Professional Documents
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Allied Bank Corporation The fact of Allied Bank’s representation has not been proven. It
G.R. No. 177921, December 4, 2013 Topic: Extinguishment of Obligations | cannot be deemed as a defense to exculpate petitioners from their
Ponente: J. Perlas-Bernabe | Author: Laureta loan obligations to Allied Bank.
Peakstar’s breach of its obligations to MC arising from the MoA cannot be
Doctrine: Article 1231 of the Civil Code states that obligations are extinguished classified as a fortuitous event under jurisprudential formulation.
either by payment or performance, the loss of the thing due, the condonation To constitute a fortuitous event, the following elements must
or remission of the debt, the confusion or merger of the rights of creditor and concur: (a) the cause of the unforeseen and unexpected occurrence
debtor, compensation or novation. or of the failure of the debtor to comply with obligations must be
independent of human will; (b) it must be impossible to foresee
Facts: the event that constitutes the caso fortuito or, if it can be foreseen,
1. Metro Concast (MC) through its officers (petitioners) obtained it must be impossible to avoid; (c) the occurrence must be such as
several loans from Allied Bank. These loan transactions were to render it impossible for the debtor to fulfill obligations in a
covered by a promissory note and separate letters of credit/trust normal manner; and (d) the obligor must be free from any
receipts (with varying interest rates). participation in the aggravation of the injury or loss.
2. MC failed to settle, hence Allied Bank filed a complaint for While it may be argued that Peakstar’s breach of the MoA was
collection of sum of money. Petitioners admitted their unforseen by petitioners, the same us clearly not "impossible"to
indebtedness to Allied Bank but denied liability for the interests foresee or even an event which is independent of human will."
and penalties charged. Neither has it been shown that said occurrence rendered it
3. MC alleged that the economic reverses suffered by the economy in impossible for petitioners to pay their loan obligations to
1998 and the devaluation of the peso against the US dollar The performance or breach of the MoA bears no relation to the performance
contributed greatly to the downfall of the steel industry leading to or breach of the subject loan transactions, they being separate and distinct
MCs cessation. sources of obligations.
4. In order to settle their debts petitioners offered the sale of MC’s The fact of the matter is that petitioners’ loan obligations to Allied
remaining assets, consisting of machineries and equipment, to Bank remain subsisting for the basic reason that the former has not
Allied Bank which was refused. Allied Bank advised them to sell the been able to prove that the same had already been paid or, in any
equipment and apply the proceeds of the sale to their outstanding way, extinguished.
obligations. There were no buyers, so the equipment was reduced
into ferro scrap or scrap metal over the years. FROM INTERNET LANG
5. In 2002, Peakstar Oil Corporation, represented by one Crisanta Topic: Test to Determine the Nature of Counterclaim
Camiling, expressed interest in buying the scrap metal. During the
negotiations with Peakstar, petitioners claimed that Atty. P. Saw, a G.R. No. L-22578 January 31, 1973
member of Allied Bank’s legal department, acted as the latter’s National Marketing Corporation vs. Federation of United NAMARCO
agent. Eventually, with the alleged conformity of Allied Bank, Distributor’s Inc.
through Atty. Saw, a Memorandum of Agreement was drawn
between Metro Concast, represented by petitioner Jose Dychiao, Facts:
and Peakstar, through Camiling, under which Peakstar obligated
itself to purchase the scrap metal for a total consideration of ₱34M. 1. NAMARCO and the FEDERATION entered into a Contract of Sale.
6. Peakstar reneged on all its obligations under the MoA. In this NAMARCO was authorized to import the following items with the
regard, petitioners alleged that: (a) their failure to pay their corresponding dollar value totalling $2,001,031.00. Among the
outstanding loan obligations to Allied Bank must be considered as goods covered by the Contract of Sale were 2,000 cartons of PK
force majeure ; and (b) since Allied Bank was the party that Chewing Gums, 1,000 cartons of Juicy Fruit Chewing Gums, 500
accepted the terms and conditions of payment proposed by cartons of Adams Chicklets, 168 cartons of Blue Denims, and 138
Peakstar, petitioners must therefore be deemed to have settled bales of Khaki Twill.
their obligations to Allied Bank.
7. Petitioners argue that their loan obligation is extinguished due to 2. To insure the payment of those goods by the FEDERATION, the
Peakstar’s failure to perform its own obligations to MC pursuant to NAMARCO accepted three domestic letters of credit.
the MoA. Petitioners classify Peakstar’s default as a form of force
majeure in the sense that they have, beyond their control, lost the 3. FEDERATION received from the NAMARCO the 2,000 cartons of PK
funds they expected to have received from the Peakstar (due to the Chewing Gums, 1,000 cartons of Juicy Fruit Chewing Gums, and
MoA) which they would, in turn, use to pay their own loan 500 cartons of Adams Chicklets, all with a total value of
obligations to Allied Bank. P277,357.91, under the condition that the cost thereof would be
paid in cash through PNB Domestic L/C No. 600570; and on
Issue: W/N obligations under the subject PN and trust receipts have already February 20, 1960, the FEDERATION received from the NAMARCO
been extinguished? NO the 168 cartons of Blue Denims and 183 bales of Khaki Twill, with
a total value of P135,891.82 and P197,804.12, respectively, under
Ruling: the condition that the cost thereof would be paid in cash through
Article 1231 of the Civil Code states that obligations are extinguished either by PNB Domestic L/C Nos. 600606 and 600586, respectively.
payment or performance, the loss of the thing due, the condonation or
remission of the debt, the confusion or merger of the rights of creditor and 4. FEDERATION filed a complaint against the NAMARCO for specific
debtor, compensation or novation. performance and damages, alleging that after the NAMARCO had
delivered a great portion of the goods listed in the Contract of
The MoA has no relevance to the performance of petitioners’ obligations to Sale, it refused to deliver the other goods mentioned in the said
Allied Bank. contract.
The MoA is a sale of assets contract, while petitioners’ obligations
to Allied Bank arose from various loan transactions.
Absent any showing that the terms and conditions of the latter a. In its answer, NAMARCO has refused and declined to
transactions have been, in any way, modified or novated by the accept the cash payments by the FEDERATION.
terms and conditions in the MoA, said contracts should be treated According to NAMARCO, the Contract of Sale was not
separately and distinctly from each other, such that the existence, validly entered into by the NAMARCO and, therefore, it
performance or breach of one would not depend on the existence, is not bound by the provisions thereof.
performance or breach of the other. b. NAMARCO tried to encash the three domestic letters
The issue on whether or not Allied Bank expressed its conformity to the assets but PNB denied.
sale transaction between Metro Concast and Peakstar is irrelevant.
i. The common condition of the three letters 2, 1960, to compel NAMARCO to recognize the validity of their agreement
of credit is that the sight drafts drawn on and deliver the remainder of the goods to be paid "on cash basis" in no way
them must be duly accepted by the involved the payment of the merchandise worth P609,014.73, already
FEDERATION before they will be honored by delivered and paid for in cash by means of the domestic letters of credit. Such
the Philippine National Bank. But the said non-payment by FEDERATION was a matter which was distinct and separate
drafts were not presented to the from and had no logical relationship with the subject matter of FEDERATION's
FEDERATION for acceptance. own suit. These two claims are separate and distinct, as they involve totally
ii. NAMARCO demanded from the different factual and legal issues and do not represent the same "basic
FEDERATION the payment of the total controversy".
amount of P611,053.35, but the latter failed The right of the NAMARCO to the cost of the goods existed upon delivery of
and refused to pay the said amount. CFI the said goods to the FEDERATION which, under the Contract of Sale, had to
Manila promulgated its decision ordering pay for them Therefore, the claim of the NAMARCO for the cost of the goods
the NAMARCO to specifically perform its delivered arose out of the failure of the FEDERATION to pay for the said
obligation in the Contract of Sale, by goods, and not out of the refusal of the NAMARCO to deliver the other goods
delivering to the FEDERATION the to the FEDERATION.
undelivered goods. SC affirms
Additional discussion:
An after-acquired counterclaim, is one of the recognized exceptions to the
5. Then, NAMARCO instituted the present action (Civil Case No. general rule that a counterclaim is compulsory and must be asserted if it
46124) alleging, that the FEDERATION'S act or omission in refusing arises out of the same transaction as the opposing party's claim.
to satisfy the former's valid, just and demandable claim has Thus a party who fails to interpose a counterclaim although arising out of or
compelled it to file the instant action; and praying that the is necessarily connected with the transaction or occurrence of the plaintiff's
FEDERATION be ordered to pay the NAMARCO the sum of suit but which did not exist or mature at the time said party files his answer is
P611,053.35, representing the cost of merchandise mentioned in not thereby barred from interposing such claim in a future litigation.
the preceding paragraph, with interest. Doctrine: "We have indicated that a counterclaim is compulsory if it bears a
a. FEDERATION: being a compulsory claim, in that it arose "logical relationship" to an opposing party's claim. Zion v. Sentry Safety
out of or is necessarily connected with the transaction Control Corp., 3 Cir., 1959. 258 F. 2d 31. See also United Artists Corp. v.
or occurrence that is the subject matter of the action Masterpiece Productions, Inc. 2 Cir., 1955, 221 F. 2d 213, 216. The phrase
of the previous civil case, it must’ve been set up in "logical relationship" is given meaning by the purpose of the rule which it was
accordance with rule 10 sec 4. Failure to set up a designed to implement. Thus, a counterclaim is logically related to the
counterclaim precludes NAMARCO from instituting an opposing party's claim where separate trials of each of their respective
independent action. claims would involve a substantial duplication of effort and time by the
b. NAMARCO: claim for recovery of the cost of parties and the courts. Where multiple claims involve many of the same
merchandise is not connected with the suit for specific factual issues, or the same factual and legal issues, or where they are off-
performance and evidence would not support or refute shoots of the same basic controversy between the parties, fairness and
both. Ergo, it is not counterclaim considerations of convenience and of economy require that the
Issue: counterclaimant be permitted to maintain his cause of action. ...
WoN the present suit instituted by NAMARCO is a counterclaim. Hence,
barred by previous suit. (short version) Obligations and contracts; Payment by delivery of commercial paper;
Whether or not this action of NAMARCO for the collection of the payment of Impairment clause in article 1249 applies only to instruments executed by
the merchandise delivered to, but not yet paid by, the FEDERATION, is third persons and delivered by the debtor to the creditor
already barred as a consequence of the failure of NAMARCO to set it up as a .—–The delivery of promissory notes payable to order, or bills of exchange or
counterclaim in the previous case, (Civil Case No. 42684) (long version lol) drafts or othermercantile documents shall produce the effect of payment
Held: only whenrealized, or when by the fault of the creditor, the privileges
Rule on compulsory counterclaim [barred when not set up]: (1) that it arises inherent in theirnegotiable character have been impaired (Article 1249, New
out of, or is necessarily connected with, the transaction or occurrence that is Civil Code).The clause of article 1249 relative to the impairment of the
the subject matter of the opposing party's claim (2) that it does not require negotiablecharacter of the commercial paper by the fault of the creditor is
for its adjudication the presence of third parties of whom the court cannot applicableonly to instruments executed by third persons and delivered by the
acquire jurisdiction; and (3) that the court has jurisdiction to entertain the debtor tothe creditor, and does not apply to instruments executed by the
claim. debtorhimself and delivered to the creditor.
Rule on permissive counterclaim [not barred if not set up]: logical connection
with the subject matter but the court has no jurisdiction or it requires for From internet also
adjudication the presence of 3rd parties. PAL v. CA
Test to determine: G.R. No. L-49188 January 30, 1990
1. Issue identity – Lessons Applicable: Promissory notes and checks (Negotiable Instruments
2. that the counterclaim is compulsory if it would be barred by res Law)
judicata
3. same evidence or substantial identity in the evidence relating to
the claim and counterclaim FACTS:
4. the logical relationship between the claim and counterclaim November 8, 1967: Amelia Tan, under the name and style of Able
(compelling test of compulsariness) Printing Press commenced a complaint for damages before the CFI
a. It is the one circumstance without which neither party
could have found it necessary to seek relief.
CFI: favored Amelia Tan against Philippine Airlines Inc. (PAL)
It must be noted that one of the requisites for the application of the rule on
compulsory counterclaim is that the counterclaim should at least be
connected with or must arise out of the transaction or occurrence which CA affirmed with mod
gave rise to the opposing party's claim.
While the refusal of NAMARCO to deliver the remainder of the goods May 18, 1978: PAL received a copy of the first alias writ of execution
contracted for in its "trade assistance agreement" with FEDERATION, is the issued on the same day directing Special Sheriff Jaime K. del Rosario to
important link in the chain of facts and events that constituted the levy on execution in the sum of P25,000.00 with legal interest thereon
transaction upon which Federation's cause of action was based in Civil Case from July 20,1967 when respondent Amelia Tan made an extra-judicial
No. 42684, it is not even a part of the transaction constituting the subject demand through a letter
matter of NAMARCO's present suit. For the action of FEDERATION on March
May 23, 1978: PAL filed an urgent motion to quash the alias writ of G.R. No. 180069, March 5, 2014
execution stating that no return of the writ had as yet been made and J.Peralta/ Resurreccion
that the judgment debt had already been fully satisfied as evidenced by
the cash vouchers signed and received by Deputy Sheriff Reyes who Topic: Payment and performance - As to time and place of performance
absconded Doctrine: One who pleads payment has the burden of proving it. Even where
the plaintiff must allege non-payment, the general rule is that the burden rests
May 26,1978: served a notice of garnishment on the depository bank of on the defendant to prove payment, rather than on the plaintiff to prove non-
PAL payment. When the creditor is in possession of the document of credit, he
need not prove non-payment for it is presumed. The creditor's possession of
ISSUE: W/N payment made to the absconding sheriff by check in his name the evidence of debt is proof that the debt has not been discharged by
operate to satisfy the judgment debt payment.
Facts:
1. Franco secured four (4) Trust Indenture Certificates from PCIB
HELD: NO. CA affirmed. (Basically, it was an investment of Franco to PCIB which will earn
interests when maturity date comes);
payment must be made to the obligee himself or to an agent having
authority, express or implied, to receive the particular payment
2. According to Franco, in making the trust investment, he was
actually providing for his future since the money invested was going
The receipt of money due on ajudgment by an officer authorized by law
to be managed and administered by PCIB and will be commingled,
to accept it will, therefore, satisfy the debt
pooled and automatically rolled- over for better investment;
Since a negotiable instrument is only a substitute for money and not 3. One day, he ran out of money because his child got leukemia. With
money, the delivery of such an instrument does not, by itself, operate this, he went to PCIB and requested withdrawal of his investment;
as payment
4. However, the PCIB denied the request and told him that due to the
The payment made by the PAL to the absconding sheriff was not in conversion of all outstanding PCIBank trust indenture accounts into
cash or legal tender but in checks common trust certificates, all trust indenture certificates have been
rendered "null and void.";
Article 1249 of the Civil Code provides: 5. Furious, Franco filed a complaint for recovery of sum of money and
The payment of debts in money shall be made in the currency stipulated, and damages against PCIB;
if it is not possible to deliver such currency, then in the currency which is
legal tender in the Philippines. 6. PCIB answered that it already paid the TICs;
The delivery of promissory notes payable to order, or bills of exchange or 7. During Pretrial, Franco presented the original TICs. PCIB witnesses
other mercantile documents shall produce the effect of payment only when were also presented. After trial, the RTC ruled in favour Franco. On
they have been cashed, or when through the fault of the creditor they have appeal, the CA affirmed the RTC;
been impaired.
As between two innocent persons, one of whom must suffer the Hence, this case.
consequence of a breach of trust, the one who made it possible by his
act of confidence must bear the loss. Issue: WON the TICs had already been paid. NO
PAL without prudence, departed from what is generally observed and Ruling:
done, and placed as payee in the checks the name of the errant Sheriff
and not the name of the rightful payee 8. No. Franco’s possession of the original copies of the TICs strongly
supports his claim that PCIB obligation to return the principal plus
EQUITABLE PCI BANK, YU and APAS v. NG SHEUNG NGOR interest of the money placement has not been extinguished;
G.R.NO. 171545, December 19, 2007
9. One who pleads payment has the burden of proving it. Even where
FACTS: On October 7, 2001, respondents Ngor and Go filed an action for the plaintiff must allege non-payment, the general rule is that the
amendment and/or reformation of documents and contracts against Equitable burden rests on the defendant to prove payment, rather than on
and its employees. They claimed that they were induced by the bank to avail the plaintiff to prove non-payment. When the creditor is in
of its peso and dollar credit facilities by offering low interests so they accepted possession of the document of credit, he need not prove non-
and signed Equitable’s proposal. They alleged that they were unaware that the payment for it is presumed. The creditor's possession of the
documents contained escalation clauses granting Equitable authority to evidence of debt is proof that the debt has not been discharged by
increase interest without their consent. These were rebutted by the bank. RTC payment;
ordered the use of the 1996 dollar exchange rate in computing respondent’s
dollar-denominated loans. CA granted the Bank’s application for injunction but 10. The TICs in the hands of Franco is a proof of indebtedness and a
the properties were sold to public auction. prima facie evidence that they have not been paid. PCIB could have
easily presented documentary evidence to dispute the claim, but it
ISSUE: Whether or not there was an extraordinary deflation did not. In its omission, it may be reasonably deduced that no
evidence to that effect really exist. Worse, the testimonies of PCIB's
RULING: Extraordinary inflation exists when there is an unusual decrease in own witnesses, reinforce, rather than belie, Franco's allegations of
the purchasing power of currency and such decrease could not be reasonably non-payment.
foreseen or was beyond the contemplation of the parties at the time of the
obligation. Deflation is an inverse situation. 11. Franco won.
The City Court of Cebu ruled that there was proper substantial For the fourth requisite, no official receipt issued by the Clerk of
compliance of the requisites of consignation; hence Francisco’s payments Court was presented to prove actual deposit of the monthly rentals except the
were valid and effective. However, the Court of First Instance reversed the two cashier's checks referred to in Exhibit 12. When the official receipt of Clerk
judgment and ruled in favour of Soco. of Court was check (Annexes B1-B40), no receipt was found for the payment
to month of May and June 1977 and on the month of July and August 1977,
Issue: the rentals were only deposited on November 1979 (more than 2 years later).
WON consignation of rental payments were valid to discharge effectively The Debit Memorandum provided by Comtrust was not considered by the
Francisco’s obligation Court as binding upon a third person such as the lessor because it is merely
internal bank procedures. It cannot prove payment of the monthly rentals.
Held: No. What is important was to prove that lessee had the checks picked up which
was the arrangement. On this, he failed to prove that he complied with the
The Court ruled that Francisco failed to comply with the requisites arrangement.
for consignation based on the evidence presented.
In sum, the Court find and rule that the lessee has failed to prove
Consignation is the act of depositing the thing due with the court tender of payment except that in Exh. 10; he has failed to prove the first
or judicial authorities whenever the creditor cannot accept or refuses to notice to the lessor prior to consignation except that given in Exh. 10; he has
accept payment and it generally requires a prior tender of payment. failed to prove the second notice after consignation except the two made in
Exh. 12; and he has failed to pay the rentals for the months of July and
According to Article 1256 of the Civil Code, if the creditor to whom August, 1977 as of the time the complaint was filed for the eviction of the
tender of payment has been made refuses without just cause to accept it, the lessee. We hold that the evidence is clear, competent and convincing
debtor shall be released from responsibility by the consignation of the thing or
showing that the lessee has violated the terms of the lease contract and he obtain. Tender of payment may be extrajudicial, while consignation is
may, therefore, be judicially ejected. necessarily judicial, and the priority of the first is the attempt to make a private
settlement before proceeding to the solemnities of consignation. Tender and
consignation, where validly made, produces the effect of payment and
63 MEAT PACKING CORP v SANDIGANBAYAN extinguishes the obligation.
G.R. No. 103068 | 22 June 2001| J. Ynares-Santiago| Valera
TOPIC: Tender of Payment and Consignation If the creditor to whom tender of payment has been made refuses without just
cause to accept it, the debtor shall be released from responsibility by the
DOCTRINE: If the creditor to whom tender of payment has been made refused consignation of the thing or sum due.
without just cause to accept it, the debtor shall be released from responsibility
by the consignation of the thing or sum due. Consignation alone shall produce the same effect in the following cases:
ER: MPCP’s meat plant and parcels of land were sequestered by the PCGG, (1) When the creditor is absent or unknown, or does not appear at the place
which at the time were in the hands of PIMECO pursuant to their lease of payment;
purchase agreement. It was eventually managed by the PCGG team. To
prevent the rescission of the agreement between MPCP and PIMECO, PCGG (2) When he is incapacitated to receive the payment at the time it is due;
tendered payment of 5 million; however, MPCP refused to accept it saying that
it has rescinded the agreement due to the failure of PIMECO to pay 3 annual (3) When, without just cause, he refuses to give a receipt;
installments. However, Sandiganbayan approved the consignation. Hence, the
agreement is not deemed rescinded because the 5 million effectively reduced (4) When two or more persons claim the same right to collect;
the payables due to PIMECO.
(5) When the title of the obligation has been lost.
In the case at bar, there was prior tender by PCGG of the amount of
FACTS:
P5,000,000.00 for payment of the rentals in arrears. MPCPs refusal to accept
1. MPCP, a corporation wholly owned by GSIS, owned 3 parcels of
the same, on the ground merely that its lease-purchase agreement with
land as well as a meat packing plant.
PIMECO had been rescinded, was unjustified. As found by the Sandiganbayan,
2. MPCP and PIMECO entered into a lease-purchase agreement
from January 29, 1986 to January 30, 1990, PIMECO paid, and GSIS/MPCP
wherein MPCP leased to PIMECO the abovementioned property,
received, several amounts due under the lease-purchase agreement, such as
payable over 28 years. (Annual Rate = Around 1.3 million; Total =
annual amortizations or rentals, advances, insurance, and taxes, in total sum
Around 38.5 million)
of P15,921,205.83. Surely, the acceptance by MPCP and GSIS of such payments
3. The agreement contained a rescission clause, which states that if
for rentals and amortizations negates any rescission of the lease-purchase
PIMECO fail or default in the payment of rentals equivalent to 3
agreement.
annual installments, the agreement shall be automatically
rescinded.
Under the terms of the lease-purchase agreement, the amount of arrears in
4. MPCP and PIMECO entered into a Supplementary Loan Agreement
rentals or amortizations must be equivalent to the cumulative sum of three
which increased the contract price to around 93.6 million, with an
annual installments, in order to warrant the rescission of the contract.
annual rate of around 3.3 million.
Therefore, it must be shown that PIMECO failed to pay the aggregate amount
of at least P10,038,809.10 before the lease-purchase agreement can be
AT THS JUNCTURE, REMIND YOURSELF THAT IF MPCP DECIDES TO
deemed automatically cancelled. Assuming in the extreme that, as alleged by
UNILATERALLY RESCIND THE AGREEMENT, PIMECO’S TOTAL AMOUNT OF
MPCP, the arrears at the time of tender on January 30, 1991 amounted to
DEFAULTED RENTALS SHOULD AMOUNT TO THREE (3) ANNUAL
P12,578,171.00,40 the tender and consignation of the sum of P5,000,000.00,
INSTALLMENTS.
which had the effect of payment, reduced the back rentals to only
P7,578,171.00, an amount less than the equivalent of three annual
5. PCGG sequestered all the assets, properties and records of
installments.
PIMECO, including the subject properties and agreement.
6. MPCP wrote a letter to PIMECO, notifying them that the agreement
Thus, with the Sandiganbayan’s approval of the consignation and directive for
has been rescinded on the ground of non payment of rentals.
MPCP to accept the tendered payment, the lease-purchase agreement could
7. GSIS asked PCGG to excluded the meat packing plant from the
not be said to have been rescinded.
sequestered assets. PCGG denied the request. MPCP sought the
turnover on the ground that the agreement has been rescinded.
8. PCGG ordered the transfer of the plant to GSIS, under the condition 65 SPS. NAMEAL and LOURDES BONROSTRO v. SPS. JUAN and CONSTANCIA
that the PCGG management team continue its operations to LUNA
complete outstanding orders. G.R. No. 172346|July 24, 2013|Del Castillo, J.|YUMUL
9. In fear that PCGG would not pay the rentals due to MPCP, PIMECO TOPIC: Tender of Payment and Consignation
filed a petition praying that it be declared to be no longer bound by DOCTRINE: Tender of payment is the manifestation by the debtor of a desire
the lease purchase agreement. to comply with or pay an obligation. If refused without just cause, the tender
10. Meanwhile, PCGG tendered to MPCP amounting to 5 million, of payment will discharge the debtor of the obligation to pay but only after a
representing partial payment of accrued rentals on the meat valid consignation of the sum due shall have been made with the proper court.
packing plant, which MPCP refused to accept on the theory that the Tender of payment, without more, produces no effect. To have the effect of
agreement has been rescinded. payment and the consequent extinguishment of the obligation to pay, the law
11. Sandiganbayan approved the consignation by PCGG after MPCP requires the companion acts of tender of payment and consignation.
refused the tender.
1. Constancia (buyer) entered into a Contract to Sell with Bliss
ISSUE/S: Development involving a house and lot.
W/N there was valid consignation – YES 2. 1 year later, Constancia Luna (as seller), entered into another Contract
to Sell with Lourdes for the same property.
HELD/RULING: 3. Sps. Bonrostro took possession of the property. However, Lourdes failed
Consignation is the act of depositing the thing due with the court or judicial to pay the subsequent amortization.
authorities whenever the creditor cannot accept or refuses to accept payment, 4. Sps. Luna filed a Complaint for Rescission of Contract.
and it generally requires a prior tender of payment. It should be distinguished 5. Sps. Bonrostro: They were willing to pay the balance after they sought
from tender of payment. Tender is the antecedent of consignation, that is, an an extension. However, during the time that they were ready to pay,
act preparatory to the consignation, which is the principal, and from which are Constancia and lawyer did not show up at their meeting.
derived the immediate consequences which the debtor desires or seeks to
a. Lourdes then sent a letter expressing her desire to pay but sold their rights over the properties to spouses Sabordo, subject to the
received no response. condition that the latter shall pay the balance of the sale price.
b. Claiming that they are still willing to pay, they prayed that the They executed a supplemental agreement to affirm that what was
Court fix the period within which they can pay Sps. Luna. actually sold to spouses Sabordo were Lots B and C, while Lots A and D
c. They also denied that they were not paying amortizations to were given to them as usufructuaries. DBP approved the sale of rights
New Capitol because they paid Bliss, which was the developer and spouses Sabordo were able to repurchase the foreclosed
of New Capitol. properties.
6. RTC: Ruled in favor of Sps. Bonrostro. CA affirmed but imposed interest Sabordo filed with an original action for declaratory relief with
only for certain amortizations, no interest on the payments made to damages and prayer for a writ of preliminary injunction raising the
Bliss. issue of whether or not the Suico spouses have the right to recover
7. Sps. Bonrostro: Sending the letter constitutes a valid tender of payment from them Lots A and D.
on their part. Thus, they should not be assessed interest after sending RTC: Spouses Suico may redeem the properties. CA: Extended the
the letter. period within which spouses Suico may redeem the lots in the amount
of P127,500.00.
ISSUE: Whether there was a valid tender of payment. Del Carmen (legal heir of Suico) discovered that spouses Sabordo
mortgaged the properties with Republic Planters Bank (RPB) as
Tender of payment is the manifestation by the debtor of a desire to security for a loan which became delinquent.
comply with or pay an obligation. If refused without just cause, the Claiming that they are ready with the payment but alleging that they
tender of payment will discharge the debtor of the obligation to pay but cannot determine as to whom such payment shall be made, Del
only after a valid consignation of the sum due shall have been made with Carmen and her coheirs filed a Complaint seeking to compel Spouses
the proper court. Sabordo and RPB to interplead and litigate between themselves their
Consignation is the deposit of the [proper amount with a judicial respective interests on the P127,000.00. Upon the complaint’s filing,
authority in accordance with rules prescribed by law, after the tender of they deposited the amount with the RTC.
payment has been refused or because of circumstances which render
direct payment to the creditor impossible or inadvisable. Issue: Whether there was a valid consignation
Tender of payment, without more, produces no effect. To have the effect Held: No. Failure to comply with the requisites, one of which is a valid prior
of payment and the consequent extinguishment of the obligation to pay, tender of payment, will render the consignation void.
the law requires the companion acts of tender of payment and Ruling:
consignation. Consignation the act of depositing the thing due with the court or
If the debtor did not take any immediate step to make a consignation, judicial authorities whenever the creditor cannot accept or
then interest is not suspended from the time of such tender. refuses to accept payment, and it generally requires a prior tender
Here, the subject letter merely states Lourdes’ willingness and readiness of payment. It should be distinguished from tender of payment
to pay but it was not accompanied by payment. which is the manifestation by the debtor to the creditor of his
o She claimed that she made numerous telephone calls to desire to comply with his obligation, with the offer of immediate
Constancia’s lawyer reminding the latter to collect her performance. Tender is the antecedent of consignation, that is, an
payment, but, neither said lawyer nor Constancia came to act preparatory to the consignation, which is the principal, and
collect the payment. from which are derived the immediate consequences which the
o After that, the spouses Bonrostro took no further steps to debtor desires or seeks to obtain. Tender of payment may be
effect payment. extrajudicial, while consignation is necessarily judicial, and the
o They did not resort to consignation of the payment with the priority of the first is the attempt to make a private settlement
proper court despite knowledge that under the contract, non- before proceeding to the solemnities of consignation. Tender and
payment of the installments on the agreed date would make consignation, where validly made, produces the effect of
them liable for interest thereon. payment and extinguishes the obligation.
The spouses Bonrostro erroneously assumed that their notice to pay In the instant case, petitioner and her coheirs, upon making the
would excuse them from paying interest. deposit with the RTC, did not ask the trial court that respondents
Their claimed tender of payment did not produce any effect whatsoever be notified to receive the amount that they have deposited. In fact,
because it was not accompanied by actual payment or followed by there was no tender of payment. Instead, what petitioner and her
consignation. coheirs prayed for is that respondents and RPB be directed to
o Hence, it did not suspend the running of interest. interplead with one another to determine their alleged respective
o The spouses Bonrostro are therefore liable for interest on the rights over the consigned amount.
subject installments from the date of default until full In Del Rosario v. Sandico and Salvante v. Cruz, this Court held that
payment. for a consignation or deposit with the court of an amount due on a
judgment to be considered as payment, there must be prior tender
66 DEL CARMEN v. SPOUSES SABORDO to the judgment creditor who refuses to accept it. As stated above,
G.R. No. 181723 | 11 August 2014 tender of payment involves a positive and unconditional act by the
Topic: Tender of Payment and Consignation | Ponente: Peralta | Author: obligor of offering legal tender currency as payment to the obligee
Acido (edited Castro’s digest) for the former’s obligation and demanding that the latter accept
Doctrine: the same. In the instant case, the Court finds no cogent reason to
Consignation is the act of depositing the thing due with the court or judicial depart from the findings of the CA and the RTC that petitioner and
authorities whenever the creditor cannot accept or refuses to accept payment, her coheirs failed to make a prior valid tender of payment to
and it generally requires a prior tender of payment. It should be distinguished respondents.
from tender of payment which is the manifestation by the debtor to the It is settled that compliance with the requisites of a valid consignation is
creditor of his desire to comply with his obligation, with the offer of immediate mandatory. Failure to comply strictly with any of the requisites will render the
performance. consignation void. One of these requisites is a valid prior tender of payment.
Facts: Under Article 1256, the only instances where prior tender of payment is
excused are: (1) when the creditor is absent or unknown, or does not appear
The properties (Lots A, B, C, and D) of Suico spouses were foreclosed
at the place of payment; (2) when the creditor is incapacitated to receive the
after they failed to pay their loan obligation to the Dev’t Bank of the
payment at the time it is due; (3) when, without just cause, the creditor refuses
Philippines (DBP). After DBP consolidated its ownership, they were
to give a receipt; (4) when two or more persons claim the same right to collect;
nonetheless allowed to repurchase the lots by way of a conditional
and (5) when the title of the obligation has been lost. None of these instances
sale.
are present in the instant case. Hence, the fact that the subject lots are in
Threatened with the cancellation of the conditional sale for paying
danger of being foreclosed does not excuse petitioner and her co-heirs from
only the down payment and first monthly amortization, Suico spouses
tendering payment to respondents, as directed by the court.