G.R. No. L-21498 June 27, 1968
ENCARNACION TEVES, plaintiff-appellant, vs. THE PEOPLE’S HOMESITE AND HOUSING CORPORATION, ET AL., defendants-appellees.

FACTS

Plaintiff Encarnacion Teves and her deceased husband, Celestino Teves, occupied Lot 9, Block K-70 of the Diliman Estate Subdivision (formerly Quezon Memorial Grove) belonging to defendant People’s Homesite and Housing Corporation (PHHC) since October 1950, constructing a residential house thereon. The PHHC Board adopted Resolution No. 21, Fiscal Year 1951-52, converting the estate into a subdivision for sale to actual occupants, giving them the first chance to purchase. An investigation before August 1951 found Celestino Teves to be the actual occupant and qualified to purchase, and a recommendation for award was made. After Celestino’s death in 1957, plaintiff filed her own application to purchase the lot and made repeated requests to PHHC officials to process it, but they deliberately refused to act. On or about February 23, 1961, defendant Melisenda L. Santos, through an attorney-in-fact, applied to purchase the same lot. PHHC officials, with knowledge of plaintiff’s prior occupancy and application, concealed Santos’s application from plaintiff. With the help of an influential politician, Santos secured approval of her application, and a deed of sale was executed in her favor on January 12, 1962. Transfer Certificate of Title No. 59796 was issued in Santos’s name on January 23, 1962. Plaintiff filed a complaint seeking to declare the deed and title null and void and to direct PHHC to execute a deed of sale in her favor. The Court of First Instance of Quezon City dismissed the complaint on the ground that it stated no cause of action, as plaintiff was not a party to the deed of sale between PHHC and Santos. Plaintiff appealed.

ISSUE

Whether the complaint states a cause of action against the defendants.

RULING

Yes. The complaint states a cause of action. A cause of action exists if the complaint alleges a legal right of the plaintiff, a correlative obligation of the defendant, and an act or omission of the defendant in violation of that legal right. The complaint alleges facts showing plaintiff acquired a preferential right to purchase the lot under PHHC Resolution No. 21, that defendants were aware of this right, and that defendants committed acts in violation of this right through fraud, bad faith, and political influence, depriving plaintiff of her preferential right. The complaint also alleges violations of principles on human relations under the Civil Code. Admitting these allegations as true, a valid judgment could be rendered in favor of plaintiff. Therefore, the order of dismissal is set aside, and the case is remanded to the lower court for further proceedings.