Case Summary (G.R. No. L-543)
Applicable Law
The decision is based on the provisions of the 1987 Philippine Constitution and relevant articles of the Civil Code of the Philippines, particularly Articles 1170, 2180, and 2224 concerning obligations and liabilities arising from contracts and quasi-delicts.
The Case Overview
The case involves a petition for review on certiorari following the decisions of the Regional Trial Court in Angeles City and the Court of Appeals which ordered GSIS to pay damages to the spouses Deang due to the loss of their title to mortgaged property.
Factual Background
In December 1969, the spouses Deang secured a housing loan from GSIS amounting to PHP 8,500, maturing on December 23, 1979, and secured by a mortgage on their property. They deposited the owner’s duplicate copy of this title with GSIS. By January 1979, the spouses had fully paid off their loan and requested the return of the title to secure a subsequent loan from a private lender, which GSIS was unable to provide due to the title's unavailability.
The Proceedings
In 1979, after acknowledging the loss of the title, GSIS initiated reconstitution proceedings. Although it was filed timely, the delays led the spouses Deang to file a complaint against GSIS for damages on July 6, 1979, citing that they were unable to secure a subsequent loan for business and renovation purposes as a result.
Trial Court Decision
On July 31, 1995, the Regional Trial Court ruled in favor of the spouses Deang, concluding that GSIS was negligent in losing the title and thus liable for damages of PHP 20,000 in temperate damages, PHP 15,000 in attorney’s fees, legal interest, and costs of suit.
Court of Appeals Ruling
GSIS appealed to the Court of Appeals, which upheld the trial court's decision. It ruled that as a government-owned and controlled corporation (GOCC), GSIS could be held liable for damages caused by its employees when acting within the scope of their duties, thus affirming the award of damages and attorney's fees.
The Issue at Stake
The principal issue for resolution was whether GSIS, despite its status as a GOCC, was liable for the negligent conduct of its employee who lost the owner’s duplicate copy of the title.
Court's Ruling
The Supreme Court affirmed the lower courts' ruling and held that GSIS was indeed liable for damages. It stated that the provisions of Article 2180 of the Civil Code did not exempt GSIS from liability in this instance as it was operating separate from the state, and negligence in its duties had led to the financial detriment suffered by the spouses Deang. It determined that there was a pre-existing contractual relationship, and GSIS had a duty to return the title upon settlement of the loan.
Determination of Damages
The Court clarified that while moral damages cannot be awarded if there is no proof of bad faith or malice, the spouses d
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Overview of the Case
- The petitioner in this case is the Government Service Insurance System (GSIS), following a loss in both the trial court and the Court of Appeals.
- The primary issue in the case revolves around GSIS's liability to pay damages to the respondent spouses, Gonzalo and Matilde Labung-Deang, for the loss of their title to a mortgaged property.
- The case is not about the suability of GSIS under the doctrine of state immunity, but rather focused on whether GSIS is liable under the circumstances presented.
Case Background
- The spouses Deang obtained a housing loan from GSIS amounting to P8,500.00 in December 1969, secured by a real estate mortgage on their property.
- The loan was scheduled to mature on December 23, 1979, and the owner’s duplicate copy of the title was deposited with GSIS as required by the mortgage agreement.
- On January 19, 1979, the spouses settled their loan but faced difficulty when GSIS was unable to locate the owner's duplicate title, which they needed to secure additional financing from a private lender.
Sequence of Events
- GSIS commenced reconstitution proceedings for the lost title in 1979 and issued a certificate of release of the mortgage on June 22, 1979.
- The reconstituted copy of the title was finally released to the spouses on June 26, 1979.
- The spouses filed suit against GSIS on July 6, 1979, seeking damages due to the delay in the release of the title, which prevented them from securing a loan for renovation and business investments.
Trial Court Ruling
- The trial court ruled in favor of the spouses, establishin