8/17/2019 PNBvsCA_Najera

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PNB V. CA; Material Alteration; Section 125, NIL

256 SCRA 491

FACS!

DECS issued a check in favor of Abante Marketing containing a specic serial

number, drawn against P!" #he check was deposited b$ Abante in its account

with Capitol and the latter conse%uentl$ deposited the same with its account

with P!C&M which later deposited it with petitioner for clearing" #he check

was thereafter cleared" 'owever, on a relevant date, petitioner P! returned the

check on account that there had been a material alteration on it" Subse%uent

debits were made but Capitol cannot debit the account of Abante an$ longer for the

latter had withdrawn all the mone$ alread$ from the account" #his prompted

Capitol to seek reclarication from P!C&M and demanded the recrediting of 

its account" P!C&M followed suit b$ doing the same against P!" Demands

unheeded, it led an action against P!C&M and the latter led a third(part$complaint against petitioner"

"#L$!

An alteration is said to be material if it alters the e)ect of the instrument" *t means

an unauthori+ed change in the instrument that purports to modif$ in an$ respect

the obligation of a part$ or an unauthori+ed addition of words or numbers or

other change to an incomplete instrument relating to the obligation of the part$"

*n other words, a material alteration is one which changes the items which are

re%uired to be stated under Section of the *-"

*n this case, the alleged material alteration was the alteration of the serial number

of the check in issue.which is not an essential element of a negotiable

instrument under Section " P! alleges that the alteration was material since it

is an accepted concept that a #CAA check b$ its ver$ nature is the medium

of e/change of governments, instrumentalities and agencies" As a safet$

measure, ever$ government o0ce or agenc$ is assigned checks bearing

di)erent serial numbers"

!ut this contention has to fail" #he check1s serial number is not the sole indicia of 

its origin" #he name of the government agenc$ issuing the check is clearl$ stated

therein" #hus, the check1s drawer is su0cientl$ identied, rendering redundant thereferral to its serial number"

 #herefore, there being no material alteration in the check committed, P! could not

return the check to P!C&M" *t should pa$ the same"