Facts:

The case involves Leoncio Boncato as the plaintiff-appellant and Cirilo G. Siason, Marcelina F. Siason, and the People's Homesite and Housing Corporation (PHHC) as the defendants-appellees. The events leading to the case unfolded in Quezon City, where Boncato was a bona fide occupant of a residential lot designated as Lot 4, Block E-140, in the Pinahan area. In 1956, he constructed a dwelling on this lot, which was later reclassified as a residential area by a Presidential Directive from President Magsaysay. This directive mandated the subdivision of the area for sale to actual occupants. Boncato, being a Filipino citizen without a home lot, applied to purchase the lot from PHHC but received no response, as PHHC claimed the area had not yet been subdivided.

Subsequent Presidential Directives in 1964 and 1965 ordered PHHC to cancel conditional awards made to non-occupants and to halt the issuance of titles to disputed lots until further notice. Despite these directives, ...

Facts:

Background and Occupancy

• Plaintiff-appellant Leoncio Boncato was the bona fide and actual occupant of a residential lot owned by the People’s Homesite and Housing Corporation (PHHC).
• The lot in dispute is designated as Lot 4, Block E-140 of subdivision plan PSD68807 in the Pinahan area of Diliman, Quezon City.
• In 1956, Boncato constructed a dwelling house on the lot while in actual possession thereof.

Presidential Directives and Qualification to Purchase

• With the reclassification of the Pinahan area as a residential zone under a Presidential Directive by President Magsaysay, the lot became part of a scheme for awarding subdivided lots to actual occupants.
• Boncato, being a Filipino citizen without a home lot of his own, was qualified under the said directive to acquire a residential lot from the PHHC.
• He duly filed an application to purchase the lot from the PHHC; however, the PHHC did not act on his application, citing that the area had not yet been subdivided.

Presidential Directives Addressing Anomalous Sales

• On February 20, 1964, President Garcia issued a directive requiring PHHC to cancel awards of lots made to non-occupants and to immediately sell such properties to members of the Pinahan Homeowners Association.
• On January 8, 1965, another directive was issued to halt the issuance of titles for disputed lots until further advisement from the presidential office to allow time for appropriate decision-making.
• The creation of the Gancayco Committee followed, tasked with investigating irregular and anomalous awards and sales of PHHC lots, including those in question.

Questionable Transactions and Sales

• On October 7, 1965, despite the presidential directives, the PHHC unlawfully sold Lot 4 to the spouses Amado A. Tolentino and Angela A. Tolentino, who were not actual occupants and already owned another lot from PHHC in Roxas District, Quezon City.
• This sale was done in apparent connivance with other defendants to deprive Boncato of his preferential right, and it was executed without clearance from the Gancayco Committee, which was still reviewing Boncato’s pending application.
• Subsequently, on May 6, 1966, the Tolentinos sold Lot 4 to the defendant spouses Cirilo Siason and Marcelina F. Siason, in breach of the PHHC deed of sale that prohibited the transfer of the lot within one year of purchase.
• By virtue of the latter transaction, the spouses Siason obtained Torrens Title No. 105073.

Procedural History and Relief Sought

• Prior to the annulment complaint, the PHHC had initiated an ejectment suit against Boncato (Civil Case No. 9974), which ultimately resulted in a favorable decision for the PHHC at the City Court level, though later dismissed by the Court of First Instance for lack of jurisdiction.
• Boncato subsequently filed a complaint for annulment of:
• The deed of sale executed by PHHC in favor of the Tolentinos;
• The subsequent sale of the same lot from the Tolentinos to the Siasons; and
• The issuance of the certificate of title to the Siasons.
• The defendants moved to dismiss the complaint on the ground that Boncato’s alleged mere possession or “squatter” status did not confer any legal or preferential right to the property.
• The trial court dismissed the action, reasoning that Boncato had not established any legal right to the disputed lot and that his status as a squatter precluded invocation of any statutory benefits.

Appeal

• Boncato appealed the order dismissing his complaint, arguing that the facts alleged—if taken as true—sufficiently established a cause of action.
• The appellate court, upon reviewing the allegations in the face of the motion to dismiss, found merit in Boncato’s appeal.

Issue:

• Whether the complaint, when accepted in the light most favorable to the plaintiff, properly alleges a cause of action sufficient to annul the deeds of sale and the certificate of title issued to the defendant spouses.
• Whether Boncato’s status as the bona fide and actual occupant of Lot 4 entitles him to a preferential right to purchase the lot under the applicable Presidential Directives.
• Whether the trial court erred in dismissing the complaint based solely on the allegation (advanced via the defendants’ motion) that Boncato was "a mere squatter" without due consideration of his factual allegations which, if accepted as true, provide an adequate basis for the cause of action.
• Whether the proper standard for evaluating a motion to dismiss—taking the complaint’s allegations as true—was applied in this case.

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Doctrine:

• (Subscriber-Only)