PHILIPPINE NATIONAL BANK vs. THE COURT OF APPEALS

PHILIPPINE NATIONAL BANK vs. THE COURT OF APPEALS, RITA GUECO TAPNIO, CECILIO GUECO and THE PHILIPPINE AMERICAN
GENERAL INSURANCE COMPANY, INC.
G.R. No. L-27155 May 18, 1978

Facts:
1.      Mrs. Tapnio was indebted to the PNB - secured by a mortgage on her standing crop including her sugar quota allocation.
2.      This arrangement was necessary in order that when Mrs. Tapnio harvests, the P.N.B., having a lien on the crop, may effectively enforce collection against her.
3.      However, a planter harvests less sugar than her quota, so her excess quota is utilized by another who pays her for its use. This is the arrangement entered into between Mrs. Tapnio and Mr. Tuazon.
4.      Since the quota was mortgaged to the P.N.B., the contract of lease had to be approved by said Bank. The same was submitted to the branch manager.
5.      The latter required the parties to raise the consideration of P2.80 per picul or a total of P2,800.00.
6.      In a letter addressed to the branch manager, Mr. Tuazon informed the manager that he was agreeable to raising the consideration to P2.80 per picul. He further informed the manager that he was ready to pay said amount as the funds were in his folder which was kept in the bank.
7.      This referred to the approved loan of Tuazon from the Bank which he intended to use in paying for the use of the sugar quota.
8.      The Branch Manager submitted the contract of lease of sugar quota allocation to the Head Office, with a recommendation for approval, which recommendation was concurred in by the Vice-President of the Bank, Mr. J. V. Buenaventura.
9.      This notwithstanding, the Board of Directors of petitioner required that the consideration be raised to P3.00 per picul
10.  The result is that the latter lost the sum of P2,800.00 which she should have received from Tuazon and which she could have paid the Bank to cancel off her indebtedness.

Issue:
            Whether the failure of the negotiation for the lease of the sugar quota allocation of Tapnio to Tuazon was due to the fault of the directors of then PNB

Ruling:
            While petitioner had the ultimate authority of approving or disapproving the proposed lease since the quota was mortgaged to the Bank, the latter certainly cannot escape its responsibility of observing, for the protection of the interest of private respondents, that degree of care, precaution and vigilance which the circumstances justly demand in approving or disapproving the lease of said sugar quota. The law makes it imperative that every person "must in the exercise of his rights and in the performance of his duties, act with justice, give everyone his due, and observe honesty and good faith. This petitioner failed to do. Certainly, it knew that the agricultural year was about to expire, that by its disapproval of the lease private respondents would be unable to utilize the sugar quota in question. In failing to observe the reasonable degree of care and vigilance which the surrounding circumstances reasonably impose, petitioner is consequently liable for the damages caused on private respondents. Under Article 21 of the New Civil Code, "any person who wilfully causes loss or injury to another in a manner that is contrary to morals, good customs or public policy shall compensate the latter for the damage."
            A corporation is civilly liable in the same manner as natural persons for torts, because "generally speaking, the rules governing the liability of a principal or master for a tort committed by an agent or servant are the same whether the principal or master be a natural person or a corporation, and whether the servant or agent be a natural or artificial person. All of the authorities agree that a principal or master is liable for every tort which he expressly directs or authorizes, and this is just as true of a corporation as of a natural person, A corporation is liable, therefore, whenever a tortious act is committed by an officer or agent under express direction or authority from the stockholders or members acting as a body, or, generally, from the directors as the governing body."

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