Andrea B. Locsin v. Raymund J. Austria

Summary

Andrea Locsin mortgaged her property to secure a P215,000 loan from Raymund Austria. After defaulting on payments, Austria sent demand letters. Subsequently, parties executed a deed of sale for P915,000. When Andrea attempted to pay the original loan and demanded return of her property title, Austria refused. Andrea filed for specific performance and consigned payment in court. The Supreme Court ruled that the deed of sale constituted dación en pago that extinguished the original mortgage obligation, making consignation invalid as no debt remained. The Court applied the parol evidence rule, finding Andrea's acknowledgment of payment in the deed must be accepted since she never challenged its validity in her pleadings. This case demonstrates the legal consequences of dación en pago transactions and the importance of properly raising issues in pleadings under procedural rules.