Insurance Case Digest: Valenzuela v. CA (1990)

G.R. No. 83122   October 19, 1990

Lessons Applicable: Effect of Non-Payment (Insurance)

Laws Applicable: Art. 19,Art. 20,Art. 21, Art. 2200 of the new Civil Code;Section 77 of the Insurance Code

FACTS:

• Valenzuela, General Agent of Philippine American General Insurance Company, Inc authorized to sell in behalf of Philamgen solicited marine insurance from Delta Motors, Inc. amounting to P4.4M  entitling him to a 32% commission or P1.6M
• 1976-1978: premium payments of P1,946,886 were paid directly to Philamgen.  Philamgen wanted a 50% share of Valenzuela's commission but Valenzuela refused.
• Because of his refusal, the officers of Philamgen reversed his commission due him, placed agency transactions on a cash and carry basis thus removing the 60-day credit for premiums due, threatened to cancel policies issued by his agency and leaked out the news that he has substantial accounts with Philamgen.
• December 27, 1978: His agency with Philamgen was terminated
• Valenzuela sought relief from the RTC
• RTC: favored Valenzuela with reinstatement, commission with interest, monthly compensatory damages, moral damages, attorney's fees and cost of suit
• CA modified by holding Philamgen and Valenzuela jointly and severally liable for the premium

ISSUE: W/N Valuenuela should be NOT be held liable since non-payment of the premium renders the policy invalid

HELD: YES. petition is GRANTED. RTC reinstated with modification that upon satisfaction of the judgment, contractual relationship is terminated

• The principal may not defeat the agent's right to indemnification by a termination of the contract of agency. Where the principal terminates or repudiates the agent's employment in violation of the contract of employment and without cause ... the agent is entitled to receive either the amount of net losses caused and gains prevented by the breach, or the reasonable value of the services rendered. Thus, the agent is entitled to prospective profits which he would have made except for such wrongful termination provided that such profits are not conjectural, or speculative but are capable of determination upon some fairly reliable basis. 
• If a principal violates a contractual or quasi-contractual duty which he owes his agent, the agent may as a rule bring an appropriate action for the breach of that duty. The agent may in a proper case maintain an action at law for compensation or damages 
• question of whether or not the agency agreement is coupled with interest is helpful to the petitioners' cause but is not the primary and compelling reason 
• Section 77 of the Insurance Code, the remedy for the non-payment of premiums is to put an end to and render the insurance policy not binding
• unless premium is paid, an insurance contract does not take effect
• since admittedly the premiums have not been paid, the policies issued have lapsed
• to sue Valenzuela for the unpaid premiums would be the height of injustice and unfair dealing
• Under Article 2200 of the new Civil Code, "indemnification for damages shall comprehend not only the value of the loss suffered, but also that of the profits which the obligee failed to obtain."

Torts and Damages Case Digest: Grand Union Supermarket et al., v. Jose J. Espino, Jr., et al., (1979)

G.R. No. L-48250 December 28, 1979

Lessons Applicable: Public humiliation (Torts and Damages)

Laws Applicable: Articles 19 and 21 in relation to Article 2219 of the Civil Code, Art. 26,Art. 2214, New Civil Code

FACTS:

• Jose J. Espino. Jr., a civil engineer and an executive of Procter and Gamble Philippines, Inc, together with his wife and two daughters went to shop at South Supermarket in Makati
• Finding a cylindrical "rat tail" file which he needed for his hobby, he picked it up and held it fearing it might get lost because of its tiny size
• While shopping, they saw the maid of Jose's aunt so as he talked, he placed the rat tail in his breast pocket partly exposed 
• At the check-out counter, he paid for their purchases worth P77 but forgot to pay the file
• As he was exiting the supermarket, he was approached by Guard Ebreo regarding the file in his pocket.  He quickly apologized saying "I'm Sorry" and he turned towards the cashier to pay.  But, he was stopped and instead was brought to the rear of the supermarket when he was asked to fill out an Incident Report labeling him as "Shoplifter"
• His wife joined him since he was taking so long and they were brought to the first checkout counter where Ms. Nelia Santos-Fandino's desk was.  She made a remark:"Ano, nakaw na naman ito".  Jose told Ms. Fandino that he was going to pay for the file because he needed it but she replied "That is all they say, the people whom we cause not paying for the goods say... They all intended to pay for the things that are found to them."
• Jose objected stating he is a regular customer of the supermarket
• He gave P5 to pay for the P3.85 cost of the file but Ms. Fandino said the P5 was his fine which will be rewarded to the guard.  People were staring at them.  He took the file and paid the file at the nearest checkout counter with P50 and got out as fast as they could.  His first impulse was to go back to the supermarket that night to throw rocks at its glass windows. But reason prevailed over passion and he thought that justice should take its due course.
• He filed against Grand Union Supermarket et al. founded on Article 21 in relation to Article 2219 of the New Civil Code and prays for moral damages, exemplary damages, attorney s fees and 'expenses of litigation, costs of the suit and the return of the P5 fine
•  CFI: dismissed
• CA: reversed and granted damages of P75,000 by way of moral damages, P25,000 as exemplary damages, and P5,000 as attorney's fee

ISSUE: W/N Grand Union Supermarket should be liable for public humiliation founded on Article 21 in relation to Article 2219 of the New Civil Code

HELD: YES. Grand Union Supermarket ordered to pay, jointly and severally moral damages P5,000 and P2,000 as and for attorney's fees; and to return the P5 fine

• Jose did not intend to steal the file and that is act of picking up the file from the open shelf was not criminal nor done with malice or criminal intent for on the contrary, he took the item with the intention of buying and paying for it
• personal circumstances:
• graduate Mechanical Engineer from U.P. Class 1950, employed as an executive of Proctor & Gamble Phils., Inc., a corporate manager incharge of motoring and warehousing therein; honorably discharged from the Philippine Army in 1946; a Philippine government pensionado of the United States for six months; member of the Philippine veterans Legion; author of articles published in the Manila Sunday Times and Philippines Free Press; member of the Knights of Columbus, Council No. 3713; son of the late Jose Maria Espino, retired Minister, Department of Foreign Affairs at the Philippine Embassy Washington
• Jose was falsely accused of shoplifting is evident
• Fine branding him as a thief which was not right nor justified
• the mode and manner in which he was subjected, shouting at him, imposing upon him a fine, threatening to call the police and in the presence and hearing of many people at the Supermarket which brought and caused him humiliation and embarrassment, sufficiently rendered the petitioners liable for damages under Articles 19 and 21 in relation to Article 2219 of the Civil Code
• It is against morals, good customs and public policy to humiliate, embarrass and degrade the dignity of a person
• Everyone must respect the dignity, personality, privacy and peace of mind of his neighbors and other persons (Article 26, Civil Code)
• His forgetfullness led to his embarassment and humiliation thereby causing him mental anguish, wounded feelings and serious anxiety. His act of omission contributed to the occurrence of his injury or loss and such contributory negligence is a factor which may reduce the damages that private respondent may recover (Art. 2214, New Civil Code). Moreover, that many people were present and they saw and heard the ensuing interrogation and altercation appears to be simply a matter of coincidence in a supermarket which is a public place and the crowd of onlookers, hearers or bystanders was not deliberately sought or called by management to witness private respondent's predicament.
• Grand Union Supermarket  acted in good faith in trying to protect and recover their property, a right which the law accords to them. - eliminate the grant of exemplary damages