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[G.R. No. 146543.March 12, 2001]

PHIL. BRITISH ASSURANCE CORP. vs. DIAMOND MOTORS, et al.

SECOND DIVISION

Gentlemen:

Quoted hereunder, for your information, is a resolution of this Court dated MAR 12 2001.

G.R. No. 146543(Philippine British Assurance Corp. vs. Diamond Motors, Arnold B. Hababag and the Court of Appeals.)

On June 28, 1996, the Regional Trial Court, Branch 266, Pasig City, rendered a decision in Civil Case No. 62505 (Diamond Motors Corporation v. Philippine British Assurance Co. Inc. and Arnold B. Hababag) ordering petitioner Philippine British Assurance Corporation (PBAC) to pay Diamond Motors Corporation (hereinafter DMC) the amount of P287,220.18 and, jointly and severally with respondent Arnold B. Hababag, the amount of P1,050,736.90, plus six percent interest to be computed from October 16, 1992. In addition, PBAC was ordered to pay to DMC attorney's fees in the amount of P267,591.41, of which P210,147.38 is to be paid by it jointly and severally with Hababag.

PBAC and Hababag separately appealed to the Court of Appeals. However, for its failure to file its appellant's brief, PBAC's appeal was dismissed. Only Hababag's appeal remained. On December 19, 2000, the Court of Appeals affirmed the decision of the trial court. PBAC, which was served a copy of the Court of Appeals' decision, filed this petition for review.

The petition has no merit. As a result of the dismissal of PBAC's appeal, the decision of the trial court, as to PBAC, became final. Consequently, PBAC cannot file this petition for review on certiorari of the decision of the Court of Appeals. Petitioner could have appealed from the dismissal of its appeal, but it did not do so. Hence, it is barred from filing this petition.

Nor is the petition for review filed by PBAC meritorious. PBAC's liability to DMC resulted from its having authorized Hababag, one of its agents, to contract with DMC for the repair of cars insured by it for claims not exceeding P10,000.00. On the other hand, PBAC's obligation to pay P1,050,736.90 to DMC, for claims exceeding P10,000.00, i.e., beyond the amount of the allowable claim under DMC's agreement with Hababag, is based on Art. 1911 of the Civil Code which provides that even when the agent has exceeded his authority, the principal is solidarily liable with the agent if the latter allowed the former to act as though he had full powers.

In this case, PBAC never informed DMC of the limitation of its agent's authority despite the fact that PBAC knew that Hababag had authorized claims for repair in excess of P10,000.00. Contrary to petitioner's contention, DMC was not required to inquire into the extent of Hababag's authority as it did not know and had no reason to believe that Hababag acted in excess of his authority. At any rate, petitioner's interests are adequately protected. It can seek reimbursement from Hababag in case DMC demands payment from it alone.

As to petitioner's claim that the total award of attorney's fees in the amount of P267,591.41 (not P497,367.56) is void for lack of basis, suffice it to say that the amount represents 20% of the total amount awarded to DMC, the rate agreed upon by DMC and its counsel. The Court finds this amount reasonable (See Philippine Air Lines Supervisors' Association v. Jimenez, 57 SCRA 260 (1974)).

WHEREFORE, the petition for review on certiorari is DENIED for lack of showing that the Court of Appeals committed a reversible error.

Very truly yours,

(Sgd.) TOMASITA M. DRIS
Clerk of Court


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