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    FEBTC Vs Diaz Realty

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    Daniela Erika Beredo Inandan
    The document summarizes a court case between Diaz Realty, Inc. and Far East Bank & Trust Company. Diaz Realty had taken out a loan from Pacific Banking Corporation secured by a mortgage on two of its properties. When Pacific Banking closed, Far East Bank & Trust purchased Diaz Realty's loan. Diaz Realty tendered payment of the loan balance to Far East Bank & Trust through an interbank check, but the bank refused to accept it as payment. The court ruled that the tender of payment through the check was valid, as Far East Bank & Trust had accepted the check initially and the check was sufficiently funded.

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    FEBTC Vs Diaz Realty

    Uploaded by

    Daniela Erika Beredo Inandan
    120 views1 page
    The document summarizes a court case between Diaz Realty, Inc. and Far East Bank & Trust Company. Diaz Realty had taken out a loan from Pacific Banking Corporation secured by a mortgage on two of its properties. When Pacific Banking closed, Far East Bank & Trust purchased Diaz Realty's loan. Diaz Realty tendered payment of the loan balance to Far East Bank & Trust through an interbank check, but the bank refused to accept it as payment. The court ruled that the tender of payment through the check was valid, as Far East Bank & Trust had accepted the check initially and the check was sufficiently funded.

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    FEBTC vs Diaz Realty

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    The document summarizes a court case between Diaz Realty, Inc. and Far East Bank & Trust Company. Diaz Realty had taken out a loan from Pacific Banking Corporation secured by a mortgage on two of its properties. When Pacific Banking closed, Far East Bank & Trust purchased Diaz Realty's loan. Diaz Realty tendered payment of the loan balance to Far East Bank & Trust through an interbank check, but the bank refused to accept it as payment. The court ruled that the tender of payment through the check was valid, as Far East Bank & Trust had accepted the check initially and the check was sufficiently funded.

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

    FEBTC Vs Diaz Realty

    Uploaded by

    Daniela Erika Beredo Inandan
    The document summarizes a court case between Diaz Realty, Inc. and Far East Bank & Trust Company. Diaz Realty had taken out a loan from Pacific Banking Corporation secured by a mortgage on two of its properties. When Pacific Banking closed, Far East Bank & Trust purchased Diaz Realty's loan. Diaz Realty tendered payment of the loan balance to Far East Bank & Trust through an interbank check, but the bank refused to accept it as payment. The court ruled that the tender of payment through the check was valid, as Far East Bank & Trust had accepted the check initially and the check was sufficiently funded.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    of 1

    G.R. No. 138588. August 23, 2001.

    *
    FAR EAST BANK & TRUST COMPANY, petitioner, vs. DIAZ REALTY, INC.,
    respondent.

    FACTS:
    Diaz and Company got a loan from the former PaBC [Pacific Banking Corporation which was
    secured by a real estate mortgage over two parcels of land owned by the plaintiff Diaz Realty.
    Allied Banking Corporation rented an office space in the building constructed on the properties
    covered by the mortgage contract, with the conformity of mortgagee PaBC, whereby the parties
    agreed that the monthly rentals shall be paid directly to the mortgagee for the lessor’s account,
    either to partly or fully pay off the aforesaid mortgage indebtedness. Pursuant to such contract,
    Allied Bank paid the monthly rentals to PaBC instead of to the plaintiffs. However, the Central
    Bank closed PaBC, placed it under receivership. Appellant FEBTC purchased the credit of Diaz
    & Company in favor of PaBC. Antonio Diaz (President of Diaz & Company and Vice-President
    of Diaz Realty) went to office of PaBC which by then housed FEBTC and was told that the latter
    had acquired PaBC; that the Cashier told him that as of such date, his loan was P1,447,142.03; that
    Diaz tendered to FEBTC the amount of P1,450,000.00 through an Interbank check, in order to
    prevent the imposition of additional interests, penalties and surcharges on its loan; that FEBTC did
    not accept it as payment; that instead, Diaz was asked to deposit the amount with the defendant’s
    Davao City Branch Office, allegedly pending the approval of Central Bank Liquidator;; that
    subsequently, the defendant told him to change the P1,450,000.00 deposit into a money market
    placement, which he did; that the money market placement expired on April 14, 1989; that when
    there was still no news from the defendant whether or not it [would] accept his tender of payment,
    he filed this case at the Regional Trial Court.

    ISSUE:
    Whether or not the tender of payment was valid.

    RULING:
    YES. True, jurisprudence holds that, in general, a check does not constitute legal tender, and that
    a creditor may validly refuse it. It must be emphasized, however, that this dictum does not prevent
    a creditor from accepting a check as payment. In other words, the creditor has the option and the
    discretion of refusing or accepting it. In the present case, petitioner bank did not refuse
    respondent’s check. On the contrary, it accepted the check which, it insisted, was a deposit. Tender
    of payment is the definitive act of offering the creditor what is due him or her, together with the
    demand that the creditor accept the same. More important, there must be a fusion of intent, ability
    and capability to make good such offer, which must be absolute and must cover the amount due.
    That respondent intended to settle its obligation with petitioner is evident from the-records of the
    case. After learning that its loan balance was P1,447,142.03, it presented to petitioner a check in
    the amount of P1,450,000, with the specific notation that it was for full payment of its Pacific Bank
    account that had been purchased by petitioner. The latter accepted the check, even if it now insists
    that it considered the same as a mere deposit. The check was sufficiently funded, as in fact it was
    honored by the drawee bank. When petitioner refused to release the mortgage, respondent
    instituted the present case to compel the bank to acknowledge the tender of payment, accept
    payment and cancel the mortgage. These acts demonstrate respondent’s intent, ability and
    capability to fully settle and extinguish its obligation to petitioner.

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