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    Negotiability Salas vs. Ca

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    Shiela Pilar
    Petitioner bought a car and signed a promissory note that was later indorsed to Filinvest Finance to finance the purchase. Petitioner defaulted on payments, claiming fraud by the original seller. Filinvest sued for payment. The court found the promissory note was a negotiable instrument, making Filinvest a holder in due course not subject to defenses between the original parties. To be negotiable, an instrument must contain words of negotiability like "to order" or be payable to a specified person, allowing it to be endorsed and delivered to another. As the promissory note here contained these words, Filinvest took free of defenses against the original seller.

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    Negotiability Salas vs. Ca

    Uploaded by

    Shiela Pilar
    7 views1 page
    Petitioner bought a car and signed a promissory note that was later indorsed to Filinvest Finance to finance the purchase. Petitioner defaulted on payments, claiming fraud by the original seller. Filinvest sued for payment. The court found the promissory note was a negotiable instrument, making Filinvest a holder in due course not subject to defenses between the original parties. To be negotiable, an instrument must contain words of negotiability like "to order" or be payable to a specified person, allowing it to be endorsed and delivered to another. As the promissory note here contained these words, Filinvest took free of defenses against the original seller.

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    Cases for Nego

    Original Title

    Cases for Nego

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    Petitioner bought a car and signed a promissory note that was later indorsed to Filinvest Finance to finance the purchase. Petitioner defaulted on payments, claiming fraud by the original seller. Filinvest sued for payment. The court found the promissory note was a negotiable instrument, making Filinvest a holder in due course not subject to defenses between the original parties. To be negotiable, an instrument must contain words of negotiability like "to order" or be payable to a specified person, allowing it to be endorsed and delivered to another. As the promissory note here contained these words, Filinvest took free of defenses against the original seller.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    7 views1 page

    Negotiability Salas vs. Ca

    Uploaded by

    Shiela Pilar
    Petitioner bought a car and signed a promissory note that was later indorsed to Filinvest Finance to finance the purchase. Petitioner defaulted on payments, claiming fraud by the original seller. Filinvest sued for payment. The court found the promissory note was a negotiable instrument, making Filinvest a holder in due course not subject to defenses between the original parties. To be negotiable, an instrument must contain words of negotiability like "to order" or be payable to a specified person, allowing it to be endorsed and delivered to another. As the promissory note here contained these words, Filinvest took free of defenses against the original seller.

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    NEGOTIABILITY

    SALAS VS. CA
    Facts:
    Petitioner bought a car from Viologo Motor Sales Company, which was
    secured by a promissory note, which was later on indorsed to Filinvest
    Finance, which financed the transaction. Petitioner later on defaulted in her
    installment payments, allegedly due to the fraud imputed by VMS in
    selling her a different vehicle from what was agreed upon. This default in payment
    prompted. Filinvest Finance to initiate a case against petitioner. The trial court
    decided in favor of Filinvest, to which the appellate court upheld by increasing the
    amount to be paid. It is the contention of petitioner that since the agreement
    between her and the motor company was inexistent, none had been assigned in
    favor of private respondent.
    Issue: W/N the promissory note is a negotiable which will bar completely all
    defenses of Salas against VMS
    Held:
    Petitioners liability on the promissory note, the due execution and
    genuineness of which she never denied under oath, is under the foregoing factual
    milieu, as inevitable as it is clearly established.

    The records reveal that involved herein is not a simple case of assignment of credit
    as petitioner would have it appear, where the assignee merely steps into the
    shoes of, is open to all defenses available against and can enforce payment
    only to the same extent as, the assignor-vendor.
    The instrument to be negotiable must contain the so-called words of
    negotiability. There are only 2 ways for an instrument to be payable to order.
    There must always be a specified person named in the instrument and the bill or
    note is to be paid to the person designated in the instrument or to any person to
    whom he has indorsed and delivered the same. Without the words or order or
    to the order of, the instrument is payable only to the person designated therein
    and is thus non-negotiable. Any subsequent purchaser thereof will not enjoy
    the advantages of being a holder in due course but will merely step into the
    shoes of the person designated in the instrument and will thus be open to the
    defenses available against the latter.
    In the case at bar, the promissory notes is earmarked with negotiability and
    Filinvest is a holder in due course.

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