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*
G.R. No. 100290. June 4, 1993.

NORBERTO TIBAJIA, JR. and CARMEN TIBAJIA, petitioners,

vs. THE HONORABLE COURT OF APPEALS and EDEN TAN,
respondents.

Civil Law; Republic Act No. 529; Central Bank Act; Payment; 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.—From the
aforequoted provisions of law, it is clear that this petition must fail. In the
recent cases of Philippine Airlines, Inc. vs. Court of Appeals and Roman
Catholic Bishop of Malolos, Inc. vs. Intermediate Appellate Court, this
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 two (2) 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,

________________

* SECOND DIVISION.

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164 SUPREME COURT REPORTS ANNOTATED

Tibajia, Jr. vs. Court of Appeals

whether it be a manager’s, cashier’s or personal check.

PETITION for review of the decision of the Court of Appeals.

The facts are stated in the opinion of the Court.

PADILLA, J.:

Petitioners, spouses Norberto Tibajia, Jr.** and Carmen Tibajia, are

before this Court assailing the decision of respondent appellate
court dated 24 April 1991 in CA-G.R. SP No. 24164 denying their
petition for certiorari, prohibition, and injunction which sought to
annul the order of Judge Eutropio Migriño of the Regional Trial
Court, Branch 151, Pasig, Metro Manila in Civil Case No. 54863
entitled “Eden Tan vs. Sps. Norberto and Carmen Tibajia.”
Stated briefly, the relevant facts are as follows:
Case No. 54863 was a suit for collection of a sum of money filed
by Eden Tan against the Tibajia spouses. 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
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the Tibajia spouses in the Regional Trial Court of Kalookan City in

the amount of Four Hundred Forty Two Thousand Seven Hundred
and Fifty Pesos (P442,750.00) in another case, had been garnished
by him. On 10 March 1988, the Regional Trial Court, Branch 151 of
Pasig, Metro Manila rendered its decision in Civil Case No. 54863
in favor of the plaintiff Eden Tan, ordering the Tibajia spouses to
pay her an amount in excess of Three Hundred Thousand Pesos
(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, Eden Tan filed the corresponding
motion for execution and thereafter, the garnished funds which by
then were on deposit with the cashier of the Regional Trial Court of
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 follow-

________________

** Penned by Justice Consuelo Ynares Santiago with the concurrence of Justices

Nicolas P. Lapeña, Jr. and Cancio C. Garcia.

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Tibajia, Jr. vs. Court of Appeals

ing 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 Regional Trial Court of Pasig,
Metro Manila be withdrawn to satisfy the judgment obligation. On
15 January 1991, defendant spouses (petitioners) 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.
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 Republic Act No. 529. The motion for reconsideration
was denied on 27 May 1991.
In this petition for review, the Tibajia spouses raise the following
issues:

“I WHETHER OR NOT THE BPI CASHIERS CHECK NO.

014021 IN THE AMOUNT OF P262,750.00 TENDERED

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BY PETITIONERS FOR PAYMENT OF THE

JUDGMENT DEBT, IS ‘LEGAL TENDER’.
II WHETHER OR NOT THE PRIVATE RESPONDENT
MAY VALIDLY REFUSE THE TENDER OF PAYMENT
PARTLY IN CHECK AND PARTLY IN CASH MADE BY
PETITIONERS, THRU AURORA VITO AND
COUNSEL, FOR THE SATISFACTION OF THE
MONETARY OBLIGATION OF PETITIONERS-
1
SPOUSES.”

The only issue to be resolved in this case is whether or not payment

by means of check (even by cashier’s check) is consid-

_______________

1 Rollo, p. 11.

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Tibajia, Jr. vs. Court of Appeals

ered payment in legal tender as required by the Civil Code, Republic

Act No. 529, and the Central Bank Act.
It is contended by the petitioners that the check, which was a
cashier’s check of the Bank of the Philippine Islands, undoubtedly a
bank of good standing and reputation, and which was a crossed
check marked “For Payee’s Account Only” and payable to private
respondent Eden Tan, is considered legal tender, payment with
2
which operates to discharge their monetary obligation. Petitioners,
to support their contention, cite
3
the case of New Pacific Timber and
Supply Co., Inc. v. Señeris where this Court held through Mr.
Justice Hermogenes Concepcion, Jr. that “It is a well-known and
accepted practice in the business sector that a cashier’s check is
deemed as cash”.
The provisions of law applicable to the case at bar are the
following:

a. Article 1249 of the Civil Code which provides:

“Article 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 Republic Act No. 529, as amended, which

provides:

“Section 1. 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
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no effect, and no such provision shall be contained in, or made with respect
to, any obligation thereafter incurred. Every

_______________

2 Rollo, p. 54.
3 G.R. No. L-41764, 19 December 1980, 101 SCRA 686.

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Tibajia, Jr. vs. Court of Appeals

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 Republic Act No. 265, as amended (Central

Bank Act) which provides:

“Section 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.”

From the aforequoted provisions of law, it is clear that this petition

must fail.
In the4 recent cases of Philippine Airlines, Inc. vs. Court of
Appeals and Roman Catholic
5
Bishop of Malolos, Inc. vs.
Intermediate Appellate Court, this 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 two (2) 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.
Petitioners erroneously rely
6
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

________________

4 G.R. No. 49188, 30 January 1990, 181 SCRA 557.

5 G.R. No. 72110, 16 November 1990, 191 SCRA 411.
6 Supra, Dissenting Opinion of Padilla, J., pp. 580-582.

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by Sheriff Reyes, there would be no payment by PAL and,

consequently,7
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.
8
In the more recent case of Fortunado vs. Court of Appeals, this
Court stressed that, “We are not, by this decision, sanctioning the
use of a check for the payment of obligations over the objection of
the creditor.”
WHEREFORE, the petition is DENIED. The appealed decision
is hereby AFFIRMED, with costs against the petitioners.
SO ORDERED.

          Narvasa (C.J., Chairman), Regalado and Nocon, JJ.,

concur.

Petition denied. Appealed decision affirmed.

Note.—Checks are not mere contracts, but substitute for money.

Non-impairment of contract clause applies only to lawful contracts
(Lozano vs. Martinez, 146 SCRA 323).

——o0o——

_______________

7 Supra, pp. 581-582.

8 G.R. No. 78556, 25 April 1991, 196 SCRA 269.

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People vs. Balacio

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