VDA DE MAGLANA v.

CONSOLACION 212 SCRA 268ROMERO; August 6, 1992 NATURE Petition for certiorari FACTS - Lope Maglana was an employee of the Bureau ofCustoms whose work station was at Lasa, hereinDavao City. One day, when he was on his way to hiswork, he met an accident that resulted in hisdeath.He died on the spot.- The PUJ jeep that bumped the deceased was drivenby Pepito Into, operated and owned bydefendantDestrajo. From the investigation conducted by thetraffic investigator, the PUJ jeep wasovertakinganother passenger jeep that was going towards thecity poblacion. While overtaking, thePUJ jeep ofdefendant Destrajo running abreast with theovertaken jeep, bumped the motorcycledriven bythe deceased. The point of impact was on the lane ofthe motorcycle and the deceased wasthrown fromthe road and met his untimely death.- Heirs of Lope Maglana, Sr. filed an action fordamages and attorney's fees against operatorPatricioDestrajo and the Afisco InsuranceCorporation (AFISCO).An information for homicidethru recklessimprudence was also filed againstPepito Into.- During the pendency of the civil case, Into wassentenced to suffer an indeterminate penalty, withallthe accessory penalties provided by law, and toindemnify the heirs of Lope Maglana, Sr. intheamount of twelve thousand pesos with subsidiaryimprisonment in case of insolvency, plus fivethousand pesos in the concept of moral andexemplarydamages with costs. No appeal wasinterposed by accused who later applied forprobation.- The lower court rendered a decision finding thatDestrajo had not exercised sufficient diligence astheoperator of the jeepney ordering him to pay plaintiffsthe sum for loss of income; funeral andburialexpenses of the deceased; moral damages, andattorney's fees and costs of suit.Thedefendantinsurance company is ordered to reimbursedefendant Destrajo whatever amounts the lattershallhave paid only up to the extent of its insurancecoverage.- Petitioners filed a motion for the reconsideration ofthe second paragraph of the decision contendingthatAFISCO should not merely be held secondarily liablebecause the Insurance Code provides thattheinsurer's liability is "direct and primary and/or jointlyand severally with the operator of thevehicle,although only up to the extent of the insurancecoverage." Hence, they argued that theP20,000.00coverage of the insurance policy issued by AFISCO,should have been awarded in theirfavor.-AFISCO argued that since the Insurance Code doesnot expressly provide for a solidary obligation,thepresumption is that the obligation is joint.- The lower court denied the motion forreconsideration ruling that since the insurancecontract "is inthe nature of suretyship, then theliability of the insurer is secondary only up to theextent of theinsurance coverage."- Petitioners filed a second motion for reconsiderationreiterating that the liability of the insurer isdirect,primary and solidary with the jeepney operatorbecause the petitioners became directbeneficiariesunder the provision of the policy which, in effect, is astipulation pour autrui. This motionwas likewisedenied for lack of merit. ISSUE WON AFISCO can be held directly liable HELD YES- As this Court ruled in Shafer vs. Judge, RTC ofOlongapo City, Br. 75, "[w]here an insurance policyinsures directly against liability, the insurer's liabilityaccrues immediately upon the occurrence oftheinjury or even upon which the liability depends, anddoes not depend on the recovery of judgment by theinjured party against the insured."- The underlying reason behind the third partyliability (TPL) of the Compulsory Motor VehicleLiabilityInsurance is "to protect injured personsagainst the insolvency of the insured who causessuch injury,and to give such injured person a certainbeneficial interest in the proceeds of the policy . . ."Sincepetitioners had received from AFISCO the sumof P5,000.00 under the no-fault clause,AFISCO'sliability is now limited to P15,000.00.- However, we cannot agree that AFISCO is likewisesolidarily liable with Destrajo. In Malayan InsuranceCo., Inc. v. Court of Appeals, this Court had the opportunity to resolve the issue as to the nature ofthe liability of the insurer and the insuredvis-a-visthe third party injured in an accident. Wecategorically ruled thus:While it is true that wheretheinsurance contract provides for indemnity againstliability to third persons, such third personscandirectly sue the insurer, however, the direct liabilityof the insurer under indemnity contracts againstthird party liability does not mean that the insurercanbe held solidarily liable with the insured and/orthe other parties found at fault. The liability oftheinsurer is based on contract; that of the insured isbased on tort.In the case at bar, petitioner asinsurer of Sio Choy, is liable to respondent Vallejos(the injured third party), but it cannot, asincorrectlyheld by the trial court, be made "solidarily" liablewith the two principal tortfeasors,namelyrespondents Sio Choy and San Leon Rice Mill, Inc.For if petitioner-insurer were solidarily liable withsaid, two (2) respondents by reason of theindemnitycontract against third party liability under which aninsurer can be directly sued by a third party this willresult in a violation of the principles underlyingsolidary obligation and insurance contracts.- While in

solidary obligations, the creditor mayenforce the entire obligation against one of thesolidarydebtors, in an insurance contract, theinsurer undertakes for a consideration to indemnifythe insuredagainst loss, damage or liability arisingfrom an unknown or contingent event.- Similarly, petitioners herein cannot validly claimthat AFISCO, whose liability under theinsurancepolicy is also P20,000.00, can be held solidarily liablewith Destrajo for the total amount ofP53,901.70 inaccordance with the decision of the lower court.Since under both the law and theinsurance policy,AFISCO's liability is only up to P20,000.00, thesecond paragraph of the dispositiveportion of thedecision in question may have unwittingly sownconfusion among the petitioners and theircounsel.What should have been clearly stressed as to leaveno room for doubt was the liability of AFISCO under the explicit terms of the insurance contract.Disposition present petition is hereby GRANTED.The award of P28,800.00 representing loss of incomeis INCREASED to P192,000.00 and thedeathindemnity of P12,000.00 to P50,000.00. Isrespon sible for the accident and liable for the victims'injuries or death. In turn, the no faultindemnityprovision is part and parcel of the Code provisions oncompulsory motor vehicle liability insurance and should be read together with the requirement forcompulsory passenger and/or 3rdparty liabilityinsurance (Sec. 377) which was mandated inorderto ensure ready compensation for victims ofvehicular accidents.-Irrespective of whether or not fault or negligencelies with the driver of the Superlines bus,asresp ondents were not occupants of the bus, theycannot claim the no fault indemnity provided inSec. 378 from Perla. The claim should be madeagainst the insurer of the vehicle they were riding.Disposition Petition GRANTED. Orders of CFIordering Perla to pay respondents immediatelyP5000 ANNULLED and SET ASIDE