Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-13465             March 29, 1960

In the Matter of the Petition to Cancel Notice of Lis Pendens on Transfer Certificate of Title
No. 13960. EWALD E. SELPH, ETC., petitioner.
EWALD E. SELPH, ETC., plaintiff-appellant,
vs.
GLICERIA M. VDA. DE AGUILAR, defendant-appellee.

Ross, Selph, Carrascoso and Janda for appellant.

Bonus and Bonus for appellee.

BENGZON, J.:

Appeal from a decision of the Quezon court of first instance, concerning a ten-hectare land in
Atimonan, same province, originally registered in 1917, under Torrens Certificate of Title No. 228.

Appellant does not dispute the facts. This property was after 1917 acquired by Lois Capule, wife of
Simeon C. Capule, to whom Transfer Certificate of Title No. 43 was issued. This certificate of title
was later cancelled and substituted on October 2, 1930, by Transfer Certificate Title No. 4610 in the
name of Lois D. Capule. Thereafter, on October 21, 1930, Valentin Devilles obtained judgment
against the Capule couple, and the latter's right and interest to the property were levied upon by
virtue of two writs of execution which culminated in the sale to Devilles of the land, at public auction.
Such sale was noted in February 1931 on Transfer Certificate of Title No. 4610.

Subsequently, Capule presented a complaint against Devilles which was docketed as Civil Case No.
2614. Capule won and, on March 14, 1931, reacquired the land at the Sheriff's sale, also on
execution. Transfer Certificate of Title No. 5568 was consequently issued to Capule, mortgaged the
property to Manila Trading & Supply Company on October 17, 1931, to secure the payment of
sixteen (16) promissory notes, as shown in the records of the Office of the Register of Deeds.

A month later or on November 14, 1931, Devilles named the spouses Capule and the Provincial
Sheriff of Tayabas in a complaint (Civil Case No. 3145) to annul the execution of the judgment in
Civil Case No. 2614 and to cancel the Sheriff's sale to the Capules. On the same date, Devilles
caused a Notice of Lis Pendens to be inscribed in Capule's certificate of title and in the land records.

The Capules failed to pay their monetary obligation Manila Trading & Supply Company; and
judgment having been rendered in favor of Manila Trading & Supply Co., the Sheriff (November
1934) sold the property at foreclosure sale to Manila Trading & Supply Co. Capule's Transfer
Certificate of Title No. 5568 was consequently cancelled and a new one, Transfer Certificate of Title
No. 8578, was issued to Manila Trading & Supply Co. The notice of Lis Pendens was annotated in
this new certificate of title of Manila Trading & Supply Co.

On April 13, 1934, Valentin Devilles at last won his Civil Case No. 3145, the Supreme Court
declaring (G. R. No. 40283),
 . . . The sale had by virtue of the execution of the judgment in Case No. 2614 of the Court of
First Instance of Tayabas is declared null and void and it is further ordered that the Transfer
Certificate of Title No. 5568 in favor of Simeon C. Capule and Lois D. Capule, which
cancelled Transfer Certificate of Title No. 4610 in favor of Valentin Devilles, be cancelled and
that a new certificate of title covering the same land be issued in favor of Valentin Devilles. . .
.

By documents executed on July 8, 1936, October 3, 1944 and October 14, 1949, Valentin Devilles
sold the property to the spouses Vicente Aguilar and Gliceria Manalo Vda. de Aguilar (herein
appellee).

On October 22, 1951, the Quezon Register of Deeds addressed a letter to Manila Trading & Supply
Co., requiring the surrender of the owner's duplicate of Transfer Certificate of Title No. 8578, for
cancellation in accordance with this Supreme Court's above mentioned decision.

On September 15, 1952, Manila Trading & Supply Co. sold the property, subject to the Lis
Pendens to Julius S. Reese, its president; and Transfer Certificate of Title No. 13960 was issued in
the latter's name, with annotation of the Lis Pendens.

On December 21, 1956, the administrator of the estate of Julius S. Reese (who had died), presented
to the Quezon court a petition under sec. 112 of Act 496 for cancellation of the annotation of lis
pendens, inasmuch as the litigation named therein had been decided in April 1934 but such
decision, never having been executed for 21 years had lost its binding force. Her husband having
died, Gliceria Manalo de Aguilar filed an opposition.

Thereafter, a few days after his petition, Reese's administrator presented a complaint against her to
get possession of the property, plus damages, and attorney's fees.

Defendant Aguilar set up the ownership of Devilles, the transfers made to her and her husband, plus
the decision of this Supreme Court annulling the titles of the Capules. And she asked that the
Register of Deeds be required issue title in her favor.

The petition was heard together with the complaint, and the Hon. Vicente del Rosario, Judge,
rendered one decision, the dispositive portion of which reads as follows:

PREMISED on the foregoing considerations, judgment is hereby rendered in favor of the

defendant and against the plaintiff dismissing the complaint and the petition to cancel the lis
pendens existing against Transfer Certificate of Title No. 13960, declaring the defendant the
absolute owner of the property in litigation and ordering the plaintiff as administrator of the
estate of the deceased Julius S. Reese to deliver to the Register of Deeds the province of
Quezon the owner's duplicate of Transfer Certificate of Title No. 13960 and authorizing the
Register of Deeds to cancel it and issue a new certificate of title in the name of the defendant
Gliceria Manalo Vda. de Aguilar with the alternative order that in the event that the plaintiff
refuses to deliver to the Register of Deeds the owner's duplicate of the certificate of title in
question within 15 days from the date this decision shall have become final, the Register of
Deeds shall cancel said owner's duplicate of Transfer Certificate of Title No. 13960 and shall
issue new certificate of title in favor of Gliceria Manalo Vda. de Aguilar. . . .

It is undisputed that this land has always been in the possession of Devilles first, and of the spouses
Vicente Aguilar later. Now Reese wishes to recover ownership possession thereof on the strength of
the title he obtained from Manila Trading & Supply Co. But Manila Trading & Supply Co. derives
ownership from the Capules1 whose title in turn has been voided by the decision of Supreme Court.
On the other hand, the Aguilars are transferees of Devilles whose title to the land (in a suit against
the Capules) was expressly upheld by this Supreme Court. Both Reese and the Manila Trading were
aware if that suit by virtue of the lis pendens notice, and are bound by the judgment against the
Capules, their predecessor in interest.2

However, Reese claims the lis pendens may not adversely affect him because the Supreme Court
decision was not shown to the Register of Deeds until the year 1951, contrary to sec. 79 of the Land
Registration Law, which provides:

SEC. 79. No . . . judgment or decree, and no proceeding to vacate or reverse any judgment
or decree, shall have any effect on registered land as against persons other than the parties
thereto, unless a memorandum .. shall be filed and registered. . . . Provided, however, That
in case notice of the pendency of the action has been duly registered it shall be sufficient to
register the judgment or decree in such action within sixty days (60) after the rendition
thereof.

We think this section does not say that if the judgment is not registered within 60 days, the notice will
not be binding. And even if it said so, the judgment will not be binding only as against persons other
than the parties to the suit. It is still binding on the parties (the Capules)and we hold also on the
successors of such parties (like Manila Trading Co. and Reese), particularly because the titles of
these successors bear the annotation relating to the lis pendens.

Indeed, even admitting for the sake of argument that the annotation in the Register's Office
concerning the lis pendens had become ineffective by reason of non-presentation (to the Register)
of this Court's 1934 decision there is still ample ground to hold that as Reese purchased the property
with actual notice of the controversy over the title thereto, he was particularly subject to its outcome.

But the appellant argues: the appealed order would enforce the judgment of 1934, which has
prescribed, more than ten years having elapsed since that year.

Remember, however, that although action on a judgment prescribes after ten years, the period
begins from the time such judgment becomes final;3 and no proof exists as to date when the
judgment of 1934 became final. And then, in so far as Reese's attempt to get possession the
decision may be invoked in defense as res judicata which does not prescribe.4

As to the order for surrender of the title and the issuance of a new certificate, Reese may not object
on the ground of non-enforcement and prescription of the 1934 decision, because if any one could
object thereto, it was the Register of Deeds who was called upon to implement the order of
cancellation and issuance; and yet he has shown willingness to comply. It is true that in complying,
the Register is now requiring Reese in turn to surrender his title. But the latter may not properly
refuse, because he received such title from the Register upon his undertaking to respect the
outcome of the litigation, the title being expressly subject thereto, by the annotation of lis pendens. 5

At any rate, according to sec. 81 of the Land Registration Act, the judgment in 1934 was "entitled to
registration" upon presentation of appropriate papers to the Register of Deeds; and the section
fixes no time for such presentation.6 And when such office was requested, in accordance with the
1934 judgment, to cancel the outstanding title and to issue another in the name of Devilles'
successors, he was authorized to take adequate measures by sec. 111, Act 496 of the law
applicable which reads as follows:

SEC. 111. In every case where the clerk or any register of deeds is requested to enter a new
certificate in pursuance of an instrument purporting to be executed by the registered owner,
 or by reason of any instrument or proceedings which divest the title of the registered owner
against his consent, if the outstanding owner's duplicate certificate is not presented for
cancellation when such request is made, the clerk or register of deeds shall not enter a new
certificate, but the person claiming to be entitled thereto may apply by petition to the court.
The court, after hearing, may order the registered owner or any person withholding the
duplicate to surrender the same, and direct the entry of a new certificate of title upon such
surrender.

Accordingly, the Register of Deeds required Manila Trading to surrender the title, and its refusal or
failure gave Devilles' successors the right to petition the court for appropriate orders, in other words,
a right of action7 which obviously had not yet prescribed when it was asserted in the Tayabas court
as a counterclaim in this case.

The appealed order is affirmed, with costs.

Paras, C. J., Montemayor, Bautista Angelo, Labrador, Concepcion, Reyes, J. B. L., Barrera and
Gutierrez David, JJ., concur.
 G.R. No. 192629, November 25, 2015

FILINVEST LAND, INC., Petitioner, v. EDUARDO R. ADIA, LITO M. ADIGUE, CANDIDO M. AMPARO,

MARINO S. AMPARO, RODOLFO S. AMPARO, FLORDELIZA L. ARIAS, BALBINO M. ATIENZA, PEDRO
M. ATIENZA, DALMACIO C. AVANILLA, PASTOR M. AVANILLA, VENACIO P. BAUTISTA, RODOLFO S.
BERGADO, ENRIQUE R. BRABANTE, EMMA D. BUBAN, JUANITO A. CANDARE, ROMEO O. CANDARE,
ANTONIO M. CATAPANG, EDUARDO A. CATAPANG, GRACIANO C. CATAPANG, HERMINIO V.
CATAPANG, JUANA P. CATAPANG, REYNALDO P. CATAPANG, ROMEO A. CATAPANG, RODOLFO A.
CATAPANG, VICTORIANO A. CATAPANG, JUAN D. CENTOS, FERNANDO B. CERNETCHEZ, EDUARDO
C. CREENCIA, ARNEL N. M. CREMA, REYNALDO B. CRISTAL, MOISES CUBCUBIN, DELSO POBLETO,
SALVADOR M. DE LEON, MELQUIADES P. DESCALSO, GREGORIO P. DINO, ROBERTO L. DOMINO,
CELSO R. ESCALLAR, ARMAND P. ESCUADRO, ELISA C. FELICIANO, PASTOR C. FERRER, ERLINDO
M. FORMARAN, LEONARDO D. GARINO, RAFAEL R. GRANADO, ALMARIO IBANEZ, CASIMIRO P.
IBANEZ, CEFERINO P. IBANEZ, MIGUEL V. IBANEZ, MONTANO V. IBANEZ, CESAR N. JECIEL,
ALFREDO B. LAURENTE, EFIGENIA B. LAURENTE, CELSO C. MEDINA, EDUARDO A. PANGANIBAN,
ROMEO C. PASCUA, DANILO L. PAULMINO, LAURO A. PEGA, LEONARDO M. PEREZ, FELIPE V.
PETATE, LEONARDO V. PETATE, ESTANISLAO PORTO, MAXIMO D. PORTO, GREGORIO L. REYES,
JOSE L. REYES, LEONARDO M. SALINGYAGA, DEMETRIO A. SALONGA, MANOLITO G. SORILLA,
HERMOGENES L. TORRES, JUANITO M. TORRES, MARIANO B. TAGLE, MARIO D. TAGLE, AND
SANCHO V. VILLA, Respondents.

DECISION

BRION, J.:**

We resolve the petition for review on certiorari challenging the April 15, 2010 decision1 and June 17, 2010
resolution of the Court of Appeals (CA) in CA G.R. CV No. 87424. The CA decision affirmed the Regional Trial
Court's (RTC) decision2 directing the petitioner to vacate the properties and to return the transfer certificates
of title (TCTs) to the respondents.

FACTUAL BACKGROUND

The respondents were the registered owners of various parcels of land located in Barangay Hugo Perez,
Trece Martires, Cavite. These properties were awarded to them pursuant to the Comprehensive Land Reform
Law (CARL),3 and had a total land area of about 709,910 square meters under seventy-five (75) TCTs.

In 1995, Filinvest Land, Inc. (Filinvest) acquired possession of these properties. Each of the respondents
executed a Sinumpaang Salaysay entitled Pagbibitaw ng Karapatan (affidavits). Based on these affidavits,
the respondents relinquished all their rights over the properties for valuable consideration.

The respondents alleged that they surrendered possession of their properties with the understanding that
Filinvest would develop these into a residential subdivision, pursuant to a joint venture agreement (JVA).
They also entrusted their respective owner's duplicate original copies of the TCTs to Filinvest because they
were told that these would be used in preparing the development plans. The respondents added that they
were even given money to find their own place while the development was taking place.

The respondents repeatedly requested Filinvest to return their owner's TCT copies and to give them a copy
of the JVA. Since development had not yet begun, they also sent a letter to Filinvest to allow them to
temporarily return to their lands. They received no response. Instead, Filinvest began to fence the area and
prohibited entry. To protect their rights, the respondents filed notices of adverse claim.

In 2010, the respondents filed a complaint for recovery of possession with damages against Filinvest.

In its answer, Filinvest argued that (a) the respondents had relinquished their rights over the property, (b)
no JVA was signed, and (c) all of the respondents signed the affidavits under which possession was validly
transferred to Filinvest.

At trial, the respondents' witnesses initially denied that they executed the affidavits but changed their
answers when they saw their signatures on them.

Filinvest presented two witnesses. Leilanie Faforga (Faforga), the custodian of Filinvest's acquisition
documents, testified that she did not possess any documents on the properties other than the respondents'
affidavits. To her knowledge, no JVA had been signed.

Lina Ferrer-De Guzman (De Guzman) testified that she was the Head of the Land Acquisition Department at
the time of the transactions. She stated that the sale with Filinvest did not push through because the
properties were covered by the CARL. Under its Section 27, the properties cannot be sold, transferred, or
conveyed within a period of ten (10) years. Thus, instead of a sale, she negotiated a transfer of possession
to Filinvest through the affidavits until such time that a sale could be made.

In its decision, the RTC found the respondents to be the lawful possessors. It then ordered Filinvest to: (a)
vacate the properties; (b) return all the TCTs to the respondents; and (c) pay two hundred thousand pesos
as attorney's fees.

The respondents challenged this ruling through a petition for review before the CA.

THE CA RULING

The CA affirmed the RTC's decision. It ruled that the respondents undoubtedly own the properties and are
entitled to possession.

First, the CA ruled that the respondents failed to prove the JVA's existence and due execution. They failed to
produce the original copy and any secondary evidence to prove that it exists. Thus, the CA had no basis to
conclude that Filinvest did not perform its obligations under the alleged JVA.

Second, the CA ruled that the affidavits could not be valid sources of Fil invest's right because their terms
were contrary to law, specifically Section 27 of the CARL. A plain reading of these affidavits showed that all
rights, not just possession, over the properties were transferred. Without expressly mentioning transfer of
ownership, the affidavits effectively gave Filinvest indefinite control over the properties; thus, the affidavits
were void.

Third, the CA ruled that, although both parties knew that the transfers were prohibited, the respondents
may still recover the properties based on Article 1416 of the Civil Code. This provision is an exception to
the pari delicto doctrine. This provision states that when an agreement is not illegal per se but is merely
prohibited, and the prohibition is designed to protect the plaintiff, he may recover what he has delivered.
Section 27 of the CARL was designed to protect the landless farmers; thus, the respondents may still
recover their properties.

Lastly, the CA removed the award of attorney's fees because the RTC did not give any reason for granting it.

The CA denied Filinvest's motion for reconsideration; hence, this petition.

THE PETITION

In its petition and supplemental petition, Filinvest insists that: chanRoblesvirtualLawlibrary

First, the affidavits are valid. Section 27 of the CARL only prohibits the sale, transfer, or conveyance of the
properties. It does not prohibit the assignment of possessory rights. When the respondents executed the
affidavits, they voluntarily assigned their possessory rights over the properties in Filinvest's favor. Filinvest
is, therefore, the lawful possessor of the properties.

Second, assuming arguendo that the affidavits are void, the respondents must return the consideration they
received. Otherwise, they will unjustly enrich themselves at Filinvest's expense.

Third, both parties are in pari delicto for entering into the void transaction. Thus, the Court should leave
them as they are. Furthermore, the pari delicto exception in Article 1416 of the Civil Code does not apply to
void contracts.

THE RESPONDENTS' CASE

On their part, the respondents argue that: chanRoblesvirtualLawlibrary

First, the affidavits are void because they effectively transferred ownership, not just possession, over the
properties. The affidavits' provisions require a perpetual surrender of the respondents' ownership rights.
This transfer violates Section 27 of the CARL.

In Maylem v. Ellano,4 this Court ruled that the waiver or surrender of possession of properties awarded
under CARL is a prohibited transfer. Thus, Filinvest's contention that they validly acquired possession
through the affidavits is baseless. Since the transfer to Filinvest is prohibited, the respondents are the
properties' lawful possessors.

Second, all the requisites of Article 1416 of the Civil Code are present. Thus, the courts may return the
properties to the respondents' possession. Moreover, the respondents will not be unjustly enriched if the
properties are returned to them because Filinvest has possessed their properties for more than fifteen years.

In sum, the CA did not commit any error in affirming the RTC's decision.

In a manifestation in 2006, the respondents informed this Court that while this case is pending, Filinvest
was able to cancel the TCTs in respondents' names and to obtain new ones in its name.

THE ISSUE

The core issue in an accion publiciana case is who between Filinvest and the respondents are the properties'
lawful possessors.

OUR RULING

The petition is unmeritorious.

An accion publiciana or a case for recovery of possession determines who between the parties has the better
and legal right to possess the properties, independently of title.5

Filinvest's claim of rightful possession relies on the affidavits. Hence, we must ascertain whether these
affidavits validly transferred possession.

The affidavits are void for violating Section 27 of the CARL.

Since the properties involved were awarded pursuant to CARL, its provisions apply here. Section 27 of the
CARL states:
"Section 27.  Transferability of Awarded Lands. - Lands acquired by the beneficiaries under this Act may
not be sold, transferred or conveyed except through hereditary succession, or to the government, or the
LBP, or to other qualified beneficiaries for a period of ten (10) years. x x x." (Emphasis supplied)
This provision prohibits the sale, transfer, or conveyance of the properties within ten years, subject to four
exceptions6 which do not apply to this case.

As early as 1990, the transfers of possessory rights over landholdings awarded under agrarian laws had
been declared void in Torres v. Ventura.7

In that case, Torres tilled the subject land when Presidential Decree No. 27 (PD 27) was promulgated in
1972. In 1978, he transferred his rights of possession and enjoyment over the land to Ventura for
P5,000.00. Through an Affidavit of Waiver, Torres relinquished all his rights over the property in Ventura's
favor. In 1985, he offered to redeem the property but Ventura refused. Thus, he filed a complaint for
recovery of possession.

This Court resolved the question of who has better right of possession between the tiller and the transferee
of the land, ruling in Torres' favor based on the facts and on the constitutional mandate to promote agrarian
reform. We noted that the fundamental policy of the law is to transfer ownership over the land to the
farmers who till them. To give effect to this policy, PD 27 prohibits the transfer of the land to third parties,
subject to certain exceptions. In a 1979 memorandum circular,8 the Minister of Agrarian Reform
acknowledged the prevalence of transactions transferring ownership, rights, or possession over awarded
lands. The Minister emphasized that these transactions violate PD 27 and are, thus, void.

The ruling in Torres was reiterated in Corpuz v. Grospe9 and in Lapanday v. Estita.10 In Lapanday, the Court
stated that waivers of rights and interests over landholdings awarded by the government are invalid for
violating agrarian reform laws. Thus, these waivers are void.

The proscription in PD 27 against transferring land awards to third persons was carried over to Section 27
of RA 6657.11

The pronouncements in Torres were ruled to be applicable to land awards under RA 6657 in Maylem v.
Ellano,12 in Lebrudo v. Loyola,13 and in Gua-an v. Quirino.14 In these cases, the Court emphasized that any
waiver and transfer of rights and interests within the 10-year prohibitory period under RA 6657 is void for
violating agrarian reform law15 whose main purpose is to ensure that the farmer-beneficiary shall
continuously possess, cultivate, and enjoy the land he tills.16 The affidavits and quitclaims signed by the
farmers to surrender possession were accordingly declared void.

In the present case, the parties do not dispute that the transfers occurred within the ten-year period.
Filinvest contends, however, that only transfer of ownership is prohibited, not of possession.

We now examine the affidavits' contents. The affidavits signed by the respondents read, in part, thus:
"SINUMPAANG SALAYSAY
(PAGBIBITAW NG KARAPATAN)

xxx

1. Na pinapatunayan ko/naming (sic) na tinanggap ko/naming nang lubos na kasiyahan ang halagang
____________ (P________) Salaping Pilipino, mula sa FILINVEST LAND, INC. bilang kabuuang bayad
pinsala (disturbance fee) sa mga pananim ko/naming at ng aking/aming buong pamilya at sa lahat ng iba pa
ko/naming mga pag-aari sa lupaing nabanggit at bilang karapatang bayad sa lahat
kong/naming interes, karapatan at paghahabol sa nasabing lupain.

2. Na alang-alang sa nabanggit na tinanggap kong/naming kabayaran, kusang-loob ko/naming

pinawawalang bisa at kabuluhan ang anumang interes, karapatan at paghahabol bilang
magsasaka at kaagad kong isasauli sa mga nasabing may-ari, sa paglagda ko/naming nito, ang
aking/aming pamumusisyon at lahat ng kaparatan sa nasabing lupain.

3. Na ako/kami at ang aking/aming pamilya ay nangangako na mula sa paglagda ko/naming nito ay hindi na
ako/kami magtatanim ng ano pa mang halaman sa lahat ng mga nasabing lupain o di kaya'y makikialam pa
sa anumang paraan sa nasabing lupain.

4. Na aking/aming kinikilala ang karapatan ng mga may-aring nabanggit at ng kanilang mga kahalili

na bakuran ang lahat ng lupaing nabanggit matapos kong/aming lagdaan ang salaysay na ito at, ako/kami
ay wala nang ano pa mang karapatan na pumasok o kaya'y makialam sa kahi't (sic) anong paraan
maging sa nasabing parselang nasasakop ng Titulong nabanggit, maging may maani man kami o
wala sa mga bunga, kung mayroon man, o ang ano pa mang mga nalalabing pananim na matatagpuan doon
pagdating ng nasabing takdang araw na iyon.

5. Na alang-alang sa mga nakasaad sa itaas, ako/kami at ang aming buong pamilya ay wala nang
paghahabol na ano pa man ukol sa nasabing lupain laban sa nabanggit na may-ari at sa kanilang
maaaring maging kahalili pa sa pagmamay-ari nito, at aming pinagtitibay na ang nasabing may-ari at
mga kahalili ay wala nang magiging ano pa mang pananagutan sa akin/amin sa ilalim ng anumang
nakaraang kasunduan namin sa kanila o sa kanilang mga magulang, o sa ilalim ng batas.

x x x"17 (emphases supplied)
The affidavits, as worded, totally waive or transfer the respondents' rights and interests over the properties.
The CA correctly observed that the affidavits do not only assign possessory rights, but perpetually surrender
the respondents' ownership rights. Furthermore, De Guzman admitted that the affidavits were deliberately
designed to circumvent the proscription under RA6657.

Clearly, the transfers of the properties, through the affidavits, violate Section 27 of the CARL. Under our
established rulings, these affidavits or waivers are void.

Because the transfers made to Filinvest in 1995 are void, Filinvest cannot claim rightful possession over the
properties. The respondents are the awardees based on the CARL and should be recognized as the lawful
possessors.
The pari delicto exception does not apply here.

We now go to the issue of whether the principle of pari delicto applies to this case. We answer in the
negative.

Filinvest claims that if the affidavits are void, this Court should consider the parties to be in pari delicto.
Both parties came to court with unclean hands because they voluntarily entered into the void transactions.
Thus, the court should leave them where they are Filinvest possessing the properties and the respondents
keeping the money they received.

We see no merit in Filinvest's position.

In Torres, we ruled that the pari delicto doctrine does not apply in an agrarian reform case.18 To hold
otherwise would defeat the spirit and intent of the agrarian reform to free the tillers from the bondage of the
soil.19 The policy of the law must be upheld.

To elaborate, Article 1416 of the Civil Code provides an exception to the pari delicto doctrine. Under this
article, the plaintiff may recover what he paid or delivered pursuant to a void contract if the following
requisites are met: (a) the contract is not illegal per se but merely prohibited; (b) the prohibition is for the
plaintiffs protection; and (c) public policy will be enhanced by his recovery.20 These requisites are present in
this case.

On the first requisite, the affidavits here are merely prohibited. A contract is illegal per se if, by universally
recognized standards, it is inherently bad, improper, immoral, or contrary to good conscience.21

Ordinarily, affidavits or contracts of sale are lawful. Only Section 27 of the CARL made them unlawful.

On the second requisite, the prohibition under Section 27 of the CARL is meant to protect the farmer-
beneficiaries. Section 2 of the CARL explains that the agrarian reform program is founded on the landless
farmers' right to own land.22 Thus, their protection must be given utmost importance.

On the third requisite, public policy will be promoted by allowing the respondents to recover their land. The
CARL distributes agricultural land to landless farmers to improve their quality of life.23 Returning the land to
them will enhance this public policy of agrarian reform.

Thus, the respondents may recover the subject properties.

No unjust enrichment

We find merit in the respondents' argument that no unjust enrichment took place. We note that Filinvest
had possessed the properties since 1995 or for about twenty years. During this period, the respondents
were deprived of the productive use of their land. The amount they paid to the respondents may serve as
compensation for Filinvest's use of the properties for this long period.

In sum, we hold that the respondents are the lawful possessors of the disputed properties. Their affidavits
are void and did not transfer possessory rights.

In 2006, the respondents filed a manifestation that new TCTs had already been issued in Filinvest's name.
An accion publiciana, however, resolves only possessory rights. The revocation of TCTs, on the other hand,
requires a conclusive determination of ownership. Thus, the respondents must file the appropriate action to
annul the TCTs issued in Filinvest's name.

So as not to frustrate our pronouncement in this case, we order the registration of this Decision with the
Register of Deeds of the place where the disputed properties are situated, in accordance with Section 78 of
Presidential Decree (PD) No. 1529,24 which provides:
"SEC. 78 Judgment for Plaintiff. - Whenever in an action to recover possession or ownership of real estate or
any interest therein affecting registered land judgment is entered for the plaintiff, such judgment shall be
entitled to registration on presentation of a certificate of the entry thereof from the clerk of court
where the action is pending to the Register of Deeds for the province or city where the land lies,
who shall enter a memorandum upon the certificate of title of the land to which such judgment relates. If
the judgment does not apply to all the land described in the certificate of title, the certificate of the clerk of
court where the action is pending and the memorandum entered by the Register of Deeds shall contain a
description of the land affected by the judgment." (Emphasis supplied)
WHEREFORE, we hereby DENY the petition for lack of merit. The April 15, 2010 decision and June 17,
2010 resolution of the Court of Appeals in CA G.R. SP No. 100262 are hereby AFFIRMED.

Upon finality of this Decision, the Office of the 2nd Division Clerk of Court is directed to furnish certified
copies of this Decision and its Entry of Judgment to the appropriate Register of Deeds pursuant to Section
78 of PD No. 1529.

Costs against petitioner.

SO ORDERED. chanroblesvirtuallawlibrary

Velasco, Jr.,*Del Castillo, Mendoza, and Leonen, JJ., concur. chanrobleslaw