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SALE vs. DACION EN PAGO

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Sale vs. Dacion En Pago:

DACION EN PAGO is a mode of extinguishing prior obligation whereas SALE is a source of

and gives rise to a new obligation.

DACION EN PAGO is a scheme to pay and settle debt by way of surrendering debtor’s
ownership over a certain property in favor of his creditor. SALE on the other hand denotes an
obligation on the part of seller to surrender his ownership over a determinate property in favor
of the buyer who purchased it with a sum of money and that is his obligation under their
contract of sale.

Example: When A is indebted to B for P300T and in payment to which, he offered his car to B
valued at P350T and which B gladly accepted, then the obligation of A is now extinguished
through the mode of Dacion En Pago. Take note that creditor B has no more obligation to
return to debtor A the excess value of his car at P50T. Assuming however that the car is of
lesser value (P250T) than the contracted debt which is P300T, then creditor B must make
proper objection and deem it only as a partial performance before he accepts it. Otherwise,
his silence and acceptance thereof can be treated as a full satisfaction and acceptance of the
obligation.

SOMETHING TO PONDER ON: Can the creditor be obliged to return to the debtor the
excess value of the property paid if there is a prior agreement to that effect?

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