San Juan was a tenant to a 6,000-square meter parcel of land owned by Abella, and located at Balatas, Naga City, Camarines Sur (Balatas property). The portion was covered by Certificate of Land Transfer No. 843 (159301) issued on 18 October 1973.
On 28 January 1981, San Juan and Abella entered into an agreement whereby the Balatas property will be exchanged with a 6,000-square meter agricultural lot situated at San Rafael, Cararayan, Naga City (Cararayan property). The parties agreed that in addition to the Cararayan property, San Juan shall receive from Abella a certain amount as disturbance compensation and a 120-square meter home lot situated at Balatas, Naga City.
The Department of Agrarian Reform approved the said agreement.
The controversy started when San Juan filed a complaint against Abella praying that she be declared the absolute and lawful owner of the Balatas property.
San Juan’s Claims
- The agreement is void as it contravened the prohibition on transfer under Presidential Decree No. 27.
- Applying said law, the title to the Balatas property could not have been acquired by Abella, since its transfer ought to have been limited only to the government or the grantee’s heirs by way of succession.
- The Department of Agrarian Reform’s approval of the agreement was of no moment.
Abella’s Arguments
- The agreement, being a mere relocation agreement, did not violate nor contravene the true spirit of Presidential Decree No. 27 and other agrarian reform laws, rules and regulations.
- The Department of Agrarian Reform, the agency tasked to implement Presidential Decree No. 27 and other agrarian laws, rules and regulations relative to the disputed land, approved the agreement. Abella posits that this fact must be accorded great weight by the courts.
- San Juan did not surrender the Balatas property to Abella as contemplated under Presidential Decree No. 27. Instead, San Juan received in return the Cararayan property.
The Supreme Court did not agree with Abella.
The Agreement was void for contravening Presidential Decree No. 27.
Presidential Decree No. 27 provides for only two exceptions to the prohibition on transfer, namely,
- transfer by hereditary succession; and
- transfer to the Government.
Sales or transfers of lands made in violation of Presidential Decree No. 271and Executive Order No. 228, July 17, 1987, “Declaring Full Land Ownership to Qualified Farmer Beneficiaries Covered by Presidential Decree No. 27” in favor of persons other than the Government by other legal means or to the farmer’s successor by hereditary succession are null and void.
The prohibition even extends to the surrender of the land to the former landowner. The sales or transfers are void ab initio, being contrary to law and public policy under Article 5 of the Civil Code of the Philippines which states that “acts executed against the provisions of mandatory or prohibiting laws shall be void.”
The prohibition against transfers to persons other than the heirs of other qualified beneficiaries stems from the policy of the Government to develop generations of farmers to attain its avowed goal to have an adequate and sustained agricultural production. With certitude, such objective will not see the light of day if lands covered by agrarian reform can easily be converted for non-agricultural purposes.
In the present case, the Court found that the agreement Abella and San Juan stipulated that the Cararayan property will be placed under Operation Land Transfer and that a new Certificate of Land Transfer shall be issued in the name of San Juan. The parties also agreed that after the execution of the Agreement, San Juan shall vacate the Balatas property and deliver its possession to Abella.
Furthermore the Court took notice of a certain Deed of Donation of Land Covered by Presidential Decree No. 27 dated 1 July 1981 which provided that “for and in consideration of the [landowner-donor’s] generosity and in exchange of the [tenant-tiller donee’s] [farm lot] at Balatas, City of Naga, the [landowner-donor] do hereby transfer and convey to the [tenant-tiller-donee], by way of [donation] the parcel of land above-described.”
The intended exchange of properties by the parties as expressed in the agreement and deed entailed transfer of all the rights and interests of San Juan over the Balatas property to Abella.
According to the Court, it is the kind of transfer contemplated by and prohibited by law.
Thus, the argument of Abella that the agreement was merely a relocation agreement, or one for the exchange or swapping of properties between him and San Juan, and not a transfer or conveyance under Presidential Decree No. 27, has no merit. The Court said that a relocation, exchange or swap of a property is a transfer of property. They cannot excuse themselves from the prohibition by a mere play on words.
The Court added that the fact that there was an approval from the Department of Agrarian Reform did not validate the agreement. A transfer of lands under Presidential Decree No. 27 other than to successors by hereditary succession and the Government is void. A void or inexistent contract is one which has no force and effect from the beginning, as if it has never been entered into, and which cannot be validated either by time or ratification. No form of validation can make the void agreement legal.
Further reading:
- Abella v. Heirs of San Juan, G.R. No. 182629, February 24, 2016.
