|
DAO
HENG BANK, INC., now BANCO
DE ORO UNIVERSAL BANK,
Petitioner, - versus - SPS.
LILIA and REYNALDO LAIGO, Respondents. |
G.R.
No. 173856 Present:
QUISUMBING, J., Chairperson,
CARPIO MORALES, TINGA,
VELASCO, JR., and
BRION, JJ. Promulgated: November 20, 2008 |
SECOND DIVISION
x - - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - - - - - - - - - - - - - - x
D E C I S I O N
CARPIO MORALES, J.
The Spouses
Lilia and Reynaldo Laigo (respondents) obtained loans from Dao Heng Bank, Inc.
(Dao Heng) in the total amount of P11 Million, to secure the payment of which
they forged on October 28, 1996, November 18, 1996 and April 18, 1997 three
Real Estate Mortgages covering two parcels of land registered in the name of
respondent “Lilia D. Laigo, . . . married to Reynaldo Laigo,” one containing 569
square meters and the other containing 537 square meters.
The mortgages were duly registered in
the Registry of Deeds of Quezon City.
The loans were payable within 12
months from the execution of the promissory notes covering the loans. As of 2000, respondents failed to settle
their outstanding obligation, drawing them to verbally offer to cede to Dao
Heng one of the two mortgaged lots by way of dacion en pago. To appraise the
value of the mortgaged lands, Dao Heng in fact commissioned an appraiser whose
fees were shouldered by it and respondents.
There appears to have been no further
action taken by the parties after the appraisal of the properties.
Dao Heng
was later to demand the settlement of respondents’ obligation by letter of P10,385,109.92
inclusive of interests and other charges.
Respondents failed to heed the demand, however.
Dao Heng thereupon filed in September
2000 an application to foreclose the real estate mortgages executed by respondents. The properties subject of the mortgage were sold
for P10,776,242 at a public auction conducted on
It appears
that respondents negotiated for the redemption of the mortgages for by a
This
is to formally advise you of the bank’s response
to your proposal pertaining to the redemption of the two (2) foreclosed lots
located in Fairview, Quezon City as has been relayed to you last June 13, 2001
as follows:
1. Redemption price shall be P11.5MM
plus 12% interest based on diminishing balance payable in staggered
payments up to
a. P3MM – immediately upon receipt
of this approval
b. Balance payable in staggered
payments (plus interest) up to
2. Release Values for Partial Redemption:
a. TCT
No. 92257 (along Commonwealth) P7.500
MM*
b. TCT
No. N-146289 (along Regalado) P4.000
MM*
*
excluding 12% interest
3. Other Conditions:
a. Payments shall be covered by
post dated checks
b. TCT No. 92257 shall be the
first property to be released upon payment of the first P7.5MM plus interest
c. Arrangement to be covered by an
Agreement
If you are agreeable to the foregoing terms
and conditions, please affix your signature showing your conformity thereto at
the space provided below. (Emphasis and
underscoring in the original; italics supplied)
Nothing was
heard from respondents, hence, petitioner by its Manager, Property Management
& Credit Services Department, advised her by letter of December 26, 2001[3]
that in view of their failure to conform to the conditions set by it for the
redemption of the properties, it would proceed to consolidate the titles
immediately after the expiration of the redemption period on January 2, 2002.
Six days before
the expiration of the redemption period or on December 27, 2001, respondents
filed a complaint before the Regional Trial Court (RTC) of Quezon City, for
Annulment, Injunction with Prayer for Temporary Restraining Order (TRO), praying
for the annulment of the foreclosure of the properties subject of the real
estate mortgages and for them to be allowed “to deliver by way of ‘dacion en pago’ one of the mortgaged properties as full
payment of [their] mortgaged obligation” and to, in the meantime, issue a TRO directing
the defendant-herein petitioner to desist from consolidating ownership over
their properties.
By
respondents’ claim, Dao Heng verbally agreed to enter into a dacion en pago.
In its
Opposition to respondents’ Application for a TRO,[4]
petitioner claimed that there was no meeting of the minds between the parties
on the settlement of respondents’ loan via
dacion en pago.
A hearing on
the application for a TRO was conducted by Branch 215 of the RTC of Quezon City
following which it denied the same.
Petitioner
thereupon filed a Motion to Dismiss the complaint on the ground that the claim
on which respondents’ action is founded is unenforceable under the Statute of Frauds
and the complaint states no cause of action.
Respondents opposed the motion,
contending that their delivery of the titles to the mortgaged properties
constituted partial performance of their obligation under the dacion en pago to take it out from the
coverage of the Statute of Frauds.
The trial
court granted petitioner’s Motion to Dismiss in this wise:
[P]laintiffs’ claim must be based
on a document or writing evidencing the alleged dacion en pago, otherwise,
the same cannot be enforced in an action in court. The Court is not persuaded by plaintiffs’
contention that their case is an exception to the operation of the rule on
statute of frauds because of their partial performance of the obligation in the
dacion en pago consisting of the delivery of the titles of the properties to
the defendants. As correctly pointed out
by the defendants, the titles were not delivered to them pursuant to the
dacion en pago but by reason of the execution of the mortgage loan agreement. If indeed a dacion en pago agreement was
entered into between the parties, it is inconceivable that a written document
would not be drafted considering the magnitude of the amount involved.[5] (Emphasis and underscoring supplied)
Respondents
assailed the dismissal of their complaint via
Petition for Review before this Court which referred it to the Court of
Appeals for disposition.
Reversing the trial court’s dismissal
of the complaint, the appellate court, by Decision of
In
ordering the reinstatement of respondents’ complaint, the appellate court held that
the complaint states a cause of action, respondents having alleged that there
was partial performance of the agreement to settle their obligation via dacion en pago when they agreed to
have the properties appraised to thus place their agreement within the
exceptions provided under Article 1403[8] of
the Civil Code on Statute of Frauds. Thus
the appellate court ratiocinated:
Particularly,
in seeking exception to the application of the Statute of Frauds, petitioners[-herein
respondents] averred partial performance of the supposed verbal dacion en pago.
In paragraph 5 of their complaint, they stated: “As part of the agreement,
defendant Dao Heng Bank had the mortgaged property appraised to
determine which of the two shall be delivered as full payment of the mortgage
obligation; Also as part of the deal, plaintiffs for their part paid P5,000.00
for the appraisal expense. As reported by the appraiser commissioned by Defendant
Dao Heng, the appraised value of the mortgaged properties were as follows: x x x”
Having done so, petitioners are at least entitled to a reasonable
opportunity to prove their case in the course of a full trial, to which the
respondents may equally present their evidence in refutation of the formers’
case. (Underscoring supplied)
Petitioner’s
Motion for Reconsideration having been denied by the appellate court by Resolution
of
I.
. . . THAT THE COMPLAINT ALLEGED A SUFFICIENT CAUSE OF ACTION DESPITE THE ALLEGATIONS, AS WELL AS ADMISSIONS FROM THE RESPONDENTS, THAT THERE WAS NO PERFECTED DACION EN PAGO CONTRACT;
II.
. . . THAT THE ALLEGED DACION EN PAGO IS NOT UNENFORCEABLE UNDER THE STATUTE OF FRAUDS, DESPITE THE ABSENCE OF A WRITTEN & BINDING CONTRACT;
III.
. . . THAT THE COMPLAINT SUFFICIENTLY STATED A CAUSE OF ACTION.[9]
Generally,
the presence of a cause of action is determined from the facts alleged in the
complaint.
In
their complaint, respondents alleged:
x x x x
4.
Sometime in the middle of the year 2000, defendant Dao Heng Bank as
the creditor bank agreed to the full settlement of plaintiffs’ mortgage
obligation of P9 Million through the assignment of one of the two
(2) mortgaged properties;
[5] As part of the
agreement, defendant Dao Heng Bank had the mortgaged properties appraised to
determine which of the two (2) mortgaged properties shall be delivered as full
payment of the mortgage obligation;
Also as part of the deal, plaintiffs for their part paid P5,000.00
for the appraisal expense; As
reported by the appraiser commissioned by defendant Dao Heng, the appraised
value of the mortgaged properties were as follows:
(a)
Property No. 1 – T.C.T. No. 92257: P12,518,000.00
L2A Blk 12 Don Mariano Marcos
Ave.,
(b)
Property No. 2 – T.C.T. No. 146289: P8,055,000.00
L36 Blk 87 Regalado Ave. Cor. Ipil St.,
[6] Sometime in December, year 2000, the protest
of plaintiffs notwithstanding and in blatant breach of the agreed “Dacion en
Pago” as the mode of full payment of plaintiffs’ mortgage obligation, defendant
Dao Heng Bank proceeded to foreclose the mortgaged properties above-described
and sold said properties which were aggregately valued at more than P20
Million for only P10,776,242.00, an unconscionably very low price; (Underscoring supplied)
Even if a complaint states a cause of
action, however, a motion to dismiss for insufficiency of cause of action may
be granted if the evidence discloses facts sufficient to defeat the claim and
enables the court to go beyond the disclosures in the complaint. In such instances, the court can dismiss a
complaint on this ground, even without a hearing, by taking into account the discussions
in said motion to dismiss and the disposition thereto.[10]
In its Opposition to respondents’
application for the issuance of a TRO,[11]
petitioner, responding to respondents’ allegation that it agreed to the
settlement of their obligation via the
assignment of one of the two mortgaged
properties, alleged that there was no meeting of the minds thereon:
4.
Plaintiffs’ claim that defendant Dao Heng Bank[s] foreclosure sale of
the mortgaged properties was improper because there was an agreement to dacion
one of the two (2) mortgaged properties as full settlement of the loan
obligation and that defendant Dao Heng Bank and Banco de Oro were already
negotiating and colluding for the latter’s acquisition of the mortgaged [properties]
for the unsconscionably low price of P10,776.242.00 are clearly WITHOUT BASIS. Quite
to the contrary, there was no meeting of the minds between defendant Dao
Heng Bank and the plaintiffs to dacion any of the mortgaged properties as full
settlement of the loan. Although
there was a PROPOSAL and NEGOTIATIONS to settle the loan by way
of dacion, nothing came out of said
proposal, much less did the negotiations mature into the execution of a dacion
en pago instrument. Defendant Dao
Heng Bank found the offer to settle by way of dacion not acceptable and thus,
it opted to foreclose on the mortgage.
The law clearly provides that “the
debtor of a thing cannot compel the creditor to receive a different one,
although the latter may be of the same value, or more valuable than that which
is due” (Article 1244, New Civil
Code). “The oblige is entitled to demand
fulfillment of the obligation or performance as stipulated” (Palmares v. Court of Appeals, 288 SCRA 422
at p. 444 [1998]). “The power to decide whether or not to foreclose on the
mortgage is the sole prerogative of the mortgagee” (Rural
Bank of San Mateo, Inc. vs. Intermediate Appellate Court, 146 SCRA 205, at
213 [1986]) Defendant Dao Heng Bank
merely opted to exercise such prerogative.[12] (Emphasis in the original; capitalization and
underscoring supplied)
Dacion
en pago as a mode of extinguishing an existing obligation partakes of the
nature of sale whereby property is alienated to the creditor in satisfaction of
a debt in money.[13] It is
an objective novation of the obligation, hence, common consent of the
parties is required in order to extinguish the 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 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 the purchase price. In any case, common
consent is an essential prerequisite, be it sale or novation, to have the effect of totally extinguishing the debt or obligation.”[14] (Emphasis, italics and underscoring supplied; citation omitted)
Being
likened to that of a contract of sale, dacion en pago is governed by the
law on sales.[15] The
partial execution of a contract of sale takes the transaction out of the
provisions of the Statute of Frauds so long as the essential requisites of consent of the contracting parties, object
and cause of the obligation concur and are clearly established to be present.[16]
Respondents
claim that petitioner’s commissioning of an appraiser to appraise the value of
the mortgaged properties, his services for which they and petitioner paid, and their
delivery to petitioner of the titles to the properties constitute partial
performance of their agreement to take the case out of the provisions on the
Statute of Frauds.
There is no concrete showing,
however, that after the appraisal of the properties, petitioner approved respondents’
proposal to settle their obligation via
dacion en pago. The delivery to
petitioner of the titles to the properties is a usual condition sine qua non to the execution of the
mortgage, both for security and registration purposes. For if the title to a property is not
delivered to the mortgagee, what will prevent the mortgagor from again encumbering
it also by mortgage or even by sale to a third party.
Finally,
that respondents did not deny proposing to redeem the mortgages,[17] as
reflected in petitioner’s
WHEREFORE,
the Court of Appeals Decision of
SO
ORDERED.
CONCHITA CARPIO MORALES
Associate
Justice
WE CONCUR:
LEONARDO A. QUISUMBING
Associate Justice
Chairperson
|
DANTE O. TINGA Associate Justice |
PRESBITERO J. VELASCO, JR. Associate Justice |
ARTURO D.
BRION
Associate
Justice
ATTESTATION
I attest
that the conclusions in the above Decision had been reached in consultation
before the case was assigned to the writer of the opinion of the Court’s
Division.
LEONARDO A. QUISUMBING
Associate
Justice
Chairperson
CERTIFICATION
Pursuant to
Section 13, Article VIII of the Constitution, and the Division Chairperson’s
Attestation, I certify that the conclusions in the above decision had been
reached in consultation before the case was assigned to the writer of the
opinion of the Court’s Division.
REYNATO
S. PUNO
Chief Justice
[1] Records, p. 29.
[2]
[3]
[4]
[5]
[6] Penned by Justice Monina
Arevalo-Zenarosa, with the concurrence of Justices Andres B. Reyes, Jr. and Rosmari D. Carandang. CA rollo,
pp. 113-124.
[7]
[8] Article 1403. The following contracts are unenforceable unless they are ratified: x x x
(2) Those that do not comply with the Statute of Frauds as set forth in this number. In the following cases an agreement hereafter made shall be unenforceable by action, unless the same, or some note or memorandum thereof be in writing, and subscribed by the party charged, or by his agent; evidence, therefore, of the agreement cannot be received without the writing, or a secondary evidence of its contents: x x x
(e) An agreement for the leasing for a longer period than one year, or for the sale of real property or of an interest therein; x x x
[9] Rollo, p. 32.
[10] Florenz
D. Regalado, Remedial Law Compendium, Vol. 1 (2005), citing Tan v. Director of Forestry, et al., L-24548,
[11] Supra note 4.
[12] Records, pp. 15-16.
[13] Civil Code, Article 1245.
[14] Filinvest
Credit Association v. Philippine Acetylene Co., 197 Phil. 394, 402-403
(1982).
[15] Supra note 13 at Article 1245.
[16] Vda. de Jomoc v. Court of Appeals,
G.R. No. 92871, August 2, 1991, 200
[17] Supra note 2