“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.”
by Ducky Paredes
Jose C. Zulueta was the First Speaker of the first congress under the Republic of the Philippines. With the liberation of the Philippines, the congress elected in 1941 were finally able to take their seats.
The congressman from the First District of Iloilo was elected speaker and served from June 9, 1945 to December 30, 1945. By 1950, already a Senator, Jose Zulueta did something that may sound familiar these days.
An article in the December 26, 1953 issue of the Philippines Free Press, written by Staff Member Teodoro M. Locsin was entitled “The Senator and the Subdivision” for which Locsin was charged with libel.
Wrote Locsin: “Last week a senator of the Republic, the Hon. Jose C. Zulueta, stood accused of having violated this provision of the Constitution, of having acted in a manner unworthy of a senator, of having disgraced the office.
“The accusation was made by the governor of Rizal, Wenceslao Pascual, who pointed to the following:
“1. During the last session of Congress, Republic Act No. 920 was passed, providing for, among other items, the construction of Pasig feeder road terminals, (Gen. Roxas—Gen. Araneta—Gen. Lucban—Gen. Capinpin—Gen. Segundo—Gen. Delgado—Gen. Malvar—Gen. Lim) at the cost of P85,000 to the people of the Philippines, President Quirino approved it.
“2. All the proposed feeder road terminals for the construction of which the sum of P85,000 was appropriated are on private land in the Antonio Subdivision owned by a Senator, Jose C. Zujueta.
“3. With the approval of the act on June 29, 1953, Senator Zulueta immediately wrote to the municipal council of Pasig, Rizal, advising the body of the availability of P85,000 in public funds for the construction of roads in his subdivision.”
And so on. You know the rest of this familiar tale.
But, it doesn’t end there.
Zulueta and his wife Soledad Ramos developed ten hectares (100,986 sq. m ), 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 (even with the roads already built by the government) still 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.
Four decades later, on May 7, 1990, Antonio Vic Zulueta, the son of Jose and Soledad filed an action against the GSIS for recovery of ownership of the 78 excluded lots before the Pasig regional trial court (Branch 71). After Antonio died, his widow, Rosario Enriquez Santiago, took over the Zulueta claim.
The claim is 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. But, how can this be when the 78 lots were expressly excluded from what was mortgaged to the GSIS? She claims that all of the lots, including the 78 were sold by the GSIS.
Not true, says the GSIS; All of the 78 lots were 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 at the time that the mortgage was executed.
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 nine 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. If the court now ruled in favor of Zulueta-Santiago, this would give her double indemnification. The GSIS and its members would be made to pay for 78 lots that it had neither owned nor possessed nor sold.
Imagine that 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 then went up to the Supreme Court, hoping it would get justice there.
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.
What’s going on here? Why are our Courts, including the Supreme Court forcing the GSIS to pay for something it never foreclosed, owned or sold.
Sadly, it is not the GSIS alone that is being forced to pay. This affects 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 GSIS members have intervened in the case; it is their money that is being fought over and which our judges and our justices are unjustly giving away.
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hvp 02.04.10
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