Dominion Insurance Corp v.

Court of Appeals
G.R. No. 129919
February 6, 2002
Art. 1878

Rodolfo Guevarra (Guevarra) instituted a case for sum of money against

Dominion Insurance Corporation (Dominion) for the amount advanced by
Guevarra in his capacity as manager of Dominion to satisfy claims filed by
Dominions clients.

The pre-trial was postponed multiple times, and during one of the pre-trial
conferences, Dominion failed to appear before the court. Therefore, the court
declared Dominion to be in default. Dominion filed several Motions to Lift Order
of Default but these were denied by the Court.

RTC Repay Guevarra for the sum advanced and other damages and fees.
CA- Affirmed the RTC

Issue:
1. W/N Guevarra acted within his authority as agent for Dominion.
2. W/N Guevarra is entitled to reimbursement of amounts he paid out of his
personal money in settling the claims of several insured.

1. NO. The basis of agency is representation. For the principal there must be
intent to appoint and on the part of the agent, there must be intention to accept
the appointment and act on it. In absence of the intent, there is no agency. The
SPA would show that Guevarra intended to enter into a principle-agent
relationship. Despite the word "Special" in the title of the document, the contents
reveal that what was constituted was actually a GENERAL AGENCY. It was
couched in general terms and is limited only to acts of administration. Article
1878 provides that a SPA is required: (1) to make such payments as are not
usually considered as acts of administration (15) any other act of dominion. The
payment of claims is not an act of administration; therefore it requires a special
power of attorney. Based on the MMA, Guevarra's authority was limited to pay
the claim of the insured but they payment shall come from the revolving fund or
collection in his possession. Thus, Guevarra had no authority to pay for the
insurance in his own capacity. Under 1918 of the Civil Code, the principal shall
not be liable for the expenses incurred by the agent in contravention of the
principles instruction.

2. YES. Even if the law on agency prohibits Guevarra from obtaining

reimbursement, his right to recover may be justified by Article 1236 of the Civil
Code: 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. Thus,
Guevarra must be reimbursed but only to the extent that Dominion has benefited
without interest or demand for damages.
IN VIEW WHEREOF, we DENY the petition. However, we MODIFY the
decision of the Court of Appeals the Regional Trial Court, Branch 44, San
Fernando, Pampanga, Guevarra the amount of P112,672.11 representing
the total amount advanced by the latter in the payment of the claims of
petitioners clients. No costs in this instance. SO ORDERED.