14) FILINVEST VS PHIL.
ACETYLENE, 111 SCRA 421;
G.R. No. L-50449 JANUARY 30, 1982
PREPARED BY: JEANELLA P. CARAS
DE CASTRO, J.:
FACTS:
Philippine Acetylene Co. Purchased from Alexander Lim a vehicle through a deed of
sale for a total amount of P55, 247.80. He placed a down payment of P20,000 and the
balance of P35,247.80 payable, under the terms and conditions of the promissory note
at a monthly installment of P1,036.70 for thirty-four (34) months, due and payable on
the first day of each month with 12 % interest per annum on each unpaid installment,
and attorney's fees in the amount equivalent to 25% of the total of the outstanding
unpaid amount with the said vehicle as the subject of a chattel mortgage to secure the
obligation.
Subsequently, Lim assigned his rights to the vehicle to appellee corporation (Filinvest).
Phil. Acetylene defaulted after it failed to pay nine (9) successive installments. The
petitioner through a demand letter informed the defendant to make the full payment plus
interests and charges or return the mortgaged property. As a result, the defendant
returned the vehicle together with the document "Voluntary Surrender with Special Power
of Attorney To Sell" by appellant on March 12, 1973 and confirmed to by Filinvest’s vice-
president.
Filinvest then informed appellant thru a letter that it cannot sell the vehicle due to its
unpaid taxes in the amount of P70,122. On the last portion of the said letter, appellee
requested the appellant to update its account by paying the instalments in arrears and
accruing interest in the amount of P4,232.21 on or before April 9, 1973. On May 8, 1973,
appellee, in a letter, offered to deliver back the motor vehicle to the appellant but the latter
refused to accept it, so the appellee instituted an action for collection of a sum of money
with damages in the CFI of Manila.
Phil. Acetylene argued that appellee has no cause of action against it since its obligation
towards the appellee was extinguished when it returned the mortgaged property, and that
assuming that the return of the property did not extinguish its obligation, it was
nonetheless 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:
whether or not the return of the mortgaged motor vehicle to the appellee by virtue of a
voluntary surrender by the appellant totally extinguished and/or cancelled the obligation
RULING:
No. No dacion en pago here since there’s nothing in the evidence to show that Filinvest
consented or intended that the mere delivery to and acceptance by him of the vehicle be
construed as actual payment or more specifically, dacion en pago. The mere return of the
mortgaged motor vehicle by the mortgagor (herein appellant) to the mortgagee,
(appellee), does not constitute dation in payment or dacion en pago in the absence,
express or implied of the true intention of the parties. Dacion en pago, (according to
Manresa) 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 en pago, as a special
mode of payment, 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 debtor's 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 fails to show that 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.
Finally the Voluntary Surrender with SPA to Sell executed reveals that the possession of
the mortgaged motor vehicle was voluntarily surrendered by the appellant to the appellee
authorizing the latter to look for a buyer and sell the vehicle in behalf of the former 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. With the stipulated conditions as stated, the
appellee, in essence was constituted as a mere agent to sell the motor vehicle which was
delivered to the appellee, not as its property. There is no estoppel on part of Filinvest to
demand payment from the unpaid obligation since it never accepted the mortgaged motor
vehicle in cull satisfaction of the mortgaged debt.
