Can we compel a creditor to accept payment by check?

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Let us say you borrowed money from someone else.

On the date set for its payment, you offered a check instead of cash.

Because the creditor prefers to be paid in cash, he right away refused to accept the check.

And so you compelled him to accept it.

When compelled to accept payment by check

But can we compel a creditor to accept payment by check? The answer is of course a big NO.

Why? Because the law requires that debts in money have to be paid in the currency stipulated.

But what if it is not possible to deliver such currency, how should payment be made then?

By law, it should be in the currency which is legal tender in the Philippines.

This holds true if there is no currency stipulated.


For instance, if you borrowed P5,000 and agreed to pay it in US Dollars, you have to pay in such currency.

But if it is not possible to deliver such currency, then payment should be made in Philippine Peso.

This is also true if there is no agreement to make payment in a foreign currency.

Legal tender defined

In a textbook, legal tender is defined as that currency which if offered by the debtor in the right amount, the creditor must accept in payment of a debt in money.

Legal tender in the Philippines

The Bangko Sentral ng Pilipinas (BSP) has by law the sole power and authority to issue currency within the Philippines.

By currency, it means all notes and coins issued or circulating in accordance with The New Central Bank Act.

And all notes and coins issued by BSP are considered legal tender for all debts in the Philippines.

BSP Circular No. 537, Series of 2006

The legal tender power of notes issued by BSP has no limits.

But it is different for coins.

In a circular, BSP limited the legal tender power of 1-piso, 5-piso and 10-piso coins up to P1,000 only.

While it is only up to P100 for 1-sentimo, 5-sentimo, 10-sentimo and 25-sentimo coins.

Checks are not legal tender

In several decided cases, the Supreme Court said that checks are not legal tender.

For this reason, the creditor may validly refuse payment by check, whether it be a manager’s, cashier’s, personal, or any other check.

This is also clear in law.

When payment by check accepted voluntarily

Of course, the creditor may accept payment by check voluntarily.

If this takes place, will the debt be considered paid the moment he receives the check? NO.

Why? Because the delivery of checks will by law produce the effect of payment only in any of the following cases:

(a)       When they have been cashed;

(b)       When they have been cleared and credited to the account of the creditor; and,

(c)        When they have been impaired through the fault of the creditor.

But what happens in the meantime? The law says the action derived from the original obligation shall be held in abeyance.

This means the right of the creditor to bring an action for the payment of the debt is suspended in the intervening period and can only do so when the check is dishonored.

[References: Article 1249 of the Civil Code of the Philippines (RA 386), The Law on Obligations and Contracts (2014) by Hector S. De Leon and Hector M. De Leon, Jr., Norberto Tibajia, Jr. and Carmen Tibajia vs. The Honorable Court of Appeals and Eden Tan (G.R. No. 100290, June 4, 1993), Towne & City Development Corporation vs. Court of Appeals, et. al. (G.R. No. 135043, July 14, 2004), Sections 48-60 of The New Central Bank Act (RA 7653), BSP Circular No. 537, Series of 2006, BSP Circular No. 829, series of 2014,,, and]

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