(Credit Transactions; Negotiable Instruments – Check; Remedial Law – Judgments)
Doctrine:
- Cashier’s check deemed as cash.
- Certification of check by drawee bank equivalent to acceptance.
Facts: In a complaint for a collection of sum of money, petitioner failed to comply with his judgment obligation in an amicable settlement with the respondent. Hence, a writ of execution was issued for the amount of P63, 140.00 pursuant to which, petitioner’s properties were levied and was set for an auction sale. Prior to the set date for the auction sale, petitioner deposited with the Clerk of Court, CFI, in his capacity as Ex-Officio Sheriff, the sum of P63, 130.00 for payment of the judgment obligation, consisting of P50, 000.00 Cashier’s Check and P13,130.00 in cash.
Private respondent refused to accept the check as well as the cash deposit and requested the scheduled auction sale. Respondent judge uphold private respondent’s claim that he has the right to refuse payment by means of a check and cited Section 63 of the Central Bank Act:
“Sec 63. Legal Character – Checks representing deposit money do not have legal tender power and their acceptance in 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 in cash in an amount equal to the amount credited to his account.”
And Article 1249 of the New Civil Code which provides for payment of debts in money shall be made in the currency stipulated or the currency that is legal tender in the Philippines.
Likewise, respondent judge sustained the contention of the private respondent that he has a right to refuse payment of the amount of P13, 130 in cash because the said amount is less than the judgment obligation, which is a partial payment as provided in Article 1248 of the New Civil Code.
Petitioner filed an ex-parte motion for issuance of certificate of satisfaction of judgment after his levied properties were all sold during the auction sale. Petitioner question the order of the judge for denial of the said motion alleging that said judge capriciously and whimsically abused his discretion on the ground that there was already a full satisfaction of the judgment before the auction sale was conducted.
Issue: WON there was a valid refusal to accept the payment of the judgment obligation made by the petitioner consisting of P50, 000.00 in Cashier’s Check and P13, 130.00 in cash.
Held: No. A cashier’s check of the Equitable Bank Corporation is not an ordinary check. It is a well-known and accepted practice in the business sector that a Cashier’s Check is deemed as cash.
Where a check is certified by the bank on which it is drawn, the certification is equivalent to acceptance. By the certification of drawee bank, the funds represented by the check are transferred from the credit of the maker to that of the payee or holder, and for all intents and purposes, the latter becomes the depositor of the drawee bank. Said certification implies that the check is drawn upon sufficient funds in the hands of the drawee that they have been set apart for its satisfaction, that they shall be so applied whenever the check is presented for payment. The object of certifying a check, as regards to both parties, is to enable the holder to use it as money. When the holder procures the check to be certified, the check operates as an assignment of a part of the funds to the creditors. Certification of a check is an exception to the rule enunciated under Sec 63 of the CB Act.
Considering that the whole amount deposited by the petitioner consisting of Cashier’s Check of P50, 000.00 and P13, 130.00 in cash covers the judgment obligation of P63,000.00 as mentioned in the writ of execution, then, we see no valid reason for the private respondent to have refused acceptance of the payment of the obligation in his favor.
CASE EATER 