Goldloop Properties v. Government Service Insurance System

Summary

This Supreme Court case involved a protracted contractual dispute between private developer Goldloop Properties and government corporation GSIS over a real estate development agreement. GSIS rescinded their 1995 MOA after Goldloop failed to pay the guaranteed P140.89 million in scheduled installments and construction stalled due to building permit issues stemming from GSIS's disputed P54 million tax liability with Pasig City. The RTC favored Goldloop, finding the rescission invalid, but the CA reversed, citing abandonment and unjust enrichment. The Supreme Court upheld the rescission on different grounds, finding both parties breached their obligations - Goldloop failed to pay as scheduled and seek proper extensions, while GSIS failed to deliver property free from encumbrances. Applying Civil Code Article 1192, the Court ruled that since the first infractor cannot be determined, each party bears its own damages with mutual restitution required. The decision demonstrates the binding nature of contractual stipulations and the consequences of reciprocal breaches in commercial development agreements.