Page 36 - Obligations & Contracts Module 1-2

*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