Article 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.

Consignation alone shall produce the same effect in the following cases:

1. When the creditor is absent or unknown, or does not appear at the place of payment;
2. When he is incapacitated to receive the payment at the time it is due;
3. When, without just cause, he refuses to give a receipt;
4. When two or more persons claim the same right to collect;
5. When the title of obligation has been lost.

Kung ang nagpautang kung saan ang kabayaran ang ginawa at tinanggihan ang walang kadahilanan na tanggapain ito, ang nangutang ay maaaring pakawalan sa kanyang responsibilidad sa pamamagitan ng konsignasyon ng mga bagay o kabuuan na dapat bayaran.

Ang konsignasyon ay maaaring maglabas ng parehong epekto sa mga sumusunod na pangyayari.

1. Kung kailan ang nagpautang ay wala o hindi na Makita, o hindi na Makita sa lugar na magbabayaran.
2. Kung kailan sya ay walang kakayahan na tumanggap ng bayad kapag dumating na ang takdang panahon na dapat ng bayaran.
3. Kung kalian, walang dahilan, ay tinanggihan nya na magbigay ng resibo;
4. Kung kalian dalawa o higit pang mga tao ay humahabol ng karapatan na kumolekta;
5. Kung kalian ang titulo ng obligasyon ay nawala.

 

Rural Bank v. Court of Appeals

While tender generally precedes consignation, consignation may be allowed without prior tender in certain cases (e.g., if there are considerations of equity as when a prior tender or offer appears to be useless).

Article 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 provision which regulate the payment.

Upang mapalaya ang may utang mula sa consignation ng kanyang pagkakautang, kinakailangan muna niyang ipaalam ito sa mga taong interesado sa pagtupad ng obligasyon.

Ang consignation ay walang bisa kapag ito ay hindi ginawa sa paraang naaayon sa probisyon na nag-aayos ng kabayaran.

Discussion:

The purpose of the announcement if to give the creditor the chance to accept the tender of payment and avoid unnecessary litigation.

The article emphasises on the fact that consignation must be strictly made in consonance with the provisions of the law in order for it to be effectual or valid.

Article 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.

Ang consignation ay mangyayari sa pamamagitan ng pagdeposito sa korte ng bagay na obligasyong ibigay, at ang korteng ito ay kung saan ang tender of payment ay kailangang patunayan, sa tamang kaso, at sa paghahayag ng consignation ng iba pang kaso.

Discussion

Distinction Between Tender of Payment and Consignation
Basis	Tender of Payment	Consignation
1.       Nature	It is the antecedent of consignation or preliminary act to consignation.	It is the principal or consummating act for the extinguishment of the obligation.
2.       Effect	It does not by itself extinguish the obligation.	It extinguishes the obligation when declared valid.
3.       Character	It is extrajudicial.	It is judicial for it requires the filing of complaint in court.

 

Requisites of Consignation:

1. Presence of existing valid debt which is due
2. Presence of prior valid tender of payment
3. Refusal of creditor to accept amount or thing tendered
4. Presence of prior notice of consignation
5. Actual deposit of the amount or thing in court or competent authority
6. Second notice after the making of the deposit is mandatory

 

Case Illustration:

Limkako vs De Teodoro 47 Phil 313 (1943)

Ponente: J. Ozaeta

Facts:

The Limkakos and David were co-owners of a property in Manila. The Limkakos mortgaged their property to David who, before her death, donated the mortgage credit to her adopted daughters, de Teodoro and de Sison. The Limkakos sold their mortgaged property to Sison. De Teodoro refused to have her mortgage credit payed off, thus the Limkakos consigned the payment to the office of the clerk of court who, in turn, deposited the check in the Insular Treasury as fiduciary funds.

The plaintiffs then brought this action to compel the Teodoros to accept the payment.

Issue: Whether or not the consignation is valid?

Held:

Yes.

Under Article 1176 of the Civil Code (now Article 1256 of the New Civil Code), if a creditor to whom tender of payment has been made should refuse without reason to accept it, the debtor may relieve himself of liability by the consignation of the thing due. Article 1177 of the Civil Code (now Article 1257 of the New Civil Code) states that in order that the consignation of the thing due may release the obligor, previous notice thereof must be given to the persons interested in the performance of the obligation. And under Article 1178 (now 1258 of the New Civil Code), consignation shall be made by the delivery of the things due to the court, accompanied by proof of tender, when required, and of notice of the consignation in other cases. After the consignation has been made, the persons interested shall also be notified thereof.

There was a tender of payment and a refusal by Mrs. Teodoro due to her preference that she be the one to purchase the property instead of Sison. The SC ruled that the refusal to accept the payment was invalid.

The second requisite for consignation to be valid is that the previous notice of the consignation be made to the person interested in the performance of the obligation. The record of the case is silent on this point, but no attack on the consignation is made by the defendants.

The third requisite is that after the consignation has been made, the person interested shall also be notified thereof. This was fulfilled by the service of summons.

The consignation therefore is valid, hence, the Teodoros are required to accept the tendered payment.