VI. MATERIAL ALTERATION (Sec.

124 and 125)

An alteration is said to be material if it changes the effect of the instrument. It means that an
unauthorized change in an instrument that purports to modify in any respect the obligation of
a party or an unauthorized addition of words or numbers or other change to an incomplete
instrument relating to the obligation of a party. In other words, a material alteration is one
which changes the items which are required to be stated under Section 1 of the Negotiable
Instruments Law. In the present case, it is obvious that Metrobank was remiss in that duty
and violated that relationship. As observed by the Court of Appeals, there are material
alterations on the check that are visible to the naked eye. (Metropolitan Bank and Trust
Company v. Cabilzo, G.R. No. 154469, December 6, 2006)

VII. ACCOMMODATION PARTY (Sec. 29)

On principle, a solidary accommodation maker—who made payment—has the right

to contribution, from his co-accommodation maker, in the absence of agreement to the
contrary between them, subject to conditions imposed by law. This right springs from an
implied promise to share equally the burdens that may ensue from their having consented to
stamp their signatures on the promissory note. (Sadaya v. Sevilla, G.R. No. L-17845, April
27, 1967)

The provision of NIL which holds an accommodation party liable on the instrument to holder
for value, although such holder at the time of taking the instrument knew him to be only an
accommodation party, does not include nor apply to corporations which are accommodation
parties. This is because the issue or indorsement of negotiable paper by a
corporation without consideration and for accommodation of another is ultra vires. Hence, one
who has taken the instrument with knowledge of the accommodation nature thereof cannot
recover against a corporation where it is only an accommodation party. (Crisologo-Jose v.
Court of Appeals, (1989), 177 SCRA 594)