3 vda de urbano v gsis sales.pdf

7/27/2019 3 Vda de Urbano v GSIS sales.pdf

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3 Vda de Urbano v GSIS (2001)

Vda De Urbano v Gsis2001

Facts

In 1971, petitioners mortgaged their 200sqm property in Q.C. to Gsis to secure ahousing loan. Since they were unable topay the loan, GSIS foreclosedthe mortgage in 1988. GSIS bid 154konthe property and emerged as thehighest bidder.In 1984, the petitioners tried to reclaimtheir property. They wrote to the GSIS

Acquired Assets Department signifyingtheir intent to reclaim. On October 16,

GSIS told them to paytheredemption price of 154k in fullbefore Nov 18, 1984.The petitioners asked for more timeto recover the property while the

Acquired Assets Dpeartmentsubsequently told them to pay 174k incash with an extension of 30 days to theNovember date. Failure to do soforfeited the reclamation of theproperty and sold in a public bidding.The petitioners wrote again requestingfor remortgage through repurchaseof the property. The Gsis AAD declined.The petitioners wrote to the Board for anapproval to file a loan worth 240,000with the GSIS real estate department torepurchase their foreclosed property.Despite attempts from Vice GovernorMathay to adjust to a moreliberal arrangement for the petitioners,the the petitioners were unable to pay.GSIS then issued a TCT in its favor.The respondent De La Cruz entered thepicture and offered to purchase theproperty for 250,000 spot cash. Withoutknowledge of the rival offer, thepetitioners then offered a50,000downpayment with the 124kbalance to be paid in 5 years. He also

enclosed 10k in check as earnestmoney. The Board informed them that ithad adopted reolution 881 that declinedtheir offer to repurchase.

At the same time, GSIS negotiated with

Dela Cruz for the purchase of theproperty. They accepted her offer ofpurchase. A new TCT was issued toher.The petitioners, on the other hand, hadtheir loan request rescinded because acertificate of award or sale was notissued in favor of the applicant.Moreover, the applicant, Urbano thepetitioner, was 81 years old and nolonger a member of the GSIS. It wasnt

given due consideration.Having learned about the transactionwith dela Cruz, thepetitioners requested the formalinvestigation with the GSIS regardingthe sale. Not satisfied, they filed a casewith the RTC of QC branch 102.The petition was dismissed. The sameview was upheld by the court ofappeals.Hence this petition.

Issues:1. Do petitioners have a right torepurchase the subject property?2. Does GSIS have a duty to dispose ofthe subject property through publicbidding?3. Was Gsis in bad faith in dealing withpetitioners?

Ruling: Petition Dismissed

Ratio:1. NoCharter of the GSIS was PD 1146 whichstipulated the power of the GSIS toacquire, utilize, and dispose of real orpersonal properties in the Philippines orelsewhere. It was amended by PD 1981


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which gave the GSIS the power tocompromise or release any claim orsettled liability to the system.SC- The laws granted the GSIS Boardthe power to exercise discretion in

determining the terms and condition offinancial accommodations to itsmembers with the dual purpose ofmaking the GSIS more responsive tothe needs of GSIS members. The lawsalso stipulated that the Boardcouldexercise discretion on whether to acceptor reject petitioners offer to repurchasethe subject property taking into accountthe dual purpose enunciated in thewhereas clause of PD 1981 which made

the GSIS more responsive to the needsof its members.With regard to the Boards exercise ofdiscretion, in Natino v IAC, the Courtalso held that repurchase of foreclosedproperty after redemption periodimposes no such obligation on thepurchaser (the board in this case) to re-sell the property since theproperty belongs to him (the board aswell)The boards denial of petitionersrequest to purchase the subject propertywas not based on whim but on a factualassessment of the financial capacity ofthe petitioners to make good theirrepeated offers to purchase the subjectproperty. Based on the circumstances,the petitioners were repeatedly unableto fulfill their obligations to pay. In thecomments of the AAD manager, theobservation was that the petitionerslacked the capacity to pay up.The petitioners are not entitled to arequest for repurchase as a matter ofright. The Boardexercised its discretionin accordance with law in denying theirrequests and the GSIS cant be faultedfor their failure to repurchase as it actedunder the petitioners application under

Operation Pabahay. The sale torespondent cant be annulled on suchinvoked right.2. No. The agreement with de laCruz was valid.

Pets.- aver that Sec. 79 of PD 1445 andthe COA Circular 86-264 mandated theGSIS to dispose of the assets throughpublic bidding and only upon its failure,through a public sale.GSIS contended that SEC 79 of PD1445 did not apply because it coveredunserviceable govt property and notacquired assets.SC- Gsis was right. Why? The provision(SEC 79) applies only to unserviceable

govt property or those no longerneeded. The house was obviously notunserviceable. And it was still used bypetitioners.With regard to COA Circular 86-264 orthe General guidelines on thedivestment or disposal of assets ofgovernment owned corporationsthelaw stipulated that it availed of anexception to the requirement ofdisposition through public biddingand such exception applied to salesof merchandise held for sale in theregular course of business. TheCourt read it in relation to Coa circular89-296 which provided for AuditGuidelines on the Disposal of Propertyand other Assets of Government

Agencies, which also did not apply thepublic bidding disposal requirement tomerchandise or inventory held for salein the regular course of business nor tothe disposal by govt financialinstitutions of foreclosed assets orcollaterals acquired in the regularcourse of business and not transferredto the Govt under proclamation no 50.The modes of disposal includedPublic auction and sale thru negotiation.


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Doctrine: With regard to these 2 laws,the Court held the question whetherthe subject property was covered bythe said Circular or falls under itsexception. It held that 89-296 was to

be interpreted with 86-264 inadherence with stat con whereinstatutes that relate to the same thingought to be taken in consideration inconstruing any one of them, and it isan established rule of law that all actsin pari material are to be takentogether as if they were one law.Moreover, the court looked into theintent of both laws and held that thesewere used to generate more revenue for

GOCCS through the disposition of itsnon-preforming assets. (Look into PD 50or the asset privatization trust in thecase) According to the court, the policyintent on the disposition of acquiredassets then governed the case at bar.Was the property covered by the publicbidding exceptions in these laws? Thecourt said yes, which meant that theirsale negotiation fell under the regularcourse of business, and thus did notoffend the requirements of the said coacirculars.3. No.GSIS denial of petitioners furtherrequests for repurchase of subjectproperty was based on a factualdetermination of the petitioners financialcapacity and the GSIS charter, PD1146. Also, GSIS sold the property todela Cruz only after giving them oneyear to repurchase.The petitioners, on the strength of theValmonte case, cant also impute badfaith on GSIS when it was secretlynegotiating with Dela Cruz. In theValmonte case, the court held that theconstitutional right to information waslimited to matters of public concern totransactions involving public

interest.The sale of the property was notimbued by public interests as it was apurely private transaction. Pets.Cant demand to be informed of suchpublic negotiation since they had no

interest on the subject property sincethey failed to comply with the GSISterms of repurchase and the denial torepurchase under the GSIS terms.

3 vda de urbano v gsis sales.pdf

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