Metropolitan Bank and Trust Company vs. Renato D. Cabilzo

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


Cabilzo a client of Metrobank, issued a Metrobank Check payable to “CASH” and postdated on 24 November 1994 in the amount of  P1,000.00. The check was drawn against Cabilzo’s Account with Metrobank under Current Account  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.

Thereafter,  Cabilzo’s representative was at when he was asked by a bank personnel if Cabilzo had issued a check in the amount of P91,000.00 to which the former replied in the negative.  On the afternoon of the same date, Cabilzo  called Metrobank to reiterate that he did not issue a check in the amount of P91,000.00 and requested that the questioned check be returned to him for verification, to which Metrobank complied.

Upon receipt of the check, Cabilzo discovered that Metrobank Check which he issued  in the amount of P1,000.00 was altered to P91,000.00 and the date 24 November 1994 was changed to 14 November 1994. 

When, after series of demand to re-credit the amount of Cabilzo instituted a civil action for damages against Metrobank before the RTC of Manila.

Metrobank argued that in clearing the check, it was not remiss in the performance of its duty as the drawee bank, but rather, it exercised the highest degree of diligence in accordance with the generally accepted banking practice. It further insisted that the entries in the check were regular and authentic and alteration could not be determined even upon close examination.

Metrobank, in turn, claimed that Cabilzo was partly responsible in leaving spaces on the check, which, made the fraudulent insertion of the amount and figures thereon, possible. On account of his negligence in the preparation and issuance of the check, which according to Metrobank, was the proximate cause of the loss, Cabilzo cannot thereafter claim indemnity by virtue of the doctrine of equitable estoppel.

RTC Ruling:

The RTC rendered a Decision in favor of Cabilzo and ordered Metrobank to pay the sum of P90,000.00, which is the amount of the check.

Court of Appeals Ruling:

            The Court of Appeals affirmed with modification the Decision of the RTC, similarly finding Metrobank liable for the amount of the check.


Whether the Metrobank, as drawee bank, is liable for the alterations on the subject check bearing the authentic signature of the drawer thereof.


Yes. An alteration is said to be material if it changes the effect of the instrument. The Court held that 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. The entries altered were among those enumerated under Section 1 and 125 of the NIL, namely, the sum of money payable and the date of the check. The issue falls within the purview of material alteration.

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. 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 failed to comply with the degree required by the nature of its business as provided by law and jurisprudence.

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