Dorotea leased portions of her 2,000 sq. m. lot to Monet, Kathy, Celia, and Ruth for five (5) years. Two (2) years before the expiration of the lease contract, Dorotea sold the property to PM Realty and Development Corporation. The following month, Dorotea and PM Realty stopped accepting rental payments from all the lessees because they wanted to terminate the lease contracts.
Due to the refusal of Dorotea to accept rental payments, the lessees , Ruth, et al., filed a complaint for consignation of the rentals before the Regional Trial Court (RTC) of Manila without notifying Dorotea.
Is the consignation valid? (4%)
Suggested answer only. Not an official answer and not legal advice.
No, the consignation is not valid. Under Article 1257 of the Civil Code, in order that the consignation of the thing due may release the obligor, it must first be announced
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Quick check
Under Article 1257 of the Civil Code, what is required before a debtor may validly make a judicial consignation of payment?
Article 1257 mandates that prior notice of consignation must be given to all persons interested in the fulfillment of the obligation.
Under Article 1258 of the Civil Code, what second notice must be served after depositing the sum due in court?
Article 1258 explicitly requires a second notice to interested parties after the consignation has been deposited.
What is the legal consequence if lessees deposit rental payments with the court without notifying the lessor before or after deposit?
Consignation made without mandatory prior and subsequent notices is invalid and fails to extinguish the obligation.
Why was the consignation filed by lessees Ruth et al. invalid when Dorotea refused to accept rental payments?
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In a contract of lease, what must a lessee do if the lessor unjustifiably refuses to accept tender of rental payments?
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Learn more about these topics
1. Consignation Notice Rule
Under Article 1256 and Article 1257 of the Civil Code, consignation is a judicial deposit of the thing or sum due when the creditor unjustifiably refuses to accept payment. To produce the effect of payment and release the debtor from liability, consignation must strictly comply with mandatory statutory requisites. First and foremost, the consignation of the thing due must be announced in advance to the persons interested in the fulfillment of the obligation. Absent prior announcement to the creditor, the deposit in court does not constitute a valid consignation.
2. Dual Notice Requirement
The Civil Code mandates a two-stage notification process for a valid judicial consignation of payment. Under Article 1257, the debtor must give prior notice to the creditor of his intention to deposit the sum due. Following the deposit in court, Article 1258 requires a second notice informing the interested parties that consignation has actually been made. Compliance with both prior and subsequent notices is essential for procedural validity; non-compliance with either notice renders the consignation ineffectual and fails to extinguish the debtor's obligation.
3. Invalid Consignation Effect
When a debtor deposits funds with the court without serving the required notices to the creditor, the consignation is legally invalid and produces no debt-extinguishing effect. Merely filing a judicial complaint or depositing rental payments with the clerk of court does not cure the failure of notification. Consequently, the debtor remains in default or liable for obligations under the lease contract, and the creditor retains all legal remedies for breach, as the deposited amount does not legally operate as valid tender and payment.