Rellosa vs. Gaw Chee Han

No. L-1411. September 29, 1953

FACTS

On February 2, 1944, Dionisio Rellosa sold to Gaw Chee Hun a parcel of land, together with the  house erected thereon, for the sum of P25,000. The vendor remained in possession of the  property under a contract of lease entered into on the same date between the same parties. 

Rellosa instituted action seeking the annulment of the sale and the lease. The Petitioner  contends that the sale in question cannot have any validity under Seirei No. 6 in view of the  failure of respondent to obtain the requisite approval by the Japanese authorities. And Even if  said requirement were met, the sale would at all events be void under article XIII, section 5, of  our Constitution which provides that “no private agricultural land shall be transferred or  assigned except to individuals, corporations, or associations qualified to acquire or hold lands  of the public domain in the Philippines”. 

Defendant answered the complaint that the sale referred was absolute and unconditional and  was in every respect valid and binding between the parties, it being not contrary to law, morals  and public order, and that plaintiff is guilty of estoppel in that, by having executed a deed of  lease over the property, he thereby recognized the title of defendant to that property. 

The court declared both the sale and the lease valid and binding and dismissed the complaint.

ISSUE

Whether or not can petitioner have the sale declared null and void and recover the property  considering the effect of the law governing rescission of contracts?

HELD

No. the sale in question is null and void, but plaintiff is barred from taking the present action  under the principle of pari delicto. The vendor in a sale of residential land executed in February  1944 cannot have the sale declared null and void nor rescind the contract and recover the  property, because both vendor and vendee are in pari delicto. 

Even if the plaintiffs can still invoke the Constitution, or the doctrine in the Krivenko Case, to  set aside the sale in question, they are now prevented from doing so if their purpose is to  recover the lands that they have voluntarily parted with, because of their guilty knowledge that  what they were doing was in violation of the Constitution. They cannot escape this conclusion  because they are presumed to know the law. As this court well said ‘A party to an illegal  contract cannot come into a court of law and ask to have his illegal objects carried out. The law  will not aid either party to an illegal agreement ; it leaves the parties where it finds them.’ The

rule is expressed in the maxims : ‘Ex dolo malo non oritur actio,’ and ‘In pari delicto potior est  conditio defendentis! 

The rule has sometimes been laid down as though it were equally universal, that where the  parties are in pari delicto, no affirmative relief of any kind will be given to one against the  other.” 

DISPOSITIVE PORTION

In view of the foregoing, we hold that the sale in question is null and void, but plaintiff is  barred from taking the present action under the principle of pari delicto. 

The decision appealed from is hereby affirmed without pronouncement as to costs.