Raiders of GSIS members’ trust fund

THE TROUBLE WITH HAVING TOO MUCH money is that there will always be people hatching up plots to get some of that money. The latest victims are the 1.3 million members of the Government Service Insurance System. Several labor unions who are members of the GSIS brought the case to my attention. GSIS members, they said, will be robbed of P1 billion (that’s billion!) of their benefits if the raid on the GSIS is not stopped.

The raiders? A group of lawyers using an old woman to fleece GSIS members. The unkindest cut is that some members of the judiciary, including the Supreme Court, may have been co-opted by the raiders, they said.

It concerns some parcels of land in Pasig, now known as Antonio Village Subdivision, already occupied by buyers. Many years after the sale, an old woman claiming to be the widow of the previous owner’s representative surfaced, saying that 78 lots that were not included among those mortgaged to the GSIS have been foreclosed by the state insurance firm. She wanted to get them back.

The court ordered the GSIS to return the 78 lots to the original owner or pay her the current market value of the land, which amounts to a total of P1 billion!

The GSIS replied that it has neither claimed nor sold the 78 lots, that they were instead sold to third parties by the owner, and that these third parties now own and are occupying these lots.

Never mind that, the court said, just pay the P1 billion! What’s going on here? That’s forcing the GSIS to pay for something it did not get. If it did that, GSIS members should sue its officers for not taking better care of their money. For it is not the GSIS that is being robbed, but the millions of elderly and disabled pensioners, widows and orphans, and modestly compensated and underpaid government employees who look to the trust fund for security when they can no longer serve in the public service. That is why members have intervened in the case as it is their money that is being fought over.

Let us go back to the beginning.

In the early 1950s, Speaker Jose Zulueta and his wife Soledad Ramos developed 100,986 sq m of their land in Oranbo, Pasig, Rizal, into a residential subdivision. They subdivided three parcels of land covered by three mother titles into 199 subdivision lots.

To finance the development of his subdivision, Zulueta borrowed a total of P3,117,000 from the GSIS. The loan was secured by a real estate mortgage covered by the three mother titles. Out of the 199 lots covered by TCT 26105, 78 lots were expressly excluded from the mother title’s mortgage.

Zulueta was unable to repay the loans, so the GSIS foreclosed the mortgages. It consolidated its title over the three mother titles of the foreclosed properties, which were cancelled and replaced with new ones in its name.

On May 7, 1990, Antonio Vic Zulueta, a son of Jose and Soledad and represented by Eduardo M. Santiago, filed an action against the GSIS for recovery of ownership of the 78 excluded lots before the Pasig regional trial court (Branch 71). Upon Eduardo’s death in 1996, he was substituted by his widow, Rosario Enriquez Santiago.

Rosario Santiago claims that when the GSIS consolidated the title over the properties covered by the mother titles, it acquired ownership over all the lots, including the 78 lots excluded from the first mortgage. She also claims that when the three titled properties were sold to Yorkstown Development Corp. in 1980, the 78 excluded lots were also sold. When President Ferdinand Marcos disapproved the sale, ownership returned to the GSIS. All the properties, including the 78 lots, were allegedly later sold by the GSIS to various parties.

On the other hand, the GSIS maintains that such claim will lead to gross injustice because all 78 lots are already titled in the names of Zulueta buyers. Copies of the TCTs in the name of Zulueta buyers were submitted to the court.

Records show that before the 1974 foreclosure sale to the GSIS, Zulueta had already sold 46 lots to his subdivision homeowners. In fact, some sales were made in the 1950s before the loans were incurred and the mortgages executed. Thus, as far as these 46 lots were concerned, it was legally impossible for them to be consolidated in the name of the GSIS because they were already segregated from the mother title that the GSIS had foreclosed.

After the foreclosure sale and before the complaint against the GSIS filed by Santiago, 23 other lots were titled in the names of Zulueta buyers, and the lots were reconveyed to them. Only none were sold, but these lots were conveyed and titled in the names of homeowners who entered into deeds of conditional sale with Zulueta.

Clearly, all 78 lots were sold and titled in the names of Zulueta buyers. There would be double indemnification if the claim of Santiago will be sustained. The GSIS and its members are being made to pay for 78 lots that it has neither owned nor possessed.
Nevertheless, the court issued a decision on Dec. 17, 1997 ordering the GSIS to return the 78 lots to Santiago. Since the lots were already owned by third parties, it was therefore impossible, and utterly unjust, for the GSIS to comply with the court decision. Still, the court ordered the GSIS to pay Santiago the current fair market value of the 78 lots.

The GSIS elevated the case to the Court of Appeals which affirmed the lower court’s decision. The GSIS went up to the Supreme Court, thinking it would get justice there.

But surprise, surprise, on Dec. 18, 2009, the First Division affirmed the decision of the Pasig RTC and the Court of Appeals and ordered the GSIS to pay Santiago P399 million as partial execution.

On Jan. 12, 2010, the GSIS asked the Court to reconsider its decision. –Neal Cruz, Philippine Daily Inquirer