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San Miguel Brewery, Inc. vs. Lifetime Enterprise, Inc. & The House of Insurance,

Inc.

FACTS:

Eliseo A. Arandia, Jr., gereal manager of the Lifetime Enterprise, Inc., applied in behalf of said

corporation for a credit line in the purchase of beer products ith the San !iguel "reer#,Inc., hich the application as appro$ed on the same date b# the latter corporation thru its

assistant $ice%president, Luis A. Fernande&. The credit line is secured b# a securit# bond

e'ecuted b# Arandia, in his capacit# as general manager of the Lifetime Enterprise, Inc., as

principal, and The (ouse of Insurance, Inc. as suret#, in hich bond the aforesaid parties

bound themsel$es )ointl# and se$erall# liable for credit purchase that the principal might

ma*e ith the San !iguel "reer#, Inc. to the e'tent of +-,---.--.

Arandia authori&ed one !anuel pao to sign /sales order0 or /purchase order0 or an# other

order forms of the San !iguel "reer#, Inc. +ursuant to said authorit#, pao ordered and

recei$ed in the morning of that da#, from the breer# compan#1s plant, beer products

$alued at +--.--. Then another deli$er# of beer products as made, hich ere $alued at

+2,---.--, recei$ed b# Arandia himself. Subse3uent thereto, further deli$eries ere madethru pao, namel# beer products orth +4-,---.-- and +4,2---.-- orth of beer.

The breer# compan#, thru its assistant $ice%president, informed Lifetime Enterprise, Inc.

that it had an outstanding account in the aggregate sum of +-,---.-- representing the

price of the beer products deli$ered to it on credit and re3uesting that the said amount be

paid as it as alread# o$erdue. (a$ing failed to recei$e an# repl# to the demand letters, the

breer# compan# sent its collector, Alfeo Aguila, to the o5ces of the Lifetime Enterprise,

Inc., but in all these occasions, no pa#ment as made as Arandia as ala#s out of o5ce.

Conse3uentl#, the breer# compan#, instituted in the Court of First Instance of !anila the

instant action for collection against the Lifetime Enterprise, Inc., as principal, and the (ouse

of Insurance, Inc., as suret#.

The (ouse of Insurance, Inc. admitted the genuineness and due e'ecution of the suret#

bond but claimed lac* of *noledge or information as regards the deli$er# of beer products

b# plainti6 to its co%defendant, Lifetime Enterprise, Inc., and the latter1s failure to compl#

ith its obligation. For its part, defendant Lifetime Enterprise, Inc. disclaimed liabilit# to

plainti6, asserting that its general manager, Eliseo A. Arandia, Jr. acted be#ond the scope of

his authorit# in entering into the transactions in 3uestion.

The trial court ruled in fa$or of the plainti6, San !iguel "reer#, Inc.

7nl# defendant Lifetime Enterprise, Inc. appealed from the trial court1s )udgement.

ISSE: 8hether or not appellant corporation is bound b# said contracts

9LI;: 7.

nder the b#%las of appellant corporation, the poer to /e'ecute on behalf of the

corporation all contracts and agreements hich said corporation ma# enter into0 and

agreements hich said corporation upon its president. pon the other hand, its general

manager is $ested ith /direct and acti$e management of the business and operations of

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the compan#, conducting the same according to the orders, resolutions and instructions of

the "oard of

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