Peoples Homesite vs.

Court of Appeals, and Mendoza

133 SCRA 777
December 1984

FACTS:

In February 1960, herein petitioner Peoples Homesite & Housing Corporation (PHHC)
passed a resolution, subject to the approval of the Court Court Council of the PHHCs
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 Court Court
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 latters 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:

Was there a perfected sale of Lot 4, with its reduced area, between the parties?

COURT 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 Court council of the proposed consolidation subdivision plan and the approval of the
award by the valuation committee and higher authorities.

When the plan with the area of Lot 4 reduced to 2,608.7 square meters was approved in
1964, the spouses Court 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.