G.R. No. 142439 - Filinvest Land, Inc. vs. Court of Appeals

The subject case involves a petition for review on certiorari challenging a Court of Appeals decision that annulled the sale of a parcel of land and ordered its reversion to the government.
The parcel in question is registered as Lot No. 329 of the Laguna Resettlement Project, located in Barrio San Vicente, San Pedro, Laguna, covering an area of 16,495 square meters.

The Department of Agrarian Reform (DAR) initially awarded the right to purchase the land to Ricardo Alvarez, via an Order of Award dated 9 October 1973.
On 15 August 1977, with the consent of his spouse, Rosario Param, Alvarez purchased the land as evidenced by a Deed of Sale executed by the DAR.
The Deed of Sale imposed a ten-year prohibition on transferring the land to anyone other than qualified beneficiaries (relatives within the third civil degree or the government), in conformity with Section 62 of Republic Act No. 3844 (Agricultural Land Reform Code).

Pending the issuance of the certificate of title, Presidential Decree No. 1474 was enacted on 11 June 1978 (and published on 27 November 1978).
PD No. 1474 declared the San Pedro Tunasan Estate (integral to the Laguna Resettlement Project) suitable for non-agricultural uses—residential, commercial, or industrial—and provided that individuals may sell or transfer their lots.
The effect of PD No. 1474 was to repeal, within its ambit, the prohibitory condition that otherwise prevented transfer within ten years, thereby superseding the relevant provisions of RA 3844 regarding agrarian land transfers.

The Register of Deeds issued Transfer Certificate of Title (TCT) No. 62731 in the name of Ricardo Alvarez on 25 May 1979.
Sixteen days later, on 10 June 1979, Alvarez and his wife sold the land to Mercedes Oliver for P10,000.

Notably, Oliver was not a relative within the third civil degree and did not qualify as a beneficiary by the previous standard.
As a consequence, the TCT in Alvarez’ name was cancelled and reissued (TCT No. 64967) in the name of Mercedes Oliver.

On 22 December 1989, Mercedes Oliver sold the property to Filinvest Land, Inc., which resulted in the issuance of TCT No. 201836 on 23 January 1990.

Prior to the land’s transfer to Filinvest, the heirs of Ricardo Alvarez filed a case for reconveyance, redemption, and damages before the RTC of BiAan, Laguna, which was dismissed on 17 February 1989 for failure to prosecute.
Respondents later filed an Amended Complaint for Annulment of Title before the Provincial Agrarian Reform Adjudication (PARAD) of Sta. Cruz, Laguna.
The PARAD initially dismissed the complaint on res judicata grounds (25 August 1993).

Upon appeal from the PARAD’s dismissal, the DAR Adjudication Board (DARAB) reversed the decision and annulled the successive land transfers, ordering the reversion of the title to the government.
Filinvest petitioned for review on certiorari challenging this reversion and raising several issues regarding the validity of the transfers and the jurisdiction of the DARAB.
On 11 November 1998, the Court of Appeals dismissed the petition for review, a decision eventually challenged before the Supreme Court.

Was the sale of the subject parcel of land by Ricardo Alvarez to Mercedes Oliver void because it violated the transfer restriction in the Deed of Sale and Section 62 of RA 3844?
Did Presidential Decree No. 1474 effectively revoke these restrictions, thus validating both the transfer from Alvarez to Oliver and the subsequent transfer to Filinvest?

Did the DARAB have proper jurisdiction over this case considering that the land had been converted from agricultural to commercial, industrial, or residential use pursuant to PD No. 1474?
Was it proper for the DARAB to annul the transfers when the subject matter arguably fell outside its statutory mandate?

Should the doctrine of res judicata bar the respondents’ complaint filed before the PARAD based on the prior RTC dismissal of a similar case?
Are the essential requisites of identity of issues and parties, finality, and adjudication on the merits met, thereby precluding subsequent litigation?

Should Filinvest, as a purchaser for value in good faith, be entitled to protection despite the allegations against the prior transactions?
Did the lower courts commit reversible error by failing to grant such protection under relevant precedents (e.g., Agricultural and Home Extension Development Group v. Court of Appeals)?