PNB vs Office of the President

G.R 104528 January 18, 1996

252 SCRA 6, 1996

Facts of the case:

Private Respondents were buyers of installments of sbdivision lots from Marikina Village Inc.
(represented by spouses Antonio and Susana Astudillo). Notwithstanding to the lot purchase, the
subdivision developer entered into a mortgage loan agreement with Philippine National Bank. Later on,
the subdivision developer defaulted on its payment that leads to the foreclosure of the mortgaged
property and PNB become the owner of the said lots as the highest bidder.

Acting on a suits brought by private respondents, HULRB Office of Appeals, Adjudication and Legal Affairs
(OAALA), decides that PNB may only collect the amortization amount from private respondents in
accordance with the land purchase agreement they had previously entered with the subdivision
developer and cannot be compelled to pay the whole amount all over again of the lots they had
previously brought from the latter.

Petitioner appealed to the Supreme Court that the Office of the President, in affirming its decision with
HULRB on the basis of PD 957, was invalid because the date of its enactment was only on July 12, 1976
while the mortgage loan agreement was executed on December 18, 1975 and that the Petitioner Bani is
not aware of the contracts executed between the private respondent and Marikina Subdivision,
Inc.,hence, Office of the President erred in ordering the bank to accept repondent's amortization and
issue the corresponding titles after the payments thereof.

Issue:

Whether Presidential Decree 957 applies to sale of land prior to its enactment.
Rulings:

The petition was denied on the basis the the petitioner failed to prove that such decision rendered by
the Office of the President was invalid despite of the fact that it does't state the retroactive effect of the
decree in its provisions. The fact that it can be plainly inferred from the unmistakable intent of the law to
protect innocent lot buyers from scheming subdivision developers. As between these small lot buyers
and the gigantic financial institutions which the developers deal with, it is obvious that the law - as an
instrument of social justice - must favors the weak. Nevertheless, private respondents obviously were
powerless to discover the attempt of the land developer to hypothecate the property being sold to
them. It was precisely in order to deal with this kind of situation that P.D. 957 was enacted, its very
essence and intendment being to provide a protective mantle over helpless citizens who may fall prey to
the razzmatazz of what P.D. 957 termed "unscrupulous subdivision and condominium sellers