SECOND DIVISION
G.R. No. 222455, September 18, 2019
GERRY S. MOJICA, PETITIONER, v. GENERALI PILIPINAS LIFE ASSURANCE COMPANY, INC., RESPONDENT.
D E C I S I O N
CARPIO, ACTING C.J.:
WHEREFORE, judgment is hereby rendered in favor of the plaintiff, ordering the defendant:The trial court held that the contractual relationship between the parties as expressly provided in the Unit Manager's Agreement, Associate Branch Manager's Agreement, and the Memorandum of Agreement shows that petitioner was respondent's agent and not its employee. Under the Memorandum of Agreement, the monthly drawing allowance given to petitioner was subject to meeting monthly validation requirements. Thus, petitioner should have liquidated the allowances he received for a period of 18 months from February 2001 to July 2002 under the terms specified in the Memorandum of Agreement. Petitioner himself testified that he failed to liquidate the allowances he received. The trial court ruled that petitioner failed to prove that he satisfied the monthly validation requirements specified in the Memorandum of Agreement, and he is thus obliged to repay respondent the monthly drawing allowances he advanced.SO ORDERED.14
- To pay the plaintiff the amount of Php514,639.17 as unpaid monthly drawing allowances he advanced, HMI membership dues, group premium and other liabilities, plus an interest computed at 6% per annum from the finality of this decision until fully paid;
- To pay the plaintiff the amount of Php70,000 as attorney's fees and costs of suit.
WHEREFORE, the decision of the Regional Trial Court of Makati City, Branch 141 in Civil Case No. 04-1111 dated June 24, 2010 is AFFIRMED with MODIFICATION. Defendant-appellant Gerry Santos Mojica shall pay plaintiff-appellee Generali Pilipinas Life Assurance Company, Inc. the principal amount of Five Hundred Fourteen Thousand Six Hundred Thirty-Nine and 17/100 Pesos (P514,639.17), with interest of six (6%) percent delete [sic] per annum on the aforestated principal obligation computed from March-6, 2003 until finality of this decision and additional interest of six [percent] (6%) per annum on the judgment award until the same is satisfied. The award of attorney's fees is DELETED.The Court of Appeals held that petitioner is an independent contractor under the terms of the Unit Manager's Agreement and the Associate Branch Manager's Agreement. The Court of Appeals found that petitioner was authorized to: (1) recruit insurance agents with whom he exercised the right to assign, control and supervise the performance of activities necessary for the operations of his unit; (2) supply his branch with the necessary tools, with an option of availing the monthly drawing allowance to meet his requirement pursuant to the terms of the Memorandum of Agreement; and (3) choose how to conduct his business. Furthermore, petitioner received commissions and not salaries or wages. Thus, the Court of Appeals concluded that petitioner is an independent contractor and not an employee of respondent.
SO ORDERED.15
xxx. The Unit Manager in performance of his duties defined herein, shall be considered an independent contractor and not an employee of Generali Pilipinas. He shall be free to exercise his own judgment as to time, place and means of soliciting insurance. However, he shall observe and conform to all existing rules and regulations as may be prescribed by Generali Pilipinas from time to time. Under no circumstance shall the Unit Manager (and/or his agents) be considered employees of Generali Pilipinas.16 (Emphasis supplied)The Associate Branch Manager's Agreement dated 24 January 2002 similarly states:
The Branch Manager, in the performance of his duties defined herein, shall be considered an independent contractor and not an employee of Generali Pilipinas. He shall be free to exercise his own judgment as to time, place and means of soliciting insurance. However, he shall observe and conform to all existing rules and regulations as may be prescribed by Generali Pilipinas from time to time.17 (Emphasis supplied)As an independent contractor, petitioner earned through commissions and was not paid a fixed salary or wage. Petitioner's remuneration on a commission basis is expressly provided under the Unit Manager's Compensation Schedule18 which was incorporated in the Unit Manager's Agreement, and the Associate Branch Manager's Compensation Schedule19 which formed part of the Associate Branch Manager's Agreement.
II. BASIC REMUNERATION Override CommissionsSimilarly, the Associate Branch Manager's Compensation Schedule provides:
Policy Year % of Basic Commissions* 1 20% 2 10% 3 10%
* Applies to all plans except Five-Year Renewable & Convertible Term, Decreasing Term and other Bancassurance plans. Also excludes the Unit Manager's commissions on his personal businesses.
x x x x20
II. BASIC COMPENSATIONAnother factor which militates against the claim of petitioner that he is an employee of respondent is the latter's lack of control over the means and methods employed by petitioner in the performance of his duties. Under the four-fold test in determining the existence of an employer-employee relationship which considers the following elements: (1) the power to hire; (2) the payment of wages; (3) the power to dismiss; and (4) the power to control, the last is the most important factor.22 As found by the trial court and the Court of Appeals, petitioner carried on the business of his unit independently and exercised wide latitude in the conduct of his business. In fact, as expressly stated in the Unit Manager's Agreement and the Associate Branch Manager's Agreement, petitioner was "free to exercise his own judgment as to time, place and means of soliciting insurance."
Override Commissions
Policy Year % of Basic Commissions* 1 8% 2 4% 3 4%
* Applies to all Plans except 5-Year Renewable & Convertible Term, Decreasing Term and other Bancassurance Plans. Also excludes the Branch Manager's commissions on his personal business.
x x x x21
That for and in consideration of the mutual covenants and agreements made by the parties hereto, the Company and the Unit Manager, by these presents enter into this Memorandum of Agreement, whereby the Company grants to the Unit Manager a gross MONTHLY DRAWING ALLOWANCE (MDA) of Forty Thousand Pesos (Php40,000.00) per month, subject to the terms and conditions embodied in the Company's Special Agency Leader Drawing Allowance Program. The Unit Manager binds himself/herself to abide by all the terms and conditions of said program as enumerated in this Memorandum of Agreement as follows:
1. ObjectiveUnder the Memorandum of Agreement executed by the parties, the monthly drawing allowance granted to petitioner is "an advance against the Manager's total expected future override commission earnings over a period of eighteen (18) months or less," and "subject to meeting specified monthly validation requirements." The Memorandum of Agreement requires petitioner to repay and validate the monthly drawing allowances by applying his commission earnings against the monthly drawing allowances.
To extend financial assistance to a newly appointed Unit Manager in the form of an advance against the Manager's total expected future override commission earnings over a period of eighteen (18) months or less, for the purpose of addressing his/her monthly income needs, and shall be released by way of a MONTHLY DRAWING ALLOWANCE (MDA), subject to meeting specified monthly validation requirements. This facility (MDA) shall not negate the fact of the Unit Manager being an independent contractor who is free to exercise his own judgment as to time, place and means of soliciting insurance, and shall therefore not be construed as creating an employer-employee relationship between the Company and the Unit Manager.
x x x x
2.5 The monthly drawing allowance shall be repaid and validated monthly over a period of eighteen (18) months or less as per Exhibit B-1, attaching herewith and forming part of this Memorandum of Agreement by applying the Unit Manager's override commission earnings and commissions on personal business, if any, (net of 10% withholding tax) against total monthly drawing allowances. x x x x 2.6 While enrolled in the program, all present and future commissions of the Manager (override commissions as well as agents' commissions on his/her personal business) shall be pledged to the company as security to offset any net outstanding accountability owed by the manager to the company in case of insufficient earnings as against the advances/monthly drawing allowance received by him/her. 2.7. At the end of the eighteen (18) months or sooner, should the Unit Manager either opt to get out of the program or be disqualified from the program for the non-meeting of validation requirements, resign or be terminated, the total debits (advances) and total credits (commissions earned) will be determined and this will put the Manager on either a net debit or net credit balance. Any net credit balance will be given in lump sum to the Manager at the end of the Program or if he opts to get out of the program sooner, or upon resignation while a net debit balance will be paid in equal monthly installments for a maximum period of six months at 12% interest per annum if the manager completes the 18 month period, or opts to get out of the Program sooner. In case of resignation or termination however, any debit will be paid in full within three (3) days from termination or acceptance of resignation.25 (Boldfacing and underscoring supplied)
Art. 2209. If the obligation consists in the payment of a sum of money, and the debtor incurs in delay, the indemnity for damages, there being no stipulation to the contrary, shall be the payment of the interest agreed upon, and in the absence of stipulation, the legal interest, which is six percent per annum. (Emphasis and italicization supplied)Thus, if the rate of interest is stipulated, such stipulated interest shall apply and not the legal interest,27 provided the stipulated interest is not excessive and unconscionable.28The stipulated interest shall be applied until full payment of the obligation because that is the law between the parties.29 The legal interest only applies in the absence of stipulated interest.
Petitioner Gerry S. Mojica is ordered to pay respondent Generali Pilipinas Life Assurance Company, Inc. the following:SO ORDERED.
- Five Hundred Eight Thousand Six Hundred Thirty- One and 5/100 Pesos (P508,631.05) representing the unpaid monthly drawing allowances plus stipulated interest at 12% per annum to be computed from 6 March 2003, the date of extrajudicial demand, until full payment.
- Six Thousand Eight and 12/100 Pesos (P6,008.12) representing unpaid Health Maintenance Insurance dues, group premium for hospitalization, and other payables plus legal interest at the rate of 12% per annum to be computed from 6 March 2003, the date of extrajudicial demand, until 30 June 2013, and thereafter at the rate of 6% per annum from 1 July 2013 until full payment.
- Legal interest on the interest due on the unpaid monthly drawing allowances and unpaid Health Maintenance Insurance dues, group premium for hospitalization, and other payables, accruing as of judicial demand, at the rate of 12% per annum from the date of judicial demand on 28 September 2004 until 30 June 2013, and thereafter at the rate of 6% per annum from 1 July 2013 until full payment.
Endnotes:
1 Under Rule 45 of the 1997 Rules of Civil Procedure.
2Rollo, pp. 38-51. Penned by Associate Justice Myra V. Garcia-Fernandez, with Associate Justices Fernanda Lampas Peralta and Francisco P. Acosta concurring.
3 Id. at 35-36.
4 Id. at 165-171-A. Penned by Judge Maryann E. Corpus-Mañalac.
5 Id. at 57-61.
6 Id. at 65-70.
7 Id. at 78-83.
8 Id. at 93-96.
9 Id. at 101.
10 Id. at 113-117.
11 Id. at 118-122. Orders dated 7 July 2008 and 31 October 2008.
12 Id. at 139-143. Penned by Associate Justice Estela M. Perlas-Bernabe (now a member of this Court), with Associate Justices Pampio A. Abarintos and Romeo F. Barza concurring.
13 Id. at 141.
14 Id. at 171-171-A.
15 Id. at 50.
16 Id. at 65.
17 Id. at 78.
18 Id. at 71-72.
19 Id. at 84-85.
20 Id. at 71.
21 Id. at 84.
22Royale Homes Marketing Corp. v. Alcantara, 739 Phil. 744 (2014); AFP Mutual Benefit Association, Inc. v. NLRC, 334 Phil. 712 (1997).
23Rollo, p. 360. Per Entry of Judgment, the Court of Appeals' Decision dated 23 June 2009 became final and executory on 25 October 2009.
24 Id. at 93-96.
25 Id. at 93-94.
26 Id. at 101. The letter reads:March 6, 200327Isla v. Estorga, G.R. No. 233974, 2 July 2018; Security Bank and Trust Co. v. RTC-Makati, Br. 61, 331 Phil. 787(1996).
Mr. Gerry S, Mojica
Lot 9 Blk. 6 G. Laurente Ave.,
Brgy. Memije GMA
Cavite
Dear Mr. Mojica,
We hereby accept your resignation as Financial Counselor effective March 01, 2003 and we are canceling your FCs appointment effective the same date.
In view of this you are hereby directed to settle in full your outstanding accountabilities with the company, as of December 2002 this amount tentatively stands at Php551,830.64 pending our Accounting Department's final determination of your accountability with us. In case however that you are unable to do so, you must settle the account over a period of [twelve] (12) months at 12% interest through twelve postdated checks. You are required to return all Company materials including, but not limited to, Provisional Receipts issued under your name.
We trust you will attend to this matter immediately.
Thank you.
(signed)
Roberto D. Crisologo
AVP-Sales Operations
28 In Asian Cathay Finance and Leasing Corp. v. Spouses Gravador, 637 Phil. 504, 510-511 (2010), this Court declared: "It is true that parties to a loan agreement have a wide latitude to stipulate on any interest rate in view of Central Bank Circular No. 905, series of 1982, which suspended the Usury Law ceiling on interest rate effective January 1, 1983. However, interest rates, whenever unconscionable, may be equitably reduced or even invalidated. In several cases, this Court had declared as null and void stipulations on interest and charges that were found excessive, iniquitous and unconscionable." See also Vitug v. Abuda, 116 Phil. 540 (2016); Spouses Silos v. Philippine National Bank, 738 Phil. 156(2014).
29 Article 1159 of the Civil Code provides:
Art. 1159. Obligations arising from contracts have the force of law between the contracting parties and should be complied with in good faith.
30The trial court found that the P6,008.12 which plaintiff [respondent] advanced for defendant's [petitioner's] medical insurance and group life insurance was sufficiently proven and that defendant [petitioner] failed to disprove his liability to reimburse the amount. Rollo, p. 171.
31 Central Bank Circular No. 416, issued on 29 July 1974, prescribed a 12% per annum interest on loans, or forbearance of any money, goods or credits, and in judgments, in the absence of a stipulated interest.
32 Bangko Sentral ng Pilipinas Monetary Board (BSP-MB) Circular No. 799, which took effect on 1 July 2013, provides that in the absence of stipulated interest, the rate of interest for loans, or forbearance of any money, goods or credits, and judgments shall be 6% per annum.
CAGUIOA, J.:
Petitioner Gerry S. Mojica is ordered to pay respondent Generali Pilipinas Life Assurance Company, Inc. the following:SO ORDERED.
- Five Hundred Eight Thousand Six Hundred Thirty-One and 5/100 Pesos (P508,631.05) representing the unpaid monthly drawing allowances plus stipulated interest at 12% per annum to be computed from March 6, 2003, the date of extra-judicial demand, until full payment; and interest on the stipulated interest due that has accrued thereon from extrajudicial demand to judicial demand, at the rate of 6% per annum from September 28, 2004, the date of judicial demand, until full payment.
- Six Thousand Eight and 12/100 Pesos (P6.008.12) representing unpaid Health Maintenance Insurance dues, group premium for hospitalization, and other payables plus legal interest at the rate of 6% per annum to be computed from extrajudicial demand until full payment.
Endnotes:
1 G.R. No. 225433, August 28. 2019.
2 J. Caguioa, Concurring and Dissenting Opinion, G.R. No. 225433, August 28, 2019, p. 48. "A forbearance is (1) an agreement or contractual obligation (2) to refrain from enforcing payment or to extend the period for the payment of (3) an obligation that has become due and demandable. (4) in return for some compensation or interest."
3 CIVIL CODE, Art. 1306.
4Ponencia, p. 10.
5 ART. 2212. Interest due shall earn legal interest from the time it is judicially demanded, although the obligation may be silent upon this point.
6 See J. Caguioa, Concurring and Dissenting Opinion, supra note 2, at 49, paragraph II(a) of the Guidelines on the Imposition of Interest, which states:II. All Other Monetary Obligations Not Constituting Loans or Forbearances7 See Reformina v. Tomol, Jr., 223 Phil. 472 (1985); National Power Corp. v. Angas, 284-A Phil. 39 (1992).
- If the parties stipulate on the payment of interest and the rate thereof, the interest due shall be that which has been stipulated. Such interest shall run in accordance with the parties' agreement, or in default thereof, from extrajudicial or judicial demand, and shall continue to run until full payment. Such stipulated interest shall, except as otherwise provided, be controlling as the compensatory interest. In addition, any stipulated interest that has accrued at the time of judicial demand shall itself earn interest from judicial demand until full payment at the 6% per annum legal rate provided under Article 2209 in relation to Article 2212 of the Civil Code.
8 See Ponencia, p. 11.
9Isla v. Estorga, G.R. No. 233974, July 2, 2018, p. 7; see also Hun Hyung Park v. Eung Won Choi, G.R. No. 220826, March 27, 2019, p. 17.