Short answer. Not as of right. Article 1249 requires debts in money to be paid in the currency stipulated. And the delivery of promissory notes, bills of exchange or other mercantile documents produces the effect of payment only when they have been cashed — so a personal check pays nothing until it clears.
What the law says
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.
Civil Code, Article 1249 — Currency of Payment; Payment by Instruments. Read the full provision →
The currency the contract names is the currency owed
Article 1249 opens with the rule: 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. A contract calling for pesos is discharged in pesos. Tendering dollars instead is an offer to substitute, and Article 1244 provides that the debtor of a thing cannot compel the creditor to receive a different one, even where what is offered is of equal or greater value. Your creditor may of course accept foreign currency if he wishes; what he cannot be told is that he must.
A check is not money until it is money
The second sentence of Article 1249 is the one that costs people. The delivery of promissory notes payable to order, bills of exchange or other mercantile documents produces the effect of payment only when they have been cashed, or when through the fault of the creditor they have been impaired. In the meantime the action derived from the original obligation is held in abeyance. So handing over a personal check does not extinguish the debt on the day it is handed over. It suspends the creditor's action, and the obligation revives in full if the check is dishonoured.
The impairment exception
The words through the fault of the creditor they have been impaired protect a debtor who did everything right. If the creditor sat on a good check until the account was closed or the instrument went stale, and it became uncollectible because of that delay rather than because it was worthless, the loss falls on him and the payment takes effect. The burden of showing the fault, though, sits with the debtor. This is why the date of delivery and the date of deposit are both worth recording, and why a check handed over should be acknowledged in writing when it is received.
How to actually close the transaction
If you want certainty, pay in the stipulated currency by a means that clears, and take a receipt describing the obligation settled. Where a check is unavoidable, note the check number on the receipt and keep the bank confirmation that it was honoured; that confirmation, not the receipt, is the proof that Article 1249 has been satisfied. And if you want to pay in another currency or by another instrument, get the creditor's written agreement first, including the rate of conversion applied. Agreeing the rate afterwards is how a settled debt turns into a fresh argument.
Cases citing this provision
These Supreme Court decisions cite the provision above. We list them so you can read them yourself; the summaries of what each decided are not ours to give.
- Cebu Int'l. Finance Corp. vs. Court of Appeals & Vicente Alegre, G.R. No. 123031, October 12, 1999 — read the decision on LawPhil →
- Benjamin Evangelista vs. Screenex, Inc., represented by Alexander G. Yu, G.R. No. 211564, November 20, 2017 — read the decision on LawPhil →
- Myron C. Papa vs. A.U. Valencia And Co. Inc., et al, G.R. No. 105188, January 23, 1998 — read the decision on LawPhil →
- Ma. Julieta B. Bendecio and Merlyn Mascariñas vs. Virginia B. Bautista, G.R. No. 242087, December 7, 2021 — read the decision on LawPhil →
Related provisions
- Civil Code, Article 1249 — Currency of Payment; Payment by Instruments
- Civil Code, Article 1244 — No Substitution of the Prestation
- Civil Code, Article 1250 — Extraordinary Inflation or Deflation
- Civil Code, Article 1233 — Payment Must Be Complete