J. Davide Jr.
Facts:
PMSI obtained a group insurance policy for its sailors. 6 of the sailors, during the effectivity of the policy, perished while the ship sank in Morocco. The families of the victims then wanted to claim the benefits of the insurance. Hence, under the advice of Nuval, the president of PMSI, they executed a special power of attorney authorizing Capt. Nuval to, "follow up, ask, demand, collect and receive" for their benefit the indemnities.
Insular drew against its account 6 checks, four for P200,00.00 each, one for P50,000.00 and another for P40,00.00, payable to the order the families. The checks were given to PMSI. Nuval, the PMSI president, pocketed the amounts in his bank account.
When the families went to insular to get the benefits, their request was denied because Insular claimed that the checks were already given to PMSI.
The families filed a petition with the Insurance Commission. They won and Insular was ordered to pay them 500 a day until the amount was furnished to them. The insurance Commission held that the special powers of attorney executed by complainants do not contain in unequivocal and clear terms authority to Nuval to obtain and receive from respondent company insurance proceeds arising from the death of the seaman-insured; also, that Insular Life did not convincingly refuted the claim of Mrs. Alarcon that neither she nor her husband executed a special power of authority in favor of Capt. Nuval and that it did not observe Sec 180(3), when it released the benefits due to the minor children of Ayo and Lontok, when the said complainants did notpost a bond as required-
Insular Life appealed to the CA. CA modified the decision of the Insurance Commission, eliminating the award to the minor children.
Hence, this petition by the beneficiary families.
Issues:
1. WON Insular Life should still be liable to the complainants when they relied on the special powers of attorney, which Capt. Nuval presented as documents, when they released the checks to the latter.
2. WON Insular Life should be liable to the complainants when they released the check in favor of Ayo and Lontok, even if no bond was posted as required.
Held: Yes to both. Petition granted.
Ratio:
1. The special powers of attorney "do not contain in unequivocal and clear terms authority to Capt. Nuval to obtain, receive, receipt from respondent company insurance proceeds arising from the death of the seaman-insured.
Insular Life knew that a power of attorney in favor of Capt. Nuval for the collection and receipt of such proceeds was a deviation from its practice with respect to group policies.
They gave the proceeds to the policyholder instead of the beneficiaries themselves. Even the Isnular rep admitted that he gave the checks to the policyholder.
Insular Life recognized Capt. Nuval as the attorney-in-fact of the petitioners. However, it acted imprudently and negligently in the premises by relying without question on the special power of attorney.
Strong vs. Repide- third persons deal with agents at their peril and are bound to inquire as to the extent of the power of the agent with whom they contract.
Harry E. Keller Electric Co. vs. Rodriguez- The person dealing with an agent must also act with ordinary prudence and reasonable diligence. Obviously, if he knows or has good reason to believe that the agent is exceeding his authority, he cannot claim protection… the party dealing with him may not shut his eyes to the real state of the case, but should either refuse to deal with the agent at all, or should ascertain from the principal the true condition of affairs.
Insular delivered the checks to a party not the agent of the beneficiaries.
2. Art. 225. The father and the mother shall jointly exercise legal guardianship over the property of their unemancipated common child without the necessity of a court appointment. In case of disagreement, the father's decision shall prevail, unless there is judicial order to the contrary.
Where the market value of the property or the annual income of the child exceeds P50,000, the parent concerned shall be required to furnish a bond in such amount as the court may determine, but not 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.
“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 :
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.
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