G.R. No. L-20697 December 24, 1964
EUSEBIO M. LOPEZ, EUSEBIO LOPEZ, JR., DEOGRACIAS P. LIRIO, SOLEDAD LIRIO-DOLOR and RENATO C. DOLOR, in his capacity as Judicial Administrator of the Intestate Estate of the late Faustino Dolor, petitioners, vs. HON. CARMELINO G. ALVENDIA as presiding judge of branch XVI, CFI Manila, DAVID MINSBERG, ADELAIDA S. MINSBERG, and CITY SHERIFF OF MANILA, respondents.

FACTS

Private respondents David and Adelaida Minsberg bought a residential lot from petitioners. After making a down payment and executing a contract, they fully paid the balance on July 31, 1958, upon petitioners’ demand. Petitioners failed to deliver the certificate of title despite full payment, initially asking the Minsbergs to wait and later issuing only a certification of full payment, which banks would not accept for a loan. The Minsbergs discovered the title was mortgaged to GSIS, a fact not disclosed to them. They filed Civil Case No. 49628 for specific performance and damages. During trial, the parties reached a compromise agreement, which the court embodied in its decision dated August 24, 1962. The decision ordered petitioners to deliver the Torrens title and pay P3,500.00 as damages not later than September 21, 1962, with the stipulation that failure to do so would automatically raise the damages to P10,000.00 and result in immediate execution. Petitioners delivered the title but issued a check for P3,500.00, part of which (P3,277.38) was dishonored upon presentment on September 26, 1962, with the notation “no arrangement.” Petitioners filed a Manifestation/Opposition to the Minsbergs’ Motion for Execution, attaching a bank cashier’s certification that the dishonor was a “pure case of oversight” and the check was still payable, and deposited the cash equivalent with the court. The respondent judge granted the motion for execution for P10,000.00, ruling that payment by check was not valid payment under Article 1249 of the Civil Code until cashed. Petitioners’ motions for reconsideration and to present evidence on the oversight were denied.

ISSUE

Whether the respondent judge acted with grave abuse of discretion in issuing the orders for execution of the increased damages of P10,000.00 and in denying petitioners’ motion to present evidence on the alleged oversight in the dishonor of the check.

RULING

No. The Supreme Court found no grave abuse of discretion committed by the respondent judge. The decision, based on a compromise agreement, was clear and made time of the essence. Petitioners failed to make full payment in legal tender by the deadline. Payment by check does not constitute valid payment until it is cashed, pursuant to Article 1249 of the Civil Code. The alleged “oversight” by the bank cashier did not constitute substantial compliance. The bank, if it indeed made an arrangement with petitioners, acted as their agent, and the principal bears the risk of the agent’s acts. Any error by the trial court in evaluating the facts or law would be an error of judgment, correctible by appeal, not by certiorari. The petition was dismissed for lack of merit, and the preliminary injunction was dissolved.