Assignment no 4: Extinguishment of Obligations

[G.R. No. 21901-96. June 27, 1978]

REPARATIONS COMMISSION, plaintiff-appellants, vs.
UNIVERSAL DEEP-SEA FISHING CORPORATION and
MANILASURETY AND FIDELITY CO., INC., Defendant-appellants
Facts:
1. Petitioner's/Plaintiff's claim/s

The plaintiff, Reparations Commission (RC) awarded

Universal six (6) trawl boats, which were delivered two at a
time, with each delivery covered by a Contract of Condition
Purchase and Sale that provided for the same payment
schedules. A performance bond in the amount of 53,643 was
performed in favor of RC to ensure faithful ₱ compliance with
the obligations under said contract, with Universal as principal
and Manila Surety & Fidelity Co., Inc. as surety. RC sued
Universal and its surety on August 10, 1962, to recover
various amounts owed under the contracts

2. Respondent’s/Defendant’s claim/s

The aforementioned property, along with other Butte

properties, appeared to have previously been mortgaged to
the bank, and the petitioner has been collecting monthly rent
from the tenants of the property, despite knowing that the
property had already been sold to Pearroyo. Private
respondent Penarroyo demanded that the title to the property
be transferred to him after Butte died, but the bank refused.
As a result, the respondents filed a specific performance
complaint against the petitioner in the Pasig Regional Trial
Court, demanding that the title be delivered and the accrued
rentals be turned over.
 3. Decision on lower courts
The lower court sided with the private respondents and
ordered herein petitioner to convey or pay for the property.
Hence, the petition for review on certiorari under Rule 45 of the
Rules of Court was filed by the petitioner.CA affirmed the lower
court's decision, with modifications.

ISSUES
4. Issue/s
Whether or not the check is a valid tender of payment.

HELD:
5. Disposition of the case
According to the verdict of the Supreme Court, the petition
for review is denied, and the appellate court's decision of January
27, 1992 is upheld

6. Dictum
Payment by checks shall produce the effect of payment
only when they have been cashed or when through the fault of
the creditor, they have been impaired (Article 1249 of the Civil
Code). Although it is correct that the delivery of a check results
in payment only when it is cashed, following Article 1249 of the
civil code, the rule is otherwise if the debtor is prejudiced by the
delay in a formal presentation of information to a court.
Acceptance of a check implied a commitment to exercise due
diligence in presenting it for payment. If the person who receives
it suffers a loss as a result of his or her failure to exercise due
diligence, the check will be considered actual payment of the
debt or obligation for which it was written. If the non-presentment
of the check was due to the creditor's error, the debtor can no
longer be held liable.