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.
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...
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- Fall '14
- gutierrez hermanos, B.A. Finance Corporation