Crisologo-Jose v. Court of Appeals, G.R. No. 80599, September 15, 1989
Crisologo-Jose v. Court of Appeals, G.R. No. 80599, September 15, 1989
ID.; ID.; ID.; ID.; ID.; EXCEPTION. By way of exception, an ocer 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 specically
authorized to do so.
5.
ID.; ID.; ID.; CORPORATE OFFICERS HAVE NO POWER TO EXECUTE FOR
MERE ACCOMMODATION A NEGOTIABLE INSTRUMENT OF THE CORPORATION FOR
THEIR INDIVIDUAL DEBTS OR TRANSACTIONS IN WHICH THEY ARE PERSONALLY
LIABLE. Corporate ocers, such as the president and vice-president, have no
power to execute for mere 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.
6.
ID.; ID.; ID.; A CO-SURETY FOR ACCOMMODATED PARTY WITH WHOM HE;
HIS CO-SIGNATORY ASSUME SOLIDARY LIABILITY EX-LEGE FOR THE DEBT
INVOLVED. Respondent Santos is an accommodation party and is, therefore,
liable for the value of the check. The fact that he was only a co-signatory does not
detract from his personal liability. A co-maker or co-drawer under the circumstances
in this case is as much an accommodation party as the other co-signatory or, for
that matter, as a lone signatory in an accommodation instrument. Under the
doctrine in Philippine Bank of Commerce vs. Aruego, supra, he is in eect a cosurety for the accommodated party with whom he and his co-signatory, as the other
co-surety, assume solidary liability ex lege for the debt involved. With the dishonor
of the check, there was created a debtor-creditor relationship, as between Atty.
Benares and respondent Santos, on the one hand, and petitioner, on the other. This
circumstance enables respondent Santos to resort to an action of consignation
where his tender of payment had been refused by petitioner.
7.
REMEDIAL LAW; COURTS; APPELLATE COURT IN CIVIL CASE BEFORE IT MAY
NOT INTERFERE IN THE RESOLUTION OF CRIMINAL CASE. Respondent court
went beyond the ratiocination called for in the appeal to it in CA-G.R. CV. No.
05464. It digressed into the merits of the aforesaid Criminal Case No. Q-14867.
That observations made in the civil case at bar and the intrusion into the merits of
the criminal case pending in another court are improper do not have to be
belabored. In the latter case, the criminal trial court has to grapple with such factual
issues. These are aside from the considerations that the disputed period involved in
the criminal case is only a presumptive rule, juris tantum at that, to determine
whether or not there was knowledge of insuciency of funds in or credit with the
drawee bank; that payment of civil liability is not a mode for extinguishment of
criminal liability; and that the requisite quantum of evidence in the two types of
cases are not the same. To repeat, the foregoing matters are properly addressed to
the trial court in Criminal Case No. Q-14867, the resolution of which should not be
interfered with by respondent Court of Appeals at the present posture of said case,
much less preempted by the inappropriate and unnecessary holdings in the
After trial, the court a quo, holding that it was "not persuaded to believe that
consignation referred to in Article 1256 of the Civil Code is applicable to this case,"
rendered judgment dismissing plaintiff's complaint and defendant's counterclaim. 4
As earlier stated, respondent court reversed and set aside said judgment of dismissal
and revived the complaint for consignation, directing the trial court to give due
course thereto.
Hence, the instant petition, the assignment of errors wherein are prefatorily stated
and discussed seriatim .
1.
Petitioner contends that respondent Court of Appeals erred in holding that
private respondent, one of the signatories of the check issued under the account of
Mover Enterprises, Inc., is an accommodation party under the Negotiable
Instruments Law and a debtor of petitioner to the extent of the amount of said
check.
Petitioner avers that the accommodation party in this case is Mover Enterprises, Inc.
and not private respondent who merely signed the check in question in a
representative capacity, that is, as vice-president of said corporation, hence he is not
liable thereon under the Negotiable Instruments Law.
The pertinent provision of said law referred to provides:
"Sec. 29.
Based on the foregoing requisites, it is not a valid defense that the accommodation
party did not receive any valuable consideration when he executed the instrument.
From the standpoint of contract law, he diers from the ordinary concept of a debtor
therein in the sense that he has not received any valuable consideration for the
instrument he signs. Nevertheless, he is liable to a holder for value as if the contract
was not for accommodation, 5 in whatever capacity such accommodation party
signed the instrument, whether primarily or secondarily. Thus, it has been held that
in lending his name to the accommodated party, the accommodation party is in
effect a surety for the latter. 6
Assuming arguendo that Mover Enterprises, Inc. is the accommodation party in this
case, as petitioner suggests, the inevitable question is whether or not it may be held
liable on the accommodation instrument, that is, the check issued in favor of herein
petitioner.
We hold in the negative.
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.
7 This is because the issue or indorsement of negotiable paper by a corporation
without consideration and for the accommodation of another is ultra vires. 8 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. 9
By way of exception, an ocer 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 specically authorized to do so. 10
Corollarily, corporate ocers, such as the president and vice-president, have no
power to execute for mere 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.
The instant case falls squarely within the purview of the aforesaid decisional rules. If
we indulge petitioner in her aforesaid postulation, then she is eectively barred
from recovering from Mover Enterprises, Inc. the value of the check. Be that as it
may, petitioner is not without recourse.
The fact that for lack of capacity the corporation is not bound by an accommodation
paper does not thereby absolve, but should render personally liable, the signatories
of said instrument where the facts show that the accommodation involved was for
their personal account, undertaking or purpose and the creditor was aware thereof.
Cdpr
"Based on the foregoing consideration, this Court nds that the plaintiappellant acted within his legal rights when he consigned the amount of
P45,000.00 on August 14, 1981, between August 7, 1981, the date when
plainti-appellant receive (sic) the notice of non-payment, and August 14,
1981, the date when the debt due was deposited with the Clerk of Court (a
Saturday and a Sunday which are not banking days) intervened. The fth
banking day fell on August 14, 1981. Hence, no criminal liability has yet
attached to plainti-appellant when he deposited the amount of P45,000.00
with the Court a quo on August 14, 1981." 11
That said observations made in the civil case at bar and the intrusion into the merits
of the criminal case pending in another court are improper do not have to be
belabored. In the latter case, the criminal trial court has to grapple with such factual
issues as, for instance, whether or not the period of ve banking days had expired,
in the process determining whether notice of dishonor should be reckoned from any
prior notice if any has been given or from receipt by private respondents of the
subpoena therein with supporting adavits, if any, or from the rst day of actual
preliminary investigation; and whether there was a justication for not making the
requisite arrangements for payment in full of such check by the drawee bank within
the said period. These are matters alien to the present controversy on tender and
consignation of payment, where no such period and its legal effects are involved.
These are aside from the considerations that the disputed period involved in the
criminal case is only a presumptive rule, juris tantum at that, to determine whether
or not there was knowledge of insuciency of funds in or credit with the drawee
bank; that payment of civil liability is not a mode for extinguishment of criminal
liability; and that the requisite quantum of evidence in the two types of cases are
not the same.
cdll
To repeat, the foregoing matters are properly addressed to the trial court in Criminal
Case No. Q-14867, the resolution of which should not be interfered with by
respondent Court of Appeals at the present posture of said case, much less
preempted by the inappropriate and unnecessary holdings in the aforequoted
portion of the decision of said respondent court. Consequently, we modify the
decision of respondent court in CA-G.R. CV No. 05464 by setting aside and declaring
without force and eect its pronouncements and ndings insofar as the merits of
Criminal Case No. Q-14867 and the liability of the accused therein are concerned.
WHEREFORE, subject to the aforesaid modications, the judgment of respondent
Court of Appeals is AFFIRMED.
SO ORDERED.
Paras, Padilla and Sarmiento, JJ., concur.
Melencio-Herrera J., took no part.
Footnotes
1.
2.
Civil Case No. Q-33160, Regional Trial Court of Quezon City, Branch XCVI.
3.
Rollo, 19-20.
4.
Rollo, 18.
5.
6.
7.
11 C.J.S. 309.
8.
9.
Oppenheim vs. Simon Reigel Cigar Co., 90 N.Y.S. 355, cited in 11 C.J.S. 309.
10.
In re Wrentham Mfg. Co., 2 Low. 119; Hall vs. Auburn Turnp. Co., 27 Cal. 255,
cited in 14A C.J. 461.
11.
Rollo, 21-22.