CASE DIGESTSCASE DIGESTSWednesday, December 1, 2010

NEW PACIFIC TIMBER & SUPPLY CO.INC. VS. SENERISNEW PACIFIC TIMBER & SUPPLY CO. INC. VS. SENERIS10 SCRA 686

FACTS: Petitioner, New Pacific Timber & Supply Co. Inc. was the defendant in acomplaint for collection of money filed by private respondent, Ricardo A. Tong. In thiscomplaint, respondent Judge rendered a compromise judgment based on the amicablesettlement entered by the parties wherein petitioner will pay to private respondentP54,500.00 at 6% interest per annum and P6,000.00 as attorney’s fee of whichP5,000.00 has been paid. Upon failure of the petitioner to pay the judgment obligation, awrit of execution worth P63,130.00 was issued levied on the personal properties of thepetitioner. Before the date of the auction sale, petitioner deposited with the Clerk of Courtin his capacity as the Ex-Officio Sheriff P50,000.00 in Cashier’s Check of the EquitableBanking Corporation and P13,130.00 in cash for a total ofP63,130.00. Private respondent refused to accept the check and the cash and requestedfor the auction sale to proceed. The properties were sold for P50,000.00 to the highestbidder with a deficiency of P13,130.00. Petitioner subsequently filed an ex-parte motionfor issuance of certificate of satisfaction of judgment which was denied by the respondentJudge. Hence this present petition, alleging that the respondent Judge capriciously andwhimsically abused his discretion in not granting the requested motion for the reason thatthe judgment obligation was fully satisfied before the auction sale with the deposit madeby the petitioner to the Ex-Officio Sheriff. In upholding the refusal of the privaterespondentto accept the check, the respondent Judge cited Article 1249 of the New Civil Code whichprovides that payments of debts shall be made in the currency which is the legal tender ofthe Philippines and Section 63 of the Central Bank Act which provides that checksrepresenting deposit money do not have legal tender power. In sustaining the contentionof the private respondent to refuse the acceptance of the cash, the respondent Judge citedArticle 1248 of the New Civil Code which provides that creditor cannot be compelled toaccept partial payment unless there is an express stipulation to the contrary.

ISSUE: Can the check be considered a valid payment of the judgment obligation?

RULING: Yes. It is to be emphasized that it is a well-known and accepted practice in thebusiness sector that a Cashier’s Check is deemed cash. Moreover, since the check has beencertified by the drawee bank, this certification implies that the check is sufficiently fundedin the drawee bank and the funds will be applied whenever the check is presented forpayment. The object of certifying a check is to enable the holder to use it as money. Whenthe holder procures the check to be certified, it operates as an assignment of a part of thefunds to the creditors. Hence, the exception provided in Section 63 of the Central BankAct which states that checks which have been cleared and credited to the account of thecreditor shall be equivalent to a delivery to the creditor in cash the amount equal to thatwhich is credited to his account. The Cashier’s Check and the cash are valid payment ofthe obligation of the petitioner. The private respondent has no valid reason to refuse theacceptance of the check and cash as full payment of the obligation

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1 comment:Unknown November 15, 2015 at 8:24 AM

Thanks!

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