8/3/2019 New Pacificc Timber vs Senerez

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NEW PACIFIC TIMBER & SUPPLY CO. INC. VS. SENERIS10 SCRA 686

FACTS: Petitioner, New Pacific Timber & Supply Co. Inc. was the defendant in a complaint for collection of money filed byprivate respondent, Ricardo A. Tong. In this complaint, respondent Judge rendered a compromise judgment based on theamicable settlement entered by the parties wherein petitioner will pay to private respondent P54,500.00 at 6% interestper annum and P6,000.00 as attorneys fee of which P5,000.00 has been paid. Upon failure of the petitioner to pay thejudgment obligation, a writ of execution worth P63,130.00 was issued levied on the personal properties of the petitioner.Before the date of the auction sale, petitioner deposited with the Clerk of Court in his capacity as the Ex-Officio Sheriff

P50,000.00 in Cashiers Check of the Equitable Banking Corporation and P13,130.00 in cash for a total ofP63,130.00. Private respondent refused to accept the check and the cash and requested for the auction sale to proceed.The properties were sold for P50,000.00 to the highest bidder with a deficiency of P13,130.00. Petitioner subsequentlyfiled an ex-parte motion for issuance of certificate of satisfaction of judgment which was denied by the respondent JudgeHence this present petition, alleging that the respondent Judge capriciously and whimsically abused his discretion in notgranting the requested motion for the reason that the judgment obligation was fully satisfied before the auction sale withthe deposit made by the petitioner to the Ex-Officio Sheriff. In upholding the refusal of the private respondentto accept the check, the respondent Judge cited Article 1249 of the New Civil Code which provides that payments of debtshall be made in the currency which is the legal tender of the Philippines and Section 63 of the Central Bank Act whichprovides that checks representing deposit money do not have legal tender power. In sustaining the contention of theprivate respondent to refuse the acceptance of the cash, the respondent Judge cited Article 1248 of the New Civil Codewhich provides that creditor cannot be compelled to accept partial payment unless there is an express stipulation to thecontrary.

ISSUE: Can the check be considered a valid payment of the judgment obligation?

RULING: Yes. It is to be emphasized that it is a well-known and accepted practice in the business sector that a CashiersCheck is deemed cash. Moreover, since the check has been certified by the drawee bank, this certification implies that thecheck is sufficiently funded in the drawee bank and the funds will be applied whenever the check is presented forpayment. The object of certifying a check is to enable the holder to use it as money. When the holder procures the checkto be certified, it operates as an assignment of a part of the funds to the creditors. Hence, the exception provided inSection 63 of the Central Bank Act which states that checks which have been cleared and credited to the account of thecreditor shall be equivalent to a delivery to the creditor in cash the amount equal to that which is credited to his account.The Cashiers Check and the cash are valid payment of the obligation of the petitioner. The private respondent has novalid reason to refuse the acceptance of the check and cash as full payment of the obligation

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New Pacific Timber & Supply Co, Inc vs Seneris, 101 SCRA 686; GR No. L-41764, December 19,

1980, digested

Doctrine:

1. Cashiers check deemed as cash.2. Certification of check by drawee bank equivalent to acceptance.Facts: In a complaint for a collection of sum of money, petitioner failed to comply with his judgment obligation in a

amicable settlement with the respondent. Hence, a writ of execution was issued for the amount of P63, 140.00 pursuant

to which, petitioners properties were levied and was set for an auction sale. Prior to the set date for the auction sale,petitioner deposited with the Clerk of Court, CFI, in his capacity as Ex-Officio Sheriff, the sum of P63, 130.00 for paymen

of the judgment obligation, consisting of P50, 000.00 Cashiers Check and P13,130.00 in cash.

Private respondent refused to accept the check as well as the cash deposit and requested the scheduled auction sale.

Respondent judge uphold private respondents claim that he has the right to refuse payment by means of a check and

cited Section 63 of the Central Bank Act:

Sec 63. Legal Character Checks representing deposit money do not have legal tender power and their acceptance in

payment of debts, both public and private, is at the option of the creditor. Provided, however, that a check which has

been cleared and credited to the account of the creditor shall be equivalent to a delivery to the creditor in cash in an

amount equal to the amount credited to his account.

And Article 1249 of the New Civil Code which provides for payment of debts in money shall be made in the currency

stipulated or the currency that is legal tender in the Philippines.

Likewise, respondent judge sustained the contention of the private respondent that he has a right to refuse payment of

the amount of P13, 130 in cash because the said amount is less than the judgment obligation, which is a partial paymen

as provided in Article 1248 of the New Civil Code.

Petitioner filed an ex-parte motion for issuance of certificate of satisfaction of judgment after his levied properties were a

sold during the auction sale. Petitioner question the order of the judge for denial of the said motion alleging that said

judge capriciously and whimsically abused his discretion on the ground that there was already a full satisfaction of the

judgment before the auction sale was conducted.

Issue: WON there was a valid refusal to accept the payment of the judgment obligation made by the petitione

consisting of P50, 000.00 in Cashiers Check and P13, 130.00 in cash.

Held: No. A cashiers check of the Equitable Bank Corporation is not an ordinary check. It is a well-known and accepted

practice in the business sector that a Cashiers Check is deemed as cash.

Where a check is certified by the bank on which it is drawn, the certification is equivalent to acceptance. By the

certification of drawee bank, the funds represented by the check are transferred from the credit of the maker to that of

the payee or holder, and for all intents and purposes, the latter becomes the depositor of the drawee bank. Said

certification implies that the check is drawn upon sufficient funds in the hands of the drawee that they have been set

apart for its satisfaction, that they shall be so applied whenever the check is presented for payment. The object o

certifying a check, as regards to both parties, is to enable the holder to use it as money. When the holder procures thecheck to be certified, the check operates as an assignment of a part of the funds to the creditors. Certification of a check

is an exception to the rule enunciated under Sec 63 of the CB Act.

Considering that the whole amount deposited by the petitioner consisting of Cashiers Check of P50, 000.00 and P13

130.00 in cash covers the judgment obligation of P63,000.00 as mentioned in the writ of execution, then, we see no valid

reason for the private respondent to have refused acceptance of the payment of the obligation in his favor.