Tuesday, February 21, 2012

Fortune Insurance and Surety Co., Inc., vs. CA [G.R. No. 115278, May 23, 1995]

Facts: On June 29, 1987, Producer’s Bank of the Philippines’ armored vehicle was robbed, in transit, of seven hundred twenty-five thousand pesos (Php 725,000.00) that it was transferring from its branch in Pasay to its main branch in Makati. To mitigate their loss, they claim the amount from their insurer, namely Fortune Insurance and Surety Co.. 

Fortune Insurance, however, assails that the general exemption clause in the Casualty Insurance coverage had a general exemption clause, to wit: 

GENERAL EXCEPTIONS 

The company shall not be liable under this policy in respect of 

xxx xxx xxx 

(b) 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. . . . 

And, since the driver (Magalong) and security guard (Atiga) of the armored vehicle were charged with three others as liable for the robbery, Fortune denies Producer’s Bank of its insurance claim. 

The trial court and the court appeals ruled in favor of recovery, hence, the case at bar. 

Issue: Whether recovery is precluded under the general exemption clause. 

Held: Yes, recovery is precluded under the general exemption clause. 

Howsoever viewed, 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. In short, for these particular tasks, the three acted as agents of Producers. 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." 23 

In view of the foregoing, Fortune is exempt from liability under the general exceptions clause of the insurance policy.

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