Nyco Sales Corp vs BA Finance Corp

NYCO Sales Corp vs BA Finance Corp August 16 1991

G.R. No. 71694

FAC!S" Nyco Sales whose president and general manager Rufno Yao is engaged in the business o selling construction materials. Fernandezes acting on behal o Sanshell Corporation approached Yao or credit accommodation. They reuested Nyco thru Yao to garant Sanshell discounting pri!eleges which Nyco had with "# Finance. Fernandezes went to Yao or the purpose o discounting Sanshell$s "%& %'C$s on the aount o %hp ()*))) payable to Nyco. Nyco then thru Yao endorsed the chec+ in a!or o "# Finance. "# Finance then issued a chec+ payable Nyco which endorsed it in a!or o Sanshell which made use o the negotiation. Nyco e,ecuted a 'eed o #ssignment in a!or o "# Finance with the conormity o Sanshell. -nder the deed* the subect o #ssignment was the "%& %'C Chec+. #greed that there will be a Continuing Suretyship #greement whereby Fernandezes unconditionally guaranteed to "# Finance the compliance o all indebtness o Nyco. The chec+ was subseuently dishonored by the drawee ban+ upon presentment or payment. "# Finance reported the matter to the Fernandezes and issued a substitute /Security "an+0 chec+ with the same amount to "# Finance which was again subseuently dishonored. 'espite repeated demands* Nyco and the Fernandezes ailed to pay the obligation. "# Finance Finance then instituted an action to the court. Nyco and Fernandezes were considered in deault. TC ruled in a!or o "# Finance ordering the Fernandezes and Nycho solidarily to pay the ormer. Nycho mo!ed to set aside the order and impleaded Sanshell. TC ruled in a!or o "# Finance. 1ith regards to the Fernandezes* the TC denied the cross claim o Nycho because it seems that Fernadezes ne!er recei!ed the cross claim o Nycho and ha!e not been declared in deault. -pon appeal* a2rmed TC decision with modifcation with respect to the running time o interest running rom February 34* 3454 instead o February 3 3454. 6ence this appeal. NYC67$S C7NT8NT&7NS9 o o o

'ischarged o liability when "# Finance ailed to gi!e a notice o dishonor. No no!ation when "# Finance accepted S"TC chec+.  Yao  Yao as %resident %resident is not authorized to enter into credit assignment with "# Finance since there is no "oard Resolution authorizing the same.

#SS$%" 1hether or not Nyco is liable or the acts o its president.

R$&#NG"  Y8S.

 The by:laws o Nyco e,pressly authorized its %resident to enter into contracts* borrowing money * signing* indorsing chec+s in behal o the compant. #lso* it appears that the same +ind o transaction already happened between Nyco and "# Finance. 6ence* Nyco is placed rom estopped rom denying Yao$s authority because o its silence ust to escape liability.