G.R. No. 100290 - Tibajia, Jr. vs. Court of Appeals

Case Summary (G.R. No. 100290)

Key Dates and Monetary Details

Writ of attachment issued: 17 August 1987.
Return of garnishment (deposit in RTC of Kalookan City): 17 September 1987 — amount P442,750.00.
RTC decision in Civil Case No. 54863 for plaintiff Eden Tan: 10 March 1988 (decision ordered payment in excess of P300,000.00).
Tender of payment by petitioners to Deputy Sheriff Eduardo Bolima: 14 December 1990 — composed of BPI cashier’s check No. 014021 for P262,750.00 and cash P135,733.70, totaling P398,483.70.
Motion to lift writ of execution filed by petitioners: 15 January 1991 (denied by trial court 29 January 1991; motion for reconsideration denied 8 February 1991).
Court of Appeals dismissal of petition: 24 April 1991; motion for reconsideration denied 27 May 1991.
Supreme Court disposition: Petition for review filed, resulting in denial and affirmation of appellate decision.

Factual Background

Eden Tan obtained a final judgment against the Tibajia spouses. After appellate modification and finality, Tan moved for execution. Prior to execution, funds of the Tibajia spouses in another RTC (Kalookan) had been garnished and were on deposit with the RTC of Pasig. The Tibajias, seeking to satisfy the judgment, tendered payment to the deputy sheriff consisting of a cashier’s check (BPI) in the amount P262,750.00 and cash P135,733.70. Eden Tan refused to accept that tender, insisting instead that the garnished funds on deposit with the Pasig RTC be withdrawn to satisfy the judgment.

Procedural History

The trial court denied the Tibajias’ motion to lift the writ of execution on grounds that: (1) payment by cashier’s check is not payment in legal tender, and (2) payment was made by a third party rather than by the defendants themselves. The Court of Appeals dismissed the Tibajias’ certiorari, prohibition and injunction petition, holding that a cashier’s check is not legal tender within the meaning of Republic Act No. 529. The Supreme Court review followed.

Legal Issue Presented

Whether the cashier’s check tendered by the Tibajia spouses (combined with cash) constituted payment in legal tender such that the judgment obligation was discharged, and whether the creditor (Eden Tan) validly refused the partial check tender.

Applicable Statutes and Doctrinal Provisions

Civil Code, Article 1249: Payment of debts in money shall be made in the currency stipulated, and if that is not possible, then in legal tender in the Philippines. Delivery of promissory notes, bills of exchange or other mercantile documents produces 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 is held in abeyance.
Republic Act No. 529, Section 1 (as amended): Obligations are discharged upon payment in any coin or currency that at the time of payment is legal tender for public and private debts; clauses requiring payment in foreign currency or in gold are void as against public policy.
Central Bank Act (Republic Act No. 265, as amended), Section 63: Checks representing deposit money do not have legal tender power; acceptance of checks for payment of debts is at the option of the creditor. Provided, however, that a check which has been cleared and credited to the creditor’s account shall be equivalent to delivery of cash in the amount credited.

Parties’ Positions

Petitioners’ position: The cashier’s check issued by a reputable bank (BPI), crossed and marked “For Payee’s Account Only,” and payable to Eden Tan should be deemed legal tender; payment by such cashier’s check together with cash sufficiently discharged the judgment obligation. Petitioners relied in part on precedent that characterizes cashier’s checks as equivalent to cash in commercial practice.
Respondent’s position (trial court and creditor): A check, including a cashier’s check, is not legal tender under the statutes; acceptance of a check is optional with the creditor. Accordingly, the creditor validly refused the tender and could insist on satisfaction from the garnished deposit.

Court’s Legal Analysis

The Court applied Article 1249, Section 1 of RA 529, and Section 63 of the Central Bank Act to conclude that payment must be in currency that is legal tender. Section 63 explicitly provides that checks do not have legal tender power and that acceptance of checks is within the creditor’s option. The Civil Code provision also treats mercantile documents as producing payment-effect only upon cashing (or if the creditor impairs them through fault). The statutory framework thus supports the rule that offer of a check, including a cashier’s check or manager’s check, is not a valid tender of payment that the obligee may be compelled to accept.

Treatment of Precedents an

Case Syllabus (G.R. No. 100290)

Procedural History

Petitioners Norberto Tibajia, Jr. and Carmen Tibajia filed a petition for review with this Court assailing the decision of the Court of Appeals dated 24 April 1991 in CA-G.R. SP No. 24164.
The Court of Appeals had denied the 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 ("Eden Tan vs. Sps. Norberto and Carmen Tibajia").
Civil Case No. 54863 was originally a suit for collection of a sum of money filed by Eden Tan against the Tibajia spouses.
After judgment rendered and appeal resolved, Eden Tan filed a motion for execution; garnished funds were levied upon and the trial court denied petitioners' motion to lift the writ of execution, a denial which the Court of Appeals affirmed.
The petitioners brought the present petition for review to this Court, raising specific issues regarding the character of a cashier's check as legal tender and the private respondent's refusal to accept payment partly in check and partly in cash.

Statement of Facts — Events and Timeline

17 August 1987: A writ of attachment was issued by the trial court in Civil Case No. 54863.
17 September 1987: 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 P442,750.00 in another case had been garnished by him.
10 March 1988: The Regional Trial Court, Branch 151 of Pasig, Metro Manila rendered judgment in Civil Case No. 54863 in favor of plaintiff Eden Tan, ordering defendants (the Tibajia spouses) to pay an amount in excess of P300,000.00.
On appeal to the Court of Appeals, the decision was modified by reducing the award of moral and exemplary damages; that decision became final.
After finality, Eden Tan filed the corresponding motion for execution; the garnished funds deposited with the cashier of the Regional Trial Court of Pasig, Metro Manila were levied upon.
14 December 1990: The Tibajia spouses delivered to Deputy Sheriff Eduardo Bolima payment in the following form:
- Cashier's Check .................................. P262,750.00
- Cash ................................................ P135,733.70
- Total ................................................. P398,483.70
Private respondent Eden Tan refused to accept the payment and insisted the garnished funds deposited with the cashier of the Regional Trial Court of Pasig be withdrawn to satisfy the judgment.

Trial Court Proceedings and Rulings

15 January 1991: The Tibajia spouses filed a motion to lift the writ of execution on the ground that the judgment debt had already been paid.
29 January 1991: The trial court denied the motion to lift the writ of execution 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.
8 February 1991: The trial court denied the motion for reconsideration.

Court of Appeals Proceedings and Rulings

The Tibajia spouses filed a petition for certiorari, prohibition and injunction in the Court of Appeals seeking to annul the trial court's order.
24 April 1991: The Court of Appeals dismissed the petition, holding that payment by cashier's check is not payment in legal tender as required by Republic Act No. 529.
27 May 1991: The Court of Appeals denied the motion for reconsideration.

Issues Presented to the Supreme Court

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."
Whether or not the private respondent may validly refuse the tender of payment partly in check and partly in cash made by petitioners, through Aurora Vito and counsel, for the satisfaction of petitioners-spouses' monetary obligation.
The Court framed the sole issue to be resolved as whether payment by means of check (including cashier's check) is considered payment in legal tender as required by the Civil Code, Republic Act No. 529, and the Central Bank Act.

Relevant Statutory Provisions Quoted in the Decision

Article 1249, Civil Code:
- "Article 1249. Th