Ever heard of the pari delicto rule? This means both parties are equally at fault. And in such a case, courts will not afford the parties any relief.

In this case, X entered into a sale of his land with Y. This he did despite the express restriction of the law prohibiting him from disposing it within a certain period. This land is agricultural and was granted to X via a CLOA, a certificate of land ownership award. The law prohibits the sale of this land within ten years from the grant.

X, however, sold it within eight years. Subsequently, X, through his son, asked the court to void it and return the property to him. The trial court denied the complaint. It decreed that he could not recover the property by simply invoking his violation.

Being in violation of the law, then the pari delicto rule applied. On appeal, the Court of Appeals reversed this finding and ordered the return of the property. Y therefore questioned this before the Supreme Court. To this, the Highest Court ruled: “The parties repeatedly refer to the 10-year period which prohibits transfer of awarded lands enunciated in Section 27 of RA 665. Sec. 27. Lands acquired by beneficiaries under this Act may not be sold, transferred or conveyed except through hereditary succession, or to the government, or to the (Land Bank of the Philippines) or to other qualified beneficiaries for a period of ten 10 years: Provided, however, That the children or the spouse of the transferor shall have a right to repurchase the land from the government or LBP within a period of two years.

“Generally, the sale, transfer, or conveyance of awarded lands are prohibited within 10 years from the award. There are only four exceptions when such may be allowed, that is, through hereditary succession, to the government, to the LBP, or to other qualified beneficiaries.”

The pronouncements in Torres were ruled to be applicable to land awards under RA 6657 in Maylem v. Ellano [G.R. 162721, 13 July 2009, in Lebrudo v. Loyola [G.R. 181370, 9 March 2011], and in Gua-an v. Quirino [G.R. 198770, 12 November 2012]. 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 law whose main purpose is to ensure that the farmer beneficiary shall continuously possess, cultivate, and enjoy the land he tills. The affidavits and quitclaims signed by the farmers to surrender possession were accordingly declared void.

Torres v. Ventura declared void transfers of ownership, rights, or possession over lands acquired pursuant to PD 27 or the government’s land reform program. Contrary to petitioner’s assertion, however, and following the ruling in Torres, the exception to the principle of pari delicto is applicable to lands awarded through agrarian reform. This exception is provided under Article 1416 of the Civil Code: “When the agreement is not illegal per se but is merely prohibited, and the prohibition by the law is designed for the protection of the plaintiff, he may, if public policy is thereby enhanced, recover what he has paid or delivered.”

Filinvest further expounds on the application of the exception to the principle of pari delicto:

“In Torres, we ruled that the pari delicto doctrine does not apply in an agrarian reform case. To hold otherwise would defeat the spirit and intent of the agrarian reform to free the tillers from the bondage of the soil. 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 plaintiff’s protection; and (c) public policy will be enhanced by his recovery. These requisites are present in this case. Thus, the respondents may recover the subject properties.

Generally, the sale, transfer, or conveyance of awarded lands are prohibited within 10 years from the award.

We therefore affirm the CA’s ruling that, despite the void sale, respondent may recover the second parcel of land from petitioner.

“Petitioner is not left without remedy. Respondent is obliged to return the purchase price with legal interest. We deem it necessary to remand this case to the RTC due to the following: (1) petitioner’s claim that the actual purchase price was P1,500,000; (2) the RTC’s denial of respondent’s prayer for annulment led to a lack of a factual determination of the actual purchase price; and (3) the CA’s pronouncement that petitioner return to respondent ‘whatever amount of money he may have received by virtue of the said transaction.’ 43 This Court is not a trier of facts and a remand to the RTC is essential for a factual determination of the aforesaid amount.”

The facts and quoted decision are from Elizabeth Ong v. Lazaro Cruz (G.R. 248650, 15 March 2023).