Does the principle of “in pari delicto” apply to an awardee of DAR who sells the awarded land within the 10-year prohibitory period and later on took opportunity to question the said sale by the same awardee?
Written by: Bert Junrie B. Espina
QUESTION: Does the principle of “in pari delicto” apply to an awardee of DAR who sells the awarded land within the 10-year prohibitory period and later on took opportunity to question the said sale by the same awardee?
In one case, a certain agrarian beneficiary was awarded with an agricultural land by the government through the Department of Agrarian Reform (DAR). This awarded land was later sold by the awardee to another person but within the 10-year prohibitory period. Pursuant to Section 27 of R.A. 6657, a 10-year prohibition is imposed for the transfer of lands acquired by beneficiaries from the time of the award, except if the transfer is through hereditary succession, or to the government, or the LBP, or to other qualified beneficiaries. Hence, the transaction entered by the buyer and the seller in this case is illegal.
Subsequently, the seller-awardee questioned the said sale which he himself entered by invoking the 10-year prohibitory period. On the other hand, the buyer argued that while their transaction is illegal under the law, the seller-awardee should now be estopped from questioning their transaction as it is already conclusive upon the former that he himself entered.
Thus, the issue raised in this case: should the seller-awardee be considered in pari delicto and preclude him to question the transaction? Stating it differently, should the “pari delicto doctrine” be applied despite the prohibition provided by law?
The Supreme Court (SC) answered this question in the NEGATIVE. It held that the pari delicto doctrine does not apply in an agrarian reform case by citing the exception provided under Article 1416 of the Civil Code of the Philippines.
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. The SC found all the requisites in this case.
On the first requisite, contracts of sale are ordinarily lawful; however, it’s just that it is prohibited by Section 27 of R.A. 6657.
On the second requisite, the prohibition provided by the law is to protect the farmer-beneficiaries.
On the third requisite, returning the land to the farmer-beneficiaries, said the Court, will enhance this public policy of agrarian reform.
However, it should be pointed out that while the sale was invalidated by the SC and returned the land to the seller-awardee, the buyer is not left without any recourse. In this case, the SC ordered the seller-awardee to return the purchase price with legal interest.
Reference:
Lim v. Cruz, G.R. №248650. March 15, 2023
