[07] People’s Homesite & Housing Corporation (PHHC) v Court of Appeals, Rizalino 5. PHHC BoD passed Resolution No.
Resolution No. 218 which withdrew Lot 4 from the
Mendoza, and Adelaida Mendoza
Topic: Conditional Contract of Sale
SUMMARY
Mendoza Spouses wanted to buy Lot 4 but PHHC (seller-company) attached the
condition that the lot only be awarded should the “OG plan” be approved by the city
council, the valuation committee, and the higher authorities. These authorities did not
approve the “OG plan” —spouses were notified of this disapproval. Soon after, PHHC
made a “revised plan” which was approved by the authorities. Under the revised plan,
however, Lot 4’s area was reduced and subsequently sold to other people. Spouses
Mendoza were shookt and asserted that there was a perfected sale under the OG plan
and thus, Lot 4 (even tho reduced in area size) should still be sold to them. They took
it to court but SC ruled against them.
DOCTRINE
Very straightforward case: see provisions below
PROVISIONS
Art. 1475, NCC: “The contract of sale is perfected at the moment there is a meeting of
minds upon the thing which is the object of the contract and upon the price. From that
moment, the parties may reciprocally demand performance, subject to the law
governing the form of contracts”
Art. 1181, NCC: “In conditional obligations, the acquisition of rights, as well as the
extinguishment or loss of those already acquired, shall depend upon the happening of
the event which constitutes the condition.”
FACTS
1. PHHC Board of Directors passed Resolution No. 513:
a. “Subject to the approval of the Quezon City Council, Lot 4 containing
4,182.2 square meters, is hereby awarded to the Spouses Mendoza
at P21 per sqm”
b. “That this award be subject to the approval of the OEC (PHHC)
Valuation Committee and higher authorities”
2. City Council disapproved the proposed subdivision plan (“OG plan”)
— Spouses were advised by registered mail of the disapproval of the
plan
3. Another plan (“revised plan”)was prepared and this one was approved by the
city council
a. This revised plan, however, reduced area of Lot 4 to 2,608.7 sqm
4. PHHC directors, subsequently passed a resolution recalling all awards of lots
to persons who failed to pay the deposit or the downpayment for the lots
awarded them
— Spouses never paid the price of the lot nor made the 20% initial
deposit
Mendoza spouses and awarded it to 5 other people, in equal shares
— these 5 people made the initial deposit and hence, deed of sale
was executed in their favor (approved by city council and Bureau of Lands)
6. Mendoza spouses requested that the award of Lot 4 to these 5 people be
cancelled and be given to them
— pending this request, they still went ahead and filed an instant
action for specific performance and damages
7. TC: sided with PHHC, withdrawal of award from Mendozas is valid
8. CA: sided with the Mendozas, ordered PHHC to sell the lot to the Mendozas
ISSUES
WN People’s Homesite & Housing Corporation bound itself to sell to the Mendoza
spouses Lot 4 of the revised consolidation subdivision plan, with an area of 2,608.7
sqm (i.e. WN there was a perfected sale of Lot 4 with reduced area, which can be
enforced against PHHC by an action for specific performance) — NO
RATIO
No perfected sale, as the sale was conditionally awarded to the Mendozas— subject to
the approval of the city council AND the approval of the valuation committee and higher
authorities
Spouses were advised of the disapproval of the “OG plan” so that when the “revised
plan” was approved, they should have manifested in writing their acceptance, to show
they were still interested in purchasing Lot 4— but they didn’t. (*sad face*)
The Court, then, cited the following provisions:
Art. 1475, NCC: “The contract of sale is perfected at the moment there is a meeting of
minds upon the thing which is the object of the contract and upon the price. From that
moment, the parties may reciprocally demand performance, subject to the law
governing the form of contracts”
Art. 1181, NCC: “In conditional obligations, the acquisition of rights, as well as the
extinguishment or loss of those already acquired, shall depend upon the happening of
the event which constitutes the condition.”
Applied to this case: There was no meeting of the minds on the purchase of Lot 4, with
the revised area of 2,608 sqm at P21 per sqm
DISPOSITIVE
WHEREFORE, the decision of the Appellate Court is reversed and set aside and the
judgment of the trial court is affirmed. No costs.
SO ORDERED.
Additional Notes from the case:
There is no perfected contract where the alleged contract was signed by only one party
and the record shows that the other party did not execute or sign the said contract
form. (Guardiano vs. Encarnacion, 29 SCRA 326.)
A contract of sale is perfected the moment there is agreement upon the thing object of
the contract and upon the price. (Philippine Virginia Tobacco Administration vs.
De los Angeles, 87 SCRA 197.)