NORBERTO TIBAJIA, JR. and CARMEN TIBAJIA vs. THE
Every provision contained in, or made with
HONORABLE COURT OF APPEALS and EDEN TAN
G.R. No. 100290 June 4, 1993
FACTS: Case No. 54863 was a suit for collection of a sum
of money filed by Eden Tan against the Tibajia spouses.
RTC of Pasig, Metro Manila rendered its decision in favor of
the plaintiff Eden Tan, ordering the Tibajia spouses to pay
her an amount in excess of P300,000.00. On appeal, the
CA modified the decision by reducing the award of moral
and exemplary damages. The decision having become
final, Eden Tan filed the corresponding motion for
execution and thereafter, the garnished funds which by
then were on deposit with the cashier of the RTC of Pasig,
Metro Manila, were levied upon. Then Tibajia spouses
delivered to Deputy Sheriff Eduardo Bolima the total
money judgment in the following form:
Cashier's Check P262,750.00
Cash 135,733.70
————
Total P398,483.70
Private respondent, Eden Tan, refused to accept the
payment made by the Tibajia spouses and instead insisted
that the garnished funds deposited with the cashier of the
RTC of Pasig, Metro Manila be withdrawn to satisfy the
judgment obligation. Petitioners then filed a motion to lift
the writ of execution on the ground that the judgment
debt had already been paid but the motion was denied
by the trial court on the ground that payment in cashier's
check is not payment in legal tender and that payment
was made by a third party other than the defendant.
Hence this petition.
ISSUE: WON payment by means of check (even by
cashier's check) is considered payment in legal tender as
required by the Civil Code, RA 529, and the Central Bank
Act.
RULING: NO. The provisions of law applicable to the case
at bar are the following:
a. Article 1249 of the Civil Code which provides:
Art. 1249. The payment of debts in money shall be
made in the currency stipulated, and if it is not possible
to deliver such currency, then in the currency which is
legal tender in the Philippines.
The delivery of promissory notes payable to order, or
bills of exchange or other mercantile documents shall
produce the effect of payment only when they have
been cashed, or when through the fault of the creditor
they have been impaired.
In the meantime, the action derived from the original
obligation shall be held in abeyance.;
b. Section 1 of RA 529, as amended, which provides:
Sec. 1.
respect to, any obligation which purports to give the
obligee the right to require payment in gold or in any
particular kind of coin or currency other than
Philippine currency or in an amount of money of the
Philippines measured thereby, shall be as it is hereby
declared against public policy null and void, and of
no effect, and no such provision shall be contained in,
or made with respect to, any obligation thereafter
incurred. Every obligation heretofore and hereafter
incurred, whether or not any such provision as to
payment is contained therein or made with respect
thereto, shall be discharged upon payment in any
coin or currency which at the time of payment is legal
tender for public and private debts.
c. Section 63 of RA 265, as amended (Central Bank Act)
which provides:
Sec. 63. Legal character — Checks representing
deposit money do not have legal tender power and
their acceptance in the payment of debts, both
public and private, is at the option of the creditor:
Provided, however, that a check which has been
cleared and credited to the account of the creditor
shall be equivalent to a delivery to the creditor of cash
in an amount equal to the amount credited to his
account.
A check, whether a manager's check or ordinary check, is
not legal tender, and an offer of a check in payment of a
debt is not a valid tender of payment and may be refused
receipt by the obligee or creditor.
Petitioners erroneously rely on one of the dissenting
opinions in the Philippine Airlines case to support their
cause. The dissenting opinion however does not in any
way support the contention that a check is legal tender
but, on the contrary, states that "If the PAL checks in
question had not been encashed by Sheriff Reyes, there
would be no payment by PAL and, consequently, no
discharge or satisfaction of its judgment obligation."
Moreover, the circumstances in the Philippine Airlines case
are quite different from those in the case at bar for in that
case the checks issued by the judgment debtor were
made payable to the sheriff, Emilio Z. Reyes, who
encashed the checks but failed to deliver the proceeds of
said encashment to the judgment creditor.
PIO BARRETTO REALTY DEVELOPMENT CORPORATION VS.
CA
360 SCRA 127 , JUNE 28, 2001
FACTS:
On 2 October 1984 respondent Honor P. Moslares instituted
an action for annulment of sale with damages before the
Regional Trial Court of Manila against the Testate Estate of
Nicolai Drepin represented by its Judicial Administrator
Atty. Tomas Trinidad and petitioner Pio Barretto Realty
Development Corporation. To settle the dispute, and while
the case is in court,they entered into a Compromise
Agreement upon which they agreed to have the estate
in dispute be sold; that in case Mosrales be able to
buy the property first, he should pay P3,000,000.00
to Barreto Realty (representing the amount of investments
by Barreto Realty on the estate); that sholud Barretto
Realty buy the property first, they should pay P 1,000,000.00
to Mosrales (representing interest
The compromise agreement was approved by the
judge. Barreto Realty was able to buy the property
first hence it delivered a manager’s check worth P
1,000,000.00 to Morales but the latter refused to accept
the same. Barreto Realty filed a petition before the trial
court to direct Mosrales to comply with the
Compromise Agreement. Barreto Realty also
consigned the check payment with the court. The
judge issued a writ of execution against Mosrales and the
sheriff also delivered the check to Mosrales which the
latter accepted. However, three years later,
Morales filed a motion for reconsideration alleging
that the check payment did not amount to legal
tender and that he never even encashed the
check. The judge agreed with Mosrales. Hence, this
petition for review on certiorari assailing the decision
dated 30 June 1997 of the CA which dismissed the special
civil action for certiorari filed by petitioner, as well as its
Resolution denying reconsideration.
ISSUE: Whether or not the petitioner’s payment in check
constituted a legal tender of payment?
RULING:
YES. While delivery of a check produces the effect of
payment only when it is encashed, the rule is otherwise if
the debtor was prejudiced by the creditor’s unreasonable
delay in presentments—acceptance of a check implies
an undertaking of due diligence in presenting it for
payment. If no such presentment was made, the drawer
cannot be held liable irrespective of loss or injury sustained
by the payee. Payment will be deemed effected and the
obligation for which the check was given as conditional
payment will be discharged.
In the case at bar, It is clear that the respondent Judge
Laguio no longer had any jurisdiction whatsoever to act
on, much less grant, the motion for execution and
supplement thereto filed by Moslares on 17 September
1993 or more than three (3) years later, claiming that he
had already bought the lots. The fact that the check paid
to him by Barretto Realty was never encashed should not
be invoked against the latter. As already stated, Moslares
never questioned the tender done three (3) years earlier.
Crystal vs. CA
(G.R. No. L-35767 June 18, 1976)
FACTS
In its decision promulgated on February 25, 1975, SC
affirmed the decision of CA in favor of private
respondents which held that petitioner's redemption of
the property acquired by said respondents in an
execution sale pursuant to a final judgment of the CFI of
Cebu, was invalid inasmuch as the check which
petitioner had used in paying the redemption price had
been either dishonored or had become stale. Petitioner
filed the instant motion for reconsideration.
ISSUE
Whether the check being dishonored and becoming
stale affect the validity of the redemption sale.
HELD
For a check to the dishonored upon presentment on the
one hand, and to be stale for not being presented at all
in time, on the other, are incompatible developments
that naturally have variant legal consequences. Thus, if
the check in question had been dishonored, then there
can be no doubt that petitioner's redemption was null
and void. On the other hand, if it had only become stale,
then it becomes imperative that the circumstances that
caused its non-presentment be determined, for if this was
not due to the fault of the petitioner, then it would be
unfair to deprive him of the rights he had acquired as
redemptioner, particularly, the value of the check has
otherwise been received or realized by the party
concerned.
There is a strong showing in the motion for reconsideration
that not only was said check not dishonored, although it
became stale, but that respondent Pelagia Ocang had
actually been paid already the full value thereof. And in
this connection, it is notable that in the comment of
respondents on petitioner's motion for reconsideration,
there is no clear and categorical denial of these
important and decisive facts.
SC reconsidered its decision and remanded the case for
further proceedings.
EDUQUE V. OCAMPO
G.R. No. L-222 26 April 1950
FACTS:
In 1935, Eduque secured two loans from Ocampo
de Leon, de los Reyes, and Don Jose Ocampo, the first in
the amount of P40,000 and the second in the sum of
P15,000, both payable within the period of twenty years,
with interest at the rate of 5 per cent per annum. It was
guaranteed by mortgage on real property. It was
stipulated in the contract that any mortgage creditors
may receive payments and execute deeds of
cancellation of the mortgage debts.
In 1943, the administratrix of the estate of Eduque
tendered payment by means of cashier’s check, of the
total amount of P55,000, to defendant-appellant Jose M.
Ocampo, one of the creditors, who refused to accept
payment. Because of the refusal, an action was brought
and a cashier's check for the total amount of P55,000
deposited in court. Judgment was rendered against
defendant compelling him to accept the P55,000
deposited in court, to issue deeds for cancellation of the
mortgage debts, and to pay the expenses of consignation
and costs.
Defendant accepted the judgment with respect
to the second loan of P15,000 and refused to accept the
amount regarding the first loan of P40,000.00. The order
was issued accordingly and the sum of P15,000 out of the
P55,000 deposited in court was delivered to the
defendant.
ISSUE:
Whether or not tender of payment by means of a
cashier's check representing Japanese war notes is not
valid.
RULING:
YES. We have already help that Japanese military
notes were legal tender during the Japanese occupation.
But appellant argues, further, that the consignation of a
cashier's check, which is not legal tender, is not binding
upon him. This question, however, has never been raised in
the lower court. Upon the contrary, defendant accepted
impliedly the consignation of the cashier's check when he
himself asked the court that out of the money thus
consigned he be paid the amount of the second loan of
P15,000. It is a rule that " a cashier's check may constitute
a sufficient tender where no objection is made on this
ground."
NEW PACIFIC TIMBER & SUPPLY COMPANY, INC., petitioner
vs. HON. ALBERTO SENERIS, RICARDO A. TONG and EX-
OFFICIO SHERIFF HAKIM S. ABDULWALID, respondents
A petition for certiorari with preliminary injunction to annul
and/or modify the order of the Court of First Instance of
Zamboanga City dated August 28, 1975 denying
petitioner’s Ex-Parte Motion for Issuance of Certification of
Satisfaction of Judgment.
FACTS
Herein petitioner is the defendant in a complaint
for collection of a sum of money filed by the private
respondent. On July 19, 1974, a compromise judgment
was rendered by the respondent Judge in accordance
with an amicable settlement entered into by the parties
the terms and conditions of which, are as follows:
1. That defendant will pay to the plaintiff the amount
of P54,500 at 6% interest per annum to be
reckoned from August 25, 1972;
2. That defendant will pay to the plaintiff the amount
of P6,000 as attorney’s fees for which P5,000 had
been acknowledged received by the plaintiff
under Consolidated Bank and Trust Corporation
Check No 16-135022 amounting to P5,000 leaving
a balance of P1,000;
3. That the entire amount of P54,000 plus interest,
plus the balance of P1,000 for attorney’s fees will
be paid by the defendant to the plaintiff within 5
months from today, July 19, 1974; and
4. Failure one the part of the defendant to comply
with any of the above conditions, a writ of
execution may be issued by this Court for the
satisfaction of the obligation.
For failure of the petitioner to comply with his judgment
obligation, the respondent Judge, upon motion of the
private respondent, issued an order for the issuance of
a writ of execution on December 21, 1974.
Accordingly, writ of execution was issued for the
amount of P63,130 pursuant to which, the Ex- Officio
Sheriff levied upon the following personal properties of
the petitioner, to wit:
1unit American Lathe 24
1unit American Lathe 18 Cracker Wheeler
1unit Rockford Shaper 24
And set the auction sale thereof on January 15,
197. However, prior on the said date, petitioner deposited
the sum of P63,130 for the payment of the judgment
obligation, consisting of the following:
1. P50,000 in Cashier’s Check No. S-314361 dated
January 3, 1975 of the Equitable Banking
Corporation; and
2. P13,130 in cash.
Private respondent through counsel, refused to
accept the check as well as the cash deposit and
requested the scheduled auction sale to proceed if the
petitioner cannot produce the cash. The auction sale
proceeded after several attempts to postpone. In the
course of the proceedings, Deputy Sheriff Castro sold the
levied properties item by item to the private respondent,
Ricardo Tong for the total amount of P50,000 only.
Subsequently, on January 17, 1975, petitioner filed an ex-
parte motion for issuance of certificate of satisfaction of
judgment but denied by the Respondent Judge.
 Petitioner questions the said order by alleging that
there was already a full satisfaction of the judgment
before the auction sale was conducted with the deposit
made to the Ex-Officio Sheriff in the amount of P63,000
consisting of P50,000 in Cashier’s Check and P13,130 in
cash, and that the auction sale was invalid for lack of
proper notice to the petitioner and its counsel.
ISSUE
Whether or not the private respondent can validly refuse
acceptance of the payment of the judgment obligation
made by the petitioner consisting of P50,000 in Cashier’s
check and P13,130 in cash?
HELD
NO. It is to be emphasized in tis connection that the check
deposited by the petitioner in the amount of P50,000 is not
an ordinary check but a Cashier’s check of the Equitable
Banking Corporation, a bank of good standing and
reputation. It is a well-known and accepted practice in the
business sector that a Cashier’s check is deemed as cash.
Moreover, since the said check had been certified by the
drawee bank, by the certification , the funds represented
by the check are transferred from the credit of the maker
to that of the payee or holder, and all for intents and
purposes, the latter becomes the depositor of the drawee
bank, with rights and duties of one in such situation. Where
a check is certified by the bank on which it is drawn, the
certification is equivalent to acceptance. 11 Said
certification "implies that the check is drawn upon
sufficient funds in the hands of the drawee, that they have
been set apart for its satisfaction, and that they shall be so
applied whenever the check is presented for payment. It
is an understanding that the check is good then, and shall
continue good, and this agreement is as binding on the
bank as its notes in circulation, a certificate of deposit
payable to the order of the depositor, or any other
obligation it can assume. The object of certifying a check,
as regards both parties, is to enable the holder to use it as
money." 12 When the holder procures the check to be
certified, "the check operates as an assignment of a part
of the funds to the creditors." 13 Hence, the exception to
the rule enunciated under Section 63 of the Central Bank
Act to the effect "that a check which has been cleared
and credited to the account of the creditor shall be
equivalent to a delivery to the creditor in cash in an
amount equal to the amount credited to his account" shall
apply in this case. Considering that the whole amount
deposited by the petitioner consisting of Cashier's Check
of P50,000.00 and P13,130.00 in cash covers the judgment
obligation of P63,000.00 as mentioned in the writ of
execution, then, We see no valid reason for the private
respondent to have refused acceptance of the payment
of the obligation in his favor. The auction sale, therefore,
was uncalled for.
Furthermore, it appears that on January 17, 1975,
the Cashier's Check was even withdrawn by the petitioner
and replaced with cash in the corresponding amount of
P50,000.00 on January 27, 1975 pursuant to an agreement
entered into by the parties at the instance of the
respondent Judge. However, the private respondent still
refused to receive the same. Obviously, the private
respondent is more interested in the levied properties than
in the mere satisfaction of the judgment obligation. Thus,
petitioner's motion for the issuance of a certificate of
satisfaction of judgment is clearly meritorious and the
respondent Judge gravely abused his discretion in not
granting the same under the circumstances.
ROMAN CATHOLIC BISHOP OF MALOLOS, INC. vs.
INTERMEDIATE APPELLATE COURT
G.R. No. 72110. November 16, 1990
Facts:
The property subject matter of the contract consists of a
parcel of land in the Province of Bulacan, issued and
registered in the name of the petitioner which it sold to the
private respondent.
On July 7, 1971, the subject contract over the land in
question was executed between the petitioner as vendor
and the private respondent through its then president, Mr.
Carlos F. Robes, as vendee, stipulating for a downpayment
of P23,930.00 and the balance of P100,000.00 plus 12%
interest per annum to be paid within four (4) years from
execution of the contract. The contract likewise provides
for cancellation, forfeiture of previous payments, and
reconveyance of the land in question in case the private
respondent would fail to complete payment within the
said period.
After the expiration of the stipulated period for payment,
Atty. Adalia Francisco (president of the company who
bought land) wrote the petitioner a formal request that her
company be allowed to pay the principal amount of
P100,000.00 in three (3) equal installments of six (6) months
each with the first installment and the accrued interest of
P24,000.00 to be paid immediately upon approval of the
said request.
The petitioner formally denied the said request of the
private respondent, but granted the latter a grace period
of five (5) days from the receipt of the denial to pay the
total balance of P124,000.00. The private respondent payment to the obligee for the former’s obligation and
wrote the petitioner requesting an extension of 30 days demanding that the latter accept the same. Thus, tender
from said date to fully settle its account but this was still of payment cannot be presumed by a mere inference
denied. from surrounding circumstances. At most, sufficiency of
available funds is only affirmative of the capacity or ability
Consequently, Atty. Francisco wrote a letter directly of the obligor to fulfill his part of the bargain. The
addressed to the petitioner, protesting the alleged refusal respondent court was therefore in error.
of the latter to accept tender of payment made by the
former on the last day of the grace period. But the private
respondent demanded the execution of a deed of 2. No.
absolute sale over the land in question
In the case of Philippine Airlines v. Court of Appeals, the
Atty. Fernandez, wrote a reply to the private respondent Court held that:
stating the refusal of his client to execute the deed of
absolute sale so the petitioner cancelled the contract and
Since a negotiable instrument is only a substitute for money
considered all previous payments forfeited and the land
and not money, the delivery of such an instrument does
as ipso facto reconveyed.
not, by itself, operate as payment. A check, whether a
manager’s check or ordinary check, is not legal tender,
From a perusal of the foregoing facts, we find that both
and an offer of a check in payment of a debt is not a valid
the contending parties have conflicting versions on the
tender of payment and may be refused receipt by the
main question of tender of payment.
obligee or creditor.
According to the trial court:
. . . What made Atty. Francisco suddenly decide to pay
The tender of payment by the private respondent was not
plaintiff’s obligation on tender her payment, when her
valid for failure to comply with the requisite payment in
request to extend the grace period has not yet been
legal tender or currency stipulated within the grace period
acted upon? Atty. Francisco’s claim that she made a
and as such, was validly refused receipt by the petitioner,
tender of payment is not worthy of credence. the subsequent consignation did not operate to discharge
the former from its obligation to the latter.
The trial court considered as fatal the failure of Atty.
Francisco to present in court the certified personal check
allegedly tendered as payment or, at least, its xerox copy,
or even bank records thereof.

Not satisfied with the said decision, the private respondent

appealed to the IAC. The IAC reversed the decision of the
trial court. The IAC, in finding that the private respondent
had sufficient available funds, ipso facto concluded that
the latter had tendered payment.

ISSUES:

1. Whether or not the finding of the IAC that Atty.

Francisco had sufficient available funds did
tender payment for the said obligation.

2. Whether or not an offer of a check is a valid

tender of payment of an obligation under a
contract which stipulates that the consideration
of the sale is in Philippine Currency.

HELD:

1. No.

Tender of payment involves a positive and unconditional

act by the obligor of offering legal tender currency as