Elizabeth Ong Lim v. Lazaro N. Cruz

Summary

This Supreme Court case involved the validity of a real estate mortgage and deed of sale concerning agricultural lands awarded under the Comprehensive Agrarian Reform Program. Lazaro Cruz, awarded two parcels of land in 1994, mortgaged one parcel in 2000 and sold another in 2002 to Elizabeth Ong Lim, both within the 10-year prohibition period under Section 27 of RA 6657. The Supreme Court affirmed the Court of Appeals' ruling that while the mortgage was valid as mere security, the sale was void for violating the transfer prohibition. Applying the exception to the pari delicto doctrine under Article 1416 of the Civil Code, the Court allowed Cruz to recover the land while requiring him to return the purchase price with interest. The decision reinforced the policy of agrarian reform to protect farmer-beneficiaries and emphasized that regular trial courts, not the DARAB, have jurisdiction over cases lacking true agrarian disputes between landlord and tenant.