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    PNB vs. Office of The President

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    Fe Gregorio
    PNB foreclosed on a mortgage for subdivision lots that were already sold to private buyers under purchase agreements. The Office of the President ruled that PNB could only collect remaining amortization from buyers and not require full repayment. PNB argued this was a retroactive application of P.D. 957, which protects buyers. However, the Court found no error, as laws can modify prior contracts via police power when addressing public welfare, like protecting innocent buyers. While laws generally do not apply retroactively, the intent and purpose of P.D. 957 was inferred to cover mortgages before its enactment to prevent harm to buyers.

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    PNB vs. Office of The President

    Uploaded by

    Fe Gregorio
    1K views1 page
    PNB foreclosed on a mortgage for subdivision lots that were already sold to private buyers under purchase agreements. The Office of the President ruled that PNB could only collect remaining amortization from buyers and not require full repayment. PNB argued this was a retroactive application of P.D. 957, which protects buyers. However, the Court found no error, as laws can modify prior contracts via police power when addressing public welfare, like protecting innocent buyers. While laws generally do not apply retroactively, the intent and purpose of P.D. 957 was inferred to cover mortgages before its enactment to prevent harm to buyers.

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    PNB vs. Office of the President

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    PNB foreclosed on a mortgage for subdivision lots that were already sold to private buyers under purchase agreements. The Office of the President ruled that PNB could only collect remaining amortization from buyers and not require full repayment. PNB argued this was a retroactive application of P.D. 957, which protects buyers. However, the Court found no error, as laws can modify prior contracts via police power when addressing public welfare, like protecting innocent buyers. While laws generally do not apply retroactively, the intent and purpose of P.D. 957 was inferred to cover mortgages before its enactment to prevent harm to buyers.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    1K views1 page

    PNB vs. Office of The President

    Uploaded by

    Fe Gregorio
    PNB foreclosed on a mortgage for subdivision lots that were already sold to private buyers under purchase agreements. The Office of the President ruled that PNB could only collect remaining amortization from buyers and not require full repayment. PNB argued this was a retroactive application of P.D. 957, which protects buyers. However, the Court found no error, as laws can modify prior contracts via police power when addressing public welfare, like protecting innocent buyers. While laws generally do not apply retroactively, the intent and purpose of P.D. 957 was inferred to cover mortgages before its enactment to prevent harm to buyers.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 1

    PNB vs.

    Office of the President


    G.R. No. 104528. January 18, 1996.
    PANGANIBAN, J.:

    FACTS:
    Private respondents were buyers on installment of subdivision lots from Marikina Village, Inc. (represented
    by spouses Antonio and Susana Astudillo). On December 18, 1975, said subdivision developer mortgaged
    the lots in favor of petitioner, Philippine National Bank, notwithstanding the land purchase agreements over
    said lots. Unaware of this mortgage, private respondents duly complied with their obligations and
    constructed their houses on the lots in question.
    Subsequently, the subdivision developer defaulted and PNB foreclosed on the mortgage. As highest bidder
    at the foreclosure sale, the bank became owner of the lots.
    In a decision rendered on October 28, 1988 ruled that PNB without prejudice to seeking relief against
    Marikina Village, Inc. may collect from private respondents only the "remaining amortization, in accordance
    with the land purchase agreements they had previously entered into with "Marikina Village. Inc., and cannot
    compel private respondents to pay all over again for the lots they had already bought from said subdivision
    developer. On May 2, 1989, the Housing and Land Use Regulatory Board affirmed this decision. On July
    12, 1976, P.D. 957, "The Subdivision and Condominium Buyers’ Protective Decree" was enacted,
    concurring with HLURB.
    ISSUE:
    Whether or not the Office of the President erred in applying P.D. 957 retroactively?
    RULINGS:

    No, the Office of the President did not err in applying P.D. 957 retroactively on subject mortgage executed
    on December 18, 1975. Generally, pursuant to Article 4 of the Civil Code, laws shall have no retroactive
    effect, unless the contrary is provided. While P.D. 957 did not expressly provide for its retroactivity, it may
    be inferred that the intent of the law was to cover even those real estate mortgages, executed prior to its
    enactment, to protect innocent lot buyers from "unscrupulous subdivision and condominium sellers”.
    Despite the impairment clause, a contract valid at the time of its execution may be legally modified or even
    completely invalidated by a subsequent law. If the law is a proper exercise of the police power, it will prevail
    over the contract. Into each contract are read the provisions of existing law and, always, a reservation of
    the police power as long as the agreement deals with a matter affecting the public welfare.

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