MINDANAO STATE UNIVERSITY

COLLEGE OF LAW
ILIGAN EXTENSION

NAME: Baruado, Jake P.

I – FERNANDO

CASE NO. / DATE 284 SCRA 643 (1998)

CASE NAME Papa v. A.U. Valencia
PONENTE

FACTS

The respondents, A.U Valencia & Penarroyo, filed a complaint for specific performance
against petitioner Papa to deliver the title and turn over the accrued rentals. The case arose
from a sale of a parcel of land allegedly made to Penarroyo by petitioner acting as attorney-in-
fact of Anne Butte. The purchaser, through Valencia,made a check payment in the amount
of P40, 000 and in cash, P5, 000. Both were accepted by petitioner as evidenced by various
receipts. It appeared that the said property has already been mortgaged to the bank previously
together with other properties of Butte.

On appeal, the petitioner argued that alleged sale of the subject property had not been
consummated because he did not en cashed the check (in the amount of P40, 000.00), which
did not produce the effect of payment as in Art. 1249 of the Civil Code.

ISSUES

Whether or not the delivery of a check produces the effect of payment only when it is
cashed?

RULING

No, the Court holds that while it is true that the delivery of a check produces the effect of
payment only when it is cashed, pursuant to Art. 1249 of the Civil Code, the rule is otherwise
if the debtor is prejudiced by the creditor's unreasonable delay in presentment.

Art. 1249 of the Civil Code provides, in part, that payment by checks 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 instant case, the acceptance of a check implies an undertaking of due diligence in
presenting it for payment, and if he from whom it is received sustains loss by want of such
diligence, it will be held to operate as actual payment of the debt or obligation for which it
was given. It has, likewise, been held that if no presentment is made at all, the drawer cannot
 MINDANAO STATE UNIVERSITY
COLLEGE OF LAW
ILIGAN EXTENSION

be held liable irrespective of loss or injury unless presentment is otherwise excused. Granting
that petitioner had never en cashed the check, his failure to do so for more than ten (10) years
undoubtedly resulted in the impairment of the check through his unreasonable and
unexplained delay.

Thus, the petition for review is DENIED