Crisologo-Jose vs. Court of Appeals 177 SCRA 594 , September 15, 1989.pdf

Crisologo-Jose vs. Court of Appeals 177 SCRA 594 , September 15, 1989.pdf

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594 SUPREME COURT REPORTS ANNOTATED Crisologo-Jose vs. Court of Appeals G.R. No. 80599.September 15, 1989. * ERNESTINA CRISOLOGO-JOSE, petitioner, vs. COURT OF APPEALS and RICARDO S. SANTOS, JR. in his own behalf and as Vice-President for Sales of Mover Enterprises, Inc., respondents. Negotiable Instruments Law; Corporations; Rule that an accommodation party liable on the instrument to a holder for value does not apply to corporations which are accommodation parties; Reasons .—The aforequoted provision of the Negotiable Instruments Law which holds an accommodation party liable on the instrument to a 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 the 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. If the form of the instrument, or the nature of the transaction, is such as to charge the indorsee with knowledge that the issue or indorsement of the instrument by the corporation is for the accommodation of another, he cannot recover against the corporation thereon. Same; Same; Same; Same; Exception; An officer or agent of a corporation shall have the power to execute or indorse a negotiable paper in the name of the corporation for accommodation only if specifically authorized to do so; Personal liability of signatories in the instrument .—By way of exception, an officer or agent of a corporation shall have the power to execute or indorse a negotiable paper in the name of the corporation for the accommodation of a third person only if specifically authorized to do so. Corollarily, corporate officers, such as the president and vice-president, have no power to execute for mere SUPREME COURT REPORTS ANNOTATED VOLUME 177 Documents/Law School Ebooks/Negotiable Instrument Act... 1 of 27 9/2/2018, 7:45 PM
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_______________ * SECOND DIVISION. 595 VOL. 177, SEPTEMBER 15 ,1989 595 Crisologo-Jose vs. Court of Appeals accommodation a negotiable instrument of the corporation for their individual debts or transactions arising from or in relation to matters in which the corporation has no legitimate concern. Since such accommodation paper cannot thus be enforced against the corporation, especially since it is not involved in any aspect of the corporate business or operations, the inescapable conclusion in law and in logic is that the signatories thereof shall be personally liable therefor, as well as the consequences arising from their acts in connection therewith.
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  • Fall '19
  • Supreme Court of the United States, Cheque, Appellate court, Negotiable instrument, Trial court

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