FIRST DIVISION
of the pavement going south and
G.R. No. L-54171 October 28, 1980
JEWEL VILLACORTA, assisted by her husband,
GUERRERO VILLACORTA, petitioner,
vs.
THE INSURANCE COMMISSION and EMPIRE
INSURANCE COMPANY, respondents.
TEEHANKEE, Acting C.J.:
The Court sets aside respondent Insurance
Commission's dismissal of petitioner's complaint and
holds that where the insured's car is wrongfully taken
without the insured's consent from the car service and
repair shop to whom it had been entrusted for check-
up and repairs (assuming that such taking was for a
joy ride, in the course of which it was totally smashed
in an accident), respondent insurer is liable and must
pay insured for the total loss of the insured vehicle
under the theft clause of the policy.
The undisputed facts of the case as found in the
appealed decision of April 14, 1980 of respondent
insurance commission are as follows:
Complainant [petitioner] was the
owner of a Colt Lancer, Model
1976, insured with respondent
company under Private Car Policy
No. MBI/PC-0704 for P35,000.00
Own Damage; P30,000.00
Theft; and P30,000.00 Third
Party Liability, effective May 16,
1977 to May 16, 1978. On May 9,
1978, the vehicle was brought to
the Sunday Machine Works, Inc.,
for general check-up and repairs.
On May 11, 1978, while it was in the
custody of the Sunday Machine
Works, the car was allegedly taken
by six (6) persons and driven out to
Montalban, Rizal. While travelling
along Mabini St., Sitio Palyasan,
Barrio Burgos, going North at
Montalban, Rizal, the car figured in
an accident, hitting and bumping a
gravel and sand truck parked at the
right side of the road going south.
As a consequence, the gravel and
sand truck veered to the right side
the car veered to the right side of
the pavement going north. The
driver, Benito Mabasa, and one of
the passengers died and the other
four sustained physical injuries. The
car, as well, suffered extensive
damage. Complainant, thereafter,
filed a claim for total loss with the
respondent company but claim was
denied. Hence, complainant, was
compelled to institute the present
action.
The comprehensive motor car insurance policy for
P35,000.00 issued by respondent Empire Insurance
Company admittedly undertook to indemnify the
petitioner-insured against loss or damage to the car
(a) by accidental collision or overturning, or collision
or overturning consequent upon mechanical
breakdown or consequent upon wear and tear; (b) by
fire, external explosion, self-ignition or lightning or
burglary, housebreaking or theft; and (c) by malicious
act.
Respondent insurance commission, however,
dismissed petitioner's complaint for recovery of the
total loss of the vehicle against private respondent,
sustaining respondent insurer's contention that the
accident did not fall within the provisions of the policy
either for the Own Damage or Theft coverage,
invoking the policy provision on "Authorized Driver"
clause. 1
Respondent commission upheld private respondent's
contention on the "Authorized Driver" clause in this
wise: "It must be observed that under the above-
quoted provisions, the policy limits the use of the
insured vehicle to two (2) persons only, namely: the
insured himself or any person on his (insured's)
permission. Under the second category, it is to be
noted that the words "any person' is qualified by the
phrase
... on the insured's order or with his
permission.' It is therefore clear
that if the person driving is other
than the insured, he must have
been duly authorized by the
insured, to drive the vehicle to
make the insurance company
liable for the driver's negligence.
 Complainant admitted that she did
not know the person who drove her
vehicle at the time of the accident,
much less consented to the use of
the same (par. 5 of the complaint).
Her husband likewise admitted that
he neither knew this driver Benito
Mabasa (Exhibit '4'). With these
declarations of complainant and her
husband, we hold that the person
who drove the vehicle, in the
person of Benito Mabasa, is not an
authorized driver of the
complainant. Apparently, this is a
violation of the 'Authorized Driver'
clause of the policy.
Respondent commission likewise upheld private
respondent's assertion that the car was not stolen and
therefore not covered by the Theft clause, ruling that
"The element of 'taking' in Article 308 of the Revised
Penal Code means that the act of depriving another of
the possession and dominion of a movable thing is
coupled ... with the intention. at the time of the
'taking', of withholding it with the character of
permanency (People vs. Galang, 7 Appt. Ct. Rep. 13).
In other words, there must have been shown a
felonious intent upon the part of the taker of the car,
and the intent must be an intent permanently to
deprive the insured of his car," and that "Such was not
the case in this instance. The fact that the car was
taken by one of the residents of the Sunday
Machine Works, and the withholding of the same,
for a joy ride should not be construed to mean
'taking' under Art. 308 of the Revised Penal Code.
If at all there was a 'taking', the same was merely
temporary in nature. A temporary taking is held
not a taking insured against (48 A LR 2d., page
15)."
The Court finds respondent commission's dismissal of
the complaint to be contrary to the evidence and the
law.
First, respondent commission's ruling that the person
who drove the vehicle in the person of Benito
Mabasa, who, according to its finding, was one of the
residents of the Sunday Machine Works, Inc. to whom
the car had been entrusted for general check-up and
repairs was not an "authorized driver" of petitioner-
complainant is too restrictive and contrary to the
established principle that insurance contracts, being
contracts of adhesion where the only participation of
the other party is the signing of his signature or his
"adhesion" thereto, "obviously call for greater
strictness and vigilance on the part of courts of justice
with a view of protecting the weaker party from abuse
and imposition, and prevent their becoming traps for
the unwary. 2
The main purpose of the "authorized driver"
clause, as may be seen from its text, supra, is that
a person other than the insured owner, who drives
the car on the insured's order, such as his regular
driver, or with his permission, such as a friend or
member of the family or the employees of a car
service or repair shop must be duly licensed
drivers and have no disqualification to drive a
motor vehicle.
A car owner who entrusts his car to an
established car service and repair shop
necessarily entrusts his car key to the shop
owner and employees who are presumed to have
the insured's permission to drive the car for
legitimate purposes of checking or road-testing
the car. The mere happenstance that the
employee(s) of the shop owner diverts the use of
the car to his own illicit or unauthorized purpose
in violation of the trust reposed in the shop by the
insured car owner does not mean that the
"authorized driver" clause has been violated such
as to bar recovery, provided that such employee
is duly qualified to drive under a valid driver's
license.
The situation is no different from the regular or family
driver, who instead of carrying out the owner's order
to fetch the children from school takes out his girl
friend instead for a joy ride and instead wrecks the
car. There is no question of his being an "authorized
driver" which allows recovery of the loss although his
trip was for a personal or illicit purpose without the
owner's authorization.
Secondly, and independently of the foregoing (since
when a car is unlawfully taken, it is the theft clause,
not the "authorized driver" clause, that applies), where
a car is admittedly as in this case unlawfully and
wrongfully taken by some people, be they employees
of the car shop or not to whom it had been entrusted,
and taken on a long trip to Montalban without the
owner's consent or knowledge, such taking
constitutes or partakes of the nature of theft as
defined in Article 308 of the Revised Penal Code, viz.
"Who are liable for theft. Theft is committed by any
person who, with intent to gain but without violence
against or intimidation of persons nor force upon
things, shall take personal property of another without
the latter's consent," for purposes of recovering the
loss under the policy in question.
The Court rejects respondent commission's premise
that there must be an intent on the part of the taker of
the car "permanently to deprive the insured of his car"
and that since the taking here was for a "joy ride" and
"merely temporary in nature," a "temporary taking is
held not a taking insured against."
The evidence does not warrant respondent
commission's findings that it was a mere "joy ride".
From the very investigator's report cited in its
comment, 3 the police found from the waist of the car
driver Benito Mabasa Bartolome who smashed the
car and was found dead right after the incident "one
cal. 45 Colt. and one apple type grenade," hardly the
materials one would bring along on a "joy ride". Then,
again, it is equally evident that the taking proved to be
quite permanent rather than temporary, for the car
was totally smashed in the fatal accident and was
never returned in serviceable and useful condition to
petitioner-owner.
Assuming, despite the totally inadequate evidence,
that the taking was "temporary" and for a "joy ride",
the Court sustains as the better view that which holds
that when a person, either with the object of going
to a certain place, or learning how to drive, or
enjoying a free ride, takes possession of a vehicle
belonging to another, without the consent of its
owner, he is guilty of theft because by taking
possession of the personal property belonging to
another and using it, his intent to gain is evident
since he derives therefrom utility, satisfaction,
enjoyment and pleasure. Justice Ramon C. Aquino
cites in his work Groizard who holds that the use of a
thing constitutes gain and Cuello Calon who calls it
"hurt de uso. " 4
The insurer must therefore indemnify the petitioner-
owner for the total loss of the insured car in the sum
of P35,000.00 under the theft clause of the policy,
subject to the filing of such claim for reimbursement or
payment as it may have as subrogee against the
Sunday Machine Works, Inc.
ACCORDINGLY, the appealed decision is set aside
and judgment is hereby rendered sentencing private
respondent to pay petitioner the sum of P35,000.00
with legal interest from the filing of the complaint until
full payment is made and to pay the costs of suit.
SO ORDERED.
Makasiar, Fernandez, Guerrero and Melencio-
Herrera, JJ., concur.
G.R. No. L-36480 May 31, 1988
ANDREW PALERMO, plaintiff-appellee,
vs.
PYRAMID INSURANCE CO., INC., defendant-
appellant.
GRIO-AQUINO, J:
The Court of Appeals certified this case to Us for
proper disposition as the only question involved is the
interpretation of the provision of the insurance
contract regarding the "authorized driver" of the
insured motor vehicle.
On March 7, 1969, the insured, appellee Andrew
Palermo, filed a complaint in the Court of First
Instance of Negros Occidental against Pyramid
Insurance Co., Inc., for payment of his claim under a
Private Car Comprehensive Policy MV-1251 issued
by the defendant (Exh. A).
In its answer, the appellant Pyramid Insurance Co.,
Inc., alleged that it disallowed the claim because
at the time of the accident, the insured was
driving his car with an expired driver's license.
After the trial, the court a quo rendered judgment on
October 29, 1969 ordering the defendant "to pay the
plaintiff the sum of P20,000.00, value of the insurance
of the motor vehicle in question and to pay the costs."
On November 26, 1969, the plaintiff filed a "Motion for
Immediate Execution Pending Appeal." It was
opposed by the defendant, but was granted by the
trial court on December 15, 1969.
The trial court found the following facts to be
undisputed:
On October 12,1968, after having
purchased a brand new Nissan
Cedric de Luxe Sedan car bearing
Motor No. 087797 from the Ng Sam
Bok Motors Co. in Bacolod City,
plaintiff insured the same with the
defendant insurance company
against any loss or damage for P
20,000.00 and against third party
liability for P 10,000.00. Plaintiff
paid the defendant P 361.34
premium for one year, March 12,
1968 to March 12, 1969, for which
defendant issued Private Car
Comprehensive Policy No. MV-
1251, marked Exhibit "A."
The automobile was, however,
mortgaged by the plaintiff with the
vendor, Ng Sam Bok Motors Co., to
secure the payment of the balance
of the purchase price, which
explains why the registration
certificate in the name of the plaintiff
remains in the hands of the
mortgagee, Ng Sam Bok Motors
Co.
On April 17, 1968, while driving the
automobile in question, the plaintiff
met a violent accident. The La
Carlota City fire engine crashed
head on, and as a consequence,
the plaintiff sustained physical
injuries, his father, Cesar Palermo,
who was with am in the car at the
time was likewise seriously injured
and died shortly thereafter, and the
car in question was totally wrecked.
The defendant was immediately
notified of the occurrence, and upon
its orders, the damaged car was
towed from the scene of the
accident to the compound of Ng
Sam Bok Motors in Bacolod City
where it remains deposited up to
the present time.
The insurance policy, Exhibit "A,"
grants an option unto the
defendant, in case of accident
either to indemnify the plaintiff for
loss or damage to the car in cash or
to replace the damaged car. The
defendant, however, refused to take
either of the above-mentioned
alternatives for the reason as
alleged, that the insured himself
had violated the terms of the policy
when he drove the car in question
with an expired driver's license.
(Decision, Oct. 29, 1969, p. 68,
Record on Appeal.)
Appellant alleges that the trial court erred in
interpreting the following provision of the Private Car
Comprehensive Policy MV-1251:
AUTHORIZED DRIVER:
Any of the following:
(a) The Insured.
(b) Any person driving on the
Insured's order or with his
permission. Provided that the
person driving is permitted in
accordance with the licensing or
other laws or regulations to drive
the Motor Vehicle and is not
disqualified from driving such motor
vehicle by order of a Court of law or
by reason of any enactment or
regulation in that behalf. (Exh. "A.")
There is no merit in the appellant's allegation that
the plaintiff was not authorized to drive the
insured motor vehicle because his driver's license
had expired. The driver of the insured motor
vehicle at the time of the accident was, the
insured himself, hence an "authorized driver"
under the policy.
While the Motor Vehicle Law prohibits a person
from operating a motor vehicle on the highway
without a license or with an expired license, an
infraction of the Motor Vehicle Law on the part of
the insured, is not a bar to recovery under the
insurance contract. It however renders him
subject to the penal sanctions of the Motor
Vehicle Law.
The requirement that the driver be "permitted in
accordance with the licensing or other laws or
regulations to drive the Motor Vehicle and is not
disqualified from driving such motor vehicle by
order of a Court of Law or by reason of any
enactment or regulation in that behalf," applies
only when the driver" is driving on the insured's
order or with his permission." It does not apply
when the person driving is the insured himself.
This view may be inferred from the decision of this
Court in Villacorta vs. Insurance Commission, 100
SCRA 467, where it was held that:
The main purpose of the
"authorized driver" clause, as may
be seen from its text, is that a
person other than the insured
owner, who drives the car on the
insured's order, such as his regular
driver, or with his permission, such
as a friend or member of the family
or the employees of a car service or
repair shop, must be duly licensed
drivers and have no disqualification
to drive a motor vehicle.
In an American case, where the insured herself was
personally operating her automobile but without a
license to operate it, her license having expired prior
to the issuance of the policy, the Supreme Court of
Massachusetts was more explicit:
... Operating an automobile on a
public highway without a license,
which act is a statutory crime is not
precluded by public policy from
enforcing a policy indemnifying her
against liability for bodily injuries
The inflicted by use of the
automobile." (Drew C. Drewfield
McMahon vs. Hannah Pearlman, et
al., 242 Mass. 367, 136 N.E. 154,
23 A.L.R. 1467.)
WHEREFORE, the appealed decision is affirmed with
costs against the defendant-appellant.
SO ORDERED.