International Corporate Bank v. Court of Appeals and Philippine National Bank

G.R. No. 129910. September 5, 2006.

Ponente: CARPIO, J.


The Ministry of Education and Culture issued 15 checks drawn against PNB which International Corporate Bank accepted for deposit on various dates.

After 24 hours from submission of the checks to PNB for clearing, petitioner paid the value of the checks and allowed the withdrawals of the deposits.

However, PNB returned all the checks to the petitioner on the ground that they were materially altered.

Thus, International Corporate Bank, Inc. (“petitioner”) filed for collection of money against the Philippine National Bank (“respondent”).

The RTC ruled in favor of the respondent, that the immediate cause of petitioner’s loss was the lack of caution of its personnel, thus, it is not entitled to recover the value of the checks from respondent.

The Court of Appeals reversed the trial court’s Decision. It held that checks that have been materially altered shall be returned within 24 hours after discovery of the alteration.


Whether or not an alteration of the serial number of a check is a material alteration under the Negotiable Instruments Law?


No. The alteration of serial number is not material.  This is already a settled matter Philippine National Bank v. Court of Appeals,  An alteration is said to be material if it alters the effect of the instruments or is one which changes the items which are required to be stated under Section 1 of the Negotiable Instrument[s] Law.”