Voidable Contracts: Teves vs PHHC G.R. No. L-21498

Facts: The complaint alleges that since October, 1950 plaintiff and her husband had been occupying Lot 9, Block K-70 of the Diliman Estate Subdivision (formerly known as the Quezon Memorial Grove), and they had built thereon their residential house with an assessed value of P3,250.00; that upon due investigation conducted sometime before August, 1951 the Chief of the Sales Division of the PHHC found plaintiff's husband to be the actual occupant of said land and having been found to be qualified to acquire said land by purchase it was recommended that the lot be sold to plaintiff's husband; that plaintiff's husband died on March 17, 1957, before the lot was actually sold to him, and so plaintiff, as successor in interest of her husband, filed an application in her own name to purchase the lot in question; that thereafter plaintiff made repeated and insistent requests and representations with the officials and personnel of the Sales Division of the PHHC to process and forward her application to the Board of Directors of the PHHC for approval, but said officials and personnel ignored the requests and representations of the plaintiff; that instead of respecting plaintiff's preferential right, and in spite of the fact that the officials and personnel of the PHHC knew that plaintiff was the actual occupant of the lot, and without giving notice to the plaintiff that a party was applying to purchase the same lot, the PHHC sold the same lot to defendant Melisenda L. Santos who applied for it only on February 23, 1961 through an agent; that on January 12, 1962, a deed of sale of the lot — with the full balance actually paid — was executed, and shortly thereafter, or on January 23, 1962, Transfer Certificate of Title No. 95976 covering the lot was issued by the Register of Deeds of Quezon City in favor of said defendant. The complaint contains allegations that the plaintiff was fraudulently deprived of her preferential right to buy the lot in question, and that defendant Melisenda L. Santos was able to secure the approval of her application to purchase the lot and the execution of the deed of sale in her favor through the help of an influential politician.

Issue: Whether or not the plaintiff has a cause of action to annul the contract.

Held: A perusal of the complaint would elicit the position of the plaintiff in her case against the defendants, to wit: she had a right which she had acquired pursuant to the very policy promulgated by the defendant PHHC; she was deprived of the enjoyment of right when defendant PHHC sold the lot in question to defendant Melisenda L. Santos who was never an occupant of the lot and who applied to purchase said lot through an agent much later; the sale of the lot to the defendant Melisenda L. Santos was made without her knowledge, much less with her consent, and was in violation of the policy of the PHHC, so that the sale should not be given effect. the plaintiff is seeking the declaration of the nullity of the deed of sale not as a party in the deed, or because she is obliged principally or subsidiarily under the deed, but because she has an interest that is affected by the deed. This Court has held that a person who is not a party obliged principally or subsidiarily in a contract may exercise an action for nullity of the contract if he is prejudice in his rights with respect to one of the contracting parties, and can show the detriment which would positively result to him from the contract in which he had no intervention.