G.R. No. 39815 ; April 28, 1934
EULALIO BELISARIO, plaintiff-appellant, vs. PAZ NATIVIDAD VIUDA DE ZULUETA, defendant-appellee.

FACTS

Plaintiff-appellant Eulalio Belisario sold two tracts of land to defendant-appellee Paz Natividad Viuda de Zulueta through an absolute deed of sale dated April 29, 1927. On the same date, the defendant executed a separate instrument granting the plaintiff an option to repurchase the property on or before the end of May 1931 for P37,000. On May 28, 1931, the plaintiff attempted to exercise the option by tendering a check for P37,000. However, the drawer of the check had only P5.85 in his bank account at the time.

ISSUE

Whether the plaintiff validly exercised his right of repurchase by tendering a check that was not backed by sufficient funds.

RULING

No. The Supreme Court affirmed the lower court’s judgment. The tender of payment was invalid. First, a check that is not supported by sufficient funds does not constitute valid payment. Second, even if the check were valid, a check is not legal tender; the defendant was not legally obligated to accept it as payment for the exercise of the repurchase option. The terms of the clear and duly executed instruments must be upheld.

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