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    Cinco Vs CA, G.R. No. 151903

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    Manuel Cinco obtained a 700,000 peso loan from Maasin Traders Lending Corporation (MTLC), secured by a mortgage on his property. To pay off this loan, Cinco applied for a larger loan from Philippine National Bank (PNB), offering the same property as collateral. PNB approved a 1.3 million peso loan contingent on canceling the MTLC mortgage. Cinco authorized MTLC's president Ester to collect the PNB loan proceeds. However, when Ester inquired about the proceeds, PNB required her to first cancel the MTLC mortgage. Outraged, Ester refused to cancel the mortgage and did not collect the funds. MTLC then initiated foreclosure proceedings against

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    Cinco Vs CA, G.R. No. 151903

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    EcnerolAicnelav
    3K views2 pages
    Manuel Cinco obtained a 700,000 peso loan from Maasin Traders Lending Corporation (MTLC), secured by a mortgage on his property. To pay off this loan, Cinco applied for a larger loan from Philippine National Bank (PNB), offering the same property as collateral. PNB approved a 1.3 million peso loan contingent on canceling the MTLC mortgage. Cinco authorized MTLC's president Ester to collect the PNB loan proceeds. However, when Ester inquired about the proceeds, PNB required her to first cancel the MTLC mortgage. Outraged, Ester refused to cancel the mortgage and did not collect the funds. MTLC then initiated foreclosure proceedings against

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    cinco v ca

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    Cinco vs CA, G.R. No. 151903

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    Manuel Cinco obtained a 700,000 peso loan from Maasin Traders Lending Corporation (MTLC), secured by a mortgage on his property. To pay off this loan, Cinco applied for a larger loan from Philippine National Bank (PNB), offering the same property as collateral. PNB approved a 1.3 million peso loan contingent on canceling the MTLC mortgage. Cinco authorized MTLC's president Ester to collect the PNB loan proceeds. However, when Ester inquired about the proceeds, PNB required her to first cancel the MTLC mortgage. Outraged, Ester refused to cancel the mortgage and did not collect the funds. MTLC then initiated foreclosure proceedings against

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    3K views2 pages

    Cinco Vs CA, G.R. No. 151903

    Uploaded by

    EcnerolAicnelav
    Manuel Cinco obtained a 700,000 peso loan from Maasin Traders Lending Corporation (MTLC), secured by a mortgage on his property. To pay off this loan, Cinco applied for a larger loan from Philippine National Bank (PNB), offering the same property as collateral. PNB approved a 1.3 million peso loan contingent on canceling the MTLC mortgage. Cinco authorized MTLC's president Ester to collect the PNB loan proceeds. However, when Ester inquired about the proceeds, PNB required her to first cancel the MTLC mortgage. Outraged, Ester refused to cancel the mortgage and did not collect the funds. MTLC then initiated foreclosure proceedings against

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 2

    Cinco vs. C.A., G.R. No.

    151903
    Petitioner Manuel Cinco obtained a loan in the amount 700,000.00 from respondent Maasin Traders
    Lending Corporation (MTLC). The loan was evidenced by the promissory note, and secured by a real
    estate mortgage over the spouses Cincos land and 4-storey building.
    To pay the loan in favor of MTLC, the spouses Cinco applied for a loan with the Philippine National Bank
    (PNB), and offered the same properties they previously mortgage to MTLC. The PNB approved the load
    application for 1.3 Million; the release was, however, conditioned on the cancellation of the mortgage in
    favor of MTLC.
    Manuel went to Ester Servacio (Ester), MTLCs President to inform her that there was money with PNB for
    Payment of his loan. Manuel executed a Special Power of Attorney (SPA) authorizing Ester to collect the
    proceeds of the loan. Ester went to the PNB to inquire, the second time around, about the proceeds. The
    bank officer confirmed the existence of such loan, but they required Ester to first sign a deed of
    release/cancellation of the mortgage before they could release the proceeds of the loan to her. Outraged,
    Ester refused the deed and did not collect the 1.3 Million.
    Ester instituted foreclosure proceeding. To prevent the foreclosure, the spouses Cinco filed an action for
    specific performance, damages, and preliminary injunction.
    Issue: Whether the loan due the MTLC had been extinguished by the act of the spouses Cinco amounted
    to payment.
    Held: No, While Esters refusal was unjustified and unreasonable, we cannot agree with Manuels position
    that this refusal had the effect of payment that extinguished his obligation to MTLC. Article 1256 is clear
    and unequivocal on this point when it provides that
    ARTICLE 1256. If the creditor to whom tender of payment has been made refuses without just
    cause to accept it, the debtor shall be released from responsibility by the consignation of the
    thing or sum due.
    In short, a refusal without just cause is not equivalent to payment; to have the effect of payment and the
    consequent extinguishment of the obligation to pay, the law requires the companion acts of tender of
    payment and consignation.
    Tender of payment, as defined in Far East Bank and Trust Company v. Diaz Realty, Inc., is the definitive
    act of offering the creditor what is due him or her, together with the demand that the creditor accept the
    same. When a creditor refuses the debtors tender of payment, the law allows the consignation of the
    thing or the sum due. Tender and consignation have the effect of payment, as by consignation, the thing
    due is deposited and placed at the disposal of the judicial authorities for the creditor to collect.
    Nonetheless, the SPA stood as an authority to collect the proceeds of the already-approved PNB loan
    that, upon receipt by Ester, would have constituted as payment of the MTLC loan. The Court agrees with
    Manuel that Esters refusal of the payment was without basis.
    Under these circumstances, we hold that while no completed tender of payment and consignation took
    place sufficient to constitute payment, the spouses Go Cinco duly established that they have legitimately
    secured a means of paying off their loan with MTLC; they were only prevented from doing so by the
    unjust refusal of Ester to accept the proceeds of the PNB loan through her refusal to execute the release
    of the mortgage on the properties mortgaged to MTLC. We also find that under the circumstances, the
    spouses Go Cinco have undertaken, at the very least, the equivalent of a tender of payment that cannot
    but have legal effect. Since payment was available and was unjustifiably refused, justice and equity
    demand that the spouses Go Cinco be freed from the obligation to pay interest on the outstanding

    amount from the time the unjust refusal took place

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