UY AND ROXAS v CA
G.R. No. 120465 | September 9, 1999
Kapunan, J. | Protacio
Summary
Petitioners are agents authorized to sell parcels of land
which were eventually bought by NHA. Out of the eight
parcels of land, only five were paid for because
apparently the three parcels were unsuitable for
development into housing project. NHA eventually
cancelled the sale for the latter parcels of land. Now, Uy
and Roxas filed a complaint for damages. The Supreme
Court held that they are not real parties-in-interest, hence
not entitled to damages. Neither were they assignees,
heirs, or beneficiaries, so they really didn’t have any right.
FACTS
- William Uy and Rodel Roxas were agents authorized
to sell eight parcels of land
- Respondent National Housing Authority bought these
lands at the cost of P23.867 million
- However, only five parcels were paid for
o NHA received a report from DENR that the
other three parcels were located in an active
landslide area, therefore dangerous for
development
- NHA subsequently cancelled the sale over the three
parcels of land they didn’t pay for.
o They did offer P1.225 million to the landowners
as daños perjuicios (sum of money paid in
compensation for loss or injury)
- Petitioners filed a complaint for damages against NHA
after such cancellation of sale
o Claim that they are complaining not in behalf of
their principals, but in their own name as
agents directly damaged by the termination
o They supposedly incurred losses consisting of
unearned income and advances
- RTC: Ruled in favor of Uy and Roxas, awarding them
damages in the sum of P1.255 million (wtf torts and
damages is shaking)
- CA reversed this decision and dismissed the original
complaint
o There was sufficient justifiable basis in
cancelling the sale  no reason for awarding
damages
o Petitioners were only attorneys-in-fact  not
real parties-in-interest to the action
- Petitioners filed the current case before the Supreme
Court
ISSUES
W/N CA erred in finding that petitioners failed to implead
the lot-owners as indispensable party plaintiffs – NO
W/N NHA had any legal basis in rescinding the sale –
YES
RATIO
First issue
- Petitioner’s argument that they were bringing the
action in their own name and on their behalf is
unmeritorious
- The Rules of Court requires that an action must be
prosecuted in the name of the party with the right
sought to be enforced
1. Petitioners are not parties to the contract of sale
between their principals and NHA
o They are mere agents of the owners
o They render some service or do something in
representation or on behalf of their principals
(Article 1868)
o Rendering such service did not make them
parties to the contracts
2. They are obviously not heirs – no allegation nor proof
3. They are not assignees to the rights under the
contract of sale
o An agent, in his own behalf, may bring an
action as an assignee
o However, it is not shown that they are
assignees
o They allege that they made advances and
suffered loss of commissions, but they did not
establish any agreement granting them the
right to receive payment and out of the
proceeds to reimburse themselves before
turning the balance over to the principals
4. They are not beneficiaries of a stipulation pour
autrui under Article 1311(2)
o No stipulation in the contract of sale conferring
a favor to any third person
o Though petitioners did not obtain their
commission – this did not entitled them to file
the action
o The grant of authority to sell property did not
make the buyer liable for the commission the
agent claimed
- Since they are not real parties-in-interest, any
decision will be pointless since it does not bind the
real parties-in-interest
Second issue
- The Court decides on the second issue just so any
further litigation will be forestalled
- NHA had basis to cancel the contract
- Contrary to the argument of petitioners, it was not a
rescission (which needs to predicated on a breach),
but a cancellation based on the negation of the
cause of the contract of sale
- Due to the realization that the lands were not suitable
for housing, the cause/motive which created the
obligation ceased to exist
- NHA would not have entered into the contract were
the lands not suitable for housing
- Quality of the land was an implied condition for the
sale
- Therefore, NHA was justified in cancelling the sale
- Assuming petitioners are parties, assignees, or
beneficiaries, they wouldn’t be entitled to any award of
damages either.