Agcaoili vs.

GSIS 165 SCRA 1

Facts: In this case, appellant GSIS approved an application of the appellee Agcaoli for the
purchase of a house and lot in the GSIS Housing Project at Nangka, Marikina, subject to the
condition that the latter should forthwith occupy the house, a condition that Agcaoli tried to
fulfill but could not because the house was absolutely uninhabitable. However, Agcaoli ask a
homeless friend, a certain Villanueva, to stay in the premises as some sort of watchman, pending
completion of the construction of the house.
Agcaoli after paying the first installment and other fees, having thereafter refused to make
further payment of other stipulated installments until GSIS had made the house habitable; and
appellant having refused to do so, opting instead to cancel the award and demanded the vacation
by Agcaoli of the premises; and the latter having sued the GSIS in the Court of First Instance of
Manila for specific performance with damages and having obtained a favorable judgment, the
cases was appealed by the GSIS.
Issue: Whether or not Agcaoli is entitled for specific performance with damages.
Held: Appeal of GSIS must fail.
There was then a perfected contract of sale between the parties; there had been a meeting of
minds upon the purchase by Agcaoli of a determinate house and lot from GSIS at a definite price
which is 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 soled in acondition suitable for its enjoyment by the buyer, in other words to deliver the
house subject of the contract in a reasonably livable state. This it failed to do.
Since GSIS failed to fulfill its obligation, and was not willing to put the house in a habitable
state, it cannot invoke Agcaolis suspension of payment as cause to cancel the contract between
them. In recipient obligation, neither party incur in delay of the other does not comply or is not
ready to comply in a proper manner with what is incumbent upon him. Nor may the GSIS
succeed in justifying its cancellation of the award by the claim tha Agcaoli had not complied
with the condition of occupying the house within three (3) days. The record shows that Agcaoli
did try to fulfill the condition.
Finally appellant having caused the ambiguity as the exact prestation of the agreement, the
question of interpretation arising therefrom, should be resolved against it.