The Ministry of Education issued a check drawn against petitioner bank. The payee deposited the questioned check in its savings account with Capitol City Development Bank (Capitol) which in turn deposited the same in its account with respondent bank. After petitioner cleared the check, respondent bank credited Capitol for the amount. However, petitioner returned the check to PBCom and debited the latter’s account for the amount covered by the check because the check number was materially altered.
Whether or not the alteration of the check number was material to its negotiability.
What was altered is the serial number of the check in question, an item which, it can readily be observed, is not an essential requisite for negotiability under Section 1 of the Negotiable Instruments Law. The aforementioned alteration did not change the relations between the parties. The name of the drawer and the drawee were not altered. The intended payee was the same. The sum of money due to the payee remained the same. Moreover, the check’s serial number is not the sole indication of its origin. The name of the government agency which issued the subject check was prominently printed therein. The check’s issuer was therefore sufficiently identified, rendering the referral to the serial number redundant and inconsequential.