Case Summary (G.R. No. L-47544)
Factual Background
The loans by GSIS to Alta Farms, amounting to P3,255,000.00 and P5,062,000.00, were secured by mortgages. Due to defaults in payments, Alta Farms transferred its obligations through a Deed of Sale With Assumption of Mortgage to Asian Engineering Corporation without GSIS's consent, violating the mortgage agreements. Subsequently, Asian Engineering contracted Laigo Realty Corporation to develop the property into a subdivision.
Construction Agreements
Petitioners Lumanlan and Velasco entered into contracts with Laigo Realty to construct houses for buyers in the subdivision. Despite their construction work, they faced non-payment issues as Laigo's checks to them were dishonored. This led to initial claims against Laigo, but after the foreclosure by GSIS on Alta Farms' properties, the petitioners sought reimbursement directly from GSIS for the labor and materials used in constructing the houses.
Legal Proceedings
Petitioners filed a case against GSIS for P607,328.27, asserting they had provided labor and materials for the construction of houses that the GSIS now owned following foreclosure. GSIS denied liability, arguing there was no privity of contract between them and the petitioners, maintaining that any claims should be against Laigo Realty Corporation.
Court of Original Jurisdiction
The Court of First Instance ruled in favor of the petitioners, concluding that they should be compensated for their expenses, ultimately valuing their claims at P607,328.27. The trial court noted the rising costs of construction materials and the fact that the GSIS stood to unjustly benefit from the improvements made by the petitioners.
Court of Appeals Ruling
The Court of Appeals later reversed this original decision, ruling that the motion for a new trial by GSIS was timely and valid, citing that the essential issue of privity of contract rendered the original decision flawed. However, it was recognized that procedural matters should not alone dictate the merits of the case.
Supreme Court's Assessment
The Supreme Court examined the case with respect to GSIS's admitted ownership of the properties in question. It ruled that despite the lack of a direct contractual relationship, GSIS was liable to the petitioners under equitable principles, as they had profited from the petitioners' contributions. The Co
...continue readingCase Syllabus (G.R. No. L-47544)
Case Background
- This case involves a petition for certiorari filed under G.R. No. L-47544 by the petitioners, Pepito Velasco, Amable Lumanlan, Ramon Galang, Felipe Lumbang, and Apolonio De Los Santos, against the Court of Appeals and the Government Service Insurance System (GSIS).
- The petition seeks to review a decision made by the Court of Appeals on December 6, 1977, which declared the order of the Court of First Instance of Pampanga in Civil Case No. 4260 null and void.
- The Court of Appeals found that the GSIS’s motion for a new trial was not pro forma, thus suspending the period to appeal the trial court's decision, allowing the GSIS's appeal to proceed.
Procedural History
- The trial court had initially declared its judgment in Civil Case No. 4260 final and executory, prompting the GSIS to file an appeal.
- The Court of Appeals, by a majority vote, overturned the trial court's order, leading the petitioners to seek a higher review.
- The Supreme Court opted to broaden its inquiry beyond the technical question of whether the GSIS's motion for a new trial should be deemed pro forma, indicating a desire to serve substantial justice.
Factual Antecedents
- Alta Farms secured loans from the GSIS totaling P8,317,000.00 for a piggery project, secured by mortgages.
- Alta Farms defaulted on payments and executed a Deed of Sale With Assumption of Mortgage with Asian Engineering Corporation without GSIS's consent, violating the mortgage agreement.
- Asian Engineering Corporation, without proper approval, contracted with Laigo Realty Corporation to develop the property into a subdivision.