GR 109404; (January, 1996) (Digest)
G.R. No. 109404 ; January 22, 1996
FLORENCIO EUGENIO, doing business under the name E & S Delta Village, petitioner, vs. EXECUTIVE SECRETARY FRANKLIN M. DRILON, HOUSING AND LAND USE REGULATORY BOARD (HLURB) AND PROSPERO PALMIANO, respondents.
FACTS
On May 10, 1972, private respondent Prospero Palmiano purchased two subdivision lots on installment from petitioner Florencio Eugenio. The National Housing Authority later ordered petitioner to cease further sales due to non-development complaints from the homeowners’ association. Consequently, Palmiano suspended his amortization payments, citing this failure to develop. Petitioner subsequently canceled the contracts and resold one of the lots to third parties. Palmiano filed a complaint with the Human Settlements Regulatory Commission (HSRC, now HLURB) seeking annulment of the resale and reconveyance.
The Office of Appeals, Adjudication and Legal Affairs (OAALA) initially dismissed Palmiano’s complaint, upholding the cancellation. On appeal, the HSRC Commission Proper reversed the OAALA, applying Presidential Decree No. 957 (The Subdivision and Condominium Buyers’ Protective Decree). It ordered the reinstatement of one contract and a refund of payments for the resold lot. The Executive Secretary affirmed this decision. Petitioner now argues before the Supreme Court that PD 957, enacted in 1976, cannot govern contracts executed in 1972 and that non-development did not justify the buyer’s payment suspension.
ISSUE
Whether PD 957 applies retroactively to contracts executed prior to its effectivity, thereby justifying the buyer’s suspension of amortization payments due to the developer’s failure to develop the subdivision.
RULING
Yes. The Supreme Court ruled that PD 957 applies retroactively to cover contracts executed before its enactment. The legal logic is anchored on statutory construction focused on legislative intent. While the decree does not expressly state retroactivity, such application is plainly inferred from its unmistakable intent to protect buyers from unscrupulous developers, as clearly stated in its preamble. The Court emphasized that the intent of the statute is the law itself and must be enforced to promote its policy objectives, even if it departs from a strict literal reading.
As a social justice measure, the law must favor disadvantaged subdivision buyers. Given this retroactive application, Section 23 of PD 957, which allows buyers to suspend payments upon the developer’s failure to develop the project according to approved plans, was properly invoked by Palmiano. The Court found no grave abuse of discretion in the Executive Secretary’s affirmation of the HLURB’s findings that the developer’s non-development justified the payment suspension. The Court also noted that the petitioner’s prolonged tolerance of the arrears effectively condoned the defaults and that his motion for reconsideration was filed out of time, rendering the decision final. The petition was dismissed.