Luzon Dev’t Bank v Enriquez

G.R. No. 168646 January 12, 2011

Art. 1245 – Dation in Payment

Facts:

·       The BANK is a domestic financial corporation that extends loans to DELTA, a domestic corporation engaged in the business of developing and selling real estate properties, particularly Delta Homes I in Cavite.

·       The owners obtained a ₱4 million loan from the BANK for the express purpose of developing Delta Homes I through real estate mortgage (REM) on several of their properties, including Lot 4, which was the subject matter of these cases.

·       DELTA executed a Contract to Sell with respondent Angeles Catherine Enriquez (Enriquez) over the house and lot in Lot 4 for the purchase price of ₱614,950.00. Enriquez made a downpayment of ₱114,950.00.

·       DELTA defaulted on its loan obligation; the BANK, instead of foreclosing the REM, agreed to a dation in payment or a dacion en pago, thereby executing Deed of Assignment in Payment of Debt.

·       Among the properties assigned to the BANK was the house and lot of Lot 4, which was the subject of Enriquez’s Contract to Sell with DELTA.

·       The BANK then posited that, if title to Lot 4 is ordered delivered to Enriquez, DELTA has the obligation to pay the BANK the corresponding value of Lot 4.

Issue:

WoN the dation in payment extinguished the loan only to the extent of the value of the thing delivered.

Held:

            No, the Court holds that Dacion en pago extinguished the loan obligation.

            Art. 1245 of the Civil Code provides "The dation in payment extinguishes the obligation to the extent of the value of the thing delivered, either as agreed upon by the parties or as may be proved, unless the parties by agreement, express or implied, or by their silence, consider the thing as equivalent to the obligation, in which case the obligation is totally extinguished."

            In the case at bar, the Dacion en Pago executed by DELTA and the BANK indicates a clear intention by the parties that the assigned properties would serve as full payment for DELTA’s entire obligation.

            Thus, CA decision is AFFIRMED with MODIFICATIONS.

Phil. Lawin Bus Co et al v CA

G.R. No. 130972. January 23, 2002

Art. 1245 – Dation in Payment

Facts:

·            Advance Capital Corporation, a licensed lending investor, extended a loan to petitioner Philippine Lawin Bus Company of P8,000,000.00 payable within 1 year.

·            To guarantee payment of the loan, Lawin executed in favor of Advance the following documents: (1) A Deed of Chattel Mortgage wherein 9 units of buses were constituted as collaterals: (2) A joint and several UNDERTAKING of defendant Master Tours and Travel Corporation, signed by Isidro Tan and Marciano: and (3) A joint and several UNDERTAKING, executed and signed by Esteban, Isidro, Marciano and Henry, all surnamed Tan.

·            Out of the P8,000,000.00 loan, P1,800,000.00 was paid. Thus, Lawin was able to avail an additional loan of P2,000,000.00 for one (1) month.

·       LAWIN failed to pay the promissory note and the same was renewed.

·       But LAWIN failed to pay the two promissory notes so that it was granted a loan re-structuring for two (2) months. Despite the restructuring, LAWIN failed to pay.

·       Respondent foreclosed the mortgaged buses and as the sole bidder thereof, the amount of P2,000,000.00 was accepted by the deputy sheriff conducting the sale and credited to the account of LAWIN.

·       Thereafter, identical demand letters were sent to petitioners to pay their obligation.  Despite repeated demands, petitioners failed to pay their indebtedness which totaled of P16,484,992.42.

·       Thus, the suit for sum of money, wherein the respondent prays that defendants solidarily pay plaintiff.

Issue:

WoN there was dacion en pago between the parties upon the surrender or transfer of the mortgaged buses to the respondent.

Held:

            No, the Court affirms with CA that there was no dacion en pago that took place between the parties.

            Article 1245 of the Civil Code provides that the law on sales shall govern an agreement of dacion en pago. A contract of sale is perfected at the moment there is a meeting of the minds of the parties thereto upon the thing which is the object of the contract and upon the price.

            In this case, there was no meeting of the minds between the parties on whether the loan of the petitioners would be extinguished by dacion en pago. 

The receipts show that the two buses were delivered to respondent in order that it would take custody for the purpose of selling the same. Such an agreement negates transfer of absolute ownership over the property to respondent, as in a sale.

Thus, the Court REVERSES and SETS ASIDE the appealed decision.

DBP v CA

G.R. No. 118342 January 5, 1998

Art. 1245 – Dation in Payment

Facts:

·          Cuba is a grantee of a Fishpond Lease Agreement from the Government.

·          Cuba obtained loans from the DBP through Deeds of Assignment of her Leasehold Rights.

·          Cuba failed to pay her loan on the scheduled dates thereof in accordance with the terms of the Promissory Notes.

·          Without foreclosure proceedings, whether judicial or extra-judicial, DBP appropriated the Leasehold Rights of Cuba over the fishpond in question.

·          DBP, in turn, executed a Deed of Conditional Sale of the Leasehold Rights in favor of Cuba over the same fishpond in question.

·          But Cuba failed to pay the amortizations stipulated in the Deed of Conditional Sale.

·          DBP sent Notice of Rescission and took possession of the Leasehold Rights over said fishpond.

·          DBP thereafter executed a Deed of Conditional Sale in favor of defendant Agripina Caperal to award Fishpond Lease Agreement.

·          The RTC Pangasinan resolved the issue in favor of CUBA, but the CA ruled otherwise except for the damages awarded to Cuba.

·          On appeal against the award of damages, DBP contended that the assignment novated the promissory notes in that the obligation to pay a sum of money the loans was substituted by the assignment of the rights over the fishpond.

  

Issue:

WoN the assignment constitute dation in payment.

Held:

            No, the Court holds that the Deeds of Assignment of Cuba’s Leasehold Rights is not dation in payment under Article 1245 of the civil Code.

            Under the law, Dation in payment, whereby property is alienated to the creditor in satisfaction of a debt in money, shall be governed by the law on sales.

            In the instant case, the assignment of leasehold rights was a mortgage contract. In their stipulation of facts the parties admitted that the assignment was by way of security for the payment of the loans, and therefore not a satisfaction of indebtedness.

            Thus, the CA decision is reversed except as to the moral damages, and the trial court’s decision is modified.