G.R. No. 172577 : January 19, 2011
SOLEDAD DALTON, Petitioner, v. FGR REALTY AND DEVELOPMENT CORPORATION, FELIX NG, NENITA NG, and FLORA R. DAYRIT or FLORA REGNER, Respondents.
R E S O L U T I O N
This is a petitioncralaw for review on certiorari under Rule 45 of the Rules of Court. The petition
challenges the 9 November 2005 Decisioncralaw and 10 April 2006 Resolutioncralaw of the Court of Appeals in CA-G.R. CV No. 76536. The Court of Appeals affirmed the 26 February 2002 Decision cralaw of the Regional Trial Court (RTC), Judicial Region 7, Branch 13, Cebu City, in Civil Case No. CEB
Flora R. Dayrit (Dayrit) owned a 1,811-square meter parcel of land located at the corner of Rama Avenue and Velez Street in Cebu City. Petitioner
Soledad Dalton (Dalton), Clemente Sasam, Romulo Villalonga, Miguela Villarente, Aniceta Fuentes, Perla Pormento, Bonifacio Cabajar, Carmencita
Yuson, Angel Ponce, Pedro Regudo, Pedro Quebedo, Mary Cabanlit, Marciana Encabo and Dolores Lim (Sasam, et al.) 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.
In a complaintcralaw dated 11 September 1985, Dalton and Sasam, et al. consigned the rental payments with
the RTC. They failed to notify Dayrit and FGR about the consignation. In motions dated 27 March 1987,cralaw 10 November 1987,cralaw 8 July 1988,cralaw and 28 November 1994,cralaw Dayrit and FGR withdrew the rental payments. In their motions, Dayrit and FGR
reserved the right to question the validity of the consignation.
Dayrit, FGR and Sasam, et al. entered into compromise agreements dated 25 March 1997cralaw and 20 June
1997.cralaw In the compromise agreements, they agreed to abandon all claims against each other. Dalton
did not enter into a compromise agreement with Dayrit and FGR.
The RTC's Ruling
In its 26 February 2002 Decision, the RTC dismissed the 11 September 1985 complaint and ordered Dalton to vacate the property. The RTC held that: chanrob1esvirtwallawlibrary
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
P 69.00. When defendants refused to accept rental and demanded vacation of the premises, she consignated [sic] her monthly rentals in court.
x x x
It is very clear from the facts that there was no valid consignation made.
The requisites of consignation are as follows: chanrob1esvirtwallawlibrary
1. The existence of a valid debt.
2. Valid prior tender, unless tender is excuse [sic]; chanroblesvirtualawlibrary
3. Prior notice of consignation (before deposit)
4. Actual consignation (deposit); chanroblesvirtualawlibrary
5. Subsequent notice of consignation; chanroblesvirtualawlibrary
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)
Besides, the last deposit was made on December 21, 1988. At the time Dalton testified on December 22, 1999, she did not present evidence of payment
in 1999. She had not, therefore, religiously paid her monthly obligation.
By clear preponderance of evidence, defendants have established that plaintiff was no longer residing at Eskina Banawa at the time she testified in
court. She vacated her house and converted it into a store or business establishment. This is buttressed by the testimony of Rogelio Capacio, the
court's appointed commissioner, who submitted a report, the full text of which reads as follows: chanrob1esvirtwallawlibrary
REPORT AND/OR OBSERVATION
"The store and/or dwelling subject to ocular inspection is stuated [sic] on the left portion of the road which is about fifty-five (55) meters from
the corner of Banawa-Guadalupe Streets, when turning right heading towards the direction of Guadalupe Church, if travelling from the Capitol
I observed that when we arrived at the ocular inspection site, Mrs. Soledad Dalton with the use of a key opened the lock of a closed door. She
claimed that it was a part of the dwelling which she occupies and was utilized as a store. There were few saleable items inside said space." chanroblesvirtualawlibrary
Soledad Dalton did not take exception to the said report.
Two witnesses who were former sub-lessees testified and clearly established that Mrs. Dalton use the house for business purposes and not for
Dalton appealed to the Court of Appeals.
The Court of Appeals' Ruling
In its 9 November 2005 Decision, the Court of Appeals affirmed the RTC's 26 February 2002 Decision. The Court of Appeals held that: chanrob1esvirtwallawlibrary
After a careful review of the facts and evidence in this case, we find no basis for overturning the decision of the lower court dismissing
plaintiffs-appellants' complaint, as we find that no valid consignation was made by the plaintiff-appellant.
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 generally requires a prior tender of payment. In order that consignation may be effective, the debtor must show that: (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 claimed 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 in any of these requirements is enough ground to render a consignation ineffective.
Consignation is made by depositing the proper amount to the judicial authority, before whom the tender of payment and the announcement of the
consignation shall be proved. All interested parties are to be notified of the consignation. It had been consistently held that compliance with
these requisites is mandatory.
No error, therefore, can be attributed to the lower court when it held that the consignation made by the plaintiff-appellant was invalid for
failure to meet requisites 3 and 5 of a valid consignation (i.e., previous notice of the consignation given to the person interested in
the performance of the obligation and, after the consignation had been made, the person interested was notified thereof).
Plaintiff-appellant failed to notify defendants-appellees of her intention to consign the amount due to them as rentals. She, however, justifies
such failure by claiming that there had been substantial compliance with the said requirement of notice upon the service of the complaint on the
defendants-appellees together with the summons.
We do not agree with such contention.
The prevailing rule is that substantial compliance with the requisites of a valid consignation is not enough. In Licuanan vs. Diaz, reiterating the
ruling in Soco vs. Militante, the Supreme Court had the occasion to rule thus: chanrob1esvirtwallawlibrary
"In addition, it must be stated that in the case of Soco v. Militante (123 SCRA 160, 166-167 ), this Court ruled that the codal provisions of
the Civil Code dealing with consignation (Articles 1252-1261) should be accorded mandatory construction -
We do not agree with the questioned decision. We hold that the essential requisites of a valid consignation must be complied with fully and
strictly in accordance with the law. Articles 1256-1261, New Civil Code. That these Articles must be accorded a mandatory construction is clearly
evident and plain from the very language of the codal provisions themselves which require absolute compliance with the essential requisites therein
provided. Substantial compliance is not enough for that would render only directory construction of the law. The use of the words "shall" and "must
[sic] which are imperative, operating to impose a duty which may be enforced, positively indicated 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..." chanroblesvirtualawlibrary
Clearly then, no valid consignation was made by the plaintiff-appellant for she did not give notice to the defendants-appellees of her intention to
so consign her rental payments. Without any announcement of the intention to resort to consignation first having been made to persons interested in
the fulfillment of the obligation, the consignation as a means of payment is void.
As to the other issues raised by the plaintiff-appellant in her second and third assigned errors, we hold that the ruling of the lower court on
such issues is supported by the evidence adduced in this case.
That plaintiff-appellant is not residing at the leased premises in Eskina Banawa and that she is using the same for business purposes, not as
dwelling place, is amply supported by the testimony of two of plaintiff-appellant's sub-lessees. The Commissioner's Report submitted by Rogelio
Capacio, who was commissioned by the lower court to conduct an ocular inspection of the leased premises, further lends support to the lower court's
findings. On the other hand, plaintiff-appellant only has her self-serving claims that she is residing at the leased premises in Eskina Banawa to
prove her continued use of the leased premises as dwelling place.
There is thus no merit to plaintiff-appellant's fourth assigned error. The lower court acted within its authority in ordering the
plaintiff-appellant to vacate the leased premises. The evidence shows that plaintiff-appellant had failed to continuously pay the rentals due to
the defendants-appellees. It was therefore within the powers of the lower court to grant such other relief and remedies equitable under the
In sum, there having been no valid consignation and with the plaintiff-appellant having failed to pay the rentals due to the defendants-appellees,
no error can be attributed to the lower court in rendering its assailed decision.cralawredlaw
Hence, the present petition. Dalton raises as issues that the Court of Appeals erred in ruling that (1) the consignation was void, and (2) Dalton
failed to pay rent.
The Court's Ruling
The petition is unmeritorious.
Dalton claims that, "the issue as to whether the consignation made by the petitioner is valid or not for lack of notice has already been rendered
moot and academic with the withdrawal by the private respondents of the amounts consigned and deposited by the petitioner as rental of the subject
The Court is not impressed. First, in withdrawing the amounts consigned, Dayrit and FGR expressly reserved the right to question the validity of
the consignation. In Riesenbeck v. Court of Appeals,cralaw the Court held that: chanrob1esvirtwallawlibrary
A sensu contrario, when the creditor's acceptance of the money consigned is conditional and with reservations, he is not deemed to have waived the claims he
reserved against his debtor . Thus, when the amount consigned does not cover the entire obligation, the creditor may accept it, reserving his right to the balance (Tolentino,
Civil Code of the Phil., Vol. IV, 1973 Ed., p. 317, citing 3 Llerena 263). The same factual milieu obtains here because the respondent creditor accepted with reservation the amount consigned in court by the petitioner-debtor. Therefore, the creditor is not barred
from raising his other claims , as he did in his answer with special defenses and counterclaim against petitioner-debtor.
As respondent-creditor's acceptance of the amount consigned was with reservations, it did not completely extinguish the entire indebtedness of the
petitioner-debtor. It is apposite to note here that consignation is completed at the time the creditor accepts the same without objections, or, if he objects, at the time the court declares that
it has been validly made in accordance with law . cralaw (Emphasis supplied)
Second, 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.
In Insular Life Assurance Company, Ltd. v. Toyota Bel-Air, Inc.,cralaw the Court enumerated
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.
Articles 1257 and 1258 of the Civil Code state, respectively: chanrob1esvirtwallawlibrary
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 .
The consignation shall be ineffectual if it is not made strictly in consonance with the provisions which regulate payment.
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. (Emphasis supplied)
The giving of notice to the persons interested in the performance of the obligation is mandatory. Failure to notify the persons interested in the
performance of the obligation will render the consignation void. In Ramos v. Sarao,cralaw the
Court held that, "All interested parties are to be notified of the consignation. Compliance with [this requisite]is mandatory."cralaw In Valdellon v. Tengco, cralaw the Court held that: chanrob1esvirtwallawlibrary
Under Art. 1257 of our Civil Code, in order that consignation of the thing due may release the obligor, it must first be announced to the persons interested in the fulfillment of
the obligation. The consignation shall be ineffectual if it is not made strictly in consonance with the provisions which regulate payment . In said Article 1258,it is further stated that the consignation having been made, the interested party shall also be notified thereof. cralaw (Emphasis supplied)
In Soco v. Militante, et al.,cralaw the Court held that: chanrob1esvirtwallawlibrary
We hold that the essential requisites of a valid consignation must be complied with fully and strictly in accordance with the law,
Articles 1256 to 1261, New Civil Code. That these Articles must be accorded a mandatory construction is clearly evident and plain from the very
language of the codal provisions themselves which require absolute compliance with the essential requisites therein provided. 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. cralaw (Emphasis supplied)
Dalton claims that the Court of Appeals erred in ruling that she failed to pay rent. The Court is not impressed. Section 1, Rule 45 of the Rules of
Court states that petitions for review on certiorari "shall raise only questions of law which must be distinctly set forth." In Pagsibigan v. People,cralaw the Court held that: chanrob1esvirtwallawlibrary
A petition for review under Rule 45 of the Rules of Court should cover only questions of law. Questions of fact are not reviewable. A question of
law exists when the doubt centers on what the law is on a certain set of facts. A question of fact exists when the doubt centers on the truth or
falsity of the alleged facts.
There is a question of law if the issue raised is capable of being resolved without need of reviewing the probative value of the evidence. The
issue to be resolved must be limited to determining what the law is on a certain set of facts. Once the issue invites a review of the evidence, the
question posed is one of fact.cralawredlaw
Whether Dalton failed to pay rent is a question of fact. It is not reviewable.
The factual findings of the lower courts are binding on the Court. The exceptions to this rule are (1) when there is grave abuse of discretion; (2)
when the findings are grounded on speculation; (3) when the inference made is manifestly mistaken; (4) when the judgment of the Court of Appeals is
based on a misapprehension of facts; (5) when the factual findings are conflicting; (6) when the Court of Appeals went beyond the issues of the
case and its findings are contrary to the admissions of the parties; (7) when the Court of Appeals overlooked undisputed facts which, if properly
considered, would justify a different conclusion; (8) when the facts set forth by the petitioner are not disputed by the respondent; and (9) when
the findings of the Court of Appeals are premised on the absence of evidence and are contradicted by the evidence on record. cralaw Dalton did not show that any of these circumstances is present.
WHEREFORE, the Court DENIES the petition. The Court AFFIRMS the 9 November 2005 Decision and 10 April 2006 Resolution of
the Court of Appeals in CA-G.R. CV No. 76536.
ANTONIO T. CARPIO
WE CONCUR: chanrob1esvirtwallawlibrary
NACHURA, PERALTA, ABAD, and MENDOZA, JJ.