Haystack: Tibajia vs. Court of Appeals (GR 100290, 4 June 1993)

Tibajia vs. CA
[G.R. No. 100290. June 4, 1993.]
Second Division, Padilla (J): 3 concurring

Facts: Case 54863 was a suit for collection of a sum of money filed by Eden Tan against the Tibajia spouses (Norberto Jr. and Carmen). A writ of attachment was issued by the trial court on 17 August 1987 and on 17 September 1987, the Deputy Sheriff filed a return stating that a deposit made by the Tibajia spouses in the RTC Kalookan City in the amount of P442,750.00 in another case, had been garnished by him. On 10 March 1988, the RTC, Branch 151 of Pasig, Metro Manila rendered its decision in Civil Case 54863 in favor of Tan, ordering the Tibajia spouses to pay her an amount in excess of P300,000.00. On appeal, the Court of Appeals modified the decision by reducing the award of moral and exemplary damages. The decision having become final, Tan filed the corresponding motion for execution and thereafter, the garnished funds which by then were on deposit with the cashier of the RTC Pasig, Metro Manila, were levied upon. On 14 December 1990, the Tibajia spouses delivered to Deputy Sheriff Eduardo Bolima the total money judgment in the form of Cashier's Check (P262,750.00) and Cash (P135,733.70). 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by the Tibajia spouses and instead insisted that the garnished funds deposited with the cashier of the RTC Pasig be withdrawn to satisfy the judgment obligation. On 15 January 1991, the spouses filed a motion to lift the writ of execution on the ground that the judgment debt had already been paid. On 29 January 1991, 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. A motion for reconsideration was denied on 8 February 1991.

Thereafter, the spouses Tibajia filed a petition for certiorari, prohibition and injunction in the Court of Appeals (CA GR SP 24164). The appellate court dismissed the petition on 24 April 1991 holding that payment by cashier's check is not payment in legal tender as required by RA 529. The motion for reconsideration was denied on 27 May 1991. Hence, the petition for review.

The Supreme Court denied the petition, and affirmed the appealed decision, with costs against the spouses.

1. Article 1249 of the Civil Code
Article 1249 of the Civil Code provides “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."

2. Section 1 of RA 529, as amended
Section 1 of RA 529, as amended, provides “Every provision contained in, or made with 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."

3. Section 63 of RA 265 (Central Bank Act), as amended
Section 63 (Legal character) of RA 265, as amended (Central Bank Act) provides “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."

4. PAL vs. CA and Roman Catholic Bishop of Malolos vs. IAC; Check not a legal tender
In the recent cases of Philippine Airlines, Inc. vs. Court of Appeals and Roman Catholic Bishop of Malolos, Inc. vs. Intermediate Appellate Court, the Court held that "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." The ruling in these cases merely applies the statutory provisions which lay down the rule that a check is not legal tender and that a creditor may validly refuse payment by check, whether it be a manager's, cashier's or personal check.

5. Reliance to a dissenting opinion in the PAL case erroneous; Circumstances in PAL case different
The spouses erroneously relied on one of the dissenting opinions in the Philippine Airlines case to support their cause. The dissenting opinion 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 present case 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.

6. Fortunado vs. CA; Check as payment cannot be sanctioned over objection of the creditor
In the more recent case of Fortunado vs. Court of Appeals, the Court stressed that the Court is not, by the decision “sanctioning the use of a check for the payment of obligations over the objection of the creditor."

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