- Petitioner
- Philippine National Bank
- Respondent
- Lilibeth S. Chan
- Citation
- G.R. No. 206037
- Court
- Supreme Court
- Division
- First Division
- Ponente
- Del Castillo, J.
- Decided
- March 13, 2017
Summary
This case involves a landlord-tenant dispute between property owner Lilibeth Chan and tenant Philippine National Bank (PNB) over unpaid rentals and the proper application of rental proceeds to an outstanding loan. Chan leased her commercial building to PNB and later obtained a loan secured by mortgage on another property, with rental payments assigned to PNB. When PNB failed to pay rentals from October 2004, Chan filed an unlawful detainer case. PNB deposited disputed rentals in a savings account rather than proper judicial consignation. The Supreme Court held that deposit in a savings account does not constitute valid consignation under Civil Code Articles 1256-1258, making PNB liable for 6% legal interest on delayed rental payments. The case was remanded to determine if any loan deficiency exists after PNB's P15.3M foreclosure bid, which would affect PNB's entitlement to the rental proceeds. The decision clarifies the strict requirements for valid judicial consignation and the mortgagee's rights in foreclosure proceedings.