NHA vs.

GRACE BAPTIST CHURCH

FACTS:
On June 13, 1986, respondent Grace Baptist Church (hereinafter, the Church) wrote a letter to petitioner
National Housing Authority (NHA), manifesting its interest in acquiring Lots 4 and 17 of the General
Mariano Alvarez Resettlement Project in Cavite. In its letter-reply dated July 9, 1986, petitioner
informed respondent: In reference to your request letter dated 13 June 1986, regarding your application
for Lots 4 and 17, Block C-3-CL, we are glad to inform you that your request was granted and you may
now visit our Project Office at General Mariano Alvarez for processing of your application to purchase
said lots. We hereby advise you also that prior to approval of such application and in accordance with
our existing policies and guidelines, your other accounts with us shall be maintained in good standing.
Respondent entered into possession of the lots and introduced improvements thereon.
On February 22, 1991, the NHAs Board of Directors passed Resolution No. 2126, approving the sale of
the subject lots to respondent Church at the price of P700.00 per square meter, or a total price of
P430,500.00.The Church was duly informed of this Resolution through a letter sent by the NHA
On April 8, 1991, the Church tendered to the NHA a managers check in the amount of P55,350.00,
purportedly in full payment of the subject properties. The Church insisted that this was the price quoted
to them by the NHA Field Office, as shown by an unsigned piece of paper with a handwritten
computation scribbled thereon. Petitioner NHA returned the check, stating that the amount was
insufficient considering that the price of the properties have changed. The Church made several
demands on the NHA to accept their tender of payment, but the latter refused. Thus, the Church
instituted a complaint for specific performance and damages against the NHA with the Regional Trial
Court of Quezon City.
Both RTC and CA ruled that there is no perfected contract of sale
ISSUE:
Whether or not there is perfected contract of sale
HELD:
The court ruled in favor of the petition which is seeking reversal of the decision of CA last Feb 26, 2001
because such court ruled that there were no perfected contract of sale, but in this case both parties are
at fault.
We note from the records, however, that the Church, despite knowledge that its intended contract of
sale with the NHA had not been perfected, proceeded to introduce improvements on the disputed land.
On the other hand, the NHA knowingly granted the Church temporary use of the subject properties and
did not prevent the Church from making improvements thereon. Thus, the Church and the NHA, who

both acted in bad faith, shall be treated as if they were both in good faith. In this connection, Article 448
of the Civil Code provides:
The owner of the land on which anything has been built, sown or planted in good faith, shall have the
right to appropriate as his own the works, sowing or planting, after payment of the indemnity provided
for in articles 546 and 548, or to oblige the one who built or planted to pay the price of the land, and the
one who sowed, the proper rent. However, the builder or planter cannot be obliged to buy the land and
if its value is considerably more than that of the building or trees. In such case, he shall pay reasonable
rent, if the owner of the land does not choose to appropriate the building or trees after proper
indemnity. The parties shall agree upon the terms of the lease and in case of disagreement, the court
shall fix the terms thereof.
Case was remanded to the RTC and case to be settled or claims of both parties will be fairly settled
under article 448 and 546 of the new civil code.

DIGNOS vs. CA
FACTS:
The Dignos spouses were owners of a parcel of land, known as Lot No. 3453, of the cadastral survey of
Opon, Lapu-Lapu City. On June 7, 1965, appellants (petitioners) Dignos spouses sold the said parcel of
land to plaintiff-appellant (respondent Atilano J. Jabil) for the sum of P28,000.00, payable in two
installments, with an assumption of indebtedness with the First Insular Bank of Cebu in the sum of
P12,000.00, which was paid and acknowledged by the vendors in the deed of sale (Exh. C) executed in
favor of plaintiff-appellant, and the next installment in the sum of P4,000.00 to be paid on or before
September 15, 1965.
On November 25, 1965, the Dignos spouses sold the same land in favor of defendants spouses, Luciano
Cabigas and Jovita L. De Cabigas, who were then U.S. citizens, for the price of P35,000.00. A deed of
absolute sale (Exh. J, also marked Exh. 3) was executed by the Dignos spouses in favor of the Cabigas
spouses, and which was registered in the Office of the Register of Deeds pursuant to the provisions of
Act No. 3344.
As the Dignos spouses refused to accept from plaintiff-appellant the balance of the purchase price of the
land, and as plaintiff- appellant discovered the second sale made by defendants-appellants to the
Cabigas spouses, plaintiff-appellant brought the present suit.
Dignos spouses contends that such is a Contract to sell and not an absolute contract of sale and that
they reserve ownership on such property after fulfillment of the suspensive condition in this case
payment in full of the purchase price.

ISSUE:
Whether or not it is a contract to sell
HELD:
The court ruled in favor of Jabil as careful examination of the contract shows that there is no such
stipulation reserving the title of the property on the vendors nor does it give them the right to
unilaterally rescind the contract upon non-payment of the balance thereof within a fixed period.
As found by the trial court, the Dignos spouses delivered the possession of the land in question to Jabil
as early as March 27,1965 so that the latter constructed thereon Sally's Beach Resort also known as
Jabil's Beach Resort in March, 1965; Mactan White Beach Resort on January 15,1966 and Bevirlyn's
Beach Resort on September 1, 1965. Such facts were admitted by petitioner spouses. It clearly shows
that absolute deed of sale was intended by the parties and not contract to sell.
Therefore the selling of such property to spouses Cabigas is null and void and also Cipriano Amistad is
not properly authorized to rescind the contract as claimed by spouses Dignos that such person was an
authorized representative of Jabil, which vigorously denied such.