PAL v CA

G.R. No. L-49188 January 30, 1990

Art. 1240 – Payment shall be made to person in whose favor obligation has been constituted.

Art. 1249 – Payment of debts in money shall be made in currency.

Facts:

·          The petition involved the alias writ of execution when respondent Amelia Tan commenced a complaint for damages against PAL, which CDI Manila rendered a decision in her favor.

·          The CA affirmed the decision with modification that PAL shall pay Tan P25,000.00 as damages and P5,000.00 as attorney's fee, with costs.

·          The case was remanded to the trial court for execution and Tan filed a motion praying for the issuance of a writ of execution of the judgment rendered by the CA.

·          Four months later, 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.

·          In opposition, PAL countered that it already fully paid its obligation to Tan through the deputy sheriff of the respondent court, Emilio Z. Reyes, as evidenced by cash vouchers properly signed and receipted by said sheriff who had absconded.

Issues:

(1) WoN the payment made to the absconding sheriff by check in his name did operate to satisfy the judgment debt.

(2) WoN such payments extinguish the judgment debt.

Held:

            (1) No, the Court disagrees that the payment made to the absconding sheriff by check in his name operates to satisfy the judgment debt. 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 that “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.”

In the instant case, because PAL did not issue the checks intended for her, in her name, but to the absconding sheriff, such payment did not extinguish the judgment debt.

(2) No, the Court rules that 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.

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 of the creditor they have been impaired.

In the meantime, the action derived from the original obligation shall be held in abeyance.

           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. 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.            
           Thus, the petition is hereby DISMISSED.