Emilio Gonzales La'O v · G.R. 160719

Petitioner: Emilio Gonzales La'O
Respondent: Republic of the Philippines
Citation: G.R. No. 160719
Court: Supreme Court
Division: Second Division
Ponente: Corona, J.
Decided: January 23, 2006

Summary

The Supreme Court upheld the nullification of a 1982 lease-purchase agreement between GSIS and Emilio Gonzales La'O for government property worth P5-8 million but sold for only P2 million. The Court found the contract violated the Anti-Graft and Corrupt Practices Act by being grossly disadvantageous to the government and giving unwarranted benefits to La'O. Under the original 1978 agreement, the Republic could have become the property owner while earning enough rental income to cover obligations. The second contract transferred these economic benefits to La'O while requiring the government to appropriate additional funds and lose ownership opportunity. The Court applied Civil Code Article 1409(7), declaring contracts expressly prohibited by law null and void ab initio, and ordered forfeiture of all payments made by La'O. This case demonstrates judicial review of government contracts for compliance with anti-graft laws and protection of public patrimony.

Statutes applied

Civil Code, Art. 1409

Related cases

Other Philippine cases on the same provisions and issues.

William Ong Genato v. Benjamin Bayhon G.R. No. 171035
Heirs of Zoilo Espiritu v. Spouses Maximo Landrito G.R. No. 169617
Government Service Insurance System (Gsis) v. The Province of Tarlac G.R. No. 157860
Spouses Antonio v. Court of Appeals G.R. No. 125172
Spouses Jaime v. The Honorable Court of Appeals G.R. No. 84464
The Commoner Lending Corporation v. Rafael Balandra G.R. No. 247646
Leticia Elizondo Eupena v. Luis G. Bobier G.R. No. 211078
Spouses May S. Villaluz v. Land Bank of the Philippines G.R. No. 192602

By the Intellegal Editorial Board · January 23, 2006

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