SPS CACAYORIN VS.

AFPMBAI
GR NO. 171298
APRIL 15, 2013

FACTS:
Petitioner Oscar Cacayorin, a member of AFPMBAI, filed an application to purchase a
piece of property through a loan facility. The purpose executed a loan and mortgage agreement
with Rural bank under the auspices of PAG-IBIG. On the basis of the guaranty, AFPMBAI
executed a deed of absolute sale a new title issued in their name. However, PAG-IBIG did not
push through and the Rural Bank closed and was placed on receivership by the PDIC.
AFPMBAI somehow acquired the loan documents and TCT while petitioners were unable to pay
the loan/consideration for the property. The petitioner then filed for consignation because as a
result of the Rural Bank’s closure and PDIC’s claim that their loan documents cannot be located,
they were in a dilemma regarding where the tender of payment of the loan must be made and
how to secure cancellation of the mortgage annotation on TCT no. 37017. The RTC ruled that it
possessed jurisdiction for the consignation since the name of the petitioner has already been
transferred in the title. However, the CA claimed that the case is under the jurisdiction of the
HLURB and not on the RTC because it involves the specific performance of AFMBAI’s
contractual and statutory obligations as owner/developer of Kalikasan Mutual Homes, making
PD 957 applicable.

ISSUE:
Whether or not the case falls under the jurisdiction of HLURB or the RTC.

RULING:
Jurisdiction falls under the RTC and consignation of the loan payment must be made to
the same. Article 1256 of the Civil Code releases the debtor from responsibility by the
consignation of the thing or sum due without need of prior tender of payment when the creditor
is absent or uknown or when he is incapacitated to receive the payment at the time it is due or
when two or more persons claim the same right to collect or when the title to the obligation has
been lost. It appears that 2 entities are in conflict with regards to which the petitioner must deal
with. Clearly, the case presents a situation where 2 or more entities appear to possess the right to
collect or where the creditor is unknown. Thus, consignation may be applied in this
aforementioned case. Consignation is necessarily judicial; hence. Jurisdiction lies in the RTC and
not with HLURB. Article 1256 therefore authorizes consignation under the jurisdiction of the
courts alone.