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Peoples Homesite and House Corp v CA (1981) Petitioner: Peoples Homesite & Housing Corp Respondents: CA and Sps Mendoza Ponente: Aquino, J. Doctrine: There is no perfected contract of sale if suspensive conditions do not happen. Short version: A subdivision plan was made, and the lot was awarded to the spouses. The contract had two suspensive conditions (it would be subject to approval of two higher bodies). However, the higher body disapproved the contract. Another subdivision plan was made, the land awarded to the spouses was reduced and this time, the higher body approved the contract. Howe ver, since the spouses did not pay the down payment, the land was withdrawn and sold to others. Spouses now want the land back. SC says they cannot have the land back because the suspensive conditions on the first plan did not happen and on the second plan, there was no meeting of minds. February 18, 1960 (Peoples Homesite Plan #1): The Peoples Homesite board of directors passed Resolution. No. 513 which is a subdivision consolidation plan; stating: o (suspensive condition) That Lot No. 4 (about 4,800 sq mtrs) shall be subject to the approval of the Quezon City Council o That the lot is awarded to Sps. Mendoza at P21.00/square meter o (suspensive condition) That the award shall be subject to the approval of the Valuation Committee and higher authorities In 1961, the City Council disapproved the proposed consolidation subdivision plan. o Peoples Homesite advised the spouses of the disapproval by mail. In 1964, there was Peoples Homesite Plan #2. o Peoples Homesite submitted a revised plan which also included Lot No. 4 but with reduced area (about 2,600 sq mtrs) This was approved by the City Council o However, the Mendoza spouses never paid down payment In April 1965, the Peoples Homesite board of directors passed a Resolution recalling all awards of lots to persons who failed to pay deposit or down payment for the lots awarded to them o Hence, the Mendoza spouses lot was recalled and not awarded to them In October 1965, another resolution was passed withdrawing the tentative award of Lot No. 4 to the spouses and awarding the lot to 5 other people. o The new awardees were required to deposit 20% of the total selling prince which all of them did. In 1966, the Mendoza Spouses wanted to cancel the award to the 5 people and requested for a reconsideration of the withdrawal of the award in their favor. TC dismissed complaint of Mendoza sps. (Held that withdrawal was valid.) CA reversed.

Issue: Was there a perfected sale of Lot 4, with the approved or reduced area (plan #2), to the Mendoza spouses? Held: No. Ratio:

There was no perfected contract of sale. It was subject to a suspensive condition which did not happen, and they did not manifest in writing their interest of accepting the award after Plan #2 was approved. NCC1475 provides that a contract of sale is perfected at the moment of the meeting of the minds. An exception to the rule is provided by NCC 1475 which states: where by virtue of the will of the parties or the law, the sale is held under a suspensive condition, and in which the sale is not perfected until the fulfillment of the condition Also, NCC1181 states that 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.

In this case: There was a suspensive condition in the contract: o It is subject to the approval by the city council of the proposed consolidation subdivision plan, and o Approval of the award by the valuation committee and higher authorities of Peoples Homesite The suspensive condition was not met. The Mendozas were advised of the disapproval but did not manifest in writing their acceptance of the award of Lot 4 to show their interest in purchasing it even after Plan #2 (reduced area) So, there was no meeting of minds on the purchase of Lot 4 with an area of 2,600 sq mtrs at P21 a square meter. Decision reversed.