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.
Soco v. Militante
June 28, 1983
J. Guerrero
Modes of Extinguishment – Special Forms of Payment - Consignation

o Petition to review the decision of CFI Cebu

o Case for illegal detainer
o Petitioner Soco questions the decision of CFI Cebu holding the view that since there was substantial compliance with the requisites of
consignation, they ruled in favor of private respondent Francisco, lessee of Soco. CFI declared payments of the rentals valid and
effective, dismissed the complaint and ordered Soco to pay moral and exemplary damages.

FACTS:
Regino Francisco JR Soledad Soco

 Soco and Francisco entered into a contract of lease; Soco leased her commercial bldg. and lot (in Cebu City) to Francisco for a monthly
rental of P800.00 for a period of 10 years renewable for another 10 years at the option of lessee.

 Claiming that par 11 of the contract of lease was in fact not part of the contract because it was cancelled, Soco filed a civil case
in CFI Cebu seeking annulment and/or reformation of contract.
 Sometime before filing civil case, Francisco noticed that Soco no longer sent his collector for the payment of rentals and some payments
were made without receipts were issued.
 This prompted Francisco to write Soco a letter (Feb 7 1975) and then sent his payments for rentals by checks issued by the Commercial
Bank and Trust Company, which was obviously received by Soco since he admitted that prior to May 1977, defendant had been
religiously paying the rental.

 When Soco learned that Francisco sub-leased a portion of the building to NACIDA, at P3,000/month, Soco felt that she was in the losing
end of the lease agreement so she tried to look for ways to terminate the contract.
 In view of alleged non-payment of rental of leased premises beginning May, 1977, Soco sent notice to Francisco to vacate the premises
leased. Francisco responded that all payments were paid by Commercial Bank through the Clerk of Court of the City Court of Cebu. Still,
Soco filed instant case of illegal detainer (Jan 8,1979).
 City Court: consignation not valid.
 CFI: there was substantial compliance with the requisites of the law on consignation.

ISSUES:
W/N the consignation of the rentals was valid to discharge effectively the lessee’s obligation to pay the same. -- NO.
[W/N lessee failed to pay the monthly rentals beginning May, 1977 up to the time complaint for eviction was filed on Jan 8, 1979?]

RULING: Decision of CFI reversed and set aside.

Court ruled (with Soco): Consignation of rentals was not valid

 Court: Essential requisites of a valid consignation must be complied with fully and strictly in accordance with the law, Arts 1256-1261
NCC. Substantial compliance is not enough for that would render only a directory construction to the law.
Use of “shall” and “must”, which imposes a duty which may be enforced, positively indicate that all essential requisites of a valid
consignation must be complied with. [used in Art 1257, 1258, and 1249. Check Notes. ]
 Tender of payment, to be valid, must be made in lawful currency. While payment in check may be acceptable as valid, if no prompt
objection to said payment is made, the fact that in previous years payment in check was accepted does not place its creditor in estoppel
from requiring debtor to pay his obligation in cash. Thus, tender of a check to pay for an obligation is not a valid tender of payment
thereof.
 Respondent lessee Francisco presented evidences (letters of Atty Abarintos on June and July, 1997, answer of Francisco in civil case, and
letter of Atty Menchavez), which to respondent judge (CFI) proved that lessor Soco was notified of the deposit of monthly rentals and
that there was substantial compliance of the requisites of consignation, but Court found such judgment wrong and based on
misapprehension of facts.
 While letter of Abarintos (June 1977) proves TOP of particular monthly rental referred to, it does not indicate for what month and
also the intention to deposit the rental with the court, which is the 1 st notice. Neither is it proof that notice of actual deposit or
consignation was given to the lessor, which is 2nd notice. No proof of tender of payment of other or subsequent monthly rentals.
 2nd letter of Abarintos (July 1977) is proof of notice to the lessor of the deposit or consignation of only 2 payments by cashier’s
checks (dated May 11, 1977 and June 15, 1977) but does not prove any other deposit nor notice to lessor.
 Francisco’s answer in the civil case consisted of mere allegations of conclusions which are not evidentiary.
 Letter of Menchavez merely proves rental deposit for Nov, 1978 and no other. Not a proof of tender of payment nor consignation.
 Best evidence of rental deposits with Clerk of Court could have been the official receipts issued by Clerk of Court but these were not
presented during trial.

 Summary: Francisco failed to prove presence of Requisites of valid consignation:

1. Tender of payment of the monthly rentals to the lessor (except that indicated in Abarintos’ 1st letter)
2. First notice to lessor prior to consignation (except consignation mentioned in Abarintos 1st letter.)
3. Second notice after consignation (except cashier’s checks dated May and June 1977 mentioned in Abarintos’ 2 nd letter. Bank
Comptroller also belied respondent’s claim; he testified that that bank did not send notice to Soco that the checks will be deposited in
consignation with the Clerk of Court (1st notice) and also, bank did not send notice to Soco that the checks were in fact deposited (2nd
notice) because no instructions were given by Francisco.)
4. Actual deposit or consignation of monthly rentals (not a single copy of official receipts were presented)

 Lessee has violated terms of lease contract and he may, therefore, be judicially ejected.

Notes:
o Art 1256 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.

o TOP vs. Consignation:

 Tender is the antecedent of consignation; act preparatory to C, which is the principal, and from which are derived the
immediate consequences which debtor desires or seeks to obtain.
 TP may be EJ but C is necessarily J
 Priority of TP is the attempt to make a private settlement before proceeding to the solemnities of C

o Consignation – act of depositing the thing due with the court or juridical authorities whenever the creditor cannot accept or refuses to
accept payment and it generally requires a prior tender of payment.
o 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.
o Requirements in order that consignation may be effective:
(1) there was a debt due
(2) consignation 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 amount due (Art 1176, CC)
(3) previous notice of the consignation had been given to the person interested in the performance of the obligation (Art 1177,
CC)
(4) amount due was placed at the disposal of the court (Art 1178, CC)
(5) after consignation had been made, person interested was notified (Art 1178, CC)

 Purpose of 1st notice: in order to give C an opportunity to reconsider his unjustified refusal and to accept payment thereby avoiding
consignation and the subsequent litigation.
 Purpose of 2nd notice: to enable creditor to withdraw goods or money deposited.
 Art 1257 In order that the consignation of the thing due may release the obligor, it must first be announced to the persons interested in
the fulfillment of the obligation.
 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.

 Art 1249 The payment of debts in money shall be made in the currency stipulated, and if it is not possible to deliver such currency, then
in the currency which is legal tender in the Phils.
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.
In the meantime, the action derived from the original obligation shall be held in abeyance.