|
The Pinoy Entrepreneur would normally think that a sale, among other commercial transactions, involves cash or money as payment for the property being sold. Rightly so. Now, if money is the agreed mode of payment under the contract, what happens if the parties subsequently agree that something other than money, like a parcel of land or a car, is used as payment?
Nothing magical happens, really, except that this special mode of payment is technically called dacion en pago or dation in payment. Seasoned businessmen simply call it "dacion."
In dacion, the debtor offers another thing to the creditor who accepts it as equivalent of payment for an outstanding debt. In order that there be a valid dation in payment, the following requisites must be present: (1) There must be the performance of the prestation in lieu of payment which may consist in the delivery of a corporeal thing or a real right or a credit against the third person
(2) There must be some difference between the prestation due and that which is given in substitution.
(3) There must be an agreement between the creditor and debtor that the obligation is immediately extinguished by reason of the performance of a prestation different from that due.
These requisites, couched in legalspeak, would most likely lead to indigestion. To avoid that, just imagine that instead of a cash payment originally agreed in a contract of sale, the buyer-debtor transfers title over a piece of property to the seller. The delivery of the real property is definitely different from, and in lieu of, the payment in cash. If the original intention is payment using land, that would no longer be dacion, but barter. Dacion is just like sale -- the creditor is really buying the thing or property of the debtor, payment for which is to be charged against the debtor’s debt. You may call that a short-cut, simplifying a two-step process.
Now, dacion is also characterized as a form of novation, which is another big word. Let's reserve that for another post, shall we? (Source: Lo vs. KJS Eco-Formwork System Phil., Inc., G.R. No. 149420, 8 October 2003)
|
