Legal Case: Genato vs. Bayhon - Debt Obligation and Transmissibility, Assignments of Law

Download Legal Case: Genato vs. Bayhon - Debt Obligation and Transmissibility and more Assignments Law in PDF only on Docsity! G.R. No. 171035 August 24, 2009 WILLIAM ONG GENATO, Petitioner, vs. BENJAMIN BAYHON, MELANIE BAYHON, BENJAMIN BAYHON, JR., BRENDA BAYHON, ALINA BAYHON-CAMPOS, IRENE BAYHON-TOLOSA, and the minor GINO BAYHON, as represented herein by his natural mother as guardian-ad-litem, JESUSITA M. BAYHON, Respondents. I. Facts Civil Case No. Q-90-7012 On October 18, 1990, respondents Benjamin M. Bayhon, Melanie Bayhon, Benjamin Bayhon Jr., Brenda Bayhon, Alina Bayhon-Campos, Irene Bayhon-Tolosa and the minor Gino Bayhon, as represented by his mother Jesusita M. Bayhon, filed an action before the RTC, Quezon City, Branch 76, docketed as Civil Case No. Q-90-7012. In their Complaint, respondents sought the declaration of nullity of a dacion en pago allegedly executed by respondent Benjamin Bayhon in favor of petitioner William Ong Genato. Benjamin Bayhon alleged that on July 3, 1989, he obtained from the petitioner a loan amounting to PhP 1,000,000.00. Civil Case No. Q-90-7551 On December 20, 1990, petitioner William Ong Genato filed Civil Case No. Q-90-7551, an action for specific performance, before the RTC, Quezon City, Branch 79. In his Complaint, petitioner alleged that respondent obtained a loan from him in the amount of PhP 1,000,000.00. Petitioner alleged further that respondent failed to pay the loan and executed on October 21, 1989 a dacion en pago in favor of the petitioner. The dacion en pago was inscribed and recorded with the Registry of Deeds of Quezon City. II. Issue Whether or not Benjamin Bayhon is liable to Mr. Genato in the amount of Php 5,647,130.00 in principal and interest as of October 3, 1997 and 5% monthly interest thereafter until the account shall have been fully paid. III. Ruling As a general rule, obligations derived from a contract are transmissible. Article 1311, par.1 of the Civil Code provides: Contracts take effect only between the parties, their assigns and heirs, except in case where the rights and obligations arising from the contract are not transmissible by their nature, or by stipulation or by provision of law. The heir is not liable beyond the value of the property he received from the decedent.