G.R. No. L-24680 - Vda. de Murga vs. Chan

In October 1943, the plaintiffs and appellants borrowed P4,000 from the defendant and appellee.
The borrowed sum was in Japanese Military notes.
To secure the loan, a parcel of land was mortgaged in favor of the creditor.
The repayment was promised to be made within a period of five years.

On November 18, 1945, the plaintiffs filed an action seeking a declaration that the obligation was already fulfilled.
They further requested the cancellation of the deed of mortgage, arguing that their tender of payment should have relieved them of the debt.

The defendant moved to dismiss the action on the ground that the plaintiffs had no cause of action.
The dismissal was based on the assertion that there was no allegation of consignation of the thing due in court as required by law when tender of payment is rejected.
The lower court granted the motion to dismiss, prompting the plaintiffs to appeal the decision.

Whether the mere tender of payment by the plaintiffs, without the consignation of the thing due in court, constitutes a legal basis to declare the debt as paid under the Civil Code.
Whether the rejection of the tender by the creditor, in the absence of a consignation, sufficiently extinguishes the debtor’s obligation.
How the provisions of Articles 1176, 1177, and 1178 of the Civil Code are to be applied in a case involving the payment (or tender of payment) for a secured debt and the redemption price.
If the rule on the consignation of the thing due is applicable, even in the context of payments related to redemption prices, in order to relieve the vendor from the obligation.