Borromeo vs. Mina

A sale of agricultural land covered by PD 27 after October 21, 1972 is null and void unless made in favor of the actual tenant-tiller thereon. Because petitioner's ownership claim derived from a void contract, he could not assert any right over the subject landholding, including a claim for exemption from OLT coverage.

The case involves a 1.1057 hectare agricultural parcel in Barangay Magsaysay, Naguilian, Isabela, designated as Lot No. 5378, covered by TCT No. EP-43526, registered in respondent's name based on Emancipation Patent No. 393178 issued by the DAR on May 2, 1990. The property fell under the coverage of PD 27, which decreed the emancipation of tenants from the bondage of the soil and transferred to them ownership of the land they tilled. The previous owner, Serafin M. Garcia, was identified as a "perennial PD 27 landowner."

Petitioner Joselito C. Borromeo filed a Petition dated June 9, 2003 before the Provincial Agrarian Reform Office (PARO) of Isabela, seeking exemption of his landholding from the coverage of the government's Operation Land Transfer (OLT) program under Presidential Decree No. 27 and the cancellation of respondent Juan T. Mina's emancipation patent over the subject property. Petitioner alleged that he purchased the property from its previous owner, Serafin M. Garcia, as evidenced by a deed of sale notarized on February 19, 1982, but was unable to effect the transfer of title in his name. He later learned that an emancipation patent was issued in respondent's favor without notice to him. Petitioner maintained that his total agricultural landholdings of only 3.3635 hectares was within the landowner's retention limits under PD 27 and RA 6647, and thus the subject landholding should have been excluded from OLT coverage. He filed a subsequent Petition dated September 1, 2003 with identical allegations.

After investigation, the Municipal Agrarian Reform Officer (MARO) Joey Rolando M. Unblas issued a Report dated September 29, 2003, finding that the subject property was erroneously identified as owned by petitioner's late father, Cipriano Borromeo, when in fact the true owner was Garcia, a perennial PD 27 landowner, who later sold the property to petitioner. The MARO recommended exemption of the landholding from OLT coverage and that petitioner be allowed to withdraw amortizations deposited by respondent with the Land Bank of the Philippines.

The PARO adopted the MARO's recommendation, cancelling respondent's emancipation patent and directing petitioner to allow respondent to continue in peaceful possession and cultivation under a leasehold contract pursuant to RA 3844. On appeal, the DAR Regional Director affirmed the PARO's decision but did not order cancellation of the emancipation patent, instead directing petitioner to institute proper proceedings before the DARAB. The DAR Secretary affirmed in toto on September 12, 2007.

The CA reversed, doubting petitioner's claim of ownership based on the 1982 deed of sale due to inconsistent allegations regarding the dates of notarization in the two PARO petitions and the absence of a copy of the deed in the records. The CA found the sale null and void as a prohibited transaction under PD 27, which forbids transfers of covered agricultural lands after October 21, 1972 except to tenant-beneficiaries. The CA also held that petitioner could not mount a collateral attack against respondent's title under Section 48 of PD 1529.

In his petition before the Supreme Court, petitioner changed his theory, claiming there was actually an oral sale entered into with Garcia through his son Lorenzo Garcia in 1976, which was merely formalized by the 1982 deed of sale. He alleged that he allowed respondent to cultivate the property in 1976 out of mercy and compassion, and that respondent could not be considered a tenant. He also claimed his right to due process was violated by the issuance of the emancipation patent without notice.

• Change of Theory — Oral Sale: Petitioner contended that the CA erred in declaring the sale between him and Garcia as null and void, averring that there was actually an oral sale entered into in 1976 through Garcia's son Lorenzo Garcia, which was consummated that same year when petitioner occupied and tilled the property and started paying real estate taxes, and which was merely formalized by the 1982 deed of sale.
• Tenant Status: Petitioner claimed that respondent cannot be considered a tenant, and thus the issuance of an emancipation patent in his favor was erroneous.
• Due Process: Petitioner claimed that his right to due process was violated by the issuance of the emancipation patent without any notice to him.

• Change of Theory: Respondent countered that petitioner cannot change his theory regarding the date of sale between him and Garcia nor raise the same factual issue on appeal before the Court.
• Unregistered Deed: Respondent asserted that the 1982 deed of sale was not registered and therefore does not bind him.
• Nullity of Sale: Respondent posited that the sale between petitioner and Garcia was null and void.
• Collateral Attack: Respondent argued that petitioner's PARO petitions constitute collateral attacks to his title to the subject property which are disallowed under PD 1529.

• Change of Theory on Appeal: Whether petitioner may change his theory on appeal by claiming an oral sale in 1976 and disputing respondent's status as tenant.
• Validity of the Sale: Whether the 1982 deed of sale between petitioner and Garcia was null and void under PD 27 for being a prohibited transfer of covered agricultural land to a non-tenant-beneficiary.
• Right to Landholding Exemption: Whether petitioner, whose title springs from a void contract, may assert a claim for landholding exemption from OLT coverage.

• Change of Theory on Appeal: No. A party who adopts a certain theory upon which the case is tried and decided by the lower courts will not be permitted to change his theory on appeal, as a matter of fairness and due process, unless the factual bases of the novel theory would not require presentation of further evidence by the adverse party.
• Validity of the Sale: Yes, the sale was null and void. PD 27 prohibits the transfer of ownership over tenanted rice and/or corn lands after October 21, 1972 except only in favor of the actual tenant-tillers thereon, and petitioner was not the tenant-beneficiary.
• Right to Landholding Exemption: No. Because petitioner's title springs from a null and void source, he cannot assert any right over the subject landholding, and the finding that his total agricultural landholdings was below retention limits becomes irrelevant.

• Change of Theory on Appeal: The Court applied the settled rule that a party who adopts a certain theory upon which the case is tried and decided by the lower courts or tribunals will not be permitted to change his theory on appeal, not because of the strict application of procedural rules, but as a matter of fairness. Basic considerations of due process dictate that theories, issues and arguments not brought to the attention of the trial court would not ordinarily be considered by a reviewing court, except when their factual bases would not require presentation of any further evidence by the adverse party, such as when the factual bases of such novel theory is subject of judicial notice or had already been judicially admitted. The Court found that petitioner changed his theory on appeal with respect to two matters: (a) the actual basis of his ownership rights, now claiming an oral sale in 1976 merely formalized by the 1982 deed of sale; and (b) the status of respondent as tenant, which he never questioned during earlier proceedings. The factual bases of these theories require presentation of proof as neither had been judicially admitted nor subject to judicial notice. Accordingly, petitioner was tied to his previous positions that his ownership rests on the 1982 deed of sale and that respondent's status as tenant remains undisputed.

• Validity of the Sale: The Court applied PD 27, which prohibits the transfer of ownership over tenanted rice and/or corn lands after October 21, 1972 except only in favor of the actual tenant-tillers thereon. Citing Sta. Monica Industrial and Development Corporation vs. DAR Regional Director for Region III and Heirs of Batongbacal vs. CA, the Court held that transfer of ownership over tenanted rice and/or corn lands after October 21, 1972 is allowed only in favor of the actual tenant-tillers thereon. The records revealed that the subject landholding fell under the coverage of PD 27 on October 21, 1972, and as such, could have been subsequently sold only to the tenant thereof, i.e., the respondent. Since petitioner was tied down to his initial theory that his claim of ownership was based on the 1982 deed of sale, and Garcia sold the property in 1982 to petitioner who was evidently not the tenant-beneficiary, the transaction was null and void for being contrary to law under Article 1409 of the Civil Code.

• Right to Landholding Exemption: The Court reasoned that because the sale was void, petitioner could not assert any right over the subject landholding, such as his claim for landholding exemption, because his title springs from a null and void source. A void contract is equivalent to nothing; it produces no civil effect; and it does not create, modify or extinguish a juridical relation. Hence, notwithstanding the erroneous identification of the subject landholding by the MARO as owned by Cipriano Borromeo, petitioner had no right to file a petition for landholding exemption since the sale of the property to him by Garcia in 1982 was null and void. The finding that petitioner's total agricultural landholdings was way below the retention limits became irrelevant because he had no right over the landholding. The Court saw no reason to delve on the issue regarding the cancellation of respondent's emancipation patent, without prejudice to petitioner's right to raise his other claims through the appropriate action before the proper forum.

• Change of Theory on Appeal — A party who adopts a certain theory upon which the case is tried and decided by the lower courts or tribunals will not be permitted to change his theory on appeal, not because of the strict application of procedural rules, but as a matter of fairness. Basic considerations of due process dictate that theories, issues and arguments not brought to the attention of the trial court would not ordinarily be considered by a reviewing court, except when their factual bases would not require presentation of any further evidence by the adverse party, such as when the factual bases of such novel theory is subject of judicial notice or had already been judicially admitted.

• Prohibition on Transfer of PD 27-Covered Lands — PD 27 prohibits the transfer of ownership over tenanted rice and/or corn lands after October 21, 1972 except only in favor of the actual tenant-tillers thereon. A sale executed in violation of this provision and its implementing guidelines is null and void. A void contract is equivalent to nothing; it produces no civil effect; and it does not create, modify or extinguish a juridical relation.

• "Settled is the rule that a party who adopts a certain theory upon which the case is tried and decided by the lower courts or tribunals will not be permitted to change his theory on appeal, not because of the strict application of procedural rules, but as a matter of fairness." — This passage articulates the procedural doctrine on change of theory on appeal, which the Court applied to bar petitioner's novel arguments regarding the oral sale and respondent's tenant status.

• "In other words, transfer of ownership over tenanted rice and/or corn lands after October 21, 1972 is allowed only in favor of the actual tenant-tillers thereon. Hence, the sale executed by Philbanking on January 11, 1985 in favor of petitioner was in violation of the aforequoted provision of P.D. 27 and its implementing guidelines, and must thus be declared null and void." — This quotation from Heirs of Batongbacal v. CA, as cited in the decision, states the controlling rule on the prohibition of transfers of PD 27-covered lands, which the Court applied to nullify the 1982 deed of sale.

• "In consequence, petitioner cannot assert any right over the subject landholding, such as his present claim for landholding exemption, because his title springs from a null and void source. A void contract is equivalent to nothing; it produces no civil effect; and it does not create, modify or extinguish a juridical relation." — This passage states the ratio decidendi: because the sale was void, petitioner had no right to claim exemption from OLT coverage, and the retention limit finding became irrelevant.

• Sta. Monica Industrial and Development Corporation vs. DAR Regional Director for Region III, G.R. No. 164846, June 18, 2008, 555 SCRA 97 — Cited as controlling authority for the proposition that PD 27 forbids the transfer or alienation of covered agricultural lands after October 21, 1972 except to the tenant-beneficiary.
• Heirs of Batongbacal vs. CA, 438 Phil. 283 (2002) — Cited as controlling precedent involving the similar issue of sale of a covered agricultural land under PD 27, holding that transfer of ownership over tenanted rice and/or corn lands after October 21, 1972 is allowed only in favor of the actual tenant-tillers thereon.
• Kings Properties Corporation vs. Galido, G.R. No. 170023, November 27, 2009, 606 SCRA 137 — Cited for the rule that a party who adopts a certain theory upon which the case is tried and decided will not be permitted to change his theory on appeal.
• Duty Free Philippines Services, Inc. vs. Tria, G.R. No. 174809, June 27, 2012, 675 SCRA 222 — Cited for the proposition that the change of theory rule applies as a matter of fairness.
• Jarcia, Jr. vs. People, G.R. No. 187926, February 15, 2012, 666 SCRA 336 — Cited for the rule that theories, issues and arguments not brought to the attention of the trial court would not ordinarily be considered by a reviewing court.
• Bote vs. Veloso, G.R. No. 194270, December 3, 2012 — Cited for the exception to the change of theory rule when factual bases would not require presentation of further evidence.
• Menchavez vs. Teves, Jr., 490 Phil. 268 (2005) — Cited for the principle that a void contract is equivalent to nothing and produces no civil effect.

• Presidential Decree No. 27 — The decree decreeing the emancipation of tenants from the bondage of the soil, transferring to them the ownership of the land they till. The Court applied its prohibition on the transfer or alienation of covered agricultural lands after October 21, 1972 except to the tenant-beneficiary to nullify the 1982 deed of sale.
• Article 1409, Civil Code — Provides that contracts whose cause, object or purpose is contrary to law, morals, good customs, public order or public policy are inexistent and void from the beginning, and cannot be ratified. The Court applied this provision to declare the sale between Garcia and petitioner null and void.
• Section 48, Presidential Decree No. 1529 (Property Registration Decree) — Cited by the CA for the prohibition against collateral attacks on registered titles, which the Court did not need to reach given its ruling on the nullity of the sale.
• Section 9, Republic Act No. 9700, amending Section 24 of Republic Act No. 6657 — Noted by the Court as providing that all cases involving the cancellation of registered emancipation patents, certificates of land ownership award, and other titles issued under any agrarian reform program are within the exclusive and original jurisdiction of the Secretary of the DAR, without prejudice to petitioner's right to raise his claims through the appropriate action before the proper forum.
• Rule 129, Rules of Court — Cited for the enumeration of matters that need not be proved, specifically judicial notice and judicial admissions, which were the exceptions to the change of theory rule that did not obtain in this case.

Arturo D. Brion (Acting Chairperson), Mariano C. del Castillo, Jose Portugal Perez, and Marvic Mario Victor F. Leonen (Acting Member) concurred in the decision.