TLG International Continental Enterprising, Inc.
v. Hon. Delfin Flores, CFI Judge
GR No. L-35381, October 31, 1972
Nature: Petition for certiorari to set aside the 2 orders
of Hon. Flores denying the motion of petitioner to
withdraw the sum of P3,750.00 deposited by it, by way
of consignation
FACTS: In a case for an action for declaratory relief
involving the rights of Bearcon Trading Co, Inc. as
lessee of the premises of Juan Fabella, Judge Flores
granted TLG’s Motion to Intervene. TLG intervened
as sub-lessee of Bearcon over the property to protect
its rights as sub-lessee and to enable it, during
pendency of the case, to make a consignation of the
monthly rentals as it was at a loss as to who is lawfully
and rightfully entitled to receive payments of the
monthly rentals. TLG deposited with the Clerk of
Court of the CFI P3,750.00
Upon Juan Fabella’s prayer, Judge Flores issued an
Omnibus Order dismissing the Complaint and the
Complaint in intervention on ground that the subject
matter could be better ventilated in the ejectment case
against Bearcon.
Petitioner filed its Motion to withdraw the P3,750.00
it deposited because the Order dismissed the case and
complaint in intervention without a resolution having
been made as to the right of Fabella/Bearcon to the
rentals deposited by TLG. This left TLG without any
recourse but to apply for authority to withdraw the
amount and turn it over to Fabella.
Judge Flores denied it and the motion for
reconsideration as well. (The 2 Orders)
ISSUE: Whether or not respondent judge could
authorize the withdrawal of the deposits considering
that according to respondent, the Court has not ordered
the intervenor to make any deposit in connection with
the case
RULING: YES. There is no question that in cases of
consignation the debtor is entitled as a matter of right
to withdraw the deposit made with the court, before
the consignation is accepted by the creditor or prior to
the judicial approval of such consignation. This is
explicit from the second paragraph of Article 1260 of
the new Civil Code which states that: "Before the
creditor has accepted the consignation, or before a
judicial declaration that the consignation has been
properly made, the debtor may withdraw the thing or
the sum deposited, allowing the obligation to remain
in force".
In this case at bar, the case was dismissed before the
amount deposited was either accepted by the creditor
or a declaration made by the Court approving such
consignation. The dismissal rendered the consignation
ineffectual. Under such circumstances, it was
incumbent upon Respondent to have allowed the
withdrawal by TLG of the money deposited with the
CFI.
Respondent nevertheless insisted that the Court had no
authority to authorize its withdrawal since it "has not
ordered intervenor to make" the deposit. This
contention ignores the fact that the deposit was made
by petitioner as a consequence of the admission by the
Court of its "Complaint In Intervention". It must be
noted that the aforesaid deposit was made with and
officially receipted by the Clerk of Court. The deposit
was made pursuant to Article 1258 of the new Civil
Code which states that: "Consignation shall be made
by depositing the things due at the disposal of judicial
authority, before whom the tender of payment shall be
proved, in a proper case, ...". It was therefore money
received by the Clerk of Court pursuant to Section 6
of the Judiciary Act. (Rep. Act 296 as Amended).
From the moment the deposit was made by petitioner,
"the money remained under the control and
jurisdiction of the court and the former could not
recover it without an express order of restitution".
LUISA F. MCLAUGHLIN, petitioner, vs. THE
COURT OF APPEALS AND RAMON
FLORES, respondents. G.R. No. L-57552 October
10, 1986
FACTS: Petitioner Luisa F. McLaughlin and private
respondent Ramon Flores entered into a contract of
conditional sale of real property. The deed of
conditional sale fixed the total purchase price of
P140,000 payable as follows: a) P26,000 upon the
execution of the deed; and b) the balance of P113,000
to be paid not later than May 1977. Parties also agreed
that the balance shall bear interest at the rate of 1% per
month to commence from December 1976, until the
full purchase price was paid.
In 1979, petitioner filed a complaint for the rescission
of the deed of conditional sale due to the failure of
private respondent to pay the balance due on May 31,
1977.
Later, the parties submitted a Compromise Agreement
on the basis of which the court rendered a decision. In
said compromise agreement, private respondent
acknowledged his indebtedness to petitioner under the
deed of conditional sale in the amount of P119,000,
and the parties agreed that said amount would be
payable as follows: a) P50,000 upon signing of the
agreement; and b) the balance of P69,000 in two equal
installments on June 1980 and December 1980. As
agreed upon, private respondent paid P50,000 upon
the signing of the agreement and in addition he also
paid an escalation cost" of P25,000. Under paragraph
3 of the Compromise Agreement, private respondent
agreed to pay P1,000 monthly rental beginning
December 1979 until the obligation is duly paid, for
the use of the property subject matter of the deed of
conditional sale. Paragraphs 6 and 7 of the
Compromise Agreement further state, that the parties
agree that in the event the defendant (private
respondent) fails to comply with his obligations herein
provided, the plaintiff (petitioner) will be entitled to
the issuance of a writ of execution rescinding the Deed
of Conditional Sale of Real Property. In such
eventuality, defendant (private respondent) hereby
waives his right to appeal to (from) the Order of
Rescission and the Writ of Execution which the Court
shall render in accordance with the stipulations herein
provided for. That in the event of execution all
payments made by defendant (private respondent) will
be forfeited in favor of the plaintiff (petitioner) as
liquidated damages.
In October 1980, petitioner wrote to private
respondent demanding that the latter pay the balance
of P69,000. This demand included not only the
installment due on June 1980 but also the installment
due on December 1980. Private respondent then sent a
letter to petitioner signifying his willingness and
intention to pay the full balance of P69,000 and at the
same time demanding to see the certificate of title of
the property and the tax payment receipts.
Private respondent holds that on the first working day
of said month, he tendered payment to petitioner but
this was refused acceptance by petitioner. Petitioner
filed a Motion for Writ of Execution alleging that
private respondent failed to pay the installment due on
June 1980 and that since June 1980 he had failed to
pay the monthly rental of P1,000.
RTC granted the motion for writ of execution. It
denied the motion for reconsideration in an order dated
November 21, 1980 and issued the writ of execution
on November 25, 1980. In an order dated November
27, 1980, the trial court granted petitioner's ex-parte
motion for clarification of the order of execution
rescinding the deed of conditional sale of real
property. CA nullified and set aside disputed orders of
RTC.
ISSUE: Whether or not the tender of payment made
by Flores which was not accepted by McLaughlin
made him not liable for further payment of his
obligation and the rentals in arrear
RULING:NO. According to Article 1256 of the Civil
Code of the Philippines, 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 consignation of the thing or sum
due, and that consignation alone shall produce the
same effect in the five cases enumerated therein;
Article 1257 provides that in order that the
consignation of the thing (or sum) due may release the
obligor, it must first be announced to the persons
interested in the fulfillment of the obligation; and
Article 1258 provides that consignation shall be made
by depositing the thing (or sum) due at the disposal of
the judicial authority and that the interested parties
shall also be notified thereof.
Tender of payment must be distinguished from
consignation. Tender is the antecedent of
consignation, that is, an act preparatory to the
consignation, which is the principal, and from which
are derived the immediate consequences which the
debtor desires or seeks to obtain. Tender of payment
may be extrajudicial, while consignation is necessarily
judicial, and the priority of the first is the attempt to
make a private settlement before proceeding to the
solemnities of consignation
In the case at bar, although as above stated private
respondent had preserved his rights as a vendee in the
contract of conditional sale of real property by a timely
valid tender of payment of the balance of his
obligation which was not accepted by petitioner, he
remains liable for the payment of his obligation
because of his failure to deposit the amount due with
the court.
Inasmuch as petitioner did not accept the aforesaid
amount, it was incumbent on private respondent to
deposit the same with the court in order to be released
from responsibility. Since private respondent did not
deposit said amount with the court, his obligation was
not paid and he is liable in addition for the payment of
the monthly rental of Pl,000.00 from January 1, 1981
until said obligation is duly paid, in accordance with
paragraph 3 of the Compromise Agreement. Upon full
payment of the amount of P76,059.71 and the rentals
in arrears, private respondent shall be entitled to a deed
of absolute sale in his favor of the real property in
question.