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the party for whose benefit the – 2-notice rule: 1st notice: notice of the
term has been constituted. intent to consign. 2nd notice: notification
informing the creditor of the consignation
Cession of the thing. Absence of one of these
notices will constitute a valid defect and
– Debtor abandons property in favor of the
will invalidate the consignation.
creditor so that the latter may dispose of
the property in order to apply the same to
– Consignation may be made judicially or
the debts.
extra-judicially. Extra-judicial
consignation, is governed by BP 25, which
– If one creditor objects to the payment by
refers to rentals in arrears. Extra-j is done
cession, the remedy for the debtor is
through opening an account in a bank in
voluntary insolvency to attain the same
the name of the creditor or lessor to
objective.
enable such person to withdraw/claim
Tender of Payment and Consignation what has been deposited. In extra-j, the
debtor can’t withdraw the thing. Judicial
– Tender of payment is the offer to pay. consignation is obviously done with the
court.
– Consignation is the act of depositing the
thing due or placing the same under – If deposit is made in a place that is not
judicial authority/disposal when the the proper place of payment, the court
creditor refuses to accept payment held in the case of Chua Kay v. Lim Chang
without just cause. that in case of loss of the thing, even if
due to fortuitous event, such will not
– Requisites: (a) valid tender of payment extinguish the obli.
(satisfies the requisites of payment); (b)
depositing the thing due to judicial – The debtor may withdraw what has been
disposal. deposited during the pendency of the
case because he still owns the thing.
– There may be consignation without valid However, the obli will subsist. He may
tender of payment (Art. 1256): also withdraw even after the consignation
• Creditor is absent, unknown, or is declared proper, provided that the
does not appear at the place of creditor consents to the withdrawal. In
payment. (He must have had no this case, the obli will remain but the
legal representative) creditor will lose his preference over the
• Creditor is incapacitated at the object and the parties interested in the
time the obli falls due, or at the fulfillment of the obli will have to be
time payment, or offer of payment, released from the obli.
is made. (Also, there must have
been no legal representative) – The creditor may prevent the debtor
• Creditor, without just cause, from withdrawing by claiming what has
refuses to give a receipt. been deposited.
• 2 or more persons claim the right – If the creditor claims the thing w/o
to collect. reservation, it will extinguish obli. If he
• Title of the obli has been lost. claims it w/ certain reservations, then his
withdrawal will only partially extinguish
– Obli is extinguished when (a) creditor the obli.
claims the thing consigned, or (b) the
court declares that the consignation was – Consignation is not proper if what is
properly made. involved is the right of option or the right
of redemption because there is no debt
due.
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Effect of condonation:
other but the one who can oppose is not creates a new one to take the place of the
precluded from invoking compensation. extinguished one.
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