People’s Homesite and Housing Corp vs.

Court of Appeals
133 SCRA 777
December 1984

Aquino, J.

Note: Memorize the underlined matters because the same is connected to the material issue of the
case

FACTS:

In February 1960, People’s Homesite & Housing Corporation (PHHC) passed a resolution, subject to
the approval of the Quezon City Council, a Consolidation Subdivision Plan, awarding Lot 4 with an
area of 4,182.2 square meters located at Diliman, Court City to respondents Rizalino and Adelaida
Mendoza (spouses Mendoza) at a price of twenty-one pesos (P21.00) per square meter.

The City Council disapproved the consolidation subdivision plan in August 1960 but approved in
February 1964 its revised version where Lot 4 was reduced to an area of 2,608.7 square meters.

Then in October 1965, the PHHC withdrew the tentative award of Lot 4 to the spouses Mendoza for
the latter’s failure neither to pay its price nor to make a 20% initial deposit, and re-awarded said lot
jointly and in equal shares to Miguela Sto. Domingo, Enrique Esteban, Virgilio Pinzon, Leonardo
Redublo and Jose Fernandez, all of whom made the initial deposit. The subdivision of Lot 4 into five
lots was later approved by the Court council and the Bureau of Lands.

The spouses Mendoza asked for reconsideration and for the withdrawal of the said 2nd award to Sto.
Domingo and four others, and at the same time filed an action for specific performance plus damages.
The trial court sustained the award but the Court of Appeals reversed the said decision, declared void
the re-award to Sto. Domingo and four others, and ordered the PHHC to sell Lot 4 with an area of
2,608.7 square meters at P21.00 per square meter to spouses Mendoza.

ISSUE:

Whether or not there was a perfected sale of Lot 4, with its reduced area, between the parties

RULING:

The Supreme Court found that there was no perfected sale of Lot 4 because the said lot was
conditionally or contingently awarded to the Mendozas subject to the approval by the City council of
the proposed consolidation subdivision plan and the approval of the award by the valuation
committee and higher authorities.

The Mendozas were advised in 1961 of the disapproval. When the plan with the area of Lot 4
reduced to 2,608.7 square meters was approved in 1964, the spouses Mendoza should have
manifested in writing their acceptance of the award for the purchase of Lot 4 just to show that they
were still interested in its purchase although the area was reduced.

Article 1475 of the Civil Court says “[t]he 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.” Indeed, there was a no meeting of the minds between the parties on the purchase of Lot 4
with an area of 2,608.7 square meters at P21 a square meter and the PHHC board of directors acted
within its rights in withdrawing the tentative award.