The dispute centered on whether a creditor could automatically take ownership of a property used as collateral without a formal foreclosure proceeding.
The Supreme Court ruled in favor of Cuba. The court held that the assignment was intended as security, not an absolute sale. Therefore, DBP’s act of taking the property without foreclosure was illegal. The court ordered DBP to pay damages to Cuba for the "moral shock and social humiliation" caused by her unlawful ejectment. Other References for "118342"
Decided on January 5, 1998, this case is a staple in Philippine property and credit law, specifically regarding the prohibition of pactum commissorium .
The number most prominently refers to a landmark Philippine legal case, G.R. No. 118342 , titled Development Bank of the Philippines (DBP) vs. Court of Appeals and Lydia Cuba .