- Petitioner
- Government Service Insurance System
- Respondent
- Eduardo M. Santiago
- Citation
- G.R. No. 155206
- Court
- Supreme Court
- Division
- Second Division
- Ponente
- Callejo, Sr., J.
- Decided
- October 28, 2003
Summary
GSIS foreclosed mortgaged properties of deceased spouses Zulueta in 1974, with 91 lots expressly excluded from public auction. Despite exclusion, GSIS consolidated ownership over all lots in 1975 through fraudulent affidavit. When Eduardo Santiago, representing Zulueta heirs, discovered the fraud in 1989 and filed reconveyance action in 1990, GSIS claimed prescription and denied bad faith. The Supreme Court affirmed lower courts' findings that GSIS acted in bad faith as government financial institution by concealing excluded lots and attempting to sell them. Court applied implied trust doctrine under Article 1456 and ruled prescriptive period began from actual discovery of fraud in 1989, not registration in 1975. GSIS ordered to reconvey 78 lots to respondent, establishing that holders in bad faith cannot claim protection under Torrens system.