Pio Barretto Realty Development Corporation vs Court of Appeals

March 15, 2012 No comments

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Pio Barretto Realty Development Corporation vs Court of Appeals

Honor Moslares and Pio Barretto Realty Development Corporation are disputing over the estate
of Nicolai Drepin, represented by Atty. Tomas Trinidad. To settle the dispute, and while the case was in
court, they entered into a Compromise Agreement by which they agreed to have the estate in dispute
be sold; that in case Moslares was able to buy the property first, he should pay P3,000,000.00 to
Barretto Realty (representing the amount of investments by Barretto Realty in the estate); that should
Barretto Realty buy the property first, it should pay P1,000,000.00 to Moslares (representing interest).
The compromise agreement was approved by the judge (Judge Perfecto Laguio).
Barretto Realty was able to buy the property first hence it delivered a manager’s check worth
P1,000,000.00 to Moslares but the latter refused to accept the same. Barretto Realty filed a petition
before the trial court to direct Moslares to comply with the Compromise Agreement. Barretto Realty
also consigned the check payment with the court. The judge issued a writ of execution against Moslares
and the sheriff also delivered the check to Moslares which the latter accepted. However, three years
later, Moslares filed a motion for reconsideration alleging that the check payment did not amount to
legal tender and that he never even encashed the check. The judge agreed with Moslares.
ISSUE: Whether or not the judge was correct.
HELD: No. There was already a final and executory order issued by the same judge three years prior. The
same may no longer be amended regardless of any claim or error or incorrectness (save for clerical
errors only). It is true that a check is not a legal tender and while delivery of a check produces the effect
of payment only when it is encashed, the rule is otherwise if the debtor (Barretto Realty) was prejudiced
by the creditor’s (Moslares’) unreasonable delay in presentment. Acceptance of a check implies an
undertaking of due diligence in presenting it for payment. If no such presentment was made, the drawer
cannot be held liable irrespective of loss or injury sustained by the payee. Payment will be deemed
effected and the obligation for which the check was given as conditional payment will be discharged.