TECNOGAS PHILIPPINES MANUFACTURING CORPORATION vs.

PHILIPPINE NATIONAL BANK

551 SCRA 183
Facts: Petitioner tecnogas obtained from respondent Philippine National Bank (P
NB) an Omnibus Line of P35 million and a %-year Term Loan of P14 million. To sec
ure the loan, Tecnogas executed a Real Estate Mortgage (REM)over its parcel of l
and in Paranaque city. When the loan matured, PNB sent collection letters to Tec
nogas, but the latter only proposed to pay its obligations by way of dacion en p
ago conveying the same real property. PNB filed a petition for extrajudicial for
eclosure of the REM in the RTC of Paranaque City. A day before the auction sale,
Tecnogas filed with the RTC a complaint of annulment of extrajudicial foreclosu
re sale, with application for the issuance of a TRO and writ of preliminary inju
nction. The same was granted and extended for 17 days. Further Tecnogas' applica
tion was also granted with regard to the writ of preliminary injunction. On appe
al, CA ruled that the trial court committed grave abuse of discretion in enjoini
ng the extrajudicial foreclosure sale. Hence, Tecnogas filed this petition for r
eview on certiorari.
Issue: Whether or not the CA err in ruling that Tecnogas was not entitled to an
injunctive relief?
Held: No. The CA did not err in ruling that Tecnogas has no clear legal right to
an injunctive relief because its proposal to pay by way of dacion en pago did n
ot extinguish its obligation. Undeniably, Tecnogas' proposal to pay by way of da
cion en pago was not accepted by PNB. Thus, the unaccepted proposal neither nova
tes the parties' mortgage contract nor suspends its execution as there was no me
eting of the minds between the parties on whether the loan will be extinguished
by way of dacion en pago. Necessarily, upon Tecnogas' default in its obligations
, the foreclosure of the REM becomes a matter of right on the part of PNB, for s
uch is the purpose of requiring security for the loans.
Dacion en pago is a special mode of payment whereby the debtor offers an
other thing to the creditor who accepts it as equivalent payment of an outstandi
ng obligation.

---------------------------------------------------------------------------------------PRUDENTIAL BANK AND TRUST COMPANY vs. ABASOLO

631 SCRA 367
Facts: Valenzuela-Rosales inherited two parcels of land situated in Laguna. Afte
r she passed away, her heirs executed a special power of attorney in favor of Ab
asolo herein respondent empowering her to sell the properties. Sometime in 1995,
one Corazon Marasigan (Corazon) wanted to buy the properties, but having no ava
ilable cash, she broached the idea of first mortgaging the properties to Petitio
ner Prudential bank and trust company and that the proceeds of which would be pa
id directly to respondent. Respondent in response agreed to the proposal. To gua
rantee the payment of the property, Corazon executed a Promissory note for 1,448
,960 in favor of respondent to cover the amountof the real property. On the othe
rhand, Mendiola, an employee of PBTC, advised respondent to transfer the propert
ies first to Corazon for immediate processing of Corazon's loan application with
assurance that the proceeds thereof would be paid directly to her(respondent),
and the obligation would be refelcted in a bank guarantee. Heeding Mendiola's ad
vice, respondent executed a Deed of Absolute Sale in favor of Corazon. Corazon t

hen after applied for a loan with PBTC and executed a real estate mortgage cover
ing the properties to secure the payment of the loan. Such loan was granted. Un
fortunately, despite repeated demands, Corazon failed to pay the purchase price
of the properties. What she received from Corazon was a partial payment in kind
consisting 5 vehicles totaled P665,000. Respondent then filed a complaint for co
llection of sum of money and annulment of sale and mortgage with damages against
Corzon and the Petitioner before the RTC.
Issue: Whether or not the petitioner is subsidiarily liable to respondent abasol
o?
Held: No. To a banking institution, well-defined lending policies and sound lend
ing practices are essential to perform its lending function effectively and mini
mize the risk inherent in any extension. However, in the absence of lender-borro
wer relationship between petitioner and Abasolo, there is no inherent obligation
of petitioner to release the proceeds of the loan to her.