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    Cebu International Vs CA

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    Jani Misterio
    Alegre invested 500,000 pesos with CIFC and received a check in return. The check was dishonored by the bank. Alegre demanded payment from CIFC in cash but CIFC refused and said the original check must be surrendered first. The court ruled that Article 1249 of the Civil Code governs the money market transaction between Alegre and CIFC, and that the check was not considered payment until it was cashed.

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    Cebu International Vs CA

    Uploaded by

    Jani Misterio
    19 views1 page
    Alegre invested 500,000 pesos with CIFC and received a check in return. The check was dishonored by the bank. Alegre demanded payment from CIFC in cash but CIFC refused and said the original check must be surrendered first. The court ruled that Article 1249 of the Civil Code governs the money market transaction between Alegre and CIFC, and that the check was not considered payment until it was cashed.

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    Cebu International vs CA

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    Alegre invested 500,000 pesos with CIFC and received a check in return. The check was dishonored by the bank. Alegre demanded payment from CIFC in cash but CIFC refused and said the original check must be surrendered first. The court ruled that Article 1249 of the Civil Code governs the money market transaction between Alegre and CIFC, and that the check was not considered payment until it was cashed.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    19 views1 page

    Cebu International Vs CA

    Uploaded by

    Jani Misterio
    Alegre invested 500,000 pesos with CIFC and received a check in return. The check was dishonored by the bank. Alegre demanded payment from CIFC in cash but CIFC refused and said the original check must be surrendered first. The court ruled that Article 1249 of the Civil Code governs the money market transaction between Alegre and CIFC, and that the check was not considered payment until it was cashed.

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    © All Rights Reserved
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    of 1

    2. Cebu International Finance Corporation vs. Court of Appeals, Vicente Alegre, G.R. No.

     
    123031, October 12, 1999, Second Division, J. Quisumbing 

    Facts: Private respondent, Vicente Alegre, invested with CIFC, five hundred thousand
    (P500,000.00) pesos, in cash. Petitioner Cebu International, a quasi-banking institution engaged
    in money market operations, issued a promissory note and issued a check in favor of the private
    respondent as proceeds of his matured investment plus interest. The check was drawn from
    petitioner's current account number maintained with the Bank of the Philippine Islands (BPI)
    main branch, Makati.

    Vicente’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 aforestated checking account. BPI used the check to trace the
    perpetrators of the forgery. Immediately, Vicente notified CIFC and demanded, on several
    occasions, that he be paid in cash but CIFC refused the request but promised to replace the
    check subject to an impossible condition that the original must first be surrendered.
     
    Alegre filed a complaint for recovery of a sum of money against CIFC. During trial, Vito Arieta,
    Bank Manager of BPI, testified that BPI encashed and deducted an amount from the account of
    CIFC, but the proceeds, as well as the check remained in BPI's custody, which was in
    accordance with the Compromise Agreement it entered with CIFC.
     
    Issue: What law governs the money market transaction of CIFC with Alegre: Article 1249 of the
    Civil Code or Section 137 of the NIL?

    1. Is a check a legal tender?


    2. Was Alegre bound by the compromise agreement of CICF and BPI?
    3. When the BPI deducted the amount of the check from CIFC’s current account, did this
    ipso facto operate as a discharge or payment of the check?

    Ruling: 1. Art. 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. Considering the nature of a money market transaction,
    the above-quoted provision (Art.1249 of the New Civil Code) 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.

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