NORBERTO TIBAJIA, JR. AND CARMEN TIBAJIA, PETITIONERS, VS. THE HONORABLE COURT OF APPEALS AND EDEN TAN, RESPONDENTS.

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 Migrino 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 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 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 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withdrawn to satisfy the judgment obligation.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 CASHIER’S CHECK NO. 014021 IN THE AMOUNT OF
P262,750.00 TENDERED 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-SPOUSES.”^[1]

The only issue to be resolved in this case is whether or not
payment by means of check (even by cashier’s check) is considered 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 which operates to discharge their monetary obligation.^[2]
Petitioners, to support their contention, cite the case of New Pacific
Timber and Supply Co., Inc. v. Seneris^[3] 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 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 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 the recent cases of Philippine Airlines, Inc. vs. Court of
Appeals^[4]
and Roman Catholic Bishop of Malolos, Inc. vs. Intermediate Appellate Court,^[5]
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 on one of the dissenting opinions in
the Philippine Airlines case^[6] 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.”^[7]
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.

In the more recent case of Fortunado vs. Court of Appeals,^[8] 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.

* Penned by Justice Consuelo
Ynares Santiago with the concurrence of Justices Nicolas P. Lapena, Jr. and
Cancio C. Garcia

^[1]
Rollo, p. 11

^[2]
Rollo, p. 54

^[3]
G.R. No. L-41764, 19 December 1980, 101 SCRA 686

^[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

^[7]
Supra, pp. 581-582

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