Professional Documents
Culture Documents
And, in addition, he engages that, on due Oral testimony is not admissible to establish
presentment, it shall be accepted or paid, that an unqualified indorsement is in fact
or both, as the case may be, according to qualified.
its tenor, and that if it be dishonored and
the necessary proceedings on dishonor be INDORSER OF BEARER INSTRUMENTS
duly taken, he will pay the amount
thereof to the holder, or to any Sec. 40. Indorsement of instrument
subsequent indorser who may be payable to bearer. - Where an instrument,
compelled to pay it. payable to bearer, is indorsed specially, it
may nevertheless be further negotiated
GENERAL INDORSER by delivery; but the person indorsing
specially is liable as indorser to only such
(a) That the instrument is genuine and in holders as make title through his
all respects what it purports to be; indorsement.
Sec. 68. Order in which indorsers are (c) That all prior parties had
liable. - As respect one another, indorsers capacity to contract;
are liable prima facie in the order in
which they indorse; but evidence is (d) That he has no knowledge of
admissible to show that, as between or any fact which would impair the
among themselves, they have agreed validity of the instrument or
otherwise. Joint payees or joint indorsees render it valueless.
who indorse are deemed to indorse jointly
and severally. Same as qualified indorser, however a person
negotiating by mere delivery’s warranties
QUALIFIED INDORSER extend only in favor of his immediate
transferee.
Warranties
AGENTS
(a) That the instrument is genuine
and in all respects what it purports Sec. 69. Liability of an agent or broker. -
to be; Where a broker or other agent negotiates
an instrument without indorsement, he
(b) That he has a good title to it; incurs all the liabilities prescribed by
Section Sixty-five of this Act, unless he
(c) That all prior parties had discloses the name of his principal and
capacity to contract; the fact that he is acting only as agent.
(d) That he has no knowledge of Agent must disclose his principal in order that
any fact which would impair the he may not incur any liability.
validity of the instrument or
render it valueless. Sec. 18. Liability of person signing in
trade or assumed name. - No person is
Even if the the validity of the instrument was in liable on the instrument whose signature
fact already impaired at the time of does not appear thereon, except as
negotiation, the qualified indorser does not herein otherwise expressly provided. But
breach his warranty if he has no knowledge of one who signs in a trade or assumed
such fact. name will be liable to the same extent as
if he had signed in his own name.
PER PROCURACION
Sec. 19. Signature by agent; authority; Signature by procuration operates as notice
how shown. - The signature of any party that the agent has but limited authority to sign,
may be made by a duly authorized agent. and the principal is bound only in case the
No particular form of appointment is agent in so signing acted within the actual
necessary for this purpose; and the limits of authority.
authority of the agent may be established
as in other cases of agency. ACCOMODATION PARTIES
Sec. 20. Liability of person signing as Sec. 29. Liability of accommodation party.
agent, and so forth. - Where the - An accommodation party is one who has
instrument contains or a person adds to signed the instrument as maker, drawer,
his signature words indicating that he acceptor, or indorser, without receiving
signs for or on behalf of a principal or in a value therefor, and for the purpose of
representative capacity, he is not liable lending his name to some other person.
on the instrument if he was duly Such a person is liable on the instrument
authorized; but the mere addition of to a holder for value, notwithstanding
words describing him as an agent, or as such holder, at the time of taking the
filling a representative character, without instrument, knew him to be only an
disclosing his principal, does not exempt accommodation party.
him from personal liability.
Requisites:
Sec. 21. Signature by procuration; effect
of. - A signature by "procuration" 1. He must be a party to the instrument,
operates as notice that the agent has but signing in as maker, drawer, acceptor
a limited authority to sign, and the or indorser
principal is bound only in case the agent 2. He must not receive value therfor
in so signing acted within the actual 3. He must sign for the purpose of lending
limits of his authority. his name or credit to some other
person
PERSON WHO SHOULD SIGN
An accomodation party ios liable according to
No person is liable on the instrument whose the face of his undertaking, the same as if he
signature does not appear theron. The party were himself financially interested in the
must sign in his own name. transaction.
CORPORATIONS
Rule on accomodation party does not apply to
corporations. This is because the issue or
indorsement of a negotiable paper by a
corporation without consideration and for the
accommodation of another is Ultra vires.