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Unformatted text preview: jurisprudence that one who has intervened in the
making of a contract in the character of agent cannot be permitted to intercept and appropriate the thing
which the principal is bound to deliver, and thereby make performance by the principal impossible. The
agent in any event must be precluded from doing any positive act that could prevent performance on the part
of his principal.
PNB–plaintiff, lender of money
Welch, Fairchild & Co.–defendant; owner of 325 shares of La Compania; agent who borrowed money for the
La Compania Naviera Inc.–not a party in the case at bar; buyer of the ship; principal
● La Compania bought Benito Juarez (a ship).
● While the ship was being delivered to the agent of the buyer in San Francisco, it was found out that
it needed repairs before it could be transported to the Philippines.
● Because of this, defendant wrote a letter to PNB to to release the money and make payment for the 48 ●
● ● ● ●
● ship upon Welch &Co.’s application without requiring the delivery of the bill of sale or insurance
La Compania also addressed a letter to PNB confirming the request and authorizing the bank to
send the necessary cablegram.
PNB sent the cablegram authorizing payment without the production of the bill of sale or insurance
After the repair of the ship, it was insured by Welch & Co to the value of $150,000 and was
dispatched on its voyage to the Phils.
The vessel encountered a storm off the Island in Hawaii and became a total loss.
When the insurance was taken out to cover the voyage to Manila, no policy was issued by any
insurer; but the insurance was placed by Welch & Co. of San Francisco, upon the instructions of
Welch, Fairchild & Co., as agents of the Compaña Naviera, and it was taken out in the ordinary
course of business to protect the interests of all parties concerned.
The risk was distributed among several companies, some in remote centers; and it was many
months before Welch & Co., of San Francisco, had collected the full amount due from the insurers.
However, as the money came to the hands of Welch & Co., of San Francisco, it was remitted by
draft or telegraphic transfer to Welch, Fairchild & Co. in...
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This document was uploaded on 03/11/2014.
- Fall '14