Case Summary (G.R. No. 61623)
Key Dates and Procedural Posture
- PHHC Board Resolution No. 513 (Feb. 18, 1960): tentative award of Lot 4 to the Mendozas at P21.00/sq. m., subject to approval of the Quezon City Council and PHHC valuation committee/higher authorities.
- City council disapproval of the proposed consolidation subdivision plan (Aug. 20, 1961); Mendozas notified by registered mail.
- Revised consolidation subdivision plan approved by city council (Feb. 25, 1964) showing Lot 4 reduced to 2,608.7 sq. m.
- PHHC Board resolution recalling awards for failure to pay deposits (Apr. 26, 1965). Mendozas did not pay the required 20% deposit.
- PHHC Board Resolution No. 218 (Oct. 18, 1965): withdrawal of the tentative award to the Mendozas and re-award of Lot 4, subdivided, to five other persons who paid deposits and executed deeds.
- Mendozas sought reconsideration (Mar. 16, 1966) and then filed suit for specific performance and damages. Trial court sustained PHHC’s withdrawal; Court of Appeals reversed and ordered sale to the Mendozas; Supreme Court (final decision) reversed the Court of Appeals and affirmed the trial court.
Applicable Legal Framework
The Court applied principles of the Civil Code regarding perfection of the contract of sale and conditional obligations, citing Article 1475 (sale perfected upon meeting of minds on thing and price) and Article 1181 (rights in conditional obligations depend on occurrence of the condition). The Court also referred to doctrinal authorities on suspensive conditions and the theory that a sale may be perfected only upon satisfaction of a suspensive condition.
Factual Findings Relevant to Contract Formation
The initial award to the Mendozas was expressly conditional: subject to (1) approval by the Quezon City Council of the consolidation subdivision plan and (2) approval by the PHHC Valuation Committee and higher authorities. The city council initially disapproved the plan (1961) and later approved a revised plan (1964) showing a reduced lot area. The Mendozas never paid the required 20% initial deposit nor otherwise manifested written acceptance after the revised plan was approved. PHHC proceeded to withdraw the tentative award and re-award the subdivided Lot 4 to other applicants who complied with deposit requirements and executed deeds of sale.
Legal Issue Presented
Whether a perfected, enforceable contract of sale existed between PHHC and the Mendozas such that the Mendozas could obtain specific performance and related relief against PHHC.
Court’s Legal Analysis and Reasoning
The Court held that there was no perfected sale. The initial award was conditional — expressly made subject to municipal approval and PHHC internal approvals — and therefore the sale would not be perfected until fulfillment of those conditions and a clear meeting of minds as to the thing and the price. Because the Quezon City Council initially disapproved the plan and, after later approval of a revised plan reducing the lot area, the Mendozas failed to manifest written acceptance or to make the required deposit, there was no objective manifestation that the parties agreed on the same thing (i.e., Lot 4 as finally delineated and measured). Under the Civil Code principles cited, rights under a suspensive condition depend on the happening of the condition; the absence of compliance and of required acts by the awardees meant the contingency was not satisfied and the contract was not perfected. PHHC therefore acted within its authority in withdrawing the conditional/tent
...continue readingCase Syllabus (G.R. No. 61623)
Citation and Court
- 218 Phil. 742, Second Division.
- G.R. No. L-61623.
- Decision rendered December 26, 1984.
- Decision penned by Justice Aquino; Makasiar (Chairman), Concepcion, Jr., Abad Santos, Escolin, and Cuevas, JJ., concur.
Parties
- Petitioner-Appellant: People's Homesite & Housing Corporation (PHHC).
- Respondents-Appellees: Rizalino L. Mendoza and Adelaida R. Mendoza.
- Third parties subsequently awarded Lot 4: Miguela Sto. Domingo, Enrique Esteban, Virgilio Pinzon, Leonardo Redublo, and Jose Fernandez.
Core Question Presented
- Whether the People's Homesite & Housing Corporation bound itself to sell to the Mendoza spouses Lot 4 (Road) Pcs-4564 of the revised consolidation subdivision plan, with an area stated in the record as 2,608.7 (and alternately 2,603.7) square meters located at Diliman, Quezon City, such that the Mendozas could enforce sale by an action for specific performance.
Relevant Chronology of Facts
- February 18, 1960: PHHC Board passed Resolution No. 513 awarding "Lot 4, containing 4,182.2 square meters" to Spouses Rizalino and Adelaida Mendoza at P21.00 per square meter, "subject to the approval of the Quezon City Council of the above-mentioned Consolidation Subdivision Plan" and "subject to the approval of the OEC (PHHC) Valuation Committee and higher authorities."
- August 20, 1961: City Council disapproved the proposed consolidation subdivision plan (Exh. 2).
- 1961: The Mendozas were advised by registered mail of the disapproval of the plan (Exh. 2-PHHC).
- A revised consolidation subdivision plan was prepared; Lot 4's area was reduced (record shows 2,608.7 and elsewhere 2,603.7 square meters).
- February 25, 1964: The revised plan, which included Lot 4 with the reduced area, was approved by the City Council (Exh. H).
- April 26, 1965: PHHC Board passed a resolution recalling all awards of lots to persons who failed to pay the deposit or down payment for lots awarded to them (Exh. 5).
- The Mendozas never paid the price of Lot 4 nor made the 20% initial deposit required.
- October 18, 1965: PHHC Board passed Resolution No. 218 withdrawing the tentative award of Lot 4 to the Mendozas under Resolution No. 513 and re-awarding the lot jointly and in equal shares to Miguela Sto. Domingo, Enrique Esteban, Virgilio Pinzon, Leonardo Redublo and Jose Fernandez, "subject to existing PHHC rules and regulations"; prices to be the same as adjoining lots; awardees required to deposit an amount equivalent to 20% of the total selling price (Exh. F).
- The five new awardees made the required initial deposit and corresponding deeds of sale were executed in their favor.
- The subdivision of Lot 4 into five lots was approved by the City Council and the Bureau of Lands.
- March 16, 1966: The Mendozas requested reconsideration of the withdrawal of their award and requested cancellation of the re-award to the five individuals.
- Before the reconsideration request could be acted upon, the Mendozas filed an action for specific performance and damages.
Trial and Appellate Proceedings
- Trial Court: Sustained PHHC's withdrawal of the award to the Mendozas (i.e., found PHHC acted within its rights).
- Court of Appeals: Reversed the trial court, declared void the re-award of Lot 4 and the deeds of sale in favor of the five awardees, and directed PHHC to sell Lot 4 to the Mendozas with an area stated as 2,603.7 square meters at P21.00 per square meter; awarded the Mendozas P4,000 as attorney's fees and litigation expenses.
- Supreme Court: PHHC appealed the Appellate Court decision to this Court.
Issue on Appeal
- Whether there was a perfected sale of Lot 4 (with the reduced area as shown in the revised plan) to the Mendozas which they could enforce against PHHC by an action for specific performance.
Supreme Court Holding
- There was no perfected sale of Lot 4 to the Mendozas.
- The award to the Mendozas was condit