Negotiable Instruments Case Digest: Bautista v. Auto Plus Traders Inc (2008)


G.R. No. 166405 August 06, 2008
Lessons Applicable: Consideration and Accommodation Party (Negotiable Instruments Law)
FACTS:
  • Claude P. Bautista, in his capacity as President and Presiding Officer of Cruiser Bus Lines and Transport Corporation (Cruiser), purchased various spare parts from Auto Plus Traders, Inc. (Auto Plus) and issued 2 postdated checks

    • The checks were subsequently dishonored

    • 2 Informations for violation of BP Blg. 22 were filed with the MTCC

  • MTCC: Cruiser directed to pay the Auto Plus 

  • CA Affirmed RTC: Bautista personally issued the check

    • According to Auto Plus, Bautista, by issuing his check to cover the obligation of the corporation, became an accommodation party


ISSUE: W/N Bautista as an officer of the corporation, is personally and civilly liable for the 2 checks

HELD: NO. petition is GRANTED. CA REVERSED and SET ASIDE. Criminal Case DISMISSED
  • Section 29 of the Negotiable Instruments Law

    • accommodation party is liable on the instrument to a holder for value Private respondent adds that petitioner should also be liable for the value of the corporation check because instituting another civil action against the corporation would result in multiplicity of suits and delay.

  • Generally this Court, in a petition for review on certiorari under Rule 45 of the Rules of Court, has no jurisdiction over questions of facts. But, considering that the findings of the MTCC and the RTC are at variance, we are compelled to settle this issue.

  • 2 check return slips in conjunction with the Current Account Statements would show that the check for P151,200 was drawn against the current account of Claude Bautista while the check for P97,500 was drawn against the current account of Cruiser Bus Lines and Transport Corporation. Hence, we sustain the factual finding of the RTC.  Nonetheless, appellate court in error for affirming the decision of the RTC holding petitioner liable for the value of the checks considering that he was acquitted of the crime charged and that the debts are clearly corporate debts for which only Cruiser Bus Lines and Transport Corporation should be held liable.

  • There is no agreement that petitioner shall be held liable for the corporation's obligations in his personal capacity. Hence, he cannot be held liable for the value of the 2 checks issued in payment for the corporation's obligation

  • Section 29 of the Negotiable Instruments Law 

    • accommodation party

      • a person "who has signed the instrument as maker, drawer, acceptor, or indorser, without receiving value therefor, and for the purpose of lending his name to some other person

      • requisites

      1. he must be a party to the instrument, signing as maker, drawer, acceptor, or indorser -present

      2. he must not receive value therefor - present

      3. he must sign for the purpose of lending his name or credit to some other person - lacking

  • Cruiser Bus Lines and Transport Corporation, however, remains liable for the checks especially since there is no evidence that the debts covered by the subject checks have been paid.