Mercantile Law, Remedial Law

NEW PACIFIC TIMBER & SUPPLY COMPANY, INC. v. Seneris G.R. No. L-41764 December 19, 1980 Nature of a Cashier’s Check, Grave Abuse of Discretion


Petitioner is the defendant in a complaint for collection of a sum of money filed by the private respondent Ricardo Tong.

On July 19, 1974, a compromise judgment was rendered by the respondent Judge Alberto Seneris in accordance with an amicable settlement entered into by the parties.

For failure of the petitioner to comply with his judgment obligation, the respondent Judge, upon motion of the private respondent, issued an order for the issuance of a Writ of Execution for the amount of P63,130.00 pursuant to which, the Ex-Officio Sheriff levied upon the personal properties of the petitioner.

Prior to the auction sale thereof, petitioner deposited with the Clerk of Court, in his capacity as Ex-Officio Sheriff, the sum of P63,130.00 for the payment of the judgment obligation, consisting of the following:

1. P50.000.00 in Cashier’s Check No. S-314361 dated January 3, 1975 of the Equitable Banking Corporation; and

2. P13,130.00 in cash.

However, private respondent refused to accept the check as well as the cash deposit.

Deputy Sheriff Castro sold the levied properties to the private respondent Ricardo Tong as the highest bidder in the amount of P50,000.00. As a result thereof, the Ex-Officio Sheriff declared a deficiency of P13,130.00. A “Sheriff’s Certificate of Sale” in favor of the private respondent Ricardo Tong.

Subsequently, petitioner filed an ex-parte motion for issuance of certificate of satisfaction of judgment. 

This motion was denied by the respondent Judge.

Petitioner now questions said order by way of the present petition alleging that said respondent Judge capriciously and whimsically abused his discretion in not granting the motion for issuance of certificate of satisfaction of judgment.


  1. Whether or not the private respondent can validly refuse acceptance of the payment of the judgment obligation made by the petitioner consisting of P50,000.00 in Cashier’s Check and P13,130.00 in cash which it deposited with the Ex-Officio Sheriff before the date of the scheduled auction sale.
  2. Whether or not respondent judge committed grave abuse of discretion in not granting the motion for issuance of certificate of satisfaction of judgment


We find the petition to be impressed with merit.

  1.  It is to be emphasized in this connection that the check deposited by the petitioner in the amount of P50,000.00 is not an ordinary check but a Cashier’s Check of the Equitable Banking Corporation, a bank of good standing and reputation. 

It is a well-known and accepted practice in the business sector that a Cashier’s Check is deemed as cash. 

Moreover, since the said check had been certified by the drawee bank, by the certification, the funds represented by the check are transferred from the credit of the maker to that of the payee or holder, and for all intents and purposes, the latter becomes the depositor of the drawee bank, with rights and duties of one in such situation. 

Where a check is certified by the bank on which it is drawn, the certification is equivalent to acceptance. Said certification “implies that the check is drawn upon sufficient funds in the hands of the drawee, that they have been set apart for its satisfaction, and that they shall be so applied whenever the check is presented for payment.

It is an understanding that the check is good then, and shall continue good, and this agreement is as binding on the bank as its notes in circulation, a certificate of deposit payable to the order of the depositor, or any other obligation it can assume. 

The object of certifying a check, as regards both parties, is to enable the holder to use it as money.” When the holder procures the check to be certified, “the check operates as an assignment of a part of the funds to the creditors.”

Considering that the whole amount deposited by the petitioner consisting of Cashier’s Check of P50,000.00 and P13,130.00 in cash covers the judgment obligation of P63,000.00 as mentioned in the writ of execution, then, We see no valid reason for the private respondent to have refused acceptance of the payment of the obligation in his favor. 

The auction sale, therefore, was uncalled for. 

Furthermore, the Cashier’s Check was even withdrawn by the petitioner and replaced with cash in the corresponding amount of P50,000.00, pursuant to an agreement entered into by the parties at the instance of the respondent Judge. 

However, the private respondent still refused to receive the same. Obviously, the private respondent is more interested in the levied properties than in the mere satisfaction of the judgment obligation. 

  1. Thus, petitioner’s motion for the issuance of a certificate of satisfaction of judgment is clearly meritorious and the respondent Judge gravely abused his discretion in not granting the same under the circumstances.

Wherefore, the auction sale conducted and the certificate of sale issued pursuant thereto, are null and void; The private respondent is ordered to accept the sum of P63,130.00 under deposit as payment of the judgment obligation in his favor; and the respondent Judge and respondent Ex-Officio Sheriff are ordered to release the levied properties to the herein petitioner.

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