G.R. No. L-29070 June 29, 1972
PEOPLE’S HOMESITE & HOUSING CORPORATION, plaintiff-appellee, vs. MELCHOR TIONGCO and MELCHOR ESCASA, defendants-appellants.

FACTS

The People’s Homesite and Housing Corporation (PHHC) filed an action for recovery of possession of a subdivision lot against defendants-appellants Melchor Tiongco and Melchor Escasa. The defendants had occupied the lot and built houses since 1949 without PHHC’s consent. In a 1957 survey, PHHC registered them as “bona fide occupants.” Both defendants filed purchase applications, which PHHC did not act upon. Instead, PHHC tentatively awarded the lot to Asuncion Enverga in 1958 and, despite the defendants’ formal protests and an ongoing administrative investigation, executed a Conditional Contract to Sell with Enverga in June 1960. PHHC then filed the instant ejectment case.

ISSUE

Whether PHHC is entitled to recover possession of the lot from the defendants.

RULING

No. The Supreme Court reversed the lower court’s decision and dismissed PHHC’s complaint. The legal logic centers on PHHC’s lack of a valid cause of action for ejectment against the defendants. The Court found that PHHC’s own policy, as evidenced by a Presidential Memorandum, mandated that priority in the sale of its subdivided lots be given to actual bona fide occupants. By registering the defendants as such occupants, PHHC effectively recognized their preferential right to purchase the lot they occupied. PHHC’s act of selling the property to another party, while the defendants’ protests were pending, violated this policy and constituted a breach of the legal obligation it had created. Consequently, PHHC could not use that sale as a basis to eject the defendants, as it was the party at fault. The rights of the third-party awardee, Asuncion Enverga, were deemed not determinative of the purely possessory issue between PHHC and the defendants and must be asserted in a separate proceeding.