Name: Abelita, John Rey D.

Time: 8:30 9:30 PM

Subject: LAW1A

Date 10/19/16

Mataas na Lupa Tenants Association vs Carlos Dimayuga andJuliana Diego

Vda, De Gabriel L-32049
This petition for review on certiorari presents for review the order dated October
30, 1969 of the defunct Court of First Instance of Manila, Branch IV, which granted
the motion to dismiss the complaint of petitioners in Civil Case No. 75391 on the
ground that the same failed to state a cause of action (p. 16, rec.; pp. 1, 100, CFI
rec.).
The undisputed facts are as follows:
On January 17, 1969, petitioners filed a complaint for the exercise of preferential
rights with the then Court of First Instance of Manila, Branch IV, docketed as Civil
Case No. 75391 (p. 32, rec.; p. 1, CFI rec.).
The said complaint alleged that petitioner association has for its members Nicolas
Aglabay, et al., named and listed in Annex "A" of said complaint, which members
are heads of 110 tenant families, and who have been, for more than ten years prior
to 1959, occupants of a parcel of land (with their 110 houses built thereon),
formerly owned by the respondent, Juliana Diez Vda. de Gabriel, to whom
petitioners have been paying rents for the lease thereof, but who, on May 14, 1968,
without notice to petitioners, sold the same to respondent Carlos Dimayuga, who,
in turn, mortgaged the same to her for the balance of the purchase price; that
according to Republic Act 1162, as amended by Republic Act 2342, a parcel of
land in Manila and suburbs, with at least fifty (50) houses of tenants erected
thereon and actually leased to said tenants for at least ten (10) years prior to June

20, 1959, may not be sold by the landowner to any person other than such tenants,
unless the latter renounced their rights in a public instrument; that without said
tenants-appellants having renounced their preferential rights in public instrument,
respondent Vda. de Gabriel sold the land to respondent Dimayuga; that petitionerstenants are willing to purchase said land at the same price and on the same terms
and conditions observed in the contract of sale with respondent Dimayuga; and
that since aforesaid contract of sale is expressly prohibited by law, the same is null
and void, while it is mandatory for respondent Vda. de Gabriel to execute such sale
to petitioners, Petitioners therefore prayed that said contract of sale be declared
void, and that respondent Vda. de Gabriel be ordered to execute a deed of sale in
favor of petitioners at the same price and conditions followed in the contract with
respondent Dimayuga, plus attorney's fees and damages (p. 32, rec.; p. 1, CFI
rec.).
On January 31, 1969, respondent Vda. de Gabriel filed a motion to dismiss on the
ground that the complaint stated no cause of action because the land subject of the
complaint is not a landed estate, and not being such, the same cannot be
expropriated, and not being expropriable, no preferential rights could be availed of
by the tenants (p. 41, rec.; p. 22, CFI rec.).
Respondent Dimayuga filed his answer to aforesaid complaint on February 6, 1969
admitting therein certain factual allegations, denied some averments, interposed
the affirmative defenses that plaintiffs had no personality to initiate the action since
the Land Tenure Administration possessed the power to institute the proper
expropriation proceedings before the competent court and that the subject
complaint stated no cause of action against respondent, alleged a counterclaim to
eject plaintiffs from the property, and prayed for the dismissal of the complaint and
other remedies (p. 44, rec.; p. 155, CFI rec.).lwphl@it

On February 6, 1969, plaintiffs-petitioners filed their opposition to the motion to

dismiss, maintaining, among others, that Republic Act 1162, as amended by
Republic Act 2342 (law which respondent Vda. de Gabriel invoked), does not
necessarily refer to landed estates, but to any piece of land occupied by more than
50 families leasing the same for more than ten (10) years prior to June 20, 1959;
that their preferential rights are independent of the expropriability of the land; that
therefore, said rights may be exercised even if the land is not expropriable; and
that these rights were granted pursuant to the police power of the State for the
general welfare, with prayer that aforesaid motion to dismiss be denied (p. 47, rec.;
p. 26, CFI rec.).
On February 13, 1969, respondent Vda. de Gabriel replied to the aforesaid
opposition to motion to dismiss, reiterating therein her prayer to dismiss the
complaint (p. 57, rec.; p. 38, CFI rec.).
Plaintiffs-petitioners filed their rejoinder to above reply to their opposition on
February 19, 1969, laying emphasis on the alleged distinction between the two
ways of acquiring occupied land under Republic Act 1162, which are expropriation
and voluntary disposal of the land by the owner thereof, and which are exercisable
independently of each other (p. 56, rec.; p. 42, CFI rec.).
On October 30, 1969, Branch IV of the Court of First Instance of Manila issued the
subject order which found respondent's motion to dismiss well-taken and thereby
dismissed the complaint (p. 69, rec.; p. 100, CFI rec.).
Petitioners moved for reconsideration of the aforecited order on January 7, 1970,
which motion was denied in the lower court's order of January 27, 1970 (p. 111,
190, CFI rec.).

On February 9, 1970, petitioners filed a notice of appeal with the lower court to
which respondent Vda. de Gabriel moved for dismissal of the same on February
11, 1970 on the alleged ground that pursuant to Republic Act 5440, petitioners
should have appealed from the questioned order by way of a petition for certiorari
to this Court since the matter involved only errors or questions of law (p. 143, CFI
rec.).
After a series of motions, reply, rejoinder, sur-rejoinder, and answer between both
parties, the lower court issued its order of May 11, 1970 dismissing petitioners'
appeal (p. 225, CFI rec.).
Petitioners thus resorted to this petition.
Petitioners contend that the lower court committed an error in dismissing their
complaint on the ground that since the land is not expropriable, it follows that the
tenants therein have no preferential rights to buy said land, if the same is sold
voluntarily. Petitioners' contention is anchored on the amendment introduced by
Republic Act 3516 into Section 1 of Republic Act 1162, which latter law had been
invoked in the decision of the lower court.
Tibajai vs CA, G.R NO. 100290
Petitioners, spouses Norberto Tibajia, Jr. and Carmen Tibajia, are before this Court
assailing the decision * of respondent appellate court dated 24 April 1991 in CAG.R. SP No. 24164 denying their petition for certiorari prohibition, and injunction
which sought to annul the order of Judge Eutropio Migrio of the Regional Trial
Court, Branch 151, Pasig, Metro Manila in Civil Case No. 54863 entitled "Eden Tan
vs. Sps. Norberto and Carmen Tibajia."

Stated briefly, the relevant facts are as follows:

Case No. 54863 was a suit for collection of a sum of money filed by Eden Tan
against the Tibajia spouses. A writ of attachment was issued by the trial court on 17
August 1987 and on 17 September 1987, the Deputy Sheriff filed a return stating
that a deposit made by the Tibajia spouses in the Regional Trial Court of Kalookan
City in the amount of Four Hundred Forty Two Thousand Seven Hundred and Fifty
Pesos (P442,750.00) in another case, had been garnished by him. On 10 March
1988, the Regional Trial Court, Branch 151 of Pasig, Metro Manila rendered its
decision in Civil Case No. 54863 in favor of the plaintiff Eden Tan, ordering the
Tibajia spouses to pay her an amount in excess of Three Hundred Thousand
Pesos (P300,000.00). On appeal, the Court of Appeals modified the decision by
reducing the award of moral and exemplary damages. The decision having
become final, Eden Tan filed the corresponding motion for execution and
thereafter, the garnished funds which by then were on deposit with the cashier of
the Regional Trial Court of Pasig, Metro Manila, were levied upon.
On 14 December 1990, the Tibajia spouses delivered to Deputy Sheriff Eduardo
Bolima the total money judgment in the following form:
Cashier's Check P262,750.00
Cash 135,733.70

Total P398,483.70
Private respondent, Eden Tan, refused to accept the payment made by the Tibajia
spouses and instead insisted that the garnished funds deposited with the cashier of
the Regional Trial Court of Pasig, Metro Manila be withdrawn to satisfy the
judgment obligation. On 15 January 1991, defendant spouses (petitioners) filed a

motion to lift the writ of execution on the ground that the judgment debt had already
been paid. On 29 January 1991, the motion was denied by the trial court on the
ground that payment in cashier's check is not payment in legal tender and that
payment was made by a third party other than the defendant. A motion for
reconsideration was denied on 8 February 1991. Thereafter, the spouses Tibajia
filed a petition for certiorari, prohibition and injunction in the Court of Appeals. The
appellate court dismissed the petition on 24 April 1991 holding that payment by
cashier's check is not payment in legal tender as required by Republic Act No. 529.
The motion for reconsideration was denied on 27 May 1991.
In this petition for review, the Tibajia spouses raise the following issues:
I WHETHER OR NOT THE BPI CASHIER'S CHECK NO. 014021 IN THE
AMOUNT OF P262,750.00 TENDERED BY PETITIONERS FOR PAYMENT OF
THE JUDGMENT DEBT, IS "LEGAL TENDER".
II WHETHER OR NOT THE PRIVATE RESPONDENT MAY VALIDLY REFUSE
THE TENDER OF PAYMENT PARTLY IN CHECK AND PARTLY IN CASH MADE
BY PETITIONERS, THRU AURORA VITO AND COUNSEL, FOR THE
SATISFACTION OF THE MONETARY OBLIGATION OF PETITIONERSSPOUSES. 1
The only issue to be resolved in this case is whether or not payment by means of
check (even by cashier's check) is considered payment in legal tender as required
by the Civil Code, Republic Act No. 529, and the Central Bank Act.
It is contended by the petitioners that the check, which was a cashier's check of the
Bank of the Philippine Islands, undoubtedly a bank of good standing and
reputation, and which was a crossed check marked "For Payee's Account Only"

and payable to private respondent Eden Tan, is considered legal tender, payment
with which operates to discharge their monetary obligation. 2 Petitioners, to
support their contention, cite the case of New Pacific Timber and Supply Co., Inc.
v. Seeris 3 where this Court held through Mr. Justice Hermogenes Concepcion,
Jr. that "It is a well-known and accepted practice in the business sector that a
cashier's check is deemed as cash".
The provisions of law applicable to the case at bar are the following:
a. Article 1249 of the Civil Code which provides:
Art. 1249. 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.;
b. Section 1 of Republic Act No. 529, as amended, which provides:
Sec. 1. Every provision contained in, or made with respect to, any obligation which
purports to give the obligee the right to require payment in gold or in any particular
kind of coin or currency other than Philippine currency or in an amount of money of
the Philippines measured thereby, shall be as it is hereby declared against public
policy null and void, and of no effect, and no such provision shall be contained in,

or made with respect to, any obligation thereafter incurred. Every obligation
heretofore and hereafter incurred, whether or not any such provision as to payment
is contained therein or made with respect thereto, shall be discharged upon
payment in any coin or currency which at the time of payment is legal tender for
public and private debts.
c. Section 63 of Republic Act No. 265, as amended (Central Bank Act) which
provides:
Sec. 63. Legal character Checks representing deposit money do not have legal
tender power and their acceptance in the payment of debts, both public and
private, is at the option of the creditor: Provided, however, that a check which has
been cleared and credited to the account of the creditor shall be equivalent to a
delivery to the creditor of cash in an amount equal to the amount credited to his
account.
From the aforequoted provisions of law, it is clear that this petition must fail.
In the recent cases of Philippine Airlines, Inc. vs. Court of Appeals 4 and Roman
Catholic Bishop of Malolos, Inc. vs. Intermediate Appellate Court, 5 this Court held
that
A check, whether a manager's check or ordinary check, 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.
The ruling in these two (2) cases merely applies the statutory provisions which lay
down the rule that a check is not legal tender and that a creditor may validly refuse
payment by check, whether it be a manager's, cashier's or personal check.

Petitioners erroneously rely on one of the dissenting opinions in the Philippine

Airlines case 6 to support their cause. The dissenting opinion however does not in
any way support the contention that a check is legal tender but, on the contrary,
states that "If the PAL checks in question had not been encashed by Sheriff Reyes,
there would be no payment by PAL and, consequently, no discharge or satisfaction
of its judgment obligation." 7 Moreover, the circumstances in the Philippine Airlines
case are quite different from those in the case at bar for in that case the checks
issued by the judgment debtor were made payable to the sheriff, Emilio Z. Reyes,
who encashed the checks but failed to deliver the proceeds of said encashment to
the judgment creditor.
In the more recent case of Fortunado vs. Court of Appeals, 8 this Court stressed
that, "We are not, by this decision, sanctioning the use of a check for the payment
of obligations over the objection of the creditor."
WHEREFORE, the petition is DENIED. The appealed decision is hereby
AFFIRMED, with costs against the petitioners.
SO ORDERED.
Narvasa, C.J., Regalado and Nocon, JJ., concur.