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Government Service Insurance System v.

The Province of Tarlac - The assailed donation is onerous, the rules on contracts will apply.
G.R. No. 157860 | December 1, 2003 | Ynares-Santiago, J. - A transfer of real property by a local government unit to an
Petition: Petition for review under Rule 45 instrumentality of government without first securing an appraised
Petitioners: Government Service Insurance System valuation from the local committee on awards does not appear to
Respondents: The Province of Tarlac be one of the void contracts enumerated in Article 1409 of the
Civil Code
FACTS - A duly executed contract carries with it the presumption of validity!
- On March 26, 1996, the Sangguniang Panlalawigan of Tarlac passed - Being a perfected contract, Tarlac (through Gov Yap) cannot revoke
Resolution No. 068-96 which authorized and approved the or renounce the contract without the consent of the other party
conversion of Urquico Memorial Athletic Field into a government o From the moment of perfection, parties are bound not only
center, as well as the segregation and donation of portions of said by the fulfillment of what is stipulated but also all the
land to different government agencies for the purpose of constructing consequences of the said agreements
or relocating their office buildings
o GSIS decided to put up an office at the site after receiving 2 DISPOSITION
letters of invitation Petition is granted. CA decision is reversed and set aside. RTC decision
- Tarlac Governor Cojuangco issued a notice of contruction for the is reinstated.
building on the designated lot
- Province of Tarlac and GSIS executed a Memorandum of Agreement
whereby Tarlac donated the said lot to GSIS
- Tarlac executed a deed of donation over the subject lot and it was
duly accepted by GSIS
o As stipulated, GSIS donated 2 million to Tarlac as a form of
financial assistance
- Subsequently, Tarlac issued a Building Permit to GSIS for the
construction of its office
- Sangguniang Panlalawigan then passed another resolution
reiterating the authority granted to Governor Cojuangco
- Another governor was elected as the new chief executive of Tarlac
(Gov Jose Yap) and he wrote a letter to GSIS inviting them to
reevaluate their respective positions with respect to the MOA
o Yap thinks that the MOA was unfair to the province
o Provincial Administrator wrote to GSIS demanding the
payment of 33.59 million representing balance of the value
of the land donated
GSIS refused to pay
- Tarlac filed a complaint against GSIS for declaration of nullity of the
donation and MOA, recovery of possession
- RTC rendered a decision in favor of the validity of the donation and
dismissed the complaint for the declaration of nullity
- CA reversed and set aside the RTC decision.

ISSUES
1. Was the Memorandum of Agreement null and void? No.

RULING & RATIO


1. No. The Memorandum of Agreement was valid.
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