PHILIPPINE BANK OF COMMERCE VS ARUEGO 102 SCRA 530
Facts:
Herein defendant, Jose Aruego obtained a credit accommodation from the plaintiff,
the Philippine Bank of Commerce (PBCom) to facilitate the payment of printing of
“World Current Events”, the periodical he is publishing.
Thus, for every printing of the periodical, the printer, Encal Press and Photo
Engraving (Encal), collected the cost of printing by drawing a draft against PBCom,
said draft being sent later to the defendant for acceptance.
As an added security for the payment of the amounts advanced to Encal, PBCom
also required the defendant to execute a trust receipt in favor of PBCom, wherein
said defendant undertook to hold in trust for PBcom the periodicals and, to sell the
same with the promise to turn over to PBCom the proceeds of the sale of said
publication to answer for the payment of all obligations arising from the draft.
The Philippine Bank of Commerce instituted an action against the defendant to
recover the cost of printing the latter’s periodical. The defendant, however, argues
that he signed the supposed bills of exchange only as an agent of the Philippine
Education Foundation Company (PEFC), where he is president.
Issue:
1.) WON the defendant can be held liable by PBCom, although he signed the
supposed bills of exchange only as an agent of PEFC. (YES)
2.) WON the drafts were bills of exchange or mere pieces of evidence of
indebtedness. (YES)
Ruling:
(1) The Court ruled in the affirmative. The defendant did not disclose in any of the
drafts that he accepted that he was signing as a representative of PEFC. The
defendant contends that he signed the supposed bills of exchange as a mere agent
of PEFC where he is president.
Sec. 20 of the Negotiable Instruments Law provides that "Where the
instrument contains or a person adds to his signature words indicating that he signs
for or on behalf of a principal or in a representative capacity, he is not liable on the
instrument if he was duly authorized; but the mere addition of words describing
him as an agent or as filing a representative character, without disclosing his
principal, does not exempt him from personal liability."
An inspection of the drafts accepted by the defendant shows that nowhere
has he disclosed that he was signing as a representative of PEFC. He merely
signed as follows: "JOSE ARUEGO (Acceptor) (SGD) JOSE ARGUEGO. For
failure to disclose his principal, The defendant, Jose Aruego is personally liable for
the drafts he accepted.
(2) The Court also ruled in the affirmative. Under Sec. 126 of the Negotiable
Instruments Law, a bill of exchange is an unconditional order in writing addressed
by one person to another, signed by the person giving it, requiring the person to
whom it is addressed to pay on demand or at a fixed or determinable future time a
sum certain in money to order or to bearer.
As long as a commercial paper conforms with the definition of a bill of
exchange, that paper is considered a bill of exchange. The nature of acceptance
is important only in the determination of the kind of liabilities of the parties involved,
but not in the determination of whether a commercial paper is a bill of exchange or
not.