G.R. No. 161004 April 14, 2008 Technogas Philippines Manufacturing Corporation Vs.

Philippine National Bank Quisumbing, J. Facts: Petitioner obtained a loan from respondent secured by a Real Estate Mortgage. On several occasions, the load had been restructured upon petitioners request whenever it could not pay the loan in maturity dates. Finally, respondent sent collection letters from petitioner but the latter proposed dacion en pago as a mode of payment for the obligation which was rejected by respondent. Issues: WON the proposal of dacion en pago caonstitutes a valid tender of payment. Ruling; No. The assignment of property of the debtor to his creditors in payments of his debts is allowed by law according to Art. 1255 of the NCC but such assignment have no effect without acceptance. The petitioners proposal of dacion en pago was rejected by respondent thus the unaccepted proposal neither novates the parties mortgage contract nor suspends its execution as there was no meeting of the minds between the parties. WHEREFORE, the petition is DENIED for lack of merit. Thus, auction sale is valid. Cost against petitioner.