488 Supreme Court Reports Annotated: Cebu International Finance Corp. vs. Court of Appeals

8/27/2018 SUPREME COURT REPORTS ANNOTATED VOLUME 316
488 SUPREME COURT REPORTS ANNOTATED

Cebu International Finance Corp. vs. Court of Appeals
*
G.R. No. 123031. October 12, 1999.
CEBU INTERNATIONAL FINANCE CORPORATION,

petitioner, vs. COURT OF APPEALS, VICENTE ALEGRE,
respondents.
Civil Law; Commercial Law; Loan; In a money market

transaction, the investor is a lender who loans his money to a
borrower through a middleman or dealer.—Considering the
nature of a money market transaction, the above-quoted provision
should be applied in the present controversy. As held in Perez vs.
Court of Appeals, a “money market is a market dealing in
standardized short-term credit instruments (involving large
amounts) where lenders and borrowers do not deal directly with
each other but through a middle man or dealer in open market. In
a money market transaction, the investor is a lender who loans
his money to a borrower through a middleman or dealer.
Same; Same; Same; Check; A check is not a legal tender, and
therefore cannot constitute valid tender of payment.—In a loan
transaction, the obligation to pay a sum certain in money may be
paid in money, which is the legal tender or, by the use of a check.
A check is not a legal tender, and therefore cannot constitute
valid tender of payment. In the case of Philippine Airlines, Inc. vs.
Court of Appeals, this Court held: “Since a negotiable instrument
is only a substitute for money and not money, the delivery of such
an instrument does not, by itself, operate as payment (citation
omitted). 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. Mere
_______________
* SECOND DIVISION.
489
http://www.central.com.ph/sfsreader/session/000001657a0fe42a44217dd9003600fb002c009e/t/?o=False 1/15
VOL. 316, OCTOBER 12, 1999 489
delivery of checks does not discharge the obligation under a

judgment. The obligation is not extinguished and remains
suspended until the payment by commercial document is actually
realized (Art. 1249, Civil Code, par. 3.)”
Same; Actions; Compromise Agreement; Nature of
Compromise Agreement; The compromise agreement could not
bind a party who did not sign the compromise agreement nor avail
of its benefits.—A compromise is a contract whereby the parties,
by making reciprocal concessions, avoid a litigation or put an end
to one already commenced. It is an agreement between two or
more persons who, for preventing or putting an end to a lawsuit,
adjust their difficulties by mutual consent in the manner which
they agree on, and which everyone of them prefers in the hope of
gaining, balanced by the danger of losing. The compromise
agreement could not bind a party who did not sign the
compromise agreement nor avail of its benefits. Thus, the
stipulations in the compromise agreement is unenforceable
against Vicente Alegre, not a party thereto. His money could not
be the subject of an agreement between CIFC and BPI. Although
Alegre’s money was in custody of the bank, the bank’s possession
of it was not in the concept of an owner. BPI cannot validly
appropriate the money as its own.
Same; Same; Garnishment; Garnishment is an attachment by
means of which the plaintiff seeks to subject to his claim the
property of the defendant in the hands of a third person or money
owed to such third person or a garnishee to the defendant; Tender
of payment involves a positive and unconditional act by the obligor
of offering legal tender currency as payment to the obligee for the
former’s obligation and demanding that the latter accept the same.
—BPI’s confiscation of Alegre’s money constitutes garnishment
without the parties going through a valid proceeding in court.
Garnishment is an attachment by means of which the plaintiff
seeks to subject to his claim the property of the defendant in the
hands of a third person or money owed to such third person or a
garnishee to the defendant. The garnishment procedure must be
upon proper order of RTC-Makati, Branch 62, the court who had
jurisdiction over the collection suit filed by BPI against Alegre. In
effect, CIFC has not yet tendered a valid payment of its obligation
to the private respondent. Tender of payment involves a positive
and unconditional act by the obligor of offering legal tender
currency as payment to the obligee for the former’s obligation and
demanding that the latter accept the same.
490
Tender of payment cannot be presumed by a mere inference from

surrounding circumstances.
Same; Same; Litis Pendentia; Requisites for litis pendentia to
be a ground for the dismissal of an action.—With regard to the
third issue, for litis pendentia to be a ground for the dismissal of
an action, the following requisites must concur: (a) identity of
parties or at least such as to represent the same interest in both
actions; (b) identity of rights asserted and relief prayed for, the
relief being founded on the same acts; and (c) the identity in the
two cases should be such that the judgment which may be
rendered in one would, regardless of which party is successful,
amount to res judicata in the other.
Same; Same; Res Judicata; The general rule is that a
compromise has upon the parties the effect and authority of res
judicata, with respect to the matter definitely stated therein, or
which by implication from its terms should be deemed to have been
included therein even if the agreement has not been judicially
approved.—The compromise agreement between CIFC and BPI,
categorically provided that “In case plaintiff is adjudged liable to
Vicente Alegre in Civil Case No. 92-515 arising from the alleged
dishonor of BPI Check No. 513397, plaintiff (CIFC) cannot go
after the defendant (BPI); otherwise stated, the defendant shall
not be liable to the plaintiff.” Clearly, this stipulation expressed
that CIFC had already abandoned any further claim against BPI
with respect to the value of BPI Check No. 513397. To ask this
Court to allow BPI to be a party in the case at bar, would amount
to res judicata and would violate terms of the compromise
agreement between CIFC and BPI. The general rule is that a
compromise has upon the parties the effect and authority of res
judicata, with respect to the matter definitely stated therein, or
which by implication from its terms should be deemed to have
been included therein. This holds true even if the agreement has
not been judicially approved.
PETITION for review on certiorari of a decision of the

Court of Appeals.
The facts are stated in the opinion of the Court.

Villanueva, Pacis, Mondragon & Cana Law Offices
for petitioner.
491
VOL. 316, OCTOBER 12, 1999 491

Marlito C. Altuna for private respondent.
QUISUMBING, J.:
This petition for review on 1

certiorari assails respondent
appellate court’s Decision, dated December 8, 1995, in CA
G.R. CV No. 44085, which affirmed the ruling of the
Regional Trial Court of Makati, Branch 132. The
dispositive portion of the trial court’s decision reads:
“WHEREFORE, judgment is hereby rendered ordering defendant

[herein petitioner] to pay plaintiff [herein private respondent]:
“(1) the principal sum of P514,390.94 with legal interest

thereon computed from August 6, 1991 until fully paid;
and
“(2) the costs of suit.
2
SO ORDERED.”
Based on the records, the following are the pertinent facts

of the case:
Cebu International Finance Corporation (CIFC), a
quasibanking institution, is engaged in money market
operations.
On April 25, 1991, private respondent, Vicente Alegre,
invested with CIFC, five hundred thousand (P500,000.00)
pesos, in cash. Petitioner issued a promissory note to
mature on May 27, 1991. The note for five hundred sixteen
thousand, two hundred thirty-eight pesos and sixty-seven
centavos (P516,238.67) covered private respondent’s
placement plus interest at twenty and a half (20.5%)
percent for thirty-two (32) days.
On May 27, 1991, CIFC issued BPI Check No. 513397
(hereinafter the CHECK) for five hundred fourteen
thousand, three hundred ninety pesos and ninety-four
centavos (P514,390.94) in favor of the private respondent
as proceeds of his matured investment plus interest. The
CHECK was
_______________
1 Rollo, pp. 46-52.

2 Court of Appeals Rollo, p. 65.
492

drawn from petitioner’s current account number 0011-

0803-59, maintained with the Bank of the Philippine
Islands (BPI), main branch at Makati City.
On June 17, 1991, private respondent’s wife deposited
the CHECK with Rizal Commercial Banking Corp. (RCBC),
in Puerto Princesa, Palawan. BPI dishonored the CHECK
with the annotation, that the “Check (is) Subject of an
Investigation.” BPI took custody of the CHECK pending an
investigation of several counterfeit checks drawn against
CIFC’s afore-stated checking account. BPI used the check
to trace the perpetrators of the forgery.
Immediately, private respondent notified CIFC of the
dishonored CHECK and demanded, on several occasions,
that he be paid in cash. CIFC refused the request, and
instead instructed private respondent to wait for its
ongoing bank reconciliation with BPI. Thereafter, private
respondent, through counsel, made a formal demand for
the payment of his money market placement. In turn, CIFC
promised to replace the CHECK but required an impossible
condition that the original must first be surrendered.
On February
3
25, 1992, private respondent Alegre filed a
complaint for recovery of a sum of money against the
petitioner with the Regional Trial Court of Makati (RTC-
Makati), Branch 132.
On July 13, 1992, CIFC sought to recover its lost funds
4
and formally filed against BPI, a separate civil action for
collection of a sum of money with the RTC-Makati, Branch
147. The collection suit alleged that BPI unlawfully
deducted from CIFC’s checking account, counterfeit checks
amounting to one million, seven hundred twenty-four
thousand, three hundred sixty-four pesos and fifty-eight
centavos (P1,724,364.58). The
_______________
3 Vicente Alegre vs. Cebu International Finance, Corporation, Civil Case

No. 92-515; Record, Regional Trial Court, pp. 1-12.
4 Cebu International Finance Corporation vs. Bank of the Philippine
Islands, Civil Case No. 92-1940; Court of Appeals, Rollo, pp. 67-77.
493
VOL. 316, OCTOBER 12, 1999 493

action included the prayer to collect the amount of the

CHECK paid to Vicente Alegre but dishonored by BPI.
Meanwhile, in response to Alegre’s complaint with RTC-
Makati, Branch 132, CIFC filed a motion for leave of court
to file a third-party complaint against BPI. BPI was
impleaded by CIFC to enforce a right, for contribution and
indemnity, with respect to Alegre’s claim. CIFC asserted
that the CHECK it issued in favor of Alegre was genuine,
valid and sufficiently funded.
On July 23, 1992, the trial court granted CIFC’s motion.
However, BPI moved to dismiss the third-party complaint
on the ground of pendency of another action with RTC-
Makati, Branch 147. Acting on the motion, the trial court
dismissed the third-party complaint on November 4, 1992,
after finding that the third party complaint filed by CIFC
against BPI is similar to its ancillary claim against the
bank, filed with RTC-Makati Branch 147.
Thereafter, during the hearing by RTC-Makati, Branch
132, held on May 27, and June 22, 1993, Vito Arieta, Bank
Manager of BPI, testified that the bank, indeed, dishonored
the CHECK, retained the original copy and forwarded only
a certified true copy to RCBC. When Arieta was recalled on
July 20, 1993, he testified that on July 16, 1993, BPI
encashed and deducted the said amount from the account
of CIFC, but the proceeds, as well as the CHECK remained
in BPI’s custody. The bank’s5 move was in accordance with
the Compromise Agreement it entered with CIFC to end
the litigation in RTC-Makati, Branch 147. The compromise
agreement, which was submitted for the approval of the
said court, provided that:
“1. Defendant [BPI] shall pay to the plaintiff [CIFC]

the amount of P1,724,364.58 plus P20,000 litigation
expenses as full and final settlement of all of
plaintiff’s claims as contained in the Amended
Complaint dated September 10, 1992. The
aforementioned amount shall be credited to
plaintiff’s current account No. 0011-
_______________
5 Rollo, pp. 71-72.
494

0803-59 maintained at defendant’s Main Branch

upon execution of this Compromise Agreement.
“2. Thereupon, defendant shall debit the sum of
P514,390.94 from the aforesaid current account
representing payment/discharge of BPI Check No.
513397 payable to Vicente Alegre.
“3. In case plaintiff is adjudged liable to Vicente Alegre
in Civil Case No. 92-515 arising from the alleged
dishonor of BPI Check No. 513397, plaintiff cannot
go after the defendant: otherwise stated, the
defendant shall not be liable to the plaintiff.
Plaintiff [CIFC] may however set-up the defense 6
of
payment/discharge stipulated in par. 2 above.”
7
On July 27, 1993, BPI filed a separate collection suit
against Vicente Alegre with the RTC-Makati, Branch 62.
The complaint alleged that Vicente Alegre connived with
certain Lina A. Pena and Lita A. Anda and forged several
checks of BPI’s client, CIFC. The total amount of
counterfeit checks was P1,724,364.58. BPI prevented the
encashment of some checks amounting to two hundred
ninety-five thousand, seven hundred seventy-five pesos and
seven centavos (P295,775.07). BPI admitted that the
CHECK, payable to Vicente Alegre for P514,390.94, was
deducted from BPI’s claim, hence, the balance of the loss
incurred by BPI was nine hundred fourteen thousand, one
hundred ninety-eight pesos and fifty-seven centavos
(P914,198.57), plus costs of suit for twenty thousand
(P20,000.00) pesos. The records are silent on the outcome of
this case.
On September 27, 1993, RTC-Makati, Branch 132,
rendered judgment in favor of Vicente Alegre.
CIFC appealed from the adverse decision of the trial
court. The respondent court affirmed the decision of the
trial court. 8
Hence this appeal, in which petitioner interposes the
following assignments of errors:
_______________
6 Id. at 71.
7 Id. at 100-103; Bank of the Philippine Island vs. Vicente A. Alegre,
Civil Case No. 93-2550.
8 Id. at 7-43.
495
VOL. 316, OCTOBER 12, 1999 495

1. The Honorable Court of Appeals erred in affirming

the finding of the Honorable Trial Court holding
that petitioner was not discharged from the liability
of paying the value of the subject check to private
respondent after BPI has debited the value thereof
against petitioner’s current account.
2. The Honorable Court of Appeals erred in applying
the provisions of paragraph 2 of Article 1249 of the
Civil Code in the instant case. The applicable law
being the Negotiable Instruments Law.
the Honorable Trial Court’s findings that the
petitioner was guilty of negligence and delay in the
performance of its obligation to the private
respondent.
the Honorable Trial Court’s decision ordering
petitioner to pay legal interest and the cost of suit.
the Honorable Trial Court’s dismissal of petitioner’s
third-party complaint against BPI.
These issues may be synthesized into three:
1. WHETHER OR NOT ARTICLE 1249 OF THE

NEW CIVIL CODE APPLIES IN THE PRESENT
CASE;
2. WHETHER OR NOT “BPI CHECK NO. 513397”
WAS VALIDLY DISCHARGED; and
3. WHETHER OR NOT THE DISMISSAL OF THE
THIRD PARTY COMPLAINT OF PETITIONER
AGAINST BPI BY REASON OF LIS PENDENS
WAS PROPER?
On the first issue, petitioner contends that the provisions of

the Negotiable Instruments Law (NIL) are the pertinent
laws to govern its money market transaction with private
respondent, and not paragraph 2 of Article 1249 of the Civil
Code. Petitioner stresses that it had already been
discharged from the liability of paying the value of the
CHECK due to the following circumstances:
“1) There was “ACCEPTANCE” of the subject check by

BPI, the drawee bank, as defined under the
Negotiable Instruments Law,
496

and therefore, BPI, the drawee bank, became

primarily liable for the payment of the check, and
consequently, the drawer, herein petitioner, was
discharged from its liability thereon;
2) Moreover, BPI, the drawee bank, has not validly
DISHONORED the subject check; and,
3) The act of BPI, the drawee bank of
debiting/deducting the value of the check from
petitioner’s account amounted to and/or constituted
a discharge of the drawer’s (petitioner’s)
9
liability
under the instrument/subject check.”
Petitioner cites Section 137 of the Negotiable Instruments

Law, which states:
“Liability of drawee retaining or destroying bill—Where a drawee

to whom a bill is delivered for acceptance destroys the same, or
refuses within twenty-four hours after such delivery or such other
period as the holder may allow, to return the bill accepted or
nonaccepted to the Holder, he will be deemed to have accepted the
same.”
Petitioner asserts that since BPI accepted the instrument,

the bank became primarily liable for the payment of the
CHECK. Consequently, when BPI offset the value of
CHECK against the losses from the forged checks allegedly
committed by the private respondent, the check was
deemed paid.
Article 1249 of the New Civil Code deals with a mode of
extinction of an obligation and expressly provides for the
medium in the “payment of debts.” It provides that:
“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.
_______________
9 Id. at 143.
497
VOL. 316, OCTOBER 12, 1999 497

In the meantime, the action derived from the original obligation

shall be held in abeyance.”
Considering the nature of a money market transaction, the

above-quoted provision should be applied in the present 10
controversy. As held in Perez vs. Court of Appeals, a
“money market is a market dealing in standardized short-
term credit instruments (involving large amounts) where
lenders and borrowers do not deal directly with each other
but through a middle man or dealer in open market. In a
money market transaction, the investor is a lender who
loans his
11
money to a borrower through a middleman or
dealer.
In the case at bar, the money market transaction
between the petitioner and the private respondent is in the
nature of a loan. The private respondent accepted the
CHECK, instead of requiring payment in money. Yet, when
he presented it to RCBC for encashment, as early as June
17, 1991, the same was dishonored by non-acceptance, with
BPI’s annotation: “Check (is) subject of an investigation.”
These facts were testified to by BPI’s manager. Under 12
these circumstances, and after the notice of dishonor, the
holder has
13
an immediate right of recourse against the
drawer, and consequently could immediately file an action
for the recovery of the value of the check.
In a loan transaction, the obligation to pay a sum certain
in money may be paid in money, which is the legal tender
or, by the use of a check. A check is not a legal tender, and
therefore cannot constitute valid tender of payment. In 14
the
case of Phil-ippine Airlines, Inc. vs. Court of Appeals, this
Court held:
“Since a negotiable instrument is only a substitute for money and

not money, the delivery of such an instrument does not, by itself,
operate as payment (citation omitted). A check, whether a
_______________
10 127 SCRA 636 (1984).

11 Sesbreño vs. Court of Appeals, 240 SCRA 606, 614 (1995).
12 Negotiable Instruments Law, Section 89.

13 Id., Section 151.
14 181 SCRA 557 (1990).
498

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.
Mere delivery of checks does not discharge the obligation under a
judgment. The obligation is not extinguished and remains
suspended until the payment by commercial 15
document is actually
realized (Art. 1249, Civil Code, par. 3.)”
Turning now to the second issue, when the bank deducted

the amount of the CHECK from CIFC’s current account,
this did not ipso facto operate as a discharge or payment of
the instrument. Although the value of the CHECK was
deducted from the funds of CIFC, it was not delivered to
the payee, Vicente Alegre. Instead, BPI offset the amount
against the losses it incurred from forgeries of CIFC
checks, allegedly committed by Alegre. The confiscation of
the value of the check was agreed upon by CIFC and BPI.
The parties intended to amicably settle the collection suit
filed by CIFC with the RTC-Makati, Branch 147, by
entering into a compromise agreement, which reads:
xxx
“2. Thereupon, defendant shall debit the sum of P514,390.94

from the aforesaid current account representing
payment/discharge of BPI Check No. 513397 payable to
Vicente Alegre.
“3. In case plaintiff is adjudged liable to Vicente Alegre in
Civil Case No. 92-515 arising from the alleged dishonor of
BPI Check No. 513397, plaintiff cannot go after the
defendant; otherwise stated, the defendant shall not be
liable to the plaintiff. Plaintiff however (sic) set-up the
16
defense of payment/discharge stipulated in par. 2 above.”
A compromise is a contract whereby the parties, by making

reciprocal concessions, avoid
17
a litigation or put an end to
one already commenced. It is an agreement between two
or more
_______________
15 Id. at 568.
16 Supra, note 5.
17 Del Rosario vs. Madayag, 247 SCRA 767, 770 (1995).
499
VOL. 316, OCTOBER 12, 1999 499

persons who, for preventing or putting an end to a lawsuit,

adjust their difficulties by mutual consent in the manner
which they agree on, and which everyone of them prefers
18
in
the hope of gaining, balanced by the danger of losing. The
compromise agreement could not bind a party who did not 19
sign the compromise agreement nor avail of its benefits.
Thus, the stipulations in the compromise agreement is
unenforceable against Vicente Alegre, not a party thereto.
His money could not be the subject of an agreement
between CIFC and BPI. Although Alegre’s money was in
custody of the bank, the bank’s possession of it was not in
the concept of an owner. BPI cannot validly appropriate the
money as its own. The codal admonition on this issue is
clear:
“Art. 1317—
“No one may contract in the name of another without being
authorized by the latter, or unless he has by law a right to
represent him.
“A Contract entered into in the name of another by one who
has no authority or legal representation, or who has acted beyond
his powers, shall be unenforceable, unless it is ratified, expressly
or impliedly, by the person on whose behalf it has 20been executed,
before it is revoked by the other contracting party.”
BPI’s confiscation of Alegre’s money constitutes

garnishment without the parties going through a valid
proceeding in court. Garnishment is an attachment by
means of which the plaintiff seeks to subject to his claim
the property of the defendant in the hands of a third person
or money owed
21
to such third person or a garnishee to the
defendant. The garnishment procedure must be upon
proper order of RTC-Makati,
_______________
18 Id., citing David vs. Court of Appeals, 214 SCRA 644, 650 (1992),
citing Rovero vs. Amparo, 91 Phil. 228, 235 (1952); Arcenas vs. Cinco, 74
SCRA 118, 123 (1976).
19 Jag and Haggar Jeans and Sportswear Corp. vs. NLRC, 241 SCRA
635, 642 (1995).
20 Civil Code of the Philippines, Article 1317.
21 Manila Remnant Co., Inc. vs. CA, 231 SCRA 281, 289 (1994).
500

Branch 62, the court who had jurisdiction over the

collection suit filed by BPI against Alegre. In effect, CIFC
has not yet tendered a valid payment of its obligation to the
private respondent. Tender of payment involves a positive
and unconditional act by the obligor of offering legal tender
currency as payment to the obligee for the former’s 22
obligation and demanding that the latter accept the same.
Tender of payment cannot be presumed by a mere
inference from surrounding circumstances.
With regard to the third issue, for litis pendentia to be a
ground for the dismissal of an action, the following
requisites must concur: (a) identity of parties or at least
such as to represent the same interest in both actions; (b)
identity of rights asserted and relief prayed for, the relief
being founded on the same acts; and (c) the identity in the
two cases should be such that the judgment which may be
rendered in one would, regardless of which 23
party is
successful, amount to res judicata in the other.
The trial court’s ruling as adopted by the respondent
court states, thus:
“A perusal of the complaint in Civil Case No. 92-1940, entitled

Cebu International Finance Corporation vs. Bank of the
Philippine Islands now pending before Branch 147 of this Court
and the Third Party Complaint in the instant case would readily
show that the parties are not only identical but also the cause of
action being asserted, which is the recovery of the value of BPI
Check No. 513397 is the same. In Civil Case No. 92-1940 and in
the Third Party Complaint the rights asserted and relief prayed
for, the reliefs being founded on the facts, are identical.
xxx
_______________
22 Roman Catholic Bishop of Malolos, Inc. vs. Intermediate Ap-pellate

Court, 191 SCRA 411, 419 (1990).
23 Ramos vs. Peralta, 203 SCRA 412, 416-417 (1991); Yu vs. CA, 232
SCRA 594, at 598 (1994).
501
VOL. 316, OCTOBER 12, 1999 501

WHEREFORE, the motion to dismiss is granted and

consequently, the Third Party Complaint
24
is hereby ordered
dismissed on ground of lis pendens.”
We agree with the observation of the respondent court that,

as between the third party claim filed by the petitioner
against BPI in Civil Case No. 92-515 and petitioner’s
ancillary claim against the bank in Civil Case No. 92-1940,
there is identity of parties as well as identity of rights
asserted, and that any judgment that may be rendered in
one case will amount to res judicata in another.
The compromise agreement between CIFC and BPI,
categorically provided that “In case plaintiff is adjudged
liable to Vicente Alegre in Civil Case No. 92-515 arising
from the alleged dishonor of BPI Check No. 513397,
plaintiff (CIFC) cannot go after the defendant (BPI);
otherwise25stated, the defendant shall not be liable to the
plaintiff.” Clearly, this stipulation expressed that CIFC
had already abandoned any further claim against BPI with
respect to the value of BPI Check No. 513397. To ask this
Court to allow BPI to be a party in the case at bar, would
amount to res judicata and would violate terms of the
compromise agreement between CIFC and BPI. The
general rule is that a compromise has upon the parties the
effect and authority of res judicata, with respect to the
matter definitely stated therein, or which by implication
from its26 terms should be deemed to have been included
therein. This holds true 27
even if the agreement has not
been judicially approved.
_______________
24 Court of Appeals, Rollo, p. 61.

25 Supra, note 5.
26 Del Rosario vs. Madayag, 247 SCRA 767, 771 (1995); citing Nieves vs.
Court of Appeals, 198 SCRA 63, 69 (1991); World Machine Enterprises vs.
Intermediate Appellate Court, 192 SCRA 459, 465 (1990).
27 Id., 771; citing Mayuga vs. Court of Appeals, 154 SCRA 309 (1987);
citing Meneses vs. De la Rosa, 77 Phil. 34 (1946); Vda. de Guilas vs. David,
23 SCRA 762 (1968); Cochingyan vs. Cloribel, 76 SCRA 361.
502

Tomas Claudio Memorial College, Inc. vs. Court of Appeals
WHEREFORE, the instant petition is hereby DENIED.

The Decision of the Court of Appeals in CA-G.R. CV No.
44085 is AFFIRMED. Costs against petitioner.
SO ORDERED.
Mendoza and Buena, JJ., concur.

Bellosillo (Chairman), J., On official leave.
Petition denied; Reviewed decision affirmed.
Note.—Settlement of disputes by way of compromise is

an accepted and desirable practice in courts of law and
administrative tribunals. (Kanlaon Construction
Enterprises Co., Inc. vs. National Labor Relations
Commission, 279 SCRA 337 [1997])
——o0o——
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8/27/2018 SUPREME COURT REPORTS ANNOTATED VOLUME 316

488 SUPREME COURT REPORTS ANNOTATED

CEBU INTERNATIONAL FINANCE CORPORATION,

Civil Law; Commercial Law; Loan; In a money market

VOL. 316, OCTOBER 12, 1999 489

Cebu International Finance Corp. vs. Court of Appeals

delivery of checks does not discharge the obligation under a

490 SUPREME COURT REPORTS ANNOTATED

Cebu International Finance Corp. vs. Court of Appeals

Tender of payment cannot be presumed by a mere inference from

PETITION for review on certiorari of a decision of the

The facts are stated in the opinion of the Court.

VOL. 316, OCTOBER 12, 1999 491

Marlito C. Altuna for private respondent.

This petition for review on 1

“WHEREFORE, judgment is hereby rendered ordering defendant

“(1) the principal sum of P514,390.94 with legal interest

Based on the records, the following are the pertinent facts

1 Rollo, pp. 46-52.

492 SUPREME COURT REPORTS ANNOTATED

drawn from petitioner’s current account number 0011-

3 Vicente Alegre vs. Cebu International Finance, Corporation, Civil Case

VOL. 316, OCTOBER 12, 1999 493

action included the prayer to collect the amount of the

“1. Defendant [BPI] shall pay to the plaintiff [CIFC]

5 Rollo, pp. 71-72.

494 SUPREME COURT REPORTS ANNOTATED

0803-59 maintained at defendant’s Main Branch

VOL. 316, OCTOBER 12, 1999 495

1. The Honorable Court of Appeals erred in affirming

These issues may be synthesized into three:

1. WHETHER OR NOT ARTICLE 1249 OF THE

On the first issue, petitioner contends that the provisions of

“1) There was “ACCEPTANCE” of the subject check by

496 SUPREME COURT REPORTS ANNOTATED

and therefore, BPI, the drawee bank, became

Petitioner cites Section 137 of the Negotiable Instruments

“Liability of drawee retaining or destroying bill—Where a drawee

Petitioner asserts that since BPI accepted the instrument,

“The payment of debts in money shall be made in the currency

VOL. 316, OCTOBER 12, 1999 497

In the meantime, the action derived from the original obligation

Considering the nature of a money market transaction, the

“Since a negotiable instrument is only a substitute for money and

10 127 SCRA 636 (1984).

12 Negotiable Instruments Law, Section 89.

498 SUPREME COURT REPORTS ANNOTATED

manager’s check or ordinary check, is not legal tender, and an

Turning now to the second issue, when the bank deducted

“2. Thereupon, defendant shall debit the sum of P514,390.94

A compromise is a contract whereby the parties, by making

VOL. 316, OCTOBER 12, 1999 499

persons who, for preventing or putting an end to a lawsuit,

BPI’s confiscation of Alegre’s money constitutes

500 SUPREME COURT REPORTS ANNOTATED

Branch 62, the court who had jurisdiction over the

“A perusal of the complaint in Civil Case No. 92-1940, entitled

22 Roman Catholic Bishop of Malolos, Inc. vs. Intermediate Ap-pellate