IN RE CONSIGNATION IN FAVOR OF BENITO GONZALES. CHING PUE ET AL., PETITIONERS AND APPELLANTS, VS. BENITO GONZALES, RESPONDENT AND APPELLEE.

These are eleven cases appealed jointly, corresponding to as many
separate cases of petition for consignation, Civil Cases Nos. 2127 to
2137 of the Court of First Instance of Manila, considered and heard
jointly by that court and determined and disposed of in one single
decision.

Respondent-appellee Benito Gonzales is the owner of the building and
the premises occupied by the eleven petitioners in these consignation
cases. The premises are situated at Muelle de Binondo, San Nicolas and
Fundidor streets, district of Binondo, Manila, about 150 meters away
from the Divisoria Market. Said petitioners were all tenants of
respondent, occupying separate and distinct lots. With the exception of
petitioner Pablo Ong alias Ong Kim Pan who began leasing his premises
from respondent in 1945, all the rest was tenants or lessees of long
standing, even before the war, Gonzales claims that the premises are
commercial properties and are used as such by his tenants while the
latter, not flatly denying the commercial nature of the property
therein occupied, affirm that they are using them essentially
for residential purposes. In none of these eleven leases has there been
any written contract of lease, much less, for any long period of
tenancy. The rentals were paid monthly and so, according to law it is
to be understood that the leases were from month to month. The assessed
value of the premises was P36,500.00 in the year 1941. Effective 1947,
however, it has been raised by the City to P150,000.

In February, 1947, the owner Benito Gonzales notified each and
everyone of the eleven tenant-petitioners that effective that month,
they were to pay the Increased rents specified by him, presumably,
deemed by him to be reasonable and commensurate with the increase in
the assessment of his property and the corresponding taxes. The notice
included a warning and advice that if they did not agree or were
unwilling to pay the increased rentals, they (tenants) should vacate
their respective premises. Despite the notice and the warning, all the
eleven tenant-petitioners refused to vacate their places; they also
refused to pay the new schedule of rents. So, on April 12, 1947,
Gonzales filed in the Municipal Court of Manila ejectment proceedings,
Civil Cases Nos. 3172 and 3173 against two of the tenants, Pablo Ong
alias Ong Kim Pan and Ong Wa, presumably to serve as test cases,
alleging that he (Gonzales) had terminated their leases, and asking
that the said two defendants be ordered to vacate the premises and that
they be directed to pay the increased rents fixed by the owner,
effective April 1, 1947, until they left the places leased by them.

The eleven tenants, including the two defendants in the ejectment
cases, quite alert if not clever, however, must have foreseen and
anticipated the legal steps that the owner would or was bound to take
in view of their adamant refusal to either vacate the premises they
were occupying or pay the new rentals fixed and demanded of them, and
using a familiar expression, they, as it were, beat him to the draw by
filing in the lower court on March 31, 1947, that is, about twelve days
before the filing of the ejectment cases, these eleven separate
petitions for consignation, one for each tenant. Each petition alleged
that the tenant-petitioner had made a formal tender of the rentals at
the old rate observed previous to February, 1947, that is, rentals for
the months of February and March of that year, but that the owner
Gonzales without valid reason refused to accept tender and so each
tenant-petitioner after having duly notified Gonzales, deposited in
court the said rentals for two months by way of consignation, at the
same time asking the court to allow him to continue depositing the
monthly rental as they f|ll due, which he would appear to have done up
to the time when the decision of the lower court was rendered.

Then, on April 10, 1947, two days before Gonzales filed his
ejectment cases, the eleven tenant-petitioners in the eleven cases of
consignation jointly filed Civil Case No. 2224 in the Court of First
Instance of Manila for declaratory relief, seeking the interpretation
and application of the rental law with reference to the premises rented
and occupied by them. Said case, however, was dismissed by Judge Ocampo
who was then presiding over branch V in a decision dated May 12, 1948.
He held that the only question involved in the case was whether or not
the premises were commercial or residential, and that this point could
not be decided in the declaratory relief case. The plaintiffs in that
case appealed to the Court of Appeals, CA-G.R, No. 3556-R, in which
court we understand, the case is still pending.

Going back to the consignation cases, after hearing, and after
considering the stipulation of facts entered into by both parties, on
August 14, 1948, the lower court rendered judgment dismissing all the
eleven cases, holding that Benito Gonzales cannot be compelled to
accept the rents tendered by the petitioners; neither can the court
determine the reasonable amount of monthly rent to be paid by each of
the petitioners. The trial court ordered the return to the petitioners
of the amounts deposited by them. From that judgment all the
petitioners appealed to this Court and have filed a single brief.

Counsel for the appellants contends that the trial court erred in
holding that Benito Gonzales could not be compelled to accept the rents
deposited in court by the petitioners. Appellants advance the theory
that being tenants of respondent Gonzales on. verbal contracts of lease
for the occupation of the premises in question, they are debtors to
their common landlord, as regards payment of the monthly rent in
arrears and also of the current rents after they fall due from time to
time, and that as such debtors, they are under obligation to pay their
debts; hence the tender of the rentals due. And because of the refusal
said to be without any valid reason on the part of Gonzales to receive
said payments, the judicial consignation made by the appellants was
justified.

We agree with the lower court that the respondent-appellee may not
be compelled to accept the monthly rents tendered by his tenants.
According to the very argument and citation of authority adduced by
appellants in their brief, when tender of payment is made by a debtor,
the creditor may accept it only under the terms which accompanied the
tender, not under conditions imposed by the payee or creditor. For
instance, if an amount is tendered as a full satisfaction or payment of
a debt, the creditor may not accept it as a mere partial payment and
reserve the right to demand and collect the balance of what he believes
to be the entire obligation, (See case of Vidal Araneta & Co. vs.
Vicente Uy Teck, CA-G.R. No. 5096, August 14, 1940, 40 Off.Gaz., No.
15, p, 29) He should as the common saying goes, “take it or leave it.”
When the tender of payment was made to Gonzales he could either accept
the amounts of the old rentals offered as full payment of the rents and
obligations of his tenants, thereby forfeiting his right to demand the
increased rentals he had fixed; or could reject the tender which he
did. He cannot very well be blamed for his decision and action.

Article 1176 of the Civil Code provides that a debtor may relieve
himself of liability by consignation of the thing due if the creditor
to whom tender of payment has been made refuses without reason
to accept it. In the present case Gonzales had his reason and a good
one for refusing to receive the payment of the rentals under the old
scale. The assessment of his property having been increased
substantially, he felt that he should also raise his rentals, which he
did. We are not now called upon to decide whether said new rentals are
reasonable or not. That question will be decided in an appropriate
ejectment case, but from the viewpoint of respondent Gonzales, he could
not very well accept said rentals because if he did, he was precluded
from claiming and demanding the payment of the increased rentals. He
was therefore not without reason in declining to accept the
rents tendered which were far below the amounts fixed by him in
February, 1947. Article 1176 of the Civil Code is, therefore, not
applicable.

Another question to be considered is the relation between the
petitioners and respondent. As already stated, the former claim that
they are debtors of Gonzales and as such they made tender of payment of
the rentals, and when tender was refused, they made the deposits in
court. Up to February, 1947, when the landlord (Gonzales) notified his
tenants to either pay the increased rents or vacate the premises, the
petitioners as regards the old rentals due might be regarded as debtors
of their landlord; but after that time when they refused to pay the
increased rents, as a result of which the landlord decided to terminate
the leases which according to him, he had right to do because the
leases were from month to month, such relation of debtor and creditor
ceased. From respondent landlord’s point of view, the petitioners may
no longer be considered as debtors who may relieve themselves of
liability by tendering payment of the old rentals, and if refused,
consigning them in court, but they may be viewed as squatters or
trespassers who were occupying the premises not only without any
agreement or contract with the owner but against his will. So, from
that point of view, their case may not come under the provisions of
article 1176 of the Civil Code.

Consignation in Court under article 1176 of the Civil Code, is not
the proper proceedings to determine the relation between landlord and
tenant, the period or life of the lease or tenancy, the reasonableness
of the rental, the right of the tenant to keep the premises against the
will of the landlord, etc. These questions should be decided in a case
of ejectment or detainer like those two cases brought by Gonzales
against two of the petitioners under the provisions of Rule 72 of the
Rules of Court. In a case of ejectment, the landlord claims either that
the lease has ended or been terminated or that the lessee has forfeited
his right as such because of his failure to pay the rents as agreed
upon or because he failed or refused to pay the new rentals fixed and
demanded by the lessor. The lessee in his turn may put up the defense
that according to law, the rental demanded of him is unreasonable,
exorbitant and illegal, or that the period of the lease has not yet
expired, or that if the rental law (Commonwealth Act No. 689, as
amended by Republic Act No. 66) is applicable, and that the premises
are destined solely for dwelling, he may not be ousted therefrom
because the owner does not need them for his own use, etc. We repeat
that all these questions should be submitted and decided in a case of
ejectment and cannot be decided in a case of consignation.

Now, for a little digression, it may be here stated that the trial
of the two ejectment cases, Civil Gases Nos. 3172 and 3173 was held in
abeyance by order of the Municipal Court pending decision Civil Case
No. 2224 for declaratory relief. After this case and the eleven cases
for consignation, Civil Cases Nos. 2127-2137 were dismissed by the
Court of First Instance, the Municipal Court sought to resume the
hearing of the ejectment cases, but the two tenant-defendants therein
who are two of the eleven plaintiffs in the declaratory relief case as
well as petitioners in the consignation cases immediately instituted
prohibition proceedings Civil Case No. 6447 in the Court of First
Instance of Manila, intended to stay the hand of the Municipal Court
and suspend the hearing of the ejectment cases. Said prohibition case
was dismissed, the trial court holding that the Municipal Court had the
right to hear and adjudge the ejectment cases. From that decision of
dismissal the petitioners appealed to this Court G. R. No. L-2850, On
December 29, 1949, this Tribunal thru Mr. Justice Reyes sustained the
trial court saying:

“It should also be borne in mind that the practice
of allowing a stay in one action pending the outcome of another is not
of universal application. In every case the court will consider whether
justice will be done by granting the stay, always mindful of the
possibility that it may work damage to someone else. (53 Am, Jur. 36.)
In the present case, the suspension of proceedings in the ejectment
cases would work injustice to the land-lord with the paralization of
his summary remedy for the ouster of tenants who insist on occupying
his property against his will beyond the period of their lease,

“As we see it. the whole controversy between landlord and. tenant in
the present case may be resolved in the actions for desahucio so that
if any stay should be granted at all it should be in the consignation
and declaratory relief cases. A contrary ruling would allow a
circumvention of the Rules by frustrating the purpose of desahucio as a
summary remedy. Such a result should be avoided.

“We are,
therefore, of the opinion that the respondent judge made a good use of
his discretion in denying the suspension of trial of the desahucio
cases, so that the petition for prohibition was properly denied by the
Court of First Instance.”

In conclusion, we find that the trial court acted correctly in
dismissing these eleven cases of consignation for the reason that
article 1176 of the Civil Code on the basis of which they were filed is
not applicable, and because the questions involved in said cases
properly belong to a case of ejectment where the relation between
landlord and tenant, the nature of the leased premises involved, the
reasonableness of the rentals demanded, the right or lack of right of
tenant to continue occupying the premises against the will of the
landlord, the applicability of the rental law, etc, will be determined.

In going over the history not only of these eleven cases of
consignation but also of the cases of declaratory relief, ejectment,
and prohibition, one gets the impression and the feeling that these
eleven tenants of respondent-appellee Gonzales wanted and were
determined to keep the premises as long as possible without paying the
new rentals fixed and demanded by their landlord and without giving him
an opportunity to prove in court the reasonableness of said new rentals
and his right to recover possession of his property. It seems that the
tenants did not wish to have the ejectment cases heard in the municipal
court when, in those very cases their right to continue occupying the
premises should and may properly be determined.

Instead of waiting until the landlord presented in court the
corresponding case of ouster or ejectment so that the court may decide
whether said tenants may continue as lessees paying the old rentals,
they tried to forestall said action for ejectment by filing these
eleven cases of consignation which we now find to be improper. Then,
almost immediately, they filed the case for declaratory relief which
was promptly dismissed by the trial court. During all this time, they
said to it that hearing on the ejectment cases was suspended. And when
the municipal court in view of the dismissal of the consignation cases
and declaratory relief case in the trial court, was set to hear the
ejectment cases, the two tenants who were defendants in the ejectment
cases by means of prohibition proceedings sought to stay the hand of
the Municipal Court and succeeded in obtaining a writ of preliminary
injunction against the trial court. When that prohibition case was
dismissed, they appealed to this Court as already stated. Because the
writ of preliminary injunction continued in force pending the appeal to
this Court, upon motion of counsel for respondent landlord, we
dissolved said injunction by resolution of this Court of June 27, 1949,
which we quote below:

“In L-2850, Ong Kim Pan etc. vs. Hon.
Francisco Geronimo et al., acting upon the motion to dissolve the writ
of preliminary injunction issued during the pendency of this
prohibition case in the Court of First Instance of Manila, and
considering the reasons therein given in support of said motion as well
as those adduced in support of the opposition to the same, and
considering that in the decision appealed from, the trial court found
that the Municipal Court had the right to hear and adjudge the
ejectment cases involved, and believing further that the interests of
justice require that the hearing of said ejectment cases which had been
suspended for about two (2) years be no longer delayed, the motion for
the dissolution of the writ of preliminary injunction is hereby
granted.”

This action and attitude of the tenants which resulted in
substantial prejudice and damage to the landlord who could neither
recover possession of his property nor receive rentals therefor is far
from commendable and cannot be viewed with favor by this Tribunal. For
over two years, by court actions and proceedings which one might set in
the category of dilatory tactics, the landlord and owner of property
was prevented from obtaining redress from the courts by proving his
right to recover possession of the premises detained by his tenants who
refused to pay the rentals fixed by him and who at the same time
equally refused to vacate the premises, or at least have their right to
continue occupying the premises determined in a proper case of
ejectment.

On June 24, 1949, this Court passed a resolution which is self-explanatory and which we quote below:

“Acting upon the motion ‘for payment of deposited
rents’ filed by counsel for respondent- appellee in case G. R, Nos.
L-2554-2564, Ching Pue, et al. vs. Benito Gonzales; whereas there is
complete agreement that these amounts repre sent accrued rents, long
over due, upon the building of respondent-appellee, the sole
disagreement between the latter and the petitioners being that
respondent-appellee is demanding greater amount; whereas there is no
conceivable possibility that respondent-appellee’s title to these
amounts by some turn of circumstances might be altered or lost; whereas
the payment of said amounts over to respondent-appellee cannot in any
manner or form prejudice the rights of the petitioners in their various
suits against respondent-appellee or in the possessory action for
unlawful detainer instituted against them; and whereas the law and the
Rules of Court abhor hairsplitting technicality that defeats justice,
protects no right, and violates no policy;
“Wherefore, let the motion be, and it hereby is, granted.”

On December 13, 1949, counsel for respondent-appellee filed another
motion asking that the deposits made by the petitioners-appellants from
June, 1949 until the date of the motion, be turned over to him
(respondent) without prejudice to his claim for higher rents. Said
motion was denied by resolution of this Court of January 9, 1950. On
April 28, 19?0 counsel for the respondent-appellee again filed a motion
asking among other things that the money deposited by the appellants
now in the hands of the Clerk of Court of this Court be turned over to
respondent without prejudice to the latter’s claim for a higher rent,
thereby reiterating the request made in his previous motion. After
considering the written opposition of counsel for the appellants and
the reply thereto of counsel for respondent-appellee, we believe that
the ends of justice will be better served by granting said motion; and,
for the same reasons contained in our resolution of June 24, 1949, it
is hereby ordered that the Clerk of Court turn over to
respondent-appellee all monies deposited by the appellants in court
pending appeal.

In view of all the foregoing, the decisions in these eleven cases of consignation appealed from, is hereby affirmed, with costs.

Ozaeta, Pablo, Bengzon, Tuason, and Reyes, JJ., concur.