GSIS vs GROUP MANAGEMENT CORP. et. al.

(JUNE 8, 2011)
GSIS vs GROUP MANAGEMENT CORP. et. al. (JUNE 8, 2011)

FACTS: This case revolves around the petitions of the Lapu-Lapu Development & Housing Corporation (LLDHC), Group Management
Corporation (GMC) and the Government Service Insurance System (GSIS). The three entities consistently filed cases for the same subject
lots from April 30, 1980, until this case. The cases were filed before both the RTC of Lapu-Lapu City, where the subject lots are situated
in, and the RTC of Manila.

LLDHC entered into a Project and Loan Agreement with GSIS on February 4, 1974, involving seventy-eight lots situated in Barrio,
Marigondon, Lapu-Lapu City. GSIS agreed to a 25 million peso loan with LLDHC, the owner of the lots. LLDHC failed to fulfill all of its
obligations regarding the lots, which included the real estate mortgage in favor of GSIS, and so, GSIS closed the mortgage. Being the only
bidder in the public auction sale, GSIS won over the subject lots, and in time secured its ownership over the lots with the transfer
certificate of titles issued to its name. GMC offered to purchase on installment the subject lots with a collective area specified as 423,177
square meters from GSIS, with the amount of 1,100,000 pesos. GSIS accepted the offer through a Deed of Conditional Sale on February
26, 1980. GMC then learned that the subject lots was only 298,504 square meters and requested GSIS to reduce the price according to the
actual proportion of the land. This proposal was approved with an Amendment to the Deed of Conditional Sale, which reflected the
agreement of GSIS and GMC. LLDHC filed a complaint against GSIS before the RTC of Manila on April 23, 1980 for Foreclosure with
Writ of Mandatory Injunction, known as Civil Case No. R-82-3429. GMC filed a complaint also against GSIS on November 3, 1989,
known as Civil Case No. 2203-L, for Specific Performance with Damages before the RTC of Lapu-Lapu City. GSIS, in its defense,
submitted a COA Memorandum dated April 3, 1989 disallowing in audit the sale of the subject to the court, stating that there were
“apparent inherent irregularities,” and that GMC bought the property at a value much lower than GSIS’ purchasing price.

On February 24, 1992, with regard to Civil Case No. 2203-L, the RTC of Lapu-Lapu City decided in favor of GMC, and that GSIS was to
execute order of the court pertaining to damages, and actions needed to finalize the deed of absolute sale with GMC. On May 10, 1994, the
RTC of Manila also rendered its judgment that, aside from court orders, all claims and counterclaims by the parties against each other are
dismissed in Civil Case No. R-82-3429. LLDHC now used the Manila RTC decision as a means to file a Petition for Annulment of
Judgment of the Lapu-Lapu RTC Decision in Civil Case No. 2203-L, named CA-GR SP No. 34696, which was dismissed by the Court of
Appeals. After this was a series of filing petitions to appeal the judgment. Throughout the years, eventually, the three parties approached
the Supreme Court, where, in G.R. No. 167000, GSIS seeks to reverse and set aside the decision made on November 25, 2004 and January
20, 2005, and to annul and set aside the March 1, 2004 and May 7 2004 orders from the Lapu-Lapu RTC in Civil Case No. 2203-L. And in
G.R. No. 169971, GMC seeks to reverse and set aside the Decision made in September 23, 2005 and to annul and set aside the March 11,
2004 Lapu-Lapu RTC decision.

Issues: Whether or not the decisions of the Manila RTC in Civil Case No. R-82-3429 shall be executory, despite the decision of Lapu-Lapu
RTC in Civil Case No. 2203-L. Whether or not the decision in CA GR SP No. 84382 and GSIS Petition in 167000 are barred by Res
Judicata. Whether or not due process was given to the parties/entities involved in the case. Whether or not GSIS can be immune to acting
out the orders of the court.

Ruling: The petition in G.R. No. 167000 was denied by the court, and the petition in G.R. No. 169971 is granted.

Ratio Decidendi: The decision of the Lapu-Lapu RTC in Civil Case No. 2203-L does not in any way affect the orders from the Manila
RTC in Civil Case No. R-82-3429, since the former has been finalized on January 28, 1995, while the latter became final on May 30,
1997. Procedural due process was extended to all parties, that there was no immediate dismissal of their cases before they were heard by
the respective courts, even if they have already had a rendered decision. However, the Supreme Court also recognized the doctrine of
“Finality of Judgment,” where the decisions, once final and executed cannot be appealed, unless of circumstances that happen after the
finalization, void judgments, correction of clerical errors and nunc pro tunc entries. The decision in CA GR SP No. 84382 and GSIS
Petition in 167000 are barred by Res Judicata, which is one of the reasons why G.R. No. 167000 was denied. GSIS acted jure gestonis,
entering into a contract, and being solely liable for their irresponsibility. They are not immune from acting out the orders of the court.