Case Digest (G.R. No. 248650)
Facts:
Elizabeth Ong Lim v. Lazaro N. Cruz, G.R. No. 248650, March 15, 2023, First Division, Zalameda, J., writing for the Court. Petitioner is the private lender and transferee; respondent is the DAR-awarded beneficiary Lazaro N. Cruz, sued through his son Vicente T. Cruz.On 21 July 1994, the Government, through the Department of Agrarian Reform, awarded two agricultural parcels in Calumpit, Bulacan to Lazaro: an 18,865 sq. m. lot covered by TCT No. 9307/CLOA No. 00243956 (first parcel) and an 11,099 sq. m. lot covered by TCT No. 9308/CLOA No. 00243955 (second parcel). Within six years of the award, on 26 April 2000, Lazaro obtained a P1,500,000 loan from petitioner and executed a Real Estate Mortgage on the first parcel as security. Within eight years of the award, on 9 May 2002, Lazaro executed a Deed of Sale over the second parcel in favor of petitioner for P1,500,000; petitioner took possession of the original TCTs/CLOAs.
On 12 May 2011 Lazaro, represented by Vicente, filed a complaint in the Regional Trial Court (Branch 78, Malolos) for annulment of the mortgage and sale and recovery of possession and damages, alleging the transactions violated the transfer prohibition in Section 27 of R.A. No. 6657. During trial Vicente admitted they could not pay the loan, made no written offer to pay, and did not demand payment before filing suit. Petitioner answered, denied the RTC lacked jurisdiction because the lands are covered by agrarian law, asserted other defenses (real party in interest, prescription, estoppel, unclean hands), and argued the 10-year prohibition did not apply to a mortgage as mere security and to an unregistered sale.
The RTC assumed jurisdiction, denied Lazaro’s complaint (finding no cause of action and applying estoppel for using his own unlawful act to profit), but reduced the interest charged on the loan to one percent per month (12% per annum). Lazaro appealed to the Court of Appeals (CA). The CA partly granted the appeal: it agreed the RTC properly assumed jurisdiction but declared the Deed of Absolute Sale (over the second parcel) null and void for violating Section 27, R.A. No. 6657, ordered petitioner to surrender possession of the second parcel and to return whatever amount Laz...(Subscriber-Only)
Issues:
- Did the Regional Trial Court (and not the DARAB) have jurisdiction to hear Lazaro’s complaint?
- Is the Deed of Absolute Sale over the second parcel void for violating Section 27 of R.A. No. 6657?
- What is the proper remedy for a void sale of agrarian-awarded land—must the purchaser return the purchase price and with what interest, and is remand nece...(Subscriber-Only)
Ruling:
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Ratio:
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Doctrine:
- (Subscriber-Only)