TENDER OF PAYMENT

DALTON, vs.FGR REALTY AND DEVELOPMENT CORP

G.R. No. 172577 January 19, 2011

FACTS:

Flora R. Dayrit (Dayrit) owned a 1,811-square meter parcel of land located

at the corner of Rama Avenue which Dalton leased portions of the property.
In June 1985, Dayrit sold the property to respondent FGR Realty and
Development Corporation (FGR). In August 1985, Dayrit and FGR stopped
accepting rental payments because they wanted to terminate the lease
agreements with Dalton and Sasam, et al.
Soledad Dalton built a house which she initially used as a dwelling and store
space. She vacated the premises when her children got married. She
transferred her residence near F. Ramos Public Market, Cebu City.
She constructed the 20 feet by 20 feet floor area house sometime in 1973.
The last monthly rental was P69.00. When defendants refused to accept rent
al and demanded vacation of the premises, she consignated [sic] her
monthly rentals in court.
The RTC dismissed the 11 September 1985 complaint and ordered Dalton
to vacate the property. The RTC held that:
The requisites of consignation are as follows:
1. The existence of a valid debt.
2. Valid prior tender, unless tender is excuse [sic];
3. Prior notice of consignation (before deposit)
4. Actual consignation (deposit);
5. Subsequent notice of consignation;
Requisite Nos. 3 and 5 are absent or were not complied with. It is very
clear that there were no prior notices of consignation (before deposit) and
subsequent notices of consignation (after deposit) The Court of Appeals
affirmed the RTC’s 26 February 2002 Decision.

ISSUE:

WON the consignation was void.

RULING:
 No. Compliance with the requisites of a valid consignation is
mandatory. Failure to comply strictly with any of the requisites will render the
consignation void. Substantial compliance is not enough. The requisites of a
valid consignation: (1) a debt due; (2) the creditor to whom tender of payment
was made refused without just cause to accept the payment, or the creditor
was absent, unknown or incapacitated, or several persons claimed the same
right to collect, or the title of the obligation was lost; (3) the person interested
in the performance of the obligation was given notice before consignation
was made; (4) the amount was placed at the disposal of the court; and (5)
the person interested in the performance of the obligation was given notice
after the consignation was made.
Substantial compliance is not enough for that would render only a directory
construction to the law. The use of the words "shall" and "must" which are
imperative, operating to impose a duty which may be enforced, positively
indicate that all the essential requisites of a valid consignation must be
complied with. The Civil Code Articles expressly and explicitly direct what
must be essentially done in order that consignation shall be valid and
effectual.

RAYOS V REYES
G.R.No. 150193 February 20, 2003

FACTS:

Three parcels were formerly owned by the spouses Francisco and

Asuncion Tazal who on 1 September 1957 sold them for P724.00 to
respondents’ predecessor-in-interest, one Mamerto Reyes, with right to
repurchase within two (2) years from date thereof by paying to the vendee
the purchase price and all expenses incident to their reconveyance. After
the sale the vendee a retro took physical possession of the properties and
paid the taxes thereon.
The otherwise inconsequential sale became controversial when two
(2) of the three (3) parcels were again sold on 24 December 1958 by
Francisco Tazal for P420.00 in favor of petitioners’ predecessor-in-interest
Blas Rayos without first availing of his right to repurchase the properties.
ISSUE:

Was there a valid consignation and tender of payment made in the

instant case?

RULING:

In order that consignation may be effective the debtor must show that
(a) there was a debt due; (b) the consignation of the obligation had been
made because the creditor to whom a valid tender of payment was made
refused to accept it; (c) previous notice of the consignation had been given
to the person interested in the performance of the obligation; (d) the amount
due was placed at the disposal of the court; and, (e) after the consignation
had been made the person interested was notified thereof.

In the instant case, petitioners failed, first, to offer a valid and

unconditional tender of payment; second, to notify respondents of the
intention to deposit the amount with the court; and third, to show the
acceptance by the creditor of the amount deposited as full settlement of the
obligation, or in the alternative, a declaration by the court of the validity of
the consignation. The failure of petitioners to comply with any of these
requirements rendered the consignation ineffective.

Consignation and tender of payment must not be encumbered by

conditions if they are to produce the intended result of fulfilling the obligation.
In the instant case, the tender of payment of P724.00 was conditional and
void as it was predicated upon the argument of Francisco Tazal that he was
paying a debt which he could do at any time allegedly because the 1
September 1957 transaction was a contract of equitable mortgage and not a
deed of sale with right to repurchase

CEBU INTERNATIONAL V CA
G.R.No. 123031 October 12, 1999

FACTS:
 On April 25, 1991, private respondent, Vicente Alegre, invested with
CIFC, P500,000.00 pesos, in cash. Petitioner issued a promissory note to
mature on May 27, 1991. The note for P516,238.67 covered private
respondent's placement plus interest at twenty and a half percent for thirty-
two days. On May 27, 1991, CIFC issued BPI Check No. 513397
P514,390.94 in favor of the private respondent as proceeds of his matured
investment plus interest. The CHECK was drawn from petitioner's current
account number 0011-0803-59, maintained with BPI, main branch at Makati
City. On June 17, 1991, private respondent's wife deposited the CHECK with
RCBC, in Puerto Princesa, Palawan. BPI dishonored the CHECK with the
annotation, that the "Check (is) Subject of an Investigation." BPI took custody
of the CHECK pending an investigation of several counterfeit checks drawn
against CIFC's aforestated checking account. BPI used the check to trace
the perpetrators of the forgery. Immediately, private respondent notified
CIFC of the dishonored CHECK and demanded, on several occasions, that
he be paid in cash. CIFC refused the request, and instead instructed private
respondent to wait for its ongoing bank reconciliation with BPI.

ISSUE:

Whether or not there was valid tender of payment in the instant case?

RULING:

A check is not a legal tender, and therefore cannot constitute valid

tender of payment. "Since a negotiable instrument is only a substitute for
money and not money, the delivery of such an instrument does not, by itself,
operate as payment. A check, whether a manager's check or ordinary check,
is not legal tender, and an offer of a check in payment of a debt is not a valid
tender of payment and may be refused receipt by the obligee or creditor.
Mere delivery of checks does not discharge the obligation under a judgment.
The obligation is not extinguished and remains suspended until the payment
by commercial document is actually realized

The delivery of promissory notes payable to order, or bills of exchange

or other mercantile documents shall produce the effect of payment only when
they have been cashed, or when through the fault of the creditor they have
been impaired.

CABALES, ET. AL vs COURT OF APPEALS

August 31, 2007
FACTS:

Saturnina and her children Bonifacio, Albino, Francisco, Leonara,

Alberto and petitioner Rito inherited a parcel of land. They sold such property
to Dr. Cayetano Corrompido with a right to repurchase within 8 years.
Alberto secured a note from Dr. Corrompido in the amount of Php
300.00.
Alberto died leaving a wife and son, petitioner Nelson.
Within the 8-year redemption period, Bonifacio and Albino tendered
their payment to Dr. Corrompido. But Dr. Corrompido only released the
document of sale with pacto de retro after Saturnina paid the share of her
deceased son, Alberto, plus the note.
Saturnina and her children executed an affidavit to the effect that
petitioner Nelson would only receive the amount of Php 176.34 from
respondents-spouses when he reaches the age if 21 considering that
Saturnina paid Dr. Corrompido Php 966.66 for the obligation of petitioner
Nelson’s late father Alberto.

ISSUE:

Whether or not the slae entered into is valid and binding.

RULING:

The legal guardian only has the plenary power of administration of the
minor’s property. It does not include the power to alienation which needs
judicial authority. Thus when Saturnina, as legal guardian of petitioner Rito,
sold the latter’s pro indiviso share in subject land, she did not have the legal
authority to do so. The contarct of sale as to the pro indiviso share of
Petitioner Rito was unenforceable. However when he acknowledged receipt
of the proceeds of the sale on July24, 1986, petitioner Rito effectively ratified
it. This act of ratification rendered the sale valid and binding as to him.

TEDDY G. PABUGAIS v. DAVE P. SAHIJWANI

G.R. No. 156846 February 23, 2004
423 SCRA 596

FACTS:

Pursuant to an “Agreement And Undertaking” on December 3, 1993,

petitioner Teddy G. Pabugais, in consideration of the amount of
P15,487,500.00, agreed to sell to respondent Dave P. Sahijwani a lot
containing 1,239 square meters located at Jacaranda Street, North Forbes
Park, Makati, Metro Manila. Respondent paid petitioner the amount of
P600,000.00 as option/reservation fee and the balance of P14,887,500.00
to be paid within 60 days from the execution of the contract, simultaneous
with delivery of the owner’s duplicate Transfer Certificate of Title in
respondent’s name the Deed of Absolute Sale; the Certificate of Non-Tax
Delinquency on real estate taxes and Clearance on Payment of Association
Dues. The parties further agreed that failure on the part of respondent to
pay the balance of the purchase price entitles petitioner to forfeit the
P600,000.00 option/reservation fee; while non-delivery by the latter of the
necessary documents obliges him to return to respondent the said
option/reservation fee with interest at 18% per annum.

Petitioner failed to deliver the required documents. In compliance with

their agreement, he returned to respondent the latter’s P600,000.00
option/reservation fee by way of Far East Bank & Trust Company Check,
which was, however, dishonored.

Petitioner claimed that he twice tendered to respondent, through his

counsel, the amount of P672,900.00 (representing the P600,000.00
option/reservation fee plus 18% interest per annum computed from
December 3, 1993 to August 3, 1994) in the form of Far East Bank & Trust
Company Manager’s Check No. 088498, dated August 3, 1994, but said
counsel refused to accept the same. On August 11, 1994, petitioner wrote a
letter to respondent saying that he is consigning the amount tendered with
the Regional Trial Court of Makati City. On August 15, 1994, petitioner filed
a complaint for consignation.

Respondent’s counsel, on the other hand, admitted that his office

received petitioner’s letter dated August 5, 1994, but claimed that no check
was appended thereto. He averred that there was no valid tender of payment
because no check was tendered and the computation of the amount to be
tendered was insufficient, because petitioner verbally promised to pay 3%
monthly interest and 25% attorney’s fees as penalty for default, in addition
to the interest of 18% per annum on the P600,000.00 option/reservation fee.

On November 29, 1996, the trial court rendered a decision declaring

the consignation invalid for failure to prove that petitioner tendered payment
to respondent and that the latter refused to receive the same. Petitioner
appealed the decision to the Court of Appeals. Petitioner’s motion to
withdraw the amount consigned was denied by the Court of Appeals and the
decision of the trial court was affirmed.

On a motion for reconsideration, the Court of Appeals declared the

consignation as valid in an Amended Decision dated January 16, 2003. It
held that the validity of the consignation had the effect of extinguishing
petitioner’s obligation to return the option/reservation fee to respondent.
Hence, petitioner can no longer withdraw the same.

Unfazed, petitioner filed the instant petition for review contending that he can
withdraw the amount deposited with the trial court as a matter of right
because at the time he moved for the withdrawal thereof, the Court of
Appeals has yet to rule on the consignation’s validity and the respondent had
not yet accepted the same.