Tender of Payment and Consignation: What if the Creditor Refuses?
Quick Answer: A debtor is not ordinarily released merely by offering payment. When a creditor unjustifiably refuses a valid tender, Article 1256 allows the debtor to be released through consignation—placing the thing or amount due at the disposal of judicial authority while complying with the Civil Code’s notice and procedural requirements.
Tender Is Different From Consignation
| Step | Function |
|---|---|
| Tender of payment | Actual, unconditional offer of the exact performance due |
| Prior notice | Informs interested persons that consignation will be made |
| Consignation | Deposit of the thing or sum with judicial authority |
| Subsequent notice | Notifies interested persons after consignation |
| Acceptance or judicial declaration | Supports release and cancellation of the obligation |
When Can Consignation Occur Without Prior Tender?
Article 1256 identifies situations such as when the creditor is absent or unknown, incapacitated to receive, refuses to issue a receipt without just cause, when two or more persons claim the same right to collect, or when the title of the obligation has been lost.
Exact Compliance Matters
Consignation is technical. The amount or thing must conform to the obligation, be due, and be placed at judicial disposal with the required notices. A partial, conditional or wrongly computed tender may fail.
Evidence Checklist
- Contract, statement and payoff computation
- Proof the obligation is due
- Funds or thing actually available for delivery
- Written tender and proof of service
- Creditor’s refusal or inability to receive
- Notices to interested persons
- Court deposit and subsequent notice records
Practical Next Steps
- Compute the exact amount, including properly due interest and charges.
- Review the contract’s payment method and place.
- Make an unconditional, provable tender unless Article 1256 dispenses with it.
- Give required notice before consignation.
- File in the proper court and deposit as directed.
- Notify interested persons after consignation and seek the appropriate declaration.
Frequently Asked Questions
Is sending a check enough?
Not automatically. Validity depends on agreement, acceptance, sufficiency, conditions and whether legal tender was required.
Can I deposit payment in my own bank account?
No. Consignation means placing the amount or thing at judicial disposal through the proper procedure.
Does creditor refusal erase interest?
Not by itself. Proper tender and consignation and the governing facts determine release and related consequences.
Do I need a court case?
Consignation is a judicial remedy. Because strict compliance matters, legal assistance is prudent.
See valid payment rules and delay or default.
If payment in cash is not the agreed solution, compare dation in payment and transferring property instead of cash.
Primary Legal Sources
- Civil Code of the Philippines, Republic Act No. 386 — LawPhil
- Civil Code of the Philippines — Supreme Court E-Library
Legal verification date: September 15, 2026. This guide provides general legal information, not advice for a specific transaction or dispute.