G.R. No. 252073 - Spouses Rafael vs. Government Service Insurance System

On May 9, 1990, Lourdes V. Rafael applied for a house-and-lot loan with GSIS; on November 20, 1990, she and her husband Raul entered into a Deed of Conditional Sale with ARB Construction Co., Inc. for a 140-sqm lot at P310,800.00, payable over 180 monthly installments of P3,094.35, with graduated interest rates (6% on first P30,000; 9% on next P40,000; 12% on balance) and 0.5% monthly default interest.
In May 1991 the property was turned over; DBM began deducting P3,094.35 from Lourdes’s salary; on March 11, 1992, ARB assigned its rights to GSIS via Deed of Absolute Sale with Assignment.

From May 1991 to September 2005, 172 monthly installments totaling P532,248.20 were deducted; petitioners contended these payments fully complied with the original terms.
GSIS invoked Board Resolution No. 365 to apply a graduated payment scheme, alleging higher amortizations in years 6–10 (P3,548.40) and 11–15 (P5,365.15), and recomputed petitioners’ outstanding balance as P384,354.72, applying earlier deductions solely to interest and penalties for alleged arrears starting January 1991.
GSIS sent a demand letter on January 25, 2005; a cancellation notice dated February 21, 2005; and notices to vacate in April and July 2005; petitioners’ request for recomputation went unanswered.

Petitioners filed in the RTC (Branch 89, Bacoor City) a Complaint for specific performance, injunction, and damages; the RTC’s January 12, 2015 Decision declared GSIS’s cancellation null and void, directed application of 167 installments to principal (Feb 1991–Feb 2005), and ordered petitioners to pay the remaining 13 installments plus P77,892.52 interest.
GSIS moved for reconsideration, asserting lack of jurisdiction (exclusive with GSIS-BOT under RA 8291) and non-exhaustion of administrative remedies; the RTC denied on December 28, 2015.
On July 23, 2019, the Court of Appeals reversed, holding the GSIS-BOT had original and exclusive jurisdiction, and dismissed the complaint without prejudice; motion for reconsideration denied on February 13, 2020.
Petitioners filed a Rule 45 petition for review with the Supreme Court, challenging jurisdiction, the validity of cancellation, and the computation of their obligations.

Whether the RTC had jurisdiction over a complaint for specific performance, injunction, and damages against GSIS under RA 8291’s Section 30, which grants original and exclusive jurisdiction to the GSIS-BOT.

Whether GSIS’s cancellation of the Deed of Conditional Sale was valid.
Whether GSIS is legally obligated to apply petitioners’ prior payments to their principal loan obligation under the original terms and to limit remaining payment to the balance of 13 installments without penalties.