SPOUSES TEOFILO ERCILLO AND TERESITA ERCILLO, PETITIONERS, VS. COURT OF APPEALS AND SPOUSES LUTGARDA CIFRA AND BENJAMIN CIFRA, SR., REPRESENTED BY THEIR SON AND ATTORNEY-IN-FACT…

This is a petition for review of the decision of the Court of
Appeals in CA-G.R. No. SP-10524 which affirmed the decision of the then Court
of First Instance of Rizal, Quezon
City, Branch IX, affirming the judgment of the City
Court of Quezon City.

The facts of the case are as follows:

Private respondents spouses Benjamin Cifra
and Lutgarda Cifra leased
an apartment building located at 11-C Purdue Street, Cubao,
Quezon City, to herein petitioners spouses Teofilo Ercillo and Teresita Ercillo at a monthly
rental of P140.00 payable within the first five (5) days of the month at the
residence of private respondents.

On November
23, 1976, private respondents filed an action for unlawful detainer
with the City Court of Quezon City.  It was alleged in the complaint that the
petitioners failed to pay the rentals for the month of August, 1976 up to the
filing of the complaint; that private respondents demanded from petitioners
payment of the accrued rentals and the surrender of the possession of the
leased premises to them before the complaint was filed and that the petitioners
neither paid the accrued rentals nor surrendered the possession of the leased premises.

Petitioners, on the other hand, alleged that they never defaulted
in the payment of their rentals; that private respondents refused to accept
their payments; that they deposited the payments with the Family Savings Bank,
Account No. 419022473, in the name of Mrs. Teresita Ercillo or Mrs. Lutgarda Cifra and that the petitioners were advised by the former
of the said deposit.

Sometime also in November, 1976, the private respondents filed a
complaint against the petitioners with the Office of the Civil Relations (OCR),
Philippine Constabulary at Camp Crame, Quezon City.  The petitioners then withdrew the rentals
deposited with the Family Savings Bank and deposited the money and the accruing
rentals with the OCR.  When the action for
ejectment was pending with the City Court, the
petitioners deposited the rentals with the said court.

After trial, the City Court rendered a decision in favor of
private respondents, the dispositive portion of the
decision provides:

“WHEREFORE, x x x
this Court finds the material allegations in the complaint filed in this case
to be duly proved with convincing and satisfactory evidence and rendered
judgment in favor of plaintiffs and against defendants spouses TEOFILO ERCILLO
and TERESITA ERCILLO, as follows:

“1.     Ordering
defendants and all persons claiming rights under them to vacate the premises
located at 11-C Purdue Street, Cubao, Quezon City and restore the peaceful possession thereof to
plaintiffs;

“2.     Ordering
defendants, jointly and severally, to pay plaintiffs the sum of P1,680.00 representing accrued monthly rentals for the period
August, 1976 to July 1977 at P144.00 a month;

“3.     Ordering defendants,
jointly and severally, to pay plaintiffs the further sum of P144.00 a month
commencing on August 1, 1977 and every month thereafter until they and all
persons claiming rights under them finally vacate the premises and restore the
peaceful possession thereof to plaintiffs;

“4.     Ordering defendants
jointly and severally, to pay the sum of P1,500.00, as
and for attorney’s fees; and

“5.     Ordering
defendants, jointly and severally, to pay the costs of the suit.

“The counter-claim interposed by the defendants is hereby
dismissed for lack of merit.

“SO ORDERED.” (pp. 14-15, Rollo)

On appeal to the then Court of First Instance of Rizal, Seventh Judicial District, Quezon City, the decision of the
City Court was affirmed in toto.

The petitioners filed a petition for review with respondent Court
of Appeals which dismissed the petition for lack of merit in a decision
promulgated on September 16, 1980
(pp. 14-18, Rollo).  The
decision of the Court of Appeals stated:

“Since the consignation of the accrued rentals with the Court
was made only during the pendency of the ejectment case, although they (petitioners) had effected
deposits with the Office of the Civil Relations, which office as opined by the
trial court, “is not a judicial authority,” such act could not have
and did not have the effect of discharging petitioners’ obligation in the
payment of rentals.

“Thus, no judicial consignation having been
made in accordance with Art. 1256, 1257 and 1258 of the New Civil Code;

“WHEREFORE, for lack of merit the instant petition for review
is hereby DISMISSED.

“SO ORDERED.” (p. 18, Rollo)

On December 1, 1980,
petitioners filed the instant petition with this Court.

The petitioners contend that respondent Court of Appeals
committed a legal error when it ruled that the deposit of the rentals with the
bank did not release the petitioners from their obligation to pay the rentals and
that LOI 768 which took effect only on November
16, 1978 cannot apply to this case which was filed on November 23, 1976.

The petition is devoid of merit.

The issue to be resolved in this case is whether or not the
private respondents had a valid ground for ejecting petitioners.

The ground raised by private respondents in ejecting petitioners
from the leased premises is the latter’s failure to pay rents due.  There is no question that this is one of the
grounds by which a lessor may judicially eject the lessee
under Article 1673 of the New Civil Code. 
Further, Section 2, Rule 70 of the Rules of Court requires that a lessor or his legal representative shall bring an action
against a lessee for failure to pay rent due only after the lessee shall have
failed to pay such rent for a period of fifteen days after a written demand therefor had been made. 
Private respondents assert that there was no payment of the rent due
within the fifteen (15) day period prescribed by the rules nor even after the
lapse of the fifteen (15) day period after a written demand to pay and to
vacate was made on petitioners.

The petitioners, for their part, assert that their obligation to
pay rent had been extinguished in view of their consignation of the rent due
with the bank after the private respondents refused to accept them.

The law on tender of payment and consignation as a mode of
extinguishing an obligations is covered by Article
1256, Article 1257 and Article 1258 of the New Civil Code.

“Art. 1256.  If the
creditor to whom tender of payment has been made
refuses without just cause to accept it, the debtor shall be released from
responsibility by the consignation of the thing or sum due.

“x x x.

“Art. 1257. In order that the consignation of the thing due may release the
obligor, it must first be announced to the persons interested in the
fulfillment of the obligation.

“The consignation shall be ineffectual if it is not made strictly in consonance
with the provisions which regulate payment.

“Art. 1258. Consignation shall be made by depositing the things due at the disposal of judicial
authority before whom the tender of payment shall be
proved, in a proper case, and the announcement of the consignation in other
cases.

“The consignation having been made, the interested parties
shall also be notified thereof.”

It is the requirement under Article 1258 which had not been
strictly complied with by petitioners.  What the law requires is the deposit of the
thing due at the disposal of judicial authority before whom
the tender of payment shall be proved, in a proper case.  The deposit of the rentals with the bank is not the consignation contemplated by
law.  Depositing the rentals in the bank
does not place such rental at the disposal of the judicial authority.

Petitioners argue further that since the case is still pending,
the full legal effect of P.D. 20 together with its implementing Instructions,
LOI 768, should be made to apply in this case.

P.D. 20, issued on October 12, 1972, amended Republic Act No. 6359
regulating rentals for dwelling units.  It was not until November 16, 1978 when Letter of Instruction No.
768 was issued implementing P.D. 20.  It
provided, among others:

“3.  The following shall not constitute grounds for
judicial ejectment of lessees:

“a)  That the lessee has
failed to pay any increased rental not mutually agreed upon; provided, that in
case of refusal of the lessor to accept payment of
the rent previously agreed upon, the lessee shall either consignate
the amount in court or deposit the said amount in a bank for the account of the
lessor.

Petitioners seek shelter under this provision.  However, it should be noted that LOI 768
which allows the deposit of accrued rentals in a bank as an alternative to
consignation in court of rental payments which the lessor
refuses to accept, was issued only on November
16, 1978.  The action for ejectment, on the other hand was filed on November 23, 1976
or some two (2) years before the issuance of LOI 768 when the law in effect
then was Article 1257 of the New Civil Code. 
Clearly, the private respondents had, at the time of the institution of
the complaint, a valid ground for ejecting petitioners.

ACCORDINGLY, the petition is DENIED for lack of merit.

SO ORDERED.

Narvasa, (Chairman), Cruz, Gancayco, and Grino-Aquino, JJ., concur.