G.R. No. 120465 - Uy vs. Court of Appeals

Petitioners William Uy and Rodel Roxas, as duly authorized agents of eight landowners, offered to sell eight parcels of land in Tuba, Tadiangan, Benguet to the National Housing Authority (NHA) for a housing project.
On February 14, 1989, the NHA Board adopted Resolution No. 1632 approving acquisition of the 31.8231‐hectare tract for P23.867 million and the parties executed Deeds of Absolute Sale covering all eight parcels.

The NHA paid for only five of the eight parcels after receiving a report from the DENR’s Land Geosciences Bureau that the remaining three parcels were in an active landslide area and unsuitable for housing development.
On November 22, 1991, the NHA issued Resolution No. 2352 cancelling the sale of the three parcels; later, by Resolution No. 2394, it offered P1.225 million as daños perjuicios to the landowners.

On March 9, 1992, petitioners filed before the RTC of Quezon City a Complaint for Damages against NHA and its General Manager, Robert Balao, alleging unjustified cancellation and praying for P6.4 million in unearned income, P4.6 million in opportunity loss, P1.3 million in expenses, P600,000 moral damages, P600,000 exemplary damages, and P1 million attorney’s fees.
The RTC upheld the cancellation as justified but nonetheless awarded P1.255 million in damages (equivalent to the NHA’s initial offer).
On appeal, the Court of Appeals reversed and dismissed the complaint, holding the cancellation justified and that petitioners—being mere attorneys‐in‐fact—were not real parties in interest, and thus had failed to join indispensable parties.
Petitioners sought certiorari relief before this Court, assigning as error (1) the CA’s finding of a legal basis to rescind, (2) denial of their claim to damages under Art. 1191 of the Civil Code, and (3) dismissal for failure to join the landowners as indispensable parties.

Did the NHA have legal basis to rescind (or cancel) the sale of the three parcels?
If the NHA had such basis, were petitioners nonetheless entitled to damages under Article 1191 of the Civil Code?
Whether petitioners’ failure to join the landowners as indispensable party‐plaintiffs warranted dismissal of the complaint.