Professional Documents
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Digests For OBLICON
Digests For OBLICON
Whether
or
not
the
consignation
was
valid
and
effective.
HELD: In order that consignation may be effective, the debtor must first comply with
certain requirements prescribed by law. The debtor must show (1) that there was a debt
due; (2) that the consignation of the obligation had been made because the creditor to
whom tender payment was made refused to accept it, or because he was absent or
incapacitated, or because several persons claimed to be entitled to receive the amount due
(Art. 1176, Civil Code); (3) that previous notice of the consignation had been given to the
person interested in the performance of the obligation (Art. 1177, Civil Code); (4) that the
amount due was placed at the disposal of the court (Art. 1178, Civil Code); and (5) that
after the consignation had been made the person interested was notified thereof (Art.
1178, Civil Code). Failure in any of these requirements is enough ground to render a
consignation
ineffective.
SC ruled that the essential requisites of a valid consignation must be complied with fully
and strictly in accordance with the law, as Articles 1256 to 1261, New Civil Code say.
Substantial compliance is not enough for that would render only a directory construction
to the law. The use of the words "shall" and "must" which are imperative, operating to
impose a duty which may be enforced, positively indicate that all the essential requisites
of a valid consignation must be complied with. The Civil Code Articles expressly and
explicitly direct what must be essentially done in order that consignation shall be valid
and effectual, as the law provides in Art 1257, 1258, 1249. SC held that the respondent
lessee has utterly failed to prove the requisites of a valid consignation.
ISSUES: Whether or not the dacion en pago is valid. Whether or not Delta is liable to the
Bank should Enriquez gain ownership of theproperty.
Civil Law: The mortgage entered into by Delta and the Bank is void for violation of PD
957. However, this does not, in any way, invalidate the dacion en pago. The CA erred
when it ruled that Delta lost ownership over the property subject of the contract to sell.
The very nature of a contract to sell is that the ownership vests upon full payment of the
purchase price. Hence there was no impediment in the dacion. Delta cannot be held liable
should Enriquez gain ownership over the land. The effect of the dacion is that the Bank
becomes a party in the contract to sell with Enriquez, replacing Delta. Enriquez now
owes the Bank the balance of the purchase price of the property. It is the intention of the
dacion to extinguish the obligation of Delta in exchange for properties. There are no other
conditions. Also, as a financial institution, the Bank should have exercised greater
diligence. It cannot claim to be a transferee in good faith. However, Enriquez is liable for
the amount agreed upon. The agreement was done in good faith, and Enriquez agreed to
Filinvest Credit Corporation vs. Phil. Acetylene Co., 197 Phil 394
Facts:
Philippine Acetylene Co. purchased from Alexander Lim a motor vehicle described as
Chevorlet 1969 model for P55K to be paid in installments. As security for the payment of
said promissory note, the appellant executed a chattel mortgage over the same motor
vehicle in favor of said Alexander Lim. Then, Lim assigned to the Filinvest all his rights,
title, and interests in the promissory note and chattel mortgage by virtue of a Deed of
Assignment.
Phil Acetylene defaulted in the payment of nine successive installments. Filinvest sent a
demand letter. Replying thereto, Phil Acetylene wrote back of its desire to return the
mortgaged property, which return shall be in full satisfaction of its indebtedness. So the
vehicle was returned to the Filinvest together with the document Voluntary Surrender
with Special Power of Attorney To Sell. Filinvest failed to sell the motor vehicle as there
were unpaid taxes on the said vehicle. Filinvest requested the appellant to update its
account by paying the installments in arrears and accruing interest. Filinvest offered to
deliver back the motor vehicle to the appellant but the latter refused to accept it, so
appellee instituted an action for collection of a sum of money with damages.
Phil Acetylenes defense: The delivery of the motor vehicle to Filinvest extinguished its
money obligation as it amounted to a dation in payment. Assuming arguendo that the
return did not extinguish, it was justified in refusing payment since the appellee is not
entitled to recover the same due to the breach of warranty committed by the original
vendor-assignor Alexander Lim.
Issue:
WON there was dation in payment that extinguished Phil Acetylenes obligation.
Held:
The mere return of the mortgaged motor vehicle by the mortgagor does not constitute
dation in payment in the absence, express or implied of the true intention of the parties.
Dacion en pago is the transmission of the ownership of a thing by the debtor to the
creditor as an accepted equivalent of the performance of obligation. In dacion, the debtor
offers another thing to the creditor who accepts it as equivalent of payment of an
outstanding debt. The undertaking really partakes in one sense of the nature of sale, that
is, the creditor is really buying the thing or property of the debtor, payment for which is
to be charged against the debtors debt. As such, the essential elements of a contract of
sale, namely, consent, object certain, and cause or consideration must be present. In its
modern concept, what actually takes place in dacion en pago is an objective novation of
the obligation where the thing offered as an accepted equivalent of the performance of an
obligation is considered as the object of the contract of sale, while the debt is considered
as the purchase price. In any case, common consent is an essential prerequisite, be it sale
or innovation to have the effect of totally extinguishing the debt or obligation.
The evidence on the record fails to show that the Filinvest consented, or at least intended,
that the mere delivery to, and acceptance by him, of the mortgaged motor vehicle be
construed as actual payment, more specifically dation in payment or dacion en pago. The
fact that the mortgaged motor vehicle was delivered to him does not necessarily mean
that ownership thereof, as juridically contemplated by dacion en pago, was transferred
from appellant to appellee. In the absence of clear consent of appellee to the proferred
special mode of payment, there can be no transfer of ownership of the mortgaged motor
vehicle from appellant to appellee. If at all, only transfer of possession of the mortgaged
motor vehicle took place, for it is quite possible that appellee, as mortgagee, merely
wanted to secure possession to forestall the loss, destruction, fraudulent transfer of the
vehicle to third persons, or its being rendered valueless if left in the hands of the
appellant.
As to the strength of the Voluntary Surrender with Special Power of Attorney To Sell, it
only authorized Filinvest to look for a buyer and sell the vehicle in behalf of the appellant
who retains ownership thereof, and to apply the proceeds of the sale to the mortgage
indebtedness, with the undertaking of the appellant to pay the difference, if any, between
the selling price and the mortgage obligation. Filinvest in essence was constituted as a
mere agent to sell the motor vehicle which was delivered not as its property. If it were, he
would have full power of disposition of the property, not only to sell it.