G.R. No. 109404 - Eugenio vs. Drilon

Petitioner Florencio Eugenio, conducting business under the name E & S Delta Village, and co-owner/developer Fermin Salazar, owned and sold subdivision lots in the E & S Delta Village, Quezon City.
Private respondent Prospero Palmiano purchased two lots on installment basis from petitioner on May 10, 1972, prior to the enactment of P.D. 957 (“The Subdivision and Condominium Buyers Protective Decree”).

The Delta Village Homeowners’ Association filed complaints for non-development (NHA Cases Nos. 2619 and 2620). The National Housing Authority (NHA) issued a resolution dated January 17, 1979, ordering the petitioner to cease and desist from further sales of lots in the village or any project owned by him.
Meanwhile, private respondent filed a complaint (Case No. 80-589) with the Office of Appeals, Adjudication and Legal Affairs (OAALA) of the Human Settlements Regulatory Commission (HSRC), alleging that he suspended payment of amortizations due to petitioner’s failure to develop the subdivision, and challenged petitioner’s resale of one lot to spouses Rodolfo and Adelina Relevo, who were registered as owners. He prayed for annulment of the sale to the Relevos and reconveyance.

OAALA ruled in favor of petitioner, upholding his right to cancel the contract and dismissing the private respondent’s complaint on October 11, 1983.
On appeal, HSRC Commission Proper reversed OAALA, applying P.D. 957 and ordering petitioner to complete subdivision development, reinstate private respondent’s purchase contract for one lot, and refund all payments for the lot registered to the Relevos, plus interest.
The Executive Secretary affirmed the HSRC decision on March 10, 1992, and denied petitioner’s motion for reconsideration due to lack of merit and late filing.
Petitioner filed this Petition for Review with the Supreme Court challenging the application of P.D. 957, arguing the law should not apply to contracts entered into before its effectivity in 1976.

Petitioner contended that since the land purchase agreements were executed in 1972, P.D. 957 should not govern their rights and obligations.
The Executive Secretary and lower bodies held otherwise, applying P.D. 957 retroactively to protect subdivision buyers.

Whether failure to develop a subdivision project constitutes legal justification for a buyer’s non-payment of amortizations under land purchase agreements entered into prior to P.D. 957.

Whether P.D. 957 applies retroactively to contracts executed before its enactment and effectivity in 1976.

Whether the Executive Secretary exceeded jurisdiction in ordering the refund of payments on a lot that was not specifically the subject of the complaint.

Whether the petitioner’s delay in canceling the contract affects the application of P.D. 957 and the buyer’s obligations.