Pio Barretto Realty Dev. Corp. v CA; G.R. No. 132362; 28 Jun 2001; 360 SCRA 127

in Legal Chyme by

Petitioner and private respondent entered into a Compromise Agreement to settle a land registration case involving four parcels of land, both agreeing to pay the other and the testate estate of Nicolai Drepin if either of them buys the property. Private respondent claimed to have bought the lots first on 15 January 1990 by delivering to the administrator of the Drepin estate two checks: one in favor of petitioner and the other in favor of the estate. Petitioner denied receiving the check, also contending that it bought the properties on 7 March 1990 by tendering a manager’s check each to private respondent and the estate administrator. However, both private respondent and estate administrator refused to accept the checks. On the order of the court, the deputy sheriff personally delivered the checks issued by petitioner to the other parties.

Whether or not petitioner’s payment in check constituted a legal tender of payment.

YES. While delivery of a check produces the effect of payment only when it is encashed, the rule is otherwise if the debtor is 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.

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