Mapa vs. Arroyo

Presidential Decree No. 957 does not retroactively become part of contracts to sell executed before its effectivity so as to impose additional development obligations on the seller and excuse the buyer's default. The developer's duty under Sections 20 and 21 was limited to facilities offered and indicated in approved plans and advertisements, and, on the facts, the right to rescind after prolonged non-payment under the contract remained enforceable.

Jose Antonio Mapa stood as installment buyer and Labrador Development Corporation as owner/developer of Barangay Hills Subdivision in Antipolo, Rizal, bound by four contracts to sell containing a stipulated subdivision-development clause. Presidential Decree No. 957, the Subdivision and Condominium Buyers' Protective Decree effective July 12, 1976, required owners or developers to complete facilities, improvements, infrastructures and other forms of development offered and indicated in approved plans and advertisements within prescribed periods. The Human Settlements Regulatory Commission, through its Office of Adjudication and Legal Affairs and Commission Proper, exercised adjudicatory competence over controversies between subdivision buyers and developers, subject to appeal to the Office of the President.

On September 18, 1975, Jose Antonio Mapa and Labrador Development Corporation entered into two contracts to sell over lots 12 and 13 of Barangay Hills Subdivision in Antipolo, Rizal, owned and developed by Labrador. On different months in 1976, they entered into two similar contracts involving lots 15 and 16 in the same subdivision. Under the contracts, Mapa undertook to pay a total monthly installment of P2,137.54 over ten years.

Mapa defaulted beginning December 1976. Thereafter, Labrador sent a demand letter dated May 5, 1977, received by Mapa on May 6, 1977, giving him until May 18, 1977 to settle unpaid installments for the four lots amounting to P15,411.66, with warning that non-payment would result in cancellation. Mapa took no action. Labrador later wrote another letter dated June 15, 1982, received June 21, 1982, reminding Mapa of total arrears of P180,065.27 and demanding payment within five days from receipt, which Mapa likewise ignored. On August 16, 1982, Labrador sent Mapa a notarial cancellation of the four contracts to sell, received August 20, 1982.

On September 10, 1982, Mapa's counsel wrote Labrador invoking Clause 20 of the contracts regarding lighting and water facilities and demanding compliance. On the same date, Labrador issued a certification holding implementation of the August 16, 1982 notarial cancellation pending complete development of the road lot cul de sac within Mapa's properties. Thereafter, on October 25, 1982, Labrador informed Mapa that construction of road, sidewalk, curbs and gutters adjacent to Block 11 was already completed and requested him to come to its office within five days upon receipt to settle his account. On December 10, 1982, Mapa tendered payment by check for P2,137.54, but Labrador refused acceptance on the ground that it was agreed that after development of the cul de sac he would pay in full the total amount due, computed at P260,138.61. On December 14, 1982, Mapa wrote that Labrador had not complied with requirements for water and light facilities in the four lots. The following day, Mapa filed a complaint against Labrador for neglect to provide (a) a water system meeting HSRC minimum standards and (b) electrical power supply, praying that Labrador be directed to provide said facilities and that a cease and desist order issue against cancellation of the contracts.

After hearing and investigation including on-site inspection, the OAALA found that Labrador had substantially complied with its development obligation and that Mapa had stopped payments as early as December 1976, when the periods for development under Presidential Decree No. 957 and under the contracts had not yet expired.

• Incorporation of P.D. No. 957: Petitioner maintained that the provisions of Presidential Decree No. 957 and its implementing rules formed part of the contracts to sell, hence Labrador was bound to comply with the obligations imposed therein within the period provided.
• Non-Compliance Precluding Rescission: Petitioner argued that because Labrador failed to perform said statutory obligations, particularly on water and lighting facilities, Labrador was precluded from rescinding the contracts and petitioner did not incur delay on his part.
• Doctrine of Last Antecedent: Petitioner argued that under Section 20, and correlatively Section 21, the phrase "which are offered and indicated in the approved subdivision or condominium plans, brochures, prospectus, printed matters, letters or in any form of advertisements" referred only to "other forms of development" and not to "facilities, improvements and infrastructures."

• Agreed Full Payment After Cul-de-sac Development: Respondent maintained that payment by check for P2,137.54 was properly refused because it was agreed that after development of the cul de sac, complainant would pay in full the total amount due computed at P260,138.61.
• Suspension of Cul-de-sac at Buyer's Request: Respondent explained that initial non-construction of the cul-de-sac was because petitioner requested suspension of its construction, as his intention was to purchase the adjoining lots and thereafter enclose the same.

• Grave Abuse of Discretion: Whether the Office of the President gravely abused discretion amounting to lack or excess of jurisdiction in dismissing the appeal from the HSRC.
• Applicability of P.D. No. 957: Whether Presidential Decree No. 957 applied to contracts to sell executed before its effectivity so as to form part thereof and impose water, lighting and other development obligations.
• Suspension of Payments and Rescission: Whether petitioner could validly suspend monthly installments for alleged non-development and whether respondent could rescind the contracts after prolonged default.

• Grave Abuse of Discretion: No. Absent clear, manifest and grave abuse amounting to want of jurisdiction, findings of the administrative agency on matters within its competence are not disturbed.
• Applicability of P.D. No. 957: No. The Decree, issued July 12, 1976 after execution of the contracts, has no retrospective application to add obligations not intended by the parties, and Sections 20-21 cover only facilities offered and indicated in approved plans and advertisements.
• Suspension of Payments and Rescission: No valid suspension was established. Any right to suspend could rest only on Clause 20, with which Labrador substantially complied, while petitioner defaulted before development periods expired, justifying rescission under Clause 7.

• Grave Abuse of Discretion: The rule applied accords respect, if not finality, to factual findings of administrative tribunals because of special knowledge and expertise, disregarded only for lack of evidentiary support, fraud, imposition, collusion, irregular procedure, palpable error, or manifest arbitrariness. Applied here, scrutiny revealed duly supported findings after hearing, investigation and on-site inspection, with no circumstance falling under the exceptions, so interference was unwarranted.
• Applicability of P.D. No. 957: Sections 20 and 21 require construction only of facilities, improvements, infrastructures and other forms of development offered and indicated in approved plans, brochures, prospectus, printed matters, letters or advertisements, within one year from license issuance or two years from the Decree for prior sales. Because the contracts predated the July 12, 1976 Decree, subsequently imposed statutory obligations could not have been intended as contractual terms, and no retrospective intent appears from its language. Other than Clause 20, no further written commitment was made, so reading petitioner's desired matters into the contract would unlawfully impose additional pre-law obligations. Petitioner's last-antecedent bifurcation was rejected under ad proximum antecedens fiat relatio nisi impediatur sentencia, since "and" denotes joinder, not separation, and the qualifying phrase applies to all antecedents.
• Suspension of Payments and Rescission: If any suspension ground existed, it could arise only from non-performance of Clause 20, particularly the cul-de-sac, which petitioner invoked to justify default. The OAALA inspection showed substantial compliance, and the initial delay was explained by petitioner's own request to suspend construction pending acquisition of adjoining lots. Moreover, petitioner stopped payment in December 1976, merely five months after the Decree's effectivity and about a year after contracting, when respondent still had one and one-half years under the Decree and two years under the agreement to develop; suspension was therefore premature, and after five years from default rescission under Clause 7 was available.

• Respect for Administrative Findings — Absent clear, manifest and grave abuse of discretion amounting to want of jurisdiction, findings of an administrative agency on matters within its competence will not be disturbed by the courts, owing to the tribunal's special knowledge and expertise. The findings were sustained here because they were supported by evidence from hearing, investigation and on-site inspection.
• Exceptions to Finality of Administrative Factual Findings — Factual findings may be disregarded only where they are not supported by evidence; where vitiated by fraud, imposition or collusion; where the procedure leading thereto is irregular; when palpable errors are committed; or when grave abuse of discretion, arbitrariness or capriciousness is manifest. None of these circumstances was found present.
• Non-Retroactivity of P.D. No. 957 to Prior Contracts — Obligations subsequently provided by Presidential Decree No. 957 cannot be deemed intended by parties to contracts executed before its issuance, absent language giving retrospective application. Sections 20 and 21 were thus held inapplicable to impose new water, lighting and infrastructure duties beyond Clause 20 of the 1975-1976 contracts to sell in Mapa vs. Arroyo.
• Doctrine of Last Antecedent; Ad Proximum Antecedens Fiat Relatio Nisi Impediatur Sentencia — Relative words refer to the nearest antecedent unless prevented by context, and "and" is a conjunction denoting joinder or union, not separation. The qualifying phrase "which are offered and indicated..." in Section 20 was therefore construed to modify all of "facilities, improvements, infrastructures and other forms of development," not merely "other forms of development."
• Contractual Basis for Suspension of Installments — Failure by the seller to reasonably comply with the Clause 20 development schedule permits the buyer to suspend monthly installments without penalties or interest until improvements are made as scheduled. Reliance on statutory standards outside Clause 20 could not justify Mapa's suspension where substantial compliance with Clause 20 was shown.

• "it is jurisprudentially settled that absent a clear, manifest and grave abuse of discretion amounting to want of jurisdiction, the findings of the administrative agency on matters falling within its competence will not be disturbed by the courts." — States the controlling standard of judicial review of administrative adjudication and anchors denial of certiorari.
• "Relative words refer to the nearest antecedent, unless it be prevented by the context." — Gives the canonical formulation of the last-antecedent rule used to reject petitioner's restrictive reading of Section 20.
• "it is basic in legal hermeneutics that "and" is not meant to separate words but is a conjunction used to denote a joinder or union." — Explains why the enumeration in Section 20 must be read as a unified list subject to the same qualifying phrase.
• "To read into the contract the matters desired by petitioner would have the law impose additional obligations on the parties to a contract executed before that very law existed or was contemplated." — Expresses the ratio against retroactive incorporation of Presidential Decree No. 957 into prior contracts to sell.

• Sagun, et al. vs. People's Homesite and Housing Corporation, G.R. No. 44738, June 22, 1988 — Cited as reiteration of the rule limiting judicial disturbance of administrative findings absent grave abuse of discretion.
• Alcuaz, et al. vs. Philippine School of Business Administration, et al., 161 SCRA 7 (1988) — Cited, in turn citing Ateneo de Manila University vs. Court of Appeals, 145 SCRA 106 (1986), for the enumerated exceptions allowing disregard of administrative factual findings.
• Brown vs. Brown, Del., 3 Terry 157, 29 A.2d 149, 153, cited in Black's Law Dictionary, 4th Ed., 57 — Cited as authority for the maxim ad proximum antecedens fiat relatio nisi impediatur sentencia on interpretation of relative words.

• Section 20, Presidential Decree No. 957 — Requires every owner or developer to construct facilities, improvements, infrastructures and other forms of development offered and indicated in approved plans, brochures and advertisements within one year from license issuance or such period fixed by the Authority; construed to apply only to offered and indicated items and held inapplicable to enlarge prior contracts.
• Section 21, Presidential Decree No. 957 — For lots sold prior to the Decree, requires completion of Section 20 obligations within two years from the Decree unless extended or bonded; invoked by petitioner but held not to create retroactive contractual terms.
• Sections 38 and 39, Presidential Decree No. 957 — Provide punishment for failure to comply with Sections 20-21 obligations; referenced as consequence of the statutory duty petitioner sought to enforce.
• Rule V, Implementing Rules of Presidential Decree No. 957 — Requires two sources of electric power, two deep-well and pump sets of specified capacity and two standard fire hose flows of 175 gallons per minute; relied upon by petitioner to define water and power obligations.
• Clause 20, Contracts to Sell — Obligates seller to provide paved roads, underground drainage, concrete curbs and gutters, water system, and park and open space, with completion within three years except items requiring public utility or government services, and allows buyer to suspend installments without penalties or interest upon seller's failure to reasonably comply; held the sole valid basis for any suspension and substantially complied with.
• Clause 7, Contracts to Sell — Invoked as basis for rescission after lapse of five years from complainant's default; sustained as ground for dismissing the complaint and upholding cancellation.

Melencio-Herrera (Chairperson), Paras, Padilla and Sarmiento, JJ., concur.