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G.R. No. 105188 – 284 SCRA 643 – Mercantile Law – Negotiable Instruments Law – Consummation of Sale in Lieu of Check Payment
Myron Papa is the administrator of the estate of Angela Butte. In 1973, he sold a portion of said estate to Felix Peñarroyo through A.U. Valencia and Co., Inc. Peñarroyo gave Papa P5,000.00 plus a check worth P40,000.00. However, Papa was not able to deliver the certificate of title to Peñarroyo. A litigation ensued and ten years after, Papa argued that the sale between him and Peñarroyo was never consummated because he did not encash the P40,000.00 check and that the P5,000.00 cash was merely earnest money.
ISSUE: Whether or not Papa is correct.
HELD: No. After more than ten (10) years from the payment in part by cash and in part by check, the presumption is that the check had been encashed. Granting that Papa 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 Article 1249 of the Civil Code, the rule is otherwise if the debtor (Peñarroyo) is prejudiced by the creditor’s (Papa’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.
