7. Nyco Sales Corporation v. Ba Finance assignor-assignee. The assignor-vendor
Corporation, Judge Rosalio A. De Leon— warrants both the credit itself (its existence Regional Trial Court, Br. Ii, Intermediate and legality) and the person of the debtor Appellate Court, First Civil Cases (his solvency), if so stipulated, as in the Division case at bar. Consequently, if there be any breach of the above warranties, the assignor-vendor should be held answerable Facts: Nyco Sales Corporation has therefor. There is no question then that the discounting privileges with BA Finance assignor-vendor is indeed liable for the Corporation. In 1978, brothers Renato invalidity of whatever he assigned to the Fernandez and Santiago Renato (officers of assignee-vendee. Considering now the Sanshell Corporation) approached Nyco facts of the case at bar, it is beyond dispute Sales Corporation for a credit that Nyco executed a deed of assignment in accommodation in order for the brothers favor of BA Finance with Sanshell make use of Nyco’s discounting privileges. Corporation as the debtor-obligor. BA Nyco Sales agreed and so, on November Finance is actually enforcing said deed and 15, 1978, Sanshell issued a post-dated the check covered thereby is merely an (November 17, 1978) BPI check to Nyco incidental or collateral matter. This particular Sales in the amount of P60,000.00. check merely evidenced the credit which Following the discounting process agreed was actually assigned to BA Finance. Thus, upon, Nyco Sales, thru its president Rufino the designation is immaterial as it could be Yao, endorsed the check in favor of BA any other check. It is only what is Finance. Thereafter, BA Finance issued a represented by the said checks that Nyco is check payable to Nyco Sales which being asked to pay. endorsed it in favor of Sanshell. Sanshell then made use of and/or negotiated the Nyco Sales’ pretension that it had not been check. Accompanying the exchange of notified of the fact of dishonor is belied not checks was a Deed of Assignment executed only by the formal demand letter issued by by Nyco Sales (assignor) in favor of BA BA Finance but also by the fact that Nyco Finance (assignee) with the conformity of Sales and Sanshell had frequent contacts Sanshell. Under the said Deed, the subject before, during and after the dishonor. More of the discounting was P60k BPI check. importantly, as long as the credit remains outstanding, Nyco Sales shall continue to The check bounced. BA Finance notified be liable to BA Finance as its assignor. The Sanshell. Sanshell substituted the BPI dishonor of an assigned check simply check with a Security Bank and Trust stresses its liability and the failure to give a Company check for P60k. This check again notice of dishonor will not discharge it from bounced. BA Finance made repeated such liability. This is because the cause of demands to Nyco Sales and Sanshell but action stems from the breach of the neither of the two settled the obligation. warranties embodied in the Deed of Hence, BA Finance sued Nyco Sales. Nyco Assignment, and not from the dishonoring of Sales averred that it received no notice of the check alone. dishonor when the second check was dishonored. Dispositive: The decision appealed from is AFFIRMED. Issue: Whether or not Nyco Sales is liable to pay BA Finance?