EUGENIO v. EXECUTIVE SECRETARY FRANKLIN DRILON, GR No.

109404,
January 22, 1996 (Third Division), Panganiban J.

Facts:

On May 10, 1972, private respondent Prospero Palmiano purchased on instalment basis
from petitioner Florencio Eugenio, two lots in the E&S Delta Village in Quezon City.
Complaints of non-development by the Delta Village Homeowners Association Inc., were filed
before the National Housing Authority (NHA) who then ordered petitioner to cease and desist
from making further sales of lots in said village owned by him. While the NHA cases were still
pending, private respondent filed before the Office of Appeals, Adjudication and Legal Affairs
(OAALA) of the Human Settlements Regulatory Commission (HSRC) a complaint against
petitioner alleging that: (1) in view of the NHA resolution and for failure to develop the village,
he suspended payment of his amortizations, (2) despite NHA resolution petitioner resold one of
the two lots to spouses Relevo in whose favour title to said property was registered, and (3)
prayed for the annulment of the sale to Relevo and for reconveyance of lot to him.

OAALA UPHELD decision of petitioner to cancel contract with respondent and

DISMISSED respondent’s complaint. On appeal HSRC REVERSED OAALA applying PD
957¹, (1) ordered petitioner to complete subdivision development, (2) reinstate private
respondent’s purchase contract, (3) refund to private respondent all payments made thereon plus
interests. Respondent Executive Secretary of the Housing and Land Use Regulatory Board
(HLURB), Franklin M. Drilon AFFIRMED the decision and DENIED subsequent motion for
reconsideration, hence this petition for review.

Petitioner avers that Executive Secretary erred in applying PD 957 in using it to justify
the non-payment of private respondent’s amortizations as the land purchase agreements were
entered into prior to the effectivity of PD 957 and as such said law cannot govern transaction.

Issue/s:

Whether or not the failure to develop a subdivision constitute legal justification for the
non-payment of amortization by a buyer on instalment under land purchase agreements entered
into prior to the enactment of PD 957 The Subdivision and Condominium Buyers Protective
Decree?

Ruling:

Respondent Executive Secretary did not abuse his discretion. PD 957 is to be given
retroactive effect so as to cover even those contracts executed prior to its enactment in 1976. PD
957 did not expressly provide retroactivity but such can be plainly inferred from the
unmistakeable intent of the law. Said law was enacted with no other end in view than to provide
a protective mantle over helpless citizens who may fall prey to the manipulations and
machinations of unscrupulous subdivision and condominium settlers. Such intent is nowhere
more clearly expressed than its preamble².

It is manifest and unarguable that the legislative intent must have been to remedy the
alarming situation by having PD 957 operate retrospectively even upon contracts already in
existence at the time of its enactment. A strictly prospective application of the statute will
effectively emasculate it for then the State will not be able to exercise its regulatory functions
and curb fraudulent schemes and practices perpetrated prior to the enactment of PD 957.
Moreover, Sections 20², 21³, and 234, by their way of terms have retroactive effect and will
impact upon even those contracts and transaction prior to enactment of PD 957.

Petition is DENIED due course and hereby DISMISSED.

1 Preamble. PD 957. The Subdivision and Condominium Buyers Protective Decree. (1) Whereas, it is the policy of the State to
afford to its inhabitants the requirements of decent human settlement and to provide them with ample opportunities for improving
their quality of life. (2) Whereas, 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 requirements, thus endangering the health and safety
of home and lot buyers.

2 Section 20. PD 957. Time of Completion. Every owner or developer shall construct and provide facilities, improvements,
infrastructures, and other forms of development...

3 Section 21. PD 957. Sales Prior to Decree. In cases of subdivision lots or condominium units sold or disposed prior to the
effectivity of this Decree, it shall be incumbent upon the owner or developer of the subdivision or condominium project to
complete compliance with his or its obligations as provided in the preceding section within two years from the date of this
decree...

4 Section 23. PD 957. Non-Forfeiture of Payments. No instalment payment made by a buyer in a ssubdivision or
condominium project for the lot or unit he contracted to buy shall be forfeited in favour 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 approval plans and within the time limit for
complying with the same. Such buyer, may at his option, be reimbursed the total amount paid including amortization
interests...