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G.R. No. L-20567 July 30, 1965

PHILIPPINE NATIONAL BANK, petitioner,vs.MANILA !RET" #$% &I'ELIT" (O., IN(. #$% THE (O!RT O& APPEAL ) *+o$%

' o$/, respondents.

Besa, Galang and Medina for petitioner.De Santos and Delfino for respondents.

RE"E , J.B.L., J.:

The Philippine National Bank petitions for the review and reversal of the decision rendered bythe Court of Appeals (Second ivision!, in its case CA"#.$. No. %&%'%"$, dis issin) the Bank*sco plaint a)ainst respondent +anila Surety -idelity Co., nc., and odifyin) the /ud) ent of the Court of -irst nstance of +anila in its Civil Case No. 00%1'.

The aterial facts of the case, as found by the appellate Court, are as follows2

The Philippine National Bank had opened a letter of credit and advanced thereon 30%4,444.44to 5d)in)ton 6il $efinery for 7,444 tons of hot asphalt. 6f this a ount, %,444 tons worthP%89,444.44 were released and delivered to Ada s Ta)uba Corporation (known as ATAC6!under a trust receipt )uaranteed by +anila Surety -idelity Co. up to the a ount of P8:,444.44. To pay for the asphalt, ATAC6 constituted the Bank its assi)nee and attorney"in"fact to receive and collect fro the Bureau of Public ;orks the a ount aforesaid out of fundspayable to the assi)nor under Purchase 6rder No. 809&8. This assi)n ent (5uidated.

%. The P? @ PP N5 NAT 6NA@ BAN is hereby appointed as our Attorney"in"-act for usand in our na e, place and stead, to collect and to receive the pay ents to be ade byvirtue of the aforesaid Purchase 6rder, with full power and authority to euidated. (5

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Nove ber 07, 09&7, P041,'7%.40. Thereafter, for une

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This holdin) is now assailed by the Bank. t contends the power of attorney obtained fro ATAC6 was erely in additional security in its favor, and that it was the duty of the surety, andnot that of the creditor, owed see to it that the obli)or fulfills his obli)ation, and that the creditor owed the surety no duty of active dili)ence to collect any, su fro the principal debtor,citin) Judge Advocate General vs. Court of Appeals , #.$. No. @"04180, 6ctober %', 09:7.

This ar)u ent of appellant Bank isses the point. The Court of Appeals did not hold the Bankanswerable for ne)li)ence in failin) to collect from the principal debtor but for its ne)lect incollectin) the su s due to the debtor fro the Bureau of Public ;orks, contrary to its duty asholder of an euired to act with the care of a )ood father of a fa ily (Civ. Code, Art. 0778! andbeco es liable for the da a)es which the principal ay suffer throu)h his non"perfor ance(Civ. Code, Art. 077&!. Certainly, the Bank could not e

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reason based on the Bank*s ne)li)ence furnishes ade>uate support to the decision of the Courtof Appeals that the surety was thereby released.

;?5$5-6$5, the appealed decision is affir ed, with costs a)ainst appellant PhilippineNational Bank.

Beng on, C.J., Concepcion, !aredes, Di on, "egala, Ma#alintal, Beng on, J.!., and $aldivar,JJ., concur.Bautista Angelo and Barerra, JJ., too# no part.