VOL.
39, JUNE 30, 1971 587 On April 18, 1958 Enrique Montinola sought to purchase from the
Philippine Education Co., Inc. vs. Soriano
No. L-22405. June 30, 1971.
PHILIPPINE EDUCATION Co., INC., plaintiff-appelant,
vs. MAURICIO A. SORIANO, ET AL., defendants-appellees.
Statutes; Interpretation of statutes; Philippine Postal statutes being
patterned after United, States postal statutes are generally construed
according to the latter.—It is not disputed that our postal statutes were
patterned after similar statutes in force in the United States. For this
reason, ours are generally construed in accordance with the construction
given in the United States to their own postal statutes, in the absence of
any special reason justifying a departure from this policy or practice.
Negotiable instruments laws; Postal money order is not a negotiable
instrument.—The weight of authority in the United States is that postal
money orders are not negotiable instruments, the reason being that in
establishing and operating a postal money order system, the government
is not engaged in commercial transactions but merely exercises a
governmental power for the public benefit. Moreover, some of the
restrictions imposed upon money orders by postal laws and regulations are
inconsistent with the character of negotiable instruments. For instance,
such laws and regulations usually provide for not more than one
endorsement; payment of money orders may be withheld under a variety
of circumstances (49 C.J., 1153).
APPEAL from a decision of the Court of First Instance of Manila .
Vasquez, J.
The facts are stated in the opinion of the Court.
Marcial Esposo for plaintiff-appellant.
Solicitor General Arturo A. Alafriz, Assistant Solicitor
General Antonio G. Ibarra, and Attorney Conception Torrijos-
Agapinan for defendants-appellees.
DIZON, J.:
An appeal from a decision of the Court of First Instance of Manila
dismissing the complaint filed by the Philippine Education Co., Inc.
against Mauricio A. Soriano, Enrico Palomar and Rafael Contreras.
588
588 SUPREME COURT REPORTS ANNOTATED
Philippine Education Co., Inc. vs. Soriano
Manila Post Office ten (10) money orders of P200.00 each payable to
E. P. Montinola with address at Lucena, Quezon. After the postal
teller had made out money orders numbered 124685, 124687-
124695, Montinola offered to pay for them with a private check. As
private checks were not generally accepted in payment of money
orders, the teller advised him to see the Chief of the Money Order
Division, but instead of doing so, Montinola managed to leave the
building with his own check and the ten (10) money orders without
the knowledge of the teller.
On the same date, April 18, 1958, upon discovery of the
disappearance of the unpaid money orders, an urgent message was
sent to all postmasters, and the following day notice was likewise
served upon all banks. instructing them not to pay anyone of the
money orders aforesaid if presented for payment. The Bank of
America received a copy of said notice three days later.
On April 23, 1958 one of the above-mentioned money orders
numbered 124688 was received by appellant as part of its sales
receipts, The following day it deposited the same with the Bank of
America, and one day thereafter the latter cleared it with the
Bureau of Posts and received from the latter its face value of
P200.00.
On September 27, 1961, appellee Mauricio A. Soriano, Chief of
the Money Order Division of the Manila Post Office, acting for and
in behalf of his co-appellee, Postmaster Enrico Palomar, notified the
Bank of America that money order No. 124688 attached to his letter
had been found to have been irregularly issued and that, in view
thereof, the amount it represented had been deducted f rom the
bank's clearing account. For its part, on August 2 of the same year,
the Bank of America debited appellant's account with the same
amount and gave it advice thereof by means of a debit memo.
On October 12, 1961 appellant requested the Postmaster General
to reconsider the action taken by has office de-
589
VOL. 39, JUNE 30, 1971 589
Philippine Education Co., Inc. vs. Soriano
ducting the sum of P200.00 from the clearing account of the Bank of
America, but his request was denied. So was appellant's subsequent
request that the matter be referred to the Secretary of Justice for
advice. Thereafter, appellant elevated the matter to the Secretary
of Public Works and Communications, but the latter sustained the
actions taken by the postal officers.
In connection with the events set f orth above, Montinola was
charged with theft in the Court of First Instance of Manila (Criminal
Case No. 43866) but after trial he was acquitted on the ground of
reasonable doubt.
On January 8, 1962 appellant filed an action against appellees
in the Municipal Court of Manila praying for judgment as follows:
"WHEREFORE, plaintiff prays that after hearing defendants be ordered:
1. (a)To countermand the notice given to the Bank of America on
September 27, 1961, deducting from the said Bank's clearing
account the sum of P200.00 represented by postal money order
No. 124688, or in the alternative indemnify the plaintiff in the
same amount with interest at 8-1/2% per annum from September
27, 1961, which is the rate of interest being paid by plaintiff on its
overdraft account;
2. (b)To pay to the plaintiff out of their own personal funds, jointly
and severally, actual and moral damages in the amount of P1,
000.00 or in such amount as will be proved and/or determined by
this Honorable Court: exemplary damages in the amount of
P1,000.00, attorney's fees of P1,000.00, and the costs of action.
Plaintiff also prays for such other and further relief as may be deemed
just and equitable."
On November 17, 1962, after the parties had submitted the
stipulation of facts reproduced at pages 12 to 15 of the Record on
Appeal, the above-named court rendered judgment as follows:
"WHEREFORE, judgment is hereby rendered, ordering the defendants to
countermand the notice given to the Bank of Amer
590
590 SUPREME COURT REPORTS ANNOTATED
Philippine Education Co., Inc. vs. Soriano
ica on September 27, 1961, deducting from said Bank's clearing account
the sum of P200.00 representing the amount of postal money order No.
124688, or in the alternative, to indemnify the plaintiff in the said sum of
P200.00 with interest thereon at the rate of 8-1/2% per annum from
September 27, 1961 until fully paid; without any pronouncement as to costs
and attorney's fees."
The case was appealed to the Court of First Instance of Manila
where, after the parties had resubmitted the same stipulation of
facts, the appealed decision dismissing the complaint, with costs,
was rendered.
The first, second and fifth assignments of error discussed in
appellant's brief are related to each other and will therefore be
discussed jointly. They raise this main issue: that the postal money
order in question is a negotiable instrument; that its nature as such
is not in anyway affected by the letter dated October 26,1948 signed
by the Director of Posts and addressed to all banks with a clearing
account with the Post Office, and that money orders. once issued.
create a contractual relationship of debtor and creditor,
respectively, between the government, on the one hand, and the
remitters payees or endorsees, on the other.
It is not disputed that our postal statutes were patterned after
similar statutes in force in the United States. For this reason, ours
are generally construed in accordance with the construction given
in the United States to their own postal statutes, in the absence of
any special reason justifying a departure from this policy or practice.
The weight of authority in the United States is that postal money
orders are not negotiable instruments (Bolognesi vs. U. S., 189 Fed.
395; U. S. vs. Stock Drawers National Bank, 30 Fed. 912), the reason
behind this rule being that, in establishing and operating a postal
money order system, the government is not engaging in commercial
transactions but merely exercises a governmental power for the
public benefit.
591
VOL. 39, JUNE 30, 1971 591
Philippine Education Co., Inc. vs. Soriano
It is to be noted in this connection that some of the restrictions
imposed upon money orders by postal laws and regulations are
inconsistent with the character of negotiable instruments. For
instance, such laws and regulations usually provide for not more
than one endorsement; payment of money orders may be withheld
under a variety of circumstances (49 C. J. 1153).
Of particular application to the postal money order in question
are the conditions laid down in the letter of the Director of Posts of
October 26, 1948 (Exhibit 3) to the Bank of America f or the
redemption of postal money orders received by it from its depositors,
Among others, the condition is imposed that "in cases of adverse
claim, the money order or money orders involved will be returned to Notes.—Negotiable instruments; commerciality of document as a
you (the bank) and the corresponding amount will have to be requisite of negotiability.—In order that a promise to pay may have
refunded to the Postmaster, Manila, who reserves the right to the effect of a commercial instrument it must appear that it
deduct the value thereof from any amount due you if such step is originated in a commercial transaction (Rodriguez vs. Lasala, 5
deemed necessary." The conditions thus imposed in order to enable Phil. 357). To be considered commercial, whether the parties
the bank to continue enjoying the facilities theretofore enjoyed by interested be merchants or not, a promissory note must be based on
its depositors, were accepted by the Bank of America. The latter is commercial transactions (Isaac vs. Bray, 30 Phil. 533). A note is not
therefore bound by them. That it is so is clearly inferred from the considered a mercantile document if it nowhere appears that it
fact that, upon receiving advice that the amount represented by the arose from a mercantile transaction (Miller, Sloss & Scott vs.
money order in question had been deducted from its clearing Jones, 9 Phil. 648).
account with the Manila Post Office, it did not file any protest A Government treasury warrant which on its f ace bears the
against such action. words "payable from the administration for food administration" is
Moreover, not being a party to the understanding existing not a negotiable instrument since it is actually an order for payment
between the postal officers, on the one hand, and the Bank of out of a particular fund and hence not unconditional (Abubakar vs.
America, on the other, appellant has no right to assail the terms and Auditor General, 81 Phil. 359).
conditions thereof on the ground that the letter setting forth the 593
terms and conditions aforesaid is void because it was not issued by
VOL. 39, JUNE 30, 1971 593
a Department Head in accordance with Sec. 79 (B) of the Revised
Administrative Code. In reality, however, said legal provision does Sison vs. Commissioner of Internal Revenue
not apply to the letter in question because it does not provide for a But a draft is nonetheless a negotiable instrument because the
department regulation but mere- amount payable is expressed in dollars, which are no longer current
592 money in the Philippines, because it is dischargeable with pesos of
592 SUPREME COURT REPORTS ANNOTATED the equivalent amount (Philippine National Bank vs. Zulueta, L-
Philippine Education Co., Inc. vs. Soriano 7271, Aug. 30, 1957).
ly sets down certain conditions upon the privilege granted to the
_______________
Bank of America to accept and pay postal money orders presented
by its depositors, instead of the same being presented for payment
at the Manila Post Office. Such being the case, it is clear that the
Director of Posts had ample authority to issue it pursuant to Sec.
1190 of the Revised Administrative Code.
In view of the foregoing, We do not find it necessary to resolve
the issues raised in the third and fourth assignments of error.
WHEREFORE, the appealed decision being in accordance with
law, the same is hereby affirmed with costs.
Concepcion, C.J., Reyes,
J.B.L., Makalintal, Zaldivar, Fernando, Teehankee, Barredo and V
illamor, JJ., concur.
Castro and Makasiar, JJ., took no part.
Decision affirmed.
 VOL. 39, JUNE 30, 1971 587
Philippine Education Co., Inc. vs. Soriano
60
PHILIPPINE EDUCATION Co., INC., plaintiff-appelant,
vs. MAURICIO A. SORIANO, ET AL., defendants-appellees.
Statutes; Interpretation of statutes; Philippine Postal statutes being
patterned after United, States postal statutes are generally construed
according to the latter.—It is not disputed that our postal statutes were
patterned after similar statutes in force in the United States. For this
reason, ours are generally construed in accordance with the construction
given in the United States to their own postal statutes, in the absence of
any special reason justifying a departure from this policy or practice.
Negotiable instruments laws; Postal money order is not a negotiable
instrument.—The weight of authority in the United States is that postal
money orders are not negotiable instruments, the reason being that in
establishing and operating a postal money order system, the government
is not engaged in commercial transactions but merely exercises a
governmental power for the public benefit. Moreover, some of the
restrictions imposed upon money orders by postal laws and regulations are
inconsistent with the character of negotiable instruments. For instance,
such laws and regulations usually provide for not more than one
endorsement; payment of money orders may be withheld under a variety
of circumstances (49 C.J., 1153).
APPEAL from a decision of the Court of First Instance of Manila .
Vasquez, J.
The facts are stated in the opinion of the Court.
Marcial Esposo for plaintiff-appellant.
Solicitor General Arturo A. Alafriz, Assistant Solicitor
General Antonio G. Ibarra, and Attorney Conception Torrijos-
Agapinan for defendants-appellees.
DIZON, J.:
An appeal from a decision of the Court of First Instance of Manila
dismissing the complaint filed by the Philippine Education Co., Inc.
against Mauricio A. Soriano, Enrico Palomar and Rafael Contreras.
588
588 SUPREME COURT REPORTS ANNOTATED
Philippine Education Co., Inc. vs. Soriano
On April 18, 1958 Enrique Montinola sought to purchase from the
Manila Post Office ten (10) money orders of P200.00 each payable to
E. P. Montinola with address at Lucena, Quezon. After the postal
teller had made out money orders numbered 124685, 124687-
124695, Montinola offered to pay for them with a private check. As
private checks were not generally accepted in payment of money
orders, the teller advised him to see the Chief of the Money Order
Division, but instead of doing so, Montinola managed to leave the
building with his own check and the ten (10) money orders without
the knowledge of the teller.
On the same date, April 18, 1958, upon discovery of the
disappearance of the unpaid money orders, an urgent message was
sent to all postmasters, and the following day notice was likewise
served upon all banks. instructing them not to pay anyone of the
money orders aforesaid if presented for payment. The Bank of
America received a copy of said notice three days later.
On April 23, 1958 one of the above-mentioned money orders
numbered 124688 was received by appellant as part of its sales
receipts, The following day it deposited the same with the Bank of
America, and one day thereafter the latter cleared it with the
Bureau of Posts and received from the latter its face value of
P200.00.
On September 27, 1961, appellee Mauricio A. Soriano, Chief of
the Money Order Division of the Manila Post Office, acting for and
in behalf of his co-appellee, Postmaster Enrico Palomar, notified the
Bank of America that money order No. 124688 attached to his letter
had been found to have been irregularly issued and that, in view
thereof, the amount it represented had been deducted f rom the
bank's clearing account. For its part, on August 2 of the same year,
the Bank of America debited appellant's account with the same
amount and gave it advice thereof by means of a debit memo.
On October 12, 1961 appellant requested the Postmaster General
to reconsider the action taken by has office de-
589
VOL. 39, JUNE 30, 1971 589
Philippine Education Co., Inc. vs. Soriano
ducting the sum of P200.00 from the clearing account of the Bank of
America, but his request was denied. So was appellant's subsequent
request that the matter be referred to the Secretary of Justice for
advice. Thereafter, appellant elevated the matter to the Secretary
of Public Works and Communications, but the latter sustained the
actions taken by the postal officers.
In connection with the events set f orth above, Montinola was
charged with theft in the Court of First Instance of Manila (Criminal
Case No. 43866) but after trial he was acquitted on the ground of
reasonable doubt.
On January 8, 1962 appellant filed an action against appellees
in the Municipal Court of Manila praying for judgment as follows:
"WHEREFORE, plaintiff prays that after hearing defendants be ordered:
1. (a)To countermand the notice given to the Bank of America on
September 27, 1961, deducting from the said Bank's clearing
account the sum of P200.00 represented by postal money order
No. 124688, or in the alternative indemnify the plaintiff in the
same amount with interest at 8-1/2% per annum from September
27, 1961, which is the rate of interest being paid by plaintiff on its
overdraft account;
2. (b)To pay to the plaintiff out of their own personal funds, jointly
and severally, actual and moral damages in the amount of P1,
000.00 or in such amount as will be proved and/or determined by
this Honorable Court: exemplary damages in the amount of
P1,000.00, attorney's fees of P1,000.00, and the costs of action.
Plaintiff also prays for such other and further relief as may be deemed
just and equitable."
On November 17, 1962, after the parties had submitted the
stipulation of facts reproduced at pages 12 to 15 of the Record on
Appeal, the above-named court rendered judgment as follows:
"WHEREFORE, judgment is hereby rendered, ordering the defendants to
countermand the notice given to the Bank of Amer
590
590 SUPREME COURT REPORTS ANNOTATED
Philippine Education Co., Inc. vs. Soriano
ica on September 27, 1961, deducting from said Bank's clearing account
the sum of P200.00 representing the amount of postal money order No.
124688, or in the alternative, to indemnify the plaintiff in the said sum of
P200.00 with interest thereon at the rate of 8-1/2% per annum from
September 27, 1961 until fully paid; without any pronouncement as to costs
and attorney's fees."
The case was appealed to the Court of First Instance of Manila
where, after the parties had resubmitted the same stipulation of
facts, the appealed decision dismissing the complaint, with costs,
was rendered.
The first, second and fifth assignments of error discussed in
appellant's brief are related to each other and will therefore be
discussed jointly. They raise this main issue: that the postal money
order in question is a negotiable instrument; that its nature as such
is not in anyway affected by the letter dated October 26,1948 signed
by the Director of Posts and addressed to all banks with a clearing
account with the Post Office, and that money orders. once issued.
create a contractual relationship of debtor and creditor,
respectively, between the government, on the one hand, and the
remitters payees or endorsees, on the other.
It is not disputed that our postal statutes were patterned after
similar statutes in force in the United States. For this reason, ours
are generally construed in accordance with the construction given
in the United States to their own postal statutes, in the absence of
any special reason justifying a departure from this policy or practice.
The weight of authority in the United States is that postal money
orders are not negotiable instruments (Bolognesi vs. U. S., 189 Fed.
395; U. S. vs. Stock Drawers National Bank, 30 Fed. 912), the reason
behind this rule being that, in establishing and operating a postal
money order system, the government is not engaging in commercial
transactions but merely exercises a governmental power for the
public benefit.
591
VOL. 39, JUNE 30, 1971 591
Philippine Education Co., Inc. vs. Soriano
It is to be noted in this connection that some of the restrictions
imposed upon money orders by postal laws and regulations are
inconsistent with the character of negotiable instruments. For
instance, such laws and regulations usually provide for not more
than one endorsement; payment of money orders may be withheld
under a variety of circumstances (49 C. J. 1153).
Of particular application to the postal money order in question
are the conditions laid down in the letter of the Director of Posts of
October 26, 1948 (Exhibit 3) to the Bank of America f or the
redemption of postal money orders received by it from its depositors,
Among others, the condition is imposed that "in cases of adverse
claim, the money order or money orders involved will be returned to
you (the bank) and the corresponding amount will have to be
refunded to the Postmaster, Manila, who reserves the right to originated in a commercial transaction (Rodriguez vs. Lasala, 5
deduct the value thereof from any amount due you if such step is Phil. 357). To be considered commercial, whether the parties
deemed necessary." The conditions thus imposed in order to enable interested be merchants or not, a promissory note must be based on
the bank to continue enjoying the facilities theretofore enjoyed by commercial transactions (Isaac vs. Bray, 30 Phil. 533). A note is not
its depositors, were accepted by the Bank of America. The latter is considered a mercantile document if it nowhere appears that it
therefore bound by them. That it is so is clearly inferred from the arose from a mercantile transaction (Miller, Sloss & Scott vs.
fact that, upon receiving advice that the amount represented by the Jones, 9 Phil. 648).
money order in question had been deducted from its clearing A Government treasury warrant which on its f ace bears the
account with the Manila Post Office, it did not file any protest words "payable from the administration for food administration" is
against such action. not a negotiable instrument since it is actually an order for payment
Moreover, not being a party to the understanding existing out of a particular fund and hence not unconditional (Abubakar vs.
between the postal officers, on the one hand, and the Bank of Auditor General, 81 Phil. 359).
America, on the other, appellant has no right to assail the terms and 593
conditions thereof on the ground that the letter setting forth the VOL. 39, JUNE 30, 1971 593
terms and conditions aforesaid is void because it was not issued by Sison vs. Commissioner of Internal Revenue
a Department Head in accordance with Sec. 79 (B) of the Revised But a draft is nonetheless a negotiable instrument because the
Administrative Code. In reality, however, said legal provision does amount payable is expressed in dollars, which are no longer current
not apply to the letter in question because it does not provide for a money in the Philippines, because it is dischargeable with pesos of
department regulation but mere- the equivalent amount (Philippine National Bank vs. Zulueta, L-
592 7271, Aug. 30, 1957).
592 SUPREME COURT REPORTS ANNOTATED
Philippine Education Co., Inc. vs. Soriano _______________
ly sets down certain conditions upon the privilege granted to the
Bank of America to accept and pay postal money orders presented
by its depositors, instead of the same being presented for payment
at the Manila Post Office. Such being the case, it is clear that the
Director of Posts had ample authority to issue it pursuant to Sec.
1190 of the Revised Administrative Code.
In view of the foregoing, We do not find it necessary to resolve
the issues raised in the third and fourth assignments of error.
WHEREFORE, the appealed decision being in accordance with
law, the same is hereby affirmed with costs.
Concepcion, C.J., Reyes,
J.B.L., Makalintal, Zaldivar, Fernando, Teehankee, Barredo and V
illamor, JJ., concur.
Castro and Makasiar, JJ., took no part.
Decision affirmed.
Notes.—Negotiable instruments; commerciality of document as a
requisite of negotiability.—In order that a promise to pay may have
the effect of a commercial instrument it must appear that it
 G.R. No. 100290. June 4, 1993. * by the Tibajia spouses in the Regional Trial Court of Kalookan City
NORBERTO TIBAJIA, JR. and CARMEN TIBAJIA,
petitioners, vs. THE HONORABLE COURT OF APPEALS and
EDEN TAN, respondents.
Civil Law; Republic Act No. 529; Central Bank Act; Payment; A check
is not legal tender and that a creditor may validly refuse payment by check,
whether it be a manager’s, cashier’s or personal check.—From the
aforequoted provisions of law, it is clear that this petition must fail. In the
recent cases of Philippine Airlines, Inc. vs. Court of Appeals and Roman
Catholic Bishop of Malolos, Inc. vs. Intermediate Appellate Court, this
Court held that—“A check, whether a manager’s check or ordinary check,
is not legal tender, and an offer of a check in payment of a debt is not a
valid tender of payment and may be refused receipt by the obligee or
creditor.” The ruling in these two (2) cases merely applies the statutory
provisions which lay down the rule that a check is not legal tender and that
a creditor may validly refuse payment by check,
________________
*SECOND DIVISION.
164
164 SUPREME COURT REPORTS ANNOTATED
Tibajia, Jr. vs. Court of Appeals
whether it be a manager’s, cashier’s or personal check.
PETITION for review of the decision of the Court of Appeals.
The facts are stated in the opinion of the Court.
PADILLA, J.:
Petitioners, spouses Norberto Tibajia, Jr. and Carmen Tibajia, are
before this Court assailing the decision of respondent appellate
**
court dated 24 April 1991 in CA-G.R. SP No. 24164 denying their
petition for certiorari, prohibition, and injunction which sought to
annul the order of Judge Eutropio Migriño of the Regional Trial
Court, Branch 151, Pasig, Metro Manila in Civil Case No.
54863entitled “Eden Tan vs. Sps. Norberto and Carmen Tibajia.”
Stated briefly, the relevant facts are as follows:
Case No. 54863 was a suit for collection of a sum of money filed
by Eden Tan against the Tibajia spouses. A writ of attachment was
issued by the trial court on 17 August 1987 and on 17 September
1987, the Deputy Sheriff filed a return stating that a deposit made
in the amount of Four Hundred Forty Two Thousand Seven
Hundred and Fifty Pesos (P442,750.00) in another case, had been
garnished by him. On 10 March 1988, the Regional Trial Court,
Branch 151 of Pasig, Metro Manila rendered its decision in Civil
Case No. 54863 in favor of the plaintiff Eden Tan, ordering the
Tibajia spouses to pay her an amount in excess of Three Hundred
Thousand Pesos (P300,000.00). On appeal, the Court of Appeals
modified the decision by reducing the award of moral and exemplary
damages. The decision having become final, Eden Tan filed the
corresponding motion for execution and thereafter, the garnished
funds which by then were on deposit with the cashier of the Regional
Trial Court of Pasig, Metro Manila, were levied upon.
On 14 December 1990, the Tibajia spouses delivered to Deputy
Sheriff Eduardo Bolima the total money judgment in the follow-
________________
Penned by Justice Consuelo Ynares Santiago with the concurrence of Justices
**
Nicolas P. Lapeña, Jr. and Cancio C. Garcia.
165
VOL. 223, JUNE 4, 1993 165
Tibajia, Jr. vs. Court of Appeals
ing form:
Cashier’s Check ................................................................... P262,750.00
Cash ....................................................................................... 135,733.70
Total .......................................................................... P398,483.70
Private respondent, Eden Tan, refused to accept the payment made
by the Tibajia spouses and instead insisted that the garnished funds
deposited with the cashier of the Regional Trial Court of Pasig,
Metro Manila be withdrawn to satisfy the judgment obligation. On
15 January 1991, defendant spouses (petitioners) filed a motion to
lift the writ of execution on the ground that the judgment debt had
already been paid. On 29 January 1991, the motion was denied by
the trial court on the ground that payment in cashier’s check is not
payment in legal tender and that payment was made by a third
party other than the defendant. A motion for reconsideration was
denied on 8 February 1991. Thereafter, the spouses Tibajia filed a
petition for certiorari, prohibition and injunction in the Court of
Appeals. The appellate court dismissed the petition on 24 April 1991
holding that payment by cashier’s check is not payment in legal
tender as required by Republic Act No. 529. The motion for
reconsideration was denied on 27 May 1991.
In this petition for review, the Tibajia spouses raise the following
issues:
1. “IWHETHER OR NOT THE BPI CASHIERS CHECK NO. 014021
IN THE AMOUNT OF P262,750.00 TENDERED BY
PETITIONERS FOR PAYMENT OF THE JUDGMENT DEBT, IS
‘LEGAL TENDER’.
2. IIWHETHER OR NOT THE PRIVATE RESPONDENT MAY
VALIDLY REFUSE THE TENDER OF PAYMENT PARTLY IN
CHECK AND PARTLY IN CASH MADE BY PETITIONERS,
THRU AURORA VITO AND COUNSEL, FOR THE
SATISFACTION OF THE MONETARY OBLIGATION OF
PETITIONERS-SPOUSES.” 1 in gold or in any particular kind of coin or currency other than Philippine
The only issue to be resolved in this case is whether or not payment
by means of check (even by cashier’s check) is consid-
_______________
1Rollo, p. 11.
166
166 SUPREME COURT REPORTS ANNOTATED
Tibajia, Jr. vs. Court of Appeals
ered payment in legal tender as required by the Civil Code, Republic
Act No. 529, and the Central Bank Act.
It is contended by the petitioners that the check, which was a
cashier’s check of the Bank of the Philippine Islands, undoubtedly a
bank of good standing and reputation, and which was a crossed
check marked “For Payee’s Account Only” and payable to private
respondent Eden Tan, is considered legal tender, payment with
which operates to discharge their monetary obligation. Petitioners,
2
to support their contention, cite the case of New Pacific Timber and
Supply Co., Inc. v. Señeris where this Court held through Mr.
3
Justice Hermogenes Concepcion, Jr. that “It is a well-known and
accepted practice in the business sector that a cashier’s check is
deemed as cash”.
The provisions of law applicable to the case at bar are the
following:
1. a.Article 1249 of the Civil Code which provides:
“Article 1249. The payment of debts in money shall be made in the currency
stipulated, and if it is not possible to deliver such currency, then in the
currency which is legal tender in the Philippines.
The delivery of promissory notes payable to order, or bills of exchange
or other mercantile documents shall produce the effect of payment only
when they have been cashed, or when through the fault of the creditor they
have been impaired.
In the meantime, the action derived from the original obligation shall
be held in abeyance.”;
1. b.Section 1 of Republic Act No. 529, as amended, which provides:
“Section 1. Every provision contained in, or made with respect to, any
obligation which purports to give the obligee the right to require payment
currency or in an amount of money of the Philippines measured thereby,
shall be as it is hereby declared against public policy null and void, and of
no effect, and no such provision shall be contained in, or made with respect
to, any obligation thereafter incurred. Every
_______________
2 Rollo, p. 54.
3 G.R. No. L-41764, 19 December 1980, 101 SCRA 686.
167
VOL. 223, JUNE 4, 1993 167
Tibajia, Jr. vs. Court of Appeals
obligation heretofore and hereafter incurred, whether or not any such
provision as to payment is contained therein or made with respect thereto,
shall be discharged upon payment in any coin or currency which at the
time of payment is legal tender for public and private debts.”
1. c.Section 63 of Republic Act No. 265, as amended (Central Bank
Act) which provides:
“Section 63. Legal character—Checks representing deposit money do not
have legal tender power and their acceptance in the 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 of cash in an amount equal
to the amount credited to his account.”
From the aforequoted provisions of law, it is clear that this petition
must fail.
 In the recent cases of Philippine Airlines, Inc. vs. Court of Petition denied. Appealed decision affirmed.
Appeals and Roman Catholic Bishop of Malolos, Inc. vs.
4
Note.—Checks are not mere contracts, but substitute for money.
Intermediate Appellate Court, this Court held that—
5
Non-impairment of contract clause applies only to lawful contracts
“A check, whether a manager’s check or ordinary check, is not legal tender, (Lozano vs. Martinez, 146 SCRA 323).
and an offer of a check in payment of a debt is not a valid tender of payment
and may be refused receipt by the obligee or creditor.” ——o0o——
The ruling in these two (2) cases merely applies the statutory
provisions which lay down the rule that a check is not legal tender _______________
and that a creditor may validly refuse payment by check, whether it
be a manager’s, cashier’s or personal check.
7 Supra, pp. 581-582.
8 G.R. No. 78556, 25 April 1991, 196 SCRA 269.
Petitioners erroneously rely on one of the dissenting opinions in
the Philippine Airlines case to support their cause. The dissenting
6

opinion however does not in any way support the contention that a
check is legal tender but, on the contrary, states that “If the PAL
checks in question had not been encashed

________________

4G.R. No. 49188, 30 January 1990, 181 SCRA 557.

5G.R. No. 72110, 16 November 1990, 191 SCRA 411.
6Supra, Dissenting Opinion of Padilla, J., pp. 580-582.
168
168 SUPREME COURT REPORTS ANNOTATED
Tibajia, Jr. vs. Court of Appeals
by Sheriff Reyes, there would be no payment by PAL and,
consequently, no discharge or satisfaction of its judgment
obligation.” Moreover, the circumstances in the Philippine
7

Airlines case are quite different from those in the case at bar for in
that case the checks issued by the judgment debtor were made
payable to the sheriff, Emilio Z. Reyes, who encashed the checks but
failed to deliver the proceeds of said encashment to the judgment
creditor.
In the more recent case of Fortunado vs. Court of Appeals, this 8

Court stressed that, “We are not, by this decision, sanctioning the
use of a check for the payment of obligations over the objection of
the creditor.”
WHEREFORE, the petition is DENIED. The appealed decision
is hereby AFFIRMED, with costs against the petitioners.
SO ORDERED.
Narvasa (C.J., Chairman), Regalado and Nocon,
JJ., concur.
 VOL. 181, JANUARY 30, 1990 557
Philippine Airlines, Inc. vs. Court of Appeals
G.R. No. 49188. January 30, 1990. *
PHILIPPINE AIRLINES, INC., petitioner, vs. HON. COURT OF
APPEALS, HON. JUDGE RICARDO D. GALANO, Court of First
Instance of Manila, Branch XIII, JAIME K. DEL ROSARIO, Deputy
Sheriff, Court of First Instance, Manila, and AMELIA TAN,
respondents.
Civil Procedure; Execution; A judgment cannot be rendered nugatory
by the unreasonable application of a strict rule of procedure. So long as a
judgment is not satisfied, a plaintiff is entitled to other writs of execution.—
Indeed, technicality cannot be countenanced to defeat the execution of a
judgment for execution is the fruit and end of the suit and is very aptly
called the life of the law (Ipekdjian Merchandising Co. v. Court of Tax
Appeals, 8 SCRA 59 [1963]; Commissioner of Internal Revenue v. Visayan
Electric Co., 19 SCRA 697, 698 [1967]). A judgment cannot be rendered
nugatory by the unreasonable application of a strict rule of procedure.
Vested rights were never intended to rest on the requirement of a return,
the office of which is merely to inform the court and the parties, of any and
all actions taken under the writ of execution. Where such information can
be established in some other manner, the absence of an executing officer’s
return will not preclude a judgment from being treated as discharged or
being
———————
*EN BANC.
558
558 SUPREME COURT REPORTS ANNOTATED
Philippine Airlines, Inc. vs. Court of Appeals
executed through an alias writ of execution as the case may be. More
so, as in the case at bar. Where the return cannot be expected to be
forthcoming, to require the same would be to compel the enforcement of
rights under a judgment to rest on an impossibility, thereby allowing the
total avoidance of judgment debts. So long as a judgment is not satisfied, a
plaintiff is entitled to other writs of execution (Government of the
Philippines v. Echaus and Gonzales, 71 Phil. 318). It is a well known legal
maxim that he who cannot prosecute his judgment with effect, sues his
case vainly.
Civil Law; Payment; The payment to the absconding sheriff by check
in his name did not operate as satisfaction of the judgment debt.—Under
the peculiar circumstances of this case, the payment to the absconding
sheriff by check in his name did not operate as a satisfaction of the
judgment debt.
Same; Same; A payment in order to be effective to discharge an
obligation must be made to the proper person.—In general, a payment, in
order to be effective to discharge an obligation, must be made to the proper
person. Thus, payment must be made to the obligee himself or to an agent
having authority, express or implied, to receive the particular payment
(Ulen v. Knecttle, 50 Wyo. 94, 58 [2d] 446, 11 ALR 65). Payment made to
one having apparent authority to receive the money will, as a rule, be
treated as though actual authority had been given for its receipt. Likewise,
if payment is made to one who by law is authorized to act for the creditor,
it will work a discharge (Hendry v. Benlisa, 37 Fla. 609, 20 SO 800, 34 LRA
283). The receipt of money due on a judgment by an officer authorized by
law to accept it will, therefore, satisfy the debt.
Same; Same; Same; Ordinarily, payment by the judgment debtor in
the case at bar, to the sheriff should be valid payment to extinguish the
judgment debt.—The theory is where payment is made to a person
authorized and recognized by the creditor, the payment to such a person so
authorized is deemed payment to the creditor. Under ordinary
circumstances, payment by the judgment debtor in the case at bar, to the
sheriff should be valid payment to extinguish the judgment debt.
Same; Same; Unless authorized to do so by law or by consent of the
obligee, a public officer has no authority to accept anything other than
money in payment of an obligation under a judgment being executed.—In
the absence of an agreement, either express or implied, payment means
the discharge of a debt or obligation in money (US v. Robertson,
559
VOL. 181, JANUARY 30, 1990 559
Philippine Airlines, Inc. vs. Court of Appeals
5 Pet. [US] 641, 8 L. ed. 257) and unless the parties so agree, a debtor
has no rights, except at his own peril, to substitute something in lieu of
cash as medium of payment of his debt (Anderson v. Gill, 79 Md. 312, 29 A
527, 25 LRA 200, 47 Am. St. Rep. 402). Consequently, unless authorized to
do so by law or by consent of the obligee, a public officer has no authority
to accept anything other than money in payment of an obligation under a
judgment being executed. Strictly speaking, the acceptance by the sheriff
of the petitioner’s checks, in the case at bar, does not, per se, operate as a
discharge of the judgment debt.
Commercial Law; Negotiable Instruments Law; A check whether
manager’s check or ordinary check is not a legal tender and an offer of a
check in payment of a debt is not a valid tender of payment and may be
refused receipt by the obligee or creditor.—Since a negotiable instrument is
only a substitute for money and not money, the delivery of such an
instrument does not, by itself, operate as payment (Sec. 189, Act 2031 on
Negs. Insts.; Art. 1249, Civil Code; Bryan Landon Co. v. American Bank, 7
Phil. 255; Tan Sunco v. Santos, 9 Phil. 44; 21 R.C.L. 60, 61) A check,
whether a manager’s check or ordinary check, is not legal tender, and an
offer of a check in payment of a debt is not a valid tender of payment and
may be refused receipt by the obligee or creditor. Mere delivery of checks
does not discharge the obligation under a judgment. The obligation is not
extinguished and remains suspended until the payment by commercial
document is actually realized.
NARVASA, J., Dissenting:
Execution; Sheriffs; Obligations; Payment by way of a check issued in
the name of the sheriff in his official capacity is a practice of common and
long acceptance. It is valid.—There is no question that the checks came into
the sheriff’s possession in his official capacity. The court may require of the
judgment debtor, in complying with the judgment, no further burden than
his vigilance in ensuring that the person he is paying money or delivering
property to is a person authorized by the court to receive it. Beyond this,
further expectations become unreasonable. To my mind, a proposal that
would make the judgment debtor unqualifiedly the insurer of the judgment
creditor’s entitlement to the judgment amount—which is really what this
case is all about—begs the question.
Same; Same Same; Same.—That the checks were made out in the
sheriff’s name (a practice, by the way, of long and common acceptance) is
of little consequence if juxtaposed with the extent of the authority
560
560 SUPREME COURT REPORTS ANNOTATED
Philippine Airlines, Inc. vs. Court of Appeals
explicitly granted him by law as the officer entrusted with the power
to execute and implement court judgments. The sheriff’s requirement that
the checks in payment of the judgment debt be issued in his name was
simply an assertion of that authority; and PAL’s compliance cannot in the
premises be faulted merely because of the sheriff’s subsequent malfeasance
in absconding with the payment instead of turning it over to the judgment
creditor.
FELICIANO, J., Dissenting:
Execution; Sheriffs; Obligations; A dishonest sheriff could as much
abscond with the cash paid to him or with a check drawn in his name;
Sheriffs do not accept checks drawn in the name of judgment creditor.—
There is no dispute with the suggestion apparently made that maximum
safety is secured where the judgment debtor delivers to the sheriff not cash
but a check made out, not in the name of the sheriff, but in the judgment
creditor’s name. The fundamental point that must be made, however, is
that under our law only cash is legal tender and that the sheriff can be
compelled to accept only cash and not checks, even if made out to the name
of the judgment creditor. The sheriff could have quite lawfully required
PAL to deliver to him only cash, i.e., Philippine currency. If the sheriff had
done so, and if PAL had complied with such a requirement, as it would
have had to, one would have to agree that legal payment must be deemed
to have been effected. It requires no particularly acute mind to note that a
dishonest sheriff could easily convert the money and abscond. The fact that
the sheriff in the instant case required, not cash to be delivered to him, but
rather a check made out in his name, does not change the legal situation.
PAL did not thereby become negligent; it did not make the loss anymore
possible or probable than if it had instead delivered plain cash to the
sheriff.
PADILLA, J., Dissenting:
Execution; Sheriffs; Encashment of checks drawn in sheriff’s name
resulted effectively in a valid payment of the judgment on execution.—Did
the situation change by PAL’s delivery of its two (2) checks totalling
P30,000.00 drawn against its bank account, payable to Sheriff Reyes, for
account of the judgment rendered against PAL? I do not think so, because
when Sheriff Reyes encashed the checks, the encashment was in fact a
payment by PAL to Amelia Tan through Sheriff Reyes, an officer of the law
authorized to receive payment, and such payment discharged PAL’s
obligation under the executed judgment.
561
VOL. 181, JANUARY 30, 1990 561
Philippine Airlines, Inc. vs. Court of Appeals
Same; Same; Same.—If the PAL checks in question had not been
encashed by Sheriff Reyes, there would be no payment by PAL and,
consequently, no discharge or satisfaction of its judgment obligation. But
the checks had been encashed by Sheriff Reyes—giving rise to a situation
as if PAL had paid Sheriff Reyes in cash, i.e., Philippine currency. This, we
repeat, is payment, in legal contemplation, on the part of PAL and this
payment legally discharged PAL from its judgment obligation to the
judgment creditor. To be sure, the same encashment by Sheriff Reyes of
PAL’s checks delivered to him in his official capacity as Sheriff, imposed
an obligation on Sheriff Reyes to pay and deliver the proceeds of the
encashment to Amelia Tan who is deemed to have acquired a cause of
action against Sheriff Reyes for his failure to deliver to her the proceeds of
the encashment.
PETITION for certiorari to review the judgment of the Court of
Appeals.
The facts are stated in the opinion of the Court.
GUTIERREZ, JR., J.:
Behind the simple issue of validity of an alias writ of execution in
this case is a more fundamental question. Should the Court allow a
too literal interpretation of the Rules with an open invitation to
knavery to prevail over a more discerning and just approach?
Should we not apply the ancient rule of statutory construction that
laws are to be interpreted by the spirit which vivifies and not by the
letter which killeth?
This is a petition to review on certiorari the decision of the Court
of Appeals in CA-G.R. No. 07695 entitled “Philippine Airlines, Inc.
v. Hon. Judge Ricardo D. Galano, et al.”, dismissing the petition for
certiorari against the order of the Court of First Instance of Manila
which issued an alias writ of execution against the petitioner.
The petition involving the alias writ of execution had its
beginnings on November 8, 1967, when respondent Amelia Tan,
under the name and style of Able Printing Press commenced a
complaint for damages before the Court of First Instance of Manila.
The case was docketed as Civil Case No. 71307, entitled “Amelia
Tan, et al. v. Philippine Airlines, Inc.”
After trial, the Court of First Instance of Manila, Branch 13, then
presided over by the late Judge Jesus P. Morfe rendered
562
562 SUPREME COURT REPORTS ANNOTATED
Philippine Airlines, Inc. vs. Court of Appeals
judgment on June 29, 1972, in favor of private respondent Amelia
Tan and against petitioner Philippine Airlines, Inc. (PAL) as
follows:
“WHEREFORE, judgment is hereby rendered, ordering the defendant
Philippine Air Lines:
1. “1.On the first cause of action, to pay to the plaintiff the amount of
P75,000.00 as actual damages, with legal interest thereon from
plaintiff’s extra-judicial demand made by the letter of July 20,
1967;
2. “2.On the third cause of action, to pay to the plaintiff the amount
of P18,200.00, representing the unrealized profit of 10% included
in the contract price of P200,000.00 plus legal interest thereon
from July 20, 1967;
3. “3.On the fourth cause of action, to pay to the plaintiff the amount
of P20,000.00 as and for moral damages, with legal interest
thereon from July 20, 1967;
4. “4.On the sixth cause of action, to pay to the plaintiff the amount
of P5,000.00 damages as and for attorney’s fee.
“Plaintiff’s second and fifth causes of action, and defendant’s
counterclaim, are dismissed.
With costs against the defendant.” (CA Rollo, p. 18)
On July 28, 1972, the petitioner filed its appeal with the Court of
Appeals. The case was docketed as CA-G.R. No. 51079-R.
On February 3, 1977, the appellate court rendered its decision,
the dispositive portion of which reads:
“IN VIEW WHEREOF, with the modification that PAL is condemned to
pay plaintiff the sum of P25,000.00 as damages and P5,000.00 as attorney’s
fee, judgment is affirmed, with costs.” (CA Rollo, p. 29)
Notice of judgment was sent by the Court of Appeals to the trial
court and on dates subsequent thereto, a motion for reconsideration
was filed by respondent Amelia Tan, duly opposed by petitioner
PAL.
On May 23, 1977, the Court of Appeals rendered its resolution
denying the respondent’s motion for reconsideration for lack of
merit.
No further appeal having been taken by the parties, the
judgment became final and executory and on May 31, 1977, judg-
563
VOL. 181, JANUARY 30, 1990 563
Philippine Airlines, Inc. vs. Court of Appeals
ment was correspondingly entered in the case.
The case was remanded to the trial court for execution and on
September 2, 1977, respondent Amelia Tan filed a motion praying
for the issuance of a writ of execution of the judgment rendered by
the Court of Appeals. On October 11, 1977, the trial court, presided
over by Judge Galano, issued its order of execution with the
corresponding writ in favor of the respondent. The writ was duly
referred to Deputy Sheriff Emilio Z. Reyes of Branch 13 of the Court
of First Instance of Manila for enforcement.
 Four months later, on February 11, 1978, respondent Amelia Tan
moved for the issuance of an alias writ of execution stating that the
judgment rendered by the lower court, and affirmed with
modification by the Court of Appeals, remained unsatisfied.
On March 1, 1978, the petitioner filed an opposition to the motion
for the issuance of an alias writ of execution stating that it had
already fully paid its obligation to plaintiff through the deputy
sheriff of the respondent court, Emilio Z. Reyes, as evidenced by
cash vouchers properly signed and receipted by said Emilio Z. Reyes.
On March 3, 1978, the Court of Appeals denied the issuance of
the alias writ for being premature, ordering the executing sheriff
Emilio Z. Reyes to appear with his return and explain the reason for
his failure to surrender the amounts paid to him by petitioner PAL.
However, the order could not be served upon Deputy Sheriff Reyes
who had absconded or disappeared.
On March 28, 1978, motion for the issuance of a partial alias writ
of execution was filed by respondent Amelia Tan.
On April 19, 1978, respondent Amelia Tan filed a motion to
withdraw “Motion for Partial Alias Writ of Execution” with
Substitute Motion for Alias Writ of Execution. On May 1, 1978, the
respondent Judge issued an order which reads:
“As prayed for by counsel for the plaintiff, the Motion to Withdraw ‘Motion
for Partial Alias Writ of Execution’ with Substitute Motion for Alias Writ
of Execution is hereby granted, and the motion for partial alias writ of
execution is considered withdrawn.
“Let an Alias Writ of Execution issue against the defendant for the full
satisfaction of the judgment rendered. Deputy Sheriff Jaime K. del Rosario
is hereby appointed Special Sheriff for the enforcement
564
564 SUPREME COURT REPORTS ANNOTATED
Philippine Airlines, Inc. vs. Court of Appeals
thereof.” (CA Rollo, p. 34)
On May 18, 1978, the petitioner received a copy of the first alias writ
of execution issued on the same day directing Special Sheriff Jaime
K. del Rosario to levy on execution in the sum of P25,000.00 with
legal interest thereon from July 20, 1967 when respondent Amelia
Tan made an extra-judicial demand through a letter. Levy was also
ordered for the further sum of P5,000.00 awarded as attorney’s fees.
On May 23, 1978, the petitioner filed an urgent motion to quash
the alias writ of execution stating that no return of the writ had as
yet been made by Deputy Sheriff Emilio Z. Reyes and that the
judgment debt had already been fully satisfied by the petitioner as
evidenced by the cash vouchers signed and receipted by the server
of the writ of execution, Deputy Sheriff Emilio Z. Reyes.
On May 26, 1978, the respondent Jaime K. del Rosario served a
notice of garnishment on the depository bank of petitioner, Far East
Bank and Trust Company, Rosario Branch, Binondo, Manila,
through its manager and garnished the petitioner’s deposit in the
said bank in the total amount of P64,408.00 as of May 16, 1978.
Hence, this petition for certiorari filed by the Philippine Airlines,
Inc., on the grounds that:
I
AN ALIAS WRIT OF EXECUTION CANNOT BE ISSUED WITHOUT
PRIOR RETURN OF THE ORIGINAL WRIT BY THE IMPLEMENTING
OFFICER.
II
PAYMENT OF JUDGMENT TO THE IMPLEMENTING OFFICER AS
DIRECTED IN THE WRIT OF EXECUTION CONSTITUTES
SATISFACTION OF JUDGMENT.
III
INTEREST IS NOT PAYABLE WHEN THE DECISION IS SILENT AS
TO THE PAYMENT THEREOF.
565
VOL. 181, JANUARY 30, 1990 565
Philippine Airlines, Inc. vs. Court of Appeals
IV
SECTION 5, RULE 39, PARTICULARLY REFERS TO LEVY OF
PROPERTY OF JUDGMENT DEBTOR AND DISPOSAL OR SALE
THEREOF TO SATISFY JUDGMENT.
Can an alias writ of execution be issued without a prior return of
the original writ by the implementing officer?
We rule in the affirmative and we quote the respondent court’s
decision with approval:
“The issuance of the questioned alias writ of execution under the
circumstances here obtaining is justified because even with the absence of
a Sheriff’s return on the original writ, the unalterable fact remains that
such a return is incapable of being obtained (sic) because the officer who is
to make the said return has absconded and cannot be brought to the Court
despite the earlier order of the court for him to appear for this purpose.
(Order of Feb. 21, 1978, Annex C, Petition). Obviously, taking cognizance
of this circumstance, the order of May 11, 1978 directing the issuance of an
alias writ was therefore issued. (Annex D. Petition). The need for such a
return as a condition precedent for the issuance of an alias writ was
justifiably dispensed with by the court below and its action in this regard
meets with our concurrence. A contrary view will produce an abhorent
situation whereby the mischief of an erring officer of the court could be
utilized to impede indefinitely the undisputed and awarded rights which a
prevailing party rightfully deserves to obtain and with dispatch. The final
judgment in this case should not indeed be permitted to become illusory or
incapable of execution for an indefinite and over extended period, as had
already transpired.” (Rollo, pp. 35-36)
Judicium non debet esse illusorium; suum effectum habere debet (A
judgment ought not to be illusory; it ought to have its proper effect).
Indeed, technicality cannot be countenanced to defeat the
execution of a judgment for execution is the fruit and end of the suit
and is very aptly called the life of the law (Ipekdjian Merchandising
Co. v. Court of Tax Appeals, 8 SCRA 59 [1963]; Commissioner of
Internal Revenue v. Visayan Electric Co., 19 SCRA 697, 698 [1967]).
A judgment cannot be rendered nugatory by the unreasonable
application of a strict rule of procedure. Vested rights were never
intended to rest on the requirement of a
566
566 SUPREME COURT REPORTS ANNOTATED
Philippine Airlines, Inc. vs. Court of Appeals
return, the office of which is merely to inform the court and the
parties, of any and all actions taken under the writ of execution.
Where such information can be established in some other manner,
the absence of an executing officer’s return will not preclude a
judgment from being treated as discharged or being executed
through an alias writ of execution as the case may be. More so, as in
the case at bar. Where the return cannot be expected to be
forthcoming, to require the same would be to compel the
enforcement of rights under a judgment to rest on an impossibility,
thereby allowing the total avoidance of judgment debts. So long as
a judgment is not satisfied, a plaintiff is entitled to other writs of
execution (Government of the Philippines v. Echaus and Gonzales,
71 Phil. 318). It is a well known legal maxim that he who cannot
prosecute his judgment with effect, sues his case vainly.
More important in the determination of the propriety of the trial
court’s issuance of an alias writ of execution is the issue of
satisfaction of judgment.
Under the peculiar circumstances surrounding this case, did the
payment made to the absconding sheriff by check in his name
operate to satisfy the judgment debt? The Court rules that the
plaintiff who has won her case should not be adjudged as having
sued in vain. To decide otherwise would not only give her an empty
but a pyrrhic victory.
It should be emphasized that under the initial judgment, Amelia
Tan was found to have been wronged by PAL.
She filed her complaint in 1967.
After ten (10) years of protracted litigation in the Court of First
Instance and the Court of Appeals, Ms. Tan won her case.
It is now 1990.
Almost twenty-two (22) years later, Ms. Tan has not seen a
centavo of what the courts have solemnly declared as rightfully hers.
Through absolutely no fault of her own, Ms. Tan has been deprived
of what, technically, she should have been paid from the start, before
1967, without need of her going to court to enforce her rights. And
all because PAL did not issue the checks intended for her, in her
name.
Under the peculiar circumstances of this case, the payment to
the absconding sheriff by check in his name did not operate as a
satisfaction of the judgment debt.
567
VOL. 181, JANUARY 30, 1990 567
Philippine Airlines, Inc. vs. Court of Appeals
In general, a payment, in order to be effective to discharge an
obligation, must be made to the proper person. Article 1240 of the
Civil Code provides:
“Payment shall be made to the person in whose favor the obligation has
been constituted, or his successor in interest, or any person authorized to
receive it.” (Emphasis supplied)
Thus, payment must be made to the obligee himself or to an agent
having authority, express or implied, to receive the particular
payment (Ulen v. Knecttle, 50 Wyo. 94, 58 [2d] 446, 111 ALR 65).
Payment made to one having apparent authority to receive the
money will, as a rule, be treated as though actual authority had been
given for its receipt. Likewise, if payment is made to one who by law
is authorized to act for the creditor, it will work a discharge (Hendry
v. Benlisa, 37 Fla. 609, 20 SO 800, 34 LRA 283). The receipt of
money due on a judgment by an officer authorized by law to accept
it will, therefore, satisfy the debt (See 40 Am Jm 729, 25; Hendry v.
Benlisa, supra;Seattle v. Stirrat, 55 Wash. 104 p. 834, 24 LRA [NS]
1275).
The theory is where payment is made to a person authorized and
recognized by the creditor, the payment to such a person so
authorized is deemed payment to the creditor. Under ordinary
circumstances, payment by the judgment debtor in the case at bar,
to the sheriff should be valid payment to extinguish the judgment
debt.
There are circumstances in this case, however, which compel a
different conclusion.
The payment made by the petitioner to the absconding sheriff
was not in cash or legal tender but in checks. The checks were not
payable to Amelia Tan or Able Printing Press but to the absconding
sheriff.
Did such payments extinguish the judgment debt?
Article 1249 of the Civil Code provides:
“The payment of debts in money shall be made in the currency stipulated,
and if it is not possible to deliver such currency, then in the currency which
is legal tender in the Philippines.
“The delivery of promissory notes payable to order, or bills of exchange
or other mercantile documents shall produce the effect of payment only
when they have been cashed, or when through the fault
568
568 SUPREME COURT REPORTS ANNOTATED
Philippine Airlines, Inc. vs. Court of Appeals
of the creditor they have been impaired.
“In the meantime, the action derived from the original obligation shall
be held in abeyance.”
In the absence of an agreement, either express or implied, payment
means the discharge of a debt or obligation in money (US v.
Robertson, 5 Pet. [US] 641, 8 L. ed. 257) and unless the parties so
agree, a debtor has no rights, except at his own peril, to substitute
something in lieu of cash as medium of payment of his debt
(Anderson v. Gill, 79 Md. 312, 29 A 527, 25 LRA 200, 47 Am. St. Rep.
402). Consequently, unless authorized to do so by law or by consent
of the obligee, a public officer has no authority to accept anything
other than money in payment of an obligation under a judgment
being executed. Strictly speaking, the acceptance by the sheriff of
the petitioner’s checks, in the case at bar, does not, per se, operate
as a discharge of the judgment debt.
Since a negotiable instrument is only a substitute for money and
not money, the delivery of such an instrument does not, by itself,
operate as payment (Sec. 189, Act 2031 on Negs. Insts.; Art. 1249,
Civil Code; Bryan Landon Co. v. American Bank, 7 Phil. 255; Tan
Sunco v. Santos, 9 Phil. 44; 21 R.C.L. 60, 61). A check, whether a
manager’s check or ordinary check, is not legal tender, and an offer
of a check in payment of a debt is not a valid tender of payment and
may be refused receipt by the obligee or creditor. Mere delivery of
checks does not discharge the obligation under a judgment. The
obligation is not extinguished and remains suspended until the
payment by commercial document is actually realized (Art. 1249,
Civil Code, par. 3).
If bouncing checks had been issued in the name of Amelia Tan
and not the Sheriff’s, there would have been no payment. After
dishonor of the checks, Ms. Tan could have run after other
properties of PAL. The theory is that she has received no value for
what had been awarded her. Because the checks were drawn in the
name of Emilio Z. Reyes, neither has she received anything. The
same rule should apply.
It is argued that if PAL had paid in cash to Sheriff Reyes, there
would have been payment in full legal contemplation. The reasoning
is logical but is it valid and proper? Logic has its
569
VOL. 181, JANUARY 30, 1990 569
Philippine Airlines, Inc. vs. Court of Appeals
limits in decision making. We should not follow rulings to their
logical extremes if in doing so we arrive at unjust or absurd results.
In the first place, PAL did not pay in cash. It paid in checks. And
second, payment in cash always carries with it certain cautions.
Nobody hands over big amounts of cash in a careless and inane
manner. Mature thought is given to the possibility of the cash being
lost, of the bearer being waylaid or running off with what he is
carrying for another. Payment in checks is precisely intended to
avoid the possibility of the money going to the wrong party. The
situation is entirely different where a Sheriff seizes a car, a tractor,
or a piece of land. Logic often has to give way to experience and to
reality. Having paid with checks, PAL should have done so properly.
 Payment in money or cash to the implementing officer may be “ ‘As between two innocent persons, one of whom must suffer the consequence of a
deemed absolute payment of the judgment debt but the Court has breach of trust, the one who made it possible by his act of confidence must bear the
loss.’ ” (Blondeau, et al. v. Nano, et al., L-41377, July 26, 1935, 61 Phil. 625)
never, in the least bit, suggested that judgment debtors should
Having failed to employ the proper safeguards to protect itself, the
settle their obligations by turning over huge amounts of cash or legal
judgment debtor whose act made possible the loss had but itself to
tender to sheriffs and other executing officers. Payment in cash
blame.
would result in damage or interminable litigations each time a
The attention of this Court has been called to the bad practice of
sheriff with huge amounts of cash in his hands decides to abscond.
a number of executing officers, of requiring checks in satisfaction of
As a protective measure, therefore, the courts encourage the
judgment debts to be made out in their own names. If a sheriff
practice of payments by check provided adequate controls are
directs a judgment debtor to issue the checks in the sheriff’s name,
instituted to prevent wrongful payment and illegal withdrawal or
claiming he must get his commission or fees, the debtor must report
disbursement of funds. If particularly big amounts are involved,
the sheriff immediately to the court which ordered the execution or
escrow arrangements with a bank and carefully supervised by the
to the Supreme Court for appropriate disciplinary action. Fees,
court would be the safer procedure. Actual transfer of funds takes
commissions, and salaries are paid through regular channels. This
place within the safety of bank premises. These practices are
improper procedure also allows such officers, who have sixty (60)
perfectly legal. The object is always the safe and incorrupt execution
days within which to make a return, to treat the moneys as their
of the judgment.
personal funds and to deposit the same in their private accounts to
It is, indeed, out of the ordinary that checks intended for a
earn sixty (60) days interest, before said funds are turned over to
particular payee are made out in the name of another. Making the
the court or judgment creditor (See Balgos v. Velasco, 108 SCRA 525
checks payable to the judgment creditor would have prevented the
[1981]). Quite as easily, such officers could put up the defense that
encashment or the taking of undue advantage by the sheriff, or any
said checks had been issued to them in their private or personal
person into whose hands the checks may have fallen, whether
capacity. Without a receipt evidencing payment of the judgment
wrongfully or in behalf of the creditor. The issuance of the checks in
debt, the misappropriation of funds by such officers becomes clean
the name of the sheriff clearly made possible the misappropriation
and complete. The practice is ingenious but evil as
of the funds that were withdrawn. 571
570
VOL. 181, JANUARY 30, 1990 571
570 SUPREME COURT REPORTS ANNOTATED
Philippine Airlines, Inc. vs. Court of Appeals
Philippine Airlines, Inc. vs. Court of Appeals
it unjustly enriches court personnel at the expense of litigants and
As explained and held by the respondent court:
the proper administration of justice. The temptation could be far
“x x x [K]nowing as it does that the intended payment was for the private-
party respondent Amelia Tan, the petitioner corporation, utilizing the
greater, as proved to be in this case of the absconding sheriff. The
services of its personnel who are or should be knowledgeable about the correct and prudent thing for the petitioner was to have issued the
accepted procedures and resulting consequences of the checks drawn, checks in the intended payee’s name.
nevertheless, in this instance, without prudence, departed from what is The pernicious effects of issuing checks in the name of a person
generally observed and done, and placed as payee in the checks the name other than the intended payee, without the latter’s agreement or
of the errant Sheriff and not the name of the rightful payee. Petitioner consent, are as many as the ways that an artful mind could concoct
thereby created a situation which permitted the said Sheriff to personally to get around the safeguards provided by the law on negotiable
encash said checks and misappropriate the proceeds thereof to his instruments. An angry litigant who loses a case, as a rule, would not
exclusive personal benefit. For the prejudice that resulted, the petitioner want the winning party to get what he won in the judgment. He
himself must bear the fault. The judicial guideline which we take note of
would think of ways to delay the winning party’s getting what has
states as follows:
been adjudged in his favor. We cannot condone that practice
especially in cases where the courts and their officers are involved.
We rule against the petitioner.
Anent the applicability of Section 15, Rule 39, as follows:
“Section 15. Execution of money judgments.—The officer must enforce an
execution of a money judgment by levying on all the property, real and
personal of every name and nature whatsoever, and which may be disposed
of for value, of the judgment debtor not exempt from execution, or on a
sufficient amount of such property, if they be sufficient, and selling the
same, and paying to the judgment creditor, or his attorney, so much of the
proceeds as will satisfy the judgment. x x x.”
the respondent court held:
“We are obliged to rule that the judgment debt cannot be considered
satisfied and therefore the orders of the respondent judge granting the
alias writ of execution may not be pronounced as a nullity.
xxx xxx xxx
“It is clear and manifest that after levy or garnishment, for a judgment
to be executed there is the requisite of payment by the officer to the
judgment creditor, or his attorney, so much of the proceeds as will satisfy
the judgment and none such payment had been concededly made yet by the
absconding Sheriff to the private respondent Amelia Tan. The ultimate and
essential step to complete the execution of the judgment not having been
performed by the City Sheriff, the judgment debt legally and factually
remains unsatisfied.”
572
572 SUPREME COURT REPORTS ANNOTATED
Philippine Airlines, Inc. vs. Court of Appeals
Strictly speaking execution cannot be equated with satisfaction of a
judgment. Under unusual circumstances as those obtaining in this
petition, the distinction comes out clearly.
Execution is the process which carries into effect a decree or
judgment (Painter v. Berglund, 31 Cal. App. 2d. 63, 87 P 2d 360,
363; Miller v. London, 294 Mass 300, 1 NE 2d 198, 200; Black’s Law
Dictionary), whereas the satisfaction of a judgment is the payment
of the amount of the writ, or a lawful tender thereof, or the
conversion by sale of the debtor’s property into an amount equal to
that due, and, it may be done otherwise than upon an execution
(Section 47, Rule 39). Levy and delivery by an execution officer are
not prerequisites to the satisfaction of a judgment when the same
has already been realized in fact (Section 47, Rule 39). Execution is
for the sheriff to accomplish while satisfaction of the judgment is for
the creditor to achieve. Section 15, Rule 39 merely provides the
sheriff with his duties as executing officer including delivery of the
proceeds of his levy on the debtor’s property to satisfy the judgment
debt. It is but to stress that the implementing officer’s duty should
not stop at his receipt of payments but must continue until payment
is delivered to the obligor or creditor.
Finally, we find no error in the respondent court’s
pronouncement on the inclusion of interests to be recovered under
the alias writ of execution. This logically follows from our ruling that
PAL is liable for both the lost checks and interest. The respondent
court’s decision in CA-G.R. No. 51079-R does not totally supersede
the trial court’s judgment in Civil Case No. 71307. It merely
modified the same as to the principal amount awarded as actual
damages.
WHEREFORE, IN VIEW OF THE FOREGOING, the petition is
hereby DISMISSED. The judgment of the respondent Court of
Appeals is AFFIRMED and the trial court’s issuance of the alias
writ of execution against the petitioner is upheld without prejudice
to any action it should take against the errant sheriff Emilio Z.
Reyes. The Court Administrator is ordered to follow up the actions
taken against Emilio Z. Reyes.
SO ORDERED.
Fernan (C.J.), Cruz, Paras, Bidin, Griño-
Aquino, Medialdea and Regalado, JJ., concur.
573
VOL. 181, JANUARY 30, 1990 573
Philippine Airlines, Inc. vs. Court of Appeals
Narvasa, J., See separate dissent.
Melencio-Herrera, J., I join the dissents of Messrs. Justices
Narvasa, Padilla and Feliciano.
Feliciano, J., Please see separate dissenting opinion.
Gancayco, J., I join the dissent of Messrs. Justices Narvasa
and Padilla.
Padilla, J., Dissenting in separate opinion.
Sarmiento, J., I join Mr. Justice Padilla in his dissent.
Cortés, J., I concur in Mr. Justice Padilla’s dissent.
DISSENTING OPINION
NARVASA, J.:
The execution of final judgments and orders is a function of the
sheriff, an officer of the court whose authority is by and large
statutorily determined to meet the particular exigencies arising
from or connected with the performance of the multifarious duties
of the office. It is the acknowledgment of the many dimensions of
this authority, defined by statute and chiselled by practice, which
compels me to disagree with the decision reached by the majority.
A consideration of the wide latitude of discretion allowed the
sheriff as the officer of the court most directly involved with the
implementation and execution of final judgments and orders
persuades me that PAL’s payment to the sheriff of its judgment debt
to Amelia Tan, though made by check issued in said officer’s name,
lawfully satisfied said obligation and foreclosed further recourse
therefor against PAL, notwithstanding the sheriff’s failure to deliver
to Tan the proceeds of the check.
It is a matter of history that the judiciary x x is an inheritor of the Anglo-
American tradition. While the common law as such x x ‘is not in force’ in
this jurisdiction, ‘to breathe the breath of life into many of the institutions,
introduced [here] under American sovereignty, recourse must be had to the
rules, principles and doctrines of the common law under whose protecting
aegis the prototypes of these institutions had their birth.’ A sheriff is ‘an
officer of great antiquity,’ and was also called the shire reeve. A shire in
English law is a Saxon word signifying a division later called a county. A
reeve is an ancient English officer of justice inferior in rank to an alderman
x x appointed
574
574 SUPREME COURT REPORTS ANNOTATED
Philippine Airlines, Inc. vs. Court of Appeals
to process, keep the King’s peace, and put the laws in execution. From a
very remote period in English constitutional history x x the shire had
another officer, namely the shire reeve or as we say, the sheriff. x x The
Sheriff was the special representative of the regal or central authority, and
as such usually nominated by the King. x x Since the earliest times, both
in England and the United States, a sheriff has continued his status as an
adjunct of the court x x. As it was there, so it has been in the Philippines
from the time of the organization of the judiciary x x.” (J. Fernando’s
concurring opinion in Bagatsing v. Herrera, 65 SCRA 434)
One of a sheriff’s principal functions is to execute final judgments
and orders. The Rules of Court require the writs of execution to issue
to him, directing him to enforce such judgments and orders in the
manner therein provided (Rule 39). The mode of enforcement varies
according to the nature of the judgment to be carried out: whether
it be against property of the judgment debtor in his hands or in the
hands of a third person (i.e. money judgment), or for the sale of
property, real or personal (i.e. foreclosure of mortgage) or the
delivery thereof, etc. (sec. 8, Rule 39).
Under sec. 15 of the same Rule, the sheriff is empowered to levy
on so much of the judgment debtor’s property as may be sufficient
to enforce the money judgment and sell these properties at public
auction after due notice to satisfy the adjudged amount. It is the
sheriff who, after the auction sale, conveys to the purchaser the
property thus sold (secs. 25, 26, 27, Rule 39), and pays the judgment
creditor so much of the proceeds as will satisfy the judgment. When
the property sold by him on execution is an immovable which
consequently gives rise to a right of redemption on the part of the
judgment debtor and others (secs. 29, 30, Rule 39), it is to him (or to
the purchaser or redemptioner) that the payments may be made by
those declared by law as entitled to redeem (sec. 31, Rule 39); and
in this situation, it becomes his duty to accept payment and execute
the certificate of redemption (Enage v. Vda. y Hijos de Escano, 38
Phil. 657, cited in Moran, Comments on the Rules of Court, 1979 ed.,
vol. 2, pp. 326-327). It is also to the sheriff that “written notice of
any redemption must be given and a duplicate filed with the
registrar of deeds of the province, and if any assessments or taxes
are paid by the redemptioner or if he has
575
VOL. 181, JANUARY 30, 1990 575
Philippine Airlines, Inc. vs. Court of Appeals
or acquires any lien other than that upon which the redemption was
made, notice thereof must in like manner be given to the officer and
filed with the registrar of deeds,” the effect of failure to file such
notice being that redemption may be made without paying such
assessments, taxes, or liens (sec. 30, Rule 39).
The sheriff may likewise be appointed a receiver of the property
of the judgment debtor where the appointment of the receiver is
deemed necessary for the execution of the judgment (sec. 32, Rule
39).
At any time before the sale of property on execution, the
judgment debtor may prevent the sale by paying the sheriff the
amount required by the execution and the costs that have been
incurred therein (sec. 20, Rule 39).
The sheriff is also authorized to receive payments on account of
the judgment debt tendered by “a person indebted to the judgment
debtor,” and his “receipt shall be a sufficient discharge for the
amount so paid or directed to be credited by the judgment creditor
on the execution” (sec. 41, Rule 39).
Now, obviously, the sheriff’s sale extinguishes the liability of the
judgment debtor either in full, if the price paid by the highest bidder
is equal to, or more than the amount of the judgment or pro tanto, if
the price fetched at the sale be less. Such extinction is not in any
way dependent upon the judgment creditor’s receiving the amount
realized, so that the conversion or embezzlement of the proceeds of
the sale by the sheriff does not revive the judgment debt or render
the judgment creditor liable anew therefor.
So, also, the taking by the sheriff of, say, personal property from
the judgment debtor for delivery to the judgment creditor, in
fulfillment of the verdict against him, extinguishes the debtor’s
liability; and the conversion of said property by the sheriff, does not
make said debtor responsible for replacing the property or paying
the value thereof.
In the instances where the Rules allow or direct payments to be
made to the sheriff, the payments may be made by check, but it goes
without saying that if the sheriff so desires, he may require payment
to be made in lawful money. If he accepts the check, he places
himself in a position where he would be liable to the judgment
creditor if any damages are suffered by the latter as a result of the
medium in which payment was made
576
576 SUPREME COURT REPORTS ANNOTATED
Philippine Airlines, Inc. vs. Court of Appeals
(Javellana v. Mirasol, et al., 40 Phil. 761). The validity of the
payment made by the judgment debtor, however, is in no wise
affected and the latter is discharged from his obligation to the
judgment creditor as of the moment the check issued to the sheriff
is encashed and the proceeds are received by said office. The
issuance of the check to a person authorized to receive it (Art. 1240,
Civil Code; Sec. 46 of the Code of Civil Procedure; Enage v. Vda y
Hijos de Escano, 38 Phil. 657, cited in Javellana v. Mirasol, 40 Phil.
761) operates to release the judgment debtor from any further
obligations on the judgment.
The sheriff is an adjunct of the court; a court functionary whose
competence involves both discretion and personal liability
(concurring opinion of J. Fernando, citing Uy Piaoco v. Osmeña, 9
Phil. 299, in Bagatsing v. Herrera, 65 SCRA 434). Being an officer
of the court and acting within the scope of his authorized functions,
the sheriff’s receipt of the checks in payment of the judgment
execution, may be deemed, in legal contemplation, as received by
the court itself (Lara v. Bayona, 10 May 1955, No. L-10919).
That the sheriff functions as a conduit of the court is further
underscored by the fact that one of the requisites for appointment
to the office is the execution of a bond, “conditioned (upon) the
faithful performance of his (the appointee’s) duties x x for the
delivery or payment to Government, or the person entitled thereto,
of all properties or sums of money that shall officially come into his
hands” (sec. 330, Revised Administrative Code).
There is no question that the checks came into the sheriff’s
possession in his official capacity. The court may require of the
judgment debtor, in complying with the judgment, no further
burden than his vigilance in ensuring that the person he is paying
money or delivering property to is a person authorized by the court
to receive it. Beyond this, further expectations become
unreasonable. To my mind, a proposal that would make the
judgment debtor unqualifiedly the insurer of the judgment creditor’s
entitlement to the judgment amount—which is really what this case
is all about—begs the question.
That the checks were made out in the sheriff’s name (a practice,
by the way, of long and common acceptance) is of little consequence
if juxtaposed with the extent of the authority
577
VOL. 181, JANUARY 30, 1990 577
Philippine Airlines, Inc. vs. Court of Appeals
explicitly granted him by law as the officer entrusted with the power
to execute and implement court judgments. The sheriff’s
requirement that the checks in payment of the judgment debt be
issued in his name was simply an assertion of that authority; and
PAL’s compliance cannot in the premises be faulted merely because
of the sheriff’s subsequent malfeasance in absconding with the
payment instead of turning it over to the judgment creditor.
If payment had been in cash, no question about its validity or of
the authority and duty of the sheriff to accept it in settlement of
PAL’s judgment obligation would even have arisen. Simply because
it was made by checks issued in the sheriff’s name does not warrant
reaching any different conclusion.
 As payment to the court discharges the judgment debtor from his
responsibility on the judgment, so too must payment to the person
designated by such court and authorized to act in its behalf, operate
to produce the same effect.
It is unfortunate and deserving of commiseration that Amelia
Tan was deprived of what was adjudged to her when the sheriff
misappropriated the payment made to him by PAL in dereliction of
his sworn duties. But I submit that her remedy lies, not here and in
reviving liability under a judgment already lawfully satisfied, but
elsewhere.
ACCORDINGLY, I vote to grant the petition.
FELICIANO, J., Dissenting
I concur in the able dissenting opinions of Narvasa and
Padilla, JJ. and would merely wish to add a few footnotes to their
lucid opinions.
1. Narvasa, J. has demonstrated in detail that a sheriff
is authorized by the Rules of Court and our case law to receive either
legal tender or checks from the judgment debtor in satisfaction of
the judgment debt. In addition, Padilla, J. has underscored
the obligation of the sheriff, imposed upon him by the nature of his
office and the law, to turn over such legal tender, checks and
proceeds of execution sales to the judgment creditor. The failure of
a sheriff to effect such turnover and his conversion of the funds (or
goods) held by him to his own uses, do not have the effect of
frustrating payment by and consequent
578
578 SUPREME COURT REPORTS ANNOTATED
Philippine Airlines, Inc. vs. Court of Appeals
discharge of the judgment debtor.
To hold otherwise would be to throw the risk of the sheriff
faithfully performing his duty as a public officer upon those
members of the general public who are compelled to deal with him.
It seems to me that a judgment debtor who turns over funds or
property to the sheriff can not reasonably be made an insurer of the
honesty and integrity of the sheriff and that the risk of the sheriff
carrying out his duties honestly and faithfully is properly lodged in
the State itself. The sheriff, like all other officers of the court, is
appointed and paid and controlled and disciplined by the
Government, more specifically by this Court. The public surely has
a duty to report possible wrongdoing by a sheriff or similar officer to
the proper authorities and, if necessary, to testify in the appropriate
judicial and administrative disciplinary proceedings. But to make
the individual members of the general community insurers of the
honest performance of duty of a sheriff, or other officer of the court,
over whom they have no control, is not only deeply unfair to the
former. It is also a confession of comprehensive failure and comes
too close to an abdication of duty on the part of the Court itself. This
Court should have no part in that.
2. I also feel compelled to comment on the majority opinion
written by Gutierrez, J. with all his customary and special way with
words. My learned and eloquent brother in the Court apparently
accepts the proposition that payment by a judgment debtor of cash
to a sheriff produces the legal effects of payment, the sheriff being
authorized to accept such payment. Thus, in page 10 of
his ponencia,Gutierrez, J. writes:
“The receipt of money due on a judgment by an officer authorized by law to
accept it will satisfy the debt. (Citations omitted)
The theory is where payment is made to a person authorized and
recognized by the creditor, the payment to such a person so authorized is
deemed payment to the creditor. Under ordinary circumstances, payment
by the judgment debtor in the case at bar, to the sheriff would be valid
payment to extinguish the judgment debt.”
Shortly thereafter, however, Gutierrez, J. backs off from the above
position and strongly implies that payment in cash to the sheriff is
sheer imprudence on the part of the judgment debtor
579
VOL. 181, JANUARY 30, 1990 579
Philippine Airlines, Inc. vs. Court of Appeals
and that therefore, should the sheriff abscond with the cash, the
judgment debtor has not validly discharged the judgment debt:
“It is argued that if PAL had paid in cash to Sheriff Reyes, there would
have been payment in full legal contemplation. The reasoning is logical but
is it valid and proper?
In the first place, PAL did not pay in cash. It paid in checks.
And second, payment in cash always carries with it certain cautions.
Nobody hands over big amounts of cash in a careless and inane manner.
Mature thought is given to the possibility of the cash being lost, of the
bearer being waylaid or running off with what he is carrying for another.
Payment in checks is precisely intended to avoid the possibility of the
money going to the wrong party. x x x
 Payment in money or cash to the implementing officer may be deemed
absolute payment of the judgment debt but the court has never, in the least
bit, suggested that judgment debtors should settle their obligations by
turning over huge amounts of cash or legal tender to sheriffs and other
executing officers. x x x” (Italics in the original) (Majority opinion, pp. 12-
13)
There is no dispute with the suggestion apparently made that
maximum safety is secured where the judgment debtor delivers to
the sheriff not cash but a check made out, not in the name of the
sheriff, but in the judgment creditor’s name. The fundamental point
that must be made, however, is that under our law only cash is legal
tender and that the sheriff can be compelled to accept only cashand
not checks, even if made out to the name of the judgment
creditor. The sheriff could have quite lawfully required PAL to
1
deliver to him only cash, i.e., Philippine currency. If the sheriff had
done so, and if PAL had complied with such a requirement, as it
would have had to, one would have to agree that legal payment must
be deemed to have been effected. It requires no particularly acute
mind to note that a dishonest sheriff could easily convert the money
and abscond. The fact that the sheriff in the instant case required,
not cash to be delivered to him, but rather a check made out in his
name, does not change the legal situation. PAL did not thereby
become negligent; it did not make the loss anymore possible or
probable
_______________
1 Art. 1249, Civil Code; e.g., Belisario v. Natividad, 60
156 (1934); Villanueva v. Santos, 67 Phil 648 (1938).
580
580 SUPREME COURT REPORTS ANNOTATED
Philippine Airlines, Inc. vs. Court of Appeals
than if it had instead delivered plain cash to the sheriff.
It seems to me that the majority opinion’s real premise is the
unspoken one that the judgment debtor should bear the risk of the
fragility of the sheriff’s virtue until the money or property parted
with by the judgment debtor actually reaches the hands of the
judgment creditor. This brings me back to my earlier point that that
risk is most appropriately borne not by the judgment debtor, nor
indeed by the judgment creditor, but by the State itself. The Court
requires all sheriffs to post good and adequate fidelity bonds before
entering upon the performance of their duties and, presumably, to
maintain such bonds in force and effect throughout their stay in
office. The judgment creditor, in circumstances like those of the
2
instant case, could be allowed to execute upon the absconding
sheriff’s bond. 3
I believe the Petition should be granted and I vote accordingly.
PADILLA, J., Dissenting Opinion
From the facts that appear to be undisputed, I reach a conclusion
different from that of the majority. Sheriff Emilio Z. Reyes, the trial
court’s authorized sheriff, armed with a writ of execution to enforce
a final money judgment against the petitioner Philippine Airlines
(PAL) in favor of private respondent Amelia Tan, proceeded to
petitioner PAL’s office to implement the writ.
There is no question that Sheriff Reyes, in enforcing the writ of
execution, was acting with full authority as an officer of the law and
not in his personal capacity. Stated differently, PAL had every right
to assume that, as an officer of the law, Sheriff Reyes would perform
his duties as enjoined by law. It would be grossly unfair to now
charge PAL with advanced or constructive notice that Mr. Reyes
would abscond and not deliver to the judgment creditor the proceeds
of the writ of execution. If a judgment debtor cannot rely on and
trust an officer of the law, as the Sheriff, whom else can he trust?
_______________
Phil. 2See e.g., Sec. 46, Republic Act No. 296, as amended by Republic Act No. 4814.
3See e.g., Sec. 9, Act No. 3598.
581
VOL. 181, JANUARY 30, 1990 581
Philippine Airlines, Inc. vs. Court of Appeals
Pursued to its logical extreme, if PAL had delivered to Sheriff Reyes
the amount of the judgment in CASH, i.e. Philippine currency, with
the corresponding receipt signed by Sheriff Reyes, this would have
been payment by PAL in full legal contemplation, because under
Article 1240 of the Civil Code, “payment shall be made to the person
in whose favor the obligation has been constituted or his successor
in interest or any person authorized to receive it.” And said payment
if made by PAL in cash, i.e., Philippine currency, to Sheriff Reyes
would have satisfied PAL’s judgment obligation, as payment is a
legally recognized mode for extinguishing one’s obligation. (Article
1231, Civil Code).
Under Sec. 15, Rule 39, Rules of Court which provides that—
“Sec. 15. Execution of money judgments.—The officer must enforce an
execution of a money judgment by levying on all the property, real and
personal of every name and nature whatsoever, and which may be disposed
of for value, of the judgment debtor not exempt from execution, or on a
sufficient amount of such property, if there be sufficient, and selling the
same, and paying to the judgment creditor, or his attorney, so much of the
proceeds as will satisfy the judgment. x x x.” (emphasis supplied)
it would be the duty of Sheriff Reyes to pay to the judgment
creditor the proceeds of the execution i.e., the cash received from
PAL (under the above assumption). But, the duty of the sheriff to
pay the cash to the judgment creditor would be a matter separate
the distinct from the fact that PAL would have satisfied its
judgment obligation to Amelia Tan, the judgment creditor, by
delivering the cash amount due under the judgment to Sheriff
Reyes.
Did the situation change by PAL’s delivery of its two (2) checks
totalling P30,000.00 drawn against its bank account, payable to
Sheriff Reyes, for account of the judgment rendered against PAL? I
do not think so, because when Sheriff Reyes encashed the checks,
the encashment was in fact a payment by PAL to Amelia Tan
through Sheriff Reyes, an officer of the law authorized to receive
payment, and such payment discharged PAL’s obligation under the
executed judgment.
If the PAL checks in question had not been encashed by Sheriff
Reyes, there would be no payment by PAL and, conse-
582
582 SUPREME COURT REPORTS ANNOTATED
Philippine Airlines, Inc. vs. Court of Appeals
quently, no discharge or satisfaction of its judgment obligation. But
the checks had been encashed by Sheriff Reyes___giving rise to a
situation as if PAL had paid Sheriff Reyes in cash, i.e., Philippine
currency. This, we repeat, is payment, in legal contemplation, on the
part of PAL and this payment legally discharged PAL from its
judgment obligation to the judgment creditor. To be sure, the same
encashment by Sheriff Reyes of PAL’s checks delivered to him in his
official capacity as Sheriff, imposed an obligation on Sheriff Reyes
to pay and deliver the proceeds of the encashment to Amelia Tan
who is deemed to have acquired a cause of action against Sheriff
Reyes for his failure to deliver to her the proceeds of the
encashment. As held:
“Payment of a judgment, to operate as a release or satisfaction, even pro
tanto, must be made to the plaintiff or to some person authorized by him,
or by law, to receive it. The payment of money to the sheriff having an
execution satisfies it, and, if the plaintiff fails to receive it, his only remedy
is against the officer (Henderson v. Planters’ and Merchants Bank, 59 SO
493, 178 Ala. 420).
“Payment of an execution satisfies it without regard to whether the
officer pays it over to the creditor or misapplies it (340, 33 C.J.S. 644, citing
Elliot v. Higgins, 83 N.C. 459). If defendant consents to the Sheriff’s
misapplication of the money, however, defendant is estopped to claim that
the debt is satisfied (340, 33 C.J.S. 644, citing Heptinstall v. Medlin, 83
N.C. 16).”
The above rulings find even more cogent application in the case at
bar because, as contended by petitioner PAL (not denied by private
respondent), when Sheriff Reyes served the writ of execution on
PAL, he (Reyes) was accompanied by private respondent’s counsel.
Prudence dictated that when PAL delivered to Sheriff Reyes the two
(2) questioned checks (payable to Sheriff Reyes), private
respondent’s counsel should have insisted on their immediate
encashment by the Sheriff with the drawee bank in order to
promptly get hold of the amount belonging to his client, the
judgment creditor.
ACCORDINGLY, I vote to grant the petition and to quash the
court a quo’s alias writ of execution.
Petition dismissed. Judgment affirmed.
583
VOL. 181, JANUARY 30, 1990 583
Philippine National Bank vs. De Leon
Note.—Issuance of certificate of satisfaction of judgment is
proper even if payment of obligation was in cash and in check. (New
Pacific Timber and Supply Co. vs. Seneris, 101 SCRA 686).
——o0o——