Obligations of the Principal (Article 1910, Chapter 3, of the New Civil Code) Article 19101.

The Principal must comply with all the obligations which the agent may have contracted within the scope of his authority. As for any obligations wherein the agent has exceeded his power, the principal is not bound except when he ratifies it expressly or tacitly. Application: A promissory note and two mortgages executed by the agent for and on behalf of is principal, in accordance with a power of attorney executed by the principal in favor of the agent, are valid, and as provided by article 1727 of the Civil Code, the principal must fulfill the obligations contracted by the agent; but a mortgage on real property of the principal not made and signed in the name of the principal is not valid as to the principal (PNB vs. Estanislao Palma Gil, G.R. No. 33796, February 17, 1931).

This article was taken from Article 1727 of the Old Civil Code