08 Pineda v. CA1 2.
W/N Insular Life should be liable to the complainants when they released
G.R. No. 105652; September 27, 1993 the check in favor of Ayo and Lontok, even if no bond was posted as
Davide, Jr., J. required.
Petitioners: LUZ PINEDA, MARILOU MONTENEGRO, VIRGINIA ALARCON, Held:
DINA LORENA AYO, CELIA CALUMBAG and LUCIA LONTOK 1. Yes, Insular Life is liable to Pineda etal when they relied on the SPA.
Respondents: THE HONORABLE COURT OF APPEALS and THE INSULAR The special powers of attorney "do not contain in unequivocal and
LIFE ASSURANCE COMPANY, LIMITED clear terms authority to Capt. Nuval to obtain, receive, receipt from
respondent company insurance proceeds arising from the death of the
Facts: seaman-insured.
PMSI obtained a group insurance policy for its sailors. 6 of the sailors, Insular Life knew that a power of attorney in favor of Capt. Nuval for
during the effectivity of the policy, perished while the ship sank in the collection and receipt of such proceeds was a deviation from its
Morocco. The families of the victims then wanted to claim the benefits of practice with respect to group policies.
the insurance. Hence, under the advice of Nuval, the president of PMSI, They gave the proceeds to the policyholder instead of the beneficiaries
they executed a special power of attorney authorizing Capt. Nuval to, themselves. Even the Isnular rep admitted that he gave the checks to
"follow up, ask, demand, collect and receive" for their benefit the the policyholder.
indemnities. Insular Life recognized Capt. Nuval as the attorney-in-fact of the
Insular drew against its account 6 checks, four for P200,00.00 each, one for petitioners. However, it acted imprudently and negligently in the
P50,000.00 and another for P40,00.00, payable to the order the families. premises by relying without question on the special power of
The checks were given to PMSI. Nuval, the PMSI president, pocketed the attorney.
amounts in his bank account. Strong vs. Repide: third persons deal with agents at their peril and are
When the families went to insular to get the benefits, their request was bound to inquire as to the extent of the power of the agent with whom
denied because Insular claimed that the checks were already given to they contract.
PMSI. Harry E. Keller Electric Co. vs. Rodriguez- The person dealing with
The families filed a petition with the Insurance Commission. They won and an agent must also act with ordinary prudence and reasonable
Insular was ordered to pay them 500 a day until the amount diligence. Obviously, if he knows or has good reason to believe that
was furnished to them. The insurance Commission held that the special the agent is exceeding his authority, he cannot claim protection… the
powers of attorney executed by complainants do not contain in unequivocal party dealing with him may not shut his eyes to the real state of the
and clear terms authority to Nuval to obtain and receive from respondent case, but should either refuse to deal with the agent at all, or should
company insurance proceeds arising from the death of the seaman-insured; ascertain from the principal the true condition of affairs.
also, that Insular Life did not convincingly refuted the claim of Insular delivered the checks to a party not the agent of the
Mrs. Alarcon that neither she nor her husband executed a special power of beneficiaries.
authority in favor of Capt. Nuval and that it did not observe Sec 180(3), 2. Yes, Insular Life is liable to Pineda etal when they released the check.
when it released the benefits due to the minor children of Ayo and Lontok, Art. 225. The father and the mother shall jointly exercise
when the said complainants did not post a bond as required. legal guardianship over the property of their unemancipated common
Insular Life appealed to the CA. CA modified the decision of the Insurance child without the necessity of a court appointment. In case of
Commission, eliminating the award to the minor children. disagreement, the father's decision shall prevail, unless there is judicial
order to the contrary.
Issue/s: Where the market value of the property or the annual income of the
1. W/N Insular Life should still be liable to the complainants when they relied child exceeds P50,000, the parent concerned shall be required
on the special powers of attorney, which Capt. Nuval presented as to furnish a bond in such amount as the court may determine, but not
documents, when they released the checks to the latter. less than ten per centum (10%) of the value of the property or annual
income, to guarantee the performance of the obligations prescribed for
general guardians.
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“If the market value of the property or the annual income of the child
exceeds P50,000.00, a bond has to be posted by the parents concerned
to guarantee the performance of the obligations of a general guardian.”
On group insurance:
o Group insurance is essentially a single insurance contract that
provides coverage for many individuals, particularly for the
employees of one employer.
There is a master agreement issued to an employer. The employer acts
as the collector of the dues and premiums. Disbursement of insurance
payments by the employer is also one of his duties.
They require an employee to pay a portion of the premium, which the
employer deducts from wages while the remainder is paid by the
employer. This is known as a contributory plan as compared to a non-
contributory plan where the premiums are solely paid by the
employer.
Although the employer may be the policyholder, the insurance is
actually for the benefit of the employee. In a non-contributory plan,
the payment by the employer of the entire premium is a part of the
total compensation paid for the services of the employee.
The primary aim of group insurance is to provide the employer with a
means of procuring insurance protection for his employees at a low
cost and thereby retain their loyalty and efficiency.
Dispositive Portion:
“WHEREFORE, the instant petition is GRANTED. The Decision of
10 October 1991 and the Resolution of 19 May 1992 of the public respondent in CA-
G.R. SP No. 22950 are SET ASIDE and the Decision of the Insurance Commission
in IC Case No. RD-058 is REINSTATED.”
