G.R. No. 198627 - DST Movers Corp. vs. People's General Insurance Corp.

On February 18, 1960, the PHHC board passed Resolution No. 513 awarding Lot 4 (initially measured at 4,182.2 square meters in the proposed consolidation subdivision plan) to the Mendoza spouses at P21 per square meter.
The award was expressly stated to be subject to two conditions:

On August 20, 1961, the Quezon City Council disapproved the proposed consolidation subdivision plan, and the Mendozas were informed by registered mail.
A subsequent subdivision plan was prepared with adjustments:

The revised plan reduced the area of Lot 4 to 2,608.7 (or 2,603.7) square meters.
This revised plan was approved by the city council on February 25, 1964.

On April 26, 1965, the PHHC board passed a resolution recalling all awards of lots to persons who failed to pay the required deposit or down payment.
The Mendoza spouses did not pay the price nor make the mandatory 20% deposit.
As a result, on October 18, 1965, Resolution No. 218 was passed to withdraw the tentative award of Lot 4 to the Mendozas and re-award it jointly to five other individuals (Miguela Sto. Domingo, Enrique Esteban, Virgilio Pinzon, Leonardo Redublo, and Jose Fernandez) under the existing PHHC rules and with payment conditions similar to adjoining lots.

On March 16, 1966, the Mendoza spouses sought reconsideration—requesting the reversal of the withdrawal of their award and the cancellation of the re-award.
Before any decision on reconsideration was reached, the spouses filed an action for specific performance and damages.
The trial court ruled in favor of PHHC, sustaining the withdrawal of the award, but the Court of Appeals later reversed this decision:

The Appellate Court declared the re-award void.
It directed PHHC to sell Lot 4 (with the reduced area) to the Mendozas and awarded them attorney’s fees and litigation expenses.

The central question was whether there was a perfected sale of Lot 4 to the Mendozas that could be enforced by an action for specific performance.
Consideration was given to whether the conditions precedent (approval of the subdivision plan and the deposit) had been fulfilled.

Whether the PHHC had bound itself to sell Lot 4 to the Mendoza spouses through Resolution No. 513.

Did the resolution, which was subject to necessary conditions (city council and valuation committee approval), create a perfected contract of sale?
Was the meeting of minds achieved regarding the terms of the contract given the stipulated conditions?

The effect of the city council’s disapproval and the subsequent revised plan.

How did the disapproval of the original consolidation subdivision plan impact the tentative award originally granted to the Mendoza spouses?
Does the approval of the revised plan (with a reduced lot area) obligate the parties to continue with the original award?

Did their failure to manifest their acceptance in writing after the revised plan affect the perfection of the contract of sale?
Can the absence of the requisite deposit and formal acceptance be deemed as non-fulfillment of the conditions necessary to perfect the sale?

Whether specific performance can be enforced given the conditional nature of the award.

Is it appropriate to enforce the contract when the condition (approval and fulfillment of corresponding obligations) was never met?