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Cvpro Digest2

The Court of Appeals committed reversible error in ruling that 1) the petitioner (Government Service Insurance System) acted in bad faith when including excluded lots in its certificate of sale, as there was insufficient evidence, and 2) the case was not barred by prescription. While the petitioner claimed bad faith could not be proven and the case had prescribed after 10 years, the Court of Appeals found the petitioner's acts in concealing the excluded lots from the original owners and failing to inform them of transactions demonstrated an effort to defraud. The Supreme Court upheld this finding, noting the complaint was filed within a year of the plaintiff discovering the fraud.

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0% found this document useful (0 votes)
40 views2 pages

Cvpro Digest2

The Court of Appeals committed reversible error in ruling that 1) the petitioner (Government Service Insurance System) acted in bad faith when including excluded lots in its certificate of sale, as there was insufficient evidence, and 2) the case was not barred by prescription. While the petitioner claimed bad faith could not be proven and the case had prescribed after 10 years, the Court of Appeals found the petitioner's acts in concealing the excluded lots from the original owners and failing to inform them of transactions demonstrated an effort to defraud. The Supreme Court upheld this finding, noting the complaint was filed within a year of the plaintiff discovering the fraud.

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rizavillalobos10
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© Attribution Non-Commercial (BY-NC)
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G.R. No.

155206 October 28, 2003


GOVERNMENT SERVICE INSURANCE SYSTEM, petitioner,
vs.
EDUARDO M. SANTIAGO, substituted by his widow ROSARIO ENRIQUEZ VDA. DE
SANTIAGO, respondent.
FACTS:
n its petition, the petitioner maintains that it did not act in bad faith when it erroneously included in
its certificate of sale, and subsequently consolidated the titles in its name over the seventy-eight lots
("subject lots") that were excluded from the foreclosure sale. There was no proof of bad faith nor
could fraud or malice be attributed to the petitioner when it erroneously caused the issuance of
certificates of title over the subject lots despite the fact that these were expressly excluded from the
foreclosure sale.
The petitioner asserts that the action for reconveyance instituted by the respondent had already
prescribed after the lapse of ten years from November 25, 1975 when the petitioner consolidated its
ownership over the subject lots. According to the petitioner, an action for reconveyance based on
implied or constructive trust prescribes in ten years from the time of its creation or upon the alleged
fraudulent registration of the property. n this case, when the action was instituted on May 7, 1990,
more than fourteen years had already lapsed. Thus, the petitioner contends that the same was
already barred by prescription as well as laches.
The petitioner likewise takes exception to the holding of the trial court and the CA that it (the
petitioner) failed to apprise or return to the Zuluetas, the respondent's predecessors-in-interest, the
seventy-eight lots excluded from the foreclosure sale because the petitioner had no such obligation
under the pertinent loan and mortgage agreement.
D
THE COURT OF APPEALS COMMTTED A REVERSBLE ERROR N RULNG THAT A)
PETTONER WAS GULTY OF BAD FATH WHEN N TRUTH AND N FACT, THERE WAS NO
SUFFCENT GROUND TO SUPPORT SUCH CONCLUSON; AND B) THERE WAS NO
PRESCRPTON N THS CASE.
5

At the outset, it bears emphasis that the jurisdiction of this Court in a petition for review on certiorari
under Rule 45 of the Rules of Court, as amended, is limited to reviewing only errors of law. This
Court is not a trier of facts. Case law has it that the findings of the trial court especially when affirmed
by the CA are binding and conclusive upon this Court. Although there are exceptions to the said rule,
we find no reason to deviate therefrom.
6
By assailing the findings of facts of the trial court as affirmed
by the CA, that it acted in bad faith, the petitioner thereby raised questions of facts in its petition.
The acts of defendant-appellant GSS in concealing from the Zuluetas [the respondent's
predecessors-in-interest] the existence of these lots, in failing to notify or apprise the spouses
Zulueta about the excluded lots from the time it consolidated its titles on their foreclosed properties
in 1975, in failing to inform them when it entered into a contract of sale of the foreclosed properties
to Yorkstown Development Corporation in 1980 as well as when the said sale was revoked by then
President Ferdinand E. Marcos during the same year demonstrated a clear effort on its part to
defraud the spouses Zulueta and appropriate for itself the subject properties
The petitioner's defense of prescription is untenable. As held by the CA, the general rule that the
discovery of fraud is deemed to have taken place upon the registration of real property because it is
"considered a constructive notice to all persons" does not apply in this case. The CA correctly cited
the cases of Adille v. Court of Appeals
14
and Samonte v. Court of Appeals,
15
where this Court
reckoned the prescriptive period for the filing of the action for reconveyance based on implied trust
from the actual discovery of fraud.
Plaintiff-appellee Eduardo M. Santiago categorically testified (TSN of July 11, 1995, pp. 14-15) that
he came to know that there were 91 excluded lots in Antonio Village which were foreclosed by the
GSS and included in its consolidation of ownership in 1975 when, in 1989, he and Antonio Vic
Zulueta discussed it and he was given by Zulueta a special power of attorney to represent him to
recover the subject properties from GSS. The complaint for reconveyance was filed barely a year
from the discovery of the fraud.
17

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