619 Phil. 171
CARPIO MORALES, J.:
WHEREFORE, premises considered, judgment is rendered:The Court of Appeals affirmed the RTC Decision.[10]SO ORDERED.[9]
- Ordering defendant Nestor Jarin to pay plaintiff the amount of P150,000.00 representing the amount received, plus interest at the prevailing rural bank[`]s rate computed from December 26, 1988 until January 14, 1999;
- Ordering the heirs of defendant Apolinar Obispo to pay plaintiff the amount of P266,750.00 representing the amount received plus interest at the prevailing rural bank[`]s rate computed from December 26, 1988 until January 14, 1999;
- Ordering the Register of Deeds for the Province of Cavite to cancel Entry Nos. 4349-96 (Certificate of Sale); 8095-96 (Affidavit); 8096-96 (Affidavit); and 106 (Affidavit of Adverse Claim) in TCT Nos. EP-994 V-B; EP-995 V-B; EP-996 V-B on file with the said register of deeds;
- Dismissing the Complaint.
As stated at the outset, the land awarded to defendants pursuant to PD 27 was formerly owned by Dr. Paulo Campos who, at the time of the transactions x x x and at the time of the filing of the case, was the president of the plaintiff. In addition, the certification dated May 13, 1999 (Exhibit "1") issued by Genoveva Hernandez, accountant of plaintiff, on the shareholdings of Dr. Paulo C. Campos and his family, as well as the testimony of plaintiff's witness Shirley Enobal (TSN, May 13, 1999) will clearly prove that Dr. Campos and his family are the only shareholders of the plaintiff. In other words, plaintiff is a family corporation.
Defendants Jarin and Obispo, on the other hand, are both uneducated and have not finished any kind of formal education. They cannot read nor write in English and they have always been, since their early years, farmers or farmworkers.
x x x x
The fact alone that the real estate mortgages were executed even before the Special Power of Attorney[13] to mortgage the property was issued and that both were already in existence even when there was no loan application yet, clearly indicates the premeditated efforts of plaintiff, its officers and Dr. Campos in illegally recovering the subject properties through fraudulent and simulated means. In addition, a perusal of the real estate mortgage shows that the interest rate was not even stated. More importantly, while the mortgage deeds make reference to promissory notes with regard to the due date of the obligations, no promissory notes were presented in evidence if in fact they were executed. The foregoing acts are not normal banking practices. x x x
In addition, plaintiff's manager, Shirley Enobal, testified on cross-examination that defendants Jarin and Obispo were assisted by Dr. Campos. x x x
x x x x
It is very surprising, to say the least, that plaintiff's president himself would assist two farmers in obtaining loans when plaintiff surely has sufficient employees assigned to perform such functions. Added to this is the fact that it was plaintiff's manager herself who was principally involved and was instrumental in the documentation of the aforesaid transactions (Exhibits "A" and "4"). These are clear indications on the objective of Dr. Campos to recover the land through plaintiff by means of anomalous and irregular bank processes.
Plaintiff continued these machinations through a supposed Special Power of Attorney dated June 16, 1990 executed by Dr. Campos appointing defendants Jarin and Obispo again as his attorneys-in-fact and authorizing them to secure additional loans with plaintiff and to mortgage the subject properties (Exhibits "E" and "11"). Similarly, plaintiff again simulated Real Estate Mortgages dated June 15, 1990, purportedly executed by defendants Jarin and Obispo mortgaging in favor of plaintiff the subject properties as attorney[s]-in-fact of Dr. Campos for the alleged additional loans (Exhibits "F", "F-1", "12 and "13").
x x x And to strengthen its purpose of defrauding the defendants, plaintiff produced demand letters seeking payment of the principal amounts of the loan (Exhibits "H," "H-1", "14", and "15".)
x x x x
The fraud persisted when defendants Jarin and Obispo were made to sign spurious "Sinumpaang Salaysay sa Pagbibitiw" prepared by plaintiff dated February 15, 1995 and allegedly acknowledging the 1988 loan with plaintiff, misrepresenting that they allegedly failed to pay the same; and that they allegedly were voluntarily surrendering their right to till the subject property (Exhibits "21" and "22").
The overall scheme and machinations of plaintiff and its officers x x x became very patent when a request was filed by Dr. Campos with the Department of Agrarian Reform (DAR) for the release of the EPs generated in the names of defendants Jarin and Obispo. Based on the Order dated August 7, 1996 (Exhibit "19") issued by the then Secretary of DAR, the said "Sinumpaang Salaysay sa Pagbibitiw" and the Deed of Donation over the subject property executed by Dr. Campos in favor of the Municipality of Dasmariñas, Cavite and the Immaculate Conception Academy, Inc. were submitted with the request. In the said Order, however, the then Secretary of DAR denied the request for the release of the Emancipation Patents of defendants over the subject properties, cancelled and revoked the same, and directed the reallocation of the properties to "qualified beneficiaries who are capable of making it agricultural".
Under the threat of losing the land awarded to them and after having finally realized that they had been defrauded and taken advantage of, defendants Jarin and Obispo sought help from their relatives who might be able to help them with their problem, which they never understood in the first place until circumstances became clear.
Thus, in a letter dated May 26, 1997 written by defendants Jarin and Obispo as well as their respective heirs addressed to the then Secretary of DAR, the said defendants requested, among others, that the subject properties be returned to them for tilling or that the same be transferred to their respective heirs (Exhibit "23"). This was supplemented in a letter dated August 17, 1997 written by the defendants addressed to the then Secretary of DAR, reiterating their pleas and prayers over the subject properties as contained in their earlier letter dated May 26, 1997 ("Exhibit 25"). This second letter included a Sworn Statement dated July 15, 1997 (Exhibit "25-A") executed by defendants Jarin and Obispo and their respective spouses disowning the "Sinumpaang Salaysay sa Pagbibitiw" dated February 15, 1995 (Exhibits "21" and "22") for lack of voluntariness. On the basis of the foregoing, an Order dated October 8, 1997 was issued by the then Secretary of DAR setting aside the earlier Order dated August 7, 1996 (Exhibit "19") and directing the issuance of Emancipation Patents to defendants Jarin and Obispo (Exhibit "26").
It was likewise brought to the attention of this Court that even prior to the institution of the instant case, plaintiff and its officers unsuccessfully attempted to consolidate their claim and title over the subject property through the filing of a Petition dated April 15, 1997, for an Action to Remove Cloud or Quiet Title to the Real Property and for Preliminary Injunction and Prayer for TRO against the then Secretary of DAR and defendants Jarin and Obispo (Exhibits "24", "24-A" to "24-G").
The foregoing will clearly establish that the transactions subject of this case were attended with fraud and formed part of a grand design to defraud the defendants Jarin and Obispo to enable plaintiff to recover the subject property awarded to said defendants.[14] (Emphasis and underscoring supplied)
Title to land acquired pursuant to this Decree or the Land Reform Program of the Government shall not be transferable except by hereditary succession or to the Government in accordance with the provisions of this Decree, the Code of Agrarian Reforms and other existing laws and regulations. (Emphasis and underscoring supplied)
SECTION 1. All financing institutions shall hereafter accept as collateral for loans any duly registered Land Transfer Certificate issued by the Government, through the Department of Agrarian Reform to tenant-farmers in an amount not less than sixty percent (60%) of the value of the farmholding as determined under Presidential Decree No. 27; Provided, That such loans shall be guaranteed by the Guarantee Fund established by the Samahang Nayon (Barrio Association) in which a tenant-farmer is a full-pledged member; Provided, Further, That the loans obtained shall be used in the improvement or development of the farmholding of the tenant-farmer or the establishment of facilities that will enhance production or marketing of agricultural products or increase farm income therefrom. (Underscoring supplied)
Upon the promulgation of Presidential Decree No. 27 on October 21, 1972, petitioner was DEEMED OWNER of the land in question. As of that date, he was declared emancipated from the bondage of the soil. As such, he gained the rights to possess, cultivate, and enjoy the landholding for himself. Those rights over that particular property were granted by the government to him and to no other. To insure his continued possession and enjoyment of the property, he could not, under the law, make any valid form of transfer except to the government or by hereditary succession, to his successors.[17]
x x x The prohibition against transfers to persons other than the heirs of other qualified beneficiaries stems from the policy of the Government to develop generations of farmers to attain its avowed goal to have an adequate and sustained agricultural production. With certitude, such objective will not see the light of day if lands covered by agrarian reform can easily be converted for non-agricultural purposes.[18] (Capitalization in the original; italics, emphasis and underscoring supplied)