Case Digest - Agcaoili Vs GSIS
Case Digest - Agcaoili Vs GSIS
Narvasa, J.:
Doctrine:
1. In reciprocal obligations, neither party incurs in delay if the other does not comply
or is not ready to comply in a proper manner with what is incumbent upon him.
2. Specific performance will not be granted if, under the circumstances of the case, the
result of the specific enforcement of the contract would be harsh, inequitable,
oppressive, or result in an unconscionable advantage to the plaintiff.
3. In the exercise of its equity jurisdiction, the Court may adjust the rights of parties in
accordance with the circumstances obtaining at the time of rendition of judgment,
when these are significantly different from those existing at the time of generation of
those rights.
Facts:
GSIS approved the application of Agcaoili to purchase a house and lot in GSIS Housing
Project at Nangka, Marikina, Rizal. He was advised to immediately (within three days)
occupy the house, which Agcaoili did. However, he could not stay in it and had to leave
the next day because it was in such a state of incompleteness that civilized occupation
was not possible. Agcaoili asked a homeless friend, Villanueva, to stay in the premises
as watchman, pending completion of the construction of the house. GSIS asked Agcaoili
to pay the monthly amortizations and other fees. Agcaoili paid the first monthly
installment and the incidental fees, but refused to make further payments until and
unless the GSIS completed the housing. GSIS cancelled the award and required Agcaoili
to vacate the premises. Agcaoili instituted a suit in CFI of Manila for specific
performance and damages. CFI declared the cancellation of award illegal and void. CFI
ordered GSIS to respect and enforce the award and complete the house in question so
as to make the same habitable and authorizing GSIS to collect the monthly amortization
only after said house shall have been completed. GSIS was likewise ordered to pay
P100.00 as damages and P300.00 as and for attorney's fees, and costs. GSIS sought to
reverse the decision of CFI.
Issue:
Ruling:
No. The Court could not require specific performance of the contract according to its
literal terms, as this would result in inequity. Because 20 years had already passed, to
compel GSIS to complete the construction at present prices, without modifying the price
Agcaoili would pay, would be unfair and unrealistic. The situation called for the exercise
by the Court of its equity jurisdiction, to the end that it may render complete justice to
both parties.
The judgment of CFI invalidating the cancellation by GSIS of the award was affirmed by
the Court. It, however, modified the requirement for GSIS to complete the house.
Instead, it is ordered that the contract between the parties be modified by adding to the
cost of the land, as of the time of perfection of the contract, the cost of the house in its
unfinished state, also as of the time of perfection of the contract, and correspondingly
adjusting the amortizations to be paid by Agcaoili, the modification to be effected after
determination by CFI of the value of said house on the basis of the agreement of the
parties, or if this is not possible by such commissioner or commissioners as the court
may appoint.