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GR No. 181723 | August 11, 2014 | Peralta, J. | Third Division
Modes of Extinguishment

CASE SUMMARY: Suico Spouses mortgaged lots to DBP in exchange for a loan for their business. They failed to pay the loan on time so DBP took
ownership of said lots. They wanted to redeem said lots but failed on installment payments so they transferred their rights to Sabordo in exchange for them
purchasing the property from DBP. They wanted to buy back the lots from Sabordo. They’re asking the court to convey the lots to them claiming they made a
valid payment and consignation. Court rules requisites of a valid consignation were incomplete because they did not have a valid tender of payment towards

 1961 - Suico Spouses entered into business venture of establishing rice and corn mill in Mandaue with other partners.
 They asked for a loan from DBP. To secure the said loan, four parcels of land owned by the Suico spouses, denominated as Lots 506, 512, 513 and
514, and another lot owned by their business partner, Juliana Del Rosario, were mortgaged.
 Flores Spouses weren’t able to pay.
 So, DBP foreclosed property = took ownership of the lot.

 DBP took ownership of lot, but allowed Suico Spouses and Flores Spouses, as substitutes for Juliana Del Rosario, to repurchase the subject lots by way
of a conditional sale for the sum of ₱240,571.
 Suico Sps, and Flores Sps weren’t able to make subsequent monthly payments, so being threatened by DBP they sold the rights of the properties to
respondents Restituto and Mima Sabordo, subject to the condition that the latter shall pay the balance of the sale price.
 Suico Spouses were able to transfer their rights to Sabordos, and Sabordos were able to repurchase the properties.
 Now, despite transfer and repurchase of Sabordos, the Suico Spouses wanted to recover some of the property lots.

 So, Sabordo filed with CFI Negros a Motion for Declaratory Relief raising issue of WoN spouses have right to recover said lot.
 RTC: ruled in favor of Suico Spouses giving them till Aug 31, 1987 to redeem said lots.
 CA: modified and gave them till October 31, 1990 within which to exercise their option to purchase or redeem the subject lots from respondents by
paying the sum of P127,500.00.

 In the meantime, Toribio Suico (Husband) died leaving Eufrocina Suico (Wife), and others as legal heirs. Suicos (=Widow + Heirs) then discovered that
Sabordos mortgaged the lot with Republic Planters Bank (RPB) as security for a loan.
 Suicos claiming that they are ready with payment of P127,500 for repurchase of lot don't know as to whom such payment shall be made.
 So Suicos filed a Complaint with RTC San Carlos seeking to compel Sabordos and RPB to interplead and litigate between themselves their
respective interests on the abovementioned sum of money. Upon filing of complaint, Suicos deposited the amount of P127,500 with Court.

ISSUE: WoN the consignation of 127,500 in the RTC San Carlos by the Suicos was a valid consignation. --NO

Petitioner Suicos averred: Consignation which she and her co-heirs made in the amount of 127,500 was a judicial deposit based on a final judgment and, as
such, does not require compliance with the requirements of Articles 1256 and 1257 of the Civil Code. (ELAM: It was a valid consignation)

Respondent Sabordos averred: Filed Counterclaim,said -- (1) the action for interpleader was improper since RPB is not claiming on sum of P127,500; (2)
the period within which Suicos are allowed to repurchase lots had already expired; (3) that there was no valid consignation, (4) case is barred by litis
pendencia or res judicata. (ELAM: It was not a valid consignation).
Court ruled (with Respondent Sabordos):
 It is settled that compliance with the requisites of a valid consignation is mandatory.
 Failure to comply strictly with any of the requisites will render the consignation void.
 One of these requisites is a valid prior tender of payment.
 Tender is the antecedent of consignation, that is, an act preparatory to the consignation, which is the principal, and from which are derived the
immediate consequences which the debtor desires or seeks to obtain. Tender of payment may be extrajudicial, while consignation is necessarily
judicial, and the priority of the first is the attempt to make a private settlement before proceeding to the solemnities of consignation. Tender and
consignation, where validly made, produces the effect of payment and extinguishes the obligation.
 Under Article 1256, the only instances where prior tender of payment is excused are: (1) when the creditor is absent or unknown, or does not appear at
the place of payment; (2) when the creditor is incapacitated to receive the payment at the time it is due; (3) when, without just cause, the creditor refuses
to give a receipt; (4) when two or more persons claim the same right to collect; and (5) when the title of the obligation has been lost.

 In this case, none of such instances mentioned are present.

 Suicos should have made tender of payment before consignation.
 The fact that the subject lots are in danger of being foreclosed does not excuse Suicos from tendering payment to Sabordos, as directed by the court.
(ELAM: In short, invalid consignation since there was no TOP).