Nyco Sales Corporation v. Ba Finance Corporation

Summary

This commercial law case involved Nyco Sales Corporation's liability as assignor to BA Finance Corporation for dishonored checks under a deed of assignment. Nyco facilitated credit accommodation for Sanshell Corporation by endorsing their post-dated check to BA Finance, but both the original and substitute checks were dishonored. The Supreme Court affirmed lower courts' rulings that under Article 1628 of the Civil Code, assignors warrant the validity of assigned credits. The Court rejected Nyco's defenses including lack of notice, novation, and unauthorized acts by its president, applying estoppel principles based on previous similar transactions and corporate by-laws. The decision establishes important precedent on assignor liability and corporate officer authority in commercial credit arrangements.