First Integrated Bonding & Insurance v. Hernando
REITERATIONFacts
The Antecedents: Silverio Blanco owned a passenger jeepney insured with First Integrated Bonding and Insurance Company, Inc. (First Insurance) for P30,000.00. On November 25, 1976, the jeepney, driven by Blanco, fatally struck a five-year-old child, Deogracias Advincula. The child's parents, the Advincula spouses, filed a complaint for damages against Blanco and First Insurance. Summons were served, but only Blanco filed an answer. First Insurance was declared in default on January 19, 1978. The Advincula spouses presented documentary evidence, including proof of marriage, birth, death, burial, autopsy, expenses, and a criminal case against Blanco. Procedural History: On March 1, 1978, the trial court rendered judgment awarding moral damages, indemnity for the loss of life, funeral expenses, and attorney's fees to the Advincula spouses, payable by First Insurance. On March 27, 1978, the decision was amended to include an award of P6,336.50 to Silverio Blanco, also to be paid by First Insurance, bringing the total to P30,000.00. First Insurance received the amended decision on April 11, 1978. An entry of judgment was made on May 11, 1978, and First Insurance received a copy on June 27, 1978. On June 14, 1978, an order granting execution was issued, which First Insurance received on August 1, 1978. On September 5, 1978, First Insurance filed a petition for relief from judgment. This petition was denied on October 4, 1978, for being filed out of time and due to the gross negligence of First Insurance. First Insurance received the denial on October 10, 1978. A motion for reconsideration filed by First Insurance on May 14, 1979, was also denied for lack of appearance. The Petition: First Insurance filed a petition for certiorari with the Supreme Court, seeking to annul the amended decision for allegedly being rendered in excess of jurisdiction. They argued they had no cause of action against them, the proceedings were abbreviated, and the liability exceeded the policy limit.
Issue(s)
Whether the trial court erred in rendering an amended decision in excess of jurisdiction. Whether the Advincula spouses had a cause of action against First Insurance. Whether the trial court erred in abbreviating proceedings and rendering judgment based solely on documentary evidence presented during pre-trial. Whether the trial court erred in holding petitioner liable in excess of the policy limits. Whether the petition for relief from judgment was filed out of time and whether First Insurance was guilty of gross negligence.
Ruling
The petition is DISMISSED. The questioned decision of the trial court in Civil Case No. 1104, having become final and executory, is AFFIRMED. The temporary restraining order issued on August 20, 1979, is lifted.
Ratio Decidendi
On the jurisdiction of the trial court: The Court affirmed that the trial court had jurisdiction over the plaintiffs' cause of action against the insurance company. It cited Section 416 of the Philippine Insurance Code (Presidential Decree No. 612), which provides that the authority of the Insurance Commissioner is concurrent with civil courts, and the filing of a complaint with the commissioner precludes civil courts only if the same subject matter is involved. In this case, the Advincula spouses filed a separate and independent civil action, and First Insurance was declared in default, waiving any objection to jurisdiction or the need to exhaust administrative remedies. On the cause of action against First Insurance: The Court affirmed that the Advincula spouses had a valid cause of action against First Insurance. It reiterated the settled rule that where an insurance contract provides for indemnity against liability to a third party, such third party can directly sue the insurer. This principle is rooted in the purpose of compulsory motor vehicle liability insurance, which is to provide compensation to innocent third parties. The insurer's liability accrues immediately upon the occurrence of the injury and does not depend on the recovery of a judgment against the insured. The Court cited Shafer v. Judge, RTC of Olongapo City to emphasize that statutes enabling an injured person to proceed directly against the insurer are liberally construed to protect injured persons against the insolvency of the insured. On the alleged error in abbreviating proceedings and rendering judgment based on documentary evidence: The Court found that First Insurance had been declared in default and had failed to file an answer, thus losing its standing in court and allowing judgment to be rendered based on the plaintiffs' evidence. Furthermore, during the pre-trial conference, when the respondent judge admitted the exhibits to abbreviate proceedings, no objection was interposed by Silverio Blanco, who was present. First Insurance, having been declared in default, had no standing to object at that stage. The decision became final and executory, precluding further challenges on this ground. On the alleged liability in excess of policy limits and the award to Blanco: The Court noted that the award of damages in favor of Blanco had no basis in the original complaint, which was for damages brought by the spouses against Blanco and First Insurance, with no claim by Blanco against the insurer. However, since the decision had already become final and executory, it could no longer be corrected or amended. Similarly, the claim that First Insurance's liability was limited to P20,000.00 could not be considered at this late stage, as the decision awarding damages had already attained finality. On the timeliness of the petition for relief from judgment and gross negligence: The Court upheld the trial court's denial of the petition for relief from judgment. It found that First Insurance received the amended decision on April 11, 1978, and filed its petition for relief on September 5, 1978, which was 191 days later, far exceeding the 60-day period allowed by Rule 38 of the Rules of Court. The Court also found First Insurance to be grossly and notoriously negligent, having been duly summoned and declared in default, and failing to take timely positive steps to vacate the order of default or the decision. The remedy of relief from judgment is an act of grace, requiring prompt action, which First Insurance failed to demonstrate.
Main Doctrine
A petition for relief from judgment filed out of time, particularly when the grounds for relief are based on alleged errors in the judgment itself rather than extrinsic fraud or mistake, and when the petitioner has been declared in default and has exhibited gross negligence in prosecuting its case, is correctly denied by the trial court.