30. Bay View Hotel v. Ker & Co.

(1982)

FACTS:
Sometime in January 1958, Bayview Hotel secured a fidelity guarantee bond from Ker & Co.,
a local agent of Phoenix Co., a foreign company. The bond was for its accountable employees
for acts of fraud and dishonesty.

One of the employees was found to have unremitted collections and cash shortage. Bayview
filed claims for payments. Ker & Co., denied. The reasons are non-compliance to the conditions
stipulated in the insurance policy, non-presentation of evidence regarding the various charges
of dishonesty, non-production of the documents to prove alleged loss and misrepresentation
against the employee Tomas Ablaza. Ker & Co. likewise averred that it was just an agent and
as such, was not liable under the policy.

ISSUE:
1. Whether or not Ker & Co. is liable?
2. Whether the admission of Ker & Co. applies to Phoenix Co. as well

HELD:
1. No. Being merely an agent, Ker & Co. was not liable under the policy.
2. Yes. Since an agent may do such acts as may be conducive to the accomplishment of
the purpose of the agency, admissions secured by the agent within the scope of the
agency ought to favor the principal. This has to be the rule, for the act or declarations
of an agent of the party within the scope of the agency and during its existence are
considered and treated in turn as the declarations, acts and representations of his
principal 1 and may be given in evidence against such party.