228. C.F. SHARP & CO., INC v. NORTHWEST AIRLINES, INC and over time payment of $5 per hour.

payment of $5 per hour. The respondent was also unpaid for approximately two years. (Inhelder’s counsel) Atty.
assigned the position of Dispatcher and Metallurgy Inspector. Fajardo sent a letter to the Panganibans requesting settlement of
FACTS: While employed, the respondent had tried to handle grievances of the said amount of P561.00. In their reply, the Panganibans
Respondent, through its Japan Branch, entered into an the other Filipino workers with the management, which resulted in requested a statement of account which was sent to them with a
International Passenger Sales Agency Agreement with petitioner, strained relations between the respondent and the management. A follow-up letter, again, requesting remittance of the outstanding
authorizing the latter to sell its air transport tickets. Petitioner failed letter of termination was given to the respondent signed by the balance of P561.00. Private respondents sent PNB Check to
to remit the proceeds of the ticket sales, for which reason, General manager that had expressed dissatisfaction of his Inhelder in the amount of P561.00, dated January 28, 1975, and
respondent filed a collection suit against petitioner before the performance within a three month trial period. The respondent had said check was received by Inhelder on or before February 5,
Tokyo District Court which rendered judgment on January 29, than departed back to the Philippines two days after receiving the 1975. However, despite such, on February 8, 1975, Atty. Fajardo
1981, ordering petitioner to pay respondent the amount of notice of termination. prepared the complaint in the collection case, which was filed on
"83,158,195 Yen and damages for the delay at the rate of 6% per The respondent had than filed a complaint for illegal dismissal. The February 12, 1975. During the hearing of the instant case
annum from August 28, 1980 up to and until payment is POEA Adjudication office had found the respondent side to hold undersigned counsel of the Panganibans showed to the Court
completed." Unable to execute the decision in Japan, respondent merit, finding the petitioner to be solidarily liable for illegal dismissal plaintiffs’ receipts to the effect that several days before the
filed a case to enforce said foreign judgment with the Regional and must pay $7,200 representing the unexpired portion of the malicious and unfounded complaint was filed before said Court Dr.
Trial Court of Manila, Branch 54. 5 However, the case was employment contract only without entitling other incentives to the and Mrs. Panganiban had already paid their accounts and as a
dismissed on the ground of failure of the Japanese Court to respondent. The case had elevated to the NLRC, by which it was matter of fact the Inhelder Corporation has acknowledged receipt
acquire jurisdiction over the person of the petitioner. Respondent held to dismiss the petitioner’s appeal and granted the respondent of payment, thus, upon motion of the undersigned counsel was
appealed to the Court of Appeals, which affirmed the decision of claims for illegal deductions, salary differentials and overtime pay. dismissed without the objection of Atty. Maximo M. Fajardo, Jr.,
the trial court. counsel for the Inhelder Corporation.
Issue: W/N the NLRC had committed grave abuse of discretion for
ISSUE: affirming the decision of POEA finding that the private respondent Thereafter, Panganibans filed a complaint for damages against
Whether the basis for the payment of the amount due is the value was illegally dismissed. Inhelder corporation. The CA ruled in favor of the Panganibans on
of the currency at the time of the establishment of the obligation the ground that the collection case was clearly unfounded; and that
Ruling: the Panganibans were entitled, as against Inhelder, to quantified
RULING: No, the NLRC did not commit grave abuse of discretion in affirming damages totalling p169,550.00. Hence, this petition to review CA’s
No. the rule that the value of currency at the time of the the decision of POEA. The court had placed the jurisdiction of this decision.
establishment of the obligation shall be the basis of payment finds case within the authorities of NLRC and POEA for they are factual
application only when there is an official pronouncement or matters which are with the competencies of the administrative ISSUE: Whether the collection case filed by Inhelder was clearly
declaration of the existence of an extraordinary inflation or agencies to determine. The employment contract in respect to this unfounded thus entitling the Panganibans for damages.
deflation. Hence, petitioner contention that Article 1250 of the Civil case did not result to illegal dismissal but rather had the status of
Code which provides that In case of an extra ordinary inflation or breach of contract for employment in a definite period. The RULING: No. There being no showing when the check given in
deflation of the currency stipulated should supervene. The value of respondent through the said contract has the constitutional right of payment by the Panganibans to Inhelder Corp. was encashed, it
the currency at the time of the establishment of the obligation shall security of tenure which ensures that the said employee cannot be cannot be said that latter’s filing of a collection suit against the
be the basis of payment, unless there is an agreement to contrary. dismissed except for causes provided by law and after due former was clearly unfounded as to justify award of damages in the
Shall in this case is untenable. This being the case the process. The dismissal of the respondent did not abide the case at bar.
jurisprudence regarding the use of the exchange rate of time of inherent right of security of tenure of the respondent, for the
payment shall be used. dismissal was on the basis of dissatisfied work performance and It is true that when the check of the Panganibans was received on
not for any law and due process. February 5, 1975, the better procedure would have been to
229. Flores withhold a complaint pending determination of whether or not the
Asia World Recruitment v NLRC GENON- CASE NO. 230 check was good. If dishonored, that would be the time to file the
INHELDER CORP. VS. CA complaint. That procedure was not followed because of the failure
Facts: of the corresponding advice which could have been given to Atty.
The petitioner Asia World Recruitment, under the authority of FACTS: Fajardo by the inhelder Credit and Collection manager but the lack
POEA had recruited and deploys the respondent Philip Medel, Jr. Petitioner Inhelder is engaged in the manufacture and sale of of that advice should not justify qualifying the collection case as
to work as a Security Officer in a diamond mind in Angola, Africa medicines and drugs. The Panganibans, physicians, are the clearly unfounded. if the check had bounced, the collection case
for a period of one year. The employment contract had also owners of the doctor’s clinic, purchased medicines and drugs from would have been tried and acted upon by the Mandaluyong court
stipulated a salary rate of $800 per month with a bonus of $1,200 Inhelder in the amount of P1,385.10, payable in installments. The on the merits. To justify award of damages for malicious
per month; working only six hours a day; with one rest day a week; Panganibans were able to pay the amount of P824.10 for that prosecution, elements of malice or sinister design to vex or
purchase, leaving a balance of P561.00 which had remained
humiliate a person, and want of probable cause must be FACTS: rendered a compromise judgment based on the amicable
proved. Queaño applied with Naguiat a loan for P200,000, which the latter settlement entered by the parties wherein petitioner will pay to
granted. Naguiat indorsed to Queaño Associated bank Check No. private respondent P54,500.00 at 6% interest per annum and
231. HALID 090990 for the amount of P95,000 and issued also her own P6,000.00 as attorney’s fee of which P5,000.00 has been paid.
LORENZO SHIPPING CORPORATION V. BJ MARTHEL Filmanbank Check to the order of Queaño for the amount of Upon failure of the petitioner to pay the judgment obligation, a writ
INTERNATIONAL P95,000. The proceeds of these checks were to constitute the loan of execution worth P63,130.00 was issued levied on the personal
granted by Naguiat to Queaño. To secure the loan, Queaño properties of the petitioner. Before the date of the auction sale,
FACTS: executed a Deed of Real Estate Mortgage in favor of Naguiat, and petitioner deposited with the Clerk of Court in his capacity as the
Petitioner Lorenzo Shipping is engaged in coastwise shipping and surrendered the owner’s duplicates of titles of the mortgaged Ex-Officio Sheriff P50,000.00 in Cashier’s Check of the Equitable
owns the cargo M/V Dadiangas Express. BJ Marthel is engaged in properties. The deed was notarized and Queaño issued to Naguiat Banking Corporation and P13,130.00 in cash for a total of
trading, marketing and selling various industrial commodities. a promissory note for the amount of P200,000. Queaño also issued P63,130.00. Private respondent refused to accept the check and
Lorenzo Shipping ordered for the second time cylinder lines from a post-dated check amounting to P200,000 payable to the order of the cash and requested for the auction sale to proceed. The
the respondent stating the term of payment to be 25% upon Naguait. The check was dishonoured for insufficiency of funds. properties were sold for P50,000.00 to the highest bidder with a
delivery, the balance payable in 5 bi-monthly equal instalments, no Demand was sent to Queaño. Shortly, Queaño, and one Ruby deficiency of P13,130.00. Petitioner subsequently filed an ex-parte
again stating the date of the cylinder’s delivery. It was allegedly Reubenfeldt met with Naguiat. Queaño told Naguiat that she did motion for issuance of certificate of satisfaction of judgment which
paid through post-dated checks but the same was dishonored due not receive the loan proceeds, adding that the checks were was denied by the respondent Judge. Hence this present petition,
to insufficiency of funds. Despite due demands by the respondent, retained by Reubenfeldt, who purportedly was Naguiat’s agent. alleging that the respondent Judge capriciously and whimsically
petitioner failed contending that time was of the essence in the abused his discretion in not granting the requested motion for the
delivery of the cylinders and that there was a delay since the Naguiat applied for extrajudicial foreclosure of the mortgage. RTC reason that the judgment obligation was fully satisfied before the
respondent committed said items “within two months after receipt declared the Deed as null and void and ordered Naguiat to return auction sale with the deposit made by the petitioner to the Ex-
of fir order”. RTC held respondents bound to the quotation with to Queaño the owner’s duplicates of titles of the mortgaged lots. Officio Sheriff. In upholding the refusal of the private respondent
respect to the term of payment, which was reversed by the Court of to accept the check, the respondent Judge cited Article 1249 of the
appeals ordering appellee to pay appellant P954,000 plus interest. ISSUE: New Civil Code which provides that payments of debts shall be
There was no delay since there was no demand. Whether or not the issuance of check resulted in the perfection of made in the currency which is the legal tender of the Philippines
the loan contract? and Section 63 of the Central Bank Act which provides that checks
ISSUE: representing deposit money do not have legal tender power. In
Whether or not respondent incurred delay in performing its RULING: sustaining the contention of the private respondent to refuse the
obligation under the contract of sale No. No evidence was submitted by Naguiat that the checks she acceptance of the cash, the respondent Judge cited Article 1248 of
issued or endorsed were actually encashed or deposited. The the New Civil Code which provides that creditor cannot be
RULING: mere issuance of the checks did not result in the perfection of the compelled to accept partial payment unless there is an express
By accepting the cylinders when they were delivered to the contract of loan. The Civil Code provides that the delivery of bills of stipulation to the contrary.
warehouse, petitioner waived the claimed delay in the delivery of exchange and mercantile documents such as checks shall produce
said items. Supreme Court held that time was not of the essence. the effect of payment only when they have been cashed. It is only ISSUE: Can the check be considered a valid payment of the
after the checks have been produced the effect of payment that the judgment obligation?
When the time of delivery is not fixed or is stated in general and contract of loan may have been perfected.
indefinite terms, time is not of the essence of the contract. . . RULING: Yes. It is to be emphasized that it is a well-known and
There having been no failure on the part of the respondent to Article 1934 of the Civil Code provides: An accepted promise to accepted practice in the business sector that a Cashier’s Check is
perform its obligations, the power to rescind the contract is deliver something by way of commodatum or simple loan is binding deemed cash. Moreover, since the check has been certified by the
unavailing to the petitioner. The law definitely does not require that upon the parties, but the commodatum or simple loan itself shall drawee bank, this certification implies that the check is sufficiently
the contracting party who believes itself injured must first file suit not be perfected until the delivery of the object of the contract. A funded in the drawee bank and the funds will be applied whenever
and wait for a judgment before taking extrajudicial steps to protect loan contract is a real contract, not consensual, and as such, is the check is presented for payment. The object of certifying a
its interest. Otherwise, the party injured by the other's breach will perfected only upon the delivery of the objects of the contract. check is to enable the holder to use it as money. When the holder
have to passively sit and watch its damages accumulate during the procures the check to be certified, it operates as an assignment of
pendency of the suit until the final judgment of rescission is 234 LAKBAO a part of the funds to the creditors. Hence, the exception provided
rendered when the law itself requires that he should exercise due New Pacific Timber vs. Judge Seneris in Section 63 of the Central Bank Act which states that checks
diligence to minimize its own damages which have been cleared and credited to the account of the
FACTS: Petitioner, New Pacific Timber & Supply Co. Inc. was the creditor shall be equivalent to a delivery to the creditor in cash the
Naguiat vs CA defendant in a complaint for collection of money filed by private amount equal to that which is credited to his account. The
respondent, Ricardo A. Tong. In this complaint, respondent Judge Cashier’s Check and the cash are valid payment of the obligation
of the petitioner. The private respondent has no valid reason to A suit for collection of sum of money was ruled in favor of Eden The court is not, by decision, sanctioning the use of a check for the
refuse the acceptance of the check and cash as full payment of the Tan and against the spouses Norberto Jr. and Carmen Tibajia. payment of obligations over the objection of the creditor.
obligation After the decision was made final, Tan filed a motion for execution (Fortunado vs. Court of Appeals).
and levied upon the garnished funds which were deposited by the
235.LIM spouses with the cashier of the Regional Trial Court of Pasig. The 237. Quiros v. Tan Guinlay (5 Phil. 675)
Fortunado vs CA spouses, however, delivered to the deputy sheriff the total money
judgment in the form of Cashier’s Check (P262,750) and Cash FACTS: The plaintiff brought this action to recover the 10,217.75,
Main Point: (P135,733.70). Tan refused the payment and insisted upon the the value of goods sold by him to the defendant and 64,984.89, as
Facts: RTC Quezon City awarded the petitioner Fortunado garnished funds to satisfy the judgment obligation. The spouses damages by the failure of defendant to pay for the goods at the
damages in Civil Case against Angel Bautista. Pursuant to the said filed a motion to lift the writ of execution on the ground that the time agreed upon. The defendant denied all the allegations and
judgment, Bautista levied upon two parcels of land registered in judgment debt had already been paid. The motion was denied by alleged the pendency of another action; a counterclaim of
her name. But the second lot had already been purchased by the trial court on the ground that payment in cashier's check is not 40,000.00 for damages suffered by defendant by reason of an
National Steel Corporation although not yet registered in its name. payment in legal tender and that payment was made by a third attachment wrongfully secured by plaintiff; and for damages
After due notice, these lots were sold at public auction to the party other than the defendant. caused by reason of estafa  instituted against him maliciously by
petitioners, and registered in his name. NSC filed with the trial the plaintiff. The court ordered judgment in favor of the plaintiff for
court an urgent motion to redeem both lots, which was opposed by Issue: Whether or not the cashier's check tendered by petitioners the value of the goods sold and delivered to the defendant, with
the petitioner. As the motion remained unresolved and the period for payment of the judgment debt is legal tender. interest thereon. He sustained the first counterclaim of defendant
of redemption would expire, NSC issued to the sheriff PNB Check and assessed the damages suffered by defendant by reason of the
as the redemption price for the lot. The sheriff acknowledged Ruling: attachment referred to in the answer at 6,347.75. The other
receipt of the check as redemption money for the two parcels of No. A check, whether a manager’s check or ordinary check, is not defenses and counterclaims of the defendant the court held not to
land and issued a certificate of redemption in favor of NSC and legal tender, and an offer of a check in payment of a debt is not a have been proven, and final judgment was entered for the plaintiff
Bautista. The petitioner rejected the redemption by check because valid tender of payment and may be refused receipt by the obligee and against the defendant for 10,000 and costs. Both parties
it was not legal tender and was not intended for payment but or creditor. Article 1249 of the Civil Code provides: appealed.
merely for deposit.
Art. 1249. The payment of debts in money shall be made in the ISSUE: Whether the court has erred in favoring the plaintiff?
issue: Whether Article 1249 of the New Civil Code does not apply currency stipulated, and if it is not possible to deliver such
to the payment of the redemption price of property sold at public currency, then in the currency which is legal tender in the RULING: It is shown that the plaintiff introduced no evidence
auction. Philippines. showing the amount of his damages. The two mercantile experts
whom he presented as witnesses testified that, from the
Ruling: Yes, the Court holds that Art. 1249 is inapplicable as it The delivery of promissory notes payable to order, or bills of examination they had already made, it would not be possible for
"deals with a mode of extinction of debts" while the "right to exchange or other mercantile documents shall produce the effect them to state how much the plaintiff's damages were. The plaintiff,
redeem is not an obligation, nor is it intended to discharge a pre- of payment only when they have been cashed, or when through after they had testified, cause them to make a further examination
existing debt." the fault of the creditor they have been impaired. of his books, and after the evidence in the case had been closed,
In Javellana v. Mirasol, the Court declares that "a made an application to the court to be allowed to present the result
redemption of property sold under execution is not rendered invalid In the meantime, the action derived from the original obligation of this examination. The court refused to open the case for this
by reason of the fact that the payment to the sheriff for the purpose shall be held in abeyance.; purpose, to which refusal the plaintiff excepted. The result of an
of redemption is effected by means of a check for the amount due." Section 63 of Republic Act No. 265, as amended (Central Bank examination of the whole case is that from the sum of 10,217.75,
Such ruling is applicable to the present controversy, Act) provides: the value of the goods sold and delivered by the plaintiff to the
stressing the liberality of the courts in redemption cases. When a defendant, there should be deducted the sum of 2,235.95, on
right of redemption is exercised, it is the policy of the law to aid Sec. 63. Legal character — Checks representing deposit money do account of the bill of exchange. The defendant is not entitled to
rather than to defeat the right of redemption. Hence, a payment by not have legal tender power and their acceptance in the payment recover any damages on account of the attachment of the goods
check which is not legal tender is effective when the officer of debts, both public and private, is at the option of the creditor: procured by the plaintiff, for which he was allowed by the court
accepted such payment. Thus, the petition is denied. Provided, however, that a check which has been cleared and below 6,347.75. The plaintiff therefore, is entitled to judgment
credited to the account of the creditor shall be equivalent to a against the defendant for the sum of 7,981.80, with interest at the
236 Musa delivery to the creditor of cash in an amount equal to the amount rate of six per cent per annum. The judgment of the court below is
Tibajia v. CA credited to his account reversed and the case remanded, with instructions to enter
judgment for the plaintiff for 7,981.80, with interest thereon at 6 per
Facts: cent per annum and for costs.
238 REYES corresponding dollar value totalling $2,001,031.00. Among the payment. The car was detained by the bank. Dr. Gueco was able
PNB vs. Seeto goods covered by the Contract of Sale were 2,000 cartons of PK to ask the bank to lower the payment twice to P150,000. When Dr.
Chewing Gums, 1,000 cartons of Juicy Fruit Chewing Gums, 500 Gueco delivered the manger’s check of P150,000, the car was not
FACTS: Benito Seeto called at the branch of PNB (Surigao) and cartons of Adams Chicklets, 168 cartons of Blue Denims, and 138 released because of his refusal to sign the Joint Motion to Dismiss
presented a check in the amount of P5,000.00 payable to cash or bales of Khaki Twill. To insure the payment of those goods by the (JMD). The bank insisted that the JMD is a standard operating
bearer and drawn by one Gan Yek Kiao against PNB (Cebu). After FEDERATION, the NAMARCO accepted three domestic letters of procedure to effect a compromise and to preclude future filing of
consultation with the employees, Seeto made a general and credit. FEDERATION received from the NAMARCO the 2,000 claims or suits for damages. Gueco spouses filed an action against
unqualified indorsement of the check, and PNB’s agency accepted cartons of PK Chewing Gums, 1,000 cartons of Juicy Fruit the bank for fraud, failing to inform them regarding JMD during the
it and paid Seeto the amount of P5,000.00 therefor. The check was Chewing Gums, and 500 cartons of Adams Chicklets, all with a meeting & for not releasing the car if they do not sign the said
mailed to PNB (Cebu) and was presented to the drawee bank for total value of P 27735791 under the condition that the cost thereof motion. Favor was given to Dr. Gueco in the resolutions of the RTC
payment, but the check was dishonored for insufficient funds. The would be paid in cash through PNB Domestic L/C No. 600570; and and CA. The petitioner bank now appeals. One of their arguments
check was returned PNB (Surigao) and upon receipt thereof, said on February 20, 1960, the FEDERATION received from the is that the court of appeals erred in holding that the petitioner
branch immediately sent a letter to Seeto demanding immediate NAMARCO the 168 cartons of Blue Denims and 183 bales of return the subject car to the respondents, without making any
refund of in the value of the check. Seeto then inquired about why Khaki Twill, with a total value of P 13589182 and P 19780412 provision for the issuance of the new manager’s/cashier’s check by
the check was dishonored. Thereafter, he refused to make the respectively, under the condition that the cost thereof would be the respondents in favor of the petitioner in lieu of the original
refund demanded, claiming that at the time of the negotiation of the paid in cash through PNB Domestic L/C Nos. 600606 and 600586, cashier’s check that already became stale.
check the drawer had sufficient funds in the drawee bank, and if respectively. Federation filed a suit for specific performace alleging ISSUE: Whether or not the check issued by Dr. Gueco is
PNB (Surigao) did not delay in clearing the check, the same would that NAMRACO didn’t deliver some of the goods and that they considered as stale.
have been paid as there would have been sufficient funds. fulfill their obligation by delivering the three letters of credit. RULING: No. A stale check is one which has not been presented
ISSUE: Whether or not Federation fulfill its obligation by delivering for payment within a reasonable time after its issue. It is valueless
The RTC ruled in favor of PNB. But the CA reversed its decision the three domestic letters of credit as guarantee for payment to and, therefore, should not be paid. Under the negotiable
and ruled that PNB was guilty of unreasonably retaining and federation. instruments law, an instrument not payable on demand must be
withholding the check, and that the delay in the presentment was RULING: presented for payment on the day it falls due. When the instrument
inexcusable. Hence, Seeto was discharged from liability. No. The mere delivery by the FEDERATION of the domestic letters is payable on demand, presentment must be made within a
of credit to NAMARCO did not operate to discharge the debt of the reasonable time after its issue. In the case of a bill of exchange,
ISSUE: Whether there was payment as to extinguish his obligation FEDERATION. As shown by the appealed judgment NAMARCO presentment is sufficient if made within a reasonable time after the
and discharge him from liability. accepted the three letters of credit "to insure the payment of those last negotiation thereof. It has been held that, if the check had
goods by the FEDERATION." It was given therefore as a mere become stale, it becomes imperative that the circumstances
RULING: YES. Section 186 of the Negotiable Instruments Law guarantee for the payment of the merchandise. The delivery of that caused its non-presentment be determined. In the case at
expressly requires that a check must be presented for payment promissory notes payable to order, or bills of exchange or drafts or bar, there is no doubt that the petitioner bank held on the check
within a reasonable time after issue. In the case at bar, a delay of other mercantile document shall produce the effect of payment and refused to encash the same (In relation to Art. 1249 wherein it
27 days from the date of indorsement to that of the presentation of only when realized, or when by the fault of the creditor, the says that bills of exchange should first be encashed) because of
the check for payment at the drawee bank, is unreasonable, and privileges inherent in their negotiable character have been the controversy surrounding the signing of the joint motion to
consequently, discharges completely the indorser from liability. impaired. (Art. 1249 New Civil Code.) The clause of Article 1249 dismiss.
relative to the impairment of the negotiable character of the
Although the drawer of a check is discharged from liability only to commercial paper by the fault of the creditor, is applicable only to 241. SALVADOR
the extent of the loss caused by unreasonable delay in presenting instruments executed by third persons and delivered by the Art 1207-1304
the check for payment, an indorser is wholly discharged thereby debtor to the creditor, and does not apply to instruments Republic Bank vs. CA 196 SCRA 100
irrespective of any question of loss or inquiry. executed by the debtor himself and delivered to the
creditor. In the case at bar it is not even pretended that the Facts: San Miguel Corporation drew a dividend Check No. 108854
CASE NO. 239 – SABTALUH negotiable character of the sight drafts was impaired as a result of for P240, Philippine currency, on its account in the respondent First
1249 the fault of NAMARCO. National City Bank (“FNCB” for brevity) in favor of J. Roberto C.
NAMARCO VS FEDERATION OF FEDERATION OF UNITED Delgado, a stockholder. The check was indorsed and deposited by
NAMARCO DISTRIBUTORS, INC. Salinas- 240. International Corporate Bank v. Gueco Delgado after fraudulently and without authority of the drawer,
FACTS: Spouses Gueco obtained a loan from petitioner SMC, altered the amount by increasing it from P240 to P9,240. in
Facts: International Corporate Bank (now Union Bank of Philippines) to his account with the petitioner Republic Bank (hereafter
purchase a car. Respondent spouses executed a promissory note “Republic”). Believing the check was genuine, and relying on the
NAMARCO and the FEDERATION entered into a Contract of Sale. in consideration, which were payable in monthly installment and guaranty and endorsement of Republic appearing on the back of
NAMARCO was authorized to import the following items with the chattel mortgage over the car. The spouses however, defaulted the check, FNCB paid P9,240 to Republic through the Central
Bank Clearing House on March 15, 1966. FNCB lost no time in of Tarlac seeks for reimbursement and payment of legal interest presumption of solidarity in an obligation. This is a principal and
recrediting P9,240 to SMC. On May 19, 1966, FNCB informed upon PNB with Associated Bank as 3rd defendant. The former bank independent remedy from contract of surety.
Republic in writing of the alteration and the forgery of the argued that the government was liable because they had been
endorsement of J. Roberto C. Delgado. By then, Delgado had giving the checks to a retired employee for more than 3-years. The 244. Leticia Co. Vs PNB
already withdrawn his account from Republic. latter bank argues that PNB is estopped from asserting the FACTS; On November 10, 1961, the Standard Parts
defense of guarantee of prior indorsements because they stamped Manufacturing Corporation, executed a real estate mortgage in
FNCB demanded that Republic refund the P9,240 on the basis of the guarantee. favor of herein defendant-appellant Philippine National Bank, over
the latter’s endorsement and guaranty. Republic refused, claiming properties covered by Transfer Certificates of Title Nos. T-5108
there was delay in giving it notice of the alteration; that it was not Issue: Whether the Province of Tarlac is liable? and T-5320, both situated in Baguio City, as collateral for a loan
guilty of negligence; that it was the drawer’s (SMC’s) fault in consideration of P500,000.00. On February 20, 1963, the same
drawing the check in such a way as to permit the insertion of Ruling: No. The bank on which a check is drawn, known as the debtor corporation executed an amended real estate mortgage to
numerals increasing the amount; that FNCB, as drawee, was drawee bank, is under strict liability to pay the check to the order of include as collateral for the increase of the above loan to
absolved of any liability to the drawer (SMC), thus, FNCB had no the payee. The drawer’s instructions are reflected on the face and P1,000,000.00 a property located at Pasong Tamo Extension
right of recourse against Republic. by the terms of the check. When the drawee bank pays a person within the Municipality of Makati. Stnadard defaulted on its loan
other than the payee, it does not comply with the terms of the obligations thus PNB foreclosed the mortgages and PNB then
Issue: Whether Republic is protected, by the 24-hour clearing check and violates its duty to charge its customer’s (the drawer) bought the foreclosed properties. Meantime, on March 5, 1976,
house rule, found in CB Circular No. 9, from liability to refund the account only for properly payable items. Since the drawee bank did Citadel wrote PNB a letter stating therein its desire to redeem the
amount paid by FNCB. not pay a holder or other person entitled to receive payment, it has Makati property, it alleging to be assignee of the right of
no right to reimbursement from the drawer. The general rule then is redemption standard with respect to the propert PNB refused
Ruling: YES, The 24-hour clearing house rule is a valid rule that the drawee bank may not debit the drawer’s account and is not considering that its total claim of 3,366,546.42 is much higher than
applicable to commercial banks. When an endorsement is forged, entitled to indemnification from the drawer. The risk of loss must citadel’s offer of only 1,621,970 as redemption price. Citadel then
the collecting bank or last endorser, as a general rule, bears the perforce fall on the drawee bank. consigned the payment to the trial court.
loss. But the unqualified endorsement of the collecting bank on the ISSUE; Whether citadel exercised its right to redemption within the
check should be read together with the 24-hour regulation on Main Point: Payment under a forged indorsement is not to the redemption period.
clearing house operation. Thus, when the drawee bank fails to drawer’s order. RULING; Yes, In this connection, lest it be argued that CITADEL
return a forged or altered check to the collecting bank within the did not include in its tender the amount of assessments or taxes
24-hour clearing period, the collecting bank is absolved from 243 TORIBIO PNB might have paid before the redemption, His Honor, We note
liability. Every bank that issues checks for the use of its customers Tolentino vs. Court of Appeals (GR No. L-50405-06) that the trial judge, has pointed out that in spite of the requirement
should know whether or not the drawer’s signature thereon is in the certificate of sale issued by the sheriff that the purchaser or
genuine, whether there are sufficient funds in the drawer’s account FACTS: A property by the Dela Cruz was sold to the spouses highest bidder submits within 30 days immediately preceding the
to cover checks issued, and it should be able to detect alterations, Tolentino and then the property therein were mortgaged to BPI and expiration of the period of redemption, an appropriate statement of
erasures, superimpositions or intercalations thereon, for these subsequently mortgaged to Philippine Banking Corporation. They the amount of such assessments or taxes, PNB failed to comply
instruments are prepared, printed and issued by itself, it has failed to pay the indebtedness with BPI and the foreclosure to the with such requirement, hence it would be unfair to fault CITADEL
control of the drawer’s account, and it is supposed to be familiar mortgaged property was executed in favor of BPI. The Tolentinos for the non- inclusion thereof in its tender. PNB argues, however,
with the drawer’s signature. filed for the redemption to the court as a judicial remedy due to the that it did furnish CITADEL on March 5, 1976 the required data.
refusal of the bank for the Tolentinos to exercise their absolute We note, however, that the statement of P3,366,546.42 specified
Case 242 -Tan privilege of redemption. by PNB in its reply of March 5, 1976 is not clear enough to show
Associated Bank vs. Ca the details on taxes and assessments under discussion. In any
ISSUE: Whether or not there is a valid exercise of redemption right event, considering that as earlier pointed out by Us, there could be
Facts: The Province of Tarlac has an account with the Philippine as absolute privilege? a possibility that March 5, 1976 should be considered as the last
National Bank (PNB). A portion of their savings is allocated to the day of redemption, the explanation of PNB is, at least in equity,
Concepcion Emergency Hospital. The funds were given through RULING: YES. The judicial action made by the Tolentinos to unavailing. There was no more time for CITADEL to have a
checks in name to the hospital, itself. It was later discovered deposit payment of the redemption is a valid tender of payment breakdown of the P3,366,546.42 to find out what items were
through a post-audit that the hospital was not receiving the funds. and will be the basis for the reckoning period for the exercise of the included therein. Anyway, this discussion is practically academic
Through investigation, it was found out that the 30 checks right. because in the manner We are resolving this case, this point would
amounting to Php 203,000 were encashed to Fausto Pangiligan, a be of no moment.  it is stated that where the judgment debtor,
retired employee of the hospital 3-years prior. MAIN POINT: Remedy for collection and exhaustion on surety which necessarily includes his successor-in-interest (Section 29, a,
Pangilinan was forging the signature of the chief doctor of makes the debtors’ solidarily liable contrary to the rule of no Rule 39) validly tenders the necessary payment for the redemption
the hospital. He encashed with the Associated Bank. The Province and the tender is refused, it is not necessary that it be followed by
the deposit of the money in court or elsewhere (Enage vs. Vda. de respondents which held that petitioner's redemption of the property commission to the prejudice of other agents who were more
Escano, 38 Phil. 687) and no interest after such tender is acquired by said respondents in an execution sale pursuant to a instrumental in the consummation of the sale. RTC ruled in favor of
demandable on the redemption money. final judgment of the trial court in Civil Case No. R-1666, Court of the Artigo, finding the De Castros jointly and solidarily liable to the
First Instance of Cebu, was invalid inasmuch as the check which plaintiff. On their appeal, they argue that Artigo’s complaint should
Javellana v. Mirasol petitioner had used in paying the redemption price had been either have been dismissed for failure to implead all the co-owners of the
dishonored or had become state, hence its value was never this lots (pertaining to the other 2 De Castro siblings). They claim that
FACTS: upholding in the process the jurisdiction of the trial court to rule on Artigo always knew that the lots were co-owned by all 4 siblings.
In the year 1915 Julio Javellana, the plaintiff herein, recovered a the question of validity of the redemption in question
judgment for the sum of P5,710.50, with interest, in the Court of notwithstanding that by order of that same court, said matter had Issue: Whether the court erred in not ordering the dismissal of the
First Instance of the Province of Iloilo against Maximino Mirasol been made the subject of a separate suit, Civil as No. 62-T also of complaint for failure to implead indispensable parties-in-interest
and Eugenio Kilayco, and in order to satisfy the same an execution the Court of First Instance of Cebu, filed on August 9, 1960.
was in due time levied upon certain properties of Maximino ISSUE: Whether respondent Pelagia Ocang has already received Ruling: No. The rule on mandatory joinder of indispensable parties
Mirasol. On July 6, 1915, said properties were exposed to sale by in one form or another, directly or indirectly, the full amount of is not applicable to the instant case as the De Castros admit that
the sheriff at public auction and were purchased by the judgment P11,200 as redemption price of the four (4) parcels of land in the other co-owners are solidarily liable under the contract of
creditor, Julio Javellana, the highest bidder. Alejandro Mirasol, a dispute agency.
brother of Maximino Mirasol, appeared before Geronimo Nuñez, RULING: Yes, there is a strong showing in the motion for When the law expressly provides for solidarity of the obligation, as
deputy sheriff of the province aforesaid, and, for the purpose of reconsideration, presmised on no less than other portions of the in the liability of co-principals in co-agency, each obligor may be
redeeming the properties in accordance with section 465 of the very decision of the intermediate court and other apparently compelled to pay the entire obligation. The agent may recover the
Code of Civil Procedure.A redemption of property from an credible evidence, that not only was said check not dishonored, whole compensation from any one of the co-principals in a contract
execution sale,was attacked in this case as void because of a although it became stale, but that repondent Pelagia Ocang had of agency, each obligor may be compelled to pay the entire
supposed collusive agreement between the redemptioner (Luis actually been paid already the full value thereof. And in this obligation.
Mirasol) and sheriff (Geronimo Nuñez) whereby the latter agreed to connection, it is notable that in the comment of respondents on Indeed Art. 1216 of the Civil Code provides that a creditor may sue
withhold the redemption money from the creditor and to return it to petitioner's motion for reconsideration, there is no clear and any of the solidary debtors. Solidarity does not make a solidary
the redemptioner if the latter should finally succeed in establishing categorical denial of these important and decisive facts. obligor an indispensable party in a suit filed by the creditor. Art.
his title to the same property in other litigation. MAINPOINT: For a check to be dishonored upon presentment, on 1216 says that the creditor may proceed against anyone of the
the one hand, and to be stale for not being presented at all in time, solidary debtors or some or all of them simultaneously.
ISSUE: on the other, are incompatible developments that naturally have
W/N the redemption has been effected in good faith and in variant legal consequences. Thus, if indeed the check in question
accordance with the requirements of law. had been dishonored, then there can be no doubt that petitioner’s Main Point: Art. 1216 - Since the liability is solidary, the other,
redemption was null and void. On the other hand, if it had only solidary debtors are not indispensable parties in a suit filed by the
RULING: become stale, then it becomes imperative that the circumstances creditor.
Yes,  the redemption had been effected in good faith and in that caused its non-presentment be determined, for if this was not Art. 1235 - The word “accept,” as used in Art. 1235, means to take
accordance with the requirements of law. A liberal construction will due to the fault of the petitioner, then it would be unfair to deprive a satisfactory or sufficient, or agree to an incomplete or irregular
be given to statutes governing the redemption of property, to the him of the rights he had acquired as redemptioner, particularly, if, performance. In the case at bar, the mere receipt of a partial
end that the property of the debtor may be made to satisfy as many after all, the value of the check has otherwise been received or payment is not equivalent to the required acceptance of
liabilities as possible. Redemption of property sold under execution realized by the party concerned. (Negotiable instruments) performance as would extinguish the whole obligation.
is not rendered invalid by reason of the fact that the payment to the
sheriff for the purpose of redemption is effected by means of a 247-Cruz 248. SELEGNA MANAGEMENT v. UCPB
check for the amount due. Any ordinary creditor, or assignee as De Castro v CA, G.R. No. 115838, July 18, 2002
such, having a judgment subsequent to that under which the FACTS:
property was sold may exercise the right of redemption. The act of Facts: Artigo was authorized Constante and Corazon De Castro to On September 19, 1995, Petitioners Selegna Management and
the redemptioner in redeeming the property pending the decision act as a real estate broker in the sale of their properties. In the Development Corporation and Spouses Edgardo and Zenaida
of those appeals was not an officious act in any sense. It was on case at bar, Artigo sued the De Castros to collect the unpaid Angeles were granted a credit facility in the amount of P70 million
the contrary necessary to the reasonable protection of his right as balance of his broker's commission from them. He felt short by Respondent United Coconut Planters Bank (UCPB). As security
a subsequent judgment-creditor of Maximino Mirasol. changed because according to him, it was he who introduced the for this credit facility, petitioners executed real estate mortgages
buyer and unceasingly facilitated the negotiation which ultimately over several parcels of land located in the cities of Muntinlupa, Las
246. Crystal v. CA (walang facts sa escra at lawphil) let to the consummation of the sale. On the other hand, petitioners Piñas, Antipolo and Quezon; and over several condominium units
FACTS: Motion for reconsideration of the decision of this Court in completely travers this claim and argues that such is tantamount to in Makati. Petitioners were likewise required to execute a
this case affirming the decision of the CA in favor of private selfishly asking for more than what he truly deserved as promissory note in favor of respondent every time they availed of
the credit facility. As required in these notes, they paid the interest The petitioner Simplicio Palanca had executed a Contract of Sale knowing its incompleteness and irregularity, and without
in monthly amortizations. of a parcel of land to Josefa Jopsen who in turn had transferred all expressing any protest or objection, the obligation is deemed fully
The parties stipulated in their Credit Agreement dated September rights and interest to the respondent Ulyssis Guides. Jopsen had complied with”. Therefore, the payment on the respondent’s behalf
19, 1995 that failure to pay "any availment of the accommodation paid the initial down payment of 1,650 pesos with a remaining is not subject to penalty charges but must pay the affirmed amount
or interest, or any sum due" shall constitute an event of default, balance of 9,600 pesos out of the total of 11,250 pesos once the of 10,65.90 pesos with 1% monthly interest, by the validated
which shall consequently allow respondent bank to "declare as transition of rights and interest was final, the initial down payment amount of 12, 180 paid by the respondent to the petitioner, the
immediately due and payable all outstanding availments of the was reimbursed to Jopsen and leaving all liabilities to the petitioner was over paid 1,527.10 pesos. Overall, the main cause
accommodation together with accrued interest and any other sum respondent. of bad faith on the petitioner part had arise from selling the subject
payable." land which did not belong to them but to Carissa T. de Leon.
In need of further business capital, petitioners obtained from UCPB The respondent later on who believed that she had paid the full
an increase in their credit facility. For this purpose, they executed a price proceeded to verify the status of the land with the Register of GENON- CASE NO. 250
Promissory Note for P103,909,710.82, which was to mature on Deeds, where the respondent had found out the land was not INHELDER CORP. VS. CA
March 26, 1999. In the same note, they agreed to an interest rate registered under the name of the petitioner but under the name of
of 21.75 percent per annum, payable by monthly amortizations. On Carissa T. de Leon. The respondent had then communicated with FACTS: Petitioner Food Terminal, Inc. (FTI), a government-owned
December 21, 1998, respondent sent petitioners a demand letter. the petitioner who did not release the title to the respondent for she corporation engaged in the business of providing warehousing and
Respondent decided to invoke the acceleration provision in their still has unpaid accounts. The respondent with her attorney had storage services to the public for a fee, and private respondent Tao
Credit Agreement. In response, petitioners paid respondent the sent a letter for compliance for the petitioner to comply their Development, Inc. (TAO), entered into a contract of storage
amount of P10,199,473.96 as partial payment of the accrued obligation. whereunder TAO deposited at FTI’s cold storage export quality
interests.[13] Apparently unsatisfied, UCPB applied for extrajudicial onions consisting of 22,716 bags (approximately 567,900 kilos) of
foreclosure of petitioners' mortgaged properties. The petitioner had still disagreed to comply with the fulfilment of yellow granex onions and 2,853 bags (approximately 71,300 kilos)
When petitioners received the Notice of Extra Judicial Foreclosure their obligation for failure of the respondent to comply with the of red creole onions. Unfortunately, an ammonia leak penetrated
Sale on May 18, 1999, they requested UCPB to give them a period mandatory requirement of PD No. 1508 since the submitted through FTI’s storage facilities and caused damage to TAO’s
of sixty (60) days to update their accrued interest charges; and to application to acquire the land was entitled to the manager of the goods, rendering the deposited onions unfit for export. TAO
restructure or, in the alternative, to negotiate for a takeout of their petitioner’s subdivision Oscar Rivera and not the petitioner himself. instituted a complaint for damages against FTI which was granted.
account. On May 25, 1999, the Bank denied petitioners' request The respondent disapproved of the petitioner’s statement for it was Final: ordering the defendant FTI to pay appellee TAO
Oscar Rivera who should be named in the certificate since he was Development, Inc. the amount of P2,400,168.00 as actual
ISSUE: the one who had appeared in the hearing. The trial court sided with damages, amount of P1,534,005.00 as unearned profits; and the
Whether partial payment will extinguish the obligation the respondent. In the financial transactions made between the amount of P100,000.00 as attorney’s fees. (6% interest per
parties, the respondent had alleged that he had paid 14,880 pesos annum)
Ruling: and since it went over the total price, the respondent should be TAO demanded from FTI payment in satisfaction of the judgment
No. the partial payment did not extinguish the obligation. The Civil reimbursed 3,620 pesos. in the amount of P7,194,453.60 as they computed. FTI disagreed
Code states that a debt is not paid unless the thing in which the During the pre-trial, the court had declared that the petitioner had with TAO’s foregoing computation and informed the latter that per
obligation consists has been completely delivered Besides, a late waived their right on the subject matter for non-appearances upon its (FTI’s) own computation, its obligation is less by P46,019.86
partial payment could not have possibly forestalled a long-expired a hearing and rendered judgement in favour of the respondent. than that claimed by TAO. In effect, it is FTI’s posture that its
maturity date. The petitioner however said that they did not receive any order or liability is only for P7,148,433.72. Percentage wise, the variance is
The only possible legal relevance of the partial payment was to notice of said hearing. less than one percent or .64 percent. A new phase of legal battle
evidence the mortgagee’s amenability to granting the mortgagor a between the herein parties began when TAO filed with the trial
grace period. Because the partial payment would constitute a Issue: W/N the petitioner’s contention of the failure of fulfilment of court a motion for execution, praying for the issuance of a writ of
waiver of the mortgagee’s vested right to foreclose, the grant of a their obligation had resulted to the declaration of bad faith on the execution against FTI for the total amount of P7,440,729.48. which
grace period cannot be casually assumed, the bank’s agreement side of the petitioner. was granted on absence of FTI.
must be clearly shown. Without a doubt, no express agreement Petitioner maintains that the motion for execution filed by TAO
was entered into by the parties. Petitioners only assumed that their Ruling: before the trial court should have been denied by said court
partial payment had satisfied respondent’s demand and obtained Yes, the petitioner’s overall contentions had resulted to the because it has satisfied the judgment award. Elaborating thereon,
for them more time to update their account. declaration of bad faith on the side of the petitioner. Although the petitioner claims that as early as April 2, 1997, or fifteen (15) days
petitioner was absent for the original hearing, another hearing was prior to TAO’s filing of the motion, it had already informed TAO that
249. Flores rescheduled where by both the petitioner and his counsel was it had computed the judgment award to be at only P7,148,433.72,
Palanca v Guides absent for. In the subject matter of pending unpaid accounts, the an amount deemed correct and acquiesced in by TAO. And since
Facts: petitioner’s point does not hold water, as mentioned in Article 1235 the latter had already encashed the check issued by the petitioner
of the Civil Code, “when the creditor accepts the performance,
for the same amount, its obligation in G.R. No. 120097 had thus date, or on February 15, 1975, the private respondent asked the upon because of the purported supervention of an extraordinary
been complied with. petitioners to furnish her with a statement of account of the balance inflation.
due; copies of the certificates of title covering the two parcels of
ISSUE: Whether petitioner’s payment of P7,148,433.72 had land subject of the sale; and a copy of the power of attorney The assailed decision is affirmed with modification that the order
resulted into the extinguishment of its obligation to respondent. executed by Rolando Gestuvo in favor of Pilar de Guzman. But, for re-computation as of the date of payment in accordance with
the petitioners denied the request. As a result, the private the provisions of Article 1250 of New Civil Code is deleted.
RULING: No. Instructive on the issue thus formulated is Article respondent filed a complaint for specific performance with
1248 of the Civil Code. It provides:“ ART. 1248. Unless there is an damages against the petitioners 255.LIM
express stipulation to that effect, the creditor cannot be compelled ISSUE: Serra vs CA
partially to receive the prestations in which the obligation consists. Whether the private respondent had substantially complied with the
Neither may the debtor be required to make partial payments. terms and conditions of the compromise agreement. Main Point:
However, when the debt is in part liquidated and in part RULING: Facts: Petitioner Federico Serra, who is the owner of a 374 square
unliquidated, the creditor may demand and the debtor may effect Yes. Her failure to deliver to the petitioners the full amount on meter parcel of land located at Masbate, Masbate, and private
the payment of the former without waiting for the liquidation of the January 27, 1978 was not her fault. The blame lies with the respondent Rizal Commercial Banking Corporation (RCBC)
latter.” petitioners. Since the deposit of the balance of the purchase price entered into a "Contract of Lease with Option to Buy" in May 25,
was made in good faith and that the failure of the private 1975 which provided that Serra will lease the subject land to RCBC
As borne by the records, petitioner FTI knew very well that respondent to deposit the purchase price on the date specified was for a period of 25 years from June 1, 1975 to June 1, 2000, that the
respondent TAO was demanding the sum of P7,194,453.60 as due to the petitioners who also make no claim that they had RCBC has the option to purchase the same at P210.00 per square
payment for its liability under this Court’s Resolution in G.R. No. sustained damages because of the two days delay, there was meter within a period of 10 years from May 25, 1975, the date of
120097. Yet, despite such knowledge, petitioner proceeded to offer substantial compliance with the terms and conditions of the the signing of the Contract, and that Serra will have to register said
a lesser amount. Under the aforequoted provision of the Civil compromise agreement. land under the Torrens System to the Register of Deeds of
Code, respondent TAO is thus justified in its initial refusal to accept Province of Masbate within the same 10-year option period.
petitioner’s offer of only P7,148,433.72. We cannot begrudge TAO TELENGTAN VS UNITED STATES LINES Pursuant to said contract, RCBC constructed improvements on the
for receiving the offered amount after it had filed its motion for subject land to house its branch office, while the petitioner had the
execution. As it were, FTI’s offer of P7,148,433.72 opened an FACTS: property, within 3 years from 1975, duly registered with OCT No. 0-
opportunity for TAO to receive a huge portion of FTI’s obligation to Petitioner is a domestic corporation while US Lines is a foreign 232 under the Torrens System. Later, petitioner alleged that as
it. In any event, there was no showing that respondent TAO has corporation engaged in  overseas shipping. It was made soon as he had the property registered, he kept on pursuing the
ever freed FTI from its obligation after receiving the partial applicable that consignees who fail to take delivery of their branch manager for the sale of the lot as per their agreement, but it
payment. What is more, it is too late in the day for petitioner to containerized cargo within the 10-day free period are liable to pay was not until September 4, 1984, that RCBC decided to exercise
raise at this stage the issue of whether or not respondent had demurrage charges. On June 22, 1981, US Lines filed a suit the option.
acceded to its own computation of liability under G.R. No. 120097. against petitioner seeking payment of demurrage charges plus
It is a factual issue which this Court will not resolve, absent any interest and damages. Petitioner incurred P94,000 which the latter RCBC informed petitioner, through a letter, of its intention to buy
compelling reason therefor, of which we find none in this case. In refused to pay despite repeated demands. Petitioner disclaims the property at the agreed price of not greater than P210.00 per
any event, settled is the rule that pure questions of fact may not be liability alleging that it has never entered into a contract nor signed square meter or a total of P78,430.00, but petitioner replied that he
the proper subject of an appeal by certiorari under Rule 45. For an agreement to be bound by it. RTC ruled that petitioner is liable is no longer selling the property. RCBC then filed an action for
sure, even the conclusion of the Court of Appeals that the letter to respondent and all be computed as of the date of payment in specific performance and damages against Serra in March 1985
dated March 13, 1997 of TAO’s president, Alberto Malvar, was a accordance with Article 1250 of  the Civil Code. CA affirmed the alleging that during the negotiations it made clear to petitioner that
forgery may no longer be reexamined by this Court. decision. it intends to stay permanently on property once its branch office is
opened unless the exigencies of the business requires otherwise.
251. HALID ISSUE: Although finding that the contract was valid, the lower court ruled
DE GUZMAN V. CA Whether the re-computation of the judgment award in accordance that the option to buy is unenforceable because it lacked a
with Article 1250 of the Civil Code proper consideration distinct from the price and RCBC did not exercise its
FACTS: option within the reasonable time. Upon motion for reconsideration,
February 17, 1971, the petitioners, as SELLER, and the private RULING: however, the lower court reversed itself on the 2nd issue, declared
respondent, as BUYER, executed a Contract to sell covering two The Supreme Court found as erroneous the trial court’s decision as the contract as valid, and ordered Serra to deliver the proper deed
(2) parcels of land owned by the petitioners located at Cementina affirmed by the Court  of Appeals. The Court holds that there has of sale to RCBC. The Court of Appeals likewise affirmed said
Street, Pasay City. It was stipulated therein that the private been an extraordinary inflation within the meaning of  Article 1250 decision.
respondent should pay the balance of the purchase price of P133, of the Civil Code. There is no reason for ordering the payment of
640.00 on or before February 17, 1975. Two days before the said an obligation in an amount different from what has been agreed Issue: Whether there was a valid contract of lease with option to
buy between the parties? Was there a consideration distinct from Whether or not the provision of Article 1250 of the New Civil Code hence it is inapplicable to obligations arising from tort and not from
the price to support the option given to RCBC is applicable in determining the amount of compensation to be paid contract, as in the case at bar, besides there being no showing that
to private respondent Amigable for the property taken. the factual assumption of the article has come into existence. As to
Ruling: The Supreme Court affirmed the appellate court’s decision. the Pantoja ruling, the regard paid to the decreasing purchase of
A contract of adhesion is one wherein a party, usually a Ruling: the peso was considered a factor in estimating the indemnity due
corporation, prepares the stipulations in the contract, while the No. Article 1250 of the NCC provides that the value of currency at for loss of life, which in itself is not susceptible of accurate
other party merely affixes his signature or his "adhesion" thereto. the time of the establishment of the obligation shall be the basis of estimation. It should not be forgotten that the damages awarded to
These types of contracts are as binding as ordinary contracts payment which would be the value of peso at the time of taking of herein appellant were by no means full compensatory damages,
because in reality, the party who adheres to the contract is free to the property when the obligation of the government to pay arises. It since the decision makes clear that appellant, by his failure to
reject it entirely. is only when there is an agreement that the inflation will make the minimize his damages by means easily within his reach, was
In the case at bar, the Supreme Court did not find the situation to value of currency at the time of payment, not at the time of the declared entitled only to a reduced award for the nuisance sued
be inequitable because petitioner is a highly educated man, who, establishment, the basis for payment. upon; and the amount granted him had already taken into account
at the time of the trial was already a CPA-Lawyer, and when he the changed economic circumstances.
entered into the contract, was already a CPA, holding a Under the law, in the absence of any agreement to the contrary,
respectable position with the Metropolitan Manila Commission. It is even assuming that there has been an extraordinary inflation within
evident that a man of his stature should have been more cautious the meaning of Article 1250 of the New Civil Code, a fact the court 258 REYES
in transactions he enters into, particularly where it concerns declines to declare categorically, the value of the peso at the time St. Paul Fire & Marine Insurance vs. Macondray
valuable properties. Also, in the present case, the consideration is of the establishment of the obligation, which in the instant case is
even more onerous on the part of the lessee since it entails when the property was taken possession of by the Government, FACTS: Winthrop Products shipped cartons and drums of drugs
transferring of the building and/or improvements on the property to must be considered for the purse of determining just and medicines consigned to Winthrop-Steams. A bill of lading was
petitioner, should respondent bank fail to exercise its option within compensation. Obviously, there can be no “agreement to the issued by Barber Steamship in the name of Winthrop Products as
the period stipulated. contrary” to speak of because the obligation of the shipper with arrival notice to Manila to consignee Winthrop-
Government sought to be enforced in the present action does Steams. The shipment was insured by shipper against loss or
256 Musa not originate from contract, but from law which, generally is damage with St. Paul Fire & Marine Insurance. When the shipment
Commissioner on Public Highways v. Burgos not subject to the will of the parties. And there being no other arrived and was discharged into the custody of the Manila Port,
legal provision cited which would justify a departure from the Winthrop-Steams discovered that a drum and several cartons were
Facts: rule that just compensation is determined on the basis of the in bad condition. They filed a claim representing the Cost,
On 1924, the government took private respondent Victor value of the property at the time of the taking thereof. Insurance and Freight (CIF) value of the damaged drum and
Amigable's land for road-right-of-way purpose. On 1959, Amigable cartons to Macondray and Barber Steamship. However, they
filed in the Court of First Instance a complaint to recover the 257. OCENA refuse to pay. It also filed its claim to St. Paul Fire & Marine
ownership and possession of the land and for damages for the VELASCO V. MERALCO (42 SCRA 556) Insurance on the basis of the value of lost and damaged goods. As
alleged illegal occupation of the land by the government (entitled subrogee of the rights of Winthrop-Steams, St. Paul Insurance filed
Victor Amigable vs. Nicolas Cuenco, in his capacity as FACTS: This is a Motion for Reconsideration sought by both an action for recovery against Macondray, etc.
Commissioner of Public Highways and Republic of the Philippines). parties emanating from a decision of the Supreme Court regarding
Amigable's complaint was dismissed on the grounds that the land an abatement complaint filed by Velasco against MERALCO. In the Macondray refused to pay and claimed that their liability should be
was either donated or sold by its owners to enhance its value, and main case, Velasco bought three lots, two of which he sold to limited to the CIF value of the goods pursuant to their bill of lading.
that in any case, the right of the owner to recover the value of said MERALCO for the latter‘s construction of a substation. A sound They also claim that they should not be made to pay the insured
property was already barred by estoppel and the statute of was emanating from said substation which Velasco made as a value.
limitations. In the hearing, the government proved that the price of basis for abatement. In this MR, Velasco alleges that that the
the property at the time of taking was P2.37 per square meter. damages awarded him are inadequate considering the present ISSUES:
Amigable, on the other hand, presented a newspaper showing that high cost of living, and calls attention to Article 1250 of the present 1. Whether, in case of loss or damage, the liability of the
the price was P6.775. Civil Code. carrier to the consignee is limited to the CIF value of the
The public respondent Judge ruled in favor of Amigable and goods which were lost or damaged.
directed the Republic of the Philippines to pay Amigable the value ISSUE: Whether Article 1250 is applicable. 2. Whether the insurer who has paid the claim in dollars to
of the property taken with interest at 6% and the attorney's fees. the consignee should be reimbursed in its peso equivalent
RULING: No. It can be seen from the employment of the words on the date of discharge.
Issue: "extraordinary inflation or deflation of the currency stipulated" that
the legal rule envisages contractual obligations where a specific RULING:
currency is selected by the parties as the medium of payment;
 1. YES. The stipulation in the bill of lading limiting the amount. Respondents refuse to pay. Respondents alleged that the Philippines under the terms stated in the Promissory Notes. As
common carrier’s liability to the value of the goods petitioner waived or condoned the interests due upon its security for said loans, Cuba executed two Deeds of Assignment of
appearing in the bill, unless the shipper or owner declares unqualified acceptance of the principal payment knowing its her Leasehold Rights; Plaintiff failed to pay her loan on the
a greater value, is valid and binding. This limitation of the incompleteness and without exercising its rights to apply a portion scheduled dates thereof in accordance with the terms of the
carrier’s liability is sanctioned by the freedom of the thereof to the interest as provided in the Articles 1235 and 1253 of Promissory Notes; Without foreclosure proceedings, whether
contracting parties to establish such stipulations, clauses, the Civil Code. They claimed that there was a novation and/or judicial or extra-judicial, defendant DBP appropriated the leasehold
terms, or conditions as they may deem convenient, modification of the obligation of the appellants in favor of the Rights of plaintiff Lydia Cuba over the fishpond in question; After
provided they are not contrary to law, morals, good appellee because the appellee accepted without reservation the defendant DBP has appropriated the Leasehold Rights of plaintiff
customs and public policy. In the case at bar, the liabilities subsequent agreement set forth in the surety bond despite its over the fishpond in question, defendant DBP, in turn, executed a
of the defendants-appellees with respect to the lost or failure to provide that it also guaranteed payment of accruing Deed of Conditional Sale of the Leasehold Rights in favor of
damaged shipments are expressly limited to the C.I.F. interest. plaintiff Lydia Cuba over the same fishpond in question; In the
value of the goods as per contract of sea carriage negotiation for repurchase, plaintiff Lydia Cuba addressed two
embodied in the bill of lading. The shipper and consignee ISSUE: Whether or not there was a waiver, novation and/or letters to the Manager DBP. DBP thereafter accepted the offer to
are, therefore, bound by such stipulations since it is modification of the obligation? repurchase in a letter addressed to plaintiff. After the Deed of
expressly stated in the bill of lading that in “accepting this Conditional Sale was executed in favor of plaintiff Lydia Cuba, a
Bill of Lading, the shipper, owner and consignee of the RULING: No. It is very clear in the promissory note that the new Fishpond Lease was issued by the Ministry of Agriculture and
goods, and the holder of the Bill of Lading agree to be principal obligation is the balance of the purchase price of the Food in favor of plaintiff Lydia Cuba only, excluding her husband;
bound by all its stipulations, exceptions and conditions, parcel of land, which is the sum of P5,000.00, and in the surety Plaintiff Lydia Cuba failed to pay the amortizations stipulated in the
whether written, stamped or printed, as fully as if they were bond, the Luzon Surety Co., Inc. undertook “to pay the amount of Deed of Conditional Sale; After plaintiff Lydia Cuba failed to pay
all signed by such shipper, owner, consignee or holder.” P5,000.00 representing balance of the purchase price of a parcel the amortization as stated in Deed of Conditional Sale, she entered
of land.  Petitioner did not protest nor object when it accepted the with the DBP a temporary arrangement whereby in consideration
2. YES. St. Paul Fire & Marine Insurance, as insurer, after payment of P5,000.00 because it knew that that was the complete for the deferment of the Notarial Rescission of Deed of Conditional
paying the claim of the insured for damages under the amount undertaken by the surety as appearing in the contract. The Sale, plaintiff Lydia Cuba promised to make certain payments as
insurance, is subrogated merely to the rights of the liability of a surety is not extended, by implication, beyond the stated in temporary Arrangement. Defendant DBP thereafter sent a
assured. As subrogee, it can recover only the amount that terms of his contract. It is for the same reason that the petitioner Notice of Rescission thru Notarial Act and which was received by
is recoverable by the latter. Since the right of the assured, cannot apply a part of the P5,000.00 as payment for the accrued plaintiff Lydia Cuba; After the Notice of Rescission, defendant DBP
in case of loss or damage to the goods, is limited or interest. Appellants are relying on Article 1253 of the Civil Code took possession of the Leasehold Rights of the fishpond in
restricted by the provisions in the bill of lading, a suit by the which states that “If the debt produces interest, payment of the question; That after defendant DBP took possession of the
insurer as subrogee necessarily is subject to like principal shall not be deemed to have been made until the interests Leasehold Rights over the fishpond in question, DBP advertised in
limitations and restrictions. The insurer after paying the have been recovered.” This law cannot be made applicable to a the SUNDAY PUNCH the public bidding to dispose of the property;
claim of the insured for damages under the insurance is person whose obligation as a mere surety is both contingent and That the DBP thereafter executed a Deed of Conditional Sale in
subrogated merely to the rights of the insured and singular; his liability is confined to such obligation, and he is favor of defendant Agripina Caperal Thereafter, defendant Caperal
therefore can necessarily recover only that to what was entitled to have all payments made applied exclusively to said was awarded Fishpond Lease Agreement by the Ministry of
recoverable by the insured. application and to no other. It is merely directory, and not Agriculture and Food.
mandatory. Inasmuch as the appellee cannot protest for non- ISSUE: Whether the assignment novated the promissory notes in
CASE NO. 259 – SABTALUH payment of the interest when it accepted the amount of P5,000.00 that the obligation to pay a sum of money the loans (under the
ARTICLE 1253 from the Luzon Surety Co., Inc., nor apply a part of that amount as promissory notes) was substituted by the assignment of the rights
MAGDALENA vs RODRIGUEZ payment for the interest, we cannot now say that there was a over the fishpond (under the deed of assignment).
waiver or condonation on the interest due. RULING: No. As correctly pointed out by CUBA, the said
FACTS: Spouses Rodriguez bought form the petitioner a parcel of assignment merely complemented or supplemented the notes;
land in Quezon City. There was an unpaid balance of P5,000.00 on MAINPOINT: The rules contained in Arts. 1253 of the Civil Code both could stand together. The former was only an accessory to
account of the price of the lot which was covered by the promissory applies to a person owing several debts of the same kind of a the latter. Contrary to DBP’s submission, the obligation to pay a
note issued by respondents. On the same date, Respondents and single creditor. They cannot be made applicable to a person whose sum of money remained, and the assignment merely served as
Luzon Surety Co., Inc. executed a bond in favor of petitioner, the obligation as a mere surety is both contingent and singular security for the loans covered by the promissory notes.
latter being the surety of the respondents. When the promissory Significantly, both the deeds of assignment and the promissory
note becomes due and demandable, Luzon Surety Com., Inc. paid Salinas- 260. Cuba v. CA notes were executed on the same dates the loans were granted.
the principal amount to petitioner without the interest. FACTS: Plaintiff Lydia P. Cuba is a grantee of a Fishpond Lease Also, the last paragraph of the assignment stated: “The assignor
Subsequently, petitioner demanded payment from respondents Agreement No. 2083 (new) dated May 13, 1974 from the further reiterates and states all terms, covenants, and conditions
herein on the alleged accumulated interests on the principal Government; Cuba obtained loans from the Development Bank of stipulated in the promissory note or notes covering the proceeds of
this loan, making said promissory note or notes, to all intent and Issue: Whether there was a novation of the obligation by the performance of obligation. In the absence of clear consent of
purposes, an integral part hereof.” substitution to debtor. appellee to the proferred special mode of payment, there can be
Neither did the assignment amount to payment by cession under no transfer of ownership of the mortgaged motor vehicle from
Article 1255 of the Civil Code for the plain and simple reason that Ruling: NO. In this kind of novation, it is not enough to extend the appellant to appellee.
there was only one creditor, the DBP. Article 1255 contemplates juridical relation to a third person; it is necessary that the old debtor
the existence of two or more creditors and involves the assignment be released from the obligation, and the third person or new debtor 263 TORIBIO
of all the debtor’s property. take his place in the relation. Without such release, there is no Philippine Lawin Bus Co vs. Court of Appeals (GR No. 130972)
Nor did the assignment constitute dation in payment under Article novation; the third person who has assumed the obligation of the
1245 of the Civil Code, which reads: “Dation in payment, whereby debtor merely becomes a co-debtor or a surety. If there is no FACTS: On 7 August 1990 plaintiff Advance Capital Corporation, a
property is alienated to the creditor in satisfaction of a debt in agreement as to solidarity, the first and the new debtor are licensed lending investor, extended a loan to defendant Philippine
money, shall be governed by the law on sales.” It bears stressing considered obligated jointly. Novation which consists in substituting Lawin Bus Company in the amount of P8,000,000.00 payable
that the assignment, being in its essence a mortgage, was but a a new debtor in the place of the original one, may be made even within a period of one (1) year, as evidenced by a Credit
security and not a satisfaction of indebtedness. without the knowledge or against the will of the latter, but not Agreement. Out of the P8,000,000.00 loan, P1,800,000.00 was
without the consent of the creditor. Payment by the new debtor paid. Thus, on 02 November 1990, defendant Bus Company was
gives him the rights mentioned in Articles 1236 and 1237. (Article able to avail an additional loan of P2,000,000.00 for one (1) month.
261. SALVADOR 1293, N.C.C.)
Art 1207-1304 On 15 May 1991 for failure to pay the two promissory notes,
Lopez vs. CA, G.R. No. L-33157, June 29, 1982 Case 262 – Tan defendant LAWIN was granted a loan re-structuring for two (2)
Filinvest Credit Corp. vs. Phil Acetylene Co. months to mature on 31 July 1991. Despite the restructuring,
Facts: On June 2, 1959, petitioner Benito H. Lopez obtained a defendant LAWIN failed to pay. Thus, plaintiff foreclosed the
loan in the amount of P20,000.00 from the Prudential Bank and Facts: Philippine Acetylene Co. purchased from Alexander Lim a mortgaged buses and as the sole bidder thereof, the amount of
Trust Company. On the same date, he executed a promissory note Chevrolet described as Chevorlet 1969 model for Php 55, 247 with P2,000,000.00 was accepted by the deputy sheriff conducting the
for the same amount, in favor of the said Bank, binding himself to a down payment of Php 20,000.00 and the balance of P35,247.80 sale and credited to the account of defendant LAWIN.
repay the said sum one (1) year after the said date, with interest at payable, under the terms and conditions of the promissory note 34
the rate of 10% per annum. In addition to said promissory note, he monthly installments. As security for the payment of said ISSUE: Whether or not there was a valid dacion en pago rendered
executed Surety Bond No. 14164 in which he, as principal, and promissory note, the appellant executed a chattel mortgage over in the equivalent payment through foreclosure of property to the
Philippine American General Insurance Co., Inc. (PHILAMGEN) as the same motor vehicle in favor of Alexander Lim. Subsequently, creditor?
surety, bound themselves jointly and severally in favor of Lim assigned to the Filinvest Credit Corp. all his rights in the
Prudential Bank for the payment of the sum of P20,000.00. On the promissory note and mortgage RULING: YES. The ruling of the court in favor of the respondents
same occasion, Lopez also executed in favor of Philamgen an and affirming the idea of a valid execution of dacion en pago as
indemnity agreement whereby he agreed “to indemnify the When it could not pay the remaining 9 installments, they there was proper foreclosure and subsequent conveyance of the
Company and keep it indemnified and hold the same harmless surrendered the vehicle upon demand of Filinvest. When the latter property in satisfaction of the obligation.
from and against any and all damages, losses, costs, stamps, could not sell the vehicle due to unpaid taxes, they wanted to
taxes, penalties, charges and expenses of whatever kind and return the vehicle to PAC and demanded payment for the MAIN POINT: In dacion en pago, property is alienated to the
nature which the Company shall or may at any time sustain or remaining balance. PAC refused because they stated that their creditor in satisfaction of a debt in money. It is “the delivery and
incur in consequence of having become surety upon the bond.” At obligation was already extinguished when it returned the car. transmission of ownership of a thing by the debtor to the creditor
the same time, Lopez executed a deed of assignment of 4,000 as an accepted equivalent of the performance of the obligation.” It
shares of the Baguio Military Institution entitled “Stock Assignment Issue: Whether the obligation was extinguished upon return? “extinguishes the obligation to the extent of the value of the thing
Separate from Certificate”. delivered, either as agreed upon by the parties or as may be
Ruling: No. Filinvest did not consented, or at least intended, that proved, unless the parties by agreement, express or implied, or by
Petitioner contends that the Court of Appeals erred in not holding the mere delivery to and acceptance of the mortgaged motor their silence, consider the thing as equivalent to the obligation, in
that since private respondent entered into an agreement with vehicle be construed as actual payment, more specifically dation in which case the obligation is totally extinguished.” Philippine Lawin
determinate third persons whereby the latter would buy the said payment or dacion en pago. The fact that the mortgaged motor Bus, Co. vs. Court of Appeals, 374 SCRA 332, G.R. No. 130972
shares so sold, assigned and transferred to the former by the vehicle was delivered to Filinvest does not necessarily mean that January 23, 2002
petitioner for the purpose of paying petitioner’s obligation out of the ownership thereof, as juridically contemplated by dacion en pago
proceeds, there was a novation of the obligation by substitution of as transferred from appellant to appellee. 264. Norkis distributors VS CA
debtor. FACTS; Petitioner Norkis Distributors, Inc. is the distributor of
Main Point: Dacion en pago is the transmission of the ownership Yamaha motorcycles in Negros Occidental. On September 20,
of a thing by the debtor to the creditor as an accepted equivalent of 1979, private respondent Alberto Nepales bought from the Norkis-
Bacolod branch a brand new Yamaha Maroon Wonderbike there was neither an actual nor constructive delivery of the thing
motorcycle Model YL2DX. The price of P7,500.00 was payable by sold, hence, the risk of loss should be borne by the seller, Norkis, 266. PABUGAIS V. SAHIJWANI
means of a Letter of Guaranty from the Development Bank of the which was still the owner and possessor of the motorcycle when it FACTS: Petitioner Pabugais, in consideration of the amount of
Philippines. Norkis' Branch Manager Labajo agreed to accept. was wrecked. This is in accordance with the well-known doctrine P15,487,500.00, agreed to sell to respondent Dave P. Sahijwani a
Hence, credit was extended to Nepales for the price of the of res perit domino. lot containing 1,239 square meter. Respondent paid petitioner the
motorcycle payable by DBP upon release of his motorcycle loan. amount of P600,000.00 as option/reservation fee and the balance
As security for the loan, Nepales would execute a chattel mortgage FAR EAST BANK & TRUST V. DIAZ REALTY INC. of P14,887,500.00 to be paid within 60 days from the execution of
on the motorcycle in favor of DBP. Branch Manager Labajo issued the contract, simultaneous with delivery of the owners duplicate
Norkis Sales Invoice No. 0120 showing that the contract of sale of FACTS: Transfer Certificate of Title in respondents name the Deed of
the motorcycle had been perfected. Nepales signed the sales Diaz and Co. obtained a loan from Pacific Banking Corp. in 1974 in Absolute Sale; the Certificate of Non-Tax Delinquency on real
invoice to signify his conformity with the terms of the sale. In the the amount of P720,000 at12% interest p.a. which was increased estate taxes and Clearance on Payment of Association Dues. The
meantime, however, the motorcycle remained in Norkis' thereafter. The said loan was secured with a real estate mortgage parties further agreed that failure on the part of respondent to pay
possession. On January 22, 1980, the motorcycle was delivered to over two parcels of land owned by Diaz Realty, herein respondent. the balance of the purchase price entitles petitioner to forfeit the
a certain Julian Nepales who was allegedly the agent of Alberto Sometime in December 1986, appellant FEBTC purchased the P600,000.00 option/reservation fee; while non-delivery by the latter
Nepales but the latter denies it. The motorcycle met an accident credit of Diaz & Company in favor of PaBC, but it was not until of the necessary documents obliges him to return to respondent
that was being driven by a certain Zacarias Payba at the time of March 23, 1988 that Diaz was informed about it. The respondent the said option/reservation fee with interest at 18% per annum.
the accident. The unit was a total wreck and was returned, and through its President inquired about its obligation and upon Petitioner failed to deliver the required documents. In
stored inside Norkis' warehouse. As the price of the motorcycle learning of the outstanding obligation, on December 14, 1988, it compliance with their agreement, he returned to respondent the
later increased to P7,828 in March, 1980, Nepales paid the tendered payment in the form of an Interbank checking the amount latters P600,000.00 option/reservation fee.
difference of P328 and demanded the delivery of the motorcycle. of P1,450,000 in order to avoid the further imposition of interests. What transpired thereafter is disputed by both parties.
When Norkis could not deliver, he filed an action for specific The payment was with a notation for the full settlement of the Petitioner claimed that he twice tendered to respondent, through
performance with damages against Norkis. He alleged that Norkis obligation. his counsel, the amount of P672,900.00 (representing the
failed to deliver the motorcycle which he purchased, thereby P600,000.00 option/reservation fee plus 18% interest per annum)
causing him damages.Norkis answered that the motorcycle had The petitioner accepted the check but it alleged in its defense that but said counsel refused to accept the same. Petitioner wrote a
already been delivered to private respondent before the accident, it was merely a deposit. When the petitioner refused to release the letter to respondent saying that he is consigning the amount
hence, the risk of loss or damage had to be borne by him as owner mortgage, the respondent filed a suit. The lower court ruled that tendered with the RTC.
of the unit. Norkis concedes that there was no "actual" delivery of there was a valid tender of payment and ordered the petitioner to Respondent averred that there was no valid tender of
the vehicle. However, it insists that there was constructive delivery cancel the mortgage. Upon appeal, the appellate court affirmed the payment because no check was tendered and the computation of
of the unit upon: (1) the issuance of the Sales Invoice No. 0120 in decision. the amount to be tendered was insufficient, because petitioner
the name of the private respondent and the affixing of his signature verbally promised to pay 3% monthly interest and 25% attorney’s
thereon; ISSUE: fees as penalty for default, in addition to the interest of 18% per
ISSUE; Whether Norkis is liable for the loss of the motorcycle W/N there was a valid tender of payment to extinguish the annum on the P600,000.00 option/reservation fee.
RULING; Yes, When the motorcycle was registered by Norkis in obligation of the respondent ISSUE: Whether there is a valid consignation and Can petitioner
the name of private respondent, Norkis did not intend yet to RULING: withdraw the amount consigned as a matter of right?
transfer the title or ownership to Nepales, but only to facilitate the Yes. Although jurisprudence tells us that a check is not a legal RULING and: Yes, In order that consignation may be effective, the
execution of a chattel mortgage in favor of the DBP for the release tender and a creditor may validly refuse it, this dictum does not debtor must show that: (1) there was a debt due; (2) the
of the buyer's motorcycle loan. The Letter of Guarantee issued by prevent a credit or from accepting a check as payment. Herein, the consignation of the obligation had been made because the creditor
the DBP, reveals that the execution in its favor of a chattel petitioner accepted the check and the same was cleared. A tender to whom tender of payment was made refused to accept it, or
mortgage over the purchased vehicle is a pre-requisite for the of payment is the definitive act of offering the creditor what is due because he was absent or incapacitated, or because several
approval of the buyer's loan. If Norkis would not accede to that him or her, together with the demand that he accepts it. More persons claimed to be entitled to receive the amount due or
arrangement, DBP would not approve private respondent's loan important is that there must be a concurrence of intent, ability and because the title to the obligation has been lost; (3) previous notice
application and, consequently, there would be no sale.In other capability to make good such offer, and must be absolute and must of the consignation had been given to the person interested in the
words, the critical factor in the different modes of effecting delivery, cover the amount due. The acts of the respondent manifest its performance of the obligation; (4) the amount due was placed at
which gives legal effect to the act, is the actual intention of the intent, ability and capability. Hence, there was a valid tender of the disposal of the court; and (5) after the consignation had been
vendor to deliver, and its acceptance by the vendee. Without that payment. Meanwhile, the transfer of credit from Pacific Bank to the made the person interested was notified thereof. The managers
intention, there is no tradition. Article 1496 of the Civil Code which petitioner did not involve an effective novation but an assignment check in the amount of P672,900.00 (representing the
provides that "in the absence of an express assumption of risk by of credit. As such, the petitioner has the right to collect the full P600,000.00 option/reservation fee plus 18% interest per annum)
the buyer, the things sold remain at seller's risk until the ownership value of the credit from the respondent subject to the conditions of which was tendered but refused by respondent, and thereafter
thereof is transferred to the buyer," is applicable to this case, for the promissory note previously executed. consigned with the court, was enough to satisfy the obligation.
MAIN POINT : Art. 1260. Once the consignation has been duly Main Point: Consignation is the act of depositing the thing due
made, the debtor may ask the judge to order the cancellation with the court or judicial authorities whenever the creditor cannot
of the obligation. accept or refuses to accept payment, and it generally requires a
prior tender of payment. It should be distinguished from tender of
267-Cruz payment. Tender is the antecedent of consignation, that is, an act
Meat Packing Corp. of the Philippines v Sandiganbayan preparatory to the consignation, which is the principal, and from
G.R. No. 103068 June 22, 2001 which are derived the immediate consequences which the debtor
desires or seeks to obtain. Tender of payment may be extrajudicial,
Facts: MPCP entered into a lease purchase agreement with while consignation is necessarily judicial, and the priority of the first
PIMECO, which stipulates that the contract is automatically is the attempt to make a private settlement before proceeding to
deemed cancelled and forfeited upon default in payments of the solemnities of consignation. Tender and consignation, where
rentals equivalent to the cumulative sum total of 3 annual validly made, produces the effect of payment and extinguishes the
payments. In 1986, PCGG sequestered all assets of PIMECO obligation.
including the leased property.
MPCP sent PIMECO a notice of rescission for nonpayment of
rentals. PCGG tendered to MPCP checks amounting to ₱5M which
the former refused, arguing that agreement already rescinded
since outstanding debt of more than ₱12M is already more than 3
years' worth of installments.
MPCP's ground for refusal of tender of payment is the rescission
clause. However, since PCGG's tender and consignation of P5M
was approved by Sandiganbayan, and is therefore a valid tender,
the accumulated back rental were reduced to around P7M, which
is less than 3 years' worth of installments. As such, rescission
cannot lie.
MPCP’s chief complaint in its present petition is that it was not a
party in Civil Case No. 0024. As such, it alleges that the
Sandiganbayan had no jurisdiction over its person and may not
direct it to accept the consigned amount of P5M

Issue: Whether the Sandiganbayan had no jurisdiction over MPCP

to direct it to accept the consigned P5M

Ruling: No. Jurisdiction over the person of the defendant in civil

cases is acquired either by his voluntary appearance in court and
his submission to its authority or by service of summons.
Furthermore, the active participation of a party in the proceedings
is tantamount to an invocation of the court’s jurisdiction and a
willingness to abide by the resolution of the case, and will bar said
party from later on impugning the court or body’s jurisdiction. In this
case, petitioner MPCP is precluded from questioning the
jurisdiction of the Sandiganbayan over its person in Civil Case No.
0024, considering that, as shown by the records, it actively
participated in the discussion of the merits of the said case, even
going to the extent of seeking affirmative relief. The
Sandiganbayan did not commit grave abuse of discretion in saying
so.