Case Digest (G.R. No. 158364)
Facts:
In Marcelo Agcaoili v. Government Service Insurance System, the GSIS approved Agcaoili’s application on June 24, 1964 for the purchase of Lot No. 26, Block No. (48) 2 in the GSIS Housing Project at Nangka, Marikina, Rizal, by letter dated October 5, 1965 signed by Manager Villanueva on behalf of the Chairman-General Manager. The approval expressly required Agcaoili to “occupy the said house immediately” or within three days upon receipt or lose his award. Agcaoili attempted occupation the following day but discovered the unit was merely a shell—lacking ceiling, stairs, lighting, water supply, bathroom, toilet, kitchen and drainage—and therefore uninhabitable. He paid the first monthly amortization and incidental fees but suspended further payments until the house was rendered livable. GSIS thereupon canceled the award and demanded vacatur. Agcaoili filed a complaint for specific performance with damages and attorney’s fees in the Court of First Instance of Manila. Other awardeesCase Digest (G.R. No. 158364)
Facts:
- Application and Approval
- On June 24, 1964, Marcelo Agcaoili submitted a printed “Application to Purchase a House and/or Lot” to GSIS for Lot No. 26, Block No. (48) 2 in the GSIS Housing Project at Nangka, Marikina, Rizal.
- By letter dated October 5, 1965 (Exh. A), GSIS, through Manager Villanueva, approved the application, allocated the subject lot and housing unit to Agcaoili, and expressly required him to occupy the house immediately (or within three days), warning that failure to do so would automatically disapprove the application and re-award the property.
- The Uninhabitable House and Payments
- Agcaoili attempted occupancy but found the house a mere shell: no ceiling or stairs; no lighting, water, bathroom, toilet, kitchen, or drainage; thus, unfit for civilized habitation.
- He left a homeless friend (Villanueva) as a watchman pending completion. He paid the first monthly amortization (O.R. No. 186558, Oct. 10, 1966) and incidental fees but refused further payments until GSIS rendered the house habitable. GSIS responded by canceling the award (Exh. D) and demanding vacation.
- Procedural History
- Agcaoili filed Civil Case No. 69417 in the CFI of Manila for specific performance with damages. Other awardees lodged a written protest (Exh. F) concerning uncompleted houses.
- Before Branch VIII (Presiding Judge Manuel P. Barcelona), GSIS presented no evidence; judgment was rendered in favor of Agcaoili. The decree:
- Declared the cancellation illegal and void;
- Ordered GSIS to respect and enforce the award;
- Ordered GSIS to complete the house before collecting further amortizations under Exhibit A;
- Awarded P100 damages, P300 attorney’s fees, plus costs.
- GSIS appealed to the Supreme Court (G.R. No. L-30056), challenging contract perfection, buyer’s suspension of payments, and alleged occupancy breach.
Issues:
- Contract Formation and Conditions
- Whether the immediate-occupancy clause, in light of the house’s uninhabitable state, precluded perfection of a binding contract of sale.
- Whether Agcaoili’s inability to reside and his placement of a friend in the premises without GSIS consent constituted a breach justifying cancellation.
- Suspension of Payments and Cancellation
- Whether Agcaoili had the right to suspend amortization payments due to GSIS’s failure to deliver a habitable dwelling.
- Whether GSIS validly canceled the award on grounds of non-occupancy and non-payment.
- Relief and Equity Jurisdiction
- Whether specific performance must be enforced literally (completion of the house) or may be modified.
- Given the elapsed time and changed circumstances, what equitable relief is appropriate.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)