PILAR DE GUZMAN, ROLANDO GESTUVO, and MINERVA GESTUVO, petitioners, vs. THE HON. COURT OF APPEALS, THE HON.

JUDGE PEDRO JL. BAUTISTA, Presiding Judge of the Court of First Instance of Rizal, Branch III, Pasay City, and LEONIDA P.
SINGH, respondents.
G.R. No. L-52733, 23 July 1985

OVERVIEW:
This case is about a contract to sell which resulted to a compromise agreement. Upon fulfilment/payment, the respondent-creditors were not able
to accept the payment, hence, there was consignation made by the buyer-petitioner to the court.

FACTS:
1. The facts of record show that on February 17, 1971, the petitioners, as SELLER, and the private respondent, as BUYER, executed a
Contract to Sell covering two (2) parcels of land owned by the petitioners located at Cementina Street, Pasay City and covered by TCT
Nos. 11326 and 11327 of the Register of Deeds of Pasay City. It was stipulated therein that the private respondent should pay the balance
of the purchase price of P133,640.00 on or before February 17, 1975. Two days before the said date, or on February 15, 1975, the private
respondent asked the petitioners to furnish her with a statement of account of the balance due; copies of the certificates of title covering
the two parcels of land subject of the sale; and a copy of the power of attorney executed by Rolando Gestuvo in favor of Pilar de Guzman.
But, the petitioners denied the request.
2. As a result, the private respondent filed a complaint for specific performance with damages against the petitioners before the Court of First
Instance of Rizal. The case, however, was dismissed for failure to prosecute. But, the private respondent subsequently refiled the case.
The case was docketed in court as Civil Case No. 5247-P. In her complaint, the private respondent charged that the petitioners, by
refusing to furnish her with copies of the documents requested, deliberately intended not to comply with their obligations under the
contract to sell, as a result of which the said petitioners committed a breach of contract, and had also acted unfairly and in manifest bad
faith for which they should be held liable for damages.
3. Answering the complaint, the petitioners claimed that the complaint failed to state a cause of action; that the balance due was already pre-
determined in the contract; that the petitioners have no obligation to furnish the private respondent with copies of the documents
requested; and that the private respondent's failure to pay the balance of the purchase price on the date specified had caused the contract
to expire and become ineffective without necessity of notice or of any judicial declaration to that effect.
4. On November 29, 1977, the trial court rendered a decision approving a compromise between Pilar de Guzman, Rolando Gestuvo,
and Minerva Gestuvo, as sellers, and Leonida P. Singh, the buyer. Singh agreed to pay de Guzman and the Gestuvos, now petitioners,
P250,000 for two lots located at Cementina Street, Pasay City at ten o’clock in the morning of January 27, 1978, in the courtroom of Judge
Bautista of Pasay City. In case no payment was made, then the petitioners would be immediately entitled to a writ of execution for the
possession of the said lots.
5. Ben Restrivera, in behalf of Singh, on January 24, 1978, deposited P220,000 with the clerk of court. Restrivera on January 27, 1978, tried
to deliver to Antonio G. Barredo, petitioners’ counsel, P5,000 cash and P25,000 in postdated checks, or P30,000 to complete the price of
P250,000. Barredo refused to accept that payment. On January 30, 1978  (3 days after the deadline) Singh deposited with the clerk of
court cash of P30,000.
6. On January 28, 1978, the petitioners filed a motion for the issuance of a writ of execution, claiming that the private respondent had failed
to abide by the terms of the compromise agreement and pay the amount specified in their compromise agreement within the period
stipulated. It was opposed by Singh,  saying that she had complied with the terms and conditions of the compromise agreement and asked
 the court to direct the petitioners to comply with the court's decision and execute the necessary documents to effect the transfer of
ownership of the two parcels of land in question to her.
7. Acting upon the motions, the respondent judge (Judge Bautista) issued an order on March 27, 1978, denying the petitioners' motion for
execution, and instead, directed the petitioners to immediately execute the necessary documents, transferring to private respondent the
title to the properties. He also ordered the Clerk of Court to release to the petitioners the amount of P250,000.00, which had been
deposited by the private respondent, upon proper receipt therefor.

ISSUE:
Whether or not private respondent substantially complied with the terms of the compromise agreement.

RULING:
The private respondent had substantially complied with the terms and conditions of the compromise agreement. Her failure to deliver to the
petitioners the full amount on January 27, 1978, was not her fault. The blame lies with the petitioners.  The deposit of the balance of the purchase
price was made in good faith and that the failure of the private respondent to deposit the purchase price on the date specified was due to the
petitioners who also make no claim that they had sustained damages because of the two days delay, there was substantial compliance with the
terms and conditions of the compromise agreement.

Her failure to deliver to the petitioners the full amount on January 27, 1978 was not her fault. The blame lies with the petitioners. The record shows
that the private respondent went to the sala of Judge Bautista on the appointed day to make payment, as agreed upon in their
compromise agreement. But, the petitioners were not there to receive it. Only the petitioners' counsel appeared later, but, he informed
the private respondent that he had no authority to receive and accept payment. Instead, he invited the private respondent and her
companions to the house of the petitioners to effect payment. But, the petitioners were not there either. They were informed that the petitioner Pilar
de Guzman would arrive late in the afternoon, possibly at around 4:00 o'clock. The private respondent was assured, however, that she would be
informed as soon as the petitioners arrived. The private respondent, in her eagerness to settle her obligation, consented and waited for the
call which did not come and unwittingly let the period lapse. The next day, January 28, 1978, the private respondent went to the office of the
Clerk of the Court of First Instance of Rizal, Pasay City Branch, to deposit the balance of the purchase price. But, it being a Saturday, the cashier
was not there to receive it. So, on the next working day, Monday, January 30, 1978, the private respondent deposited the amount of P30,000.00
with the cashier of the Office of the Clerk of the Court of First Instance of Rizal, Pasay City Branch, to complete the payment of the purchase price
of P250,000.00. Since the deposit of the balance of the purchase price was made in good faith and that the failure of the private
respondent to deposit the purchase price on the date specified was due to the petitioners who also make no claim that they had
sustained damages because of the two days delay, there was substantial compliance with the terms and conditions of the compromise
agreement.

TLG INTERNATIONAL CONTINENTAL ENTERPRISING, INC., petitioner, vs. HON. DELFIN B. FLORES, Presiding Judge, Court of First
Instance of Rizal, Branch XI, respondent.
G.R. No. L-35381, 31 October 1972

OVERVIEW:
This case is about a valid consignation of the lessee to the Court and valid withdrawal of deposit by virtue of dismissal of a subsequent complaint.
FACTS:
1. 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
(lessor), Judge Flores granted TLG’s Motion to Intervene.
2. 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.
3. 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.
4. 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.
5. This left TLG without any recourse but to apply for authority to withdraw the amount and turn it over to Fabella (lessor).
6. Judge Flores denied it and the motion for reconsideration as well.

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, 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 the
respondent (Judge) to have allowed the withdrawal by TLG of the money deposited with the CFI.

RELATED PROVISION:
Art. 1260 – 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.

The two Orders are hereby set aside and the respondent is directed to grant the withdrawal of the deposit in accordance with the foregoing.

LUISA F. MCLAUGHLIN, petitioner, vs. THE COURT OF APPEALS AND RAMON FLORES, respondents.

G.R. No. L-57552, 10 October 1986

OVERVIEW:
This case is about a valid tender of payment and consignation made by one party to a compromise agreement.

FACTS:
1. Petitioner and private respondent, Flores, entered into a contract of conditional sale of real property.
2. When the private responded failed to pay the balance on the date stipulated, he filed a petition to rescind the contract. They entered
into a Compromise Agreement.
 3. Thereafter, the petitioner made a demand.
4. In response, the Flores sent a letter to the former signifying his willingness and intention to pay the balance . Flores alleged that he
tendered payment to petitioner but the petitioner refused to accept it.
5. Petitioner filed a motion for writ of execution, to rescind and liquidate damages, alleging that Flores had failed to pay the installment
due, as stipulated in their compromise agreement.
6. Flores filed a motion for reconsideration and tendered a certified manager’s check covering the entire obligation, within seventeen
days after it was due.
7. The trial court dismissed the motion for reconsideration. The CA nullified and set aside the decision of the trial court. It contended that
rescission will not be permitted in cases of a slight or casual breach. The delay in payment of Flores is merely a slight breach.

ISSUE:
WON the tender of payment restored the defendant’s right as vendee.

RULING:
Yes. The tender made by private respondent of a certified bank manager’s check payable to petitioner was a valid tender of payment. The
certified check covered not only the balance of the purchase price in the amount of P69,059.71, but also the arrears in the rental payments from
June to December 1980 in the amount of P7,000.00, or a total of P76,059.71. But he is not released from the responsibility to pay the vendor.

The vendee must first consign the amount to the court.

RELATED PROVISION:
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.

SOLEDAD SOCO, petitioner, vs. HON. FRANCIS MILITANTE, Incumbent Presiding Judge of the Court of First Instance of Cebu, Branch
XII, Cebu City and REGINO FRANCISCO, JR., respondents.
G.R. No. L-58961, 28 June 1983

OVERVIEW:
This case illustrated an invalid tender of payment and consignation made by one party to a contract of lease.
FACTS:
1. Soco (LESSOR) and Francisco (LESSEE) entered into a contract of lease whereby Soco leased her commercial building and lot to
Francisco for a monthly rental of P800.00 for a period of 10 years renewable for another 10 years at the option of the lessee.
2. Francisco noticed that Soco did not anymore send her collector for the payment of rentals and at times there were payments made but
no receipts were issued. This situation prompted Francisco to write Soco a letter which the latter received. After writing this letter,
Francisco sent his payment for rentals by checks issued by the Commercial Bank and Trust Company.
3. Soon after Soco learned that Francisco sub-leased a portion of the building to NACIDA at a monthly rental of more than P3,000.00
which is definitely very much higher than what Francisco was paying to Soco under the Contract of Lease, the latter felt that she was on
the losing end of the lease agreement so she tried to look for ways and means to terminate the contract.
4. In view of the alleged non-payment of rental of the leased premises, Soco, through her lawyer, sent to Francisco serving notice to
the latter ‘to vacate the premises leased.’ In answer to this letter, Francisco, through his lawyer, informed Soco and her lawyer that all
payments of rental due her were in fact paid by Commercial Bank and Trust Company through the Clerk of Court.
5. Despite this explanation, Soco filed a case of Illegal Detainer.

ISSUE:
Whether or not there was a valid consignation of payment of the rentals.

RULING:
No valid consignation. In order that consignation may be effective, the debtor must first comply with certain requirements prescribed by
law. The debtor must show:
(1) that there was a debt due;
(2) that the consignation of the obligation had been made because the creditor to whom tender of payment was made refused to accept it, or
because he was absent or incapacitated, or because several persons claimed to be entitled to receive the amount due (Art. 1176, Civil
Code);
(3) that previous notice of the consignation had been given to the person interested in the performance of the obligation (Art. 1177, Civil
Code);
(4) that the amount due was placed at the disposal of the court (Art. 1178, Civil Code); and
(5) that after the consignation had been made the person interested was notified thereof (Art. 1178, Civil Code).

Failure in any of these requirements is enough ground to render a consignation ineffective.

The Court held that the respondent lessee has utterly failed to prove the following requisites of a valid consignation.

 First, failed to prove tender of payment of the monthly rentals to the lessor.
 Second, respondent lessee also failed to prove the first notice to the lessor prior to consignation. Evidently, from this arrangement, it
was the lessee’s duty to send someone to get the cashier’s check from the bank and logically, the lessee has the obligation to make
and tender the check to the lessor. This the lessee failed to do, which is fatal to his defense.
 Third, respondent lessee likewise failed to prove the second notice, that is, after consignation has been made, to the lessor.
 And, lastly, respondent lessee failed to prove the actual deposit or consignation of the monthly rentals.