Pagco v. Court of Appeals
REITERATIONFacts
1. The Antecedents: Private respondent Peter Quimson acquired a parcel of land in San Isidro Street, Singalong, Manila, in March 1987. At the time of acquisition, eleven occupants, including petitioners Virginia and Gaudencio Pagco, were in possession of the property with their residential houses. Quimson had previously negotiated with the occupants to purchase the portions they occupied, but they declined. He subsequently demanded that they pay back rentals and remove their houses, as he intended to use the property for himself and his family. When the occupants failed to comply, Quimson filed a complaint for ejectment against them. 2. Procedural History: The complaint for ejectment was initially filed in the Metropolitan Trial Court (MTC) of Manila, Branch 6. The MTC dismissed the complaint, ruling that a perfected sale existed between Quimson and the occupants, thus divesting the court of jurisdiction over a lease dispute. Quimson appealed this decision to the Regional Trial Court (RTC), Branch 35. The RTC reversed the MTC's decision, ordering the defendants to vacate the premises and pay rentals. Petitioners then filed a petition for review with the Court of Appeals (CA), which dismissed their petition, affirming the RTC's ruling. The CA found no perfected contract of sale due to a lack of agreement on the price and rejected the argument of misjoinder of parties. 3. The Petition: Petitioners Virginia and Gaudencio Pagco seek review of the Court of Appeals' decision. Their sole assigned error is that the CA erred in not considering fatal allegations in the complaint that indicated a lack of cause of action, which they argue was improperly cured by the defendants' answer. They contend that the complaint itself, particularly paragraphs 8, 9, and 10, suggests a perfected contract of sale, which was then repudiated. However, the Supreme Court, in reviewing the petition, found no merit. The Court agreed with the lower courts that there was no meeting of the minds on the price, and that the petitioners' own answer denied the existence of a perfected contract, instead raising the defense that the property was within an area for priority development. The Court also noted that even if a perfected contract existed, the subsequent actions indicated a mutual withdrawal.
Issue(s)
Whether there was a perfected contract of sale between the parties. Whether the Court of Appeals erred in disregarding the alleged fatal defect of misjoinder of parties.
Ruling
The petition is denied for lack of merit. The Court affirmed the decision of the Court of Appeals, upholding the ejectment of the petitioners and the order to pay rentals in arrears.
Ratio Decidendi
On the issue of a perfected contract of sale: The Court held that a contract of sale is perfected when there is an agreement upon the thing which is the object of the contract and upon the price. In this case, there was no meeting of the minds as to the price. Private respondent Quimson asked for P970.00 or P980.00 per square meter, while the petitioners were willing to pay only P850.00 per square meter. This disagreement on the price clearly indicates that no perfected contract of sale was formed. The Court further noted that petitioners, in their answer to the complaint, never alleged the existence of a perfected contract of sale, but instead raised the defense that the property was within an Area for Priority Development. The phrase "perfected contract" in the complaint was used loosely and did not connote a meeting of the minds, especially since it was followed by allegations of refusal to continue negotiating. The letter from petitioners' counsel explicitly stated that their clients had not consented to any agreement on a direct purchase, particularly on the price mentioned. Even if a perfected contract existed, the filing of the ejectment case and the petitioners' failure to claim ownership by purchase implied a mutual withdrawal from any such agreement. On the issue of misjoinder of parties: The Court found the petitioners' reliance on the case of Flores vs. Mallare-Philipps to be misplaced. The cited case involved separate and distinct claims that did not fall within the jurisdiction of the RTC. In the present case, the cause of action for ejectment against all defendants, including the petitioners, was based on the non-payment of rentals from 1987 onwards. The relief sought against all of them was the same: to vacate the premises and pay rentals in arrears. Therefore, there was no misjoinder of parties, as the claims were unified and fell within the jurisdiction of the court. The Court reiterated that arrears in payment of rentals for three months is a ground for judicial ejectment, and the defendants admitted their respective rental rates and non-payment since June 1985, although the plaintiff was only entitled to recover arrears from March 1987 when he became the owner-lessor.
Main Doctrine
A perfected contract of sale requires a meeting of the minds upon the thing which is the object of the contract and upon the price. Without agreement on the price, no perfected contract of sale exists, and the relationship remains one of lease, thus allowing for ejectment proceedings based on non-payment of rentals.