inc to pay plaintiff philippines national bank the

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Unformatted text preview: the second reason it advanced in support of the decision now under appeal – because the rules on application of payments, giving preference to secured obligations are only operative in cases where there are several distinct debts, and not where there is only one that is partially secured – the error is of no importance, since the principal reasonbased on the Bank's negligence furnishes adequate support to the decision of the Court of Appeals that the surety was thereby released. Art. 1887 ­ Agent Should Carry Out Agency In Accordance with Instructions of the Principal DOCTRINE: An agent is required to act with the care of a good father of a family and becomes liable for the damages which the principal may suffer through his non­performance. FACTS: The Philippine National Bank had opened a letter of credit and advanced thereon $120,000.00 to Edgington Oil Refinery for 8,000 tons of hot asphalt. Of this amount, 2,000 tons worth P279, 000.00 were released and delivered to Adams & Taguba Corporation (known as ATACO) under a trust receipt guaranteed by Manila Surety & Fidelity Co. up to the amount of P75,000.00.. To pay for the asphalt, ATACO constituted the Bank its assignee and attorney­in­fact to receive and collect from the Bureau of Public Works the amount aforesaid out of funds payable to the assignor under Purchase Order No. 71947. PNB was negligent in its duty under the power of attorney to collect sums due to debtor from the latter’s debtor, thereby allowing such funds to be exhausted by other creditors. TC: The Court ordered defendants, Adams & Taguba Corporation and Manila Surety & Fidelity Co., Inc., to pay plaintiff, Philippines National Bank, the sum of P174,462.34 as of February 24, 1956, minus the amount of P8,000 which defendant, Manila Surety Co., Inc. paid from March, 1956 to October, 1956 with interest at the rate of 5% per annum from February 25, 1956, until fully paid provided that the total amount that should be paid by defendant Manila Surety Co., Inc., on account of this case shall not exceed P75,000.00, and to pay the costs; CA: Court of Appeals rendered an adverse decision and modified t...
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This document was uploaded on 03/11/2014.

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