Consignation

Tender -the act of offering the creditor what is due him together with a demand that the creditor accept the same (When creditor refuses w/o just cause to accept payment, he becomes in mora accepiendi & debtor is released from responsibility if he consigns the thing or sum due)

Consignation – the act of depositing the thing due with the court or judicial authorities whenever the creditor cannot accept or refuses to accept payment; generally requires prior tender of payment

REQUISITES OF VALID CONSIGNATION:
(1) Existence of valid debt

(2) Consignation was made because of some legal cause - previous valid tender was unjustly refused or circumstances making previous tender exempt

(3) Prior Notice of Consignation had been given to the person interested in performance of obligation (1st notice)

(4) actual deposit/Consignation with proper judicial authorities

(5) subsequent notice of Consignation (2nd notice)

Effects: Extinguishment of obligation

(1) Debtor may ask judge to order cancellation of obligation

(2) Running of interest is suspended

(3) Before creditor accepts or before judge declares consignation has been properly made, obligation remains ( debtor bears risk of loss at the meantime, after acceptance by creditor or after judge declares that consignation has been properly made – risk of loss is shifted to creditor)

Consignation w/o prior tender – allowed in:

1. creditor absent or unknown/ does not appear at the place of payment

2. incapacitated to receive payment at the time it is due
3. refuses to issue receipt w/o just cause

4. 2 or more creditor claiming the same right to collect

5. title of obligation has been lost