Answered: A gasoline manufacturing company (TPMC)…

Understanding Business

12th Edition

ISBN:9781259929434

Author:William Nickels

Publisher:William Nickels

Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment

Section: Chapter Questions

Problem 1CE

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Question

A gasoline manufacturing company (TPMC) obtained a loan from PNB and executed a real estate mortgage over its parcel of land in Paranaque City to secure its loan. When the loan matured, PNB sent collection letters to TPMC. In reply, TPMC proposed to pay its obligations by way of a dacion en pago conveying its TCT No. 122533. Instead of accepting the offer, PNB filed a petition for extrajudicial foreclosure of the HEM. TPMC filed a complaint for annulment of extrajudicial foreclosure sale alleging that its debt has already been extinguished by its offer of dacion en pago. PNB contended that the proposal of TPMC to pay by way of dacion en pago did not extinguish its obligation as it was not accepted by PNB. Hence, the extrajudicial foreclosure sale was proper. Was PNB correct?

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