DELTA DEVELOPMENT AND MANAGEMENT SERVICES, INC. V.

ANGELES CATHERINE
ENRIQUEZ, ET AL.
G.R. No. 168666, 12 January 2011 FIRST DIVISION (Del Castillo, J.)

Dacion en pago extinguished the obligation to the extent it was stipulated unless either
by express or implied stipulation, it shall serve as the full payment.
Delta Management Services, Inc. (DELTA) which is owned by Ricardo De Leon, is a
corporation engaged in the trade of developing and selling real estate properties loaned from Luzon
Development Bank (LDB) for the development of Delta Homes. Spouses De Leon obtained a loan from
the bank wherein it is secured by a real estate mortgage over a number of their properties.

In 1997, DELTA executed a Contract to Sell with Angela Catherine Enriquez (Enriquez) over
the disputed land that was mortgaged by the De Leons, wherein the downpayment was paid by
Enriquez. DELTA subsequently defaulted in its obligations to the bank. Instead of foreclosing the
mortgaged properties however, the bank offered a dacion en pago.

A Deed of Assignment was executed between DELTA and LDB which transfers and conveys
certain properties of the former to the latter. It was however unknown to Enriquez that the property
she has an interest in is included in the deed of Assignment as the document is silent as to which
properties are excluded from the agreement between the two.

ISSUE:

Whether or not the dacion en pago extinguished the obligation of DELTA to the bank.

RULING:

YES. Dacion en pago extinguished the obligation to the extent it was stipulated unless either
by express or implied stipulation, it shall serve as the full payment. It is shown in this case that the
agreement entered into between the parties contemplates the extinguishment of the obligation
when it is not made with any condition or reservation.