Case : F10 - PNB vs. BERNARDO BAGAMASPAD and BIENVENIDO M.

FERRER,

Facts : Because of the Pacific War, after liberation, President Roxas in order to foment and encourage food
production, instructed the plaintiff Philippine National Bank to extend special facilities to farmers. The Bank passed the
corresponding resolution authorizing the granting of ten-month special crop loans to bona fide food producers, land-
owners or their tenants, under certain conditions. On June 14, 1946, the Bank held in Manila a conference in of all its
manager and Agents. Ferrer of the Cotabato Agency attended the conference. He arrived late but Tueres explained to
him what had been discussed and repeated to him the advice of the bank, that the Managers and Agents of the Bank
should not allow themselves to be fooled.

The Cotabato Agency under the management of the two defendants began granting these special crop loans

Appellant contend that as Agent and Assistant Agent, they did so at their own risk and in violation of the instructions
received from the Manila office; and that they acted with extreme laxity, negligence and carelessness in granting said
new special crops loans.

Appellants not only granted new special crop loans after they were given to understand that they should no longer grant
said loans, but they also violated the express instructions of the Bank

Issue(s): Whether or not the two defendants Bagamaspad and Ferrer acting as Agent and Assistant Agent of the
Cotabato Agency, in granting new crop loans after November 13, 1946, violated the instructions of the Bank,

Ruling : The trial court based the civil liability of the appellants herein on the provisions of Arts. 1718 and 1719 of the
Civil Code, defining and enumerating the duties and obligations of an agent and his liability for failure to comply with
such duties, and Art. 259 of the Code of Commerce which provides that an agent must observe the provisions of law
and regulations with respect to business transactions entrusted to him otherwise he shall be responsible for the
consequences resulting from their breach or omissions; and also Art. 1902 of the Civil Code which provides for the
liability of one for his tortious act, that is to say, any act or omission which causes damage to another by his fault or
negligence.

Defendants-appellants have not only violated instructions of the plaintiff Bank, including things which said Bank
wanted done or not done, but they also violated standing regulations regarding the granting of loans.

A principal who collects either judicially or extrajudicially a loan made by an agent without authority, thereby ratifies
the said act of the agent.