Case Summary (G.R. No. 91307)
Key Individuals and Context
- Petitioner: Antipolo Realty Corporation (seller/developer).
- Private Respondent/Buyer: Virgilio A. Yuson (assignee of Jose Hernando).
- Public Respondents: National Housing Authority (NHA); Hon. G.V. Tobias, in his capacity as General Manager of the NHA; Hon. Jacobo C. Clave, in his capacity as Presidential Executive Assistant (appeal office).
- Property/Place: Lot No. 15, Block IV, Ponderosa Heights Subdivision, Antipolo, Rizal.
- Core dispute: Whether the NHA had jurisdiction to hear and decide Yuson’s complaint and whether Antipolo Realty could rescind the Contract to Sell and forfeit prior payments because the developer allegedly complied with subdivision improvements.
Petitioner, Respondent, Key Dates
- Contract to Sell executed: 18 August 1970 (original vendee: Jose Hernando).
- Assignment/substitution to Yuson: 28 August 1974.
- Seller’s alleged default period for improvements: improvements were required within two years of contract; buyer suspended payments after August 1972.
- Seller’s notice to resume payments: 14 October 1976 and reiterated 27 November 1976 (invoking an NHA decision in Case No. 252).
- Complaint to NHA by Yuson: docketed as NHA Case No. 2123, complaint letter dated 10 May 1977.
- NHA decision ordering reinstatement: 9 March 1978.
- Subsequent administrative appeal: dismissed by Presidential Executive Assistant on 9 March 1979.
- Original petition to the Supreme Court in related proceedings: certiorari denied (minute resolution 11 December 1978; reconsideration denied 29 January 1979).
- Supreme Court decision here: petition for certiorari dismissed; NHA decision affirmed and clarified (disposition included an extension of the original payment period by four years and two months).
Applicable Law and Contractual Provisions
- Presidential Decree No. 957 ("The Subdivision and Condominium Buyers’ Decree"). Section 3 vests the NHA with exclusive jurisdiction to regulate the real estate trade and business under the decree. Section 23 (Non-Forfeiture of Payments) provides that no installment payment shall be forfeited in favor of the owner or developer where a buyer, after due notice, desists from payment due to the owner’s failure to develop according to approved plans and time limits; buyer may be reimbursed or suspend payments.
- Presidential Decree No. 1344 (clarifying NHA’s jurisdiction): confers exclusive jurisdiction on NHA for unsound real estate practices, refund claims by buyers, and specific performance cases by buyers against owners/developers.
- Contract provisions: Clause 17 (Subdivision Beautification) required completion of specified subdivision improvements within two years and expressly permitted suspension of monthly installments without penalties or interest until completion; Clause 7 provided seller remedies for buyer default, including cancellation and forfeiture after specified grace/penalty periods.
- Civil Code provisions cited: Articles 1191 and 1169 (general remedies for breach of contract).
Issue Presented
- Whether the NHA had jurisdiction and acted within its authority in hearing Yuson’s complaint and ordering reinstatement of the Contract to Sell; and whether Antipolo Realty could rescind the contract and retain prior installment payments under Clause 7 given the developer’s failure to complete subdivision improvements within the contractual period.
Facts and Buyer’s Suspension of Payments
- Under the Contract to Sell, Antipolo Realty agreed to complete enumerated improvements within two years (Clause 17). Following Antipolo Realty’s failure to complete those improvements within the prescribed period, Yuson paid arrearages only through August 1972 and suspended subsequent monthly installment payments, relying on Clause 17’s express provision allowing suspension without penalties until completion. Antipolo Realty later asserted completion (letters of October and November 1976) and demanded payment of installments alleged to have accrued during September 1972 – October 1976 amounting to P16,994.73; Yuson refused to pay those disputed installments but agreed to resume payments post-October 1976.
Procedural History Before Administrative Bodies
- Yuson filed a complaint with the NHA (Case No. 2123). Antipolo Realty moved to dismiss and sought consolidation with other pending cases but did not present evidence at the NHA hearing. The NHA denied the motion to dismiss, heard the case, and, on 9 March 1978, ordered reinstatement of the Contract to Sell on specific conditions (statement of account for monthly amortizations from November 1976 onward; no penalty interest for November 1976 to date of statement; 60 days to pay arrears shown). Antipolo Realty’s motion for reconsideration was denied (28 June 1978) on jurisdictional grounds and for service of notice; Antipolo Realty sought certiorari which was denied by the Supreme Court in a minute resolution, and an administrative appeal to the Office of the President was dismissed.
NHA’s Power to Adjudicate: Statutory Basis and Precedent
- The Court reviewed the legislative and decree-based scheme: PD No. 957 vests the NHA with exclusive jurisdiction to regulate the real estate trade under that decree; PD No. 1344 explicitly confers exclusive jurisdiction to hear and decide unsound real estate practices and buyer claims (refunds, specific performance) against developers/owners. The Court noted settled jurisprudence recognizing that administrative agencies may exercise limited quasi-judicial powers when empowered by statute, especially where specialized expertise and expeditious resolution are required and court dockets are congested. The decision cites precedents that support the delegation of adjudicatory power to agencies in limited domains.
Interpretation of Section 23 (Non-Forfeiture of Payments)
- Section 23 expressly prohibits forfeiture of installments made by a buyer when the buyer, after due notice, ceases payments because the developer failed to develop according to approved plans and time limits. It authorizes the buyer to seek reimbursement of total amounts paid (excluding delinquency interest) with legal interest, or to suspend payments. Given Antipolo Realty’s failure to complete the prescribed improvements within two years, the Court held that the developer could not validly invoke Clause 7 to rescind the contract and declare forfeiture of prior payments. Under both Section 23 and general contract law, the buyer had the remedial options of rescission and reimbursement or suspension of payments until completion.
Contractual Remedies vs. Statutory Protections
- Clause 7 (which would permit seller cancellation and forfeiture upon buyer default) cannot be enforced against the buyer where the seller itself breached the obligation to complete subdivision improvements and where the buyer suspended payments pursuant to Clause 17 and Section 23. The Court emphasized that petitioner’s breach deprived it of the right to rescind and to retain payments, and that general Civil Code remedies also favor the buyer under those circumstances.
Due Process Claim
- Antipolo Realty asserted denial of due process because of alleged lack of notice of the NHA hearing. The Court found insufficient merit in this claim: the record showed service of the order scheduling the hearing on counsel (annotated proof of service). Even assuming service was defective, the Court remarked that what due process fundamentally requires is not merely prior notice but opportunity to be heard; petitioner had the opportunity to be heard on reconsideration and other administrative remedies. Hence the claim of violation of due process was rejected.
NHA’s Ruling on Accrued Installments: Interpretation and Clarification
- The NHA held that monthly installments did not accrue during the period September 1972 – October 1976 because the buyer had been permitted to suspend payment until improvements were completed; thus the seller’s demand for those installments and the subsequent cancellation notice were null and void. The Court observed that the NHA resolution was terse and required clarification: the practical effec
Case Syllabus (G.R. No. 91307)
Facts of the Case
- By virtue of a Contract to Sell dated 18 August 1970, Jose Hernando acquired prospective and beneficial ownership over Lot No. 15, Block IV of the Ponderosa Heights Subdivision in Antipolo, Rizal, from petitioner Antipolo Realty Corporation.
- On 28 August 1974, Jose Hernando transferred his rights over Lot No. 15 to private respondent Virgilio Yuson by a Deed of Assignment and Substitution of Obligor (Delegacion), executed with the consent of Antipolo Realty; under that instrument Mr. Yuson assumed the vendee’s obligations under the original contract, including payment of his predecessor’s installments in arrears.
- Clause 17 of the Contract to Sell obligated the seller to provide a list of subdivision improvements (concrete curbs and gutters; underground drainage; asphalt roads; independent water system; electrical installation with concrete posts; landscaping and concrete sidewalks; developed park or amphitheatre; 24-hour security), to be completed within two years from the date of the contract, and expressly permitted the buyer to suspend monthly installments without penalties or interest until such improvements were completed if the seller failed to comply.
- Because Antipolo Realty failed to develop the subdivision project in accordance with Clause 17, Mr. Yuson paid only the arrearages up to and including August 1972 and suspended all monthly installment payments thereafter.
- On 14 October 1976 the president of Antipolo Realty sent a notice to Mr. Yuson claiming required improvements had been completed and requesting resumption of monthly installment payments; Mr. Yuson replied he would conform as soon as he could verify the truth of the representation.
- On 27 November 1976 Antipolo Realty reiterated its request, cited an NHA decision of 25 October 1976 in Case No. 252 declaring Antipolo Realty to have “substantially complied,” and made formal demand for payment of P16,994.73 representing installments allegedly accrued between September 1972 and October 1976.
- Mr. Yuson refused to pay the September 1972–October 1976 installments but agreed to pay installments after October 1976; Antipolo Realty responded by rescinding the Contract to Sell and claiming forfeiture of all installments previously paid by Mr. Yuson.
- Aggrieved, Mr. Yuson filed a letter-complaint dated 10 May 1977 with the NHA, docketed as Case No. 2123.
Relevant Contractual Clauses (as contained in the source)
- Clause 17 (Subdivision Beautification) (full text as quoted in the source):
- Seller obligations: provide concrete curbs and gutters; underground drainage system; asphalt paved roads; independent water system; electrical installation with concrete posts; landscaping and concrete sidewalks; developed park or amphitheatre; 24-hour security guard service.
- Time: improvements to be complete within two (2) years from date of contract.
- Remedy: Failure by the seller permits buyer to suspend monthly installments without penalties or interest until improvements are completed.
- Clause 7 (Termination and Forfeiture) (full text as quoted in the source):
- Buyer granted one month of grace for missed monthly installments; 12% per annum interest after the month of grace.
- If 60 days elapse from expiration of month of grace without full payment including interest, seller may declare the contract cancelled ex parte, dispose of the parcel to others, and all amounts paid and improvements shall be considered rents, charges and damages; buyer renounces right to reclaim payments and must vacate.
NHA Proceedings and Administrative Rulings
- Antipolo Realty filed a Motion to Dismiss; hearing occurred on 2 September 1977.
- On 7 February 1978 the NHA denied the motion to dismiss and scheduled Case No. 2123 for hearing.
- After hearing (the case was decided solely on complainant’s evidence), the NHA rendered a decision on 9 March 1978 ordering reinstatement of the Contract to Sell under conditions:
- (1) Antipolo Realty to send a statement of account for monthly amortizations from November 1976 to the present;
- (2) No penalty interest to be charged for the period from November 1976 to date of the statement of account;
- (3) Virgilio Yuson to be given sixty (60) days to pay the arrears shown in the statement of account.
- Antipolo Realty moved for reconsideration to the NHA asserting denial of due process (not served with notice of hearing) and lack of NHA jurisdiction because the complaint involved interpretation and application of the Contract to Sell; Motion for Reconsideration denied on 28 June 1978 by NHA General Manager G.V. Tobias, who sustained NHA jurisdiction and found Antipolo Realty had been served with notice but its counsel failed to attend.
- The NHA resolution concluded that monthly installments during the suspension period did not become due, demandable, or accrued, and declared the demand for arrears and the cancellation notice based on such demand null and void.
Further Judicial and Executive Proceedings Prior to the Present Petition
- Antipolo Realty filed a Petition for Certiorari and Prohibition with Writ of Preliminary Injunction in this Court on 2 October 1978 (docketed G.R. No. L-49051), again assailing NHA jurisdiction and asserting rights under Clause 7 to terminate and retain prior installments.
- This Court denied certiorari in a minute resolution on 11 December 1978 “without prejudice to petitioner’s pursuing the administrative remedy”; a motion for reconsideration was denied on 29 January 1979.
- Petitioner appealed the NHA decision to the Office of the President; the appeal was dismissed on 9 March 1979 by Presidential Executive Assistant Jacobo C. Clave.
Issues Presented by Petitioner in the Present Petition
- Whether