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PNB VS Ca

PNB cleared a check for 97,650 payable to F. Abante Marketing that was deposited in Capitol City Development Bank. PNB later returned the check, debiting the amount from PBCom's account claiming a material alteration of the check number. Capitol sued PBCom, who filed a third-party complaint against PNB for reimbursement. The RTC ruled in favor of Capitol and PBCom. The CA exempted PBCom from liability and denied reconsideration, prompting PNB's petition for review. The SC ruled that altering the serial number is not a material alteration as it does not change the obligations of the parties under the Negotiable Instruments Law. Therefore, PNB had no right to

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255 views2 pages

PNB VS Ca

PNB cleared a check for 97,650 payable to F. Abante Marketing that was deposited in Capitol City Development Bank. PNB later returned the check, debiting the amount from PBCom's account claiming a material alteration of the check number. Capitol sued PBCom, who filed a third-party complaint against PNB for reimbursement. The RTC ruled in favor of Capitol and PBCom. The CA exempted PBCom from liability and denied reconsideration, prompting PNB's petition for review. The SC ruled that altering the serial number is not a material alteration as it does not change the obligations of the parties under the Negotiable Instruments Law. Therefore, PNB had no right to

Uploaded by

axvxxn
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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PNB VS CA

256 SCRA 491 JAN 22, 1990

FACTS:

Ministry of Education, Culture and Sports issued a check with serial number 7-3666-223-3 dated
Aug. 7, 1981 in the amount of P 97, 650.00 payable to respondent F. Abante Marketing drawn against
Petitioner PNB. Respondent F. Abante deposited the check in its savings account with Capitol City
Development Bank which in turn deposited the same with Phil. Bank of Communications (PBCom) which
in turn sent the check to petitioner for clearing. Petitioner cleared the check as good then PBCom
credited Capitol’s account the amount stated. However, petitioner returned the check and debited
PBCom’s account for the amount some time later due to material alteration of the check number.
PBCom debited Capitol’s account for the same amount. Capitol could not debit the amount to F.
Abante’s account for the latter has already withdrawn the amount of check. Capitol sought clarification
from PBCom which as well turned to the petitioner.

Capitol filed a suit with RTC Manila against PBCom, which in turn filed a third-party complaint
against the petitioner for reimbursement/indemnity. Petitioner filed a fourth-party complaint against F.
Abante. The RTC decided in favor of the Capitol in its complaint, in favor PBCOM in its third-party
complaint and in favor of PNB in its fourth-party complaint. On appeal, the CA exempted PBCom from
liability to Capitol and denied the subsequent motion for reconsideration. Hence, this petition for review
on certiorari under Rule 45 before the SC.

ISSUE:

Whether or not there is petitioner can use the defense of material alteration to the instrument.

RULING:

No. An alteration is said to be material if it alters the effect of the instrument. It means 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 NIL. In this case, there is no material alteration since it was
the serial number which is not a requisite under Sec. 1 of the NIL. Since, there is no material alteration,
petitioner has no right to dishonor the check and return it to PBCom.

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