Civil Law, 2016 Bar — Question IX

ESSAY

Butch got a loan from Hagibis Corporation (Hagibis) but he defaulted in the payment. A case for collection of a sum of money was filed against him. As a defense, Butch claims that there was already an arrangement with Hagibis on the payment of the loan. To implement the same, Butch already surrendered five (5) service utility vehicles (SUVs) to the company for it to sell and the proceeds to be credited to the loan as payment. Was the obligation of Butch extinguished by reason of dacion en pago upon the surrender of the SUVs? Decide and explain. (5%)

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