G.R. No. 29341 August 21, 1989
EDITH SUSTIGUER and ISABEL APOSAGA, plaintiffs-appellants, vs. JOSE TAMAYO and CITY OF BACOLOD, defendants-appellees, RAMON VILLAMARZO, intervenor.

FACTS

The case involves Lot No. 379-B-34 in Bacolod City, a subdivision lot owned by the city government for sale to qualified occupants under Ordinance No. 149. Edith Sustiguer and Isabel Aposaga were adverse possessors. On November 2, 1960, they agreed before the Mayor’s Office that the lot would be awarded to Aposaga, provided she made a 20% down payment by November 15, 1960. Aposaga claimed she attempted to pay but was advised the Secretary was out of town, causing her to miss the deadline. Consequently, the City executed a Contract of Sale on Installment over the lot in favor of Jose Tamayo on May 16, 1961.
Sustiguer and Aposaga filed a complaint for annulment of the sale to Tamayo, alleging the sale violated the city’s commitment and that Tamayo was not a qualified applicant under the ordinance. Later, Aposaga withdrew from the case after being paid for her claims. The trial court, upon Tamayo’s motion, dismissed Sustiguer’s complaint for lack of cause of action, finding that the allegations showed a cause of action only for Aposaga, the named awardee, and not for Sustiguer. Sustiguer appealed.

ISSUE

Whether or not the trial court correctly dismissed Edith Sustiguer’s complaint for annulment of sale for lack of cause of action.

RULING

Yes, the Supreme Court affirmed the dismissal. The core legal principle is that a cause of action exists only if the plaintiff has a legal right, the defendant has a correlative duty, and an act or omission by the defendant violates that right. The complaint’s allegations failed to establish that Sustiguer possessed a legal right that was violated. The agreement and subsequent award documented by the City of Bacolod specifically named Isabel Aposaga as the awardee of the lot. Sustiguer was merely a party to the agreement consenting to Aposaga’s award. She was not designated as a purchaser or awardee herself. Therefore, she had no personal, direct legal right to the lot arising from the city’s commitment or ordinance.
Furthermore, to maintain an action for annulment of a contract to which one is not a party, a plaintiff must demonstrate a real and actual interest affected by the contract and show the positive injury that would result from its continuance. The Court found that Sustiguer’s complaint did not sufficiently allege such a direct, personal interest or injury. Her claim of being an “actual occupant” accommodated by Aposaga was insufficient to confer upon her a legal right equivalent to that of a recognized awardee or purchaser under the ordinance. Since the complaint’s averments did not show that Sustiguer had a legal right violated by the sale to Tamayo, it correctly failed to state a cause of action in her favor. The dismissal was proper.