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86 - Expenses of Consignation - Pabugais V Sahijwani - KS

The petitioner agreed to sell land to the respondent, but failed to deliver required documents. Per their agreement, the petitioner returned the respondent's reservation fee plus 18% annual interest, totaling P672,900, by consigning the amount with the regional trial court after the respondent refused the tender. The court found the tender of payment was valid as the requirements for consignation were met, and the respondent subsequently requested the consigned amount, equivalent to accepting the consignation and extinguishing the petitioner's obligation.

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Kyra Sy-Santos
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120 views1 page

86 - Expenses of Consignation - Pabugais V Sahijwani - KS

The petitioner agreed to sell land to the respondent, but failed to deliver required documents. Per their agreement, the petitioner returned the respondent's reservation fee plus 18% annual interest, totaling P672,900, by consigning the amount with the regional trial court after the respondent refused the tender. The court found the tender of payment was valid as the requirements for consignation were met, and the respondent subsequently requested the consigned amount, equivalent to accepting the consignation and extinguishing the petitioner's obligation.

Uploaded by

Kyra Sy-Santos
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Topic: Expenses of consignation (Pabugais v Sahijwani)

Facts:

Petitioner Teddy G. Pabugais agreed to sell to respondent Dave P. Sahijwani a lot located at Jacaranda
Street, North Forbes Park, Makati, Metro Manila.

The parties further agreed that failure on the part of respondent to pay the balance of the purchase
price entitles petitioner to forfeit the P600,000.00 option/reservation fee; while non-delivery by the
latter of the necessary documents obliges him to return to respondent the said option/reservation
fee with interest at 18% per annum. Petitioner failed to deliver the required documents. In
compliance with their agreement, he returned to respondent the latters P600,000.00
option/reservation fee by way of check, which was, however, dishonored.

Petitioner claimed that he twice tendered to respondent, through his counsel, the amount of
P672,900.00 (representing the P600,000.00 option/reservation fee plus 18% interest per annum
computed from December 3, 1993 to August 3, 1994) in the form of a managers check, dated August
3, 1994, but said counsel refused to accept the same. Petitioner wrote a letter to respondent saying
that he is consigning the amount tendered with the Regional Trial Court of Makati City. On August
15, 1994, petitioner filed a complaint for consignation.

Respondents counsel, on the other hand, received petitioners letter dated August 5, 1994, but
claimed that no check was appended thereto. He averred that there was no valid tender of payment
because no check was tendered and the computation of the amount to be tendered was insufficient.

Issue: 1. WON there is the existence of a valid tender of payment

Held:

Consignation is the act of depositing the thing due with the court or judicial authorities whenever the
creditor cannot accept or refuses to accept payment and it generally requires a prior tender of
payment. Art. 1260. provides: Once the consignation has been duly made, the debtor may ask the
judge to order the cancellation of the obligation. Before the creditor has accepted the consignation,
or before a judicial confirmation that the consignation has been properly made, the debtor may
withdraw the thing or the sum deposited, allowing the obligation to remain in force.

The amount consigned with the trial court can no longer be withdrawn by petitioner because
respondents prayer in his answer that the amount consigned be awarded to him is equivalent to an
acceptance of the consignation, which has the effect of extinguishing petitioners obligation. The
Court held that the tender of payment made by petitioner is valid.

Petition is Denied.

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