In B.E. San Diego, Inc. v. Rosario T. Alzul, the Supreme Court ruled against Rosario Alzul, denying her right to consign payment for a property purchase due to her failure to comply with a previous court order’s strict timeline. The Court emphasized that Alzul’s delay in making full payment within the non-extendible period previously mandated forfeited her rights to the property. This decision underscores the importance of adhering to court-ordered deadlines and clarifies the requirements for valid consignation, particularly in real estate transactions. This case serves as a reminder that even with established rights, failing to meet court-imposed deadlines can result in the loss of those rights.

Missed Deadlines and Lost Rights: The Alzul Property Battle

The legal saga began when Rosario T. Alzul purchased four subdivision lots from B.E. San Diego, Inc. in 1975 under a contract to sell. Over the years, the property became entangled in a series of assignments, defaults, and legal battles, eventually reaching the Supreme Court in G.R. No. 109078. In that case, the Court affirmed Alzul’s inchoate rights to the property but set a non-extendible deadline of thirty days for her to make full payment. When Alzul failed to meet this deadline, B.E. San Diego refused her subsequent attempts to pay, leading to further litigation and the present case. At the heart of this dispute lies the question: Can a party be granted leniency in complying with a court-ordered deadline, even when that deadline is explicitly non-extendible?

The Supreme Court addressed several procedural and substantive issues. The Court examined whether Rosario Alzul’s petition before the Court of Appeals (CA) was deficient due to the absence of essential pleadings from the Housing and Land Use Regulatory Board (HLURB) and the Office of the President (OP). The Court clarified that while Rule 43 of the Rules of Civil Procedure requires the submission of material portions of the record, the CA has the discretion to determine if the omission warrants dismissal. In this instance, the CA found no sufficient grounds for dismissal, emphasizing that the core issue could be resolved based on the available documents.

Turning to the main issue, the Court focused on Alzul’s failure to comply with the thirty-day non-extendible deadline set in its June 17, 1996 Resolution in G.R. No. 109078. The Court noted that Alzul attempted to tender payment within this period, but B.E. San Diego refused to accept it. Following this refusal, Alzul did not immediately consign the payment with the court. Instead, she filed a manifestation with the Supreme Court and later initiated an action for consignation before the HLURB, which was well beyond the original deadline. This delay was deemed fatal to her claim.

The Court underscored the distinction between tender of payment and consignation. A tender of payment is an act preparatory to consignation, representing an attempt to settle the obligation privately. Consignation, on the other hand, involves depositing the amount due with the judicial authority when the creditor refuses to accept payment. The Court emphasized that a valid consignation requires compliance with specific legal requirements, including depositing the amount due at the disposal of the judicial authority and providing notice to all interested parties. Here, Alzul’s failure to deposit the amount with the HLURB rendered her attempted consignation invalid.

The Supreme Court cited the case of St. Dominic Corporation v. Intermediate Appellate Court, which held that when a party is judicially directed to make payment within a specific period, they must consign the amount with the court within that period or a reasonable time thereafter, if the creditor refuses to accept payment. Alzul’s delay of over a year in pursuing consignation was deemed unreasonable and constituted a waiver of her rights. Furthermore, the Court clarified that the action for quieting of title, which initially established Alzul’s rights, was a quasi in rem proceeding, binding only on the parties involved. Since B.E. San Diego was not a party to that case, the court’s directives could not be directly enforced against them.

In this case, the Court noted that B.E. San Diego was not a party to the original case and, therefore, not under the jurisdiction of the previous courts’ orders. The Court explained that the action for quieting of title is a quasi in rem proceeding, which means it is “against the person in respect of the res” and is conclusive only between the parties involved. Thus, the directive to transfer ownership to Alzul could not be directly enforced against B.E. San Diego. The Court also highlighted that even if B.E. San Diego could be compelled to accept payment, Alzul’s failure to consign the money with the court of origin, following the refusal of payment, was a critical error.

Despite acknowledging Alzul’s previous payments on the property, the Supreme Court emphasized that equity could not override statutory law or established rules of procedure. While the Court sympathized with Alzul’s situation, it held that equity is only available in the absence of law and cannot be used to reward negligence or disregard for legal requirements. Therefore, the Court reversed the Court of Appeals’ decision and reinstated the rulings of the Office of the President, effectively denying Alzul’s claim to the property.

The Supreme Court, however, ordered B.E. San Diego to reimburse Alzul for all payments she had made on the property under the contract to sell, to prevent unjust enrichment. The Court also directed the Register of Deeds to cancel the titles issued to the Ventura spouses, reinstate the titles in the name of B.E. San Diego, and lift the lis pendens in favor of Alzul. Finally, Alzul and all persons claiming under her were ordered to vacate the property and surrender it to B.E. San Diego within sixty days of the judgment’s finality.

FAQs

What was the key issue in this case?	The key issue was whether Rosario Alzul was entitled to consign payment for a property despite failing to comply with a previous court order’s non-extendible deadline for making full payment.
What is consignation, and why is it important?	Consignation is the act of depositing the amount due with the judicial authority when the creditor refuses to accept payment; it is important because it allows the debtor to fulfill their obligation and avoid penalties.
What does it mean that the June 17, 1996, resolution by the Supreme court gave a non-extendible period?	Giving the term as non-extendible means that it cannot be extended and or renegotiated.
Why did the Supreme Court rule against Rosario Alzul?	The Supreme Court ruled against Alzul because she failed to consign the payment within the thirty-day non-extendible deadline set by the Court and her subsequent delay constituted a waiver of her rights.
What is the difference between tender of payment and consignation?	Tender of payment is an attempt to settle the obligation privately, while consignation involves depositing the amount due with the judicial authority when the creditor refuses to accept payment.
What was the significance of B.E. San Diego not being a party to the original case?	Because B.E. San Diego was not a party to the original case, the court’s directives in that case could not be directly enforced against them, as the action was considered a quasi in rem proceeding binding only on the parties involved.
Did Rosario Alzul lose all rights to the property?	Yes, because of the failure of Alzul to effect payment to petitioner within the 30-day period or soon thereafter, her rights to buy the disputed lots have been forfeited, lost, and extinguished.
What was B.E. San Diego required to do in this case?	B.E. San Diego was required to reimburse Rosario Alzul for all payments she had made on the property under the contract to sell, to prevent unjust enrichment.

This case highlights the critical importance of complying with court-ordered deadlines, particularly in property disputes. While equity may sometimes provide relief, it cannot override statutory law or procedural rules. Parties must ensure they meet all legal requirements and act promptly to protect their rights. The Supreme Court decision also reaffirms the necessity of proper consignation procedures when creditors refuse payment, emphasizing the need to deposit the amount due with the judicial authority within the prescribed timeframe.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: B.E. San Diego, Inc. v. Alzul, G.R. No. 169501, June 08, 2007