G.R. No.

105567

SECOND DIVISION
[ G.R. No. 105567, November 25, 1993 ]
GOVERNMENT SERVICE INSURANCE SYSTEM (GSIS), PETITIONER, VS.
HONORABLE COURT OF APPEALS AND SPOUSES RAUL AND ESPERANZA
LEUTERIO, RESPONDENTS.
DECISION
PUNO, J.:
This is a petition for review on certiorari to set aside the Decision of the 10th Division of the Court
of Appeals ordering the petitioner GSIS to execute a Final Deed of Sale in favor of the spouses
Raul and Esperanza Leuterio involving a house and lot in the GSIS Village, Project 8-C, Quezon
City.[1]
The facts show that on December 18, 1963, the petitioner GSIS conducted a lottery draw for the
allocation of lots and housing units in Project 8-C of GSIS Village. Private respondent Esperanza
Leuterio won and was issued a Certificate of Acknowledgment to purchase the subject house and
lot[2] on December 27, 1963. In 1965, the parties entered into a Deed of Conditional Sale
evidencing the conveyance of the subject property and all improvements thereon to the Leuterio
spouses for the purchase price of P19,740.00, payable over a fifteen-year period, in 180 equal
monthly installments of P168.53 each. Paragraph 11 of the Deed of Conditional Sale provides:
"Upon the full payment by the Vendee of the purchase price of the lot and
dwelling/improvement above referred to together with all the interest due thereon,
taxes and other charges and upon his faithful compliance with all the conditions of the
Contract, the Vendor agrees to execute in favor of the Vendee, or his/their heirs and
successors-in-interest a final Deed of Sale of the aforementioned land and
dwelling/improvements. x x x"[3]
Three years elapsed before the Deed was notarized, and a copy of the same was given to the
private respondents.
After the land development and housing construction of Project 8-C were completed in 1966,
petitioner's Board of Trustees increased the purchase price indicated in the Deeds of Conditional
Sale covering houses and lots therein. The new price was based on the alleged final cost of
construction of the GSIS Village. It is noted that, on the face of the Leuterio's Conditional Deed of
Sale is the marginal notation "subject to adjustment pending approval of the Board of Trustees."
The Leuterio spouses alleged that this notation was not in the Deed when they signed the same in
1965. Resolving this factual issue, the trial court found that the appended words were inserted into
the document without the knowledge or consent of the Leuterio spouses. This finding of fact went
undisturbed on appeal to the respondent court.[4]

Sometime in the early 1970's, a group (not including the Leuterios) of conditional vendees of
houses and lots in Project 8-C of GSIS Village brought suit[5] against herein petitioner, questioning
the increase in purchase price. They likewise wrote a "A Plea For Justice" to then President
Ferdinand E. Marcos, requesting for a directive to petitioner's management to "accept payments
of amortization installments on the original amounts stated in the Deed(s) of Conditional Sale."
As a result, the Office of the President created a three-man Ad Hoc committee, composed of
representatives of the Office of the President, the petitioner System, and the GSIS Village
Association. The committee found that the final cost of the Village justified a higher price range for
the houses and lots in the project.
Based on the ad hoc committee's findings, the petitioner System, with the approval of its Board of
Trustees, increased the purchase prices of houses and lots in the GSIS Village.
On May 30, 1973, however, then Presidential Executive Assistant Jacobo C. Clave, through a
memorandum, advised petitioner that then President Marcos has approved the "Plea" and wanted
its "immediate implementation." The attempt by petitioner to have the presidential endorsement
reconsidered was denied on December 18, 1980.
Meanwhile, after years of diligently paying the monthly amortizations[6] and real estate taxes on
the subject property, the private respondents spouses informed[7] petitioner that the payments[8]
for the property had been completed, and hence, the execution of an absolute deed of sale in
their favor was in order. No action on the matter was taken by petitioner.
The instant case was initiated on May 20, 1984 in the RTC of Manila, Br. 11, with the filing of a
Complaint for Specific Performance With Damages to compel petitioner to execute in private
respondents' favor, the final Deed of Sale over the subject property.[9] The trial court found for the
Leuterios.
On January 24, 1992, the Court of Appeals[10] , in its impugned Decision, upheld the trial court
solely on the basis of estoppel. It held that petitioner cannot increase the price of the subject
house and lot after it failed, through the years, to protest against private respondents' P200.00amortization or to require the payment by them of bigger monthly installments.[11]
Petitioner now urges the setting aside of the impugned Decision of the Court of Appeals, alleging
that it erred in:
I.
x x x HOLDING THAT THE PETITIONER GSIS IS ESTOPPED FROM
ENFORCING THE ADJUSTMENT OF THE SELLING PRICE
II. x x x NOT HOLDING THAT THE SPOUSES LEUTERIO MUST BE BOUND BY
THE RECOMMENDATION MADE BY THE AD HOC COMMITTEE
III. x x x FAILING TO CONSIDER THE JUSTIFICATION FOR THE ADJUSTMENT IN
THE SELLING PRICE OF THE LOTS AND HOUSING UNITS
IV. x x x AFFIRMING THE DECISION OF THE TRIAL COURT WHICH ORDERED
THE PETITIONER GSIS TO EXECUTE THE FINAL DEED OF SALE"[12]
Upon the other hand, private respondents, in their Comment,[13] contend that the Petition only

raises factual issues, which cannot be settled by this Court in the instant proceedings. They further
contend that no reversible errors were committed by the Court of Appeals in its impugned
Decision.
We find no merit in the petition, but for reasons different from those espoused by the respondent
Court of Appeals.
The decisive issue really involves a question of fact -- whether or not the spouses Leuterio agreed
to the notation "subject to adjustment pending approval of the Board of Trustees" appearing on
the margin of the parties' Conditional Deed of Sale. If there was no agreement, the Leuterio
spouses are only obligated to pay the purchase price of P19,740.00 as stipulated in the main body
of the Conditional Deed of Sale.
Trite to state, this Court is not a trier of facts. I n a multitude of cases, we have laid down the
unbending rule that findings of fact of lower courts are binding on us unless they are marred by
manifest errors. T he pleadings before us do not demonstrate that the trial court grossly erred
when it found that the purchase price agreed upon by the parties was P19,740.00 and this
agreement was not made subject to any posterior event or condition. This finding of fact was
based on the explicit testimony of private respondent Raul Leuterio that when he and his wife
signed the Deed of Conditional Sale in 1965, the notation "subject to adjustment pending approval
of the Board of Trustees" was not in the Deed.[14] Likewise, the Answer of petitioner to the
Complaint of the private respondents admitted the non-existence of this notation at the time the
Deed of Conditional Sale was signed, albeit, it called the omission an honest mistake.[15] We quote
paragraph 5 of said Answer, viz:
"5. The omission of the marginal notation reading '(x) subject to adjustment pending
approval of the Board of Trustees' (Annexes B to B-1-b of the Complaint) on the
Deed of Conditional Sale signed by the plaintiffs, as alleged in paragraph VII of the
Complaint, must have been an honest mistake on the part of the clerk who typed the
document."
This was also confirmed by the petitioner in the instant Petition for Review on Certiorari where it is
alleged that "x x x the respondents-spouses Leuterio were not required to sign a new contract as
provided in Resolution No. 996 but instead, the words 'subject to adjustment pending approval of
the Board of Trustees' were inserted in the Deed of Conditional Sale executed in 1965." Petitioner
is bound by these judicial admissions.
Quite clearly, therefore, the purchase price mutually agreed upon by the parties was P19,740.00.
The spouses Leuterio did not give their consent for petitioner to make a unilateral upward
adjustment of this purchase price depending on the final cost of construction of the subject house
and lot. It is illegal for petitioner to claim this prerogative, for Article 1473 of the Civil Code provides
that "the fixing of the price can never be left to the discretion of one of the contracting parties x x
x."
We also reject petitioner's contention that the spouses Leuterio are bound by the recommendation
of the ad hoc committee as this was set aside by then President Ferdinand E. Marcos.[16] The
rejection was communicated by then Presidential Assistant Jacobo Clave to petitioner in a
Memorandum dated May 30, 1973.[17] Petitioner moved for its reconsideration but the motion was
denied by the former President thru Presidential Assistant Joaquin Venus, in a letter dated

December 18, 1990.[18]

Next, petitioner would impress on us the need to adjust the purchase price of the spouses' house
and lot in view of the change in the final cost of construction. If petitioner failed to factor this
increase in the cost of construction in the purchase price of the subject house and lot, it has
nobody to blame but itself and it alone should suffer the loss. To be sure, given the expertise of its
technical people, it has no reason to be shortsighted. In any event, our law on contract does not
excuse a party from specifically performing his obligation on the ground that he made a bad
business judgment.
IN VIEW WHEREOF, the petition for review on certiorari is DISMISSED. Cost against petitioner.
SO ORDERED.
Narvasa, C.J., (Chairman), Padilla, Regalado, and Nocon, JJ., concur.

CA-G.R. CV No. 27430 with Justice F.A. Santiago as ponente and Justices Pedro Ramirez and
Angelina Gutierrez concurring. The Decision affirmed the ruling of the RTC, NCJR, Br. XI, Manila
in Civil Case No. 84-24675.
[1]

The house and lot is located at No. 55 Administration St., GSIS Village. It is described in the
Certificate of Acknowledgment and in the Deed of Conditional Sale as Lot 22, Block 14, Subd.
Section B in Project 8-C of the GSIS Village, with Housing Unit type 3-B-7.
[2]

[3]

Rollo, p. 21.

It is noted that on pages 10-11 of the Petition (Rollo, pp. 18-19), it is admitted by the petitioner
that the Leuterios "were not required to sign a new contract as provided in Resolution No. 996 but
instead, the words 'Subject to adjustment pending approval of the Board of Trustees' were
inserted in the Deed of Conditional Sale executed in 1965."
[4]

[5]

Civil Cases No. 83368 and 87603.

Starting September, 1967, the Leuterios paid petitioner accelerated monthly amortizations of
P200 each.
[6]

[7]

Through a letter of Esperanza Leuterio to the GSIS General Manager, dated June 21, 1977.

[8]

Including interest.

[9]

CV No. 84-24675.

The respondent court also denied petitioner's Motion for Reconsideration in a resolution
promulgated May 22, 1992.
[10]

[11]

Rollo, pp. 19-30.

[12]

Rollo, p. 15.

[13]

Rollo, pp. 25-28.

[14]

TSN October 2, 1985, pp. 9-10.

[15]

See pp. 10-11, Petition for Review, underscoring ours.

[16]

Exhibits "E-1", "E-1-A".

[17]

Exhibit "F".

[18]

Exhibit "H".

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