G.R. No. 154469, 6 December 2006


Cabilzo issued a Metrobank Check payable to “CASH” and postdated on November 24, 1994 in the amount of P1,000.00. The check was drawn against Cabilzo’s account with Metrobank and was paid by Cabilzo to a certain Mr. Marquez, as his sales commission.

Subsequently, the check was presented to Westmont Bank for payment. Westmont Bank, in turn, indorsed the check to Metrobank for appropriate clearing. After the entries thereon were examined, including the availability of funds and the authenticity of the signature of the drawer, Metrobank cleared the check for encashment in accordance with the Philippine Clearing House Corporation (PCHC) Rules.

Cabilzo discovered that Metrobank Check No. 985988 which he issued on 12 November 1994 in the amount of P1,000.00 was altered to P91,000.00 and the date 24 November 1994 was changed to 14 November 1994. Cabilzo demanded that Metrobank re-credit the amount of P91,000.00 to his account. Third-Party Complaint was then filed by Westmont bank because another case involving the same cause of action was pending before a different court.

The trial court granted the Motion to Dismiss the Third-Party Complaint on the ground of litis pendentia. On 4 September 1998, the RTC rendered a Decision in favor of Cabilzo and thereby ordered Metrobank to pay the sum of P90,000.00, the amount of the check. The Court of Appeals affirmed the RTC’s decision. Hence this petition.


Whether or not Metrobank is liable for the alterations on the subject check bearing the forged signature of the drawer.


Yes. An alteration is said to be material if it changes the effect of the instrument. It means that an unauthorized change in an instrument that purports to modify in any respect the obligation of a party or an unauthorized addition of words or numbers or other change to an incomplete instrument relating to the obligation of a party. In other words, a material alteration is one which changes the items which are required to be stated under Section 1 of the Negotiable Instruments Law. In the present case, it is obvious that Metrobank was remiss in that duty and violated that relationship. As observed by the Court of Appeals, there are material alterations on the check that are visible to the naked eye.

Surprisingly, however, Metrobank failed to detect the above alterations which could not escape the attention of even an ordinary person. This negligence was exacerbated by the fact that, as found by the trial court, the check in question was examined by the cash custodian whose functions do not include the examinations of checks indorsed for payment against drawer’s accounts. Obviously, the employee allowed by Metrobank to examine the check was not verse and competent to handle such duty. WHEREFORE, the instant Petition is DENIED.

*Case digest by Krishianne Louise C. Labiano, JD-IV, Andres Bonifacio Law School, SY 2019-2020