Case Summary (G.R. No. 245617)
Contract to Sell and Subsequent Events
On October 8, 1959, Fernando Santiago entered into a Contract to Sell with the GSIS regarding Lot 15, Block 2 of Leonila Hills Subdivision in Baguio City for a total consideration of PHP 33,000. According to the terms specified, Santiago was required to pay a down payment and subsequently make monthly payments, with stipulations regarding cancellation for non-payment and terms for possession. Santiago took possession of the property and made improvements, but later failed to meet his payment obligations, leading to GSIS sending multiple demand letters for arrears.
GSIS's Actions and Santiago's Non-Payment
Despite initially being aware of Santiago's residence changes, GSIS communicated with him at his previous address in Manila. Santiago mistakenly believed he had paid off the property by 1973 and sought finalization of the purchase. Meanwhile, spouses Rustico and Fe Santos later sought to purchase the property and were inadvertently placed in a position that resulted in their occupancy due to actions taken by Dr. Jose Dela Rosa, who had negotiated with Santiago's representative.
Legal Proceedings in Trial Court
In 1988, Santiago filed a complaint against GSIS and the Santos spouses for specific performance, damages, and ejectment due to the alleged unauthorized occupation of his property by the Santos couple. The Regional Trial Court (RTC) ruled in favor of Santiago, declaring the 1975 Deed of Absolute Sale valid, ordering GSIS to refund certain payments, and mandating the Santos spouses to vacate the property. The RTC awarded damages, including moral and exemplary damages, which were later contested.
Appeal to the Court of Appeals
Santiago and the Santos spouses both appealed the RTC's ruling. The Court of Appeals affirmed the lower court's decision with modifications, notably removing the awards for damages. It reasoned that GSIS acted in good faith towards both parties, supported by the fact that the Santos application for purchase was submitted after Santiago's contract had been cancelled for non-payment. Furthermore, it was determined that the Santos couple bore no preferential legal right to the property as their application for purchase was not recognized as valid due to Santiago’s prior contractual obligations.
Issues Raised on Review
Santiago's subsequent petition to the Supreme Court raised three primary issues focused on GSIS's good faith, the legal characterization of the Santos's possession as that of lessees, and the reversal of damage awards. However, these issues were found to be based on factual determinations rather than legal questions, which the Supreme Court does not reevaluate.
The Supreme Court's Ruling
The Supreme Court ruled to deny Santiago's petition, agreeing with the findings of the CA that GSIS acted in good faith and that the Santos spouses
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Case Information
- Citation: 542 Phil. 68
- Date: January 27, 2007
- Division: Second Division
- G.R. No.: 127440
Parties Involved
- Petitioner: Fernando Santiago
- Respondents: The Honorable Court of Appeals, Government Service Insurance System (GSIS), Spouses Rustico and Fe Santos
Procedural History
- Challenged the June 25, 1996 Decision of the Court of Appeals (CA) in CA-G.R. CV No. 32374, which modified the July 29, 1988 Decision of the Manila Regional Trial Court (RTC), Branch XXVI in Civil Case No. R-81-616.
- The RTC decision involved claims for specific performance and damages against GSIS and for ejectment and damages against the spouses Santos.
- Also assailed was the December 10, 1996 CA Resolution rejecting the petitioner’s Motion for Reconsideration.
Factual Background
- Contract to Sell: Entered on October 8, 1959, between Fernando Santiago and GSIS for Lot 15, Block 2, Leonila Hills Subdivision, Baguio City, for PhP 33,000.
- Payment Terms: Initial down payment of PhP 4,950 and monthly installments thereafter.
- Possession: Possession to be delivered after contract signing and payment of the down payment.
- Cancellation Clause: If the purchaser fails to pay installments for 90 days, the contract is automatically cancelled.
- Petitioner occupied the property, made improvements, and authorized his cousin, Mrs. Lydia B. Salonga, to manage the property.
- In 1973, the property was leased to Dr. Jose De la Rosa, who eventually informed GSIS about the lease and sought to purchase the property.
- Santiago failed to pay 71 monthly installments as of September 30, 1973 and received demand letters from GSI