HEIRS OF SPS. PEDRO F. SANTOS AND DAMASA P. ANTONIO, NAMELY: LUZVIMINDA S. RIVERA, JUN SANTOS, MYRNA S. VERDADERO AND TERESITA S. MEJIA, PETITIONERS, VS. ESTELA SORIANO, RESPOND…
GONZALES-SISON, M., J.:
The controversy arose from the filing of a petition[2] by the petitioners seeking to recover the possession and cultivation of the landholding with an area of 23,587 square meters, more or less, located at Sto. Nino 3rd , San Jose City, Nueva Ecija, covered by Transfer Certificate of Title (TCT) No. EP-6514 and registered in the name of the late Pedro Santos.
Petitioners alleged that they are the direct descendants and successors-in-interests of the late Pedro F. Santos; due to poverty and in dire need of money, their mother was constrained to mortgage the subject landholding to the respondent in the amount of Twenty One Thousand Five Hundred Pesos (P21,500.00); despite the demand and offer made by the petitioners unto the respondent to return the possession and cultivation of the subject landholding, the respondent refused to do the same; being the direct descendants and successors-in-interests, the petitioners paid the corresponding “Land Amortization” and “Real Property Tax” due on the landholding in question; the petitioners incurred and tend to incur damages for failure to realize the income derived from the subject landholding; the dispute was referred to mediation, but to no avail as per Certification to File Action duly issued by the Pangkat Chairman of the Lupong Tagapamayapa in the locality.
The respondent in her Answer[3] denied all the material allegations of the petition and averred that the conciliation process at the Barangay level was invalid since the law requires that all agrarian disputes should be mediated before the Barangay Agrarian Reform Committee (BARC) concerned and not before the Katarungang Pambarangay.
By way of special and affirmative defenses, respondent claimed that petitioners have no valid cause of action against her as the petition was bereft of any factual and legal basis; the petitioners’ cause of action was already barred by prescription and laches because the subject landholding has been transferred or sold as per Transfer of Rights and Deed of Sale to her by Damasa Antonio and Domingo Antonio, the mother and brother, respectively, of the petitioners for more than twenty five (25) years ago and thereafter, she immediately took possession thereof continuously, openly, notoriously and adversely in the concept of an owner since then and up to the present; hence, her possession of the landholding in question has ripened into ownership by acquisitive prescription and conversely, the petitioners had lost their alleged rights to recover the possession of the same by extinctive prescription.
Respondent added that she paid or amortized the value of the subject landholding to the landowner; the title TCT EP-6514 that was issued in 1989 in the name of Pedro Santos and Damasa Antonio, the parents of the petitioners, should be cancelled and in lieu thereof, another title should be issued in her name.
Respondent then prayed for the dismissal of the petition for lack of factual and legal basis and on the counterclaim, ordering the petitioners to pay her damages, i.e. attorney’s fees of P25,000.00, appearance fee of P2,000.00 per hearing, litigation expenses of P10,000.00 and moral damages of P50,000.00. Respondent likewise prayed that the TCT EP No. 6514 in the name of Pedro Santos and Damasa Antonio be ordered cancelled and another title issued covering the subject land in her name.
In their Reply, petitioners countered that there was no transfer of rights or sale executed between respondent and Damasa Antonio nor by Domingo Santos. What was allegedly agreed upon was to mortgage the subject landholding for P21,500.00, this is why the title covering the landholding remained in the name of Pedro Santos. They added that prescription never set in against them instead, respondent merely refused to surrender the land.[4]
Via her Rejoinder, the respondent averred that there was no attempt on the part of petitioners to recover possession of the subject landholding for the past 25 years when the same had been sold or transferred to respondent on July 3, 1985. The relinquishment of possession for more than 25 years amounted to abandonment and petitioners have already lost whatever rights they may have thereto.
Respondent argued that such relinquishment of possession and cultivation is tantamount to surrender of rights and in violation of the conditions set forth under RA 3844 or RA 6657 where it provides that a person must be in physical possession and cultivation of the land for him to qualify as a farmer-beneficiary.
Respondent finally added that petitioners’ claim that they attempted to redeem the subject landholding was without any factual basis for they have not presented any evidence in support such claim.[5]
After the parties submitted their respective position papers, [6] the Provincial Adjudicator rendered a decision[7] by dismissing the petition and directing the respondent to ventilate her cause of action in another forum, the dispositive portion of which reads, to wit:
“WHEREFORE, premises considered, judgment is hereby rendered:
1. Dismissing the instant petition for lack of merit;
2. Directing the respondent to ventilate his (sic) cause of action for the cancellation of TCT EP No. 6514 issued and registered in the name of Pedro Santos in another forum;
2. All other claims and counterclaims are hereby ordered dismissed for insufficiency of evidence.
SO ORDERED.”[8]
In issuing the foregoing, the Provincial Adjudicator arrived at the following finding, to wit:
“From the allegations and evidence presented by the contending parties, this Office finds and so holds that what has been entered into by the parties was a contract of sale. This fact finds support as per Transfer of Rights (Annex “1”) and Deed of Sale (Annex “2”) executed by Domingo Santos with the conformity of the petitioners mother Damasa Antonio-Santos in favor of the respondent Estela. The pertinent portion of which is hereunder below for ready reference.
“1. Domingo Santos xxx the tenant-lessee or that certain parcel of land situated at Barangay Sto. Niño 3rd, San Jose City consisting of two (2) hectares, more or less owned by a certain Margarita Fernando xxx.
That for and in consideration of the sum of SEVENTEEN THOUSAND PESOS (P17,000.00) I do hereby transfer by way of Absolute Transfer the said parcel of land in favor of ESTELA SORIANO xxx”
xxx
Granting arguendo that what has been entered into by the parties was just a mere contract of mortgage, then, they could not just (sic) have waited for twenty five (25) long years to ventilate their cause of action with respect to their rights against the respondent. Such being the case, they are already estopped from denying the same.
The claim of the respondent that the title covering the subject landholding should be cancelled cannot be given due course. The title represented by the certificate cannot be changed, altered, modified, enlarged or diminished in a collateral proceeding (Lagrosa vs. Court of Appeals, 370 Phil. 225). The same can be ventilated in another forum considering that this Office is now divested with jurisdiction to act on it as provided for under the DARAB New Rules of Procedure in connection with R.A. 9700 otherwise known as the CARPER.”[9]
Against the decision, the petitioners filed a notice of appeal[10] and submitted their memorandum of appeal.[11] They claimed that the Provincial Adjudicator erred in dismissing their petition.
In a Decision[12] promulgated on October 1, 2013, the DARAB agreed with the findings of PARAD that the parties entered into a contract of sale and not a mere mortgage. However, it found the Transfer of Rights and Deed of Sale executed by the parties to be null and void. It opined that when the petitioners’ mother sold the subject landholding to respondent, she had not yet acquired full ownership over it hence, the sale violated the prohibition on transferability of awarded lands under Section 27, RA 6657, as amended, and DAR AO No. 8, Series of 1995 as well as DAR MC No. 19, Series of 1995 of the implementing guidelines. [13]
The DARAB stated that a void contract is equivalent to nothing, produces no civil effect and parties to a void agreement cannot expect the aid of law. More so, that both the contending parties were in pari delicto or in equal fault. Thus, they cannot seek for any affirmative relief pursuant to Article 1409 of the New Civil Code. The DARAB then disposed the case in this maner, to wit:
“WHEREFORE, the appeal is DENIED for lack of merit. The Decision dated July 20, 2011 is hereby AFFIRMED with MODIFICATION to read as follows:
1. Dismiss the basic Petition for lack of merit; and
2. Refer to the DAR PARO II, North Nueva Ecija to investigate the subject land with the end view of redistributing to a qualified re-allocatee consistent with the DAR rules and regulations on the matter;
3. All claims and counterclaims are hereby ORDERED DIMISSED for the parties are equally at fault.
SO ORDERED.”[14]
The petitioners as well as the respondent filed a motion for reconsideration from the decision of the DARAB but in a Resolution[15] promulgated on January 27, 2013,[16] the DARAB denied both motions for reconsideration of the parties for lack of merit.
Unfazed, petitioners come before the Court via this instant recourse claiming that, to wit:
“THE HONORABLE BOARD SERIOUSLY ERRED IN DISMISSING THE BASIC PETITION FOR LACK OF MERIT, AND ORDERING THE REDISTRIBUTION OF THE SUBJECT LAND TO QUALIFIED RE-ALLOCATEE.”[17]
Petitioners assert that there was neither a transfer of rights nor sale of the subject landholding between the parties because what was agreed upon by Damasa Antonio and respondent was merely an oral mortgage; the Transfer of Rights and Deed of Sale were falsified contracts and that said documents were not really signed by Domingo Santos; their payment of the land amortizations and the corresponding taxes after the execution of the falsified documents bolstered the fact that what was entered into by the parties was an oral mortgage and not a sale, and that they are not estopped in claiming the subject landholding because prescription never sets in, in the instant case.
Private respondent opposed the petition via her Comment.[18] However, she claims that the DARAB erred in finding that the sale of the subject landholding is null and void because she has finally paid the amortization.
The petitioners reiterate their claims and contention in their Memorandum[19] whilst the respondent claims, in addition to what she have stated in her Comment, that the DARAB erred when it ordered the redistribution of the subject land to another re-allocatee because granting that she and the petitioners’ mother were in pari delicto at the time they entered into a contract of sale and the law leaves the parties where it finds them to be, she, being in possession of the subject landholding, should not be divested of its possession in favor of another.[20]
The petition fails.
The Court agrees with the DARAB when it adopted the finding of the PARAD that what has been entered into by the petitioners’ mother and respondent was a contract of sale and not a mere mortgage. The record would bear out that all the elements of a contract of sale, to wit: a] consent or meeting of the minds, that is, consent to transfer ownership in exchange for the price; b] determinate subject matter; and c] price certain in money or its equivalent were all present in the Deed of Sale[21] that was executed by the parties.
However, like the DARAB, the Court sees the Deed of Sale as well as the Transfer of Rights[22] to be invalid. In agreeing with the DARAB, the Court is guided by the decision of the Supreme Court in the case of Heirs of Buensuceso vs. Lopez,[23] wherein the High tribunal categorically ruled that, viz:
“Mere issuance of the CLT does not vest full ownership on the holder and does not automatically operate to divest the landowner of all of his rights over the landholding. The holder must first comply with certain mandatory requirements to effect a transfer of ownership. Under R.A. No. 6657 in relation with P.D. No. 27 and E.O. No. 228, the title to the landholding shall be issued to the tenant-farmer only upon the satisfaction of the following requirements: (1) payment in full of the just compensation for the landholding, duly determined by final judgment of the proper court; (2) possession of the qualifications of a farmer-beneficiary under the law; (3) full-pledged membership of the farmer-beneficiary in a duly recognized farmers’ cooperative; and (4) actual cultivation of the landholding. We explained in several cases that while a tenant with a CLT is deemed the owner of a landholding, the CLT does not vest full ownership on him. The tenant-holder of a CLT merely possesses an inchoate right that is subject to compliance with certain legal preconditions for perfecting title and acquiring full ownership. For these reasons, we hold that Lorenzo’s right and claim to ownership over the disputed lot were, at most, inchoate.
In the same vein, we hold that German – as Lorenzo’s heir – is not automatically rendered the owner of the disputed lot. German must also still first comply with certain procedural and mandatory requirements in order to acquire Lorenzo’s rights under the CLT, including the right to acquire ownership of the disputed lot. Under Section 27 of R.A. No. 6657, lands not yet fully paid by the beneficiary may be transferred, with prior approval of the DAR, to any heir of the beneficiary who, as a condition for such transfer, shall cultivate the land for himself.” (Underlining Ours)
It is clear that the farmer-beneficiary of an agricultural land can perfect his title and acquire full ownership over the land if he complied with the following conditions, to wit: (1) payment in full of the just compensation for the landholding, duly determined by final judgment of the proper court; (2) possession of the qualifications of a farmer-beneficiary under the law; (3) full-pledged membership of the farmer-beneficiary in a duly recognized farmers’ cooperative; and (4) actual cultivation of the landholding. The farmer-beneficiary can transfer the unpaid landholding only to any of his heir or any qualified beneficiary subject further to the following conditions, to wit: (1) the transfer must have the prior approval of the DAR, and (2) the transferee shall cultivate the land for himself.
The surrounding facts of the case show that when Pedro Santos died, he has not yet paid in full the just compensation of the landholding to the owner thereof. Under the above jurisprudence, Pedro’s heirs, the late Damasa Santos and the herein petitioners, should comply first with the procedural and mandatory requirements in order to acquire their rights under the CLT, including the right to acquire ownership over the subject landholding.
The evidence at hand is bereft of any proof that petitioners had complied with all the aforestated requirements, particularly, paying in full the just compensation of the subject landholding to the owner. In not so doing, their rights and interests over the subject landholding were merely contingent, expectant and inchoate. Article 1459 of the Civil Code provides, that:
“Art. 1459. The thing must be licit and the vendor must have a right to transfer ownership thereof at the time it is delivered.”
Verily, the law specifically requires that the vendor must have ownership of the property at the time it is delivered. Not being yet the owners of the subject landholding and were only expecting to inherit, petitioners should not have transferred their rights and interests over the subject landholding to respondent. Thus, the Transfer of Rights and Deed of Sale petitioners executed on July 3, 1985 in favor of respondent, though notarized, were invalid or void. More so, that the parties did not secure the approval of the DAR before the said conveyance of the subject landholding was made.
The long and established rule is that “a void contract is equivalent to nothing; it produces no civil effect. It does not create, modify or extinguish a juridical relation.[24] And, generally, the parties to a void contract cannot expect the aid of the law, the courts leave them as they are, because they are deemed in pari delicto or “in equal fault.”[25]
In pari delicto is a universal doctrine which holds that no action arises, in equity or in law, from an illegal contract; no suit can be maintained for its specific performance, or to recover the property agreed to be sold or delivered, or the money agreed to be paid, or damaged for its violation; and where the parties are in pari delicto, no affirmative relief of any kind will be given to one against the other.[26]
Prescinding therefrom, the Court holds that the DARAB committed no reversible error when it ruled that both the petitioners and respondent cannot seek affirmative relief for the transfer of the subject landholding because it was executed against the prohibitory or mandatory laws. Incidentally, the Court now debunks all the other claims of petitioners and respondent.
The Court is aware that the doctrine of in pari delicto admits of exceptions that permit the return of what may have been given under a void contract to: (a) the innocent party (Arts. 1411-1412, Civil Code); (b) the debtor who pays usurious interest (Art. 1413, Civil Code); (c) the party repudiating the void contract before the illegal purpose is accomplished or before damage is caused to a third person and if public interest is subserved by allowing recovery (Art. 1414, Civil Code); (d) the incapacitated party if the interest of justice so demands (Art. 1415, Civil Code); (e) the party for whose protection the prohibition by law is intended if the agreement is not illegal per se but merely prohibited and if public policy would be enhanced by permitting recovery (Art. 1416, Civil Code); and (f) the party for whose benefit the law has been intended such as in price ceiling laws (Art. 1417, Civil Code) and labor laws (Arts. 1418-1419, Civil Code).[27] However, not one of the exceptions is present in this case hence, the Court has no valid reason to overturn the decision of the DARAB.
In fine, the Court sees no persuasive reason to grant the instant petition. The assailed Decision of the DARAB is in accordance with existing rules and jurisprudence on the matter.
WHEREFORE, premises considered, the instant petition is hereby DENIED. The Decision dated October 1, 2013 of the DARAB in DARAB Case No. 17400 is AFFIRMED.
SO ORDERED.
De Guia-Salvador, R., Chairperson and Cruz, R.A., JJ., concur.
[1] Rollo, pp. 45-56.
[2] Id., Annex “H”, pp. 66-69.
[3] Id., pp. 88-92.
[4] See note 1 at p. 48.
[5] Id., at pp. 48-49.
[6] Id., at p. 49.
[7] Rollo, Annex “A”, pp. 27-30.
[8] Id., penned by Provincial Adjudicator Arolf M. Ancheta.
[9] Id., at pp. 29-30.
[10] Id., Annex “B”, pp. 31-34.
[11] Id., pp. 35-44.
[12] See note 1.
[13] Id., at pp. 52-53.
[14] Id., penned by Member Jim G. Coleto with Chairman Virgilio R. Delos Reyes and Members Anthony N. Parungao and Gerundio C. Madueño, concurring.
[15] Rollo, pp. 57-59.
[16] It should be January 27, 2014 considering the decision of the DARAB was promulgated on October 1, 2013.
[17] Rollo, pp. 12-26 at p. 18.
[18] Id., pp. 99-103.
[19] Id., Memorandum For the Petitioners, pp. 129-143.
[20] Id., Respondent’s Memorandum, pp. 113-117.
[21] Id., p. 110.
[22] Id., p. 109.
[23] G.R. No. 173926, March 6, 2013.
[24] Hulst vs. PR Builders, G.R.No. 156364, September 3, 2007.
[25] Id.
[26] Id.
[27] Id.