G.R. No. 101083
METROPOLITAN BANK AND TRUST COMPANY, petitioner, vs. HON. COURT OF APPEALS AND SPOUSES FORTUNATO AND VIRGINIA VITAL, respondents.

July 30, 1996

FACTS

Spouses Fortunato and Virginia Vital 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 the property was sold at public auction where Metrobank was the highest bidder. A certificate of sale was issued and registered. Within the one-year redemption period, the Vitals 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 must be made in legal tender (cash) only. The Vitals consigned the manager’s check with the court and filed an action for consignation. The trial court ruled in favor of the Vitals, 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 for redemption.

ISSUE

Whether a manager’s check constitutes legal tender sufficient to exercise the right of redemption over a foreclosed property.

RULING

YES. The Supreme Court affirmed the decision of the Court of Appeals. A manager’s check, being a check drawn by the bank’s manager upon the bank itself and deemed accepted upon issuance, is as good as cash and constitutes legal tender. The Court held that the purpose of requiring payment in “legal tender” for redemption is to ensure the certainty and immediacy of payment. A manager’s check satisfies this purpose because it is a primary obligation of the issuing bank and is not subject to the condition of sufficient funds in the drawer’s account. Metrobank’s refusal to accept the manager’s check, which is a widely accepted banking instrument equivalent to cash, was unjustified. The consignation by the Vitals was valid and effected the redemption of the property.