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[ G.R. No. 142934. July 10, 2000]

CIGNA INSURANCE CO. OF NORTH AMERICA vs. EULALIO GLINOGA, et al.

FIRST DIVISION

Gentlemen:

Quoted hereunder, for your information, is a resolution of this Court dated JUL 10 2000.

G.R. No. 142934 (Cigna Insurance Company of North America vs. Eulalio Glinoga and Luis Y. Glinoga, Jr.)

Petitioner Cigna Insurance Company of North America, through this petition for review on certiorari, seeks to reverse and set aside the Decision, dated 14 February 2000, of the Court of Appeals affirming the denial by the Regional Trial Court, Branch 146 of Makati City, of petitioner's motion to dismiss. Likewise sought to be reversed is the appellate court's Resolution, dated 12 April 2000, denying petitioner's motion for reconsideration.

Respondents Eulalio and Luis, both surnamed Glinoga, filed before the RTC an action for, among others, "specific performance to render an accounting" against petitioner. The complaint alleged that petitioner entered into an agreement with respondents whereby the latter would "work out the accreditation of CIGNA as a member establishment with the credit card companies" and that respondents "were to receive a commission of 20% less the credit card fee of the amount of all premiums collected through the credit card companies with which plaintiffs [respondent herein] had CIGNA accredited.

The complaint further alleged that respondents subsequently had petitioner accredited with six (6) credit card companies namely: Bankard, Chargekard, Diners, Pacificard, Equitable Card and Visa. Some time in 1983, petitioner started the mass marketing of insurance through the credit card companies. In that same year, respondent Eulalio assigned to respondent Luis his (Eulalio) commission under the agreement.

From 1983 to 1991, petitioner allegedly remitted to respondent Luis the commissions on premium payments made to CIGNA through the credit card companies. In 1992, petitioner failed to remit to respondent Luis his commissions for premium payments paid through the Diners Club Credit Card. For premium payment paid through Bankard, the last remittance made to respondent Luis was on 20 June 1996.

Thereafter, respondents sent several letters to petitioner demanding payment of their commissions. Despite said repeated demands, respondents did not receive any satisfactory reply from petitioner. Respondents thus filed the complaint with the RTC.

Instead of filing a responsive pleading, petitioner filed a motion to dismiss the complaint on grounds that the complaint failed to state a cause of action and that the alleged contract sued upon is void. Petitioner alleged in the main that the complaint does not state that respondent Eulalio is a licensed insurance agent. This being so, he is allegedly not entitled to the payment of commission for services rendered in obtaining insurance following Section 299 of the Insurance Code and Section 2.1 of Insurance Memorandum Circular No. 3-93. Thus, petitioner maintained, absent such allegation, i.e., that respondent were licensed insurance agents, respondents' complaint failed to state a cause of action. Further, as an "unlicensed" insurance agent, the contract sued upon by respondents is allegedly void ab initio.

In its Order, dated 14 October 1997, the RTC denied the motion to dismiss holding that "the complaint, standing alone, is sufficient to compel a judgment in accordance with its prayer." Petitioner's motion for reconsideration was likewise denied by the trial court in its Order, dated 12 December 1997.

Aggrieved, petitioner filed a petition for certiorari with the CA alleging grave abuse of discretion on the part of the RTC in denying the motion to dismiss. In its assailed decision and resolution, however, the CA affirmed the denial of petitioner's motion to dismiss.

In this petition for review on certiorari, petitioner raises the followng issues:

a) Whether or not the Court of Appeals correctly held that, being interlocutory, the orders of the trial court assailed in CIGNA's petition for certiorari could not be the subject of the extraordinary remedy of certiorari;

b) Whether or not the Court of Appeals correctly held that the trial court did not commit grave abuse of discretion amounting to lack or excess of jurisdiction when it rendered the assailed orders a quo; and

c) Whether or not the Court of Appeals correctly held that, in view of respondent's claim (which was not raised in the complaint but in their opposition to CIGNA's motion to dismiss and their rejoinder) that their alleged contract with CIGNA was not one of "insurance agency" but a "special agency", a determination of the legality of that contract necessitated the presentation of evidence at the trial proper. (Rollo, pp. 30-31)

These issues may be subsumed under the issue of whether the complaint below alleges a cause of action against petitioner and the CA properly found that the RTC committed no grave abuse of discretion in denying petitioner's motion for reconsideration. We rule in the affirmative.

To determine whether a complaint states a cause of action, it must contain the three (3) essential requisites of a cause of action, namely: (1) the legal right of the plaintiff; (2) the correlative obligation of the defendant, and (3) the act or omission of the defendant in violation of said legal right. If these elements are absent, the complaint becomes vulnerable to a motion to dismiss on the ground of failure to state a cause of action (San Lorenzo Village, Inc. vs. CA, 288 SCRA 115 [1998]).

As alleged in the complaint, under the agreement between respondents and petitioner, respondents, after they had successfully accredited petitioner with the credit card companies, are entitled to the payment of commissions from premium payments received by petitioner made through these credit cards. As further alleged, petitioner, without valid reason, breached its obligation under said agreement as it stopped remitting the commissions due respondents beginning 1992. By these allegations, all the three (3) elements of a cause of action have clearly been satisfied.

Moreover, a motion to dismiss on the ground of failure to state a cause of action in the complaint hypothetically admits the truth of the facts alleged therein. As correctly found by the trial court and the CA, the complaint filed by respondents, standing alone, is sufficient to warrant a judgment in accordance with the prayers therein (citing De Dios vs. Bristol Laboratories, 55 SCRA 349 [1974]). That respondents are not licensed insurance agents, as alleged by petitioner, is a matter of defense that must be proven during trial on the merits.

In sum, the Court finds that the CA committed no reversible error in affirming the denial by the RTC of petitioner's motion to dismiss.

ACCORDINGLY, the Petition is DENIED for lack of merit.

Very truly yours,

VIRGINIA ANCHETA-SORIANO

Clerk of Court

(Sgd. By) ENRIQUETA ESGUERRA-VIDAL

Asst. Clerk of Court

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