G.R. No. 181723 , August 11, 2014
ELIZABETH DEL CARMEN, Petitioner, vs. SPOUSES RESTITUTO SABORDO and MIMA MAHILUM-SABORDO, Respondents.

FACTS

Spouses Toribio and Eufrocina Suico, along with partners, mortgaged several lots (including Lots 506 and 514) to DBP to secure a loan. After foreclosure and failure to redeem, DBP consolidated ownership. DBP later allowed the Suico spouses and others to repurchase the lots via a conditional sale. The Suico and Flores spouses, unable to continue payments, sold their rights to respondents Spouses Sabordo, subject to the condition that the Sabordos pay the balance. A supplemental agreement stated that Lots 512 and 513 were sold, while Lots 506 and 514 were given to the Sabordos as usufructuaries. DBP approved the sale. Respondents eventually repurchased the properties from DBP.
Respondent Restituto Sabordo filed an action for declaratory relief. The RTC ruled in favor of the Suico spouses, giving them a period to redeem Lots 506 and 514. The CA modified the decision, granting the Suico spouses until October 31, 1990, to exercise their option to purchase the lots by paying P127,500.00, and later granted an additional 90-day extension.
Toribio Suico died. His heirs, including petitioner Elizabeth del Carmen, discovered respondents had mortgaged Lots 506 and 514 to Republic Planters Bank (RPB). Claiming readiness to pay the P127,500.00 but unable to determine to whom payment should be made, the heirs filed a Complaint for interpleader, seeking to compel respondents and RPB to litigate their interests. They deposited P127,500.00 with the RTC and prayed for respondents to substitute the lots as collateral and for RPB to release the mortgage.
Respondents moved to dismiss, arguing the interpleader was improper, the option period had expired, there was no valid consignation, and the case was barred. RPB also moved to dismiss, asserting the heirs had no cause of action against it. The RTC dismissed the Complaint. The CA affirmed, prompting the petition.

ISSUE

Whether the judicial deposit (consignation) of P127,500.00 made by the Suico heirs with the Clerk of Court was valid, thereby constituting payment for the purchase of Lots 506 and 514 in compliance with the final CA decision.

RULING

No. The Supreme Court affirmed the CA and RTC rulings, holding the consignation invalid. Consignation requires prior valid tender of payment to the creditor, unless excused under Article 1256 of the Civil Code. The Court found petitioner and her co-heirs failed to make a prior valid tender of payment to respondents. The deposit alone was insufficient. Unlike in Arzaga v. Rumbaoa, where a petition accompanied the deposit asking the court to notify the creditors, here the heirs did not ask the court to notify respondents to receive payment. Instead, they filed an improper action for interpleader (as RPB made no claim to the money) and prayed for substitution of collateral. Strict compliance with consignation requisites is mandatory. Since prior tender was lacking and no statutory excuse applied, the consignation was void and did not produce the effect of payment. The petition was denied for lack of merit.