smith bell v ca

8/9/2019 Smith Bell v CA

1/9

Republic of the Philippines

SUPREME COURT

Manila

THIRD DIVISION

G.R. No. 110668 February 6, 1997

SMITH, BE ! CO., INC., petitioner,

vs.

COURT OF "PPE"S a#$ %OSEPH BENG&ON CHU",1responents.

P"NG"NIB"N, J.:

The !ain issue raise in this case is "hether a local clai! or settlin# a#ent is personall$

an%or soliaril$ liable upon a !arine insurance polic$ issue b$ its isclose forei#n

principal.

This is a petition for revie" on certiorariof the Decision of responent &ourt 'pro!ul#ate

on 'anuar$ (), 1**+ in &-.R. &V No. +1/1( affir!in# the ecision (of the trial

court)"hich ispose as follo"s0 *

herefore, the &ourt reners 2u#!ent cone!nin# the efenants3petitioner an 4irst Insurance &o. 5t.6 2ointl$ an severall$ to pa$ the

plaintiff 3private responent6 the a!ount of 7S89,+:*.9/. plus (;< interest

thereon annuall$ until the clai! is full$ pai, 1)< as an for attorne$=s fees,

an the cost.

The Facts

The facts are unispute b$ the parties,6an are narrate b$ responent &ourt, >uotin# the

trial court, as follo"s07

The unispute facts of the case have been succintl$ 3sic6 su!!ari?e b$ the lo"er court3,6

as follo"s0

. . . in 'ul$ 1*/(, the plaintiffs, oin# business uner the st$le of Tic Hin

&hion#, I!porter, bou#ht an i!porte to the Philippines fro! the fir! &hin

act &o., 5t. of Taipei@ Tai"an, :) !etric tons of Dicalciu! Phosphate, 4ee


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rae 4-1:< value at 7S81+,))).)) &I4 Manila. These "ere containe in

1,(:) ba#s an shippe fro! the Port of Aaohsiun#, Tai"an on Boar S.S.

CO5DN 5THC for the Port on 3sic6 Manila. On 'ul$ (9, 1*/(, this

ship!ent "as insure b$ the efenant 4irst Insurance &o. for 7S81*,:)).))

Ca#ainst all risEsC at port of eparture uner Marine Polic$ No.

1)))M/()9))++(1*, "ith the note C&lai!, if an$, pa$able in 7.S. currenc$ atManila 3Fh. C1C, =DC for the plaintiff6 an "ith efenant S!ith, Bell, an &o.

sta!pe at the lo"er left sie of the polic$ as C&lai! #ent.C

The car#o arrive at the Port of Manila on Septe!ber 1, 1*/( aboar the

above-!entione carr$in# vessel an lane at port on Septe!ber (, 1*/(.

thereafter, the entire car#o "as ischar#e to the local arrastre contractor,

Metroport Services Inc. "ith a nu!ber of the car#o in apparent ba orer

conition. On Septe!ber (9, 1*/(, the plaintiff secure the services of a

car#o surve$or to conuct a surve$ of the a!a#e car#o "hich "ere 3 sic6

elivere b$ plaintiff=s broEer on sai ate to the plaintiffs pre!ises at 1(thvenue, race ParE, &aloocan &it$. The surve$or=s report 3Fh. CC6 sho"e

that of the 1,(:) ba#s of the i!porte !aterial, G)) "ere a!a#e b$ tearin#

at the sies of the container ba#s an the contents partl$ e!pt$. 7pon

"ei#hin#, the contents of the a!a#e ba#s "ere foun to be 1/,:;G.) E#

short. ccorin#l$, on October 1G follo"in#, the plaintiff file "ith S!ith, Bell,

an &o., Inc. a for!al state!ent of clai! 3Fh. CC6 "ith proof of loss an a

e!an for settle!ent of the corresponin# value of the losses, in the su! of

7S89,+:9.9/.)). 3sic6 fter purportel$ conve$in# the clai! to its principal,

S!ith, Bell, an &o., Inc. infor!e the plaintiff b$ letter ate 4ebruar$ 1:,

1*/+ 3Fh.C-(C6 that its principal offere onl$ :)< of the clai! or7S8+,G1G.19 as reress, on the alle#e #roun of iscrepanc$ bet"een the

a!ounts containe in the shippin# a#ent=s repl$ to the clai!ant of onl$

7S8*).;/ "ith that of Metroport=s. The offer not bein# acceptable to the

plaintiff, the latter "rote S!ith, Bell, &o. eFpressin# his refusal to the

CreressC offer. contenin# that the iscrepanc$ "as a result of loss fro!

vessel to arrastre to consi#nees= "arehouse"hich losses "ere still "ithin the

Call risEC insurance cover. No settle!ent of the clai! havin# been !ae, the

plaintiff then cause the instant case to be file. 3p. (, RT& Decision@ p. 1;(,

Recor6.

Den$in# an$ liabilit$, efenant-appellant averre in its ans"er that it is !erel$ a settlin# or

clai! a#ent of efenant insurance co!pan$ an as S7&H a#ent, it is not personall$ liable

uner the polic$ in "hich it has not even taEen part of. It then alle#e that plaintiff-appellee

has no cause of action a#ainst it.

Defenant The 4irst Insurance &o. 5t. i not file an ns"er, hence it "as eclare in

efault.


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There are three reasons "h$ "e fin for petitioner.

First Reason E!isting "uris#rudence

Petitioner, unisputel$ a settlin# a#ent actin# "ithin the scope of its authorit$, cannot be

hel personall$ an%or soliaril$ liable for the obli#ations of its isclose principal !erel$because there is alle#el$ a nee for a spee$ settle!ent of the clai! of private

responent. In the leain# case of Salonga vs. Warner, Barnes & Co., Ltd. this &ourt rule

in this "ise0 1*

e a#ree "ith counsel for the appellee that the efenant is a settle!ent an

a2ust!ent a#ent of the forei#n insurance co!pan$ an that as such a#ent it

has the authorit$ to settle all the losses an clai!s that !a$ arise uner the

policies that !a$ be issue b$ or in behalf of sai co!pan$ in accorance

"ith the instructions it !a$ receive fro! ti!e to ti!e fro! its principal, but "e

isa#ree "ith counsel in his contention that as such a2ust!ent ansettle!ent a#ent, the efenant has assu!e personal liabilit$ uner sai

policies, an, therefore, it can be sue in its o"n ri#ht. n a2ust!ent an

settle!ent a#ent is no ifferent fro! an$ other a#ent fro! the point of vie" of

his responsibilit$ 3sic6, for he also acts in a representative capacit$. henever

he a2usts or settles a clai!, he oes it in behalf of his principal, an his

action is binin# not upon hi!self but upon his principal. n here a#ain, the

orinar$ rule of a#enc$ applies. The follo"in# authorities bear this out0

Cn insurance a2uster is orinaril$ a special a#ent for the

person or co!pan$ for "ho! he acts, an his authorit$is#ri$a %aciecoeFtensive "ith the business intruste to

hi!. . . .C

Cn a2uster oes not ischar#e functions of a >uasi-2uicial

nature, but represents his e!plo$er, to "ho! he o"es faithful

service, an for his acts, in the e!plo$er=s interest, the

e!plo$er is responsible so lon# as the acts are one "hile the

a#ent is actin# "ithin the scope of his e!plo$!ent.C 3;: &.'.S.,

1++/- 1+;).6

It, therefore, clearl$ appears that the scope an eFtent of the functions of an

a2ust!ent an settle!ent a#ent o not inclue personal liabilit$. is

%unctions are $erel to settle and ad(usts clai$s in )ehal% o% his #rinci#al i%

those clai$s are #roven and undis#uted, and i% the clai$ is dis#uted or is

disa##roved ) the #rinci#al, li*e in the instant case, the agent does not

assu$e an #ersonal lia)ilit. The recourse of the insure is to press his

clai! a#ainst the principal. 3!phasis supplie6.


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The fore#oin# octrine !a$ have been enunciate b$ this &ourt in 1*:1, but the passa#e of

ti!e has not eroe its value or !erit. It still applies "ith e>ual force an vi#or.

Private responent=s contention that Salongaoes not appl$ si!pl$ because onl$ the a#ent

"as sue therein "hile here both a#ent an principal "ere i!pleae an foun soliaril$

liable is "ithout !erit.

Such istinction is i!!aterial. The a#ent can not be sue nor hel liable "hether sin#l$ or

soliaril$ "ith its principal.

ver$ cause of action e! contractu!ust be foune upon a contract, oral or "ritten, either

eFpress or i!plie. 16The onl$ Cinvolve!entC of petitioner in the sub2ect contract of insurance

"as havin# its na!e sta!pe at the botto! left portion of the polic$ as C&lai! #ent.C

ithout an$thin# else to bacE it up, such sta!p cannot even be ee!e b$ the re!otest

interpretation to !ean that petitioner participate in the preparation of sai contract. Hence,

there is no privit$ of contract, an corresponin#l$ there can be no obli#ation or liabilit$, anthus no &ause of action a#ainst petitioner attaches. 7ner rticle 1+11 17of the &ivil &oe,

contracts are binin# onl$ upon the parties 3an their assi#ns an heirs6 "ho eFecute the!.

The sub2ect car#o insurance "as bet"een the 4irst Insurance &o!pan$, 5t. an the &hin

act &o., 5t., both of Tai"an, an "as si#ne in Taipei, Tai"an b$ the presient of the 4irst

Insurance &o!pan$, 5t. an the presient of the &hin act &o., 5t. 18There is absolutel$

nothin# in the contract "hich !entions the personal liabilit$ of petitioner.

Second Reason +)sence o% Solidarit Lia)ilit

Ma$ then petitioner, in its capacit$ as resient a#ent 3as foun in the case cite b$ the

responent &ourt 196 be hel soliaril$ liable "ith the forei#n insurerK rticle 1()9 of the &ivil

&oe clearl$ provies that C3t6here is a soliar$ liabilit$ onl$ "hen the obli#ation eFpressl$

so states, or "hen the la" or the nature of the obli#ation re>uires soliarit$.C The "ell-

entrenche rule is that soliar$ obli#ation cannot li#htl$ be inferre. It !ust be positivel$ an

clearl$ eFpresse. The contention that, in the en, it "oul reall$ be 4irst Insurance

&o!pan$, 5t. "hich "oul be hel liable is specious an cannot be accepte. Such a

stance "oul inflict in2ustice upon petitioner "hich "oul be !ae to avance the funs to

settle the clai! "ithout an$ assurance that it can collect fro! the principal "hich

isapprove such clai!, in the first place. More i!portantl$, such ,position "oul have

absolutel$ no le#al basis.

The Insurance &oe is >uite clear as to the Purpose an role of a resient a#ent. Such

a#ent, as a representative of the forei#n insurance co!pan$, is tasEe onl$ to receive le#al

processes on behalf of its principal an not to ans"er personall$ for an$ insurance clai!s.

e >uote0


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5astl$, bein# a !ere a#ent an representative, petitioner is also not the real part$-in-interest

in this case. n action is brou#ht for a practical purpose, that is, to obtain actual an positive

relief. If the part$ sue is not the proper part$, an$ ecision that !a$ be renere a#ainst

hi! "oul be futile, for the ecision cannot be enforce or eFecute. Section (, Rule + of

the Rules of &ourt ientifies "ho the real parties-in-interest are, thus0

Sec. (. arties in interest. J ver$ action !ust be prosecute an efene

in the na!e of the real part$ in interest. ll persons havin# an interest in the

sub2ect of the action an in obtainin# the relief e!ane shall be 2oine as

plaintiffs. ll persons "ho clai! an interest in the controvers$ or the sub2ect

thereof averse to the, plaintiff, or "ho are necessar$ to a co!plete

eter!ination or settle!ent of the >uestions involve therein shall be 2oine

as efenants.

The cause of action of private responent is base on a contract of insurance "hich as

alrea$ sho"n "as not participate in b$ petitioner. It is not a Cperson "ho clai!3s6 aninterest averse to the plaintiffC nor is sai responent Cnecessar$ to a co!plete

eter!ination or settle!ent of the >uestions involveC in the controvers$. Petitioner is

i!properl$ i!pleae for not bein# a real-part$-interest. It "ill not benefit or suffer in case

the action prospers. '0

Resort to E0uit Mis#laced

4inall$, responent &ourt also contens that Cthe interest of 2ustice is better serve b$

holin# the settlin# a#ent 2ointl$ an severall$ liable "ith its principal.C s no la" bacEs up

such pronounce!ent, the appellate &ourt is thus resortin# to e>uit$. Ho"ever, e>uit$ "hichhas been aptl$ escribe as C2ustice outsie le#alit$,C is availe of onl$ in the absence of,

an never a#ainst, statutor$ la" or 2uicial pronounce!ents. '17pon the other han the

liabilit$ of a#ents is clearl$ provie for b$ our la"s an eFistin# 2urispruence.

HR4OR, in vie" of the fore#oin# consierations, the Petition is RNTD an the

Decision appeale fro! is RVRSD an ST SID.

No costs.

SO ORDRD.

-arvasa, C."., 1avide, "r., Melo and Francisco, ""., concur.

Foo+#o+e

1 Doin# business uner the na!e an st$le CTic Hin &hion# I!porter.C


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( Tenth Division, co!pose of ". Re#ina . OroLe?-Benite?,#onente,

an "". rturo B. Buena an uaro . Montene#ro, concurrin#.

+ In &ivil &ase No. /+-1911/.

; Re#ional Trial &ourt of Manila, Branch ((, presie b$ 'u#e Ricarte N.To#onon.

: Rollo, p. ().

G I)id., pp. /-* +)-+(.

9 I)id., pp. 1/-()@ assaile Decision, pp. 1-+.

/ I)id., p. 9(@ petitioner=s !e!oranu!, p. G.

* I)id., p. 9+-9;@ i)id, pp. 9-/.

1) &hoa TieE Sen# vs. The 4irst Insurance &o!pan$, 5t. an%or S!ith, Bell

&o!pan$, Inc., &-.R. &V No. )G9G/, pril G, 1*/9.

11 Rollo, p. (1@ assaile Decision, p. ;.

1( ;+ Phil. 1:: 31*((6.

1+ // Phil. 1(: 31*:16.

1; Rollo, p. :/@ private responent=s !e!oranu!, p. +.

1: Salon#a vs. arner Barnes &o., 5t., su#ra, on pp. 1+1-1+(.

1G . Macias &o. vs. arner, Barnes &o., su#ra, at p. 1G(.

19 Crticle 1+11. &ontracts taEe effect onl$ bet"een the parties, their assi#ns

an heirs, eFcept in case "here the ri#hts an obli#ations arisin# fro! the

contract are not trans!issible b$ their nature, or b$ stipulation or b$ provision

of la". The heir is not liable be$on the value of the propert$ he receive fro!the eceent.

If a contract shoul contain so!e stipulation in favor of a thir person, he !a$

e!an its fulfill!ent provie he co!!unicate his acceptance to the

obli#or before its revocation. !ere inciental benefit or interest of a person

is not sufficient. The contractin# parties !ust have earl$ an eliberatel$

conferre a favor upon a thir person.C


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1/ Fhibit CDC@ Ori#inal Recors, p. :9.

1* &hoa TieE Sen# vs. The 4irst Insurance &o!pan$, 5t. an%or S!ith, Bell

&o!pan$, Inc., su#ra.

() N#o The Hua v. &hun# Aiat Hua, * S&R 11+, 11G, Septe!ber +), 1*G+.

(1 &ausapin vs. &ourt of ppeals, (++ S&R G1:, G(:, 'ul$ ;, 1**;.

smith bell v ca

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