Agcaoili V Gsis

AGCAOILI v GSIS

G.R. No. L-30056 August 30, 1988

FACTS: The Government Service Insurance System, (GSIS) approved the application of Agcaoili for the purchase of a house and lot in the GSIS Housing Project at Nangka Marikina, Rizal, subject to the condition that the latter should forthwith occupy the house within 3 days otherwise his application shall be considered automatically disapproved, a condition that Agacoili tried to fulfill but could not for the reason that the house was absolutely uninhabitable. Agcaoili, after paying the first installment and other fees, refused to make further payment of other stipulated installments until GSIS had made the house habitable. GSIS opted to cancel the award and demand the vacation by Agcaoili of the premises. Agcaoili sued the GSIS in the Court of First Instance of Manila for specific performance with damages and obtained a favorable judgment.

ISSUE: Was the cancellation by GSIS of the award in favor of Agcaoili just and proper?

HELD: GSIS contends that Agcaoili had no right to suspend payment of amortizations on account of the incompleteness of his housing unit, since said unit had been sold "in the condition and state of completion then existing and he is deemed to have accepted the same in the condition he found it when he accepted the award. Hence, they had a valid reason to cancel the award.

There was then a perfected contract of sale between the parties; there had been a meeting of the minds upon the purchase by Agcaoili of a determinate house at a definite price payable in amortizations and from that moment the parties acquired the right to reciprocally demand performance. It was, to be sure, the duty of the GSIS, as seller, to deliver the thing sold in a condition suitable for its enjoyment by the buyer for the purpose contemplated, in other words, to deliver the house subject of the contract in a reasonably livable state. This it failed to do.

In this case, the Court cannot require specific performance of...