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ISSUES: 1. WON the power of attorney PNB obtained from ATACO was merely in additional security in its favor- NO 2. WON it was the duty of the surety, and not that of the creditor owed to see to it that the obligor fulfills his obligation- NO 3. WON the creditor owed the surety no duty of active diligence to collect any, sum from the principal debtor- NO RATIO: The Court of Appeals did not hold the Bank 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 (Civ. Code, Art. 1887) and becomes liable for the damages which the principal may suffer through his non-performance (Civ. Code, 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 recoursing against that security. The Bank thereby exonerated the surety, pursuant to Article 2080 of the Civil Code: o ART. 2080. The guarantors, even though they be solidary, are released from their obligation whenever by come act of the creditor they cannot be subrogated to the rights, mortgages and preferences of the latter. 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. Even if the Court of Appeals erred on 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 reason based on the Bank's negligence furnishes adequate support to the decision of the Court of Appeals that the surety was thereby released. DOMINGO v. DOMINGO 42 SCRA 131 FACTS: Vicente granted Gregorio exclusive agency to sell lot for P2 per square meter. 5% commission was to be granted to Gregorio is Vicente sells the property during the period of agency or if the property is sold by Vicente within three months from the termination of the agency to a purchaser to whom it was submitted by Gregorio during the continuance of the agency with notice ot Vicente. Gregorio authorized Purisima to look for a buyer with the agreement that Purisima will get half of the 5% commission. Purisima introduced Oscar de Leon to Gregorio as a prospective buyer.
PNB v. MANILA SURETY 14 SCRA 776 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 attorney-in-fact to receive and collect from the Bureau of Public Works the amount aforesaid out of funds payable to the assignor . ATACO delivered to the Bureau of Public Works, and the latter accepted, asphalt to the total value of P431,466.52. Of this amount the Bank regularly collected, from April 21, 1948 to November 18, 1948, P106,382.01. Thereafter, for unexplained reasons, the Bank ceased to collect, until in 1952 its investigators found that more moneys were payable to ATACO from the Public Works office, because the latter
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ISSUES: 1. WON the failure on the part of Gregorio to disclose to Vicente the payment to him by Oscar of the 1K as gift or propina constitutes fraud as to cause the forfeiture of his 5% commission on the sale price. YES 2. WON Gregorio or Vicente should be liable directly to the intervenor Purisima for the latter's share in the expected commission of Gregorio by reason of the sale. GREGORIO RATIO: 1. Articles 1891 and 1909 of the NCC demand the utmost good faith, fidelity, honesty, candor and fairness on the part of the agent, the real estate broker in this case, to his principal, the vendor. The law imposes upon the agent the absolute obligation to make a full disclosure or complete account to his principal of all his transactions and other material facts relevant to the agency. The duty of the agent is likened to that of a trustee. An agent who takes a secret profit in the nature of a bonus, gratuity, or personal benefit from the vendee, without revealing the same to his principal, the vendor, is guilty of a breach of his loyalty to the principal and forfeits his right to collect the commission from his principal, even if the principal does not suffer any injury by reason of such breach of fidelity, or that he obtained better results, or that the agency is a gratuitous one, or that usage of custom allows it. The rule is to prevent any possibility of a wrong. By taking such profit or bonus or gift or propina from the vendee, the agent thereby assumes a position wholly inconsistent with that of being an agent for his principal, who has a right to treat him, insofar as his commission is concerned, as if no agency had existed. Gregorio received the propina without the knowledge and consent of Vicente. His acceptance of the 1K corrupted his duty to serve the interests only of his principal and undermined his loyalty to his principal. Instead of exerting his best to get the most advantageous terms for Vicente, he succeeded in persuading his principal to accept terms that are more beneficial to the prospective buyer. Because of this, Gregorio must forfeit his right to the commission and must return the part of the commission he received from his principal. Purisima can only recover from Gregorio of whatever amount Gregorio received by virtue of the transaction as his sub-agency
2.
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part payment of the judgment, assigned to him by Tan Boon Tiong, acting as attorney-in-fact of the Vda. de Tan Toco. Municipal treasurer of Iloilo deposited with the clerk of the Court of First Instance of Iloilo the amount of P6,000 on account of the judgment. Clerk of court delivered to Atty. Evangelista the said amount of P6,000. The judgment for P42,966.44 against the municipality of Iloilo was reduced to P30,966.40, which was adjudicated by said court to Mauricio Cruz & Co.
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public or judicial auction, either in person or through the mediation of another: 5. Justices, judges, members of the department of public prosecution, clerks of superior and inferior courts, and other officers of such courts, the property and rights in litigation before the court within whose jurisdiction or territory they perform their respective duties .This prohibition shall include the acquisition of such property by assignment. Actions between co-heirs concerning the hereditary property, assignments in payment of debts, or to secure the property of such persons, shall be excluded from this rule. The prohibition contained in this paragraph shall include lawyers and solicitors with respect to any property or rights involved in any litigation in which they may take part by virtue of their profession and office.