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Hernandez Adriano ObliCon

Spouses GO CINCO, Petitioner, TENDER OF PAYMENT - an unconditional offer by a debtor or


vs. obligor to pay another, in current coin of the realm, a sum not
COURT OF APPEALS. less in amount than that due on a specified debt or obligation.
Topic: Tender of Payment
SHORT ANSWERS:
Petitioner: Sps. GO CINCO 1 When did the problem start: When Ester Servacio refused to
Respondent: Court of Appeals accept the proceeds of the mortgage loan of Sps. Go Cinco
1. Who is chasing who: Sps. Go Cinco filed for specific performance
DOCTRINE: to compel Ester Servacio to accept payment.
In the case at bar, the equivalent of a tender of payment cannot 1. Where does the obligation arise: When the loan of Sps. Go Cinco
have legal effect if it cannot be consigned to a court. matured and became due and demandable

Art 1252, Civil Code: FACTS:


Art. 1256. If the creditor to whom tender of payment has been Petitioner Manuel Cinco obtained a loan in the amount
made refuses without just cause to accept it, the debtor shall be 700,000.00 from respondent Maasin Traders Lending
released from responsibility by the consignation of the thing or Corporation (MTLC). The loan was evidenced by the promissory
sum due. note, and secured by a real estate mortgage over the spouses
Consignation alone shall produce the same effect in the Cincos land and 4-storey building.
following cases:
To pay the loan in favor of MTLC, the spouses Cinco applied for
(1)When the creditor is absent or unknown, or does not appear a loan with the Philippine National Bank (PNB), and offered the
at the place of payment; same properties they previously mortgage to MTLC. The PNB
approved the load application for 1.3 Million; the release was,
(2)When he is incapacitated to receive the payment at the time it however, conditioned on the cancellation of the mortgage in
is due; favor of MTLC.

(3)When, without just cause, he refuses to give a receipt; Manuel went to Ester Servacio (Ester), MTLCs President to
inform her that there was money with PNB for Payment of his
(4)When two or more persons claim the same right to collect; loan. Manuel executed a Special Power of Attorney (SPA)
authorizing Ester to collect the proceeds of the loan. Ester went
(5)When the title of the obligation has been lost to the PNB to inquire, the second time around, about the
proceeds. The bank officer confirmed the existence of such loan,
VOCABULARY but they required Ester to first sign a deed of
release/cancellation of the mortgage before they could release
Hernandez Adriano ObliCon

the proceeds of the loan to her. Outraged, Ester refused the alleged that the SPA merely authorized her to collect the
deed and did not collect the 1.3 Million. proceeds of the loan; there was no explicit agreement that the
MTLC loan would be paid out of the proceeds of the PNB loan.
Ester instituted foreclosure proceeding. To prevent the
foreclosure, the spouses Cinco filed an action for specific There is nothing legally objectionable in a mortgagors act of
performance, damages, and preliminary injunction taking a second or subsequent mortgage on a property already
mortgaged; a subsequent mortgage is recognized as valid by
law and by commercial practice, subject to the prior rights of
ISSUE: WON the unjust refusal of payment released Go Cinco from the previous mortgages. Section 4, Rule 68 of the 1997 Rules of
Responsibility of paying. Civil Procedure on the disposition of the proceeds of sale after
foreclosure
HELD: NO.
Ester Servacio abused her rights according to Article 19 of the
A sad twist in this case for Manuel was that he could not avail of Civil Code where the unjust refusal was contrary to the duty to
consignation to extinguish his obligation to MTLC, as PNB would act with honesty and good faith.
not release the proceeds of the loan unless and until Ester had
signed the deed of release/cancellation of mortgage, which she
unjustly refused to do. Hence, to compel Ester to accept the loan
proceeds and to prevent their mortgaged properties from being
foreclosed, the spouses Go Cinco found it necessary to institute
the present case for specific performance and damages.

Ester refused to accept the payment because the bank required


her to first sign a deed of release/cancellation of the mortgage
before the proceeds of the PNB loan could be released. As a
prior mortgagee, she claimed that the spouses Go Cinco should
have obtained her consent before offering the properties already
mortgaged to her as security for the PNB loan. Moreover, Ester