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PNB V Chan

The document discusses a case involving a commercial property that was leased by Philippine National Bank. The landlord filed an unlawful detainer case for unpaid rent. While PNB claimed it deposited rent payments with the court, the court found this was not a valid consignation under the law as it did not place the funds at the disposal of the court. Therefore PNB was liable to pay interest on the unpaid rent.

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Maisie Zabala
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21 views

PNB V Chan

The document discusses a case involving a commercial property that was leased by Philippine National Bank. The landlord filed an unlawful detainer case for unpaid rent. While PNB claimed it deposited rent payments with the court, the court found this was not a valid consignation under the law as it did not place the funds at the disposal of the court. Therefore PNB was liable to pay interest on the unpaid rent.

Uploaded by

Maisie Zabala
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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FIRST DIVISION property on a month-to-month basis with a monthly rental of ₱116,788.44.

PNB vacated the premises on March 23, 2006


March 13, 2017
On August 26, 2005, respondent Chan filed a Complaint for Unlawful
G.R. No. 206037 Detainer before the MeTC against PNB, alleging that the latter failed to pay
its monthly rentals from October 2004 until August 2005:9
PHILIPPINE NATIONAL BANK, Petitioner 
vs In its defense, PNB claimed that it applied the rental proceeds from October
LILIBETH S. CHAN, Respondent 2004 to January 15, 2005 as payment for respondent's outstanding loan
which became due and demandable in October 2004. As for the monthly
rentals from January 16, 2005 to February 2006, PNB explained that it
DECISION received a demand letter from a certain Lamberto Chua (Chua) who claimed
to be the new owner of the leased property and requested that the rentals be
DEL CASTILLO, J.: paid directly to him, reckoned from January 15, 2005 until PNB decides to
vacate the premises or a new lease contract with Chua is executed. PNB
We resolve the Petition for Review on Certiorari under Rule 45 of the Rules thus deposited the rentals in a separate non-drawing savings account for the
of Court, assailing the May 28, 2012 Decision1 and the February 21, 2013 benefit of the rightful party.
Resolution2 of the Court of Appeals (CA) in CA-G.R. SP No. 98112.
Later, PNB consigned the amount of ₱l,348,643.92, representing rentals due
The Antecedent Facts from January 16, 2005 to February 2006, with the court on May 31, 2006.

.5 The MeTC ordered PNB to pay respondent accrued rentals in the amount of
with interest at 6% per annum from January 16, 2005 up to March 23, 2006,
when PNB finally vacated the leased propeity.
Meanwhile, on January 22, 2002, respondent obtained a ₱l,500,000.00 loan
from PNB which was secured by a Real Estate Mortgage constituted over
the leased property.6 In addition, respondent executed a Deed of PNB now contends that it is not liable to pay any interest on the lease
Assignment7over the rental payments in favor of PNB. rentals since it did not incur any delay in the payment of rent.

The amount of the respondent's loan was subsequently increased to Issue: whether PNB properly consigned the disputed rental payments and
₱7,500,000.00. Consequently, PNB and the respondent executed an whether it should be liable for interest – NO. The deposit made by PNB in a
"Amendment to the Real Estate Mortgage by Substitution of Collateral" on separate savings account is not the consignation contemplated by law.
March 31, 2004, where the mortgage over the leased property was released Hence, it only consigned the rentals on May 31, 2006, when it placed the
and substituted by a mortgage over a parcel of land located in Paco, Manila, rentals with the MeTC. By then, the rentals had already become due and
covered by TCT No. 209631.8 thereby plcing PNB in default and liable for interest.

x----x Ratio:

Respondent Lilibeth S. Chan owns a three-story commercial building located "Consignation is the act of depositing the thing due with the court or judicial
along A. Linao Street, Paco, Manila. She leased said commercial building to authorities whenever the creditor cannot accept or refuses to accept
petitioner Philippine National Bank (PNB). PNB continued to occupy the payment. [ I]t generally  requires a prior tender of payment."
Under Article 1256 of the Civil Code, consignation alone is sufficient even Given its belated  consignment of the rental proceeds in court, PNB clearly
without a prior tender of payment a) when the creditor is absent or unknown defaulted in the payment of monthly rentals to the respondent for the period
or does not appear at the place of payment; b) when he is incapacitated to January 16, 2005 up to March 23, 2006, when it finally vacated the leased
receive the payment at the time it is due; c) when, without just cause, he property, As such, it is liable to pay interest in accordance with Article 2209
refuses to give a receipt; d) when two or more persons claim the same right of the Civil Code.
to collect; and e) when the title of the obligation has been lost.
WHEREFORE, we DENY the Petition for Review
For consignation to be valid, the debtor must comply with the following on Certiorari and AFFIRM the Decision dated May 28, 2012 and the
requirements under the law: Resolution dated February 21, 2013 of the Court of Appeals in CA-G.R. SP
No. 98112. 
1) there was a debt due;
SO ORDERED.
2) valid prior tender of payment, unless the consignation was made because
of some legal cause provided in Article 1256; MARIANO C. DEL CASTILLO
Associate Justice
3) previous notice of the consignation has been given to the persons
interested in the performance of the obligation;

4) the amount or thing due was placed at the disposal of the court; and,

5) after the consignation had been made, the persons interested were
notified thereof:45

"Failure in any of the requirements is enough ground to render a


consignation ineffective."

Note that PNB's deposit of the subject monthly rentals in a non-drawing


savings account is not the consignation contemplated by law, precisely
because it does not place the same at the disposal of the
court.51 Consignation is necessarily judicial;  it is not allowed in venues other
than the courts.52 Consequently, PNB's obligation to pay rent for the period
of January 16, 2005 up to March 23, 2006 remained subsisting, as the
deposit of the rentals cannot be considered to have the effect of payment.

It is important to point out that PNB's obligation to pay the subject monthly
rentals had already fallen due and demandable before  PNB consigned the
rental proceeds with the MeTC on May 31, 2006. Although it is true that
consignment has a retroactive effect, such payment is deemed to have been
made only at the time of the deposit of the thing in court or when it was
placed at the disposal of the judicial authority.53 Based on these premises,
PNB's payment of the monthly rentals can only be considered to have been
made not earlier than May 31, 2006. 

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