Case Summary (G.R. No. 225920)
Petitioner's Background and GSIS Housing Loan
In 1979, Dominador, a Philippine Air Force combat pilot, entered into a Deed of Conditional Sale with ARB Construction Co., Inc., financed by a GSIS‐secured housing loan of ₱76,830. Monthly amortizations were to be deducted from salary. Sales Redemption Insurance (SRI) coverage depended on passing medical examinations and payment of premiums.
Tragic Death and Notices of Foreclosure
On September 2, 1980, Dominador died in an accidental helicopter crash in Lanao del Sur. GSIS, unaware of his death, sent successive letters demanding loan payments. In December 1988, it issued a Notice of Foreclosure.
Petitioner’s Claims on SRI Coverage
Between 1989 and 1990, petitioner asserted entitlement to SRI benefits—premiums had allegedly been deducted—thus waiving unpaid amortizations. GSIS replied in 2003 that Dominador never underwent required examinations nor paid SRI premiums. In September 2005, GSIS issued a Notice of Cancellation of the DCS and demanded vacancy of the property.
GSIS Board Proceedings
Petitioner filed GSIS Case No. 002-06 in February 2006, seeking consolidation of title and, alternatively, settlement on original purchase price if SRI claim were denied. In March 2012, the GSIS Board dismissed the petition for lack of merit, finding no SRI coverage. A 2014 Resolution denied reconsideration but noted PPG No. 232-13 (Housing Loan Remedial and Restructuring Program) as an available remedy for heirs of deceased borrowers.
Court of Appeals Ruling
In CA-G.R. SP No. 136562, the Court of Appeals (2016) affirmed the GSIS Board: Dominador never complied with SRI prerequisites; no premium receipts or insurance policy were presented. It recognized petitioner’s standing but held that equity cannot override clear statutory and insurance‐law mandates. Reconsideration was denied.
Issues on Review
- Whether Dominador’s DCS was covered by a valid SRI, despite failure to undergo GSIS examinations.
- Whether SRI became effective automatically upon loan approval under GSIS Resolution No. 206 (1978).
- Whether petitioner may nonetheless avail of GSIS’s loan restructuring program.
Supreme Court Ruling – SRI Non-Coverage
– GSIS Resolution No. 206-78 made SRI compulsory only for members who pass GSIS medical examinations; premiums must be paid before coverage (Insurance Code, Sec. 77).
– Dominador did not submit to GSIS exams nor pay premiums. PAF medical examinations serve a different purpose and cannot substitute.
Conclusion: No SRI coverage attached to the DCS.
Supreme Court Ruling – Availability of Restructuring Remedy
– Under Civil Code Art. 781, Dominador’s patrimonial rights transmitted to petitioner.
– GSIS Resolution No. 48 approved PPG No. 232-13 (2013–2014) offering delinquents and heirs condonation, interest discounts, and extended terms to avoid cancellation or foreclosure.
– Despite the formal lapse of PPG No. 232-13’s implementation period, the GSIS Board itself referenced it in 2014. In equity and pursuant to GSIS’s mandate (PD No. 1146), petitioner must be allowed to apply for restructurin
Case Syllabus (G.R. No. 225920)
Procedural Posture
- Petition for Review on Certiorari under Rule 45 of the Rules of Court filed by Felimon C. Torres assailing:
• The March 16, 2016 Decision of the Court of Appeals Eleventh Division in CA-G.R. SP No. 136562
• The July 20, 2016 Resolution of the same court denying reconsideration - CA had affirmed the March 8, 2012 Decision of the GSIS Board of Trustees (GSIS Board) in GSIS Case No. 002-06 dismissing petitioner’s claim
- Petition raises issues of Sales Redemption Insurance (SRI) coverage and availability of a loan restructuring remedy under GSIS rules
Factual Antecedents
- Second Lieutenant Dominador dela Cena Torres, Jr., active PAF combat pilot, entered into a Deed of Conditional Sale (DCS) in 1979 for a low-cost housing unit in Muntinlupa City, financed by a GSIS loan of PHP 76,830.00, payable by salary deduction
- On September 2, 1980, Dominador died in an accidental helicopter crash in Lanao del Sur; he died intestate, single, childless, survived by his parents
- GSIS, uninformed of his death, sent periodic notices for unpaid amortizations, then a Notice of Foreclosure/Cancellation for delinquency
- Petitioner, Dominador’s sibling and sole heir by affidavit of adjudication (2014), claimed the SRI premiums had been paid and coverage waived amortizations
- GSIS maintained Dominador never underwent required physical/medical examinations nor paid SRI premiums; issued final Notice of Cancellation on September 15, 2005; demanded vacatur
GSIS Board Decision (March 8, 2012)
- Dismissed petitioner’s petition for consolidation of title in his name for lack of merit
- Key findings:
• Dominador failed to submit to required physical and medical examinations, a precondition for SRI coverage
• No record of premium payment for SRI under Dominador’s account; no portion of amortizations applied to SRI premium - Held: Without exam an