G.R. No. 101083
METROPOLITAN BANK AND TRUST COMPANY, petitioner, vs. HON. COURT OF APPEALS AND SPOUSES ANTONIO and ELISA DY, respondents.

July 11, 1996

FACTS

Spouses Antonio and Elisa Dy obtained a loan from Metropolitan Bank and Trust Company (Metrobank) secured by a real estate mortgage over their property. They defaulted. Metrobank extrajudicially foreclosed the mortgage and purchased the property as the highest bidder at the public auction. A certificate of sale was issued and registered. Within the one-year redemption period, the Dy spouses offered to redeem the property by tendering a manager’s check for the full redemption price. Metrobank refused to accept the tender, insisting that redemption could only be made in legal tender (cash). The Dy spouses filed an action for consignation. The trial court ruled in their favor, ordering Metrobank to accept the manager’s check and execute a deed of redemption. The Court of Appeals affirmed. Metrobank appealed, arguing that a manager’s check is not legal tender and redemption must be made in cash.

ISSUE

Whether a manager’s check is a valid medium for the payment of the redemption price in an extrajudicial foreclosure of mortgage.

RULING

Yes. The Supreme Court affirmed the decision of the Court of Appeals. A manager’s check is a valid tender of payment for the exercise of the right of redemption. The Court held that while a manager’s check is not legal tender, the law does not require payment in legal tender for redemption. What is required is the payment of the redemption price. A manager’s check, being a cashier’s or treasurer’s check issued by the bank’s manager, is as good as cash. It is a primary obligation of the bank itself and is accepted in the commercial world as a virtual equivalent of cash. Metrobank’s refusal to accept it was unjustified. The Dy spouses validly exercised their right of redemption by tendering the manager’s check within the statutory period.