Dominion Insurance Corp v CA

G.R. No. 129919 February 6, 2002

Art. 1236 – Creditor not bound to accept payment or performance by third person.

Facts:

·          Guevarra instituted civil case against the petitioner to recover sum of money, which he claimed to have advanced in his capacity as manager of defendant to satisfy certain claims filed by defendant’s clients.

·          Dominion denied any liability to Guevarra and asserted that the latter was appointed only as Agency Manager by virtue of Special Power of Attorney.

·          Moreover, it contended that respondent had  deviated from the instructions of the principal so that the expenses he incurred in the settlement of the claims of the insured may not be reimbursed from petitioner Dominion.

Issue:

WoN respondent Guevarra is entitled to reimbursement of amounts he paid out of his personal money in settling the claims of several insured

Held:

            Yes, the Court holds that while the law on agency prohibits respondent Guevarra from obtaining reimbursement, his right to recover may still be justified under the general law on obligations and contracts.

            Article 1236, second paragraph, Civil Code, provides “Whoever pays for another may demand from the debtor what he has paid, except that if he paid without the knowledge or against the will of the debtor, he can recover only insofar as the payment has been beneficial to the debtor.”

In this case, when the risk insured against occurred, petitioner’s liability as insurer arose. This obligation was extinguished when respondent Guevarra paid the claims and obtained Release of Claim Loss and Subrogation Receipts from the insured who were paid.

Thus, to the extent that the obligation of the petitioner has been extinguished, respondent Guevarra may demand for reimbursement from his principal. To rule otherwise would result in unjust enrichment of petitioner. But the amount of the revolving fund/ collection that was then in the possession of respondent Guevarra was P3,604.84. Deducting this from P116,276.95, the amount of P112,672.11 may be reimbursed to respondent.