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    Metrobank Vs Cabilzo

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    Sheilah Mae Padalla
    Renato Cabilzo issued a check for P1,000 that was later altered to P91,000 and paid by Metrobank, the drawee bank. Metrobank refused Cabilzo's demand to re-credit his account. The court ruled that Metrobank was liable as the alterations to the amount and date were material changes. When a drawee bank pays a materially altered check, it violates its duty to only charge its client's account for actual disbursements. As Metrobank did not pay according to the original check, it had no right to deduct the erroneous payment from Cabilzo's account.

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    Metrobank Vs Cabilzo

    Uploaded by

    Sheilah Mae Padalla
    684 views1 page
    Renato Cabilzo issued a check for P1,000 that was later altered to P91,000 and paid by Metrobank, the drawee bank. Metrobank refused Cabilzo's demand to re-credit his account. The court ruled that Metrobank was liable as the alterations to the amount and date were material changes. When a drawee bank pays a materially altered check, it violates its duty to only charge its client's account for actual disbursements. As Metrobank did not pay according to the original check, it had no right to deduct the erroneous payment from Cabilzo's account.

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    Metrobank vs Cabilzo

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    Renato Cabilzo issued a check for P1,000 that was later altered to P91,000 and paid by Metrobank, the drawee bank. Metrobank refused Cabilzo's demand to re-credit his account. The court ruled that Metrobank was liable as the alterations to the amount and date were material changes. When a drawee bank pays a materially altered check, it violates its duty to only charge its client's account for actual disbursements. As Metrobank did not pay according to the original check, it had no right to deduct the erroneous payment from Cabilzo's account.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    684 views1 page

    Metrobank Vs Cabilzo

    Uploaded by

    Sheilah Mae Padalla
    Renato Cabilzo issued a check for P1,000 that was later altered to P91,000 and paid by Metrobank, the drawee bank. Metrobank refused Cabilzo's demand to re-credit his account. The court ruled that Metrobank was liable as the alterations to the amount and date were material changes. When a drawee bank pays a materially altered check, it violates its duty to only charge its client's account for actual disbursements. As Metrobank did not pay according to the original check, it had no right to deduct the erroneous payment from Cabilzo's account.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 1

    METROPOLITAN BANK AND TRUST COMPANY vs. RENATO D.

    CABILZO

    G.R. No. 154469, December 6, 2006


    FACTS:

    Renato D. Cabilzo issued a check payable to "CASH" and postdated on 24 November 1994 in
    the amount of P1, 000.00. The check was drawn against Cabilzos Account with Metrobank
    Pasong Tamo 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. Later, Cabilzo discovered
    that the check was altered to P91, 000.00 and the date 24 November 1994 was changed to
    14 November 1994. Hence, he demanded that Metrobank re-credit the amount of P91,
    000.00 to his account. Metrobank, however, refused reasoning that it has to refer the
    matter first to its Legal Division for appropriate action. Metrobank failed or refused to
    comply with its obligation. Consequently, Cabilzo instituted a civil action for damages
    against Metrobank. Metrobank claimed that as a collecting bank and the last indorser,
    Westmont Bankshould be held liable for the value of the check, and that Cabilzo leaving
    spaces on the check, was partly responsible for the fraudulent insertion of the amount and
    figures thereon. The RTC favored Cabilzo and the CA affirmed the decision; hence, this
    petition for review by Metrobankon the ground that the CA erred in holding the drawee
    bank as liable for the altered check.

    ISSUE:

    Whether or not Metrobank is liable for the altered check.

    RULING:

    Yes. An alteration is said to be material if it changes the effect of the instrument. 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 case at bar, the
    check was altered so that the amount was increased from P1, 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. Under Section 124, 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. When the drawee bank pays a materially altered check, it
    violates the terms of the check, as well as its duty to charge its clients 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 drawers account which it was expected to treat
    with utmost fidelity.

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