Papa v. Valencia Digest

Papa v. Valencia

G.R. No. 105188 January 23, 1998

Banking; Checks

Facts:

1. The case arose from a sale of a parcel of land allegedly made to private respondent Penarroyo by petitioner acting as attorney-in-fact of Anne Butte. The purchaser, through Valencia, made a check payment in the amount of P40,000 and in cash, P5,000. Both were accepted by petitioner as evidenced by various receipts. It appeared that the said property has already been mortgaged to the bank previously together with other properties of Butte.

2. When Butte passed away, the private respondent Penarroyo now demanded that the title to the property be conveyed to him, however the bank refused. Hence, the filing of a suit for specific performance by private respondents against the petitioner. 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. 

3. The Court of Appeals affirmed with modifications the lower court's decision. It held that there was a consummated sale of the subject property despite.

Issue: Whether or not the check is a valid tender of payment/Whether or not there was a valid sale of the subject property

RULING: Yes. While it is true that the delivery of check produces payment only when encashed (pursuant to Art. 1249, Civil Code), the rule is otherwise if the debtor is prejudiced by the delay in presentment. (Here in this case, the petitioner now alleges that he did not present the check, ten years after the same was paid to him as part of the purchase price of the property.)

Check acceptance implied an undertaking of due diligence in presenting it for payment. If the person who receives it sustains loss by want of this diligence, this will operated as actual payment of the debt or obligation for which the check was given. The debtor cannot now be held liable if non-presentment of the check was through the fault of the creditor.