[G.R. No. 84281. May 27, 1994.

]
CITYTRUST BANKING CORPORATION, petitioner, vs. THE INTERMEDIATE APPELLATE COURT and EMME
HERRERO, respondents.
VITUG, J p
FACTS OF THE CASE:
This case was a complaint filed by Emmer Herrero for damages against City trust Banking Corporation where she
averred that she was a businesswoman and made regular deposits, starting September of 1979, with petitioner Citytrust
Banking Corporation. On 15 May 1980, she deposited with petitioner the amount of Thirty One Thousand Five
Hundred Pesos (P31,500.00), in cash, in order to amply cover six (6) postdated checks she issued, viz:
007383 P1,507.00
007384 1,262.00
007387 4,299.00
007389 2,204.00
007492 6,281.00
007400 4,716.00
When presented for encashment upon maturity, all the checks were dishonored due to "insufficient funds."
The last check No. 007400, however, was personally redeemed by private respondent in cash before it could be
redeposited. cdrep
Petitioner, in its answer, asserted that it was due to private respondent's fault that her check were dishonored. It
averred that instead of stating her correct account number. i.e., 29000823, in her deposit slip, she inaccurately
wrote 2900823. The RTC of Laguna dismissed the complaint for lack of merit in favor of CityTrust Bank. Private
respondent went to the Court of Appeals, which found the appeal meritorious. Hence, it rendered judgment, on 15 July
1988, reserving the trial court's decision.
Petitioner bank concedes that it is its obligation to honor checks issued by private respondent which are
sufficiently funded, but, it contends, private respondent has also the duty to use her account in accordance with the
rules of petitioner bank to which she has contractually acceded whereas:
"In making a deposit . . . kindly insure accuracy in filing said deposit slip forms as we hold ourselves free of any
liability for loss due to an incorrect account number indicated in the deposit slip although the name of the depositor is
correctly written."
The appellate court contends that even if it were true that there was error on the part of the plaintiff in omitting a
'zero' in her account number, yet, it is a fact that her name, `Emme E. Herrero,' is clearly written on said deposit slip (Exh.
`B'). This is controlling in determining in whose account the deposit is made or should be posted. This is so because it is
not likely to commit an error in one's name than merely relying on numbers which are difficult to remember, especially a
number with eight (8) digits as the account numbers of defendant's depositors. We view the use of numbers as simply
for the convenience of the bank but was never intended to disregard the real name of its depositors. In the first
place, the teller should not have accepted plaintiff's deposit without correcting the account number on the deposit slip
which, obviously, was erroneous because, as pointed out by defendant, it contained only seven (7) digits instead of eight
(8). This, indeed, could have been avoided at the first instance had the teller of defendant bank performed her duties
efficiently and well. That is, or should be, part of the training and standard operating procedure of the bank's employees.
On the other hand, the depositors are not concerned with banking procedure. That is the responsibility of the bank and its
employees.

ISSUE OF THE CASE:

Whether or not Citytrust banking Corp. has the duty to honor checks issued by Emme Herrero despite the failure
to accurately stating the account number resulting to insufficiency of funds for the check.

RULING OF THE COURT:

The CAs decision is affirmed. In Simmer International (Manila), Inc. vs. Court of Appeals, in cautioning depository
banks on their fiduciary responsibility SC ruled that:
"In every case, the depositor expects the bank to treat his account with utmost fidelity, whether such
account consists only of a few hundred pesos or of millions. The bank must record every single transaction
accurately, down to the last centavo, and as promptly as possible. This has to be done if the account is to reflect at
any given time the amount of money the depositor can dispose of as he sees fit, confident that the bank will deliver it as
and to whomever he directs. A blunder on the part of the bank, such as the dishonor of a check without good reason, can
cause the depositor not a little embarrassment if not also financial loss and perhaps even civil and criminal litigation. LLpr
We agree with petitioner, however, that it is wrong to award, along with nominal damages, temperate or moderate
damages. The two awards are incompatible and cannot be granted concurrently. Nominal damages are given in order that
a right of the plaintiff, which has been violated or invaded by the defendant, may be vindicated or recognized, and not for
the purpose of indemnifying the plaintiff for any loss suffered by him (Art. 2221, New Civil Code; Manila Banking Corp. vs.
Intermediate Appellate Court, 131 SCRA 271). In the instant case, we also find need for vindicating the wrong done on
private respondent, and we accordingly agree with the Court of Appeals in granting to her nominal damages but not in
similarly awarding temperate or moderate damages.
CASE DOCTRINE:
Even there was error on the account number the controlling in determining in whose account the deposit is name
of the account owner. This is so because it is not likely to commit an error in ones name than merely relying on numbers
which are difficult to remember. Numbers are for the convenience of the bank but was never intended to disregard the real
name of its depositors. The bank is engaged in business impressed with public trust, and it is its duty to protect in return
its clients and depositors who transact business with it.

[G.R. No. 108555. December 20, 1994.]

RAMON TAN, petitioner, vs. THE HONORABLE COURT OF APPEALS and RIZAL COMMERCIAL BANKING
CORPORATION, respondents.
KAPUNAN, J p:
FACTS OF THE CASE:
Petitioner Ramon Tan, a trader-businessman and community leader in Puerto Princesa, had maintained since
1976 Current Account No. 109058068 with respondent bank's Binondo branch. On March 11, 1988, to avoid carrying cash
while enroute to Manila, he secured a Cashier's Check No. L 406000126 from the Philippine Commercial Industrial
Bank (PCIB), Puerto Princesa branch, in the amount of Thirty Thousand (P30,000.00) Pesos, payable to his order.
He deposited the check in his account with RCBC. On the same day, RCBC erroneously sent the same cashier's check
for clearing to the Central Bank which was returned for having been "missent" or "misrouted."1 The next day, RCBC
debited the amount covered by the same cashier's check from the account of the petitioner. Respondent bank at this
time had not informed the petitioner of its action which the latter claims he learned of only 42 days after ,
specifically on March 16, when he received the bank's debit memo.
2 Relying on the common knowledge that a cashier's check was as good as cash, that the usual banking practice
that local checks are cleared within three (3) working days and regional checks within seven (7) working days, and the
fact that the cashier's check was accepted, petitioner issued two (2) personal checks both dated March 18 in the name of
Go Lac for Five Thousand Five Hundred (P5,5000.00) Pesos was presented on April 25, 3 more than 30 days from
petitioner's deposit date of the cashier's check. And in the name of MS Development Trading Corporation for Six
Thousand Fifty-Three Pesos and Seventy Centavos (P6,053.70) was returned twice on March 24, nine (9) days from his
deposits date and again on April 26, twenty-two days after the day the cashier's check was deposited for insufficiency of
funds.

Petitioner filed a complaint against RCBC that it was the banks responsibility to call his attention when it
erroneously filled the wrong deposit slip and when it misspent the cashiers check to the Central Bank knowing that it was
from PCIB Puerto Princesa Branch, not included in the areas covered by Central Bank, that RCBC failed to inform
petitioner that the check had not been cleared despite its debiting without delay the amount covered by the check from the
account of the petitioner and hastily charging the latter service fees immediately after the return of the "missent checks"
and with such error there was doubt in his credibility as a businessman and community leader which sullied his reputation
that he built on for years.
In its defense, RCBC disowning any negligence, put the blame for the "misrouting" on the petitioner for using the
wrong check deposit slip. It insisted that the misuse of a local check deposit slip, instead of a regional check deposit slip,
triggered the "misrouting" by RCBC of the cashier's check to the Central Bank and it was petitioner's negligent "misuse" of
a local deposit slip which was the proximate cause of the "misrouting", thus he should bear the consequence, it
dishonored the two (2) checks amounting to P11,553.70 since they were drawn against insufficient funds. RCBC added
that petitioner had no bills purchase (BP) line which allows a depositor to receive or draw from proceeds of a check
without waiting it to be cleared. Besides, RCBC maintained that, it would take at least twenty (20) working days for the
cashier's check to be cleared and it would take the same length of time to clear the two (2) personal checks of Tan.
RCBC further asseverated it was merely acting as petitioner's collecting agent and it assumed no
responsibility beyond care in selecting correspondents under the theory that where a check is deposited with a collecting
bank the relationship created is that of agency and not creditor-debtor, thus it cannot be liable. 16 and that serious
attempts were made to contact petitioner through the telephone numbers in the signature specimen card of petitioner but
to no avail. 17
The trial court rendered a decision on December 28, 1990 in petitioner's favor (tan), The CA reversed the decision
of the trial court and dismissed the complaint. The evidence indicated that the defendant bank thru its personnel had
called him up thru telephone in the number (No. 60-45-23) which he gave in his specimen signature card. But it came out,
that said telephone number was no longer active or was already deleted from the list of telephone numbers.
There was an instruction on the part of the plaintiff for the bank to contact his daughter, Mrs. Evelyn Tan Banzon
which also could not be contacted at the number supposed to pertain to her as appeared in the specimen signature card.
In the instant case, prior to the deposit of P30,000.00, the plaintiff's account appeared to be only in the amount of
P2,792.98. So the two (2) checks issued by the plaintiff amounting to P11,553.70 had to be dishonored since they were
drawn against insufficient funds. Petitioner seeks to reverse the decision of the Court of Appeals and affirm that of the
lower court.
ISSUE OF THE CASE:
Whether or not a cashier check is as good as cash, so as to have funded the two checks subsequently drawn by
the Petitioner and who should be held liable
RULING OF THE COURT:
The decision of the CA is reversed, and RCBC be held liable to the petitioner. Bank clients are supposed to rely
on the services extended by the bank, including the assurance that their deposits will be duly credited them as
soon as they are made. The point is that as a business affected with public interest and because of the nature of
its functions, the bank is under obligation to treat the accounts of its depositors with meticulous care, always
having in mind the fiduciary nature of their relationship. The respondent bank cannot exculpate itself from liability
by claiming that its depositor "impliedly instructed" the bank to clear his check with the Central Bank by filling a
local check deposit slip. Such posture is disingenuous, to say the least. First, why would RCBC follow a patently
erroneous act born of ignorance or inattention or both? Second, bank transactions pass through a succession
of bank personnel whose duty is to check and countercheck transactions for possible errors. In the instant
case, the teller should not have accepted the local deposit slip with the cashier's check that on its face
was clearly a regional check without calling the depositor's attention to the mistake at the very moment
this was presented to her. Neither should everyone else down the line who processed the same check for
clearing have allowed the check to be sent to Central Bank
We do not subscribe to RCBC's assertion that petitioner's use of the wrong deposit slip was the proximate cause
of the clearing fiasco and so, petitioner must bear the consequence, where the conclusion is inevitable that respondent
RCBC had been remiss in the performance of its duty and obligation to its client, as well as to itself. We draw attention to

the fact that the two dishonored checks issued by petitioner, Check No. 040719 and Check No. 040718 were presented
for payment 24 more than 45 days from the day the cashier's check was deposited. This gave RCBC more than
ample time to have cleared the cashier's check had it corrected its "missending" the same upon return from Central Bank
using the correct slip this time so it can be cleared properly. Instead, RCBC promptly debited the amount of P30,000.00
against petitioner's account and left it at that.
An ordinary check is not a mere undertaking to pay an amount of money. There is an element of certainty
or assurance that it will be paid upon presentation that is why it is perceived as a convenient substitute for
currency in commercial and financial transactions. Now, what was presented for deposit in the instant cases was
not just an ordinary check but a cashier's check payable to the account of the depositor himself. A cashier's
check is a primary obligation of the issuing bank and accepted in advance by its mere issuance. 27 By its very
nature, a cashier's check is the bank's order to pay drawn upon itself, committing in effect its total resources,
integrity and honor behind the check. A cashier's check by its peculiar character and general use in the
commercial world is regarded substantially to be as good as the money which it represents.
All these considered, petitioner's reliance on the layman's perception that a cashier's check is as good as cash is
not entirely misplaced, as it is rooted in practice, tradition, and principle. We see no reason thus why this so-called
discretion was not exercised in favor of petitioner, especially since PCIB and RCBC are members of the same clearing
house group relying on each other's solvency. RCBC could surely rely on the solvency of PCIB when the latter issued its
cashier's check.
CASE DOCTRINE:
A cashiers check is a primary obligation of the issuing bank and accepted in advance by its mere issuance, and
by its peculiar character and general use in the commercial world is regarded substantially to be as good as the money
which it represents.
[G.R. No. 105188. January 23, 1998.]
MYRON C. PAPA, Administrator of the Testate Estate of Angela M. Butte, petitioner, vs. A.U. VALENCIA and
CO. INC., FELIX PEARROYO, SPS. ARSENIO B. REYES & AMANDA SANTOS, and DELFIN JAO, respondents
KAPUNAN, J p:
FACTS OF THE CASE:
The complaint alleged that on 15 June 1973, petitioner Myron C. Papa, acting as attorney-in-fact of Angela M.
Butte, sold to respondent Pearroyo, through respondent Valencia, a parcel of land, consisting of 286.60 square meters,
located at corner Retiro and Cadiz Streets, La Loma, Quezon City, and covered by Transfer Certificate of Title No. 28993
of the Register of Deeds of Quezon City; Pearroyo gave Papa P5,000.00 plus a check worth P40,000.00. However,
Papa was not able to deliver the certificate of title to Pearroyo. that prior to the alleged sale, the said property,
together with several other parcels of land likewise owned by Angela M. Butte, had been mortgaged by her to the
Associated Banking Corporation (now Associated Citizens Bank); that after the alleged sale, but before the title to the
subject property had been released, Angela M. Butte passed away; that despite representations made by herein
respondents to the bank to release the title to the property sold to respondent Pearroyo, the bank refused to release it
unless and until all the mortgaged properties of the late Angela M. Butte were also redeemed; that in order to protect his
rights and interests over the property, respondent Pearroyo caused the annotation on the title of an adverse claim as
evidenced by Entry No. PE. 6118/T-28993, inscribed on 18 January 1977.
The complaint further alleged that it was only upon the release of the title to the property, sometime in
April 1977, that respondents Valencia and Pearroyo discovered that the mortgage rights of the bank had been
assigned to one Tomas L. Parpana (now deceased), as special administrator of the Estate of Ramon Papa. Jr., on 12
April 1977; that since then, herein petitioner had been collecting monthly rentals in the amount of P800.00 from the
tenants of the property, knowing that said property had already been sold to private respondents on 15 June 1973;

that despite repeated demands from said respondents, petitioner refused and failed to deliver the title to the property.
Thereupon, respondents Valencia and Pearroyo filed a complaint for specific performance, praying that petitioner be
ordered to deliver to respondent Pearroyo the title to the subject property (TCT 28993); to turn over to the latter the sum
of P72,000.00 as accrued rentals as of April 1982, and the monthly rental of P800.00 until the property is delivered to
respondent Pearroyo; In his Answer, petitioner admitted that the lot had been mortgaged to the Associated Banking
Corporation (now Associated Citizens Bank). He contended, however, that the complaint did not state a cause of action;
that the real property in interest was the Testate Estate of Angela M. Butte, which should have been joined as a party
defendant; that the case amounted to a claim against the Estate of Angela M. Butte and should have been filed in Special
Proceedings, that he did not have TCT No. 28993 in his possession; that he could not be held personally liable as he
signed the deed merely as attorney-in-fact of said Angela M. Butte. Petitioner argued that the sale between him and
Pearroyo was never consummated because he did not encash the P40,000.00 check and that the P5,000.00 cash
was merely earnest money.
Upon his motion, herein private respondent Delfin Jao alleged that the subject lot which had been sold to
respondent Pearroyo through respondent Valencia was in turn sold to him on 20 August 1973 for the sum of P71,500.00,
and that after the delivery of the title to said respondents, the latter in turn be ordered to execute in his favor the
appropriate deed of conveyance covering the property in question and to turn over to him the rentals which aforesaid
respondents sought to collect from petitioner Myron C. Papa.
For his part, petitioner filed a third party complaint,against herein private respondents, spouses Arsenio B. Reyes
and Amanda Santos (respondent Reyes spouses, for short). He averred, among others, that the late Angela M. Butte was
the owner of the subject property; that due to non-payment of real estate tax said property was sold at public auction by
the City Treasurer of Quezon City to the respondent Reyes spouses, that respondents Valencia and Pearroyo had sued
petitioner Papa as administrator of the estate of Angela M. Butte, for the delivery of the title to the property; that petitioner
was willing to reimburse respondent Reyes spouses whatever amount they might have paid for taxes and other charges,
since the subject property was still registered in the name of the late Angela M. Butte;
The lower court ruled in favor of the private respondents and ordered herein petitioner the conveyance or the
property or if not, its payment. The petitioner appealed the lower court's decision alleging that the sale was not
consummated as he never encashed the check given as part of the purchase price.
In affirming the trial court's decision, respondent court held that contrary to petitioner's claim that he did not
encash the aforesaid check, and therefore, the sale was not consummated, there was no evidence at all that petitioner did
not, in fact, encash said check. On the other hand, respondent Pearroyo testified in court that petitioner Papa had
received the amount of P45,000.00 and issued receipts therefor According to respondent court, the presumption is that
the check was encashed, especially since the payment by check was not denied by defendant-appellant (herein
petitioner) who, in his Answer, merely alleged that he "can no longer recall the transaction which is supposed to have
happened 10 years ago. Petitioner insists that he never cashed said check; and, such being the case, its delivery never
produced the effect of payment. Petitioner, while admitting that he had issued receipts for the payments, asserts that said
receipts, particularly the receipt of PCIB Check No. 761025 in the amount of P40,000.00, do not prove payment. He avers
that there must be a showing that said check had been encashed.
ISSUE OF THE CASE:
Whether or not the check is a valid tender of payment/Whether or not there was a valid sale of the subject
property
RULING OF THE COURT:
We find no merit in petitioner's arguments. The petition is denied. CAs decision is affirmed. It is an undisputed fact
that respondents Valencia and Pearroyo had given petitioner Myron C. Papa the amounts of Five Thousand Pesos
(P5,000.00) in cash on 24 May 1973, and Forty Thousand Pesos (P40,000.00) in check on 15 June 1973, in payment of
the purchase price of the subject lot. After more than ten (10) years from the payment in part by cash and in part by check,
the presumption is that the check had been encashed.
While it is true that the delivery of a check produces the effect of payment only when it is cashed, pursuant to Art.
1249 of the Civil Code, the rule is otherwise if the debtor is prejudiced by the creditor's unreasonable delay in
presentment. The acceptance of a cheek implies an undertaking of due diligence in presenting it for payment, and
if he from whom it is received sustains loss by want of such diligence, it will be held to operate as actual payment

of the debt or obligation for which it was given. 11 It has, likewise, been held that if no presentment is made at all,
the drawer cannot be held liable irrespective of loss or injury 12 unless presentment is otherwise excused. This is
in harmony with Article 1249 of the Civil Code under which payment by way of check or other negotiable instrument is
conditioned on its being cashed, except when through the fault of the creditor, the instrument is impaired. The payee of a
check would be a creditor under this provision and if its non-payment is caused by his negligence, payment will
be deemed effected and the obligation for which the check was given as conditional payment will be
discharged. 13
Considering that respondents Valencia and Pearroyo had fulfilled their part of the contract of sale by delivering
the payment of the purchase price, said respondents, therefore, had the right to compel petitioner to deliver to them the
owner's duplicate of TCT No. 28993 of Angela M. Butte and the peaceful possession and enjoyment of the lot in question.
Neither is the estate of Ramon Papa, Jr. an indispensable party without whom, no final determination of the action
can be had. Whatever prior and subsisting mortgage rights the estate of Ramon Papa, Jr. has over the property may still
be enforced regardless of the change in ownership thereof.
CASE DOCTRINE:
After more than 10 years from the payment in part by cash and in part by check, the presumption is that the check
had been encashed. Failure of the payee to encash a check for more than 10 years undoubtedly resulted in the
impairment of the check through his unreasonable and unexplained delay.

[G.R. No. 132362. June 28, 2001.]

PIO BARRETTO REALTY DEVELOPMENT CORPORATION, petitioner, vs. COURT OF APPEALS, JUDGE
PERFECTO A.S. LAGUIO, JR., RTC-Branch 18, Manila, and HONOR P. MOSLARES, respondents.
BELLOSILLO, J p:
FACTS OF THE CASE:
On 2 October 1984 respondent Honor P. Moslares instituted an action for annulment of sale with damages before
the Regional Trial Court of Manila against the Testate Estate of Nicolai Drepin represented by its Judicial Administrator
Atty. Tomas Trinidad and petitioner Pio Barretto Realty Development Corporation. Moslares alleged that the Deed of
Sale over four (4) parcels of land of the Drepin Estate executed in favor of the Barretto Realty was null and void
on the ground that the same parcels of land had already been sold to him by the deceased Nicolai Drepin.
On 2 May 1986 the parties, to settle the case, executed a Compromise Agreement pertinent portions of which are
quoted
a. If plaintiff Honor P. Moslares . . . buys the property, he is under obligation, as follows:
1. To reimburse and pay Defendant Pio Barretto Realty Development Corporation, represented by Anthony Que,
its capital investment of Three Million Pesos (P3,000,000.00), Philippine Currency, and
2. To pay the Estate of Nicolai Drepin, represented by the Judicial Administrator, Atty. Tomas Trinidad, the sum of
One Million Three Hundred Fifty Thousand (P1,350,000.00) Pesos, Philippine Currency
b. If defendant Pio Barretto Realty Development Corporation, represented by Mr. Anthony Que . . . continue[s] to
buy the property, it shall pay for the interests of plaintiff Honor P. Moslares:
1. The sum of One Million (P1,000.000.00) Pesos, Philippine Currency to plaintiff Honor P. Moslares personally
and
2. Pay to the Estate of Nicolai Drepin, through the Judicial Administrator, Atty. Tomas Trinidad, the balance of the
agreed purchase price subject to negotiation and verification of payments already made.

2. In the event that plaintiff Honor P. Moslares buys the Estate and pays in full the amount of Three Million
(P3,000,000.00) Philippine Currency to defendant Pio Barretto Realty Development Corporation, and the full sum of One
Million Three Hundred Fifty Thousand (P1,350,000.00) Pesos, Philippine Currency, to the Estate of Nicolai Drepin,
through
It must be noted that the Compromise Agreement merely gave Moslares and Barretto Realty options to buy the
disputed lots thus implicitly recognizing that the one who paid first had priority in right. Moslares claimed that he
bought the lots first on 15 January 1990 by delivering to Atty. Tomas Trinidad two (2) PBCom checks, one (1) in
favor of Barretto Realty for P3 million, and the other, in favor of the Drepin Estate for P1.35 million.
But petitioner Barretto Realty denied receiving the check. Instead, it claimed that it bought the properties
on 7 March 1990 by tendering a Traders Royal Bank Manager's Check for P1 million to Moslares, and a Far East
Bank and Trust Company Cashier's Check for P1 million and a Traders Royal Bank Manager's Check for
P350,000.00 to Atty. Tomas Trinidad as Judicial Administrator of the Estate. However, Moslares and Atty. Trinidad
refused to accept the checks.
On 10 May 1990 3 Judge Laguio, Jr. ordered that "a writ of execution be issued for the enforcement of the
decision of this Court for the parties to deposit with this Court, thru the City Treasurer's Office of Manila, their respective
monetary obligations under the compromise agreement that had been executed by them . . ."
On 20 June 1990 Deputy Sheriff Apolonio L. Golfo of the RTC-Br. 18, Manila, implemented the order by
personally delivering the checks issued by Barretto Realty in favor of Moslares and the Estate to Atty. Pedro S. Ravelo,
counsel for Moslares, and to Atty. Tomas Trinidad, respectively, as recorded in a Sheriff's Return dated 25 June 1990. 5
However, on 17 September 1993, or more than three (3) years later, Moslares filed a Motion for Execution. He
asked that Barretto Realty be directed to execute a deed of conveyance over subject lots in his favor. In a Supplement to
his motion Moslares contended that the previous tender of the checks by Barretto Realty did not produce the effect
of payment because checks, according to jurisprudence, were not legal tender.
Respondent Judge granted Moslares' Motion for Execution. Consequently, on 8 November 1993 Barretto Realty
was ordered to execute a deed of conveyance over the subject lots in favor of Moslares.
Aggrieved, Barretto Realty moved for reconsideration alleging that respondent Judge could no longer grant
Moslares' motion since the prior sale of subject lots in its favor had already been recognized when the court
sheriff was directed to deliver, and did in fact deliver, the checks it issued in payment therefor to Moslares and
Atty. Trinidad.
On 7 December 1993 respondent Judge granted the motion of Barretto Realty for reconsideration and ruled
Such being the case, Defendant Pio Barretto Realty Corporation Inc., is the absolute owner of the real properties
in question and the issue on such ownership is now a closed matter.
Within a reglementary period Moslares moved to reconsider insisting that Barretto Realty's payment by check was
not valid because (a) the check was not delivered personally to him but to his counsel Atty. Pedro Ravelo, (b) the
check was not encashed hence did not produce the effect of payment; and, (c) the check was not legal tender per
judicial pronouncements. Respondent Judge granted the motion for reconsideration and set aside his Order of 7
December 1993. Judge Laguio ruled that Barretto Realty's payment through checks was not valid because "a check is not
legal tender and it cannot produce the effect of payment until it is encashed . . . the check in question has neither been
negotiated nor encashed by the plaintiff." 7 , Judge ordered defendant Pio Barretto Realty Development Corporation, Inc.,
to pay the plaintiff (in the event the latter should fail to exercise his said option and the former would want to buy the real
property in question) the sum of P1,000,000.00.
But Moslares failed to exercise his option and pay the amount within the five (5)-day period granted him. Instead,
he filed a Supplemental Motion to Pay praying that he be given additional seven (7) days within which to do so. Barretto
Realty prayed that the P1 million cashier's check still in Moslares' possession be considered as sufficient
compliance with the pertinent provision of the court's order. Later, Barretto Realty offered to exchange the check with
cash. When Moslares did not appear however at the designated time for payment on 10 March 1994 before the Branch
Clerk of Court, Barretto Realty filed a Motion for Consignation praying that it be allowed to deposit the P1,000,000.00

Respondent Judge Laguio found Moslares' motions meritorious and granted them. Moslares was thus given a
non-extendible grace period of three (3) days within which to pay the P3,000,000.00 to Barretto Realty. Moslares then
deposited the amount with the Branch Clerk of Court of Br. 18 within two (2) days from receipt of the order of respondent
Judge, and on 25 April 1994 filed a motion for the Clerk of Court to be authorized to execute the necessary deed of
conveyance in his favor.
On 2 May 1994 Barretto Realty filed a petition for certiorari and prohibition with prayer for a temporary restraining
order and/or preliminary injunction with the Court of Appeals assailing the Orders of respondent Judge which also granted
Moslares' motion. CA denied the petition.

ISSUE OF THE CASE:

Whether or not said checks were considered legal tender in payment for the realty of the deceased Drepin
RULING OF THE COURT:
We grant the petition, in favor of Pio Barreto. Final and executory decisions, more so with those already executed,
may no longer be amended except only to correct errors which are clerical in nature. It is not disputed, and in fact borne
by the records, that petitioner bought the disputed lots of the Drepin Estate and that the checks issued in payment thereof
were even personally delivered by the Deputy Sheriff of the RTC-Br. 18, Manila, after tender was refused by Moslares and
the Drepin Estate. Respondent Moslares never raised the invalidity of the payment through checks either through a
motion for reconsideration or a timely appeal.
As already stated petitioner paid for the lots through the court-sanctioned procedure outlined above. There was
no more need for the Drepin Estate, owner of the lots, to execute a deed of conveyance in petitioner's favor
because it had already done so on 10 October 1980. In fact the disputed lots were already registered in
petitioner's name under TCT Nos. 50539, 50540 and 50541 as a consequence thereof. That was also why in the
penultimate paragraph of theCompromise Agreement it was provided that in the event respondent Moslares bought the
lots ahead of petitioner Barretto Realty the latter, not the Drepin Estate, was to execute the corresponding deed of
conveyance and deliver all the titles and pertinent papers to respondent Moslares
The fact that the check paid to him by Barretto Realty was never encashed should not be invoked against
the latter. As already stated, Moslares never questioned the tender done three (3) years earlier. Besides, while
delivery of a check produces the effect of payment only when it is encashed, the rule is otherwise if the debtor was
prejudiced by the creditor's unreasonable delay in presentment. Acceptance of a check implies an undertaking of due
diligence in presenting it for payment. If no such presentment was made, the drawer cannot be held liable
irrespective of loss or injury sustained by the payee. Payment will be deemed effected and the obligation for
which the check was given as conditional payment will be discharged. 18
Considering the foregoing, respondent Judge Laguio's Order dated 8 November 1993 which granted private
respondent's motion for execution thus nullifying the 1990 sale in favor of petitioner after he had in effect approved such
sale in his Order of 14 June 1990 and after such order had already become final and executory, amounted to an
oppressive exercise of judicial authority, a grave abuse of discretion amounting to lack of jurisdiction, for which reason, all
further orders stemming therefrom are also null and void and without effect. 19
The principle of laches does not attach when the judgment is null and void for want of jurisdiction. 20 The fact that
petitioner invoked par. 3 of the Order of 11 February 1994 praying that its P1,000,000.00 check still in Moslares'
possession be considered sufficient payment of the disputed lots, could not be cited against it. For one thing, petitioner
from the very start had always consistently questioned and assailed the jurisdiction of the trial court to entertain
respondent's motion for execution filed three (3) years after the case had in fact been executed. Secondly, estoppel being
an equitable doctrine cannot be invoked to perpetuate an injustice. 21
Consequently, petitioner Pio Barretto Realty Development Corporation is declared the absolute owner of
the disputed properties subject matter of the compromise agreement dated 2 May 1986 as fully implemented by
the Deputy Sheriff, RTC-Br. 18, Manila, pursuant to the final and executory Order dated 14 June 1990 of its
Presiding Judge Perfecto A. S. Laguio, Jr.
CASE DOCTRINE:

If the debtor was prejudiced by the creditor's unreasonable delay in presentment. Acceptance of a check implies
an undertaking of due diligence in presenting it for payment. If no such presentment was made, the drawer cannot be held
liable irrespective of loss or injury sustained by the payee. Payment will be deemed effected and the obligation for which
the check was given as conditional payment will be discharged.