G.R. No. 129919 - Dominion Insurance Corp. vs. Court of Appeals

On January 25, 1991, Rodolfo S. Guevarra filed Civil Case No. 8855 against Dominion Insurance Corporation seeking the recovery of P156,473.90, which he claimed to have advanced in his capacity as manager to settle claims of the insurer’s clients.
In its pleadings, Dominion denied any liability and asserted a counterclaim for P249,672.53, alleging that Guevarra had failed to remit premiums.
On August 8, 1991, Dominion filed a third-party complaint against Fernando Austria, who at the time was the Regional Manager for Central Luzon, to involve him in the dispute.

Multiple pre-trial conferences were scheduled on various 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) but were not held due to repeated postponements or cancellations.
On May 22, 1992, when the case was called for pre-trial, only the plaintiff and his counsel appeared. Despite due notice, Dominion and its counsel did not attend, submitting instead a handwritten note via messenger Roy Gamboa seeking postponement.
Plaintiff’s counsel objected, deeming the note insufficient, and moved to declare Dominion in default. The trial court granted this motion and declared Dominion in default, allowing the plaintiff to proceed with his evidence on June 16, 1992.

Plaintiff presented his evidence on June 16, 1992, followed by a written offer of documentary exhibits on July 8, 1992, and an additional supplemental offer on July 13, 1992. These exhibits were admitted on July 17, 1992.
On August 7, 1992, Dominion filed a motion to lift the default order on the ground that its counsel’s nonappearance was due to unavoidable circumstances and that a representative had been sent to notify the court.
The trial court denied the motion on August 25, 1992 for failure to verify the motion with an affidavit of merit and a proper specification of the facts constituting a meritorious defense.
On September 28, 1992, Dominion moved for reconsideration, admitting for the first time that counsel’s nonappearance was due to illness, and attached an Affidavit of Merit executed by its Executive Vice-President. This motion was also denied on November 13, 1992.

On November 18, 1992, the Regional Trial Court rendered judgment ordering Dominion to pay Guevarra:

Dominion appealed on December 14, 1992 to the Court of Appeals.
The Court of Appeals affirmed the trial court’s decision on July 19, 1996.
Dominion further filed a motion for reconsideration on September 3, 1996, which was denied on July 16, 1997, leading to the present appeal before the Supreme Court.

The relationship between Dominion (originally named First Continental Assurance Company, Inc.) and Guevarra was governed by a Special Power of Attorney, though the contents revealed a general agency arrangement.
The document appointed Guevarra as Agency Manager in San Fernando, granting him authority to conduct various insurance-related transactions.
The explicit instructions contained within the agreement emphasized that payments, such as settling claims, were to be made from Guevarra’s revolving fund or collection.
Subsequent instructions regarding the settlement of claims were further detailed in the Memorandum of Management Agreement dated February 18, 1987, which limited his authority in carrying out claims settlements.

Whether respondent Rodolfo S. Guevarra acted within his authority as an agent under the purported agency agreement with petitioner Dominion Insurance Corporation.

Analysis of the Special Power of Attorney and the Memorandum of Management Agreement.
Evaluation of whether the acts performed by Guevarra fell within the agreed scope of authority.

Whether respondent Guevarra is entitled to reimbursement for the amounts he advanced from his personal funds to settle the claims of Dominion’s clients.

Consideration of the payment guidelines stipulated in the written authority which mandated that settlements should come from his revolving fund.
Implications of the principal’s instructions against the actual disbursement made by Guevarra.