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Obli Case

Lydia Cuba obtained loans from DBP secured by assignments of her fishpond leasehold rights. She defaulted on the loans. DBP appropriated the leasehold rights without foreclosure. Cuba challenged this as the assignments were a mortgage, not cession of payment. The Court ruled the assignments were not cession of payment as there was only one creditor, DBP, and cession involves multiple creditors. The Court found DBP's appropriation of the leasehold rights without foreclosure invalid.

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Monica Morante
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114 views

Obli Case

Lydia Cuba obtained loans from DBP secured by assignments of her fishpond leasehold rights. She defaulted on the loans. DBP appropriated the leasehold rights without foreclosure. Cuba challenged this as the assignments were a mortgage, not cession of payment. The Court ruled the assignments were not cession of payment as there was only one creditor, DBP, and cession involves multiple creditors. The Court found DBP's appropriation of the leasehold rights without foreclosure invalid.

Uploaded by

Monica Morante
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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G.R. No.

112182 December 12, 1994


GR No. 118342, January 5, 1998 DBP v Court of Appeals and Lydia Cuba
BRICKTOWN DEVELOPMENT CORP. (its new corporate name MULTINATIONAL
GR No 118367, January 5, 1998 Lydia Cuba v Court of Appeals, Development Bank REALTY DEVELOPMENT CORPORATION) and MARIANO Z. VERALDE, petitioners,
of the Philippines and Agripina Caperal vs.
AMOR TIERRA DEVELOPMENT CORPORATION and the HON. COURT OF
FACTS: Plaintiff Lydia P. Cuba is a grantee of a Fishpond Lease Agreement No. 2083 APPEALS, respondents.
from the Government. She obtained loans from the DBP and as security for said
loans, executed two Deeds of Assignment of her Leasehold Rights. However, she FACTS: Petitioner corporation executed two Contracts to Sell in favor of
failed to pay her loan on the scheduled dates in accordance with its terms. DBP respondent. The total price was stipulated to be paid by private respondent in
thereafter appropriated the Leasehold rights of Cuba over the fishpond in question specific amounts and at their maturity dates. Private respondent was only able to
without foreclosure proceedings and sent a Notice of Rescission thru Notarial Act pay petitioner corporation the sum of P1,334,443.21. Private respondent sent a
and which was received by plaintiff Lydia Cuba. DBP then took possession of the "Notice of Cancellation of Contract" on account of the petitioner's continued failure
Leasehold Rights over the fishpond. Cuba then challenged the act of DBP in to pay the installment due 30 June 1981 and the interest on the unpaid balance of
appropriating to itself Cuba’s leasehold rights over the fishpond without foreclosure the stipulated initial payment.
proceedings. Furthermore, Cuba insists that the assignment was a mortgage
contract while DBP insists that it had the effect of Novation.
ISSUES: WON the contracts to sell were validly rescinded/cancelled by Bricktown.

ISSUE: W/N the assignment amounts to cession of payment.


RULING: YES. Admittedly, the terms of payment agreed upon by the parties were
RULING: No, there was no cession. Neither did the assignment amount to payment not met by private respondent. On this score, the provisions of Article 1169 of the
by cession under Article 1255 of the Civil Code for the plain and simple reason that Civil Code would find no relevance whatsoever. The cancellation of the contracts to
there was only one creditor, the DBP. Article 1255 contemplates the existence of sell by petitioner corporation accords with the contractual covenants of the parties,
two or more creditors and involves the assignment of all the debtors property. and such cancellation must be respected. It may be noteworthy to add that in a
contract to sell, the non-payment of the purchase price (which is normally the
condition for the final sale) can prevent the obligation to convey title from acquiring
any obligatory force.

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