GOVERNMENT SERVICE INSURANCE SYSTEM (GSIS), PETITIONER, VS. HONORABLE COURT OF APPEALS AND SPOUSES RAUL AND ESPERANZA LEUTERIO, RESPONDENTS.

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’ P200.00-amortization 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. In 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. The 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.

^[1]
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.

^[2]
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.

^[3]
Rollo, p. 21.

^[4]
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.”

^[5]
Civil Cases No. 83368 and 87603.

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

^[7]
Through a letter of Esperanza Leuterio to the GSIS General Manager, dated June
21, 1977.

^[8]
Including interest.

^[9]
CV No. 84-24675.

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

^[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”.