G.R. No. 106467-68. October 19, 1999.
DOLORES LIGAYA DE MESA, petitioner, vs. THE COURT OF APPEALS, OSSA HOUSE, INC. AND DEVELOPMENT BANK OF THE PHILIPPINES, respondents.

FACTS

Petitioner Dolores Ligaya de Mesa owned several parcels of land mortgaged to the Development Bank of the Philippines (DBP) as security for a loan. Due to her failure to pay the mortgage debt, all properties were foreclosed and sold at public auctions between April 30, 1977, and January 12, 1978, with DBP as the winning bidder. On May 29, 1978, de Mesa requested DBP to allow her to repurchase the foreclosed properties. On October 23, 1978, de Mesa executed a “Deed of Sale with Assumption of Mortgage” in favor of private respondent OSSA House, Inc., under which OSSA was to assume payment of the mortgage debt by repurchasing the properties on installment, with an initial payment of P90,000.00. OSSA remitted this amount to DBP. On February 22, 1979, DBP granted de Mesa’s repurchase request, and a “Deed of Conditional Sale” was executed in March 1979, whereby DBP agreed to sell the properties to de Mesa for P363,408.20, payable with an initial P90,000.00 and the balance in quarterly installments over seven years. OSSA paid the first to eighth quarterly installments to DBP from April 11, 1979, to May 8, 1981. On March 11, 1981, de Mesa notified OSSA that she was rescinding their Deed of Sale due to OSSA’s alleged failure to comply with its terms, including payment of installments to DBP. OSSA offered to pay de Mesa the balance of the purchase price, but she refused. OSSA then filed Civil Case No. 41059 for consignation against de Mesa, depositing P34,363.08 with the court. When DBP refused OSSA’s ninth installment, OSSA filed Civil Case No. 42381 for specific performance and consignation against DBP and de Mesa, depositing P15,824.92. The cases were consolidated. The trial court ruled in favor of OSSA, declaring the consignation valid and ordering DBP to execute a Deed of Absolute Sale in favor of OSSA upon full payment. The Court of Appeals modified the decision, declaring the consignation valid as to de Mesa, ordering de Mesa to receive the consigned amounts and pay DBP, and ordering DBP to execute a Deed of Absolute Sale in favor of de Mesa, who in turn must execute a Deed of Absolute Sale in favor of OSSA.

ISSUE

1. Whether the mandatory requirements for consignation under Articles 1256 to 1261 of the Civil Code can be relaxed or substantially complied with.
2. Whether the court can supplant its own reading of an ambiguous contract for the actual intention of the contracting parties as testified to in court.
3. Whether petitioner de Mesa can be held in estoppel for the acts of DBP.

RULING

1. On consignation: The Supreme Court upheld the Court of Appeals’ finding that the consignation was valid. The Court ruled that while consignation must generally comply with the Civil Code’s formalities, the trial court’s order allowing OSSA to deposit future installments without further tender or notice was a valid relaxation of these requirements under the circumstances, as it prevented needless multiplicity of suits and served the ends of justice. The deposits were deemed proper consignations.
2. On contract interpretation: The Supreme Court affirmed that the “Deed of Sale with Assumption of Mortgage” conveyed the properties themselves, not merely the right of redemption. Applying Article 1370 of the Civil Code, the Court held that the terms of the written contract are clear and leave no doubt as to the intention of the parties; thus, the literal meaning of its stipulations controls. The contract explicitly stated that de Mesa “sells, transfers, and conveys” the properties to OSSA. The Court rejected de Mesa’s claim that only the right of redemption was sold, as this would contradict the contract’s unambiguous terms. Parol evidence of a different intention is inadmissible when the agreement is clear.
3. On estoppel: The Supreme Court found that de Mesa was estopped from denying the benefits accruing to OSSA from her repurchase agreement with DBP. By requesting DBP to allow repurchase and then executing the Deed of Conditional Sale, de Mesa enabled OSSA to acquire the properties. Her actions conferred a benefit upon OSSA, which she cannot now disavow. The Court also noted that de Mesa’s conduct, including accepting OSSA’s payments for the installments, estopped her from rescinding the contract with OSSA.
The Petition for Review was DENIED, and the Decision of the Court of Appeals was AFFIRMED.