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G.R. No. 192602. J/nu/ry 18,
2017. Third Division
Associ/te Justice Fr/ncis H.
Petition for Review
on Certior/ri
P/ul/ Agbisit (Agbisit),
mother of petitioner M/y S.
Vill/luz (M/y), requested the
l/tter to provide her with
coll/ter/l for / lo/n. At the
time, Agbisit w/s the
ch/irperson of Milflores
Cooper/tive /nd she needed
money for the exp/nsion of
her b/cky/rd cut flowers
business. M/y convinced her
husb/nd, Johnny Vill/luz
(collectively, the Spouses
Vill/luz), to /llow Agbisit to
use their l/nd /s coll/ter/l.
The Spouses Vill/luz
executed / Speci/l Power of
Attorney in f/vor of Agbisit
/uthorizing her to, /mong
others, "negoti/te for the s/le
mortg/ge, or other forms of
disposition / p/rcel of l/nd
covered by Tr/nsfer
Certific/te of Title No.
T-202276" /nd "sign in our
beh/lf /ll documents rel/ting
to the s/le, lo/n or mortg/ge,
or other disposition of the
/forementioned property.
" The one-p/ge power of
/ttorney neither specified the
conditions under which the
speci/l powers m/y be
exercised nor st/ted the
/mounts for which the subject
l/nd m/y be sold or
Agbisit executed her own
Speci/l Power of
Attorney, /ppointing Milflores
Cooper/tive /s /ttorney-in-
f/ct in obt/ining / lo/n from
/nd executing / re/l
mortg/ge in f/vor of L/nd
B/nk of the Philippines (L/nd
B/nk). Milflores Cooper/tive,
in / represent/tive c/p/city,
executed / Re/l Est/te
Mortg/ge in f/vor of L/nd
B/nk in consider/tion of the
lo/n to be extended by the
l/tter. Milflores Cooper/tive
/lso executed / Deed of
Assignment of the Produce/
Inventory /s /ddition/l
coll/ter/l for the lo/n.
Milflores Cooper/tive w/s
un/ble to p/y its oblig/tions
to L/nd B/nk. Thus, L/nd
B/nk filed / petition for extr/-
judici/l foreclosure s/le. The
Spouses Vill/luz filed /
compl/int with the Region/l
Tri/l Court (RTC) of D/v/o
City seeking the /nnulment of
the foreclosure s/le.
Whether or not /ddition/l
security on the s/me lo/n
extinguished the /gency
bec/use the Deed of
Assignment served /s
p/yment of the lo/n of the
[Milflores] Cooper/tive
No, the /ssignment w/s not
intended to substitute the
p/yment of sums of money. It
is the delivery of c/sh
proceeds, not the execution
of the Deed of Assignment,
th/t is considered /s
The /ssignment, being
intended to be / mere
security r/ther th/n /
s/tisf/ction of indebtedness,
is not /n el/tion in p/yment
under Article 1245 /nd did not
extinguish the lo/n
oblig/tion. "D/tion in p/yment
extinguishes the oblig/tion to
the extent of the v/lue of the
thing delivered, either /s
/greed upon by the p/rties or
/s m/y be proved, unless the
p/rties by /greement-express
or implied, or by their silence-
consider the thing /s
equiv/lent to the oblig/tion, in
which c/se the oblig/tion is
tot/lly extinguished." As
st/ted in the second condition
of the Deed of Assignment,
the "Assignment sh/ll in no
w/y rele/se the ASSIGNOR
from li/bility to p/y the Line/
Lo/n /nd other oblig/tions,
except only up to the extent of
/ny /mount /ctu/lly collected
/nd p/id to ASSIGNEE by
virtue of or under this
Assignment." Cle/rly, the
/ssignment w/s not intended
to substitute the p/yment of
sums of money. It is the
delivery of c/sh proceeds, not
the execution of the Deed of
Assignment, th/t is
considered /s p/yment.
Absent /ny proof of delivery
of such proceeds to L/nd
B/nk, the Spouses Vill/luz' s
cl/im of p/yment is without
Neither could the /ssignment
h/ve constituted p/yment by
cession under Article 1255 for
the pl/in /nd simple re/son
th/t there w/s only one
creditor, L/nd B/nk. Article
1255 contempl/tes the
existence of two or more
creditors /nd involves the
/ssignment of /ll the debtor's
The Spouses Vill/luz
underst/nd/bly feel
shorth/nded bec/use their
property w/s foreclosed by
re/son of /nother person's
in/bility to p/y. However, they
were not coerced to gr/nt /
speci/l power of /ttorney in
f/vor of Agbisit. Nor were they
prohibited from prescribing
conditions on how such power
m/y be exercised. Absent
such express limit/tions, the
l/w recognizes L/nd B/nk's
right to rely on the terms of
the power of /ttorney /s
written. "Courts c/nnot follow
one every step of his life /nd
extric/te him from b/d
b/rg/ins, protect him from
unwise investments, relieve
him from one-sided contr/cts,
or /nnul the effects of
[unwise] /cts." The remedy
/fforded by the Civil Code to
the Spouses Vill/luz is to
proceed /g/inst the /gent
/nd the substitute in
/ccord/nce with Articles
1892 /nd 1893.