Case Digest (G.R. No. 129910)
Facts:
In The International Corporate Bank, Inc. v. Philippine National Bank, G.R. No. 129910, decided on September 5, 2006 under the 1987 Constitution, the petitioner, International Corporate Bank, Inc. (now Union Bank of the Philippines), filed on March 16, 1982 an action for collection of sums of money against Philippine National Bank (PNB) in the then Court of First Instance of Manila, Branch 6 (later Regional Trial Court, Branch 52). The suit arose from fifteen checks drawn by the Ministry of Education and Culture, deposited by petitioner on various dates between July and October 1981, which petitioner honored and allowed withdrawal within twenty‐four hours. On October 14, 1981, respondent returned all checks, claiming material alteration—the serial numbers had been changed. The trial court found that petitioner failed to exercise ordinary diligence in verifying the checks’ status before honoring them, dismissed the complaint, and assessed costs against petitioner. On appeal, theCase Digest (G.R. No. 129910)
Facts:
- Parties and Procedural History
- International Corporate Bank, Inc. (“petitioner”) filed on 16 March 1982 an action for collection of sum of money against Philippine National Bank (“respondent”) in the CFI of Manila, Branch 6; later raffled to RTC of Manila, Branch 52.
- The complaint was amended on 19 March 1982 to include a 15th check.
- Checks, Deposit and Return
- The Ministry of Education and Culture issued 15 checks drawn on respondent, bearing various payees, dates (July–October 1981) and amounts totaling ₱1,447,920.00.
- Petitioner deposited these checks between 23 July and 7 October 1981 into designated accounts; after the 24-hour clearing period, petitioner paid their value and allowed withdrawals.
- On 14 October 1981, respondent returned all checks, alleging material alterations in their serial numbers.
- Trial Court and Court of Appeals Decisions
- Trial Court (RTC Branch 52) held petitioner negligent for failing to verify check status before payment, dismissed complaint with costs against petitioner.
- Court of Appeals (10 October 1991) reversed, applying Central Bank Circular No. 580, sec. 4(c), and ruled respondent liable despite delayed return if negligent in detecting alterations.
- On motion for reconsideration, CA (9 August 1994 Amended Decision; 16 July 1997 Resolution) reversed itself, reinstated RTC dismissal, and denied petitioner’s motion.
Issues:
- Material Alteration
- Whether the alterations of serial numbers on the checks constitute material alterations under the Negotiable Instruments Law.
- Negligence and Return Period
- Whether respondent was negligent in failing to detect the alleged alterations within a reasonable period and in not returning the checks within the prescribed time.
- Timeliness of Motion for Reconsideration
- Whether respondent’s motion for reconsideration of the CA’s 10 October 1991 Decision was filed out of time, rendering that Decision final and executory.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)