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Unformatted text preview: ank answerable for negligence in failing to collect from the principal debtor
but for its neglect in collecting the sums due to the debtor from the Bureau of Public Works, contrary to its
duty as holder of an exclusive and irrevocable power of attorney to make such collections, since an agent is
required to act with the care of a good father of a family (Art. 1887) and becomes liable for the damages
which the principal may suffer through his nonperformance (Art. 1884). It must not be forgotten that the
Bank's power to collect was expressly made irrevocable, so that the Bureau of Public Works could very well
refuse to make payments to the principal debtor itself, and a fortiori reject any demands by the surety.
Even if the assignment with power of attorney from the principal debtor were considered as mere additional
security, still, by allowing the assigned funds to be exhausted without notifying the surety, the Bank
deprived the former of any possibility of recourse against that security. The Bank thereby exonerated the
surety, pursuant to Article 2080 of the Civil Code.
The appellant points out to its letter of demand, addressed to the Bureau of Public Works, and its
letter to ATACO, informing the debtor that as of its date, October 31, 1949, its outstanding balance was
P156,374.83. Said letter has no bearing on the issue whether the Bank has exercised due diligence in
collecting from the Bureau of Public Works, since the letter was addressed to ATACO, and the funds were 5 to come from elsewhere. As to the letter of demand on the Public Works office, it does not appear that any
reply thereto was made; nor that the demand was pressed, nor that the debtor or the surety were ever
apprised that payment was not being made. The fact remains that because of the Bank's inactivity the other
creditors were enabled to collect P173,870.31, when the balance due to appellant Bank was only
P158,563.18. The finding of negligence made by the Court of Appeals is thus not only conclusive on us but
fully supported by the evidence.
Even if the Court of Appeals erred on...
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This document was uploaded on 03/11/2014.
- Fall '14