THIRD DIVISION

[G.R. No. 109404. January 22, 1996]

FLORENCIO EUGENIO, doing u!in"!! und"r #$" na%" E & ' (")#a
*i))ag", +"#i#ion"r, ,!. E-ECU.I*E 'ECRE./R0 FR/N1LIN 2.
(RILON, 3OU'ING /N( L/N( U'E. REGUL/.OR0 4O/R(
53LUR46 /N( 7RO'7ERO 7/L2I/NO, r"!+ond"n#!.
R E ' O L U . I O N
7/NG/NI4/N, J.:
Did the failure to develop a subdivision constitute legal justification for the non-
payent of aorti!ations by a buyer on installent under land purchase agreeents
entered into prior to the enactent of "#D# $%&' (The Subdivision and )ondoiniu
*uyers+ "rotective Decree,- This is the ajor .uestion raised in the instant "etition
see/ing to set aside the Decision of the respondent 01ecutive Secretary dated 2arch
34' 3$$5 in O#"# )ase No# 6&73' 8hich affired the order of the respondent H9:R*
dated Septeber 3' 3$;&#
On 2ay 34' 3$&5' private respondent purchased on installent basis fro petitioner
and his co-o8ner< developer =erin Sala!ar' t8o lots in the 0 >
S Delta Village in ?ue!on )ity#
@cting on coplaints for non-developent doc/eted as NH@ )ases Nos# 573$ and
5754 filed by the Delta Village Hoeo8ners+ @ssociation' Inc#' the National Housing
@uthority rendered a resolution on Aanuary 3&' 3$&$ inter alia ordering petitioner to
cease and desist fro a/ing further sales of lots in said village or in any project o8ned
by hi#
Bhile NH@ )ases Nos# 573$ and 5754 8ere still pending' private respondent filed
8ith the Office of @ppeals' @djudication and 9egal @ffairs CO@@9@D of the Huan
Settleents Regulatory )oission CHSR)D' a coplaint C)ase No# 80-589) against
petitioner and spouses Rodolfo and @delina Relevo alleging that' in vie8 of the above
NH@ resolution' he suspended payent of his aorti!ations' but that petitioner resold
one of the t8o lots to the said spouses Relevo' in 8hose favor title to the said property
8as registered# "rivate respondent further alleged that he suspended his payents
because of petitioner+s failure to develop the village# "rivate respondent prayed for the
annulent of the sale to the Relevo spouses and for reconveyance of the lot to hi#
On October 33' 3$;6' the O@@9@ rendered a decision upholding the right of
petitioner to cancel the contract 8ith private respondent and disissed private
respondent+s coplaint#
On appeal' the )oission "roper of the HSR) reversed the O@@9@ and' applying
"#D# $%&' ordered petitioner to coplete the subdivision developent and to reinstate
private respondent+s purchase contract over one lot' and as to the other' (it appearing
that Transfer )ertificate of Title No# 57$%E7 has been issued to 1 1 1 spouses Rodolfo
and @dCeDlina Relevo 1 1 1' the anageent of 0 > S Delta Village is hereby ordered to
iediately refund to the coplainant-appellant Cherein private respondentD all
payents ade thereon' plus interests coputed at legal rates fro date of receipt
hereof until fully paid#,
The respondent 01ecutive Secretary' on appeal' affired the decision of the HSR)
and denied the subse.uent 2otion for Reconsideration for lac/ of erit and for having
been filed out of tie# "etitioner has no8 filed this "etition for revie8 before the
Supree )ourt#
:nder Revised @dinistrative )ircular No# 3-95, (appeals fro judgents or final
orders of the 1 1 1 Office of the "resident 1 1 1 ay be ta/en to the )ourt of @ppeals 1 1
1#, Ho8ever' in order to hasten the resolution of this case' 8hich 8as deeed subitted
for decision one and a half years ago' the )ourt resolved to a/e an e1ception to the
said )ircular in the interest of speedy justice#
In his "etition before this )ourt' petitioner avers that the 01ecutive Secretary erred
in applying "#D# $%& and in concluding that the non-developent of the 0 >
S Delta Village justified private respondent+s non-payent of his aorti!ations#
"etitioner avers that inasuch as the land purchase agreeents 8ere entered into in
3$&5' prior to the effectivity of "#D# $%& in 3$&7' said la8 cannot govern the transaction#
Be hold other8ise' and here8ith rule that respondent 01ecutive Secretary did not
abuse his discretion' and that "#D# $%& is to be given retroactive effect so as to cover
even those contracts e1ecuted prior to its enactent in 3$&7#
"#D# $%& did not e1pressly provide for retroactivity in its entirety' but such can be
plainly inferred fro the unista/able intent of the la8#
The intent of the la8' as culled fro its preable and fro the situation'
circustances and conditions it sought to reedy' ust be enforced# On this point' a
leading authority on statutory construction stressedF
The intent of a statute is the law x x x. The intent is the vital part, the essence of the
law, and the primary rule of construction is to ascertain and give effect to the
intent. The intention of the legislature in enacting a law is the law itself and must be
enforced when ascertained, although it may not be consistent with the strict letter of
the statute. Courts will not follow the letter of a statute when it leads away from the
true intent and purpose of the legislature and to conclusions inconsistent with the
general purpose of the act x x x. In construing statutes the proper course is to start out
and follow the true intent of the legislature and to adopt that sense which harmonizes
best with the context and promotes in the fullest manner the apparent policy and
objects of the legislature.
1
italics supplied.!
It goes 8ithout saying that' as an instruent of social justice' the la8 ust favor the
8ea/ and the disadvantaged' including' in this instance' sall lot buyers and aspiring
hoeo8ners# "#D# $%& 8as enacted 8ith no other end in vie8 than to provide a
protective antle over helpless citi!ens 8ho ay fall prey to the anipulations and
achinations of Gunscrupulous subdivision and condoiniu sellers'+ and such intent is
no8here e1pressed ore clearly than in its preable' pertinent portions of 8hich read
as follo8sF
"#$%&%'(, it is the policy of the (tate to afford its inhabitants the re)uirements of
decent human settlement and to provide them with ample opportunities for improving
their )uality of life*
"#$%&%'(, numerous reports reveal that many real estate subdivision owners,
developers, operators, and+or sellers have reneged on their representations and
obligations to provide and maintain properly subdivision roads, drainage, sewerage,
water systems, lighting systems, and other similar basic re)uirements, thus
endangering the health and safety of home and lot buyers*
"#$%&%'(, reports of alarming magnitude also show cases of swindling and
fraudulent manipulations perpetrated by unscrupulous subdivision and condominium
sellers and operators, such as failure to deliver titles to the buyers or titles free from
liens and encumbrances, and to pay real estate taxes, and fraudulent sales of the same
subdivision lots to different innocent purchasers for value,*
2

italics supplied.!
=ro a dedicated reading of the preable' it is anifest and unarguable that the
legislative intent ust have been to reedy the alaring situation by having "#D# $%&
operate retrospectively even upon contracts already in e1istence Gat the tie of its
enactent# Indeed' a strictly prospective application of the statute 8ill effectively
easculate it' for then the State 8ill not be able to e1ercise its regulatory functions and
curb fraudulent schees and practices perpetrated under or in connection 8ith those
contracts and transactions 8hich happen to have been entered into prior to "#D# $%&'
despite obvious prejudice to the very subdivision lot buyers sought to be protected by
said la8# It is hardly conceivable that the legislative authority intended to perit such a
loophole to reain and continue to be a source of isery for subdivision lot buyers 8ell
into the future#
@dding force to the arguents for the retroactivity of "#D# 957 as a 8hole are certain
of its provisions' viz., Sections 54' 53 and 56 thereof' 8hich by their very ters have
retroactive effect and 8ill ipact upon even those contracts and transactions entered
into prior to "#D# $%&+s enactentF
"(ec. -.. Time of Completion. / Every owner or developer shall construct and provide
the facilities, improvements, infrastructures and other forms of development,
including water supply and lighting facilities, which are offered and indicated in the
approved subdivision or condominium plans, brochures, prospectus, printed matters,
letters or in any form of advertisement, within one year from the date of the issuance
of the license for the subdivision or condominium project or such other period of time
as may be fixed by the 'uthority.
"(ec. -1. Sales Prior to Decree. !n cases of subdivision lots or condominium units
sold or disposed of prior to the effectivity of this Decree, it shall be incumbent upon
the owner or developer of the subdivision or condominium pro"ect to complete
compliance with his or its obligations as provided in the preceding section within two
years from the date of this Decree unless otherwise extended by the 'uthority or
unless an ade)uate performance bond is filed in accordance with (ection 0 hereof.
"1ailure of the owner or developer to comply with the obligations under this and the
preceding provisions shall constitute a violation punishable under (ections 23 and 24
of this 5ecree.
"(ec. -2. #on$orfeiture of Payments. / 6o installment payment made by a buyer in a
subdivision or condominium project for the lot or unit he contracted to buy shall be
forfeited in favor of the owner or developer when the buyer, after due notice to the
owner or developer, desists from further payment due to the failure of the owner or
developer to develop the subdivision or condominium project according to the
approved plans and within the time limit for complying with the same. (uch buyer
may, at his option, be reimbursed the total amount paid including amortization
interests but excluding delin)uency interests, with interest thereon at the legal rate.,
italics supplied!
On the other hand' as argued by the respondent 01ecutive Secretary' the
application of "#D# $%& to the contracts in .uestion 8ill be consistent 8ith paragraph E of
the contracts theselves' 8hich e1pressly providesF
"7! The party of the 1irst 8art hereby binds himself to subdivide, develop and
improve the entire area covered by Transfer 9ertificate of Title 6o. 103114 of which
the parcels of lands subject of this contract is a part in accordance with the provisions
of :uezon 9ity ;rdinance 6o. 0<01, (/00 and the 8arty of the 1irst 8art further binds
himself to comply with and abide by all laws, rules and regulations respecting the
subdivision and development of lots for residential purposes as may be presently in
force or may hereafter be re%uired by laws passed by the Congress of the Philippines
or re%uired by regulations of the &ureau of 'ands, the (eneral )egistration *ffice
and other government agencies+. italics supplied!
2oreover' as "#D# $%& is undeniably applicable to the contracts in .uestion' it
follo8s that Section 56 thereof had been properly invo/ed by private respondent 8hen
he desisted fro a/ing further payent to petitioner due to petitioner+s failure to
develop the subdivision project according to the approved plans and 8ithin the tie liit
for coplying 8ith the sae# CSuch incoplete developent of the subdivision and non-
perforance of specific contractual and statutory obligations on the part of the
subdivision-o8ner had been established in the findings of the H9:R* 8hich in turn
8ere confired by the respondent 01ecutive Secretary in his assailed Decision#D
=urtherore' respondent 01ecutive Secretary also gave due 8eight to the follo8ing
attersF although private respondent started to default on aorti!ation payents
beginning 2ay 3$&%' so that by the end of Auly 3$&% he had already incurred three
consecutive arrearages in payents' nevertheless' the petitioner' 8ho had the
cancellation option available to hi under the contract' did not e1ercise or utili!e the
sae in tiely fashion but delayed until 2ay 3$&$ 8hen he finally ade up his ind to
cancel the contracts# *ut by that tie the land purchase agreeents had already been
overta/en by the provisions of "#D# $%&' proulgated on Auly 35' 3$&7# CIn any event'
as pointed out by respondent H9:R* and seconded by the Solicitor Heneral' the
defaults in aorti!ation payents incurred by private respondent had been effectively
condoned by the petitioner' by reason of the latter+s tolerance of the defaults for a long
period of tie#D
9i/e8ise' there is no erit in petitioner+s contention that respondent Secretary
e1ceeded his jurisdiction in ordering the refund of private respondent+s payents on 9ot
35 although Caccording to petitionerD only 9ot 36 8as the subject of the coplaint#
Respondent Secretary duly noted that the supporting docuents subitted
substantiating the clai of non-developent justified such order inasuch as such
clai 8as also the basis for non-payent of aorti!ations on said 9ot 35#
=inally' since petitioner+s otion for reconsideration of the C01ecutive Secretary+sD
Decision dated 2arch 34' 3$$5 8as filed only on the 53st day fro receipt thereof' said
decision had becoe final and e1ecutory' pursuant to Section & of @dinistrative Order
No# 3; dated =ebruary 35' 3$;&' 8hich provides that (CdDecisions< resolutionsI orders of
the Office of the "resident shall' e1cept as other8ise provided for by special la8s'
becoe final after the lapse of fifteen (15) days fro receipt of a copy thereof 1 1 1 '
unless a otion for reconsideration thereof is filed 8ithin such period#,
83EREFORE' there being no sho8ing of grave abuse of discretion' the petition
is (ENIE( due course and is hereby (I'2I''E(# No costs#
'O OR(ERE(.
Narvasa, C.J. (Chairman), Davide Jr., elo, and !ran"is"o, JJ., concur.
3
Vol# II' Sutherland' Statutory )onstruction' pp# #9$-#95.
5
"reable' "residential Decree No# $%&#