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    Vda. de Jayme

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    Michael Vincent P.
    The spouses Jayme entered into a 20-year lease contract with Asian Cars for half of Lot 2700. The contract stipulated that any loans Asian Cars obtained using the property as collateral must only be used for building construction, which would become the Jaymes' property after the lease. Asian Cars obtained a loan from Metrobank using the entire lot as collateral, then transferred ownership of the building to Metrobank via dacion en pago due to financial difficulties. Metrobank later foreclosed on the property. The Court of Appeals ruled that the dacion en pago was valid because Metrobank was an innocent purchaser with no knowledge of the lease stipulation, as the title had no encumbrance annotation

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    Vda. de Jayme

    Uploaded by

    Michael Vincent P.
    44 views1 page
    The spouses Jayme entered into a 20-year lease contract with Asian Cars for half of Lot 2700. The contract stipulated that any loans Asian Cars obtained using the property as collateral must only be used for building construction, which would become the Jaymes' property after the lease. Asian Cars obtained a loan from Metrobank using the entire lot as collateral, then transferred ownership of the building to Metrobank via dacion en pago due to financial difficulties. Metrobank later foreclosed on the property. The Court of Appeals ruled that the dacion en pago was valid because Metrobank was an innocent purchaser with no knowledge of the lease stipulation, as the title had no encumbrance annotation

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    The spouses Jayme entered into a 20-year lease contract with Asian Cars for half of Lot 2700. The contract stipulated that any loans Asian Cars obtained using the property as collateral must only be used for building construction, which would become the Jaymes' property after the lease. Asian Cars obtained a loan from Metrobank using the entire lot as collateral, then transferred ownership of the building to Metrobank via dacion en pago due to financial difficulties. Metrobank later foreclosed on the property. The Court of Appeals ruled that the dacion en pago was valid because Metrobank was an innocent purchaser with no knowledge of the lease stipulation, as the title had no encumbrance annotation

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    44 views1 page

    Vda. de Jayme

    Uploaded by

    Michael Vincent P.
    The spouses Jayme entered into a 20-year lease contract with Asian Cars for half of Lot 2700. The contract stipulated that any loans Asian Cars obtained using the property as collateral must only be used for building construction, which would become the Jaymes' property after the lease. Asian Cars obtained a loan from Metrobank using the entire lot as collateral, then transferred ownership of the building to Metrobank via dacion en pago due to financial difficulties. Metrobank later foreclosed on the property. The Court of Appeals ruled that the dacion en pago was valid because Metrobank was an innocent purchaser with no knowledge of the lease stipulation, as the title had no encumbrance annotation

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    © All Rights Reserved
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    VDA. DE JAYME v.

    COURT OF APPEALS
    G.R. No. 128669,October 4, 2002
    Quisumbing, J.:

    FACTS:

    On January 8, 1973, spouses Jayme entered into a contract of lease with


    George Neri, President of Asian Cars covering one-half of Lot 2700 for 20 years.
    Under the contract, Asian Cars used the leased premises as a collateral to
    secure payment of loan which Asian Cars may obtain from any bank, provided,
    the proceeds of the loans shall be used solely for the construction of the building
    which upon the termination of lease shall automatically become the property of
    the Jayme spouses. In October1977, Asian Cars obtained a loan of six million
    from Metrobank. The entire lot 2700 was offered as one of the several properties
    given as collateral for the loan. Due to financial difficulties, Asian Cars conveyed
    ownership of the building on the leased premises to MBTC by way of dacion en
    pago. Eventually, MBTC extrajudicially foreclosed the mortgage and MBTC was
    the highest bidder in a public auction. Heirs of Graciano Jayme filed an action
    for annulment of contract with damages and issuance of preliminary injunction
    against Asian Cars. RTC declared that the REM executed by Jayme in favor of
    Metrobank as valid and binding. XXX CA affirmed the decision declaring valid
    also the foreclosure of the mortgage and the foreclosure sale.

    ISSUE:

    Whether or not the dacion en pago by Asian Cars in favor of MBTC is valid and
    binding despite the stipulation in the lease contract

    RULING:

    Court of Appeal did not err in considering MBTC as a purchase in good faith,
    MBTC had no knowledge of the stipulation in the lease contract. There was no
    annotation on the title of any encumbrance. Thus, the transfer of the building in
    favor of MBTC was properly held valid and binding by respondent CA.

    CA decision is affirmed with modification ordering that private respondent MBTC


    pay petitioner’s rentals amounting to P602,083.33. with 6 % interest per annum
    until fully paid.

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