G.R. No. 192629 - Filinvest Land, Inc. vs. Adia

The respondents were registered owners of various land parcels in Barangay Hugo Perez, Trece Martires, Cavite, awarded to them under the Comprehensive Agrarian Reform Law (CARL) with a total area of about 709,910 square meters documented in seventy‐five Transfer Certificates of Title (TCTs).
In 1995, Filinvest Land, Inc. acquired possession of these properties based on affidavits executed by the respondents.
The affidavits, known as Sinumpaang Salaysay or “Pagbibitaw ng Karapatan,” were purportedly executed in connection with a joint venture agreement (JVA) in which the respondents relinquished their rights for valuable consideration, expecting the development of a residential subdivision.

Respondents allegedly surrendered both possession and, effectively, ownership interests by executing the affidavits in exchange for a disturbance fee and assurances related to a joint venture.
They also delivered the duplicate original TCTs to Filinvest so these could be used in the planning and development of the subdivision.
Respondents maintained that they were provided with financial assistance (money to find alternative accommodation) during the period when development was to be initiated.
Despite these arrangements, Filinvest began fencing off the area and prohibited respondents from accessing their lands, prompting the dispute.

The respondents filed a complaint for recovery of possession with damages against Filinvest in 2010.
At trial, respondents’ witnesses initially denied executing the affidavits but later admitted to having signed them when confronted with their signatures.
Filinvest presented two key witnesses:

One testified that no documents other than the affidavits were in its possession regarding the transactions.
The other, then-Head of the Land Acquisition Department, explained that the negotiations for sale were redirected to an assignment of possession because Section 27 of CARL prohibited a sale within ten years.

The Regional Trial Court (RTC) ruled in favor of the respondents, ordering Filinvest to vacate the properties, return all TCTs, and pay attorney’s fees.
The Court of Appeals (CA) affirmed the RTC decision.

The affidavits validly assigned possessory rights, not full ownership, and thus were lawful.
Even if void, the respondents should refund the consideration to avoid unjust enrichment.
Both parties were in pari delicto, suggesting that neither should prevail as each was equally at fault.

The affidavits amounted to a surrender of ownership rights, violating Section 27 of CARL.
All requisites of Article 1416 of the Civil Code were present for recovery despite the prohibited transaction.
The longstanding possession (over fifteen years by Filinvest) did not justify retention of the properties given the legal framework protecting agrarian beneficiaries.

In 2006, the respondents informed the Court that new TCTs had been issued in Filinvest’s name, though the case at hand strictly resolved possessory rights and not title.

Whether the affidavits transferring possession—and effectively ownership—of the disputed properties are valid under Section 27 of the Comprehensive Agrarian Reform Law, which prohibits sale, transfer, or conveyance within a ten-year period.

Did the affidavits amount to a valid assignment of mere possessory rights or did they improperly transfer full ownership rights?
Is there any merit in the claim that a joint venture agreement (JVA) existed to justify the transaction, considering the lack of documentary evidence?
Can Filinvest assert rightful possession based on the affidavits despite the statutory prohibition?
Does the doctrine of pari delicto preclude the respondents from recovering their property, or does the exception provided under Article 1416 of the Civil Code apply?
Does the principle of avoiding unjust enrichment have any bearing on upholding or voiding the transfers effected by the affidavits?