AQUINTEY V.

SPOUSES TIBONG
G.R. NO. 166704,DECEMBER 20, 2006
FACTS: On May 6, 1999, petitioner Aquintey filed before RTC Baguio, a complaint for sum of
money and damages against respondents. Agrifina alleged that Felicidad secured loans from her
on several occasions at monthly interest rates of 6% to 7%. Despite demands, spouses Tibong
failed to pay their outstanding loans of P773,000,00 exclusive of interests. However, spouses
Tiong alleged that they had executed deeds of assignment in favor of Agrifina amounting to
P546,459 and that their debtors had executed promissory notes in favor of Agrifina. Spouses
insisted that by virtue of these documents, Agrifina became the new collector of their debts.
Agrifina was able to collect the total amount of P301,000 from Felicdads debtors. She tried to
collect the balance of Felicidad and when the latter reneged on her promise, Agrifina filed a
complaint in the office of the barangay for the collection of P773,000.00. There was no
settlement. RTC favored Agrifina. Court of Appeals affirmed the decision with modification
ordering defendant to pay the balance of total indebtedness in the amount of P51,341,00 plus 6%
per month.
ISSUE: Whether or not the deeds of assignment in favor of petitioner has the effect of payment of
the original obligation that would partially extinguish the same
RULING: YES. Substitution of the person of the debtor may be affected by delegacion. Meaning,
the debtor offers, the creditor accepts a third person who consent of the substitution and assumes
the obligation. It is necessary that the old debtor be released fro the obligation and the third
person or new debtor takes his place in the relation . Without such release, there is no novation.
Court of Appeals correctly found that the respondents obligation to pay the balance of
their account with petitioner was extinguished pro tanto by the deeds of credit. CA decision
is affirmed with the modification that the principal amount of the respondents is P33,841.
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.
SSS V CA, 553 SCRA 677 (2008)
FACTS:
AG&P and Semirara Coal Company proposed to pay its arrears of premiums and loan
amortization delinquencies through dacion en pago which was subsequently accepted by SSS.
Thereafter, SSS directed herein defendant to submit certain documents necessary for the
agreement which AG&P immediately complied with. SSS finally approved the dacion en pago
which as of March 2001 amounted to P29, 261,902.45. To effect said transfer, a Deed of
Assignment had to be executed between the two parties which SSS failed to come up. On the
other hand, defendant continuously submitted drafts to SSS of the needed Deed of Assignment.
ON 2003, SSS sent to AG&P a revised copy of the Deed of Assignment, however, the amount
went from P29, 261,902.45 to P40, 846,610.64 allegedly because of the additional interest and
penalties. AG&P requested for the deduction of these interests and penalties for the delay of the
Deed of Assignment was the fault of SSS.
Thus, AG&P filed a complaint for the specific performance and damages against SSS. SSS
contended that the court has no jurisdiction over the case in accordance with R.A. 8282 which
provides that any dispute should be filed in the Commission. RTC ruled in favor of AG&P. upon
appeal, the CA held that the court has jurisdiction and that the case be reverted back to the Trial
Court for actual proceedings. Thus, SSS appealed to the Court.
ISSUE:
1. WON dacion en pago should be implemented

2. Which body has jurisdiction over non-implementation of a dacion en pago agreed by the
parties?
HELD:
1. Yes. The Supreme Court absolutely adopted the CA decision.
Dacion en pago is the delivery and transmission of ownership of a thing by the debtor to the
creditor as an accepted equivalent of the performance of the obligation. It is a special mode of
payment where 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 novation, to have
the effect of totally extinguishing the debt or obligation.
From the averments in their complaint, the appellate court observed that private respondents are
seeking to implement the Deed of Assignment which they had drafted and submitted to
SSS pursuant to the approval by SSS. The appellate court thus held that the subject of the
complaint is no longer the payment of the premium and loan amortization delinquencies, as well
as the penalties appurtenant thereto, but the enforcement of the dacion en pago. Thus, the trial
court was ordered to settle the controversy.
From the allegations of respondents complaint, it readily appears that there is no longer any
dispute with respect to respondents accountability to the SSS. Respondents had, in
fact admitted their delinquency and offered to settle them by way of dacion en
pago subsequently approved by the SSS in Resolution No. 270-s. 2001. SSS stated in said
resolution that the dacion en pago proposal of AG&P Co. of Manila and Semirara Coals
Corporation to pay their liabilities in the total amount ofP30,652,710.71 as of 31 March 2001 by
offering their 5.8 ha. property located in San Pascual, Batangas, be, as it is hereby, approved..
This statement unequivocally evinces its consent to the dacion en pago.
2. The controversy, instead, lies in the non-implementation of the approved and agreed dacion en
pago on the part of the SSS. As such, respondents filed a suit to obtain its enforcement which is,
doubtless, a suit for specific performance and one incapable of pecuniary estimation beyond the
competence of the Commission. Pertinently, the Court ruled in Singson v. Isabela Sawmill, as
follows:
In determining whether an action is one the subject matter of which is not capable of pecuniary
estimation this Court has adopted the criterion of first ascertaining the nature of the principal
action or remedy sought. If it is primarily for the recovery of a sum of money, the claim is
considered capable of pecuniary estimation, and whether jurisdiction in the municipal courts or in
the courts of first instance would depend on the amount of the claim. However, where the basic
issue is something other than the right to recover a sum of money, where the money claim is
purely incidental to, or a consequence of, the principal relief sought, this Court has considered
such actions as cases where the subject of the litigation may not be estimated in terms of money,
and are cognizable exclusively by courts of first instance (now Regional Trial Courts).