[ G.R. No. L-3742. December 23, 1952 ] 92 Phil. 355
[ G.R. No. L-3742. December 23, 1952 ]
LAUREANO SIA, PETITIONER, VS. COURT OF APPEALS AND NUMERIANO VALENCIA, RESPONDENTS. 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:
“Pagare a la orden del Sr. Laureano Sia en Masbate, Masbate, al plazo de cinco años contados desde esta fecha, la suma de 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.”
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 sufferred 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 mili’tares japoneses y no podemos determiner 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 atane 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.”
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 vs. 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:
“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 itmay, 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 consignaua. (8 Manresa, 4th edition, page 297; italics supplied.)”
Upon the other hand, in the case of China Insurance & Surety Co., Inc. vs. 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 vs. 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:
“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 heeha.’ El Juez no ordenara la cancelacion a menos que se le demuestre que en la consignacion se cumplieron todos los requisites necesarios para su validez. For ejemplo, 1. que se ofrecio el pago y fue rechazado; 2. que se ha heeho la notificacion de la consignacion; 3.” que, hecha al consignacion, se notified debidamente del hecho al interesado (art. 1180, Codigo Civil); 4. que la consignacion constituye el pago completo de la obligacion (art. 1177).
“Si el juez no esta convencido de que la consignacion esta hecha debidamente,’ no rendira la caneelacion de la obligacion. La extincion de esta no depende de la sola voluntad del deudor; debe intervenir la autoridad judicial para comprobar si ha sido debidamente hecha la consignacion. Seria injusto que dependiese sola-men’e del acto del deudor la cancelacion de la deuda. El orden publico y el sentido de justicia exigen que un tercero asi lo dictamine. ‘Mientras el acreedor—dice el articulo 1180—no hubiere aceptado la consignacion o no hubiere recaido la declaracion judicial de que esta bien hecha, podra el deudor retirar la cantidad consignada.’ Bajo esta circunstancia,—que la consignacion esta aun a disposicion del acreedor—su obligacion queda subsistente. No puede considerarse pagada, como pretende la apelante. En el caso presente se quemo la consignacion mientras estaba a la disposicion completa de ella; ella, pues, debe sufrir la perdida, no el acreedor.
“En conclusion declaramos: primero, que bajo el articulo 1180 del Codigo Civil la aprobacion de la consignacion por el juzgado es indispensable para que la obligacion se considere extinguida; segundo, que los P10,000 en papel moneda japonesa depositados no cubren todo el importe de la sentencia apelada que monta a P10,833.82 ein incluir las costas judiciales, y por tanto, la apelante no ha hecho una debida consignacion; y tercero, que la obligacion de la apelante en virtud de la sentencia del Tribunal de Apelacion de 3 de Julio de 1944 queda aun subsistente.”
It would seem, therefore, that while under the earlier case of Haw Pia vs. San Jose, we held that the loss of the thing consigned, without the fault of the debtor, is to be for the account of the creditor, under the ruling in China Insurance & Surety Co., Inc. vs. Berkenkotter, and Padua vs. Rizal Surety & Insurance Co., in order that the debtor may be released from the obligation, there must first be approval of the consignation by the court. Although there is an apparent conflict, we may reconcile the decisions by stating that, where all the requisites for a valid consignation have been complied with, and there can be no reason for disapproving said consignation, 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. This is obvious even from the decisions in the two later cases. Thus, in China Insurance & Surety Co. Inc., vs. Berkenkotter, this court had to make reference to the fact that “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 the terms of the obligation which is to be paid.” And in the case of Padua vs. Rizal Surety & Insurance Co., the court held as a fact that “los P10,000 en papel moneda japonesa depositados no cubren todo el importe de la sentencia apelada que monta a P10,833.82 sin incluir las costas judiciales, y por tanto, la apelante no ha hecho una debida consignacion.” In the last analysis, therefore, the decisive consideration is that there be a valid consignation which may not be disapproved by the court.
In the case before us, as already noted, the Court of Appeals found that respondent Valencia had performed all the acts necessary to a valid consignation. It is not pretended that the amount consigned was less than that specified in the promissory note. If the matter of the approval of the consignation was therefore presented to the court prior to the loss of the thing consigned, there can be no doubt about its approval. Our conclusion in this case merely gives effect and essence to the purposes of consignation. It is true that, under article 1180 of the Civil Code, at any time before the creditor has accepted the consignation or the court has declared that it was properly made, the debtor may withdraw the thing or sum of money consigned, leaving the obligation in force; but it cannot be denied also that, until the thing or amount consigned shall have been withdrawn by the debtor, the creditor may accept the same, with the result that in the meantime the consignation is at the disposal both of the debtor and the creditor. The risk of loss before acceptance by the creditor or approval by the court is likewise mutual, because if it be determined that there was no valid consignation, he loss mus be suffered by the debtor; othewise, by the creditor.
The petitioner further invokes the equitable consideration that the amount consigned in Japanese military notes should not have been given a value at par with the Philippine peso, actual currency. Having come to the conclusion that the obligation was payable during the enemy occupation, and that the Japanese war notes were then legal tender at par with the Philippine peso, we are constrained to disagree with tne petitioner.
Wherefore, the appealed decision is affirmed without costs. So ordered.
Bengzon, Tuason, Montemayor, Bautista Angelo, and Labrador, JJ., concur.