G.R. No. L-793; April 27, 1949
FELISA R. PAEZ, ET AL., plaintiffs-appellants, vs. FRANCISCO MAGNO, defendant-appellee.

FACTS

In October 1943, the plaintiffs borrowed P4,000 in Japanese military notes from the defendant, secured by a mortgage on a parcel of land. In September 1944, the plaintiffs offered and tendered payment of the debt, but the defendant-creditor refused to accept it. Consequently, on November 18, 1945, the plaintiffs filed an action seeking a declaration that the obligation was already paid and for the cancellation of the mortgage deed. The defendant moved to dismiss the complaint on the ground that it stated no cause of action, as it lacked an allegation that the amount due had been consigned in court after the tender was refused.

ISSUE

Whether the complaint states a cause of action despite the lack of an allegation that consignation of the debt was made after the creditor’s refusal of the tender of payment.

RULING

No. The order of dismissal is correct. Under Articles 1176, 1177, and 1178 of the Civil Code, for a debtor to be relieved from liability after a creditor unreasonably refuses a tender of payment, the debtor must make a consignation (deposit) of the thing due with the judicial authority, after giving notice to interested persons. The complaint failed to allege that such consignation was made; therefore, the debtor-plaintiffs were not released from their obligation. The Court distinguished the case from redemption scenarios where a mere tender is sufficient to compel the vendee to allow repurchase, noting that such tender does not itself constitute payment that extinguishes the obligation to pay the price. The appealed order was affirmed.

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