G.R. No. L-35381 October 31, 1972
TLG International Continental Enterprising, Inc. vs. Hon. Delfin B. Flores, Presiding Judge, Court of First Instance of Rizal, Branch XI

FACTS

Petitioner TLG International Continental Enterprising, Inc. intervened as a sub-lessee in Civil Case No. 14880, an action for declaratory relief filed by Bearcon Trading Co., Inc. against Juan Fabella et al. concerning lease rights. To protect its interests and resolve uncertainty over the rightful recipient of monthly rentals during the litigation, petitioner filed a Complaint in Intervention and, upon its admission by the court, consigned rental payments totaling P3,750.00 with the Clerk of Court. The deposits were covered by official receipts. Subsequently, the defendants filed an Omnibus Motion seeking dismissal of the main complaint and the complaint in intervention, arguing the issues were better addressed in a pending ejectment case. The respondent judge granted the motion and dismissed the entire case on April 24, 1972.
Following the dismissal, petitioner filed a motion to withdraw the consigned funds, intending to turn them over to the defendants based on an understanding between the parties. The respondent judge denied this motion on June 23, 1972, and also denied a motion for reconsideration on July 15, 1972. The judge reasoned that the court had not ordered the intervenor to make any deposit. Petitioner then filed this certiorari proceeding to challenge the denial of its withdrawal request.

ISSUE

Whether the respondent judge acted with grave abuse of discretion in denying petitioner’s motion to withdraw the consigned rental deposits after the dismissal of the case.

RULING

Yes. The Supreme Court granted the petition and set aside the respondent judge’s orders. The legal logic is anchored on the statutory provisions governing consignation under the Civil Code. Article 1260 explicitly provides that before the creditor accepts the consignation or before a judicial declaration of its propriety, the debtor may withdraw the deposit, leaving the obligation in force. In this case, the dismissal of the action occurred before any acceptance by a creditor or a judicial approval of the consignation, thereby rendering the consignation ineffectual. Consequently, petitioner retained the right to withdraw the deposits as a matter of law.
The Court rejected the respondent judge’s contention that he lacked authority because no court order compelled the deposit. The deposit was a direct consequence of the court’s admission of the Complaint in Intervention and was made pursuant to Article 1258, which requires consignation to be made at the disposal of judicial authority. The funds were officially received by the Clerk of Court, placing them under the court’s control and jurisdiction. Withdrawal thus required a court order, which the judge unjustifiably refused. The Court found no legal basis for the denial and directed the respondent judge to authorize the withdrawal.