Facts:
Respondent GSIS conducted a public bidding of several foreclosed properties, including a house and lot. The petitioner participated and submitted his bid. It bid was subject to a down payment of 35% of the amount thereof, the 10% constituting the proposal bond with the remaining 25% to be paid after the receipt of the notice of award or acceptance of the bid. Accordingly, petitioner enclosed with his sealed bid a manager's and cash to complete the proposal bond. Upon the receipt of the notice of award, petitioner offered to pay the additional 25% in Land Bank bonds at their face value. These bonds were issued to petitioner as payment for his riceland acquired by the Government from him. However, the GSIS rejected the offer, hence it was withdrawn by petitioner. Petitioner then offered to pay in cash the balance of the required down payment. When the second monthly installment became due, petitioner sent a letter to the GSIS Board of Trustees requesting that he be allowed to pay with his Land Bank bonds. Petitioner invoked the provisions of Section 85 of Republic Act No. 3844, as amended by Presidential Decree No. 251. The GSIS Board of Trustees denied petitioner's offer and "resolved to reiterate the policy that Land Bank bonds shall be accepted as payment only at a discounted rate to yield the System 18% at maturity." The petitioner asked the Board to reconsider and them submitted an opinion of the Ministry of Agrarian Reform, wherein it was stated that "if the GSIS accepts the Land Bank bonds as payment thereof, it must accept the same at par or face value.
Respondent GSIS conducted a public bidding of several foreclosed properties, including a house and lot. The petitioner participated and submitted his bid. It bid was subject to a down payment of 35% of the amount thereof, the 10% constituting the proposal bond with the remaining 25% to be paid after the receipt of the notice of award or acceptance of the bid. Accordingly, petitioner enclosed with his sealed bid a manager's and cash to complete the proposal bond. Upon the receipt of the notice of award, petitioner offered to pay the additional 25% in Land Bank bonds at their face value. These bonds were issued to petitioner as payment for his riceland acquired by the Government from him. However, the GSIS rejected the offer, hence it was withdrawn by petitioner. Petitioner then offered to pay in cash the balance of the required down payment. When the second monthly installment became due, petitioner sent a letter to the GSIS Board of Trustees requesting that he be allowed to pay with his Land Bank bonds. Petitioner invoked the provisions of Section 85 of Republic Act No. 3844, as amended by Presidential Decree No. 251. The GSIS Board of Trustees denied petitioner's offer and "resolved to reiterate the policy that Land Bank bonds shall be accepted as payment only at a discounted rate to yield the System 18% at maturity." The petitioner asked the Board to reconsider and them submitted an opinion of the Ministry of Agrarian Reform, wherein it was stated that "if the GSIS accepts the Land Bank bonds as payment thereof, it must accept the same at par or face value.
Issue:
Whether or not under the provisions of Section 85 of Republic Act No. 3844, as amended by Presidential Decree No. 251, the GSIS may be compelled to accept Land Bank bonds at their face value in payment for a residential house and lot purchased by the bondholder from the GSIS.
Whether or not under the provisions of Section 85 of Republic Act No. 3844, as amended by Presidential Decree No. 251, the GSIS may be compelled to accept Land Bank bonds at their face value in payment for a residential house and lot purchased by the bondholder from the GSIS.
Held:
Respondent Government Service Insurance System is ordered to accept the bonds issued by the Land Bank of the Philippines at their par or face value. A government-owned or controlled corporation, like the GSIS, is compelled to accept Land Bank bonds as payment for the purchase of its assets. As a matter of fact, the bidder who offers to pay in bonds of the Land Bank is entitled to preference. Respondent, in support of its stance that it can discount the bonds, avers that "(a) PD 251 has amended Section 85 of RA 3844 by deleting and eliminating the original provision that Land Bank bonds shall be accepted 'in the amount of their face value'; and (b) to accept the said bonds at their face value will impair the actuarial solvency of the GSIS and thoroughly prejudice its capacity to pay death, retirement, insurance, dividends and other benefits and claims to its more than a million members, the majority of whom are low salaried government employees and workers." Respondent's arguments disregard the fact that the provisions of Section 85 are primarily designed to cushion the impact of dispossession. Not only would there be inconvenience resulting from dispossession itself, but also from the modes of payment in financing the acquisition of farm lots. Acceptance of Land Bank bonds, instead of money, undoubtedly involves a certain degree of sacrifice for the landowner. This, of course, is in addition to the fact that, in case of expropriation of land covered by land reform, the landowner will seldom get the compensation he desires. Thus, discounting the Land Banks bonds, and thereby reducing their effective value, entails and imposes an additional burden on his part. It is, in fact, in consideration of this sacrifice that we extended the rule on liberality in the interpretation of the provisions of Republic Act No. 3844, then known as the Agricultural Land Reform Code, in favor not only of the actual tillers but the landowners as well. As explained in an earlier case, “the value of these bonds cannot be diminished by any direct or indirect act, particularly, since said bonds are fully guaranteed by the Government of the Philippines.” Respondent cannot rely on the deletion by Presidential Decree No. 251 of the provision in Section 85 that the bonds shall be accepted in the amount of their face value, and wrest therefrom an interpretation in support of its thesis.
Respondent Government Service Insurance System is ordered to accept the bonds issued by the Land Bank of the Philippines at their par or face value. A government-owned or controlled corporation, like the GSIS, is compelled to accept Land Bank bonds as payment for the purchase of its assets. As a matter of fact, the bidder who offers to pay in bonds of the Land Bank is entitled to preference. Respondent, in support of its stance that it can discount the bonds, avers that "(a) PD 251 has amended Section 85 of RA 3844 by deleting and eliminating the original provision that Land Bank bonds shall be accepted 'in the amount of their face value'; and (b) to accept the said bonds at their face value will impair the actuarial solvency of the GSIS and thoroughly prejudice its capacity to pay death, retirement, insurance, dividends and other benefits and claims to its more than a million members, the majority of whom are low salaried government employees and workers." Respondent's arguments disregard the fact that the provisions of Section 85 are primarily designed to cushion the impact of dispossession. Not only would there be inconvenience resulting from dispossession itself, but also from the modes of payment in financing the acquisition of farm lots. Acceptance of Land Bank bonds, instead of money, undoubtedly involves a certain degree of sacrifice for the landowner. This, of course, is in addition to the fact that, in case of expropriation of land covered by land reform, the landowner will seldom get the compensation he desires. Thus, discounting the Land Banks bonds, and thereby reducing their effective value, entails and imposes an additional burden on his part. It is, in fact, in consideration of this sacrifice that we extended the rule on liberality in the interpretation of the provisions of Republic Act No. 3844, then known as the Agricultural Land Reform Code, in favor not only of the actual tillers but the landowners as well. As explained in an earlier case, “the value of these bonds cannot be diminished by any direct or indirect act, particularly, since said bonds are fully guaranteed by the Government of the Philippines.” Respondent cannot rely on the deletion by Presidential Decree No. 251 of the provision in Section 85 that the bonds shall be accepted in the amount of their face value, and wrest therefrom an interpretation in support of its thesis.
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