GR 67279; (June, 1992) (Digest)
G.R. No. L-67279 June 3, 1992
VICENTE IBAY, petitioner, vs. THE HONORABLE INTERMEDIATE APPELLATE COURT, ATANACIO ABANDO and ROSITA T. ABANDO, respondents.
FACTS
The property in question is Lot 19, Block 68 of the Diliman Estate, originally owned by the People’s Homesite and Housing Corporation (PHHC). It was awarded to Atanacio Abando, who transferred his rights to one-half (168.90 sq.m.) of the lot to his daughter, Rosita Abando, on July 22, 1959. On January 28, 1960, Rosita Abando entered into an agreement with Vicente Ibay for the sale of her one-half portion for P4,500.00, which Ibay paid in full. Ibay took possession, made improvements, paid realty taxes, and caused the lot to be subdivided. However, the PHHC disapproved the transfer because Ibay was already a holder of another PHHC lot and was thus disqualified under PHHC policy. On August 16, 1971, the Abandos became registered owners under TCT No. 167385. They demanded Ibay vacate the property. Ibay annotated an adverse claim on the title. The Abandos filed an action for recovery of possession. The trial court ruled in favor of the Abandos, ordering Ibay to vacate, cancel the adverse claim, and pay attorney’s fees. The Intermediate Appellate Court affirmed the decision.
ISSUE
Whether the Intermediate Appellate Court erred in affirming the trial court’s decision, which held that the agreement between Rosita Abando and Vicente Ibay was an invalid transfer of rights due to lack of PHHC approval and Ibay’s disqualification, and that Ibay acquired no rights over the property.
RULING
The Supreme Court dismissed the petition. The agreement between Rosita Abando and Vicente Ibay was a transfer of rights, not a sale, as Rosita was not yet the owner at the time of execution; the PHHC was still the registered owner. The transfer required PHHC approval under its rules, which have the force of law. The PHHC disapproved the transfer because Ibay was already a holder of another PHHC lot, violating PHHC policy (Resolution No. 82) that prohibits the sale of more than one lot per person, a policy intended to provide housing to as many needy families as possible. The transfer, being in violation of law, is void ab initio. No rights arise from a void contract, and estoppel cannot validate an illegal act. Ibay’s adverse claim, based on the void transfer, is also invalid. The Supreme Court found no merit in Ibay’s arguments regarding the admissibility of evidence and the application of procedural rules, as the core issue of the transfer’s invalidity was firmly established.