G.R. Nos. L-25836-37, 31 January 1981

FACTS:

To facilitate payment of the printing of a periodical called “World Current Events.”, Aruego, its publisher, obtained a credit accommodation from the Philippine Bank of Commerce. For every printing of the periodical, the printer collected the cost of printing by drawing a draft against the bank, said draft being sent later to Aruego for acceptance. As an added security for the payment of the amounts advanced to the printer, the bank also required Aruego to execute a trust receipt in favor of the bank wherein Aruego undertook to hold in trust for the bank the periodicals and to sell the same with the promise to turn over to the bank the proceeds of the sale to answer for the payment of all obligations arising from the draft. The bank instituted an action against Aruego to recover the cost of printing of the latter’s periodical. Aruego however argues that he signed the supposed bills of exchange only as an agent of the Philippine Education Foundation Company where he is president.

ISSUE:

Whether Aruego can be held liable by the petitioner although he signed the supposed bills of exchange only as an agent of Philippine Education Foundation Company.

RULING:

Yes, Aruego can be held liable although he signed the supposed bills of exchange only as an agent.

An inspection of the drafts accepted by the defendant would show nowhere that he has disclosed that he was signing in representation of the Philippine Education Foundation Company. He merely signed his name. For failure to disclose his principal, Aruego was personally liable for the drafts he accepted.

*Case digest by Rezeile S. Morandarte, JD – 4, Andres Bonifacio College, SY 2019 – 2020