PAL vs CA (GR No. 49188, 30 January 1990)

PAL vs CA (GR No. 49188, 30 January 1990)

Facts:
Amelia Tan was found to have been wronged by Philippine Air Lines (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. 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. Petitioner PAL filed a petition for review on certiorari the decision of Court of Appeals dismissing the petition for certiorari against the order of the Court of First Instance (CFI) which issued an alias writ of execution against them. Petitioner alleged that the payment in check had already been effected to the absconding sheriff, satisfying the judgment.

Issue:
Whether or not payment by check to the sheriff extinguished the judgment debt.

Held:
​No. 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. In the absence of an agreement, either express or implied, payment means the discharge of a debt or obligation in money 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. 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. The check as 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. A check, whether a manager’s check or ordinary cheek, 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).