Corporation instituted an action for collection of a sum of money with

Filinvest v Philippine Acetylene damages.

111Scra 421 (1982)
In its answer, PAC, while admitting the material allegations of the
Filinvest Credit Corporations complaint, avers that Filinvest Credit
TOPIC: DACION EN PAGO
Corporation has no cause of action against it since its obligation towards the
Filinvest Credit Corporation was extinguished when in compliance with the
Facts:
Filinvest Credit Corporation's demand letter, it returned the mortgaged
The Philippine Acetylene Co., Inc. purchased from one Alexander property to the Filinvest Credit Corporation, and that assuming arguendo that
Lim, as evidenced by a Deed of Sale, a motor vehicle described as Chevorlet, the return of the property did not extinguish its obligation, it was nonetheless
1969 model, paying a down payment and the balance payable at 34 monthly justified in refusing payment since the Filinvest Credit Corporation is not
installments. As security for the payment of said promissory note, PAC entitled to recover the same due to the breach of warranty committed by the
executed a chattel mortgage over the same motor vehicle in favor of said original vendor-assignor Alexander Lim.
Alexander Lim.-Subsequently, Alexander Lim assigned to the Filinvest
LC: Ordered PAC to pay the outstanding unpaid obligation and to accept the
Finance Corporation all his rights, title, and interests in the promissory note
delivery of the motor vehicle subject of the chattel mortgage.
and chattel mortgage by virtue of a Deed of Assignment.
Issue:
Thereafter, the Filinvest Finance Corporation, as a consequence of
its merger with the Credit and Development Corporation assigned to the new
Whether or not the return the return of the mortgaged property by
corporation, Filinvest Credit Corporation, all its rights, title, and interests on
the mortgagor to the mortgagee constituted dacion en pago or Dation in
the aforesaid promissory note and chattel mortgage, which, in effect, the
payment.
payment of the unpaid balance owed by PAC to Alexander Lim was financed
by Filinvest Credit Corporation such that Lim became fully paid. PAC failed to
comply with the terms and conditions set forth in the promissory note and
chattel mortgage since it had defaulted in the payment of nine successive
Held:
installments. Filinvest Credit Corporation then sent a demand letter whereby
its counsel demanded "that you (appellant) remit the aforesaid amount in full
The mere return of the mortgaged motor vehicle by the mortgagor,
in addition to stipulated interest and charges or return the mortgaged
PAC, to the mortgagee, Filinvest Credit Corporation, does not constitute
property to my client at its office at 2133 Taft Avenue, Malate, Manila within
dation in payment or dacion en pago in the absence, express or implied of the
five (5) days from date of this letter during office hours. "
true intention of the parties.
Replying thereto, PAC, thru its assistant general- manager, wrote
Dacion en pago, according to Manresa, is the transmission of the
back advising Filinvest Credit Corporation of its decision to "return the
ownership of a thing by the debtor to the creditor as an accepted equivalent of
mortgaged property, which return shall be in full satisfaction of its
the performance of obligation. In dacion en pago, as a special mode of
indebtedness pursuant to Article 1484 of the New Civil Code." Accordingly,
payment, the debtor offers another thing to the creditor who accepts it as
the mortgaged vehicle was returned Filinvest Credit Corporation to the
equivalent of payment of an outstanding debt. The undertaking really partakes
together with the document "Voluntary Surrender with Special Power of
in one sense of the nature of sale, that is, the creditor is really buying the thing
Attorney To Sell" executed by PAC. Filinvest Credit Corporation wrote a letter
or property of the debtor, payment for which is to be charged against the
to PAC informing the latter that Filinvest Credit Corporation cannot sell the
debtor's debt. As such, the essential elements of a contract of sale, namely,
motor vehicle as there were unpaid taxes on the said vehicle. On the last
consent, object certain, and cause or consideration must be present. In its
portion of the said letter, Filinvest Credit Corporation requested the PAC to
modern concept, what actually takes place in dacion en pago is an objective
update its account by paying the installments in arrears and accruing interest.
novation of the obligation where the thing offered as an accepted equivalent
Filinvest Credit Corporation, in a letter, offered to deliver back the motor
of the performance of an obligation is considered as the object of the contract
vehicle to the PAC but the latter refused to accept it, so Filinvest Credit
of sale, while the debt is considered as the purchase price.
 In any case, common consent is an essential prerequisite, be it sale loan and to sell lucad or copra to petitioner. Below is a reproduction of the
or innovation to have the effect of totally extinguishing the debt or obligation.- contract:
The evidence on the record fails to show that the mortgagee, the herein
appellee, consented, or at least intended, that the mere delivery to, and
acceptance by him, of the mortgaged motor vehicle be construed as actual No 2567 Lopez, Quezon July
payment, more specifically dation in payment or dacion en pago. 10, 1997

The fact that the mortgaged motor vehicle was delivered to him does
not necessarily mean that ownership thereof, as juridically contemplated by Tinanggap ko kay G. TAN SHUY ang halagang
dacion en pago, was transferred from appellant to appellee. In the absence of . (P420,000.00) salaping Filipino.
clear consent of appellee to the proferred special mode of payment, there can Inaako ko na isusulit sa kanya ang aking LUCAD at babayaran ko ang nasabing
be no transfer of ownership of the mortgaged motor vehicle from appellant to halaga. Kung hindi ako makasulit ng LUCAD o makabayad bago sumapit ang
appellee. If at all, only transfer of possession of the mortgaged motor vehicle ., 19 maaari niya akong ibigay sa may kapangyarihan. Kung ang
took place, for it is quite possible that appellee, as mortgagee, merely wanted pagsisingilan ay makakarating sa Juzgado ay sinasagutan ko ang lahat ng
to secure possession to forestall the loss, destruction, fraudulent transfer of kaniyang gugol.
the vehicle to third persons, or its being rendered valueless if left in the hands
of the appellant. [Sgd. by respondent]

Tan Shuy v. Sps. Maulawin (F2012)
Topic: Dacion En Pago
Doctrine: Dation in payment extinguishes the obligation to the extent of the
value of the thing delivered, either as agreed upon by the parties or as may
be proved, unless the parties by agreement express or implied, or by their
silence consider the thing as equivalent to the obligation, in which case the
obligation is totally extinguished.
Facts: Tan Shuy is engaged in the business of buying copra and corn in the
4th district of Quezon Province. According to his son, Vicente Tan, whenever
they would buy copra or corn from crop sellers, they would prepare and issue
a pesada1 in their favor. When a pesada contained the annotation pd on the
total amount of the purchase price, it meant that the crop delivered had
already been paid for by Tan Shuy.
Guillermo Maulawin is a farmer businessman engaged in buying and selling
copra and corn. On July 10, 1997, Tan Shuy extended a loan of P420K to
Guillermo. In consideration thereof, Guillermo obligated himself to pay the
.
P................
Lagda
The transactions between Tan Shuy and Guillermo were coursed through Tan
Shuys daughter Elena. She served as cashier in the business of Tan Shuy, who
primarily prepared and issued the pesada. When shes absent, Vicente would
issue the pesada.
Vicente also helped Tan Shuy in buying copra and granting loans to customers
[copra sellers]. According to him, part of their agreement with Guillermo was
that they would put the annotation sulong on the pesada when partial
payment on the loan had been made. But despite repeated demands,
Guillermo remitted only P23k in August 1998 and P5.5k in October 1998, or
atotal of P28.5K. Claiming that Maulawin had an outstanding balance of
P391.5K and convinced that he no longer had any intention to pay, Ran Shuy

1
A pesada is a document containing details of the transaction, including
the date of sale, the weight of the crop delivered, the trucking cost, and
the net price of the crop
went to the Lupon Tagapamayapa. Failing to reach a settlement, he filed
acomplaint before the RTC.
Maulawins Arguments:
1. Loan had already been paid in full.
2. He continuously delivered and sold copra to petitioner from April
1998 to April 1999. An oral arrangement that the net proceeds
thereof shall be applied as installment payments for the loan was
made. His deliveries amounted to P420,537.68 worth of copra.
3. To bolster his claim, he presented copies of pesadas issued by Elena
and Vicente. The pesadas did not contain the notation "pd," which
meant that actual payment of the net proceeds from copra deliveries
was not given to him, but was instead applied as loanpayment.
4. Tan Shuy filed a complaint because he got angry when Maulawin sold
copra to other copra buyers.
RTC: The net proceeds from Guillermo's copra deliveries -represented in
the pesadas, which did not bear the notation "pd" should be applied as
installment payments for the loan. It Gave credence to the pesadas, as their
due execution and authenticity was established by Elena and Vicente. But the
RTC did not credit the net proceeds from 12 pesadas, as they were deliveries
for corn and not copra. Guillermo testified that it was the net proceeds from
the copra deliveries to be applied as installment payment for the loan. Thus,
P41,585.25, which corresponded to the net proceeds from corn deliveries,
should be deducted from the amount of P420,537.68claimed by Guillermo to
be the total value of his copra deliveries. There exists, therefore, a balance of
P41,047.57 in Guillermos loan.
CA: Affrirmed RTC
Issue: WON the delivery of copra amounted to installment payments for the
loan obtained by Guillermo from Tan Shuy.
Held: YES.
Tan Shuys Arguments:
Guillermo undertook two separate obligations: 1) Pay for the loan in cash; and
2) Sell lucad or copra. Since the written agreement did not specifically provide
for the application of the net proceeds from the deliveries for the loan, Tan
Shuy argues that he cannot be compelled to accept copra as payment for the
loan. The pesadas did not specifically indicate that the net proceeds from the
copra deliver is were to be used as installment payments for the loan.
Guillermos copra deliveries were duly paid in cash. The pesadas were in fact
documentary receipts for those payments.
Supreme Court Ruling:
Pursuant to Art. 1232 of the Civil Code, an obligation is extinguished by
payment or performance. There is payment when there is delivery of money
or performance of an obligation. Art. 1245 provides for a special mode of
payment known as dation in payment.
Dation in payment extinguishes the obligation to the extent of the value of the
thing delivered, either as agreed upon by the parties or as may be proved,
unless the parties by agreement express or implied, or by their silence
consider the thing as equivalent to the obligation, in which case the obligation
is totally extinguished. In this regard, the RTC made the following findings:
a) Pesadas from April 1998 to April 1999shows that Guillermo only gets
the payments for trucking while the total amount which represent
the total purchase price for the copras that he delivered to the
plaintiff were all given to Elena Tan Shuy as installments for the loan
he owed to plaintiff. Such claim was bolstered by the testimony of
Apolinario Cario which affirmed that he also sold copras to the
plaintiff Tan Shuy. Guillermo also said that he incurred indebtedness
to Tan Shuy and whenever he delivered copras the amount of the
copras sold were applied as payments to his loan.
The CA fully subscribed to the findings of the RTC. The subsequent
arrangement between Tan Shuy and Guillermo can thus be considered as one
in the nature of dation in payment. There was partial payment every time
Guillermo delivered copra to Tan Shuy, whenever he chose not to collect the
net proceeds of his copra deliveries, and instead applied the collectible as
installment payments for his loan from Tan Shuy.

Reparations Commission v Universal Deep Sea Fishing (1978)
Application of Payment
Doctrine: The rules contained in Articles 1252 to 1254 of judgment, Civil
Code apply to a person owing several debts of judgment, same kind to a
single creditor. They cannot be made applicable to a person whose obligation
as a mere surety is both contingent and singular, which in this case is the full
and faithful compliance with the terms of the contract of conditional
purchase and sale of reparations goods.
Facts:
The Reparations Commission awarded six (6) trawl boats to
the Universal Deep-Sea Fishing Corporation which were delivered
two at a time, each delivery being covered by a Contract of
Conditional Purchase and Sale providing for identical schedules of
payments.
The first installment representing 10% of the total cost was to be paid
24 months after delivery and the balance of the total cost to be paid
in ten (10) equal installments, which, in the schedule were numbered
as "1", "2", "3", etc., the first of which was due one year after the first
installment.
When the Reparations Commission sued Universal and its surety to
recover various amounts of money due under the contracts, they
claimed that the amounts were not yet due and demandable.
Universal alleged that there was an obscurity in the terms of the
contracts in question which was caused by the plaintiff as to the
amounts and due dates of the first installments which should have
been first fixed before the creditor could demand its payment from
the debtor, specifically referring to the schedule of payments which
allegedly indicated two (2) due dates for the payment of the first
installment.
Issue:
Whether there was an obscurity in the terms of the contracts which was caused
by the plaintiff as to the amounts and due dates of the first installments
which should have been first fixed before the creditor could demand
its payment from the debtor
Ruling:
The Supreme Court found the terms of the contracts clear and left no doubt as
to the intent of the contracting parties that the first installment due 24 months
after delivery was different from the first ten (10) equal yearly installment of
the balance of the purchase price (which are not designated as "first",
"second", "third", etc., installments).
The obligation included the payment, not only of the first installment in the
amount of P53,643.00, but also of the ten (10) equal yearly installments of
P56,597.20 per annum. The amount of P10,000.00 was, indeed, deducted
from judgment, amount of P53,643.00, but then judgment, first of judgment,
ten (10) equal yearly installments had also accrued, hence, no error was
committed in holding judgment, surety company to judgment, full extent of
its undertaking.
The rules contained in Articles 1252 to 1254 of judgment, Civil Code apply to
a person owing several debts of judgment, same kind to a single creditor. They
cannot be made applicable to a person whose obligation as a mere surety is
both contingent and singular, which in this case is the full and faithful
compliance with the terms of the contract of conditional purchase and sale of
reparations goods.
Paculdo v Regalado (2000)
Pardo, J.
Re: Application of Payment
DOCTRINE
Under the law, if the debtor did not declare at the time he made the payment
to which of his debts with the creditor the payment is to be applied, the law
provided the guideline; i.e. no payment is to be applied to a debt which is not
yet due and the payment has to be applied first to the debt which is most
onerous to the debtor.
FACTS: On December 27, 1990, petitioner Nereo Paculdo and respondent
Bonifacio Regalado entered into a contract of lease over a parcel of land with
a wet market building, located at Fairview Park, Quezon City. The contract was
for twenty five (25) years, commencing on January 1, 1991 and ending on
December 27, 2015. For the first five (5) years of the contract beginning
December 27, 1990, Nereo would pay a monthly rental of P450,000, payable
within the first five (5) days of each month with a 2% penalty for every month
of late payment.
Aside from the above lease, petitioner leased eleven (11) other property from
the respondent, ten (10) of which were located within the Fairview compound,
while the eleventh was located along Quirino Highway Quezon City. Petitioner
also purchased from respondent eight (8) units of heavy equipment and
vehicles in the aggregate amount of Php 1, 020,000.
On account of petitioners failure to pay P361, 895.55 in rental for the month
of May, 1992, and the monthly rental of P450, 000.00 for the months of June
and July 1992, the respondent sent two demand letters to petitioner
demanding payment of the back rentals, and if no payment was made within
fifteen (15) days from the receipt of the letter, it would cause the cancellation
of the lease contract.
Without the knowledge of petitioner, on August 3, 1992, respondent
mortgaged the land subject of the lease contract, including the improvements
which petitioner introduced into the land amounting to P35, 000,000.00, to
Monte de Piedad Savings Bank, as a security for a loan.
On August 12, 1992, and the subsequent dates thereafter, respondent refused
to accept petitioners daily rental payments.
Subsequently, petitioner filed an action for injunction and damages seeking to
enjoin respondents from disturbing his possession of the property subject of
the lease contract. On the same day, respondent also filed a complaint for
ejectment against petitioner.
The lower court rendered a decision in favor of the respondent, which was
affirmed in toto by the Court of Appeals.
ISSUE
Whether the petitioner was truly in arrears in the payment of rentals on the
subject property at the time of the filing of the complaint for ejectment.
HELD
NO, the petitioner was not in arrears in the payment of rentals on
the subject property at the time of the filing of the complaint for
ejectment.
As found by the lower court there was a letter sent by respondent to
herein petitioner, dated November 19, 1991, which states that
petitioners security deposit for the Quirino lot, be applied as partial
payment for his account under the subject lot as well as to the real
estate taxes on the Quirino lot. Petitioner interposed no objection, as
evidenced by his signature signifying his conformity thereto.
Meanwhile, in an earlier letter, dated July 15, 1991, respondent
informed petitioner that the payment was to be applied not only to
petitioners accounts under the subject land and the Quirino lot but
also to heavy equipment bought by the latter from respondent.
Unlike in the November letter, the July letter did not contain the
signature of petitioner.
Petitioner submits that his silence is not consent but is in fact a rejection. As
provided in Article 1252 of the Civil Code, the right to specify
which among his various obligations to the same creditor is to be
satisfied first rest with the debtor.
In the case at bar, at the time petitioner made the payment, he made it clear
to respondent that they were to be applied to his rental obligations on the
Fairview wet market property. Though he entered into various contracts and
obligations with respondent, all the payments made, about P11,000,000.00
were to be applied to rental and security deposit on the Fairview wet market
property. However, respondent applied a big portion of the amount paid by
petitioner to the satisfaction of an obligation which was not yet due and
demandable- the payment of the eight heavy equipment.
Under the law, if the debtor did not declare at the time he made the payment
to which of his debts with the creditor the payment is to be applied, the law
provided the guideline; i.e. no payment is to be applied to a debt which is not
yet due and the payment has to be applied first to the debt which is most
onerous to the debtor.
The lease over the Fairview wet market is the most onerous to the petitioner
in the case at bar.
Petition granted.
*Sps. Sinamban v China Bank
Marquez v Elisan Credit
Facts:
Marquez obtained from Elisan Credit Corporation a loan payable in weekly
installments and subject to annual interest with monthly penalties and
attorneys in case of nonpayment. A chattel mortgage was also executed
stipulating that the motor vehicle shall stand as a security for all other
obligations of every kind already incurred or which hereafter may be
incurred. The payment of that loan was acknowledged by both parties.
Subsequently, Marquez obtained another loan evidenced by a promissory note
with the same terms and conditions as the first loan. When the second loan
matured, there still remained an unpaid balance. Marquez requested the
creditor to pay the unpaid balance by daily installments until the loan is paid;
the creditor agreed. Thus, several months after the maturity of the loan,
Marquez had already paid a total amount which is greater than the amount of
the principal.
Despite such, the creditor filed a complaint for foreclosure of the CM on the
ground that Marquez allegedly failed to pay the principal of the second
loan despite demand. It was also prayed that the unpaid balance plus
accrued penalties and interestsbe paid because, allegedly, Marquez failure to
pay upon maturity triggered the imposition of monthly penalties and
attorneys fees.
Marquez, citing Art 1176 and 1235 of the Civil Code, insists that his daily
payments should be deemed to have been credited against the principal, as
the official receipts issued by the creditor were silent with respect to the
payment of interest and penalties.
Issue 1: W/N the creditor waived the payment of the interest
No. The fact that the official receipts did not indicate whether the payments
were made for the principal or the interest does not prove that the creditor
waived the interest. There is no presumption of waiver of interest without any
evidence showing that the creditor accepted the daily instruments as
payments for the principal.
Issue 2: W/N the daily payments made by the debtor be applied to the
interest
Yes. Notwithstanding the fact it was not indicated in the receipts whether the
payments were applied to the principal or the interest, such failure should not
be taken against the creditor. Under Article 1253 of the Civil Code, if the debt
produces interest, payment of the principal shall not be deemed to have been
made until the interests have been covered. Thus, the creditor in this case has
a right to credit the payments to the interest first.
Read More
Issue 3: W/N an order for foreclosure is proper
No. Foreclosure in this case is without legal and factual basis because the
chattel mortgage was already extinguished when the obligation under the first
loan was duly paid.
A CM can only cover obligations existing at the time the mortgage is
constituted. For a CM to cover debts yet to be contracted, a fresh chattel
mortgage may be executed or the old contract be amended conformably to the
form prescribed by the CM Law. Here, since there was no showing that a new
agreement was executed, the security can no longer apply to the second loan.
The chattel mortgage was already extinguished because being merely an
accessory in nature, it cannot exist independently of the principal obligation.
Meat Packing Corporation of the Philippines (MPCP) v
Sandiganbayan
Tender of payment and consignation
Facts:
MPCP is a corporation wholly owned by the GSIS. It is the owner of 3 parcels
of land, as well as the meat processing and packing plant thereon. MPCP and
the Philippine Integrated Meat Corporation (PIMECO) entered into an
Agreement whereby MPCP leased to PIMECO, under a lease-purchase
arrangement, its property. The Agreement contained rescission clauses.
On March 17, 1986, the PCGG sequestered all the assets, properties and
records of PIMECO. The sequestration included the meat packing plant and
the lease-purchase agreement. MPCP gave notice to PIMECO of the rescission
of the lease-purchase agreement on the ground, among others, of non-
payment of rentals of more than P2,000,000 for the year 1986. GSIS asked
the PCGG to exclude the meat packing plant from the sequestered assets of
PIMECO, inasmuch as the same is owned by MPCP. PCGG denied the request.
MPCP sought the turnover to it of the meat packing plant on the ground that
the lease-purchase agreement had already been rescinded. PCGG acceded to
this request.
Meanwhile, PCGG instituted with the Sandiganbayan a complaint for
reconveyance, reversion, accounting, restitution and damages, entitled,
"Republic vs Peter Sabido, et al." The complaint alleged that Sabido obtained,
under favored and very liberal terms, huge loans from the GSIS in favor of
PIMECO, was beneficially held and controlled by defendants Sabido et al.
Sabido filed an Urgent Manifestation and Motion, alleging that, according to
newspaper accounts, PCGG had already turned over the management and
operation of PIMECO to the GSIS/MPCP. Thus, he prayed that the transfer of
the management, control and possession of PIMECO to GSIS be declared null
and void ab initio for having been done without the approval of the
Sandiganbayan. Sandiganbayan received a letter from members of the
PIMECO Labor Union, praying for the maintenance of the status quo to enable
PIMECO to continue its business operations and to ensure their continuity of
work and security of tenure. Sandiganbayan issued a TRO commanding the
PCGG to cease and desist from enforcing the contemplated turnover to MPCP.
Sandiganbayan, finding that the PCGG committed grave abuse of authority,
power and discretion in unilaterally terminating the lease-purchase
agreement of PIMECO with MPCP and in turning over its management,
control and operation to the latter, ordered the issuance of a writ of
preliminary injunction. PCGG filed a Motion for Reconsideration, which the
Sandiganbayan granted. Thereafter, the Sandiganbayan declared the turn-
over of the meat packing plant to GSIS null and void.
PIMECO filed with the Sandiganbayan a petition entitled, PIMECO vs MPCP
and PCGG," captioned as for "Declaratory Relief and Other Similar
Remedies. PIMECO alleged that from 1981 to 1985, PIMECO has been
regularly paying the annual rentals; and that prior to its sequestration in
January 1986, PIMECO was able to pay MPCP P846,269.70. However, after
its sequestration, the PCGG Management Team that took over the plant
became erratic and irregular in its payments of the annual rentals to MPCP,
thus presenting the danger that PIMECO may be declared in default in the
payment of rentals equivalent to 3 annual installments and causing the
cancellation of the lease-purchase agreement. Hence, PIMECO prayed for a
declaration that it is no longer bound by the provisions of the rescission clause
of the lease-purchase agreement.
In the meantime, PCGG tendered to MPCP 2 checks (total of P5,000,000),
representing partial payment of accrued rentals on the meat packing plant,
which MPCP refused to accept on the theory that the lease-purchase
agreement had been rescinded. Thus, the PCGG filed an Urgent Motion
praying that the Sandiganbayan order MPCP to accept the tendered amount.
MPCP alleged that its lease-purchase agreement with PIMECO has been
rescinded; and that PIMECO was in arrears in the payment of rentals in the
amount of P12,378,171.06, which is more than the equivalent of 3 cumulative
rentals at the annual rate of P3,346,269.70.
The Sandiganbayan held that the tender of payment has been validly made.
To rule otherwise would be unfair and unjust to PIMECO considering that
during the time the PCGG had possession and control of the sequestered
assets and records, PIMECO was not in the position to take steps necessary
for the preservation and conservation of those assets and records.
Meanwhile, Sandiganbayan dismissed the petition for declaratory relief, it
appearing that while the unpaid rentals as of January 27, 1991 have reached
P7,530,036.21, PCGGs tender of payment and consignation of
P5,000,000.00 averted the accumulation of the unpaid rentals to 3 yearly
rentals-installments. Consequently, the petition for declaratory relief has
become moot and academic.
Hence, MPCP brought this petition for certiorari, mandamus and prohibition,
arguing in fine that the PCGG is in estoppel because it has already admitted
that the lease-purchase agreement between MPCP and PIMECO has been
rescinded.
Issue:
Whether or not the lease-purchase agreement between MPCP and PIMECO
has been validly rescinded, making the Sandiganbayans approval of the
consignation by PCGG as payment for back rentals or accrued amortizations
on the meat packing plant, after the MPCP refused the tender of payment of
the same, improper.
Ruling:
No. Consignation is the act of depositing the thing due with the court or
judicial authorities whenever the creditor cannot accept or refuses to accept
payment, and it generally requires a prior tender of payment. It should be
distinguished from tender of payment. 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. Tender and consignation, where validly made, produces the
effect of payment and extinguishes the obligation.
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.
Consignation alone shall produce the same effect in the following cases:
(1) When the creditor is absent or unknown, or does not appear at the
place of payment;
(2) When he is incapacitated to receive the payment at the time it is due;
(3) When, without just cause, he refuses to give a receipt;
(4) When two or more persons claim the same right to collect;
(5) When the title of the obligation has been lost.

There was prior tender by PCGG of the amount of P5,000,000.00 for payment
of the rentals in arrears. MPCPs refusal to accept the same, on the ground
merely that its lease-purchase agreement with PIMECO had been rescinded,
was unjustified. From January 29, 1986 to January 30, 1990, PIMECO paid,
and GSIS/MPCP received, several amounts due under the lease-purchase
agreement, such as annual amortizations or rentals, advances, insurance, and
taxes, in total sum of P15,921,205.83. Surely, the acceptance by MPCP and
GSIS of such payments for rentals and amortizations negates any rescission of
the lease-purchase agreement.
In support of its contention that the lease-purchase agreement has been
rescinded, MPCP makes reference to the resolutions of the PCGG turning over
to the GSIS the meat packing complex and the land on which it is situated.
MPCP argues that PCGG was estopped from taking a contrary position. A
closer perusal of the resolutions, however, readily shows that the turn-over
was explicitly made dependent on certain conditions precedent, among which
was the approval by the Sandiganbayan and the execution of a MOA between
PCGG and MPCP. A MOA was in fact executed on April 28, 1989, although the
same suffers from formal and substantial infirmities. However, no approval
was sought from the Sandiganbayan. On the contrary, the Sandiganbayan, in
its Resolution declaring the turn-over null and void, refused to honor the
PCGG resolutions, reasoning thus:
First, what was approved by the PCGG in its resolutions of September 20,
1988, and January 24, 1989, is the transfer of the "meat packing complex
including the land located at Barrio Ugong, Pasig, Metro Manila," and not "the
management and operation of PIMECO." It is, however, the latter that the
Memorandum of Agreement, executed on April 28, 1989, pursuant to the said
resolutions, transferred to the GSIS.
Second, the second resolution made the turnover of the "meat packing
complex including the land located at Barrio Ugong, Pasig Metro Manila,"
"upon compliance with these conditions, to be implemented by the [PCGG]
Operations and Legal Departments: . . . (b) approval by the Sandiganbayan . .
." Until now, however, no motion has been presented to secure that approval,
and none can be expected because the same Memorandum of Agreement
changed the requirement of approval to "(t)he Sandiganbayan shall be advised
of this Agreement." Even the advice stipulated has never been given by the
PCGG.
Since the MOA was executed by one PCGG commissioner only, the same
cannot validly amend the resolutions passed by the PCGG itself.
Consequently, the turnover of the management and operation of PIMECO,
which, of course, include the meat packing complex and the land of which it
stands, stipulated in the MOA, cannot be legally enforced. Needless to say, the
commissioners should be the first to abide by the PCGGs resolutions.
Under the terms of the lease-purchase agreement, the amount of arrears in
rentals or amortizations must be equivalent to the cumulative sum of three
annual installments, in order to warrant the rescission of the contract.
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
deemed automatically cancelled. Assuming in the extreme that, as alleged by
MPCP, the arrears at the time of tender on January 30, 1991 amounted to
P12,578,171.00,40 the tender and consignation of the sum of P5,000,000.00,
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
installments. Thus, with the Sandiganbayans approval of the consignation
and directive for MPCP to accept the tendered payment, the lease-purchase
agreement could not be said to have been rescinded.
ALLANDALE SPORTSLINE INC. v. THE GOOD DEVELOPMENT
CORP
CONSIGNATION
Allandale Sportsline Inc (ASI) obtained a loan of P204,000 from The Good
Development Corp (GDC) under a Promissory Note signed by Melbarose
Sasot (Pres) and Allandale Sasot (VP) of ASI, with Theresa
Manipon, as one of the three co-makers.
The promissory note provides that the loan is payable in daily equal
installments of P2,000 with interest as 26.002% per annum.
In case of default in the payment of any installment, the
entire balance of the obligation shall become immediately
due and demandable, and subject to liquidated penalty
charge equivalent to 2% of the principal
To provide additional security, ASI and Melbarose executed a Deed
of Mortgage in favor of GDC acceding that: should the
Mortgagors fail to comply with any of the terms of the
promissory note and this mortgage contract, the
Mortgagee shall automatically have the absolute right
without need of prior notice or demand to forthwith
judicially or extrajudicially forclose this mortgage xxx
 The properties subject of the mortgage are itemized in an inventory
attached to the deed:
o List A- all the merchandise and stocks in trade found in the
commercial establishment owned by ASI and Melbarose,
valued at P100,000
o List B- all the furniture, fixtures, appliances, equipment and
other personal property found in said business
establishment, P3,500
o List C- one Toyota Corona, valued at P40,000; one Totoya
Corolla, P35,000
GD demanded that Melbarose pay the unpaid account of P179,000,
or surrender the mortgaged chattels within 5 days from notice
No payment was made, RTC filed a complaint for Replevin
and/or Sum of Money with Damages against ASI,
Melbarose, Manipon, Florante Edrino and John Doe.
o Replevin- ordering the seizure of the above described
chattels or personal propert with all accessories and
directing their transfer to Plaintiff for the purposes of
foreclosure and or transfer to satisfy the obligation in favor
of the plaintiff
RTC issued a Writ of Replivin, by virtue thereof, the Sheriff seized
and delivered to the GDC one unit of Toyota Corona and two
appliances
Dec. 2, 1991, GDC filed an Amended Complaint to include in its
application for replevin the items under List A. RTC issued an Alias
Writ of Replevin, items seized and delivered to GDC
Second Writ of Replevin was also issued over the Toyota Corolla, but
records do not indicate that the Sheriff made a return on the writ
ASI and Melbarose filed their Answer with Counterclaim, contending
that their loan obligation was only P200,000, and after deducting
the P18,000 which amount was retained by GDC as advance
payment, and P29,000 representing payments made from June 4,
1991 to July 8, 1991, their unpaid obligation was only P171,000.
o That they repeatedly tendered payment, but GDC
rejected their efforts for no valid reason
o That the unreasonable refusal to accept such
payment relieved them of their loan obligation
Manipon led a separate Answer in which she did not deny the
authenticity of her signature on the Promissory Note, but argued that
she did not knowingly or voluntarily sign the instrument as a co-
maker, for at that time she was under the impression that the
instrument she was signing was her own loan application with GDC
GDC disclosed that after it obtained possession of the properties
subject of the writs of replevin, it caused the auction sale of some of
them and realized proceeds amounting to P78,750.00 (No
certificate of sale, but as testified by respondents witness,
Leonila Buenviaje)
GDC presented a Statement of Account, which indicated that
the total outstanding balance of the loan obligation of ASI and
Melbarose was reduced to P191,111.82 after the proceeds of the
auction sale conducted on June 19, 1992 in the amount of P78,750.00
was deducted from the earlier balance of P266,126.17
RTC, in favor of GDC
ASI, Sasot and Manipon appealed to CA, DENIED; Motion for
Recon, denied
SC: Petitioners contend that they were relieved of their obligation to
pay GDC when they made several attempts to tender payment but
respondent refused to accept them without any valid reason.
July 3, 1991- first tender of payment, Sasot sent GDC a PCIB check
postdated Oct 31, 1991 of P171,000. Check rejected because the
amount was insufficient for as July 4, 1991, the balance of the
principal loand was P175,000, not P171,000, and its maturity was
Sept. 13, not Oct. 31
Oct. 15, 1997- tendered payment of P171,000 in cash, respondent
refused due to insufficiency. Statement of Account was sent to
petitioner indicating that the total balance due was P228,071.61
 On October 29, 1991, petitioners tendered cash payment of
P174,986.96, 338 8 but respondent still refused to accept it for
insufficiency of the amount.
ISSUE: WHETHER OR NOT TENDER OF PAYMENT AND
RESPONDENTS REFUSAL DISCHARGED PETITIONERS FROM
THEIR OBLIGATION
HELD: NO
Tender of payment, without more, produces no effect;
rather, tender of payment must be followed by a valid
consignation in order to produce the effect of payment and
extinguish an obligation
Mere preparatory act to consignation. It is the manifestation of a
desire by the debtor to comply with or pay an obligation. If refused
without just cause, the tender of payment will discharge the debtor
of the obligation to pay but only after a valid consignation of the sum
due shall have been made with the proper court
Consignation is the deposit of the proper amount with a
judicial authority, before whom the debtor must establish
compliance with the following mandatory requirements:
(1) there was a debt due;
(2) 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 claim to be entitled to
receive the amount due, or because the title to the obligation has been lost;
(3) previous notice of the consignation had been given to the person interested
in the performance of the obligation;
(4) the amount due was placed at the disposal of the court; and
(5) after the consignation had been made, the person interested was notified
thereof. Failure to prove any of these requirements is enough ground to render
a consignation ineffective.
Petitioners did not allege or prove that after their tender of
payment was refused by respondents, they attempted or
pursued consignation of the payment with the proper
court.
Their tender of payment not having been followed by a valid
consignation, it produced no effect whatsoever, least of all the
extinguishment of the loan obligation.
Therefore, the first issue of the validity or invalidity of their
tender of payment is completely moot and academic, for
either way the discussion will go, it will lead to no other
conclusion but that, without an accompanying valid
consignation, the tender of payment did not result in the
payment and extinguishment of the loan obligation. The
Court cannot take cognizance of such a purely hypothetical issue.
Disclaimer: following issues, irrelevant to Oblicon pero ilagay at idiscuss ko
na rin briefly kahit di ko naiintindihan HAHAHHHA WAG NIYO NA ITO
BASAHIN
FIRST ISSUE: Whether the parol evidence rule applies on the promissory
note in question when the co-makers thereon are total strangers to another
HELD: Lack of basis. Manipon did not join in the petition.
The finding of the RTC, as affirmed by the CA, that she was a co-
maker of Promissory Note and a real party-in-interest is already final
and conclusive. Petitioners cannot now question this finding by
raising the defense that Manipon signed the promissory note without
knowledge of the nature of her liability under the instrument.
Such defense is personal to Manipon and cannot be invoked by
petitioners, unless it is shown that their interests are so interwoven
with and dependent on Manipon's as to be inseparable.
SECOND ISSUE: Was there a legal basis for RTC to grant respondent the
relief of collecting the amount of P269,611.82 plus legal interest until full
amount is paid, when respondents already covered P78,750
As emphasized at the outset, the reliefs respondent prayed for in its
Complaint and Amended Complaint are in the alternative: delivery
of the mortgaged properties preparatory to foreclosure or payment
of the unpaid loan
NO, by causing the auction sale of the mortgaged properties,
respondent effectively adopted and pursued the remedy of extra-
judicial foreclosure, using the writ of replevin as a tool to get hold of
the mortgaged properties. One effect of respondent's election of the
 remedy of extra-judicial foreclosure is its waiver of the remedy of
collection of the unpaid loan
However, another effect of its election of the remedy of extra-judicial
foreclosure is that whatever deciency remains after applying the
proceeds of the auction sale to the total loan obligation may still be
recovered by respondent
THIRD ISSUE, DI PA RIN RELEVANT: Whether respondent instituted
the proper action for deficiency amount or raised or its claim at the pre-trial
The Complaint and Amended Complaint reveals that
respondent did not allege any deciency account. Nor did it
raise the matter in its PreTrial Brief. This is only to be expected
because the auction sale of the properties was apparently conducted
long after it led its Complaint/Amended Complaint and Pre-trial
Brief
However, the Court notes that evidence on the deficiency amount
was duly presented by respondent and examined by petitioners (thru
the testimonies and documentary evidences presented in court)
The properties of petitioners which were seized by virtue of the Writs
of Replevin were extra-judicially foreclosed and sold at public
auction by respondent in the exercise of its absolute right under the
contract entered into by the parties, without need of prior notice or
demand to forthwith judicially or extra-judicially foreclose this
mortgage and proceed against all or any of the mortgaged rights,
interests and properties for the full satisfaction of the mortgagors'
entire obligation to the mortgagee.
Under the Deed of Mortgage, it is provided that in case of
default, petitioners shall be liable for liquidated collection
charge in the amount equivalent to 25% of said outstanding
obligation.
Sps. Cacyurin v AFPMB (2013)
G.R. No. 171298, April 15, 2013
Topic: Tender of Payment and consignation
Doctrine: Besides, as earlier stated, Article 1256 authorizes consignation
alone, without need of prior tender of payment, where the ground for
consignation is that the creditor is unknown, or does not appear at the place
of payment; or is incapacitated to receive the payment at the time it is due;
or when, without just cause, he refuses to give a receipt; or when two or more
persons claim the same right to collect; or when the title of the obligation has
been lost.
Facts:
Petitioner Oscar Cacayorin filed an application with AFPMBAI to
purchase a piece of property which the latter owned in Puerto Princesa City,
through a loan facility.
On July 4, 1994, Oscar and his wife and the Rural Bank of San Teodoro
executed a Loan and Mortgage Agreement with the former as borrowers and
the Rural Bank as lender, under the auspices of Pag-IBIG or Home
Development Mutual Funds Home Financing Program.
The Rural Bank issued an August 22, 1994 letter of guaranty6
informing AFPMBAI that the proceeds of petitioners approved loan in the
amount of P77,418.00 shall be released to AFPMBAI after title to the property
is transferred in petitioners name and after the registration and annotation of
the parties mortgage agreement.
AFPMBAI executed in petitioners favor a Deed of Absolute Sale, and a new
title was issued in their name, with the corresponding annotation of their
mortgage agreement with the Rural Bank.
Unfortunately, the Pag-IBIG loan facility did not push through and
the Rural Bank closed and was placed under receivership by the Philippine
Deposit Insurance Corporation (PDIC). Meanwhile, AFPMBAI somehow was
able to take possession of petitioners loan documents and the title, while
petitioners were unable to pay the loan/consideration for the property.
AFPMBAI made oral and written demands to petitioners.
In July 2003, petitioners filed a Complaint for consignation of loan
payment, recovery of title and cancellation of mortgage annotation against
AFPMBAI, PDIC and the Register of Deeds of Puerto Princesa City.
Petitioners alleged in their Complaint that as a result of the Rural Banks
closure and PDICs claim that their loan papers could not be located, they were
left in a quandary as to where they should tender full payment of the loan and
how to secure cancellation of the mortgage annotation on title of the land.
AFPMBAI filed a Motion to Dismiss13 claiming that petitioners
Complaint falls within the jurisdiction of the Housing and Land Use
Regulatory Board (HLURB) and not the Puerto Princesa RTC, as it was filed
by petitioners in their capacity as buyers of a subdivision lot and it prays for
specific performance of contractual and legal obligations decreed under PD
957. It added that since no prior valid tender of payment was made by
petitioners, the consignation case was fatally defective and susceptible to
dismissal.
L.C.: dismissed AFPMBAI motion
C.A.: reversed decision and sided with AFPMBAI
Issue:
1)Whether or not consignation is proper
2) Whether or not RTC has jurisdiction
Held:
1) Applying Article 1256 to the petitioners case as shaped by the
allegations in their Complaint, the Court finds that a case for
consignation has been made out, as it now appears that there are
two entities which petitioners must deal with in order to fully
secure their title to the property: 1) the Rural Bank (through
PDIC), which is the apparent creditor under the July 4, 1994
Loan and Mortgage Agreement; and 2) AFPMBAI, which is
currently in possession of the loan documents and the certificate
of title, and the one making demands upon petitioners to pay.
Clearly, the allegations in the Complaint present a situation
where the creditor is unknown, or that two or more entities
appear to possess the same right to collect from petitioners.
Whatever transpired between the Rural Bank or PDIC and
AFPMBAI in respect of petitioners loan account, if any, such
that AFPMBAI came into possession of the loan documents and
TCT No. 37017, it appears that petitioners were not informed
thereof, nor made privy thereto.
2) On the question of jurisdiction, petitioners case should be tried
in the Puerto Princesa RTC, and not the HLURB. Consignation
is necessarily judicial, as the Civil Code itself provides that
consignation shall be made by depositing the thing or things due
at the disposal of judicial authority, thus: Art. 1258.
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, and the
announcement of the consignation in other cases. The
consignation having been made, the interested parties shall also
be notified thereof.
The above provision clearly precludes consignation in venues
other than the courts. Elsewhere, what may be made is a valid
tender of payment, but not consignation. The two, however, are
to be distinguished. 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. (8 Manresa 325). While it may be true that
petitioners claim relates to the terms and conditions of the sale
of AFPMBAIs subdivision lot, this is overshadowed by the fact
that since the Complaint in Civil Case No. 3812 pleads a case for
consignation, the HLURB is without jurisdiction to try it, as such
case may only be tried by the regular courts.
Spouses Nameal and Lourdes Bonrostro v. Spouses Juan and
Constancia Luna (2013)
Topic: Tender of Payment and consignation
Doctrine: For a tender of payment to take effect it must be accompanied by
the means of payment and debtor must take immediate step to make a
consignation.
Facts: Constancia Luna, as buyer, entered into a contract to sell with Bliss
Development Corporation involving a house located in Quezon City. A year
after, Luna sold it to Lourdes Bonrostro under the ff. terms:
The stipulated price of P1,250,000.00 shall be paid by the VENDEE to the
VENDOR in the following manner:
 (a) P200,000.00 upon signing x x x the Contract To Sell,
(b) P300,000.00 payable on or before April 30, 1993,
(c) P330,000.00 payable on or before July 31, 1993,
(d) P417,000.00 payable to the New Capitol Estate, for 15 years at
[P6,867.12] a month
x x x In the event the VENDEE fails to pay the second installment on time,
[t]he VENDEE will pay starting May 1, 1993 a 2% interest on the P300,000.00
monthly. Likewise, in the event the VENDEE fails to pay the amount of
P630,000.00 on the stipulated time, this CONTRACT TO SELL shall likewise
be deemed cancelled and rescinded and x x x 5% of the total contract price [of]
P1,250,000.00 shall be deemed forfeited in favor of the VENDOR. Unpaid
monthly amortization shall likewise be deducted from the initial down
payment in favor of the VENDOR.
After execution of the contract, Bonrostro took possession of the property.
However, except for P200,000.00 downpayment, she failed to pay
subsequent amortization. Luna then filed before the RTC a Complaint for
Rescission of Contract and Damages. This is a petition for review on certiorari
assailing the decision of CA affirming with modification the decision of RTC
in favor herein respondents.
Issue: Whether or not delay in the payment of installment is a substantial
breach of obligation as to warrant its rescission.
Ruling: No, in a contract to sell, payment of the price is a positive suspensive
condition. Failure of which is not a breach of contract warranting rescission
under Article 1191 of the Civil Code, but rather just an event that prevents the
supposed seller from being bound to convey title to the supposed buyer. The
contract to sell entered by the parties refers to real property on installment
basis, in which Art. 1191 cannot apply since they are governed by the Maceda
Law. However, there being no breach, Bonrostro is still not excused from
being made liable for interest on the installments due from the date of default
until fully paid. Tender of payment, a manifestation by the debtor of a desire
to comply with or pay an obligation, asserted by Bonrostro for the accrual of
interest to be suspended is not a valid defense because for a tender of payment
to take effect it must be accompanied by the means of payment and debtor
must take immediate step to make a consignation, the deposit of the proper
amount with a judicial authority, then interest is suspended from the time of
such tender.
Del Carmen v Sabordo (2014)
G.R. No. 181723, Aug. 11, 2014
Consignation
Doctrine: It is settled that compliance with the requisites of a valid
consignation is mandatory. Failure to comply strictly with any of the
requisites will render the consignation void. One of these requisites is a valid
prior tender of payment.
Facts:
Subsequently, the Suico spouses and their business partners failed to pay their
loan obligations forcing DBP to foreclose the mortgage. After the Suico
spouses and their partners failed to redeem the foreclosed properties, DBP
consolidated its ownership over the same.
Nonetheless, DBP later allowed the Suico spouses and Reginald and Beatriz
Flores (Flores spouses), as substitutes for Juliana Del Rosario, to repurchase
the subject lots by way of a conditional sale for the sum of P240,571.00.
The Suico and Flores spouses were able to pay the downpayment and the first
monthly amortization, but no monthly installments were made thereafter.
Threatened with the cancellation of the conditional sale, the Suico and Flores
spouses sold their rights over the said properties to herein respondents
Restituto and Mima Sabordo, subject to the condition that the latter shall pay
the balance of the sale price. Subsequently, respondents were able to
repurchase the foreclosed properties of the Suico and Flores spouses.
Respondents Restituto Sabordo (Restituto) filed with the then Court of First
Instance of Negros Occidental an original action for declaratory relief with
damages and prayer for a writ of preliminary injunction raising the issue of
whether or not the Suico spouses have the right to recover from respondents
Lots 506 and 514. The court ruled that the petioners can exercise their option
to purchase or redeem the subject lots from respondents by paying the sum of
P127,500.00.
In the meantime, Toribio Suico (Toribio) died leaving his widow, Eufrocina,
and several others, including herein petitioner, as legal heirs. Later, they
discovered that respondents mortgaged Lots 506 and 514 with Republic
Planters Bank (RPB) as security for a loan which, subsequently, became
delinquent.
Thereafter, claiming that they are ready with the payment of P127,500.00, but
alleging that they cannot determine as to whom such payment shall be made,
petitioner and her co-heirs filed a Complaint with the RTC of San Carlos City,
Negros Occidental seeking to compel herein respondents and RPB to
interplead and litigate between themselves their respective interests on the
abovementioned sum of money. The Complaint also prayed that respondents
be directed to substitute Lots 506 and 514 with other real estate properties as
collateral for their outstanding obligation with RPB and that the latter be
ordered to accept the substitute collateral and release the mortgage on Lots
506 and 514. Upon filing of their complaint, the heirs of Toribio
deposited the amount of P127,500.00 with the RTC of San Carlos
City, Branch 59.
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
at the place of payment; (2) when the creditor is incapacitated to receive the
payment at the time it is due; (3) when, without just cause, the creditor refuses
to give a receipt; (4) when two or more persons claim the same right to collect;
and (5) when the title of the obligation has been lost. None of these instances
are present in the instant case. Hence, the fact that the subject lots are in
danger of being foreclosed does not excuse petitioner and her co-heirs from
tendering payment to respondents, as directed by the court.

Respondents filed their Answer with Counterclaim praying for the dismissal
of the above Complaint on the grounds that (1) the action for interpleader
was improper since RPB is not laying any claim on the sum of
P127,500.00; (2) that the period within which the complainants are
allowed to purchase Lots 506 and 514 had already expired; (3) that
there was no valid consignation, and (4) that the case is barred
by litis pendencia or res judicata.

Issue: Whether the consignation made by the petitioners was a judicial

deposit based on a final judgment and, as such, does not require compliance
with the requirements of Articles 1256 and 1257 of the Civil Code.

Ruling:

The petition lacks merit. In the instant case, petitioner and her co-heirs, upon
making the deposit with the RTC, did not ask the trial court that respondents
be notified to receive the amount that they have deposited. In fact, there was
no tender of payment. Instead, what petitioner and her co-heirs prayed for is
that respondents and RPB be directed to interplead with one another to
determine their alleged espective rights over the consigned amount; that
respondents be likewise directed to substitute the subject lots with other real
properties as collateral for their loan with RPB and that RPB be also directed
to accept the substitute real properties as collateral for the said loan.
Nonetheless, the trial court correctly ruled that interpleader is not the proper
remedy because RPB did not make any claim whatsoever over the amount
consigned by petitioner and her co-heirs with the court.

It is settled that compliance with the requisites of a valid consignation is

mandatory. Failure to comply strictly with any of the requisites will render the
consignation void. One of these requisites is a valid prior tender of payment.