which lacks, absolutely either in fact or in law, one or some of the elements which are essential for its validity. It is one which has no force and effect from the very beginning, as if it had never been entered into it produces no effect whatsoever either against or in favor of anyone.Applying the above-mentioned laws in your situation, the contract of lease giving him option to buy your property and stipulating that your boyfriend will lease your property for 50 years circumvent the Constitutional prohibition against the transfer of lands to foreigners/aliens, rendering the said lease contract void. Furthermore, the same contract makes you powerless to dispose your own property. Hence, the contract of lease executed by your boyfriend is void and produces no rights and obligations. We hope that we were able to answer your queries. This advice is based solely on the facts you have narrated and our appreciation of the same. Our opinion may vary when other facts are changed or elaborated.Editor’s note: Dear PAO is a daily column of the Public Attorney’s Office. Questions for Chief Acosta may be sent to "

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"A contract that violates laws is void" was written by Mary under the Legal Advice category. It has been read 72 times and generated 0 comments. The article was created on and updated on 14 September 2021.
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