FIRST DIVISION
[G.R. No. 171151. October 12, 2016.]
NATIONAL POWER CORPORATION, petitioner, vs. SPOUSES SOLIMAN and MELINDA IRASUSTA, respondents.
NOTICE
Sirs/Mesdames :
Please take notice that the Court, First Division, issued a Resolution dated October 12, 2016 which reads as follows:
"G.R. No. 171151 — NATIONAL POWER CORPORATION, Petitioner, v. SPOUSES SOLIMAN and MELINDA IRASUSTA, Respondents.
Petitioner National Power Corporation (NAPOCOR) appeals the decision promulgated on September 27, 2005, 1 whereby the Court of Appeals (CA) affirmed the adverse judgment rendered on June 9, 1999 by the Regional Trial Court (RTC), Branch 216, in Quezon City 2 in the action for specific performance docketed as Civil Case No. Q-96-28542 brought by the respondents to compel it to comply with its obligations under the contract to sell it had entered into with respondent Soliman Irasusta on August 5, 1985.
The CA summarized the pertinent antecedents as follows:
Soliman and Melinda Irasusta have both been employees of the National Power Corporation since they were still single. Soliman started working for Napocor in 1979, and Melinda in 1980.
In 1982, the Napocor created a housing project for its employees in Tandang Sora, Quezon City, now known as Napocor Village. However, as there were more employees than available lots, the Napocor had to raffle off the lots. To further give the employees a chance to get a lot, Napocor, in a memorandum, dated 12 September 1983, imposed the rule that where both spouses work in Napocor, they are entitled to only 1 lot. They called this rule the one household, one lot rule.
In 1982, while they were still single, Soliman and Melinda were separately awarded lots in Napocor Village. Soliman was awarded Lot 9, Block 12-A, Phase II, while Melinda was awarded Lot 78, Block 3, Phase I. On 5 August 1985, Napocor and Soliman signed a contract to sell covering Lot 9, Block 12-A.
On 18 March 1986, Melinda and Soliman got married. Upon noting the marriage, Napocor, on 11 July 1986, invalidated the award of Lot 9, Block 12-A to Soliman, justifying the forfeiture on its memorandum, dated 12 September 1983, stating the one household, one lot rule.
In a series of letters, the last of which was written on 4 January 1994, the Irasustas asked Napocor to reconsider the forfeiture of Soliman's lot. However, Napocor stood firm on its one household, one lot rule.
On 17 September 1987, Melinda wrote to Napocor, seemingly conceding the forfeiture of Soliman's lot. To compensate them for the forfeiture, Melinda asked Napocor to approve the swap of the lot awarded to her for another one, and to approve her application for real estate loan. The Napocor approved Melinda's loan application, and allowed her to choose a new lot, until she settled for Lot 53, Block 21. On 17 March 1988, the Irasustas and Napocor executed a contract to sell over said lot.
In 1993, however, the Irasustas again pursued their claim over Lot 9, Block 12-A. When it became clear that Napocor would not grant their claim, on 23 August 1998, the Irasustas filed an action for specific performance against Napocor, seeking to enforce the contract to sell over Lot 9, Block 12-A. 3
In defense, NAPOCOR contended that it had withdrawn the award of Lot 9, Block 12-A on the basis of the "one household, one lot policy" adopted in the memorandum dated September 12, 1983, pertinently reading thusly:
C. House and Lot Distribution
4. Spouses who are both qualified for award shall be entitled to only one (1) unit. However, for purposes of house and lot allocation, the higher basic salary between them will be the basis of determining housing category and priority will be based on the lower number. 4 . . .
NAPOCOR averred that the subsequent marriage of the respondents to each other had limited their entitlement to only one lot. CAIHTE
As stated, the RTC rendered judgment on June 9, 1999, holding that NAPOCOR's "one household, one lot" policy did not apply to the respondents but referred only to spouses qualified at the time of the award. It disposed as follows:
WHEREFORE, premises considered, the defendant National Power Corporation is hereby ordered to comply with its obligations under the Contract to Sell dated August 5, 1985 and to deliver to the plaintiff Soliman Irasusta the awarded property described as Lot 9 Block 12-A Phase II of Tandang Sora Housing Project (now Napocor Village), Quezon City. The Defendant is likewise ordered to pay plaintiffs the sum of Php10,000.00 as and for attorney's fees.
SO ORDERED. 5
NAPOCOR appealed the adverse judgment but the CA affirmed on September 27, 2005 the RTC's ruling, declaring that the restriction did not apply to employees like the respondents who married after entering into the contracts to sell; and that respondent Soliman had acquired a vested right in Lot 9, Block 12-A based on the contract to sell.
NAPOCOR sought reconsideration, but its motion to that effect was denied.
Hence, this appeal.
Issues
The issue is whether or not the respondents were entitled to demand specific performance by NAPOCOR of its obligations under the contract to sell dated August 5, 1985.
Ruling of the Court
The appeal lacks merit.
The disputed provision of the contract to sell of August 5, 1985 respecting Lot 9, Block 12-A, which reads: "Spouses who are both qualified for award shall be entitled to only one (1) unit," enunciated the "one household, one lot" policy. According to NAPOCOR, when two awardees originally qualified to get a unit each subsequently became one household by virtue of marriage, they were required to give up one of their units.
The RTC held, however, that the "one household, one lot" policy looked to the status of the employees at the time of the award. The CA upheld the RTC. We agree with both lower courts. The usage in the disputed provision of the phrase "qualified for award" unquestionably referred to the entitled employee during the process of selection and qualification prior to entering into the contract to sell. The cardinal rule in the interpretation and construction of contracts is that if the terms are clear and leave no doubt upon the intention of the contracting parties, the literal meaning of its stipulations shall control. 6 This interpretation is bolstered by the fact that the disputed provision was placed under the heading "House and Lot Distribution," thereby indicating the "one household, one lot" policy to impact only on how the units were to be distributed by raffle and awarded to the qualified employees. Plainly enough, the "one household, one lot" policy was not imposed on the title of the affected units. In other words, the policy did not apply to Soliman because he was not yet married to Melinda at the time Lot 9, Block 12-A was awarded to him through the contract to sell dated August 5, 1985.
NAPOCOR's interpretation to the effect that the "one household, one lot" policy was a continuing and perpetual one was a strained reading of the contested provision. To adopt and apply NAPOCOR's interpretation to Soliman would be to apply the policy indiscriminately, as well as impose undue burdens on NAPOCOR's employees-spouses who could come into the ownership of their units through other indirect means like donation or succession. The undue burdens were not possibly intended or contemplated even by NAPOCOR itself. Another consequence of adopting NAPOCOR's interpretation would be to have the qualified employees already living in their respective units for many years suddenly divested of them by virtue of the subsequent marriages with other employees-awardees.
NAPOCOR insists that the respondents' cause of action was extinguished by novation and waiver, stating that Melinda had requested to have her awarded lot swapped with a larger one. Her request, which NAPOCOR granted, allegedly resulted in the respondents having waived their right to Lot 9, Block 12-A.
Both the RTC and the CA rejected this insistence of NAPOCOR. The rejection was warranted. To start with, the exchange was only with regard to the lot awarded to Melinda, and did not involve Soliman's Lot 9, Block 12-A now the subject matter of this case. And, secondly, the tenor of Melinda's letter request showed that she was seeking the concession following the forfeiture of Soliman's lot. Her saying that she would abide by NAPOCOR's decision as to Lot 9, Block 12-A "with a heavy heart" was really meant to persuade NAPOCOR to grant her request in the meantime. But she did not thereby waive Soliman's right to the disputed lot. The rule that every waiver of a right must be express still applied. As such, novation, which implied the waiver of priorly existing rights, did not also apply. 7
Nonetheless, NAPOCOR properly argues that the parties entered into a contract to sell, not a contract of sale. We find, therefore, that the RTC had no legal and factual bases to order NAPOCOR to deliver Lot 9, Block 12-A to the respondents without requiring the respondents to perform their own obligations under the contract to sell. As to this, the CA fittingly observed: DETACa
. . . Soliman does not seek to compel Napocor to convey the property to him before he even pays the full purchase price thereof. Rather, Soliman seeks a judicial declaration of the validity of the award to him, and the consequent obligation of Napocor to continue accepting his monthly amortizations for Lot 9, Block 12-A. 8
WHEREFORE, the Court DENIES the petition for review on certiorari; AFFIRMS the decision promulgated on September 27, 2005 subject to the MODIFICATION that the respondents are ordered to comply with their own obligations under the contract to sell dated August 5, 1985; and DIRECTS the petitioner to pay the costs of suit.
SO ORDERED." SERENO, C.J., on official leave.
Very truly yours,
(SGD.) EDGAR O. ARICHETADivision Clerk of Court
Footnotes
1. Rollo, pp. 41-48; penned by Associate Justice Santiago Javier Ranada (retired), and concurred in by Associate Justice Roberto A. Barrios (retired/deceased) and Associate Justice Mario L. Guariña, III (retired).
2. Id. at 80-88; penned by Judge Marciano I. Bacalla.
3. Id. at 42-43.
4. Id. at 85.
5. Id. at 88.
6. Article 1370, Civil Code; see Forest Hills Golf and Country Club, Inc. v. Gardpro, Inc., G.R. No. 164686, October 22, 2014, 739 SCRA 28, 43.
7. Bank of the Philippine Islands v. Domingo, G.R. No. 169407, March 25, 2015, 754 SCRA 245, 262; Japan Airlines v. Simangan, G.R. No. 170141, April 22, 2008, 552 SCRA 341, 359-360.
8. Rollo, p. 46.