284 SCRA 643 (1998)


The respondents, A.U Valencia & Penarroyo, filed a complaint for specific performance against petitioner Papa to deliver the title and turn over the accrued rentals. The case arose from a sale of a parcel of land allegedly made to 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.

On appeal, the petitioner argued that alleged sale of the subject property had not been consummated because he did not encashed the check (in the amount of P40,000.00), which did not produce the effect of payment as in Art. 1249 of the Civil Code.


Whether payments by check shall produce the effect of payment only when cashed?


It is an undisputed fact that respondents Valencia and Peñarroyo 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.

Petitioner himself admits having received said amounts, and having issued receipts therefor. Petitioner’s assertion that he never encashed the aforesaid check is not substantiated and is at odds with his statement in his answer that “he can no longer recall the transaction which is supposed to have happened 10 years ago.”

After more than ten (10) years from the payment in party by cash and in part by check, the presumption is that the check had been encashed. As already stated, he even waived the presentation of oral evidence.

Granting that petitioner had never encashed the check, his failure to do so for more than ten (10) years undoubtedly resulted in the impairment of the check through his unreasonable and unexplained delay.

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 check 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. It has, likewise, been held that if no presentment is made at all, the drawer cannot be held liable irrespective of loss or injury 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 no-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. Considering that respondents Valencia and Peñarroyo 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.

*Case digest by Meriam Rika R. Wong, JD-IV, Andres Bonifacio Law School, SY 2019-2020