THE EARNSHAWS DOCKS & HONOLULU IRON WORKS, PLAINTIFF AND APPELLEE, VS. MABALACAT SUGAR COMPANY, DEFENDANT AND APPELLANT.

This action was instituted in the Court of First Instance of Manila by the
Earnshaws Docks & Honolulu Iron Works, for the purpose of recovering from
the defendant, Mabalacat Sugar Company, a sum of money, alleged, in the first
cause of action, to be due for labor and materials supplied at the defendant’s
request and for its use, together with interest at 9 per cent; and, on the
second cause of action, a sum of money due upon a promissory note, with interest
at 10 per cent. After the defendant answered, the court heard the cause and
rendered judgment in favor of the plaintiff for the recovery, upon the first
cause of action, of the sum of P16,231.51, with interest at the rate of 9 per
cent from August 1,1928, until paid; and, upon the second cause of action, the
sum of P8,000, with interest at the rate of 10 per cent from April 15, 1927,
until paid, plus an attorney’s fee of 10 per centum of the principal sum of
P8,000, with costs against the defendant. From this judgment the defendant
appealed.

It is admitted by the appellee that the item of P16,231.51 awarded upon the
first cause of action contains an error, and that it ought to be reduced by the
amount of P245.30. Indeed it is noted in the body of the opinion] of the trial
judge that this deduction should be made, but in the dispositive part of the
opinion judgment was erroneously given for the whole, without deduction.
Furthermore, there is no controversy over the amount awarded upon the second
cause of action, the indebtedness under this head being proved by a promissory
note of the Mabalacat Sugar Company, signed by B. A. Green, as president. It
results that the real controversy involves only the item of P15,986.21, the
subject of the first cause of action.

Both plaintiff and defendant are domestic corporations, domiciled in Manila.
The president of the Mabalacat Sugar Company is B. A. Green, who owns about 55
per cent of its capital stock. At the same time Green is general manager of the
company. Between September 24,1926 and June 20, 1928, the’ plaintiff company
rendered services for and supplied materials to the Mabalacat Sugar Company, of
the value claimed in the first cause of action stated in the complaint. It is
alleged that the balance due from the defendant to the plaintiff far such
services and materials, as :of July 31, 1928, was P15,384.53, as principal, with
interest from that date amounting, at the time of the institution of the action,
to P846.98 calculated at the rate of 9 per cent.

It appears that Green, president and general manager, as aforesaid, of the
defendant corporation, has adopted the appellation of “B. A. Green & Co.”
But there is no corporate or partnership entity corresponding to this
designation, the term “B. A. Green & Co.” being a mere trade-name, commonly
printed on the letterheads used by B. A. Green.

The course of business between Green and the Earnshaws Docks & Honolulu
Iron Works, with respect to the creation of the obligation with which we are
here concerned, appears to have been in the main as follows: Green, when
desirous of obtaining materials, or service from the plaintiff for the benefit
of the Mabalacat Sugar Company, was accustomed to make out an appropriate order
on a letterhead such as is described above and would sign the same at the bottom
with his own name, B. A. Green. On the lower part of the sheet was printed the
name “Mabalacat Sugar Company, Mabalacat, Pampanga,” as a shipping mark
indicating that the finished work corresponding to the order should be sent to
the defendant company, as the entity which the work or material was intended to
serve. When the order had been filled and work forwarded as directed, bills were
usually submitted by the plaintiff to “Mabalacat Sugar Company, Messrs. B. A.
Green & Co., agents.” All bills for payment Were delivered by the plaintiff
to B. A. Green & Co. in the form stated; and such payments as were made,
with one exception, were made in the name of “B. A. Green & Co.” It will be
noted that the plaintiff kept its accounts in the name of the Mabalacat Sugar
Company and shipped the goods which it supplied directly to that entity.

The contention in this case on the part of the plaintiff is that the
Mabalacat Sugar Company is liable for the work supplied and repairs made for it;
while the contention of the defendant is that the obligation, or obligations,
contracted were the obligations of B. A. Green & Co., and not of the
defendant, Mabalacat Sugar Company. In connection with this contention it is
worth noting that Green, or B. A. Green & Co., makes no pretense of having
sold to the Mabalacat Sugar Company the supplies and labor furnished by the
plaintiff.

The simplest view of this situation is perhaps that these orders were given
by Green in his capacity as president and manager of the Mabalacat Sugar
Company; and Green himself admits that he was empowered by the defendant
corporation to run the business of the Mabalacat Sugar Company, to determine
what purchases should be made for1 it, and make all necessary purchases. The
superintendent of the plaintiff company, who received and acted upon the orders
in question, knew that Green was general manager of the defendant corporation.
The device of adopting the mask of a fictitious entity as the nominal agent of
the defendant in the course of these incidents cannot obscure the true legal
nature of the transactions between the plaintiff and the defendant, since it is
the4 duty of the court to look through the form and into the substance. The
credit in this case was extended upon the faith of the credit of the defendant
company, and it was not the intention of the plaintiff to extend credit for so
many thousands of pesos to the shade bearing the name of B. A. Green &
Co.

The trial judge adopted the view, identical in its results with the
foregoing, that Green, or B. A. Green & Co., was a mere agent of the
defendant. But whether Green acted as officer or agent, the result is the same,
namely, that the Mabalacat Sugar Company is liable for the value of the
materials and labor supplied to it by the plaintiff. Even supposing Green to
have been an agent, in a sense different from officer, the plaintiff has the
right to go upon the principal, the recipient of its materials and services, for
it does not appear that the plaintiff in this case trusted B. A. Green
exclusively and the circumstances do not show that the agent only was intended
to be bound. Neither is any usage of trade proved that would alter the
situation. The Mabalacat Sugar Company is therefore liable upon the plaintiff’s
claim (Wing Kee Compradoring Co. vs. Bark “Monongahela,” 44 Phil, 464).

It is contended by the appellant that the plaintiff is not entitled to
recover interest at 9 per cent on this claim, but Green admitted that he had
made a stipulation in court to the effect that he would Day the interest, and
this agreement must be understood to cover not only the original principal of
the debt but the interest then charged in the account already stated by the
plaintiff.

It being understood, therefore, that the judgment upon the first cause of
action shall be in the amount of P15,986.21, instead of P16,231.51, the
judgment, as thus modified, is in all respects affirmed, with costs against the
appellant. So ordered.

Avanceña, C. J., Malcolm, Villamor, Ostrand, Johns, Romualdez and
Villa-Real, JJ., concur.