FIRST DIVISION
[G.R. No. L-3742. December 23, 1952. ]
LAUREANO SIA, Petitioner, v. COURT OF APPEALS and NUMERIANO VALENCIA, Respondents.
Jose L. Almario for Petitioner.
Angustia & Valencia for Respondents.
SYLLABUS
1. OBLIGATIONS AND CONTRACTS; CONSIGNATION; LOSS OF THE THING DULY CONSIGNED WITHOUT FAULT OF DEBTOR, FOR ACCOUNT OF CREDITOR. — Where all the requisites for a valid consignation have been complied with, the loss of the thing or amount consigned occurring without the fault of the debtor before the acceptance of the consignation by the creditor or its approval by the court, should be for the account of the creditor.
D E C I S I O N
PARAS, C.J. :
This is an appeal from a decision of the Court of Appeals. As found by said court, the facts are as follows: On May 22, 1940, the petitioner, Laureano Sia, executed in favor of the respondent, Numeriano Valencia, the following promissory note:red:chanrobles.com.ph
"Pagare a la orden del Sr. Laureano Sia en Masbate, Masbate, al plazo de cinco años contados desde esta fecha, la suma da sietecientos cincuenta y tres con sesenta y tres centimos (P753.63) en moneda filipina, valor recibido del mismo en virtud de una hipoteca de terreno cocal de que es parte integrante este pagare."cralaw virtua1aw library
On September 4, 1944, Atty. Ernesto Valencia, son of respondent Numeriano Valencia, offered to pay to the petitioner the mortgage debt of P753.63 in Japanese military notes, which the petitioner refused to receive, alleging that the currency had no value and that he wanted to be paid in Philippine currency. In view whereof, Attorney Valencia, on behalf of his father, informed the petitioner that he would consign the amount in the Court of First Instance of Masbate. Accordingly, on September 5, 1944, Attorney Valencia deposited with the Clerk of the Court of First Instance of Masbate the sum of P753.63 in Japanese military notes, and filed a sworn pleading for consignation, in which it was made to appear that the debt was being paid to the petitioner who refused to accept the payments, and that the latter was notified of the consignation. The clerk of the Court of First Instance of Masbate receipted for the amount thus deposited by Attorney Valencia who thereupon prepared a notice to the petitioner of the deposit of the sum of P753.63 in Japanese military notes with the clerk of the Court of First Instance of Masbate, which notice Attorney Valencia personally delivered in the office of the petitioner. The clerk of the Court of First Instance if Masbate in turn sent a notice of consignation by registered mail to the petitioner. The latter, however, never withdrew the money thus consigned.
As a result of the bombing by American planes between September and December, 1944, the records of Attorney Valencia relating to the consignation, as well as the records of the Court of First Instance of Masbate, including the amount of P753.63 deposited by respondent Valencia, were lost or destroyed.
After the promissory note herein-above quoted had matured on May 2, 1945, the petitioner demanded from the respondent, Numeriano Valencia, the payment of the mortgage debt in the sum of P753.63. The respondent refused to accede to the demand, alleging that the debt had already been paid. Whereupon, on August 5, 1946, the petitioner filed in the Court of First Instance of Masbate a complaint for the recovery of the debt, with foreclosure of mortgage. After trial, the court rendered a decision, holding that the debt in question had already been paid in virtue of the consignation above mentioned, and dismissing the complaint without pronouncement as to costs. Upon appeal by the petitioner, the Court of Appeals affirmed the decision, without pronouncement as to costs.
The petitioner contends (1) that he was justified in refusing to accept the tendered payment on September 4, 1944, because the Japanese military notes were almost valueless and the debt was not then due and payable; (2) that there was no valid consignation; (3) that the loss of the amount deposited or consigned should not be suffered by the petitioner; and (4) that, at any rate, the Japanese military notes deposited in September, 1944, should not be valued at par with the Philippine peso.
The promissory note executed on May 22, 1940, recited that the sum of P753.63 was payable "al plazo de cinco años contados desde esta fecha." The Court of Appeals held, and correctly, that the expression "Al plazo de cinco años contados desde esta fecha" may mean as well that payment could be made at the end of five years from May 22, 1940, or May 22, 1945, as that the debt could be settled at any time within five years from May 22, 1940; in such case, the respondent Valencia was justified in offering to pay on September 4, 1944, and the petitioner, Laureano Sia, had no reason to reject said payment. The conclusion of the Court of Appeals is well founded, specially because the refusal of the petitioner to accept the tendered payment was premised on the allegation that the Japanese military notes were valueless, and not upon the allegation that the debt had not yet matured.
The contention that the notes tendered by respondent Valencia were valueless is of course untenable, since it is already settled that the Japanese war notes were legal tender during the enemy occupation. The result is that the petitioner was not justified in refusing to accept payment in said notes on September 4, 1944.
With respect to the validity of the consignation upheld by the Court of Appeals, the pertinent findings of said court are as follows: "No tenemos a la vista el documento por el cual se consigno en el juzgado la suma de P753.63 en billetes militares japoneses y no podemos determinar si tal escrito era simplemente de consignacion o si ademas se solicitaba del tribunal que, tras los tramites de rigor, declarase saldada la obligacion y cancelada la hipoteca, mas, en lo que atañe a la consignacion propiamente dicha, puede verse de los hechos expuestos que se ha cumplido con todos los requisitos prescritos por el Codigo. De las pruebas consta que se hizo el ofrecimiento de pago en forma al acreedor, que este recibio los avisos correspondientes antes y despues de hecha la consignacion judicial; que los billetes militares japoneses, que eran moneda de curso legal en Filipinas al tiempo de la consignacion, constituian la ’cosa debida’ que se deposito a disposicion de la Autoridad judicial; que la consignacion se ajusto estrictamente a las disposiciones que regulan el pago de una obligacion que podia liberarse; y, en su consecuencia, que el acreedor a quien se hizo el ofrecimiento de pago se nego sin razon valida a recibirlo."cralaw virtua1aw library
We cannot, therefore, in this instance depart from the finding of the Court of Appeals that all the steps for a valid consignation had been taken by respondent Valencia. The only important question that arises is whether the loss of the amount consigned should be borne by the petitioner or by the Respondent.
In the case of Haw Pia v. Jose, etc. 1 decided on May 13, 1947, 44 Off. Gaz., 2704, this court held that the loss of the thing validly consigned, without the fault of the debtor, is to be borne by the creditor. We quote the following from said decision:jgc:chanrobles.com.ph
"But there are certain other considerations which we deem worthy to be noted. Petitioner lays much emphasis upon the point that the aforesaid order of January 6, 1944, has become impossible of execution because she says the amount consigned by respondent Altea in September or October, 1940, with the Clerk of the Court of First Instance, which was later deposited by said official with the Provincial Treasurer, was ’frozen’ by the Japanese authorities, and she adds that to this day the present government has not made provision for the payment of said amount. Be this as it may, and even supposing that the so-called freezing of said amount and the alleged failure of the government to provide for its payment have made it impossible for petitioner to collect the same, the loss, if any there would be, must be suffered by petitioner.
"Art. 1176. If a creditor to whom tender of payment has been made should refuse without reason to accept it, the debtor may relieve himself of liability by the consignation of the thing due.
"The same effect shall be produced by consignation alone when made in the absence of the creditor, or if the latter should be incapacitated to accept the payment when it is due, or when several persons claim to be entitled to receive it, or when the muniments of the obligation have been lost or mislaid. (Civil Code.)
"The amount consigned was in Philippine genuine money before the war and the record shows that all the requisites of a valid consignation were complied with.
". . . Ademas de quedar extinguida la obligacion produce la consignacion valida el efecto de quedar libre el deudor de responsabilidad por los riesgos que despues, y sin que procedan de actos suyos, sobrevengan a la cosa debida y consignada. (8 Manresa, 4th edition, page 297; Italics supplied.)"
Upon the other hand, in the case of China Insurance & Surety Co., Inc. v. Berkenkotter 1 (46 Off. Gaz., 5466), we promulgated on April 29, 1949, a resolution to the following effect: "On this point, the reconstituted documents show that while the consignation was really made and the adverse party notified thereof, the same has neither been accepted by the latter nor approved by the court, and in any event, there is no clear proof before us that the essentials of a valid consignation are here present specially the conformity of the proferred payment to terms of the obligation which is to be paid. It should be remarked in this connection that strict conformity in that regard is required, for as Manresa says ’. . . el acreedor tan solo, y no el juez, puede autorizar la variacion que para los derechos de aquel suponga la que se intente en el objeto, cuantia o forma de las obligaciones.’ (8 Manresa, 312.)"
In the case of Padua v. Rizal Surety & Insurance Co. 2 decided on July 27, 1950 (47 Off. Gaz., Supp. No. 12, page 308), it was held that, under article 1180 of the Civil Code, the approval of the consignation by the court is indispensable to the extinction of the obligation. We quote the following pertinent passages of said decision:jgc:chanrobles.com.ph
"Los dos citados autores opinan que es necesaria la aprobacion judicial de la consignacion, no por disposicion expresa del articulo 1180 del Codigo Civil, sino por deduccion forzosa. Dicho articulo dice que ’podra el deudor pedir al Juez que mande cancelar la obligacion.’ La mocion tiene que fundarse en algun hecho y no sera otro sino el de que la consignacion ha sido ’debidamente hecha.’ El juez no ordenara la cancelacion a menos que se le demuestre que en la consignacion se cumplieron todos los requisitos necesarios para su validez. Por ejemplo, 1.
"Pagare a la orden del Sr. Laureano Sia en Masbate, Masbate, al plazo de cinco años contados desde esta fecha, la suma da sietecientos cincuenta y tres con sesenta y tres centimos (P753.63) en moneda filipina, valor recibido del mismo en virtud de una hipoteca de terreno cocal de que es parte integrante este pagare."cralaw virtua1aw library
On September 4, 1944, Atty. Ernesto Valencia, son of respondent Numeriano Valencia, offered to pay to the petitioner the mortgage debt of P753.63 in Japanese military notes, which the petitioner refused to receive, alleging that the currency had no value and that he wanted to be paid in Philippine currency. In view whereof, Attorney Valencia, on behalf of his father, informed the petitioner that he would consign the amount in the Court of First Instance of Masbate. Accordingly, on September 5, 1944, Attorney Valencia deposited with the Clerk of the Court of First Instance of Masbate the sum of P753.63 in Japanese military notes, and filed a sworn pleading for consignation, in which it was made to appear that the debt was being paid to the petitioner who refused to accept the payments, and that the latter was notified of the consignation. The clerk of the Court of First Instance of Masbate receipted for the amount thus deposited by Attorney Valencia who thereupon prepared a notice to the petitioner of the deposit of the sum of P753.63 in Japanese military notes with the clerk of the Court of First Instance of Masbate, which notice Attorney Valencia personally delivered in the office of the petitioner. The clerk of the Court of First Instance if Masbate in turn sent a notice of consignation by registered mail to the petitioner. The latter, however, never withdrew the money thus consigned.
As a result of the bombing by American planes between September and December, 1944, the records of Attorney Valencia relating to the consignation, as well as the records of the Court of First Instance of Masbate, including the amount of P753.63 deposited by respondent Valencia, were lost or destroyed.
After the promissory note herein-above quoted had matured on May 2, 1945, the petitioner demanded from the respondent, Numeriano Valencia, the payment of the mortgage debt in the sum of P753.63. The respondent refused to accede to the demand, alleging that the debt had already been paid. Whereupon, on August 5, 1946, the petitioner filed in the Court of First Instance of Masbate a complaint for the recovery of the debt, with foreclosure of mortgage. After trial, the court rendered a decision, holding that the debt in question had already been paid in virtue of the consignation above mentioned, and dismissing the complaint without pronouncement as to costs. Upon appeal by the petitioner, the Court of Appeals affirmed the decision, without pronouncement as to costs.
The petitioner contends (1) that he was justified in refusing to accept the tendered payment on September 4, 1944, because the Japanese military notes were almost valueless and the debt was not then due and payable; (2) that there was no valid consignation; (3) that the loss of the amount deposited or consigned should not be suffered by the petitioner; and (4) that, at any rate, the Japanese military notes deposited in September, 1944, should not be valued at par with the Philippine peso.
The promissory note executed on May 22, 1940, recited that the sum of P753.63 was payable "al plazo de cinco años contados desde esta fecha." The Court of Appeals held, and correctly, that the expression "Al plazo de cinco años contados desde esta fecha" may mean as well that payment could be made at the end of five years from May 22, 1940, or May 22, 1945, as that the debt could be settled at any time within five years from May 22, 1940; in such case, the respondent Valencia was justified in offering to pay on September 4, 1944, and the petitioner, Laureano Sia, had no reason to reject said payment. The conclusion of the Court of Appeals is well founded, specially because the refusal of the petitioner to accept the tendered payment was premised on the allegation that the Japanese military notes were valueless, and not upon the allegation that the debt had not yet matured.
The contention that the notes tendered by respondent Valencia were valueless is of course untenable, since it is already settled that the Japanese war notes were legal tender during the enemy occupation. The result is that the petitioner was not justified in refusing to accept payment in said notes on September 4, 1944.
With respect to the validity of the consignation upheld by the Court of Appeals, the pertinent findings of said court are as follows: "No tenemos a la vista el documento por el cual se consigno en el juzgado la suma de P753.63 en billetes militares japoneses y no podemos determinar si tal escrito era simplemente de consignacion o si ademas se solicitaba del tribunal que, tras los tramites de rigor, declarase saldada la obligacion y cancelada la hipoteca, mas, en lo que atañe a la consignacion propiamente dicha, puede verse de los hechos expuestos que se ha cumplido con todos los requisitos prescritos por el Codigo. De las pruebas consta que se hizo el ofrecimiento de pago en forma al acreedor, que este recibio los avisos correspondientes antes y despues de hecha la consignacion judicial; que los billetes militares japoneses, que eran moneda de curso legal en Filipinas al tiempo de la consignacion, constituian la ’cosa debida’ que se deposito a disposicion de la Autoridad judicial; que la consignacion se ajusto estrictamente a las disposiciones que regulan el pago de una obligacion que podia liberarse; y, en su consecuencia, que el acreedor a quien se hizo el ofrecimiento de pago se nego sin razon valida a recibirlo."cralaw virtua1aw library
We cannot, therefore, in this instance depart from the finding of the Court of Appeals that all the steps for a valid consignation had been taken by respondent Valencia. The only important question that arises is whether the loss of the amount consigned should be borne by the petitioner or by the Respondent.
In the case of Haw Pia v. Jose, etc. 1 decided on May 13, 1947, 44 Off. Gaz., 2704, this court held that the loss of the thing validly consigned, without the fault of the debtor, is to be borne by the creditor. We quote the following from said decision:jgc:chanrobles.com.ph
"But there are certain other considerations which we deem worthy to be noted. Petitioner lays much emphasis upon the point that the aforesaid order of January 6, 1944, has become impossible of execution because she says the amount consigned by respondent Altea in September or October, 1940, with the Clerk of the Court of First Instance, which was later deposited by said official with the Provincial Treasurer, was ’frozen’ by the Japanese authorities, and she adds that to this day the present government has not made provision for the payment of said amount. Be this as it may, and even supposing that the so-called freezing of said amount and the alleged failure of the government to provide for its payment have made it impossible for petitioner to collect the same, the loss, if any there would be, must be suffered by petitioner.
"Art. 1176. If a creditor to whom tender of payment has been made should refuse without reason to accept it, the debtor may relieve himself of liability by the consignation of the thing due.
"The same effect shall be produced by consignation alone when made in the absence of the creditor, or if the latter should be incapacitated to accept the payment when it is due, or when several persons claim to be entitled to receive it, or when the muniments of the obligation have been lost or mislaid. (Civil Code.)
"The amount consigned was in Philippine genuine money before the war and the record shows that all the requisites of a valid consignation were complied with.
". . . Ademas de quedar extinguida la obligacion produce la consignacion valida el efecto de quedar libre el deudor de responsabilidad por los riesgos que despues, y sin que procedan de actos suyos, sobrevengan a la cosa debida y consignada. (8 Manresa, 4th edition, page 297; Italics supplied.)"
Upon the other hand, in the case of China Insurance & Surety Co., Inc. v. Berkenkotter 1 (46 Off. Gaz., 5466), we promulgated on April 29, 1949, a resolution to the following effect: "On this point, the reconstituted documents show that while the consignation was really made and the adverse party notified thereof, the same has neither been accepted by the latter nor approved by the court, and in any event, there is no clear proof before us that the essentials of a valid consignation are here present specially the conformity of the proferred payment to terms of the obligation which is to be paid. It should be remarked in this connection that strict conformity in that regard is required, for as Manresa says ’. . . el acreedor tan solo, y no el juez, puede autorizar la variacion que para los derechos de aquel suponga la que se intente en el objeto, cuantia o forma de las obligaciones.’ (8 Manresa, 312.)"
In the case of Padua v. Rizal Surety & Insurance Co. 2 decided on July 27, 1950 (47 Off. Gaz., Supp. No. 12, page 308), it was held that, under article 1180 of the Civil Code, the approval of the consignation by the court is indispensable to the extinction of the obligation. We quote the following pertinent passages of said decision:jgc:chanrobles.com.ph
"Los dos citados autores opinan que es necesaria la aprobacion judicial de la consignacion, no por disposicion expresa del articulo 1180 del Codigo Civil, sino por deduccion forzosa. Dicho articulo dice que ’podra el deudor pedir al Juez que mande cancelar la obligacion.’ La mocion tiene que fundarse en algun hecho y no sera otro sino el de que la consignacion ha sido ’debidamente hecha.’ El juez no ordenara la cancelacion a menos que se le demuestre que en la consignacion se cumplieron todos los requisitos necesarios para su validez. Por ejemplo, 1.
