SECTION 21 OF LAW ON NEGOTIABLE INSTRUMENT A signature by procuration operates as a notice that the agent has but a limited authority

to sign, and the principal is bound only in case the agent in so signing acted within the actual limits of his authority

Example of indorsement with agent involve Pay to the order of P, the sum of P5000 (Sgd) R Per Procuration : Angelo Alvares

indorser Agent - reason why pumasok ang law on contract of agency

Under contract of agency The ACT IS VALID ONLY if the following are present 1. The agent must act within the scope of his authority 2. The agent must act in behalf of his principal Agent acts in excess of the authority of his principal The act is UNENFORCEABLE against the principal or the person in whose name the contract was entered into unless the latter ratifies the same..(Article 1317 and 1403) Example: A was authorized by P to sell Ps car for at least P100000 cash. A, however, sold the car in the name of P to B for the same price but on credit. B cannot enforce the sale against P unless P ratifies the contract. A alone will be liable to B. hindi sya authorized to sell it on credit. Unless ratifies meaning although ngact in excess of the authority ang isa agent..kun hinayaan o niratify ng principal yung act ng agent..magiging valid na ung sale kasi kapag nagratifies, it cleanses yung defect and magiging valid sya as a complete contract of sale, and magiging enforceable ang contract Enforceable meaning kapag hindi magcomply ang obligor, pwede pumanta yung obligee sa court to enforce the obligation. Unenforceable meaning hindi pwede maenforce kun sakali hindi magcomply yung obligor

SECTION 22 of Law on Negotiable Instrument 1. Indorsement or assignment by a minor

Title to the instrument passes. However, the minor does not incur any liability on the instrument even to a hoder in due course because his lack of capacity is a complete or real defense. This rule is also applicable to those incapable of giving consent such as insane or demented persons and deaf-mutes who do not know how to write (Art 1327, Civil Code of the Philippines) Example: M makes a promissory note payable to the order of P. He issues the same to P who indorses it to A, a minor. A indorses the note to B. B to C. C to D. and D to H May H