Digest: New Pacific Timber & Supply Co., Inc vs. Seneris [No. L-41764. December19, 1980.]

FACTS: Herein petitioner was the defendant in a complaint for collection of a sum of money filed by the private respondent. On July 19, 1974, a compromise judgment was rendered by the respondent Judge in accordance with an amicable settlement entered into by the parties. For failure of the petitioner to comply with his judgment obligation, the respondent Judge, issued an order for the issuance of a writ of execution. Accordingly, writ of execution was issued for the amount of P63,130.00 pursuant to which, the Ex Officio Sheriff levied upon the following personal properties of the petitioner and set the auction sale thereof on January 15, 1975. Prior to January 15, 1975, petitioner deposited with the Clerk of CFI the sum of P63,130.00 for the payment of the judgment obligation, consisting of the following. (1) P50,000.00 in Cashier's Checks No. S314361 dated January 3, 1975 of the Equitable Banking Corporation; and (2) P13,130.00 in cash. The private respondent refused to accept the check as well as the cash deposit. The respondent judge upheld private respondent's claim that he has the right to refuse payment by means of a check, the respondent Judge citing Section 63 of the Central Bank Act, and Article 1249 of the New Civil Code.

ISSUE: Whether or not the private respondent can validly refuse acceptance of the payment of the judgment obligation made by the petitioner consisting of P50,000.00 in Cashier's Check and P13,130.00 in cash which it deposited with the Ex-Officio Sheriff before the date of the scheduled auction sale.

HELD: It is to be emphasized in this connection that the check deposited by the petitioner in the amount of P50.000.00 is not an ordinary check but a Cashier's Check of the Equitable Banking Corporation, a bank of good standing and reputation. Where a check is certified by the bank on which it is drawn, the certification is equivalent to acceptance. The object of certifying a check, as regards both parties, is to enable the holder to use it as money. When the holder procures the check to be certified, "the check operates as an assignment of a part of the funds to the creditors". The exception to the rule enunciated under Section 63 of the Central Bank Act to the effect "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" shall apply in this case. Petition was granted ordering the private respondent to accept the sum of P63,130.00 under deposit as payment of the judgment obligation in his favor. “Considering that the whole amount deposited by the petitioner consisting of Cashier's Check of P60;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”.