Agency, Cases Where Special Powers of Attorney Are Necessary

Home Insurance Company v. United States Lines Co.

G.R. No. L-25593 November 15, 1967

Facts:

SS Pioneer Moon arrived in Manila sometime in 1964

- discharged unto the custody of the BUREAU OF CUSTOMS, as arrastre operator, 200 cartons of
carbonized adding machine rolls (I dont know what this is lol)
- this was consigned to Burroughs, Limited

When the cargo was delivered to the consignee, however, several cartons were damaged

Consignee claimed the P2,605.64 worth of damage from:

- Bureau of Customs
- United Lines Company (owner of the vessel)
- Home Insurance Company (which insured the cargo)

Home Insurance paid the claim and demanded reimbursement from either arrastre operator or the
carrier (Customs or United Lines)

When both rejected the claim, the Home Insurance Company, as subrogee, filed on June 11, 1965 an
action against the Republic of the Philippines, the Bureau of Customs and the United States Lines, in
the alternative, for the recovery of P2,605.64, with interest plus costs

United States Lines

- disclaimed liability on the ground that the damage was incurred while the cargo was in the
possession of Customs

Customs
- after denial of their motion to dismiss, answered and alleged among others, non-suability and
non-compliance with Act 3083, as amended by CA 327 which requires money claims to be filed
with the Auditor General

December 7, 1965: Date set for pre-trial

- Only the counsel for the plaintiff appeared, who upon being asked for written authority to
compromise, assured the court that though he had no written authority, he had such
authority verbally given by the plaintiff.
- On the same day, the court dismissed the case for failure of the plaintiff to appear at the pre-trial
conference

Issue:
Whether or not the lower court erred in dismissing the case for failure of the plaintiff to appear

Held:
NO. Taking into consideration said purpose and spirit of the new Rules as well as the facts in the present
case, We find no reversible error committed by the court a quo in dismissing the action for the reason that
only plaintiff's counsel appeared at the pre-trial (and not plaintiff's official representative also). True, said
counsel asserted that he had verbal authority to compromise the case. The Rules, however, require, for
attorneys to compromise the litigation of their clients, a "special authority" (Section 23, Rule 138, Rules of
Court). And while the same does not state that the special authority be in writing, the court has every reason
to expect that, if not in writing, the same be duly established by evidence other than the self-serving assertion
of counsel himself that such authority was verbally given him.

Authority to compromise cannot lightly be presumed. And if, with good reason, the judge is not satisfied that
said authority exists, as in this case, dismissal of the suit for non-appearance of plaintiff in pre-trial is
sanctioned by the Rules.

WHEREFORE, the appealed order of dismissal is affirmed, without costs. So ordered.