Dominion Insurance Corporation v CA

GR No. 129919, February 6,2002

Pardo, J
Facts:
Rodolfo Guevarra instituted a civil case for the recovery of a sum of money against Dominion
Insurance. He sought to recover sums he had advanced in his capacity as manager. Dominion
denied any liability to Guevarra.
The pre-trial was always postponed, and during one of the pre-trial conference dominion failed to
arrive therefore the court declared them to be in default. Dominion filed several Motions to Lift
Order of Default but was always denied by the court. The RTC rendered its decision making
Dominion liable to repay Guevarra for the sum advanced and other damages and fees. Dominion
appealed but CA affirmed the decision of RTC and denied the appeal of Dominion.

Issue: WON Guevarra acted within his authority as agent for Dominion?
Held: No.
Ratio: Even though the contact entered into by Guevarra and Dominion was with the word
special the contents of the document was actually a general agency. A general power permits
the agent to do all acts for which the law does not require a special power and the contents in the
document did not require a special power of attorney.
Art 1878 of the civil code provides instances when a special power of attorney is required.:
1) To make such payment 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 which requires a special power of attorney
before Guevarra could settle the insurance claims of the insured.
Also Guevarra was instructed that the payment for the insured must come from the revolving fund
or collection in his possession, Gueverra should not have paid the insured through his own
capacity. Under 1918 of civil code an agent who acted in contravention of the principal s
instruction the principal will not be liable for the expenses incurred by the agent.