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Insurance Case Digest: Fortune Insurance and Surety Co., Inc. v. CA (1995)

G.R. No. 115278 May 23, 1995
Lessons Applicable: Stipulations Cannot Be Segregated (Insurance)

  • Producers Bank of the Philippines insured with Fortune Insurance and Surety Co. P725,000 which was lost during a robbery of Producer's armored vehicle while it was in transit from Pasay City City to its Makati head office.  
  • The armored car was driven by Benjamin Magalong Y de Vera, escorted by Security Guard Saturnino Atiga Y Rosete.
  • After an investigation conducted by the Pasay police authorities, the driver Magalong and guard Atiga were charged, together with Edelmer Bantigue Y Eulalio, Reynaldo Aquino and John Doe, with violation of P.D. 532 (Anti-Highway Robbery Law)
  • Upon claiming, Fortune refused stating that it is not liable since under the general exceptions of the policy:
    • any loss caused by any dishonest, fraudulent or criminal act of the insured or any officer, employee, partner, director, trustee or authorized representative of the Insured whether acting alone or in conjunction with others. . . .
  • RTC: favored Producers Bank since Driver and Security Guard were merely assigned
  • CA: Affirmed RTC  
ISSUE: W/N the driver and security guard are employees under the general exception

HELD: YES. Petition is granted.
    • It is clear to us that insofar as Fortune is concerned, it was its intention to exclude and exempt from protection and coverage losses arising from dishonest, fraudulent, or criminal acts of persons granted or having unrestricted access to Producers' money or payroll. When it used then the term "employee," it must have had in mind any person who qualifies as such as generally and universally understood, or jurisprudentially established in the light of the four standards in the determination of the employer-employee relationship, 21 or as statutorily declared even in a limited sense as in the case of Article 106 of the Labor Code which considers the employees under a "labor-only" contract as employees of the party employing them and not of the party who supplied them to the employer
    • Producers entrusted the three with the specific duty to safely transfer the money to its head office, with Alampay to be responsible for its custody in transit; Magalong to drive the armored vehicle which would carry the money; and Atiga to provide the needed security for the money, the vehicle, and his two other companions.
    • A "representative" is defined as one who represents or stands in the place of another; one who represents others or another in a special capacity, as an agent, and is interchangeable with "agent."