The person I owe has become incapacitated and has no one authorized to receive payment - how do I discharge my debt?

Incapacity is one of the 'consignation alone' cases

Article 1256 gives two ways to discharge a debt you cannot hand over normally. The usual way needs a tender first, and works only if the creditor to whom tender of payment has been made refuses without just cause to accept it. But the article lists five situations where the tender step is unnecessary and Consignation alone shall produce the same effect. Your case is the second on that list: When he is incapacitated to receive the payment at the time it is due. Because a creditor who has lost the capacity to receive payment, with no one authorized to act for him, cannot validly take your money, the law lets you go straight to consignation.

Why you cannot safely just pay him anyway

It is tempting to simply hand the money to the incapacitated creditor or a relative and consider yourself done. That is risky. Payment must be made to someone with the legal capacity or authority to receive it; money pressed into the hands of a person who can no longer manage his own affairs, or of someone with no authority to collect, may not discharge you at all. You could be told later that the debt was never validly paid and be made to pay a second time. Article 1256 exists precisely to protect you from that trap: rather than gamble on an invalid payment, you place the sum with the court.

What consignation achieves

Consignation is the deposit of what you owe with the proper court, in place of the creditor. When your ground is the creditor's incapacity, consignation alone brings the same result the article gives elsewhere: the debtor shall be released from responsibility by the consignation of the thing or sum due. Once the deposit is valid, your obligation stops running, so interest, penalties and default consequences cease to build against you from that point. The money waits in the court's custody for the creditor, or for whoever is eventually authorized to act for him, to claim it. You have done what the law asks and are discharged.

It has to be done properly

A few limits keep this from being automatic. Consignation is a formal deposit made under the requirements the Code sets out in the articles that follow; simply setting the money aside, or telling the family you are ready to pay, does not discharge the debt. If a guardian or other representative is in fact appointed and authorized to receive payment, the ordinary route of paying that person becomes available and the ground of incapacity may no longer fit. And the same article covers other situations, an absent or unknown creditor, competing claimants, a refused receipt, a lost title, so if your facts change, make sure the ground you invoke still matches your real problem.

Cases citing this provision

These Supreme Court decisions cite the provision above. We list them so you can read them yourself; the summaries of what each decided are not ours to give.

• Sps. Ricardo and Lydia Llobrera, et al. vs. Josefina V. Fernandez, G.R. No. 142882, May 2, 2006 — read the decision on LawPhil →
• Raquel Estipona (Lelandlord E. Sto. Domingo) and Sps. Alberto Co and Lulu Co, G.R. No. 207407, September 29, 2021 — read the decision on LawPhil →
• Edita A. De Leon, Lara Bianca L. Sarte and Renzo Edgar L. Sarte, G.R. No. 243733, January 12, 2021 — read the decision on LawPhil →
• Philippine National Bank vs. Lilibeth S. Chan, G.R. No. 206037, March 13, 2017 — read the decision on LawPhil →

Related provisions

• Civil Code, Article 1256 — Tender of Payment and Consignation