FIRST DIVISION
[G. R. No. 129919.
DOMINION INSURANCE CORPORATION, petitioner, vs. COURT OF APPEALS, RODOLFO S. GUEVARRA, and FERNANDO AUSTRIA, respondents.
D E C I S I O N
PARDO, J.:
The Case
This is an appeal via certiorari[1] from the decision of the Court of Appeals[2] affirming the decision[3] of the Regional Trial Court, Branch 44, San Fernando, Pampanga, which ordered petitioner Dominion Insurance
Corporation (Dominion) to pay Rodolfo S. Guevarra (Guevarra) the sum of P156,473.90 representing the
total amount advanced by Guevarra in the payment of
the claims of Dominion’s clients.
The Facts
The facts, as found by the Court of Appeals, are as follows:
“On
“In its traverse, defendant denied any liability to plaintiff and asserted a counterclaim for P249,672.53, representing premiums that plaintiff allegedly failed to remit.
“On
“In due time, third-party defendant
“Thereafter the pre-trial conference was set on the following
dates: October 18, 1991, November 12, 1991, March 29, 1991, December 12, 1991,
January 17, 1992, January 29, 1992, February 28, 1992, March 17, 1992 and April
6, 1992, in all of which dates no pre-trial conference was held. The record
shows that except for the settings on
“On
“ORDER
“When this case was called for pre-trial this afternoon only plaintiff and his counsel Atty. Romeo Maglalang appeared. When shown a note dated May 21, 1992 addressed to a certain Roy who was requested to ask for postponement, Atty. Maglalang vigorously objected to any postponement on the ground that the note is but a mere scrap of paper and moved that the defendant corporation be declared as in default for its failure to appear in court despite due notice.
“Finding the verbal motion of plaintiff’s counsel to be meritorious and considering that the pre-trial conference has been repeatedly postponed on motion of the defendant Corporation, the defendant Dominion Insurance Corporation is hereby declared (as) in default and plaintiff is allowed to present his evidence on June 16, 1992 at 9:00 o’clock in the morning.
“The plaintiff and his counsel are notified of this order in open court.
“SO ORDERED.
“Plaintiff presented his evidence on
“On
“On
“On
“On
“WHEREFORE, premises considered, judgment is hereby rendered ordering:
“1. The defendant Dominion Insurance Corporation to pay plaintiff the sum of P156,473.90 representing the total amount advanced by plaintiff in the payment of the claims of defendant’s clients;
“2. The defendant to pay plaintiff P10,000.00 as and by way of attorney’s fees;
“3. The dismissal of the counter-claim of the defendant and the third-party complaint;
“4. The defendant to pay the costs of suit.”[4]
On
On
Hence, this appeal.[9]
The Issues
The issues raised are: (1) whether respondent Guevarra acted within his authority as agent for petitioner, and (2) whether respondent Guevarra is entitled to reimbursement of amounts he paid out of his personal money in settling the claims of several insured.
The Court's Ruling
The petition is without merit.
By the contract of agency, a person binds himself to render some
service or to do something in representation or on behalf of another, with the
consent or authority of the latter.[10] The basis for agency is representation.[11] On the part of the principal, there must be
an actual intention to appoint[12] or an intention naturally inferrable
from his words or actions;[13] and on the part of the agent, there must be an intention to accept the
appointment and act on it,[14] and in the absence of such intent, there is generally no agency.[15]
A perusal of the Special Power of Attorney[16]
would show that petitioner (represented
by third-party defendant
“That we, FIRST CONTINENTAL ASSURANCE COMPANY, INC.,[17] a corporation duly organized and existing under and by virtue of the
laws of the Republic of the Philippines, xxx represented by the undersigned as
Regional Manager, xxx do hereby appoint RSG Guevarra
Insurance Services represented by Mr. Rodolfo Guevarra
xxx to be our Agency Manager in San Fdo., for
our place and stead, to do and perform the following acts and things:
“1. To conduct, sign,
manager (sic), carry on and transact Bonding and Insurance business as
usually pertain to a Agency Office, or FIRE, MARINE, MOTOR CAR, PERSONAL
ACCIDENT, and BONDING with the right, upon our prior written consent, to
appoint agents and sub-agents.
“2. To accept, underwrite and subscribed (sic) cover notes or Policies of Insurance and Bonds for and on our behalf.
“3. To demand, sue, for (sic) collect, deposit, enforce
payment, deliver and transfer for and receive and give effectual receipts and
discharge for all money to which the FIRST CONTINENTAL ASSURANCE COMPANY,
INC.,[18] may hereafter become due, owing payable or
transferable to said Corporation by reason of or in connection with the
above-mentioned appointment.
“4. To receive notices,
summons, and legal processes for and in behalf of the FIRST CONTINENTAL
ASSURANCE COMPANY, INC., in connection with actions and all legal proceedings
against the said Corporation.”[19] [Emphasis supplied]
The agency comprises all the business of the principal,[20] but, couched in general terms, it is limited
only to acts of administration.[21]
A general power permits the agent to do all acts for which the
law does not require a special power.[22] Thus, the acts enumerated in or similar to
those enumerated in the Special Power of Attorney do not require a special
power of attorney.
Article 1878, Civil Code, enumerates the instances when a special power of attorney is required. The pertinent portion that applies to this case provides that:
“Article 1878. Special powers of attorney are necessary in the following cases:
“(1) To make such payments as are not usually considered as acts of administration;
“xxx xxx xxx
“(15) Any other act of strict dominion.”
The payment of claims is not an act of administration. The settlement of claims is not included among the acts enumerated in the Special Power of Attorney, neither is it of a character similar to the acts enumerated therein. A special power of attorney is required before respondent Guevarra could settle the insurance claims of the insured.
Respondent Guevarra’s authority to
settle claims is embodied in the Memorandum of Management Agreement[23]
dated
“xxx xxx xxx
“1. You are hereby given authority to settle and dispose of all
motor car claims in the amount of P5,000.00 with prior approval of the Regional
Office.
“2. Full authority is given you on TPPI claims
settlement.
“xxx xxx xxx”[24]
In settling the claims mentioned above, respondent Guevarra’s authority is further limited by the written
standard authority to pay,[25] which states that the payment shall come from respondent Guevarra’s revolving fund or collection. The authority to
pay is worded as follows:
“This is to authorize you to withdraw from your revolving fund/collection the amount of PESOS __________________ (P ) representing the payment on the _________________ claim of assured _______________ under Policy No. ______ in that accident of ___________ at ____________.
“It is further expected, release papers will be signed and authorized by the concerned and attached to the corresponding claim folder after effecting payment of the claim.
“(sgd.) FERNANDO C. AUSTRIA
Regional Manager”[26]
[Emphasis supplied]
The instruction of petitioner as the principal could not be any clearer. Respondent Guevarra was authorized to pay the claim of the insured, but the payment shall come from the revolving fund or collection in his possession.
Having deviated from the instructions of the principal, the expenses that respondent Guevarra incurred in the settlement of the claims of the insured may not be reimbursed from petitioner Dominion. This conclusion is in accord with Article 1918, Civil Code, which states that:
“The principal is not liable for the expenses incurred by the agent in the following cases:
“(1) If the agent acted in contravention of the principal’s instructions, unless the latter should wish to avail himself of the benefits derived from the contract;
“xxx xxx xxx”
However, while the law on agency prohibits respondent Guevarra from obtaining reimbursement, his right to recover may still be justified under the general law on obligations and contracts.
Article 1236, second paragraph, Civil Code, provides:
“Whoever pays for another may demand from the debtor what he has
paid, except that if he paid without the knowledge or against the will of
the debtor, he can recover only insofar as the payment has been beneficial to
the debtor.”
In this case, when the risk insured against occurred, petitioner’s liability as insurer arose. This obligation was extinguished when respondent Guevarra paid the claims and obtained Release of Claim Loss and Subrogation Receipts from the insured who were paid.
Thus, to the extent that the obligation of the petitioner has been extinguished, respondent Guevarra may demand for reimbursement from his principal. To rule otherwise would result in unjust enrichment of petitioner.
The extent to which petitioner was benefited by the settlement of
the insurance claims could best be proven by the Release of Claim Loss and
Subrogation Receipts[27] which were attached to the original complaint as Annexes C-2, D-1, E-1,
F-1, G-1, H-1, I-1 and J-l, in the total amount of P116,276.95.
However, the amount of the revolving fund/collection that was
then in the possession of respondent Guevarra as
reflected in the statement of account dated
The outstanding balance and the production/remittance for the period corresponding to the claims was P3,604.84. Deducting this from P116,276.95, we get P112,672.11. This is the amount that may be reimbursed to respondent Guevarra.
The Fallo
IN VIEW WHEREOF, we DENY the Petition. However, we MODIFY the
decision of the Court of Appeals[28] and that of the Regional Trial Court, Branch
44,
No costs in this instance.
SO ORDERED.
Davide, Jr., (Chairman), Puno, Kapunan, and Ynares-Santiago,
JJ., concur.
[1] Under Rule 45,
Revised Rules of Court.
[2] In CA-G.R. CV No.
40803, promulgated on
[3] Decision, original
Record, Civil Case 8855, pp. 358-361.
[4] Petition, Annex “B”,
Rollo, pp. 12-18, at pp. 12-15.
[5] Notice of Appeal,
Original Record, Civil Case No. 8855, p. 362.
[6] Petition, Annex “B”,
Rollo, pp. 12-18.
[7] CA Rollo, pp. 99-112.
[8] Petition, Annex “A”,
Rollo, p. 10.
[9] Filed on
[10] Article 1869, Civil
Code.
[11] Bordador
v. Luz, 347 Phil. 654, 662 (1997).
[12] Victorias
Milling Co., Inc. v. Court of Appeals, 333 SCRA 663, 675 (2000),
citing Connell v. McLoughlin, 28 Or. 230; 42 P. 218.
[13] Victorias
Milling Co., Inc. v. Court of Appeals, 333 SCRA 663, 675 (2000),
citing Halladay v. Underwood, 90
[14] Victorias
Milling Co., Inc. v. Court of Appeals, 333 SCRA 663, 675 (2000),
citing Internal Trust Co. v. Bridges, 57 F. 753.
[15] Victorias
Milling Co., Inc. v. Court of Appeals, 333 SCRA 663, 675 (2000),
citing Security Co. v. Graybeal, 85
[16] Original Record,
Civil Case No. 8855, p. 235.
[17] Now Dominion
Insurance Corporation.
[18] Now Dominion
Insurance Corporation.
[19] Original Record,
Civil Case No. 8855, p. 235.
[20] Article 1876, Civil
Code.
[21] Article 1877, Civil
Code.
[22] Tolentino,
Arturo M., Commentaries and Jurisprudence on the Civil Code of the Philippines,
Vol. V (1997), p. 405, citing 6 Llerena 137.
[23] Original Record,
Civil Case No. 8855, pp. 236-237.
[24] Original Record,
Civil Case No. 8855, pp. 236-237, at p. 236.
[25] Original Record,
Civil Case No. 8855, p. 299.
[26] Original Record,
Civil Case No. 8855, p. 299.
[27] Original Records, Civil
Case No. 8855, pp. 11, 13, 15, 17, 19, 21, 23, 25.
[28] In CA-G.R. CV No.
40803.
[29] In Civil Case No.
8855.