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Philippine Bank of Commerce v. Aruego [G.R. Nos. L-25836-37.January 31, 1981]

30 Jul

FACTS

Defendant-appellant Aruego signed various bills of exchange which was negotiated and later dishonored. Appellee bank aggrieved, sued Aruego.

 

ISSUE

Whether or not defendant may effectively put up the defense that he was just an agent of the company issuing the bills of exchange.

 

RULING

Section 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.”

 

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