Dominion Insurance Corp. v.

CA

Facts:
- Rodolfo Guevarra instituted a civil case for a sum of money against Dominion Insurance
Corporation (Dominion), seeking to recover the sum of P156,473.90.
- Guevarra alleged that he advanced P156,473 in his capacity as manager of Dominion to
satisfy claims filed by Dominion’s clients
- Dominion denied having any liability and asserted a counterclaim, seeking the payment
of the premiums that Guevarra allegedly failed to remit, which totaled to the amount of
P249,672
- The pre-trial conference was set on 9 different dates but no pre-trial was held. Record
shows that except for 3 of the set dates, which were cancelled at the instance of
Dominion, 3rd party defendant and Guevarra, the rest of the pre-trials were postponed
upon the joint request of the parties
- When the case was called again for pre-trial, only Guevarra and his counsel were
present. Dominion’s counsel instructed a messenger to submit a handwritten note
requesting for postponement
- Guevarra objected to the postponement and moved to have Dominion declared in
default. Considering that the pre-trial has been postponed numerous times, the trial court
declared Dominion as in default
- Dominion filed a motion to lift order of default, alleging that the failure of its counsel to
attend the pre-trial was due to an unavoidable circumstance. The court denied the
motion, prompting Dominion to move for reconsideration with its counsel revealing to the
trial court that his non-appearance was due to illness. However, the trial court still denied
the motion and later rendered a decision ordering Dominion to pay Guevarra P156,473
the total amount advanced by him in the payment of the claims of Dominion’s clients
- Dominion appealed to the CA but the CA affirmed the trial court’s decision. Dominion
filed a motion for reconsideration but the Ca denied it.

Issue:
WON Guevarra acted within his authority as garnet for petitioner

Held:
YES.
- An examination of the SPA shows that Dominion and Guevarra intended to enter into a
principal-agent relationship. Despite the title of the document containing the word
“special,” the content reveal that a general agency was actually constituted
- The agency comprises all the business of the principal, but when couched in
general terms, the agency is limited to acts of administration only. A general
power allows the agent to do all acts for which the law does not require a special
power.
- Thus, the acts enumerated in the SPA do not require a special power of attorney
 - Based on the instructions given by Dominion as the principal, Guevarra was authorized
to pay the claim of the insured. However, suc claim shall come from the revolving fund or
collection in his possession
- As an agent, Guevarra deviated from the instructions of Dominion, his principal.
The Court thus stated that according to Art. 1918 of the Civil Code, Guevarra
cannot reimburse from Dominion the expenses he incurred in the settlement of
claims of the insured.
- The Court further states that even if the law on agency prohibits Guevarra from
obtaining a reimbursement, his right to recover may still be justified under Art.
1236 of the Civil Code, the general law on obligations and contracts.
- Dominion’s liability arose when the risk insured against occurred and such obligation
extinguished only when Guevarra paid the claims and obtained Release of Claim Loss
and Subrogation Receipts from the ones who made an insurance claim
- Thus, the Court stated that Guevarra may demand reimbursement from his principal to
the extent that Dominion’s obligation has been extinguished
PETITION DENIED, CA DECISION MODIFIED, DOMINION ORDERED TO PAY P112,672 TO
GUEVARRA