Scribd Logo
Upload

Welcome to Scribd!

  • 96 views

    Metropolitan Bank and Trust Company V Cabilzo

    Uploaded by

    Phi Salvador
    1) Cabilzo issued a check for P1,000 that was later altered to P91,000 without his authorization. Metrobank cleared the altered check. 2) There was no evidence that Cabilzo was negligent in issuing the original check. He took precautions by placing asterisks around the amount to prevent alterations. 3) As Cabilzo did not authorize the alteration and was not shown to be negligent, the altered check was void and Metrobank could not hold him responsible or deduct funds from his account for the erroneous payment.

    Copyright:

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

    Metropolitan Bank and Trust Company V Cabilzo

    Uploaded by

    Phi Salvador
    96 views2 pages
    1) Cabilzo issued a check for P1,000 that was later altered to P91,000 without his authorization. Metrobank cleared the altered check. 2) There was no evidence that Cabilzo was negligent in issuing the original check. He took precautions by placing asterisks around the amount to prevent alterations. 3) As Cabilzo did not authorize the alteration and was not shown to be negligent, the altered check was void and Metrobank could not hold him responsible or deduct funds from his account for the erroneous payment.

    Original Title

    METROPOLITAN BANK AND TRUST COMPANY V CABILZO

    Copyright

    © © All Rights Reserved

    Available Formats

    DOCX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    1) Cabilzo issued a check for P1,000 that was later altered to P91,000 without his authorization. Metrobank cleared the altered check. 2) There was no evidence that Cabilzo was negligent in issuing the original check. He took precautions by placing asterisks around the amount to prevent alterations. 3) As Cabilzo did not authorize the alteration and was not shown to be negligent, the altered check was void and Metrobank could not hold him responsible or deduct funds from his account for the erroneous payment.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    96 views2 pages

    Metropolitan Bank and Trust Company V Cabilzo

    Uploaded by

    Phi Salvador
    1) Cabilzo issued a check for P1,000 that was later altered to P91,000 without his authorization. Metrobank cleared the altered check. 2) There was no evidence that Cabilzo was negligent in issuing the original check. He took precautions by placing asterisks around the amount to prevent alterations. 3) As Cabilzo did not authorize the alteration and was not shown to be negligent, the altered check was void and Metrobank could not hold him responsible or deduct funds from his account for the erroneous payment.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    METROPOLITAN BANK AND TRUST COMPANY V RENATO D.

    CABILZO

    FACTS
    Petitioner Metrobank is a banking institution duly organized and existing as such under
    Philippine
    laws. Respondent Renato D. Cabilzo (Cabilzo) was one of Metrobank’s clients who maintained
    current account with Metrobank Pasong Tamo Branch. On 12 November 1994, Cabilzo issued a
    Metrobank Check No. 985988, payable to “CASH” and postdated on 24 November 1994 in the
    amount of One Thousand Pesos (P 1,000.00). The check was drawn against Cabilzo’s Account
    with Metrobank Pasong Tamo Branch under Current Account No. 618044873-3 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. On 16 November 1994, Cabilzo’s representative was at Metrobank Pasong Tamo
    Branch to make some transaction when he was asked by a bank personnel if Cabilzo had
    issued a check in the amount of P 91,000.00 to which the former replied in the negative. On the
    afternoon of the same date, Cabilzo himself called Metrobank to reiterate that he did not issue a
    check in the amount of P 91,000.00 and requested that the questioned check be returned to him
    for verification, to which Metrobank complied. 1,000.00 was altered to P Upon receipt of the
    check, Cabilzo discovered that Metrobank Check No. 985988 which he issued on 12 November
    1994 in the amount of P 91,000.00 and the date 24 November 1994 was changed to 14
    November 1994.

    ISSUE
    Whether or not the alteration made in the subject check is a material alteration.
    RULING
    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.

    Section 125. What constitutes material alteration. – Any alteration which changes: (a) The
    date; (b) The sum payable, either for principal or interest; (c) The time or place of payment; (d)
    The number or the relation of the parties; (e) The medium or currency in which payment is to be
    made; Or which adds a place of payment where no place of payment is specified, or any other
    change or addition which alters the effect of the instrument in any respect is a material
    alteration.
    In the case at bar, the check was altered so that the amount was increased from P 1,000.00 to
    P91,000.00 and the date was changed from 24 November 1994 to 14 November 1994.
    Apparently, since the entries altered were among those enumerated under Section 1 and 125,
    namely, the sum of money payable and the date of the check, the instant controversy therefore
    squarely falls within the purview of material alteration.
    Now, having laid the premise that the present petition is a case of material alteration, it is now
    necessary for us to determine the effect of a materially altered instrument, as well as the rights
    and obligations of the parties thereunder. The following provision of the Negotiable Instrument
    Law will shed us some light in threshing out this issue:

    Section 124. Alteration of instrument; effect of. – Where a negotiable instrument is materially
    altered without the assent of all parties liable thereon, it is avoided, except as against a party
    who has himself made, authorized, assented to the alteration and subsequent indorsers . and
    But when the instrument has been materially altered and is in the hands of a holder in due
    course not a party to the alteration, he may enforce the payment thereof according to its original
    tenor. Indubitably, Cabilzo was not the one who made nor authorized the alteration. Neither did
    he assent to the alteration by his express or implied acts. There is no showing that he failed to
    exercise such reasonable degree of diligence required of a prudent man which could have
    otherwise prevented the loss. As correctly ruled by the appellate court, Cabilzo was never
    remiss in the preparation and issuance of the check, and there were no indicia of evidence that
    would prove otherwise. Indeed, Cabilzo placed asterisks before and after the amount in
    words and figures in order to forewarn the subsequent holders that nothing follows
    before and after the amount indicated other than the one specified between the
    asterisks.

    (QUESTION SA TNQ)
    Q: Metrobank v. Cabilzo: Was Cabilzo negligent? Why was there no showing of
    negligence?

    (SAGOT SA QUESTION SA TNQ)


    The degree of diligence required of a reasonable man in the exercise of his tasks and the
    performance of his duties has been faithfully complied with by Cabilzo. In fact, he was
    wary enough that he filled with asterisks the spaces between and after the amounts, not
    only those stated in words, but also those in numerical figures, in order to prevent any
    fraudulent insertion, but unfortunately, the check was still successfully altered, indorsed by the
    collecting bank, and cleared by the drawee. And encashed by the perpetrator of the fraud, to the
    damage and prejudice of Cabilzo. Verily, Metrobank cannot lightly impute that Cabilzo was
    negligent and is therefore prevented from asserting his rights under the doctrine of equitable
    estoppel when the facts on record are bare of evidence to support such conclusion. The
    doctrine of equitable estoppel states that when one of the two innocent persons, each guiltless
    of any intentional or moral wrong, must suffer a loss, it must be borne by the one whose
    erroneous conduct, either by omission or commission, was the cause of injury. Metrobank’s
    reliance on this dictum, is misplaced. For one, Metrobank’s representation that it is an innocent
    party is flimsy and evidently, misleading. At the same time, Metrobank cannot asseverate that
    Cabilzo was negligent and this negligence was the proximate cause of the loss in the absence
    of even a scintilla proof to buttress such claim. Negligence is not presumed but must be proven
    by the one who alleges it. When the drawee bank pays a materially altered check, it violates the
    terms of the check, as well as its duty to charge its client’s account only for bona fide
    disbursements he had made. Since the drawee bank, in the instant case, did not pay according
    to the original tenor of the instrument, as directed by the drawer, then it has no right to claim
    reimbursement from the drawer, much less, the right to deduct the erroneous payment it made
    from the drawer’s account which it was expected to treat with utmost fidelity.

    You might also like