INTERNATIONAL EXCHANGE BANK NOW UNION BANK OF THE PHILIPPINES,

VS. SPOUSES JEROME AND QUINNIE BRIONES, AND JOHN DOE

G.R. No. 205657, March 29, 2017
FACTS:
On July 2, 2003 Spouses Jerome and Quinnie Briones took out a loan from iBank to purchase a
BMW Z4 Roadster (BMW). The Spouses execute a promissory note with chattel mortgage that
required them to take out an insurance policy on the vehicle. The promissory note also gave
iBank as attorney-in-fact of the spouses, irrevocable authority to file an insurance claim in case
of loss or damage to the vehicle and the insurance proceeds payable to iBank.
On November 5, 2003, the mortgaged BMW was car-napped by three armed men and Jerome
immediately reported the incident to the PNP. The Spouses declared the loss to iBank, which
instructed them to continue paying the next three (3) monthly installments “as a sign of good
faith”, a directive they complied with.
After the spouses’ finish paying the three (3) month installment, iBank sent them a letter
demanding full payment of the lost vehicle. Prompted by the demand of iBank, spouses
submitted a notice of claim with their insurance company, which was denied the claim due to the
delayed reporting of the lost vehicle.
ISSUE (S):
Whether or not an agency relationship existed between parties and the agency relationship was
revoked or terminated?
RULING:
Agency relation existed between parties, in 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. It is clear in the promissory note that iBank was aware of the bilateral contract and
included the designation of an irrevocable agency.
Revocation as a form of extinguishing an agency does not apply, since the mortgaged vehicle
was carnapped the spouses immediately inform iBank about the loss. The former continued
payment was in accordance to the latter directive to show their good faith. The spouses
constrained to file claim only because iBank failed to do so despite their agent and being
authorized to file a claim under the insurance policy.
THEREFORE, iBank is held liable of negligence of Agency.