SECOND DIVISION

[G.R. No. 261491. December 4, 2023.]

CANDELARIO S. DELA CRUZ, LUBITA D.

LANTAPON, DIEGO S. DELA CRUZ, MAURICIA
D. EPE, RODRIGO S. DELA CRUZ, and
ARISTON S. DELA CRUZ, petitioners, vs.
ALEJANDRO DUMASIG and ROSALINDA D.
EPE, respondents.

DECISION

LAZARO-JAVIER, J : p

The Case
This Petition for Review on Certiorari 1 under Rule 45 of
the Revised Rules of Court assails the following dispositions
of the Court of Appeals in CA-G.R. CV No. 05495-MIN entitled
"Candelario S. Dela Cruz, Labita D. Lantapon, Diego S. Dela
Cruz, Mauricia D. Epe, Rodrigo S. Dela Cruz and Ariston S.
Dela Cruz v. Alejandro Dumasig and Rosalinda D. Epe," viz.:
1) Decision 2 dated October 29, 2020, declaring
respondents Rosalinda D. Epe (Rosalinda)
and Alejandro Dumasig (Dumasig) as the
rightful owners and possessors of the parcel
of land covered by Transfer Certificate of
Title (TCT) No. EP-250; 3 and
2) Resolution 4 dated June 8, 2022, denying the
Motion for Reconsideration of petitioners
Candelario S. Dela Cruz, Lubita D. Lantapon,
Diego S. Dela Cruz, Mauricia D. Epe, Rodrigo
S. Dela Cruz and Ariston S. Dela Cruz. HTcADC

Antecedents
Respondent Rosalinda and petitioners are the children
of Eniego P. Dela Cruz and Silvestra Dela Cruz (Sps. Dela
Cruz) who passed away on July 31, 2009 and October 30,
2007, respectively. 5 During the lifetime of Sps. Dela Cruz,
they owned 35,153 square meters of agricultural land in Sitio
Cogon, Barangay Lala Proper, Lala, Lanao del Norte, through
an emancipation patent covered by TCT No. EP-250. 6
Sometime in 1987, Sps. Dela Cruz obtained a loan and
mortgaged two of their lots, including the property covered by
TCT No. EP-250, with Cooperative Rural Bank (CRB) located
at Tubod, Lanao del Norte. The loan was never paid. Thus, the
bank foreclosed the real estate mortgage. 7
Fearing the loss of their properties, Sps. Dela Cruz
visited Rosalinda in her home at Iligan City to ask for help to
pay the loan and to redeem the foreclosed properties. In
exchange, they promised her that the same will be her share
in the inheritance. Rosalinda felt sorry for her parents'
predicament so she agreed to pay the loan. 8 The receipt
issued for the payment indicated Silvestra Dela Cruz as the
payor. 9 After paying the loan, CRB returned the original
copies of the TCTs of the mortgaged properties to Sps. Dela
Cruz, who, in turn, gave them to Rosalinda. 10
On December 27, 2003, the three of them went to see a
lawyer, Atty. Gregorio Pizarro, who drafted a Deed of Sale
with Assumption of Mortgage, involving the property covered
by TCT No. EP-250 (subject property), which was signed by
all parties and duly notarized. 11 In 2004, Sps. Dela Cruz
remortgaged the subject property to a certain Erlito Llanes
(Llanes) for the sum of PHP350,000.00. 12 Meanwhile,
Rosalinda possessed the subject property for one cropping
season only in the same year, which she then returned to her
parents. Sps. Dela Cruz possessed the property until their
respective deaths in 2007 and 2009. 13
On August 22, 2011, Rosalinda mortgaged the subject
property to respondent Dumasig for the amount of
PHP700,000.00 and they executed an Agreement of Loan with
Real Estate Mortgage, which she signed as the borrower-
mortgagor with Dumasig as the lender mortgagee. It was
witnessed by their respective children and duly notarized by
Atty. Bienvenido L. Bontilao. 14 Out of the amount of
PHP700,000.00, PHP100,000.00 was used to pay a loan to
Paulino Saladaga (Saladaga) while PHP500,000.00 was paid
to Llanes. 15
On the other hand, petitioners countered that when
their parents were still alive, they tilled, cultivated, and
planted rice on the subject property. After the death of their
father Eniego, they entrusted to their sister Rosalinda the
management and cultivation of the land. Sometime in 2011,
they discovered that Dumasig began occupying and
cultivating the land without their knowledge, much less
consent. Upon asking him, he told them that Rosalinda
mortgaged to him a 30,000-square meter portion of the
subject land. 16
In December 2016, petitioners demanded that Dumasig
return the physical possession and ownership of the subject
property since it is their inherited property from their parents
Sps. Dela Cruz, but he refused. However, he failed to produce
a copy of the Deed of Real Estate Mortgage and the Deed of
Absolute Sale which he and Rosalinda allegedly executed. The
dispute was brought before the barangay, but no settlement
was reached. 17 CAIHTE

Thus, they filed a complaint for accion reivindicatoria

with damages before the Regional Trial Court of Lanao del
Norte, Branch 21, docketed as Civil Case No. 21-508. 18
Ruling of the Trial Court
By Decision 19 dated August 14, 2019, the trial court
granted petitioners' complaint, declared petitioners as co-
owners of the subject property, and ordered the partition of
the same and for Dumasig to vacate and surrender possession
of the portion of the land mortgaged to him, viz.:
WHEREFORE, based on the foregoing, judgment
is hereby rendered, as follows:
(1) The plaintiffs, on one hand, and Rosalinda
D. Epe, on the other hand, are hereby
declared as co-owners of the land
covered by Transfer Certificate of Title
No. EP-250 in the name of Eniego P.
Dela Cruz married to Silvestra Suelo
Dela Cruz and located in Cogon, Lala,
Lanao del Norte;
(2) The plaintiffs and Rosalinda are directed
to partition the above-described land;
(3) Defendant Alejandro Dumasig is hereby
directed to vacate and surrender
possession of the above-described land
to the plaintiffs;
(4) Defendants Alejandro Dumasig and
Rosalinda D. Epe are hereby directed
to pay litigation expenses in the sum of
P100,000.00, solidarily, in favor of the
plaintiffs.
SO ORDERED. 20 (Emphasis in the original)
It ordained that the sale of the subject property by Sps.
Dela Cruz to Rosalinda was void since the parties did not
intend to be bound by the agreement as revealed by the Sps.
Dela Cruz continued possession, cultivation and enjoyment of
the land after the execution of the Deed of Sale until their
respective deaths. 21 In any case, the sale was void since it
violated Presidential Decree No. 27, 22 which prohibited the
transfer of land acquired pursuant to the law except by
hereditary succession or to the government in accordance
with its provisions and other pertinent laws and regulations.
23 Consequently, the sale being void, the subsequent
acquisition and possession of the same by Dumasig was also
void. 24aScITE

Ruling of the Court of Appeals

 By Decision 25 dated October 29, 2020, the Court of
Appeals reversed and set aside the trial court's dispositions
and dismissed petitioners' accion reivindicatoria with
damages. 26 First, the fact that Sps. Dela Cruz continued to
till the land allegedly did not negate the fact of sale between
them and Rosalinda since the same was in keeping with
traditional Filipino family values for a daughter to help her
parents retain their source of livelihood. Too, the Deed of Sale
was duly notarized and thus enjoys the presumption of
regularity. 27 Second, the assailed sale did not violate
Presidential Decree No. 27 since the subject property was
sold to one of Sps. Dela Cruz's heirs, Rosalinda, hence, it fell
within the exceptions to the prohibition on transfer of lands
covered by the law. Consequently, the transfer of the property
to Dumasig was also valid. 28 In fine, it declared Rosalinda
and Dumasig as the rightful owners and possessors of the
subject property.
By Resolution 29 dated June 8, 2022, the Court of
Appeals denied petitioners' motion for reconsideration. It
added that since the sale occurred 16 years after Sps. Dela
Cruz obtained title to the land and after fully paying its price,
the same was outside the 10-year prescriptive period under
Presidential Decree No. 27 in relation to Department of
Agrarian Reform (DAR) Administrative Order (AO) No. 08-
1995. 30
The Present Petition
Petitioners now seek affirmative relief from the Court
and pray that the assailed dispositions of the Court of Appeals
be reversed and a new one rendered, reinstating the Decision
dated August 14, 2019 of Regional Trial Court for Lanao del
Norte, Branch 21 in Civil Case No. 21-508. 31
They argue that the sale between Sps. Dela Cruz and
Rosalinda is void for lack of consideration since the purchase
price for the same came from the loan proceeds obtained by
Sps. Dela Cruz and not from Rosalinda's pocket. 32 In truth,
Sps. Dela Cruz did not really intend to sell the land since they
continued to cultivate the same after the purported sale, and
re-mortgaged the same in 2004. 33 More, they executed an
Amended Waiver of Right and Interest dated July 13, 2005
over the subject property in favor of Diego when he asked
about his share in the inheritance. 34
Further, the sale is purportedly void since it was sold in
violation of Presidential Decree No. 27. The exception to the
prohibition against sales or transfers of land covered by the
said law is limited to transfers to the government or to the
heirs by hereditary succession. While Rosalinda is
undisputedly an heir of Sps. Dela Cruz, the transfer of the
land to her was by no means through hereditary succession
but through sale, and hence, outside the exception. 35
 At any rate, the sale to Rosalinda allegedly deprived
petitioners of their legitimes since at the time of Sps. Dela
Cruz' death, the subject parcel of land was their only
remaining property. 36 Since the sale to Rosalinda is void,
Dumasig's possession and ownership of the same is likewise
void. 37
DETACa

Issue
Based on the facts and evidence on record, are
Rosalinda and Dumasig the rightful owners and possessors of
the subject property?
Ruling
We reverse.
While the Court is generally not a trier of facts, it may
pass upon questions of fact when the findings of fact of the
Court of Appeals are contrary to the findings and conclusions
of the trial court or are not supported by the evidence on
record, 38 as in this case.
Here, the trial court found that the sale between Sps.
Dela Cruz and Rosalinda was absolutely fictitious since their
subsequent actions revealed their lack of intent to be bound
by the agreement. On the other hand, the Court of Appeals
ordained that the sale was valid and binding.
The Court of Appeals is incorrect.
In Heirs of Spouses Intac v. Court of Appeals, 39 the
Court explained that in absolute simulation, there is a
colorable contract but it has no substance as the parties have
no intent to be bound by it. The main characteristic of an
absolute simulation is that the apparent contract is not really
desired or intended to produce legal effects or in any way
alter the juridical situation of the parties. As a result, an
absolutely simulated or fictitious contract is void, and the
parties may recover from each other what they may have
given under the contract. Thus, since there was no
consideration and no intent to sell the subject property, there
was no valid sale between the parties.
In determining whether a contract is absolutely
simulated, the totality of the prior, contemporaneous and
subsequent acts of the parties must be considered. 40 In this
case, the following circumstances indicate that Sps. Dela Cruz
never intended to sell the subject property to Rosalinda:
(1) the money she used to pay the loan with CRB
were proceeds of the loan from Saladaga,
which she acquired by using the subject
property as collateral; 41
(2) Sps. Dela Cruz continued to possess the subject
property and exercised rights of ownership
 over the same even after the sale in 2003
until their respective deaths;
(3) in fact, they re-mortgaged the same to Llanes
for PHP350,000.00 in 2004;
(4) Rosalinda, on the other hand, possessed the
land for one cropping only and returned the
same to Sps. Dela Cruz immediately after;
(5) while still alive, Sps. Dela Cruz executed an
Amended Waiver of Rights and Interest
involving the subject property in favor of
Diego to form part of his share in the
inheritance; and
(6) it was only after Sps. Dela Cruz' death that
Rosalinda took over the land and mortgaged
the same to Dumasig. HEITAD

Verily, Rosalinda's failure to exercise any act of

dominion over the property after the sale belies any intention
to be bound by the Deed of Sale between her and Sps. Dela
Cruz.
In any case, the sale is void for violating the provisions
of Presidential Decree No. 27, which clearly provide:
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)
In Abella v. Heirs of Francisca C. San Juan, 42 citing
Estate of the Late Encarnacion Vda. De Panililio v. Dizon, 43
we explained that sales or transfers of lands made in violation
of Presidential Decree No. 27 and Executive Order No. 228 44
in favor of persons other than the Government by other legal
means or to the farmer's successor by hereditary succession
are null and void. The prohibition even extends to the
surrender of the land to the former landowner.
In Digan v. Malines, 45 the Court further elucidated that
the general rule is that any transfer of ownership over
tenanted rice and/or corn lands after October 21, 1972 to
persons other than the heirs of the landowner, via hereditary
succession, is prohibited. However, when the conveyance was
made in favor of the actual tenant-tiller thereon, such sale is
valid.
The law is clear. There are thus only three exceptions to
the prohibition against transfer of ownership over lands
covered by Presidential Deere No. 27, viz.: first, to the
Government; second, to the heirs of the landowners via
hereditary succession; and third, to the actual tenant-tiller of
the same.
 Verily, the Court of Appeals erred in upholding the sale
between Sps. Dela Cruz and Rosalinda under the ratio that
she is their heir. To be valid, the transfer to the landowner's
heirs must be via hereditary succession, not via sale, as in this
case. Neither do the other two exceptions apply. For it is
undisputed that at the time of the sale, Rosalinda was not the
actual tenant-tiller of the subject property but Sps. Dela Cruz.
In fine, the sale between Sps. Dela Cruz and Rosalinda is
void The Agreement of Loan with Real Estate Mortgage
between Rosalinda and Dumasig is also void since Rosalinda
was not the absolute owner of the land she mortgaged to
Dumasig. 46 Thus, petitioners and Rosalinda, as the children
of Sps. Dela Cruz, are the co-owners of the subject property in
accordance with Article 1087 47 of the Civil Code.
As regards petitioners' claim regarding their legitimes,
we will not rule on the same as it involves issues of fact which
should be ventilated in appropriate judicial proceeding. aDSIHc

ACCORDINGLY, the Petition is GRANTED. The

Decision dated October 29, 2020 and Resolution dated June 8,
2022 of the Court of Appeals in CA-G.R. CV No. 05495-MIN
are REVERSED. The Decision dated August 14, 2019 of the
Regional Trial Court, Branch 21, Lanao del Norte, in Civil
Case No. 21-508 is REINSTATED. ATICcS

SO ORDERED.
Leonen, M.V. Lopez, J.Y. Lopez and Kho, Jr., JJ., concur.

Footnotes
1. Rollo, pp. 11-33.
2. Id. at 41-48. Penned by Associate Justice Oscar V. Badelles
and concurred in by Associate Justices Lily V. Biton and
Richard D. Mordeno of the Twenty-Third Division, Court
of Appeals, Cagayan de Oro City.
3. Id. at 48.
4. Id. at 55-57. Penned by Associate Justice Oscar V. Badelles
and concurred in by Associate Justices Lily V. Biton and
Richard D. Mordeno of the Former Twenty-Third
Division, Court of Appeals, Cagayan de Oro City.
5. Id. at 42.
6. Id.
7. Id. at 42-43.
8. Id. at 43.
9. Id. at 34.
10. Id. at 43.
11. Id. at 43.
12. Id. at 34.
13. Id. at 35.
14. Id. at 43.
15. Id. at 35.
16. Id. at 43-44.
17. Id. at 44.
18. Id. at 34.
19. Id. at 34-39. Penned by Acting Presiding Judge Alberto P.
Quinto or Branch 21, Regional Trial Court, Lanao del
Norte.
20. Id. at 38.
21. Id. at 37.
22. Decreeing the emancipation of tenants from bondage of
the soil, transferring to them the ownership of the land
they till and providing the instruments and mechanism
therefor.
23. Rollo, p. 37.
24. Id. at 38.
25. Id. at 41-48.
26. Id. at 48.
27. Id. at 45.
28. Id. at 47.
29. Id. at 55-57.
30. Id. at 57.
31. Id. at 26.
32. Id. at 17-18.
33. Id. at 19.
34. Id. at 20.
35. Id. at 21.
36. Id. at 24.
37. Id. at 26.
38. See Bank of the Philippine Islands v. Leobrera, 425 Phil.
679 (2002) [Per J. Pardo, First Division].
39. 697 Phil. 373, 384 (2012) [Per J. Mendoza, Third Division].
40. See Clemente v. Court of Appeals, 771 Phil. 113, 125
(2015) [Per J. Jardeleza, Third Division]; Valerio v.
Refresca, 520 Phil. 367 (2006) [Per J. Puno, Second
Division]; Ramos v. Heirs of Ramos, Sr., 431 Phil. 337
(2002) [Per J. Panganiban, Third Division].
 41. Rollo, p. 17.
42. 781 Phil. 533 (2016) [Per J. Jardeleza, Third Division].
43. 562 Phil. 518 (2007) [Per J. Velasco, Jr., Second Division].
44. Declaring full land ownership to qualified farmer
beneficiaries covered by Presidential Decree No. 27;
determining the value of remaining unvalued rice and
corn lands subject to P.D. No. 27; and providing for the
manner of payment by the farmer beneficiary and mode
of compensation to the landowner.
45. 822 Phil. 220, 231 (2017) [Per J. Martires, Third Division].
46. CIVIL CODE, Art. 2085. The following requisites are
essential to the contracts of pledge and mortgage:
(1) That they be constituted to secure the fulfillment of a
principal obligation;
(2) That the pledgor or mortgagor be the absolute owner of the
thing pledged or mortgaged;
(3) That the persons constituting the pledge or mortgage have
the free disposal of their property, and in the absence thereof,
that they be legally authorized for the purpose.
Third persons who are not parties to the principal obligation
may secure the latter by pledging or mortgaging their own
property.
47. CIVIL CODE, Art. 1087. Where there are two or more
heirs, the whole estate of the decedent is, before its
partition, owned in common by such heirs, subject to the
payment of debts of the deceased.
||| (Dela Cruz v. Dumasig, G.R. No. 261491, [December 4, 2023])