G.R. No. 100290 June 4, 1993
Norberto Tibajia, Jr. and Carmen Tibajia, petitioners, vs. The Honorable Court of Appeals and Eden Tan, respondents.

FACTS

Petitioners Norberto Tibajia, Jr. and Carmen Tibajia were defendants in a collection case (Civil Case No. 54863) filed by respondent Eden Tan. The trial court issued a writ of attachment, and a deposit of the Tibajia spouses in another case was garnished. The trial court rendered a decision in favor of Tan, which was affirmed with modification by the Court of Appeals. After the decision became final, Tan moved for execution, and the garnished funds were levied upon. On December 14, 1990, the Tibajia spouses delivered the total money judgment to the Deputy Sheriff, consisting of a cashier’s check for P262,750.00 and cash of P135,733.70. Eden Tan refused to accept this payment, insisting instead on the withdrawal of the garnished funds on deposit with the court cashier. The Tibajia spouses filed a motion to lift the writ of execution, arguing the judgment debt had been paid. The trial court denied the motion, ruling that payment by cashier’s check is not payment in legal tender and that payment was made by a third party. The Court of Appeals dismissed the spouses’ subsequent petition for certiorari, upholding the trial court’s ruling. The Tibajia spouses then filed this petition for review.

ISSUE

Whether payment by means of a cashier’s check is considered payment in legal tender as required by law, such that a creditor may not validly refuse it.

RULING

The Supreme Court DENIED the petition and AFFIRMED the decision of the Court of Appeals. A check, whether a manager’s check, cashier’s check, or ordinary check, is not legal tender. The applicable laws are clear: Article 1249 of the Civil Code provides that the delivery of promissory notes or bills of exchange produces the effect of payment only when cashed; Section 1 of Republic Act No. 529 mandates that obligations shall be discharged upon payment in legal tender; and Section 63 of the Central Bank Act explicitly states that checks do not have legal tender power and their acceptance is at the option of the creditor. The Court cited its rulings in Philippine Airlines, Inc. vs. Court of Appeals and Roman Catholic Bishop of Malolos, Inc. vs. Intermediate Appellate Court, which held that an offer of a check in payment is not a valid tender of payment and may be refused by the creditor. The petitioners’ reliance on a dissenting opinion in the Philippine Airlines case and the New Pacific Timber case was misplaced, as the statutory provisions and prevailing jurisprudence are controlling. Therefore, Eden Tan validly refused the tender of payment partly by cashier’s check.