FIRST INTEGRATED BONDING & INSURANCE COMPANY, INC., PETITIONER, VS. HON. HAROLD M. HERNANDO, VICTORINO ADVINCULA, ROMANA ADVINCULA, SILVERIO BLANCO & THE SHERIFF OF MANILA AND H…

This petition for certiorari under Rule 65 of the Revised
Rules of Court, seeks the annulment of the amended decision of respondent trial
court in Civil Case No. 1104 for allegedly having been rendered in excess of jurisdiction.  The same decision was sought to be annulled
in a petition for relief from judgment filed in the same case but the petition
was denied for having been filed out of time.

The narration of facts below was taken from the pleadings filed by
the parties.  As regards the proceedings following the promulgation of the amended decision, the
dates were supplied in the Comment and Answer filed by respondent judge and
which were not disputed by petitioner.

Silverio Blanco was the owner of a
passenger ­jeepney which he insured against
liabilities for death and injuries to third persons with First Integrated
Bonding and Insurance Company, Inc. (First Insurance) under Motor Vehicle
Policy No. V-05-63751 with the face value of P30,000.00
(p. 15, Rollo).

On November 25, 1976, the said jeepney
driven by Blanco himself bumped a five-year old child, Deogracias
Advincula, causing the latter’s death.

A complaint (pp. 38-41, Rollo)
for damages was brought by the child’s parents, the Advincula
spouses, against Silverio Blanco.  First Insurance was also impleaded
in the complaint as the insurer.  The
complaint was docketed as Civil Case No. 1104 of the Court of First Instance of
Abra (now Regional Trial Court).

Summons were served on Silverio Blanco and First Insurance.  However, only Blanco filed an answer.  Upon motion of the Advincula
spouses, First Insurance was declared in default (p. 45, Rollo)
on January 19, 1978.

Thereafter, a pre-trial conference was conducted where the Advincula spouses presented the following documentary
evidence:

“Exhibit ‘A’ – Marriage Certificate, Exhibit B – Birth
Certificate, Exhibit B-1 – the Certificate of the Local Civil Registrar,
Exhibit C – Certificate of Death, Exhibit C-1 – the official receipt of the
burial permit, Exhibit C-2 – the autopsy report, Exhibit D – filing fee under
official receipt in the amount of P80.00, Exhibit D-1 – list of actual expenses
in connection with the death and burial of the deceased Advincula,
Exhibit E – Criminal Case No. 666 of the Municipal Court of Tayum,
Abra entitled People of the Philippines versus Silverio Blanco for Homicide thru Reckless Imprudence,
Exhibit E-1 – sworn statement of Severino Balneg, Exhibit F – Tax Declaration No. 906 in the name of
Maria Blanco delivered by Silverio Blanco to the plaintiffs
as pledge of Silverio Blanco to settle the civil
aspect of this case.” (pp. 14-15, Rollo)

On the basis of the evidence presented by the Advincula
spouses, judgment was rendered by the trial court on March 1, 1978, the dispositive
portion of which states:

“WHEREFORE, for moral damages, this court adjudicates to the
plaintiffs P5,000.00; for the life of Deogracias Advincula P12,000.00,
for funeral expenses, P3,663.50 and for attorney’s fees, P3,000.00.  The satisfaction of these damages divulged
(sic) independently now upon the defendant insurance company and to pay the
costs of the proceedings.

“SO ORDERED.” (p. 16, Rollo)

First Insurance received a copy of the decision on March 14, 1978.  Upon motion of the Advincula
spouses, the decision was amended on March
27, 1978 (p. 17, Rollo), which, in
addition to the damages granted in the original decision, awarded damages in
the amount of P6,336.50 to Silverio
Blanco.  The dispositive
portion of the amended decision is quoted, as follows:

“WHEREFORE, for moral damages, this Court hereby adjudicates
to the plaintiffs P5,000.00; for the life of Deogracias Advincula P12,000.00;
for funeral expenses P3,663.50 and for attorney’s fees P3,000.00 or in the
total amount of P23,663.50 which must be satisfied independently by the
defendant First Integrated Bonding and Insurance Company, Inc. in favor of the
plaintiffs and the balance of P6,336.50 shall also be paid by said defendant
Insurance Company to the defendant Silverio
Blanco.  The grand total under the insurance
policy, Exhibit H, is P30,000.00.

“The defendant Insurance Company to pay the
costs of the proceedings.

“SO ORDERED.” (p. 17, Rollo)

The amended decision was received by First Insurance on April 11, 1978.  On May
11, 1978, entry of judgment was made, a copy of which was furnished
First Insurance on June 27, 1978.  Upon motion of the Advincula
spouses, an order granting execution was issued by the court on June 14, 1978, which was received by
First Insurance on August 1, 1978
(pp. 31-32, Rollo).

On September 5, 1978,
First Insurance filed a petition for relief from judgment in the same
case.  The petition was set for hearing
on September 28, 1978.  No appearance was entered by First Insurance
on the said date.  On October 4, 1978, the trial court issued
an order, denying the petition for relief from judgment (pp. 33-34, Rollo), a copy of which was received by First
Insurance on October 10, 1978
(p. 35, Rollo).  The order reads:

“The records of this case show that on April 11, 1978, the
defendant First Integrated Bonding and Insurance Company, Inc. received a copy
of the amended decision dated March 27, 1978 and found on page 30 of the
records of this case; on May 11, 1978, the Deputy Clerk of Court entered the
corresponding entry of judgment and the First Integrated Bonding and Insurance
Company, Inc. received a copy thereof on June 27, 1978.  On June 13, 1978, the plaintiffs moved for
execution of judgment and the same was granted pursuant to an Order of this Court
dated June 14, 1978 and found on page 35 of the records of this case.

“And now comes the petition for relief from the Order of
execution and judgment with preliminary injunction filed by First Integrated
Bonding and Insurance Co., Inc. and which was received by this Court on
September 5, 1978; on September 28, 1978, the plaintiffs filed their written
opposition to the petition for relief from judgment and preliminary
injunction.  The opposition is based on
three grounds, namely:  1.  that the petition
is filed out of time; 2.  that there was
gross and notorious negligence of the Insurance Company; 3.  that this case is within the jurisdiction of
this Court and therefore the cause of action of the plaintiffs deserves
judicial consideration.

“It was on April 11, 1978 that the First Integrated Bonding
and Insurance Co., Inc. received the amended decision and the petition for
relief from Order of Execution and judgment with preliminary injunction was
filed on September 5, 1978 or a period of 191 days already expired, that is,
more than 6 months already as required by Section 3, Rule 38 of the Rules Of
Court.  Consequently, the first ground
invoked by the opposition must be sustained. 
On the second ground, the records of this case show that the First
Integrated Bonding and Insurance Co., Inc. was duly summoned and served a copy
of the complaint on August 16, 1977 and it was received by the President of the
Insurance Company as shown by the certificate of Service of the Sheriff of
Manila and found in page 12 and page 13 of the records of this case; after the reglementary period to file an answer expired, the
plaintiffs move to declare the defendant insurance company in default and
likewise asked the Court that they be allowed to present their evidence on
January 23, 1978 and which was granted by this Court pursuant to an order dated
January 19, 1978 and found on page 16 of the records of this case; after the
reception of the evidence for the plaintiffs this Court rendered a decision on
March 1, 1978 and which is found on pages 23 to 26 of the records of this case;
subsequently, on March 27, 1978, an amended decision was issued by this Court
and it is found on page 30 of the records of this case.  Clearly, therefore, the First Integrated
Bonding and Insurance Co., Inc. was grossly and
notoriously negligent in giving the proper attention to this case.  This kind of gross and notorious negligence
can not be considered excusable.  The
last ground is that this Court has jurisdiction over the plaintiffs’ cause of
action against the insurance company. 
This ground is well-taken because according to Section 416 of the
Philippine Insurance Code, Presidential Decree No. 612, it provides that the
authority to adjudicate granted to the Commissioner of insurance shall be
concurrent with that of the civil courts, but the filing of a complaint with
the commissioner shall preclude the civil courts from taking cognizance of a
suit involving the same subject matter. 
Furthermore, the plaintiffs did not intervene in the criminal aspect of
this case, instead, they filed a separate and independent civil action on July 26, 1977 and which is now the
present Civil Case No. 1104.  It may be
added, that the matter of exhaustion of administrative remedy maybe waived
which has been so in the present case because the First Integrated Bonding and
Insurance Co., Inc, was declared in default.

“In view of all the foregoing
considerations, the petition for relief from the order of execution and
judgment with preliminary injunction, for lack of merit, is hereby denied.

“SO ORDERED.”
(pp. 33-34, Rollo)

First Insurance filed a motion for reconsideration of the order
denying the petition for relief on May
14, 1979.  The motion was set
for hearing and again no appearance was entered by the movant
First Insurance (p. 35, Rollo), prompting the
trial court to deny the same.

On August 13, 1979,
the herein petitioner First Insurance filed this petition for certiorari
on the following grounds:

1.    The trial court erred in deciding for the
respondent spouse(s) where there exists no cause of action against the herein
petitioner.

2.    The trial court erred when it abbreviated
the proceeding and rendered judgment based only on the documentary evidence presented  during the
pre-trial conference.

3.    The trial court erred in holding the petitioner
liable in excess of the limits of liability as provided for in the policy
contract.

On August 20, 1979,
this Court issued a temporary restraining order enjoining the respondents from
enforcing the Writ of Execution dated August
1, 1978 (p. 19, Rollo).

It is the contention of the petitioner that the Advincula spouses have no cause of action against it.  As parents of the victim, they may proceed
against the driver, Silverio Blanco on the basis of
the provisions of the New Civil Code. 
However, they have no cause of action against First Insurance, because
they are not parties to the insurance contract.

It is settled that where the insurance contract provides for
indemnity against liability to a third party, such third party can directly sue
the insurer (Caguia v. Fieldman’s
Insurance Co., Inc. G.R. No. 23276, November 29, 1968, 26 SCRA 178).  The liability of the insurer to such third
person is based on contract while the liability of the insured to the third
party is based on tort (Malayan Insurance Co., Inc. v. CA, L-36413, September
26, 1988, 165 SCRA 536).  This rule was
explained in the case of Shafer v. Judge, RTC of Olongapo
City, Br. 75, G.R. No. 78848, November 14, 1988:

“The injured for whom the contract of insurance is intended
can sue directly the insurer.  The
general purpose of statutes enabling an injured person to proceed directly
against the insurer is to protect injured persons against the insolvency of the
insured who causes such injury, and to give such injured person a certain beneficial
interest in the proceeds of the policy, and statutes are to be liberally
construed so that their intended purpose may be accomplished.  It has even been held
that such a provision creates a contractual
relation which inures to the benefit of
any and every person who may be
negligently injured by the named insured
as if such injured person were specifically
named in the policy.

“In the event that the injured fails or refuses to include the
insurer as party defendant in his claim for indemnity against the insured, the
latter is not prevented by law to avail of the procedural rules intended to
avoid multiplicity of suits.  Not even
a ‘no action’ clause under the policy
which requires that a final judgment be
first obtained against the insured and
that only thereafter can the person insured
recover on the policy can prevail over
the Rules of Court provisions aimed at
avoiding multiplicity of suits.” (p. 391, 167
SCRA) (underscoring supplied)

First Insurance cannot evade its liability as insurer by hiding
under the cloak of the insured.  Its
liability is primary and not dependent on the recovery of judgment from the
insured.

“Compulsory Motor Vehicle Liability Insurance (third party liability, or TPL) is primarily intended to provide
compensation for the death or bodily injuries suffered by innocent third
parties or passengers as a result of a negligent operation and use of motor
vehicles.  The victims and/or their
dependents are assured of immediate financial assistance, regardless of the
financial capacity of the motor vehicle owners.

“x x x the
insurer’s liability accrues immediately upon the occurrence of the injury or
event upon which the liability depends, and does not depend
on the recovery of judgment by the
injured party against the insured (Shafer v.
Judge, RTC of Olongapo, supra, p. 390)

It is true that Blanco denied that he was negligent when the
incident occurred.  However, during the
pre-trial conference, when respondent judge admitted all the exhibits of the
plaintiffs to abbreviate the proceedings, no objection was interposed by
Blanco.  When a decision was rendered
based only on the exhibits of the plaintiffs, Blanco likewise did not object.  No motion for reconsideration was filed by
either Blanco or First Insurance.  Hence,
the decision became final and may no longer be attacked.

It should be noted also that First Insurance was declared in
default because of its failure to file an answer.  As far as it was concerned, it failed to
raise any triable issue.  It lost its standing in court and judgment
may be rendered against it on the basis only of the evidence of the Advincula spouses.

Petitioner had been given its day in court.  Despite its having been declared in default
and its failure to file a motion to lift the order of default, it was still
notified of the subsequent proceedings in the trial court.  But no positive step was taken by it on time
to vacate the order of default, the decision nor the amended decision.  Instead, it chose to file a petition for
relief from judgment on September 1,
1978 almost five (5) months from its receipt of a copy of the
amended decision on April 11, 1978.  Clearly, the said petition for relief from
judgment was filed out of time.  The
rules require that such petitions must be filed within sixty (60) days after
the petitioner learns of the judgment and not more than six (6) months after
such judgment was entered (Rule 38, Section 3). 
The period fixed by Rule 38 of the Rules of Court is non-extendible and
never interrupted.  It is not subject to
any condition or contingency, because it is itself devised to meet a condition
or contingency.  The remedy allowed by
Rule 38 is an act of grace, as it were, designed to give the aggrieved party
another and last chance.  Being in the
position of one who begs, such party’s privilege is not to impose conditions,
haggle or dilly-dally, but to grab what is offered him (Palomares,
et al. v. Jimenes, et al., 90 Phil. 773, XVII, L.J.,
No. 3, p. 136, Rafanan v. Rafanan,
35 O.G. 228; Santos v. Manila Electric Co., G.R. L-7735, December 29, 1955; Gana v. Abaya, G.R. No. L-3106,
December 29, 1955, cited in Vicente J. Francisco, The Revised Rules of Court of
the Philippines, Annotated and Commented, Vol. 11, p. 580).

It appears that the award of damages in favor of Blanco has no
basis.  The complaint in Civil Case 1104
was for damages brought by the spouses against Blanco and First Insurance.  Blanco did not put up any claim against the
latter.  However, since the said decision
had already become final and executory, it can no
longer be corrected or amended.  In the
same vein, the claim of petitioner that its liability to third parties under
the insurance policy is limited to P20,000.00 only can
no longer be given consideration at this late stage, when the decision of the
trial court awarding damages had already become final and executory.

ACCORDINGLY, finding respondent judge to have acted within
his jurisdiction in denying the petition for relief from judgment, 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 hereby lifted.

Costs against petitioner.

SO ORDERED.

Narvasa, (Chairman), Cruz, Gancayco, and Grino-Aquino, JJ., concur.