Nothing in the aforesaid powers of attorney expressly

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Manila. The amount of $13,000 was mistakenly remitted to PNB in New York, and it was only a month after this that PNB Manila received authority to pay defendant the said amount. This drew the attention of the bank to the fact that the transfer was related to the proceeds of the insurance on Benito Juarez. PNB Manila first determined to intercept the transfer and withhold the credit from the defendant. When the determination was communicated to defendant, it protested. Money was the credited Welch’s account and interest was even paid for the time the money was withheld. Welch, Fairchild & Co. pointed out that it had acted throughout merely in the capacity of agent for La Compania and was therefore not legally bound by the promise made by it in the letter to the effect that the policy of insurance would be delivered to PNB Manila by La Compania. PNB made demands upon La Compania, but the latter claimed that it never received any policy of insurance upon the ship as it was insured in San Francisco by the agent in behalf of La Compania. Because La Compania became insolvent, PNB made formal demand upon the defendant basing it on the letter that the defendant wrote. The defendant refused even if it had received the proceeds of the insurance way before. It must be noted that the principal is indebted to the agent because of repeated transactions which were the same as the one in this case and that the proceeds of the insurance policy was not enough to cover the entire debt. ISSUE: WON PNB could collect from Welch, Fairchild & Co. HELD: YES. RATIO: While it is true that an agent who acts for a revealed principal in the making of a contract does not become personally bound to the other party in the sense that an action can ordinarily be maintained upon such contract directly against the agent (art. 1725, Civ. Code), yet that rule clearly does not control this case; for even conceding that the obligation created by the letter of August 8, 1918, was directly binding only on the principal, and that in law the agent may stand apart therefrom. yet it is manifest upon the simpl...
View Full Document

This document was uploaded on 03/11/2014.

Ask a homework question - tutors are online