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Unaccepted Offer

Sec. 35. Unaccepted offer. — An offer in writing to pay a particular sum of money or to deliver a written instrument or specific personal property is, if rejected without valid cause, equivalent to the actual production and tender of the money, instrument, or property. (Rule 130, Rules of Court)

● The offer must be in writing.

● 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. (Art. 1256 Civil Code)

What is tender of payment?

● Tender of payment is the definitive act of offering the creditor what is due him or her, together with the demand that the creditor accept the same. (Cinco vs. CA, G.R. No. 151903, October 9, 2009)

● Tender of payment is the manifestation by debtors of their desire to comply with or to pay their obligation. (Ramos vs. Sarao, G.R. No. 149756. February 11, 2005)

Is mere tender of payment enough to extinguish an obligation?

● A mere tender of payment is not enough to extinguish an obligation. Both tender of payment and consignation must be validly done in order to effect the extinguishment of the obligation. (B.E. San Diego, Inc. vs. Alzul, G.R. No. 169501, June 8, 2007)

● A refusal without just cause is not equivalent to payment; to have the effect of payment and the consequent extinguishment of the obligation to pay, the law requires the companion acts of tender of payment and consignation. (Cinco vs. CA)

Distinguish consignation from tender of payment

Consignation is the act of depositing the thing due with the court or judicial authorities whenever the creditor cannot accept or refuses to accept payment, and it generally requires a prior tender of payment. It should be distinguished from tender of payment. Tender is the antecedent of consignation, that is, an act preparatory to the consignation, which is the principal, and from which are derived the immediate consequences which the debtor desires or seeks to obtain. Tender of payment may be extrajudicial, while consignation is necessarily judicial, and the priority of the first is the attempt to make a private settlement before proceeding to the solemnities of consignation. Tender and consignation, where validly made, produces the effect of payment and extinguishes the obligation. (B.E. San Diego, Inc. vs. Alzul)

What are the requisites of a valid consignation?

The requisites of a valid consignation: 

(1) a debt due; 

(2) the creditor to whom tender of payment was made refused without just cause to accept the payment, or the creditor was absent, unknown or incapacitated, or several persons claimed the same right to collect, or the title of the obligation was lost; 

(3) the person interested in the performance of the obligation was given notice before consignation was made; 

(4) the amount was placed at the disposal of the court; and 

(5) the person interested in the performance of the obligation was given notice after the consignation was made. (Dalton vs. FGR Realty and Development Corp., G.R. No. 172577, January 19, 2011)

How is consignation made?

If the creditor refuses the tender of payment without just cause, the debtors are discharged from the obligation by the consignation of the sum due. Consignation is made by depositing the proper amount to the judicial authority, before whom the tender of payment and the announcement of the consignation shall be proved. All interested parties are to be notified of the consignation. Compliance with these requisites is mandatory. (Ramos vs. Sarao)

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