VICENTE IBAY, PETITIONER, VS. THE HONORABLE INTERMEDIATE APPELLATE COURT, ATANACIO ABANDO AND ROSITA T. ABANDO, RESPONDENTS.

Through this petition for review under Rule 45 of the Rules of
Court, petitioner urges this Court to set aside the decision of the then
Intermediate Appellate Court (now Court of Appeals) of 27 February 1984 in
A.C.-G.R. CV No. 68339^[1] which
affirmed in toto the decision of the then Court of First Instance (now
Regional Trial Court) of Rizal in Civil Case No. Q-25747 entitled Atanacio T.
Abando and Rosita Abando vs. Vicente Ibay, an action for recovery of possession
of a portion of a lot located in Quezon City.

The antecedent facts are faithfully summarized by the respondent
Court as follows:

“The real property in question originally belonged to the People’s
Homesite and Housing Corporation, referred to herein as PHHC, and is bounded
and described as follows:

‘A parcel of land (Lot 19, block 68 of Diliman Estate, subdivision
plan Psd-10575 being a portion of Lot R. P. 3-A-3 B of Plan Psd 2007, L.R.C.
(GLRC). Rec. No. 7681 x x x containing
an area of THREE HUNDRED THIRTY SEVEN SQUARE METERS AND EIGHTY SQUARE DECIMETERS
(337.80) x x x’.

The above-described lot was later awarded to the
plaintiff-appellee, Atanacio T. Abando, but on July 22, 1959, the said
plaintiff with the consent of his wife Jacobina Tarifa, transferred his rights
and interest on (sic) the one-half (1/2) portion or an area of 168.90 square
meters of said land in favor of his daughter and co-plaintiff Rosita Abando,
who was then legally separated from her husband, in consideration of the sum of
P1,109.68 paid by the said transferee to the transferor (Exhibit
2). The transferee took possession of
the portion of land sold and had (sic) small house thereon.

On January 28, 1960, Rosita Abando entered into an agreement with
Vicente Ibay for the sale of her one-half of the property, covered by TCT No. 167385,
Registry of Deeds of Quezon City marked as Exhibit 1 which she claims to be a
lease.

The consideration of the sale in the amount of P4,500.00 was
paid in full by defendant Vicente Ibay on the occasions as follows:

P 2,100.00 – on
January 28, 1960 when the document was executed;

1,500.00 – on December 10, 1959 (Exhibit
13);

410.00 – on December 8, 1959 (Exhibit
14);

490.00 – on December 23, 1959
(Exhibit 15);

P 4,500.00

As a consequence of the sale, transfer or conveyance, the defendant
immediately took possession of the portion of land sold, together with the
improvements therein consisting of a small house. The remaining one-half (1/2) portion of the whole land was
occupied and possessed by both plaintiffs and Rosita Abando actually resided
therein. Defendant Vicente Ibay and his
family since the sale and contiuously (sic) up to the present possessed and
occupied and is (sic) still occupying and possessing the same.

He gradually made changes and improvement (sic) on the small house
bought to make it what is now a bigger house with 3 bedrooms, toilet, closet
and a store as could be seen on the land at present valued at about P50,000.00.

The defendant paid the taxes of (sic) the land from 1973 up to 1979
to the City Treasurer’s Office of Quezon City (Exhibits 6, 6-A to 6-E,
inclusive). He likewise paid the realty
taxes on the house constructed on the land from 1970 to 1979 (Exhibits 7, 7-A
to 7-Q, inclusively). The one-half
portion of land was declared for taxation purpose in the name of Vicente Ibay
under Tax Declaration No. 8-831 (Exhibit 9) for the year 1979 of the Assessor’s
Office of Quezon City. The other half
is declared in the name of Atanacio Abando under Tax Declaration No. 8-2410 for
the year 1979 of the Assessor’s Office of Quezon City (Exhibit 8).

The defendant Vicente Ibay had caused the whole land, Lot 19,
Block-68 to be subdivided into two (2) lots — Lot No. 19-A with an area of
168.90 in the name of Atanacio T. Abando and Lot No. 19-B with an area of
168.90 in the name of Vicente Ibay with approved plan and technical
descriptions (Exhibits 11, 11-A to 11-B).

Nevertheless, Ibay submitted the alleged document of transfer of
rights to PHHC, but the latter disapproved the transaction, because:

‘x x x Mr. Ibay is no longer qualified to acquire same as he is
already the holder of PHHC Lot 10, block S-29, of the Diliman Estate
Subdivision, Quezon City.’ (Exh. “C”).

This letter, dated February 15, 1960, was addressed to Rosita
Abando, and copy furnished to Mr. Ibay.

Without further action as against Rosita Abando or the PHHC,
Vicente Ibay remained in possession, as testified to by Rosita, as ‘lessee’
(TSN, same date, same pages).

On August 16, 1971, appellees became the registered owners in fee
simple of the property in question, under TCT No. 167385 (Exhibit “A”).

On August 25, 1971, a demand letter was sent to Mr. Ibay, demanding
that he should vacate the property, remove the improvements, pay for the use
and occupation, and restore possession to the appellees as owners. (Exhibits “5” and “16”).

Mr. Ibay also admitted that, very much earlier than that final
demand letter, he had received a telegram from Malacañang, upon complaint of
Atanacio Abando also demanding that he he (sic) should vacate the property.

Mr. Ibay did not comply with the demands, but on August 30, 1971,
he caused to be annotated on TCT No. 167385, a notice of adverse claim stating
under oath that he purchased the property but the same could not be registered
‘FOR LACK OF CONSENT’. (Exhibit A-1,
PE-1668, TCT No. 167385).

Thereafter, Mr. Ibay’s son wrote to Rosita Abando asking her to
comply with a certain agreement. Abando’s lawyer answered back informing him that there is no such
agreement with him, that the action for specific performance of a supposed contract,
if any, had already prescribed, and that on the other hand, Mr. Ibay should
vacate the property, remove the improvements, pay for his reasonable use and
occupation thereof, and deliver possession to the owners. (Exhibits “4” and “55”).”^[2]

On 4 August 1978, the Abandos, hereinafter referred to as private respondents, filed a complaint with the then Court of
First Instance of Rizal for recovery of possession of the one-half (1/2)
portion of the lot from herein petitioner. The case was docketed as Civil Case No. Q-25747. After trial on the merits, the court, on 19
March 1980, handed down a decision in favor of private respondents, the
dispositive portion of which reads as follows:

“WHEREFORE, PREMISES CONSIDERED, judgment is hereby rendered in favor of the plaintiffs and against the
defendant:

a) Ordering the defendant and those deriving
right from him, to leave and vacate the premises described in par. 2 of the
complaint and to restore possession to the plaintiff;

b) Ordering the defendant and those in privity
with him to pay the price of the land on which the building is constructed, or
in lieu thereof, requiring the plaintiffs to reimburse to the defendant
whatever defendant has incurred in accordance with Articles 546 and 548 of the
Civil Code and in case of failure to comply with this, requiring the defendant
to pay the owner reasonable rental on the premises;

c) Ordering the cancellation of the annotation
of the Adverse Claim on TCT No. 167385 under P.E.1668-T-167385 as appearing in
the registered title;

d) Ordering the defendant to pay to the
plaintiffs the amount of ten thousand pesos (P10,000.00) for and by way
of attorney’s fees.

Costs against the
defendant.

SO ORDERED.”^[3]

Petitioner appealed from said decision to the Intermediate
Appellate Court which docketed the case as A.C.-G.R. CV No. 68339. In urging said court to reverse the appealed
decision, petitioner contended that the lower court erred in:

“I.     x x x HOLDING THAT EXHIBIT 1 (DEED OF SALE
DATED JANUARY 28, 1960 EXECUTED BY ROSITA ABANDO IN FAVOR OF VICENTE IBAY) IS A
XEROX COPY AND MUST NOT BE ACCEPTED IN COURT.

II.      x x x HOLDING THAT EXHIBIT 1 IS NOT
ADMISSIBLE IN EVIDENCE, AND EVEN IF ADMISSIBLE THE REAL CONTRACT OF THE PARTIES
IS NOT SALE BUT TRANSFER OF RIGHTS WHICH HAS BEEN DISAPPROVED BY THE PHHC.

III.     x x x HOLDING THAT ADVERSE CLAIM IS INVALID.”^[4]

In its decision of 28 February 1984, the respondent Court found
no merit in the appeal. In disposing of
the first and second assigned errors, the respondent Court, while agreeing with
the petitioner that the Exhibit “1” in the folder of exhibits is not a xerox
copy but a carbon original, expressed doubt that it was the one actually
introduced in evidence since if
indeed the trial court committed an error in this regard, petitioner should
have immediately called its attention thereto. Petitioner failed to do so; since he raised the issue only on appeal, it
is possible that the xerox copy could have been, with the connivance of some
personnel in the office of the clerk of court, surreptitiously substituted with
the carbon original. In any case if
indeed there existed a clear error or mistake on the part of the trial court,
then it cannot be raised on appeal unless the latter’s attention is first
called to it. Notwithstanding such assertions,
the respondent Court nevertheless declared that Exhibit “1” is admissible in
evidence. However, it ruled that the
same is not a deed of sale but a mere transfer of rights since Rosita Abando
was not yet the owner of the one-half (1/2) portion of the lot in question at
the time it was executed. As of that
time, she had not yet completed the payment of the purchase price to the PHHC,
for which reason approval by the latter of the transfer was necessary. The transfer was disapproved^[5]
because petitioner was no longer qualified to acquire the same as he was
already the holder of PHHC Lot 10, Block S-29 of the Diliman Estate
Subdivision. Accordingly, the transfer
“became one in violation of law (the rules of the PHHC being promulgated in
pursuance of law have the force of law) and therefore void ab initio.”
Hence, appellant acquired no right over the lot for, from a contract void ab
initio, no rights are created. Estoppel, as postulated by petitioner, will not apply for it cannot be
predicated on an illegal act. It is
generally considered that as between the parties to a contract, validity cannot
be given to it by estoppel if it is prohibited by law or is against public
policy.^[6]

Since respondent Court found Exhibit “1” to be in violation of
the law, it ruled that the adverse claim was also null and void. Thus, it rejected the third assigned error.

His motion to reconsider the decision having been denied by the
respondent Court in its resolution of 3 April 1984,^[7]
petitioner filed the instant petition wherein he imputes two (2) vague errors
committed by the respondent Court, to wit:

“1. That the
Honorable Intermediate Appellate Court committee an error in its finding of
facts as contained in the decision,

2. That the ruling made by the Honorable
Court on the defendant-appellant’s three (3) assignment (sic) of errors is not
supported by fact and jurisprudence on the matter.”

and submits the following as his grounds
for the allowance of the petition:

“1. THE INTERMEDIATE
APPELLATE COURT ERRED ON QUESTION OF LAW IN APPLYING IN THE CASE AT BAR THE
RULE THAT NO MISTAKE OR ERROR CLEARLY APPARENT NOT CALLED TO THE ATTENTION OF
THE TRIAL COURT CANNOT BE RAISED FOR THE FIRST TIME ON APPEAL.

2. THAT THE INTERMEDIATE APPELLATE COURT ERRED
ON A QUESTION OF LAW IN HOLDING A DOUBT AS TO WHETHER THE CARBON ORIGINAL
(EXHIBIT 1), NOT A XEROX COPY, WAS PROPERLY INTRODUCED IN EVIDENCE AND THE
PROBALITY (sic) OF CONNIVANCE AND INSERTION OF DOCUMENT.

3. THAT THE INTERMEDIATE APPELLATE COURT ERRED
IN (sic) A QUESTION OF LAW IN HOLDING THAT THE DEED OF SALE (EXHIBIT 1) IS NULL
AND VOID OR AGAINST THE LAW AND PUBLIC POLICY.

4. THE APPELLATE
COURT ERRED ON A QUESTION OF LAW IN HOLDING THAT THE ADVERSE CLAIM FILED BY THE
PETITIONER IS INVALID.”^[8]

We find no merit in this petition.

The first two grounds
relied upon are misplaced. The
respondent Court, despite its suspicion that what was marked as Exhibit “1” is
in fact a xerox copy, for which reason the trial court declared it as
inadmissible for not being the best evidence, and that the carbon original
which petitioner claims to be his Exhibit “1” could have been surreptitiously
substituted for the xerox copy, did in fact rule that Exhibit “1” is admissible
in evidence. There is no need to
quibble on or belabor further this point. As squarely ruled by the respondent Court, Exhibit “1” is not to be
considered a deed of sale of the property but merely a transfer of Rosita
Abando’s rights as an applicant to one-half (1/2) of the lot. This is so because at the date of its
execution, Rosita was not yet the owner of the lot. The document itself explicitly states that the PHHC is the
registered owner of the property. The
approval of the PHHC is necessary for the transfer to be valid and
effective. In the case at bar, not only
did the transfer lack the requisite approval, the same was categorically
disapproved by the latter, per its letter of 15 February 1960,^[9] because petitioner, under the policy of the
PHHC, is no longer qualified to acquire another PHHC lot. Resolution No. 82 of the PHHC, adopted by
its Board of Directors on 23 May 1951, provided that “the sale of more than one
lot per person shall not be permitted.”^[10] This policy is supported by the law. One of the purposes of the PHHC was to
acquire, develop, improve, subdivide, lease and sell lands and construct, lease
and sell buildings or any interest therein in the cities and populous towns in
the Philippines with the object of providing decent housing for those who may
be found unable otherwise to provide themselves therewith.^[11] Petitioner himself sought the approval of
the transfer and was furnished with a copy of the disapproval. He did not ask for its reconsideration. He took no further steps to perfect his
right as transferee. It can then be
logically presumed that he was aware of his disqualification from acquiring
another lot from the PHHC and that no remedy was available to him. Even after the private respondents obtained
a transfer certificate of title on the lot on 16 August 1971, petitioner
exerted no effort to register the so-called deed of sale in his favor. Indisputably, petitioner was fully aware of
the fatal flaw in his claim.

WHEREFORE, for lack of merit, the petition is DISMISSED,
with costs against the petitioner.

SO ORDERED.

Gutierrez, Jr., (Chairman), Feliciano, Bidin, and Romero, JJ., concur.

^[1]
Per Associate Justice Eduardo P. Caguioa, concurred in by Associate Justices
Ramon G. Gaviola, Jr. and Ma. Rosario Quentulio-Losa.

^[2]
Rollo, 23-26.

^[3]
Rollo, 22-23.

^[4]
Rollo, 8.

^[5]
Exhibit “C”.

^[6]
Citing 19 Am. Jur. 802; Eugenio vs. Perdido, 97 Phil. 41 [1955].

^[7]
Rollo, 46.

^[8]
Id., 9.

^[9]
Exhibit “C”, op. cit.

^[10]
Resolution No. 558, adopted on 16 April 1962, also expressly provided
that: “x x x only one residential lot
per family shall be allowed, it being understood that children of legal age and
no longer dependent upon the applicant for support, shall not be considered
members of that family for purposes of award.” This restriction was “intended
to distribute to as many needy families as possible the benefits of the
government’s assistance program through the PHHC.”

^[11]
Executive Order No. 399, issued on 5
January 1951. Executive Order No. 93 Of
4 October 1947 merged the National Housing Commission, created under C.A. No.
648, and the People’s Homesite Corporation and converted them into the
Philippine Homesite and Housing Corporation.