Académique Documents
Professionnel Documents
Culture Documents
L-26827
The trial court sustained the contention of the private respondent and
dismissed the complaint. It was reasoned out that a policy of insurance
being a contract of adhesion, it was the duty of the insured to know the
terms of the contract he or she is entering into; the insured in this case,
upon learning from its terms that she could not have been qualified
under the conditions stated in said contract, what she should have done
is simply to ask for a refund of the premium that she paid. It was further
argued by the trial court that the ruling calling for a liberal interpretation
of an insurance contract in favor of the insured and strictly against the
insurer may not be applied in the present case in view of the peculiar
facts and circumstances obtaining therein.
The policy defines the term 'authorized driver' to be the insured himself
or any person driving on the insured's order or with his permission
provided he is permitted to drive under the licensing laws.
In the given case, plaintiff's brother, who was at the wheel at the time of
the collision, did not have a valid license because the one he had
obtained had already expired and had not been renewed as required by
Section 31 of the Motor Vehicle Law. That since he had renewed his
license one week after the accident, it did not cure the delinquency or
revalidate the license which had already expired (Syllabus, Tanco, Jr. vs.
Phil. Guaranty Co., 122 Phil. 709). Wherefore the case is against
Gutierrez.
REGINA L. EDILLON, as assisted by her husband, MARCIAL
EDILLON, petitioners-appellants,
vs.
MANILA BANKERS LIFE INSURANCE CORPORATION and the
COURT OF FIRST INSTANCE OF RIZAL, BRANCH V, QUEZON CITY,
respondents-appellees.
Issue:
Whether or not the acceptance by the private respondent insurance
corporation of the premium and the issuance of the corresponding
certificate of insurance should be deemed a waiver of the exclusionary
condition of overage stated in the said certificate of insurance.
Ruling:
The Supreme Court reversed trial court's decision. The Court ruled that
the age of the insured Carmen Lapuz was not concealed to the
insurance company. Her application for insurance coverage which was
on a printed form furnished by private respondent and which contained
very few items of information clearly indicated her age of the time of filing
the same to be almost 65 years of age. Despite of, it could hardly be
Facts:
insured property under Policy but the latter refused for the reason that,
among others, Plastic Era failed to pay the insurance premium.
On August 25, 1961, Plastic Era filed its complaint against Capital
Insurance for the recovery of the sum of P100,000.00 plus P25,000.00
for attorney's fees and P20,000.00 for additional expenses. Capital
Insurance filed a counterclaim of P25,000.00 as and for attorney's fees.
The trial court rendered judgment in favor of the plaintiff and against the
defendant for the sum of P88,325.63 with interest at the legal rate from
the filing of the complaint and to pay the costs. Court of appeals affirmes
lower court's decision. Thus, Capital Insurance elevated the case in the
Supreme Court.
Issue:
Whether or not a contract of insurance has been duly perfected between
the petitioner, Capital Insurance, and respondent Plastic Era.
Ruling: Yes
that the collection of the note had been enjoined by the insured in any
way affect the policy.
By accepting its promise to pay the insurance premium within thirty (30)
days from the effectivity date of the policy December 17, 1960 Capital
Insurance had in effect extended credit to Plastic Era. The payment of
the premium on the insurance policy therefore became an independent
obligation the non-fulfillment of which would entitle Capital Insurance to
recover. It could just deduct the premium due and unpaid upon the
satisfaction of the loss under the policy. It did not have the right to cancel
the policy for nonpayment of the premium except by putting Plastic Era
in default and giving it personal notice to that effect. This Capital
Insurance failed to do.
... Where credit is given by an insurance company for the payment of the
premium it has no right to cancel the policy for nonpayment except by
putting the insured in default and giving him personal notice....
Facts:
right armpit. She stayed in the hospital for a period of eight days, after
which she was discharged, although according to the surgeon who
operated on her she could not be considered definitely cured, her
ailment being of the malignant type. Notwithstanding the fact of her
operation Estefania A. Saturnino did not make a disclosure thereof in her
application for insurance. On the contrary, she stated therein that she did
not have, nor had she ever had, among other ailments listed in the
application, cancer or other tumors; that she had not consulted any
physician, undergone any operation or suffered any injury within the
preceding five years; and that she had never been treated for nor did she
ever have any illness or disease peculiar to her sex, particularly of the
breast, ovaries, uterus, and menstrual disorders. The application also
recites that the foregoing declarations constituted "a further basis for the
issuance of the policy."
Plaintiffs, now appellants, filed this action in the Court of to recover the
sum of P5,000.00, corresponding to the face value of an insurance policy
issued by defendant on the life of Estefania A. Saturnino, and the sum of
P1,500.00 as attorney's fees.
Both the complaint and the counterclaim were dismissed by the trial
court; but appellants were declared entitled to the return of the premium
already paid; plus interest at 6% up to January 8, 1959, when a check for
the corresponding amount - P359.65 - was sent to them by appellee.
ISSUE:
Whether or not the insured made such false representations of material
facts as to avoid the policy.
RULING:
It is also important to note the principle laid down by this Court in the
case of Ang v. Fulton Fire Insurance Co., (2 SCRA 945 [1961]), to wit:
On August 15, 1983, herein private respondent Emilio Tan took from
herein petitioner a P300,000.00 property insurance policy to cover his
interest in the electrical supply store of his brother housed in a building in
Iloilo City. Four (4) days after the issuance of the policy, the building was
burned including the insured store. On August 20, 1983, Tan filed his
claim for fire loss with petitioner, but on February 29, 1984, petitioner
wrote Tan denying the latter's claim. On April 3, 1984, Tan wrote
petitioner, seeking reconsideration of the denial of his claim. On
September 3, 1985, Tan's counsel wrote the Insurer inquiring about the
status of his April 3, 1984 request for reconsideration. Petitioner
answered the letter on October 11, 1985, advising Tan's counsel that the
Insurer's denial of Tan's claim remained unchanged, enclosing copies of
petitioners' letters of February 29, 1984 and May 17, 1985 (response to
petition for reconsideration). On November 20, 1985, Tan filed Civil Case
with the Regional Trial Court but petitioner filed a motion to dismiss on
the alleged ground that the action had already prescribed. Said motion
was denied in an order dated November 3, 1987; and petitioner's motion
for reconsideration was also denied in an order dated January 14, 1988.
Petitioner went to the Court of Appeals and sought the nullification of the
said Nov. 3, 1987 and January 14, 1988 orders, but the Court of
Appeals, in its June 20, 1989 decision denied the petition and held that
the court a quomay continue until its final termination. A motion for
reconsideration was filed, but the same was denied by the Court of
Appeals in its resolution of August 22, 1989.
Hence, petitioners elevated the case to the Supreme Court.
ISSUE:
Whether or not the filing of a motion for reconsideration interrupts the 12
months prescriptive period to contest the denial of the insurance claim.
RULING: NO
While it is a cardinal principle of insurance law that a policy or contract of
insurance is to be construed liberally in favor of the insured and strictly
against the insurer company, yet, contracts of insurance, like other
contracts, are to be construed according to the sense and meaning of
the terms which the parties themselves have used. If such terms are
clear and unambiguous, they must be taken and understood in their
plain, ordinary and popular sense.
Condition 27 of the Insurance Policy, which is the subject of the
conflicting contentions of the parties, reads:
FACTS:
Julio Aguilar owned and operated several jeepneys in the City of
Manila. . He entered into a contract with the Capital Insurance & Surety
Co., Inc. insuring the operation of his jeepneys against accidents with
insurance. Perez, on the other hand, averred that the deceased had
fulfilled all his prestations under the Contract and all the elements of a
valid contract are present.
ISSUE:
Trial Court ruled in favor of Virginia Perez, but on appeal the decision
was reversed by the Court of Appeals, hence this petition.
FACTS:
Primitivo Perez had been insured with BF Lifeman Insurance
Corporation since 1980 for P20,000. In October 1987 , an agent of
Lifeman Insurance, Rodolfo Lalog, visited Perez in Quezon and
convinced him to apply for additional insurance coverage of P50,000, to
avail of the ongoing promotional discount of P400 if the premium were
paid annually.
Primitivo accomplished an application form for the additional insurance
coverage. Virginia Perez, his wife, paid P2,075 to Lalog. The receipt
issued by Lalog indicated the amount receives as deposit.
Unfortunately, Lalog lost the application form accomplished by Perez
and so on, he asked the latter to fill up another application form.
Sometime in 1987, Perez was made to undergo the required medical
examination, which he passed.
Lalog forwarded the application for additional insurance of Perez,
together with all its supporting papers, to the office of BF Lifeman
Insurance in Quezon which was supposed to forward the papers to the
Manila Office.
On November 25, 1987, Perez died while he was riding a banca which
capsized during a storm.
At the time of his death, his application papers for the additional
insurance were still in the Quezon Office. Lalog testified that when he
went to follow up the papers, he found them still in the Quezon office and
so he personally brought the papers to the Manila office. It was only on
November 27, 1987 that the said papers were received in Manila.
Without knowing that Perez died on November 25, 1987, BF Lifeman
Insurance Corporation approved the application and issued the
corresponding policy for P50,000 on December 2, 1987.
Virginia went to Manila to claim the benefits under the insurance policies
of the deceased. She was paid P40,000 under the first insurance policy
for P20,000 (double indemnity in case of accident) but the insurance
company refused to pay the claim under the additional policy coverage
of P50,000, the proceeds of which amount to P150,000 in view of a triple
indemnity rider on the insurance policy.
In its letter to Virginia , the insurance company maintained that the
insurance for P50,000 had not been perfected at the time of the death of
Primitivo Perez. Consequently, the insurance company refunded the
amount of P2,075 which Virginia had paid.
ARGUMENT:
Lifeman Insurance filed for the rescission and declaration of nullity
contending that the insurance policy in question was not yet perfected,
hence, the wife cannot claim under said unperfected contract of
FACTS:
The petitioners were the complainants in an administrative complaint
against private respondent Insular Life Assurance Company, Ltd.
(Insular Life), which was filed with the Insurance Commission. They
prayed that Insular Life "be ordered to pay the claimants their insurance
claims" and that "proper sanctions/penalties be imposed on" it "for its
deliberate, feckless violation of its contractual obligations to the
complainants, and of the Insurance Code.
Insular Life's motion to dismiss the complaint on the ground that "the
claims of complainants are all respectively beyond the jurisdiction of the
Insurance Commission as provided in Section 416 of the Insurance
Code." Having been denied it filed its answer, thereafter, hearings were
conducted.The Commission rendered its decision in favor of the
complainants.
Insular Life appealed the decision seeking that the appellate court to
reverse the decision because the Insurance Commission:
(a) had no jurisdiction over the case considering that the claims
exceeded
P100,000.00,
(b) erred in holding that the powers of attorney relied upon by Insular Life
were insufficient to convey absolute authority to Capt. Nuval to demand,
receive and take delivery of the insurance proceeds pertaining to the
petitioners, (c) erred in not giving credit to the version of Insular Life that
the power of attorney supposed to have been executed in favor of the
Alarcons
was
missing,
and
(d) erred in holding that Insular Life was liable for violating Section 180 of
the Insurance Code for having released to the surviving mothers the
insurance proceeds pertaining to the beneficiaries who were still minors
despite the failure of the former to obtain a court authorization or to post
a bond.
The Court of Appeals rendered its decision with modification. Hence this
petition.
ARGUMENT:
The Insurance Commission had jurisdiction over the case on the ground
that although some of the claims exceed P100,000.00, the petitioners
had asked for administrative sanctions against Insular Life which are
within the Commission's jurisdiction to grant; hence, "there was merely a
misjoinder of causes of action . . . and, like misjoinder of parties, it is not
a ground for the dismissal of the action as it does not affect the other
reliefs prayed for."
When the officers of respondent-appellant read these written powers,
they must have assumed Capt. Nuval indeed had authority to collect the
insurance proceeds in behalf of the beneficiaries who duly affixed their
signatures therein. The written power is specific enough to define the
authority of the agent to collect any sum of money pertaining to the
sinking of the fatal vessel. Respondent-appellant interpreted this power
to include the collection of insurance proceeds in behalf of the
beneficiaries concerned. We believe this is a reasonable interpretation
even by an officer of respondent-appellant unschooled in the law. Had
respondent appellant, consulted its legal department it would not have
received a contrary view. There is nothing in the law which mandates a
specific or special power of attorney to be executed to collect insurance
proceeds.
ISSUE:
Whether or not the parents of the minors have a right in the policy in
behalf of their minor children.
RULING:
"If the property hereby insured shall, at the breaking out of any
fire, be collectively of greater value than the sum insured thereon then
the insured shall be considered as being his own insurer for the
difference, and shall bear a ratable proportion of the loss accordingly.
Every item, if more than one, of the policy shall be separately subject to
this condition"
ISSUE
ISSUE
DISCUSSION
AMERICAN
LIFE
INSURANCE
COMPANY
VS.
FACTS
Whether the commisioner has jurisdiction over the subject matter of the
complaint filed by the private respondent
RULING OF THE COURT
DISCUSSION
between
the
insurance
PAN MALAYAN
APPEALS
INSURANCE
CORPORATION
VS
COUR
OF
FACTS
DISCUSSION
The court explained that although there are a few recognized exceptions
to this rule. For instance, if the assured by his own act releases the
wrongdoer or third party liable for the loss or damage, from liability, the
insurer's right of subrogation is defeated [Phoenix Ins. Co. of Brooklyn v.
Erie & Western Transport, Co., 117 US 312, 29 L. Ed. 873 (1886);
Insurance Company of North America v. Elgin, Joliet & Eastern Railway
Co., 229 F 2d 705 (1956)]. Similarly, where the insurer pays the assured
the value of the lost goods without notifying the carrier who has in good
faith settled the assured's claim for loss, the settlement is binding on
both the assured and the insurer, and the latter cannot bring an action
against the carrier on his right of subrogation [McCarthy v. Barber
Steamship Lines, Inc., 45 Phil. 488 (1923)]. And where the insurer pays
the assured for a loss which is not a risk covered by the policy, thereby
effecting "voluntary payment", the former has no right of subrogation
against the third party liable for the loss [Sveriges Angfartygs Assurans
Forening v. Qua Chee Gan, G. R. No. L-22146, September 5, 1967, 21
SCRA 12].None of the exceptions are availing in the present case.
FACTS
On April 20, 1952, Rufino D. Andres filed a complaint in the Court of First
Instance of Ilocos Norte against the Crown Life Insurance Company for
the recovery of the amount of P5,000, as the face value of a joint 20-year
endowment insurance policy issued in favor of the plaintiff Rufino D.
Andres and his wife Severa G. Andres on the 13th of February, 1950, by
said insurance company. On Jun 7, 1951, Rufino Andres presented his
on February 20, 1951, before his wife's death (Stipulation, par. 7) ; and,
despite the Company's reminders on April 14 and 27, he remitted the
balance of P65 on May 5, 1951 (received by the Company's agency on
May 11), two days after his wife died. On the face of such facts, the
Company had the right to treat the contract as lapsed and refuse
payment of the policy.
If you cannot pay the full amount immediately, send as large an amount
as possible and advise us how soon you expect to be able to pay the
balance. Every consideration will be given to your request consistent
with the company's regulations (Exhibit 4).
If you are unable to cover this amount in full, send us as big an amount
as you are able and we will work out an adjustment most beneficial to
you
Furthermore petitioner paid a partial amount of the balance due
FACTS:
White Gold Marine Services, Inc. procured a protection and
indemnity coverage for its vessels from the Steamship Mutual Underwriting
Association Limited through Pioneer Insurance and Surety Corporation.
White Gold was issued a certificate of entry and acceptance. Pioneer also
issued receipts evidencing payments for the coverage. When White Gold
failed to fully pay its accounts, Steamship Mutual refused to renew the
coverage. Steamship Mutual thereafter filed case against White Gold for
collection of sum of money to recover the latters unpaid balance. White Gold
on the other hand, filed a complaint before the Insurance Commission
claiming that Steamship Mutual Violated Sections 186 and 187, while
Pioneer violated Sections 299 to 301 of the Insurance Code.
DISCUSSION
The supreme court explained that the conditions set forth in
the policy for reinstatement are the following: (a) application shall be
made within three years from the date of lapse; (b) there should be a
production of evidence of the good health of the insured: (c) if the rate of
premium depends upon the age of the Beneficiary, there should likewise
be a production of evidence of his or her good health; (d) there should be
presented such other evidence of insurability at the date of application
for reinstatement; (e) there should be no change which has taken place
in such good health and insurability subsequent to the date of such
application and before the policy is reinstated; and (f) all overdue
premiums and other indebtedness in respect of the policy, together with
interest at six per cent, compounded annually, should first be paid.
The plaintiff-appellant did not comply with the last condition; for he only
paid P100 (on account of the overdue semi-annual premium of P165.15)
are both the insurer nd insured. the members all contribute, by a system of
premiums or assessments, to the creation of fund from which all losses and
liabilities are paid, and where the profits are divided among themselves, in
proportion to their interest. Additionally, mutual insurance associations, or
VS
PHILIPPINE
CHARTER
INSURANCE
FACTS :
Gulf Resorts is the owner of the Plaza Resort situated at Agoo, La Union
ARGUMENTS:
Petitioner contends:
First, that the policys earthquake shock endorsement clearly covers all
of the properties insured and not only the swimming pools. It used the
words "any property insured by this policy," and it should be interpreted
as all inclusive.
Respondent Arguments:
and had its properties in said resort insured originally with the American
Home Assurance Company (AHAC). In the first 4 policies issued, the
risks of loss from earthquake shock was extended only to petitioners
two swimming pools. Gulf Resorts agreed to insure with Phil Charter the
properties covered by the AHAC policy provided that the policy wording
and rates in said policy be copied in the policy to be issued by Phil
Charter. Phil Charter issued Policy No. 31944 to Gulf Resorts covering
the period of March 14, 1990 to March 14, 1991 for P10,700,600.00 for a
total premium of P45,159.92. the break-down of premiums shows that
Gulf Resorts paid only P393.00 as premium against earthquake shock
ISSUE: Whether or not the policy covers only the two swimming
pools owned by Gulf Resorts and does not extend to all properties
damaged therein
HELD: Yes, All the provisions and riders taken and interpreted together,
indubitably show the intention of the parties to extend earthquake shock
coverage to the two swimming pools only. Aninsurance premium is the
consideration paid an insurer for undertaking to indemnify the insured
against a specified peril. In fire, casualty and marine insurance, the
premium becomes a debt as soon as the risk attaches. In the subject
policy, no premium payments were made with regard to earthquake
shock coverage except on the two swimming pools. There is no mention
of any premium payable for the other resort properties with regard to
earthquake
shock.
This
is
consistent
with
the
history
of
to the two swimming pools. Section 2(1) of the Insurance Code defines a
contract of insurance as an agreement whereby one undertakes for a
consideration to indemnify another against loss, damage or liability
arising from an unknown or contingent event. Thus, an insurance
contract exists where the following elements concur:
1. The insured has an insurable interest;
2. The insured is subject to a risk of loss by the happening of
the designated peril;
3. The insurer assumes the risk;
4. Such assumption of risk is part of a general scheme to
distribute actual losses among a large group of persons
bearing a similar risk; and
ISSUE:
Whether the claim of Insurance Corporation is barred by prescription
under section 384 of PD No. 612.
HELD:
In the present case, it is not denied that an extrajudicial demand for
payment was made by respondent FGU on petitioner but petitioner failed
to respond to the same. Nevertheless the complaint was filed even
before a denial of the claim was made by petitioner. For all legal
purposes, the one-year prescriptive period provided for in Section 384 of
the Insurance Code has not begun to run. The cause of action arises
only and starts to run upon the denial of the claim by the insurance
company.
DISCUSSION ON HOW THE SC RULED THE CASE
FACTS:
As a result of a vehicular accident that happened on November 26,1976
whereby a Ford Pick-up with Plate No. UC-5925 Phil. '76 owned by
Marcos Olaso was bumped by a cargo truck with Plate No. OY-783 then
owned by Alberto Floralde, FGU insurance poration FGU by reason of
Motor Vehicle Insurance Policy No. IC-VF-07185 paid Olaso the sum of
P 2,817.50 as its share in the repair cost of the said Ford Pick-up.
Having thus been subrogated to the rights and causes of action of said
Olaso in the said amount FGU formally demanded payment of said
amount from Floralde and attempted to verify Floralde's insurance
carrier. Floralde failed to reveal his insurance carrier. In the early part of
1978 FGU was able to ascertain the Identity of Floralde's insurance
carrier to be the Summit Guaranty and Insurance Company, Inc.
(Summit). On February 22,1978 FGU wrote to the insurance
commissioner requesting for a conference with Summit and demanded
from Summit through counsel on February 28,1978 the payment of the
damages sustained by the car of Olaso but to no avail. Hence on May
22,1978 FGU filed IC Case No. 825 in the Insurance Commissioner's
Office against Summit for recovery of said amount.
ARGUMENTS:
Petitioner squarely brings into focus the provisions of Section 384 of PD
612, the Insurance Code, Petitioner company contends that the two
periods prescribed in the aforementioned law that is, the six-month
period for filing the notice of claim and the one-year period for bringing
an action or suit are mandatory and must always concur.
Respondent FGU, however, contends that the said one-year prescriptive
period can not apply to it because it was merely subrogated to the rights
of Olaso. Respondent Commissioner invites attention to the phrase "in
proper cases" in Section 384 of PD 612 and argues that the prescriptive
period was interrupted upon the extrajudicial demand for payment made
by FGU on petitioner
INC., petitioner,
AMERICAN
HOME
FACTS:
The facts show that Caltex Philippines (Caltex for brevity) entered into a
contract of affreightment with the petitioner, Delsan Transport Lines, Inc.,
for a period of one year whereby the said common carrier agreed to
transport Caltexs industrial fuel oil from the Batangas-Bataan Refinery to
different parts of the country. Under the contract, petitioner took on board
its vessel, MT Maysun 2,277.314 kiloliters of industrial fuel oil of Caltex
to be delivered to the Caltex Oil Terminal in Zamboanga City. The
shipment was insured with the private respondent, American Home
Assurance Corporation.
On August 14, 1986, MT Maysum set sail from Batangas for Zamboanga
City. Unfortunately, the vessel sank in the early morning of August 16,
1986 near Panay Gulf in the Visayas taking with it the entire cargo of fuel
oil.
Subsequently, private respondent paid Caltex the sum of Five Million
Ninety-Six Thousand Six Hundred Thirty-Five Pesos and Fifty-Seven
Centavos (P5,096,635.67) representing the insured value of the lost
cargo. Exercising its right of subrogation under Article 2207 of the New
Civil Code, the private respondent demanded of the petitioner the same
amount it paid to Caltex.1wphi1.nt
Due to its failure to collect from the petitioner despite prior demand,
private respondent filed a complaint with the Regional Trial Court of
Makati City, Branch 137, for collection of a sum of money.
ARGUMENTS:
Petitioner Delsan Transport Lines, Inc. invokes the provision of Section
113 of the Insurance Code of the Philippines, which states that in every
marine insurance upon a ship or freight, or freightage, or upon any thin
which is the subject of marine insurance there is an implied warranty by
the shipper that the ship is seaworthy.
Private respondent argues that the vessel was not seaworthy
HELD:
The payment made by the private respondent for the insured value of the
lost cargo operates as waiver of its (private respondent) right to enforce
the term of the implied warranty against Caltex under the marine
insurance policy. However, the same cannot be validly interpreted as an
automatic admission of the vessels seaworthiness by the private
respondent as to foreclose recourse against the petitioner for any liability
under its contractual obligation as a common carrier. The fact of
payment grants the private respondent subrogatory right which enables it
to exercise legal remedies that would otherwise be available to Caltex as
owner of the lost cargo against the petitioner common carrier.
DISCUSSION ON HOW THE SC RULED THE CASE
The right of subrogation has its roots in equity. It is designed to promote
and to accomplish justice and is the mode which equity adopts to compel
the ultimate payment of a debt by one who in justice and good
conscience ought to pay.9 It is not dependent upon, nor does it grow out
of, any privity of contract or upon written assignment of claim. It accrues
simply upon payment by the insurance company of the insurance
claim.10 Consequently, the payment made by the private respondent
(insurer) to Caltex (assured) operates as an equitable assignment to the
former of all the remedies which the latter may have against the
petitioner.
PERLA COMPANIA DE SEGUROS, INC., PETITIONER, V. HON.
CONSTANTE A. ANCHETA., RESPONDENTS. GR L-49699. AUGUST 8,
1988
Case no. 43
Facts: IH Scout in which private respondents were riding collided with
Superlines bus, private respondent sustained physical injuries in varying
degrees of gravity. Thus, they filed a complaint for damages against
Superlines, the bus driver and petitioner, the insurer of the bus.
The
judge ordered petitioner to pay private respondents the 'no fault
indemnity in the amount of P5,000. Petitioner contended that under Sec.
378 of the Insurance Code, the insurer liable to pay the P5,000.00 is the
insurer of the vehicle in which private respondents were riding, not
petitioner. Motions for Reconsiderations were denied.
Issue: whether or not petitioner is the insurer liable to indemnify private
respondents under Sec. 378 of the Insurance Code.
Ruling: under the "no fault indemnity" provision, where proof of fault or
negligence is not necessary for payment of any claim for death Or injury
to a passenger or a third party, are established:
1. A claim may be made against one motor vehicle only.
2. If the victim is an occupant of a vehicle, the claim shall lie against the
insurer of the vehicle. in which he is riding, mounting or dismounting
from.
3. In any other case (i.e. if the victim is not an occupant of a vehicle), the
claim shall lie against the insurer of the directly offending vehicle.
4. In all cases, the right of the party paying the claim to recover against
the owner of the vehicle responsible for the accident shall be maintained.
The claimant is not free to choose from which insurer he will claim the
"no fault indemnity," as the law, by using the word "shall, makes it
mandatory that the claim be made against the insurer of the vehicle in
which the occupant is riding, mounting or dismounting from.
That said vehicle might not be the one that caused the accident is of no
moment since the law itself provides that the party paying the claim
under Sec. 378 may recover against the owner of the vehicle responsible
for the accident. This is precisely the essence of "no fault indemnity"
insurance which was introduced to and made part of our laws in order to
provide victims of vehicular accidents or their heirs immediate
compensation, although in a limited amount, pending final determination
of who is responsible for the accident and liable for the victims'injuries or
death. Irrespective of whether or not fault or negligence lies with the
ISSUE: WHETHER OR NOT THE INSURER COMPANY SHOULD PAY THE SAID
CLAIM.
RULING: YES. WHERE THE INSUREDS CAR IS WRONGFULLY TAKEN WITHOUT
THE INSUREDS CONSENT FROM THE CAR SERVICE AND REPAIR SHOP TO
WHOM IT HAD BEEN ENTRUSTED FOR CHECK-UP AND REPAIRS (ASSUMING
THAT SUCH TAKING WAS FOR A JOY RIDE, IN THE COURSE OF WHICH IT WAS
TOTALLY SMASHED IN AN ACCIDENT), RESPONDENT INSURER IS LIABLE AND
MUST PAY INSURED FOR THE TOTAL LOSS OF THE INSURED VEHICLE UNDER
THE THEFT CLAUSE OF THE POLICY. ASSUMING, DESPITE THE TOTALLY
INADEQUATE EVIDENCE, THAT THE TAKING WAS TEMPORARY AND FOR A
JOY RIDE, THE COURT SUSTAINS AS THE BETTER VIEW THAT WHICH HOLDS
THAT WHEN A PERSON, EITHER WITH THE OBJECT OF GOING TO A CERTAIN
PLACE, OR LEARNING HOW TO DRIVE, OR ENJOYING A FREE RIDE, TAKES
POSSESSION OF A VEHICLE BELONGING TO ANOTHER, WITHOUT THE CONSENT
OF ITS OWNER, HE IS GUILTY OF THEFT BECAUSE BY TAKING POSSESSION OF
THE PERSONAL PROPERTY BELONGING TO ANOTHER AND USING IT, HIS
INTENT TO GAIN IS EVIDENT SINCE HE DERIVES THERE FROM UTILITY,
SATISFACTION, ENJOYMENT AND PLEASURE. ACCORDINGLY, THE
APPEALED DECISION IS SET ASIDE AND JUDGMENT IS HEREBY RENDERED
SENTENCING PRIVATE RESPONDENT TO PAY PETITIONER THE SUM OF
P35,000.00 WITH LEGAL INTEREST FROM THE FILING OF THE COMPLAINT
UNTIL FULL PAYMENT IS MADE AND TO PAY THE COSTS OF SUIT.
ISSUE:
WHETHER OR NOT PHILAMLIFE RECEIVED THE APPLICATION PRIOR TO THE
DEATH OF CHUANG AND THEREBY BE HELD LIABLE.
RULING OF THE COURT:
YES.
INSURANCE CONTRACTS ARE WHOLLY PREPARED BY THE INSURER WITH
VAST AMOUNTS OF EXPERIENCE IN THE INDUSTRY PURPOSEFULLY USED TO
THUS, THE MERE INACTION OF THE INSURER DOES NOT TERMINATE THE
CONTRACT. HAVING PROVED THAT PHILAMLIFE RECEIVED THE LETTER PRIOR
TO THE DEATH AND FAILURE ON THE PART OF THE LATTER TO PRODUCE
EVIDENCE AGAINST IT, PHILAMLIFE IS DEEMED TO HAVE RECEIVED THE
APPLICATION.
FIELDMENS INSURANCE CO. VS. VDA DE SONGCO
G.R. NO. 24833 SEPTEMBER 23, 1986
FACTS:
FEDERICO SONGCO, OWNER OF A PRIVATE JEEPNEY, WAS INDUCED BY THE
AGENT OF FIELDMENS INSURANCE CO. TO APPLY FOR A COMMON
CARRIERS INSURANCE POLICY WHICH WAS LATER RENEWED. DURING THE
EFFECTIVITY OF THE RENEWED POLICY, THE JEEPNEY COLLIDED WITH A CAR
RESULTING DEATH TO FEDERICO AND HIS SON. NOW, THE SURVIVING SPOUSE
OF FEDERICO SEEKS RELIEF TO FIELDMENS. THE COMPANY REFUSED TO
PAY.
ARGUMENTS:
THE AGENT OF FIELDMENS CONTENDS THAT SINCE THEY ARE NOT
GOVERNMENT-OWNED, THEY COULD DO WHAT THEY PLEASE WHENEVER THEY
BELIEVE A VEHICLE IS INSURABLE. SONGCO, ON THE OTHER HAND, ASSERTS
THAT THEY SHOULD BE ENTITLED FOR THE PAYMENT.
ISSUE:
WHETHER OR NOT FIELDMENS SHOULD BE HELD LIABLE.
RULING OF THE COURT:
YES.
IT IS A WELL-SETTLED JURISPRUDENCE THAT WHERE INEQUITABLE CONDUCT
IS SHOWN BY AN INSURANCE FIRM, IT IS "ESTOPPED FROM ENFORCING
FORFEITURES IN ITS FAVOR, IN ORDER TO FORESTALL FRAUD OR IMPOSITION
ON THE INSURED." AS ESTOPPEL IS PRIMARILY BASED ON THE DOCTRINE OF
GOOD FAITH AND THE AVOIDANCE OF HARM THAT WILL BEFALL THE
INNOCENT PARTY DUE TO ITS INJURIOUS RELIANCE, THE FAILURE TO APPLY IT
IN THIS CASE WOULD RESULT IN A GROSS TRAVESTY OF JUSTICE.
ISSUE:
WHETHER OR NOT PETITIONER SHOULD HAVE APPLIED THE INSTALLMENT
PAYMENTS MADE BY PRIVATE RESPONDENTS FOR THE PAYMENT OF THE CAR
TO THE PAYMENT OF THE INSURANCE PREMIUMS WITHOUT PRIOR NOTICE TO
PRIVATE RESPONDENTS.
ISSUE:
WHETHER OR NOT MALAYAN HAS A RIGHT OF RELIEF AGAINST ATI.
RULING:
YES.
Non-presentation of the insurance contract or policy is not necessarily
fatal. The subrogation receipt, by itself, is sufficient to establish not only
the relationship of insurer and the assured shipper of the lost cargo, but
also the amount paid to settle the insurance claim. The right of
subrogation accrues simply upon payment by the insurance company of
the insurance claim.
Since there was no issue regarding the validity of the insurance contract
or policy, or any provision thereof, respondent had no reason to present
the insurance contract or policy as evidence during the trial.
THE
MANUFACTURERS
LIFE
INSURANCE
CO
vs.
BIBIANO L. MEER, in the capacity as Collector of Internal Revenue
FACTS:
Manufacturer Life Insurance Company is a corporation duly
organized in Canada with head office at Toronto. It is duly registered and
licensed to engage in life insurance business in the Philippines, and
maintains a branch office in Manila. It was engaged in such business in
the Philippines for more than five years before and including the year
1941. But due to the exigencies of the war it closed the branch office at
Manila during 1942 up to September 1945.
In the course of its operations before the war, plaintiff issued a
number of life insurance policies in the Philippines containing stipulations
referred to as non-forfeiture clauses.
Since the insured failed to pay from 1942 to 1946, the
company applied the provision of the automatic premium loan clauses;
and the net amount of premiums so advanced or loaned totaled
P1,069,254.98. On this sum the defendant Collector of Internal Revenue
assessed P17,917.12. The assessment was made pursuant to section
255 of the NIRC which put taxes on insurance premiums paid by money,
notes, credits or any substitutes for money.
ISSUE/S:
(a) Whether or not premium advances made by plaintiffappellant under the automatic premium loan clause of its policies are
"premium collected" by the Company subject to tax
(b) Whether or not, in the application of the automatic premium
loan clause of plaintiff-appellant's policies, there is "payment in money,
notes, credit, or any substitutes for money
Under the circumstances described, did the insurer collect the amount of
P250 as the annual premium for the eleventh year on the said policy? In
and the taxes due because section 255 above quoted levies
effect the Manufacturers Life Insurance Co. loaned to the person P250
and the latter in turn paid with that sum the annual premium on his
policy. The Company therefore collected the premium for the eleventh
year.
"How could there be such a collection when insurer becomes a creditor,
acquires a lien on the policy and is entitled to collect interest on the
Ang Giok Chip doing business under the name and style of
Hua Bee Kong Si was formerly the owner of a warehouse situated at No.
643 Calle Reina Regente, City of Manila. The contents of the warehouse
were insured with the three insurance companies for the total sum of
P60,000. One insurance policy, in the amount of P10,000, was taken out
with the Springfield Fire & Marine Insurance Company. The warehouse
was destroyed by fire on January 11, 1928, while the policy issued by
the latter company was in force.
The insurance company interposed its defense on a rider in
the policy in the form of Warranty F, fixing the amount of hazardous good
that can be stored in a building to be covered by the insurance. They
claimed that Ang violated the 3 percent limit by placing hazardous goods
to as high as 39 percent of all the goods stored in the building. His suit to
recover was granted by the trial court.
ISSUE:
There was new credit for the advances made. True, the company could
not sue the insured to enforce that credit. But it has means of satisfaction
out of the cash surrender value.
Here again it may be urged that if the credit is paid out of the cash
surrender value, there were no new funds added to the company's
assets. Cash surrender value "as applied to life insurance policy, is the
amount of money the company agrees to pay to the holder of the policy if
he surrenders it and releases his claims upon it. The more premiums the
insured has paid the greater will be the surrender value; but the
2.
condition is always a part of the policy, but, like any other part of an
A fire broke out in the building, and the store was burned. Yap filed an
it."
Oliva Yap filed a case for payment of the face value of her fire insurance
contract, to the same extent and with like effect as it actually embodied
parties.
The receipt of the policy by the insured without objection binds him. It
was his duty to read the policy and know its terms. He also never chose
Among the conditions in the policy executed by the parties are the
following:
PIONEER
unless such notice be given and the particulars of such insurance or
insurances be stated in, or endorsed on this Policy by or on behalf of the
Company before the occurrence of any loss or damage, all benefits
under this Policy shall be forfeited Any false declaration or breach or
INSURANCE
&
SURETY
CORPORATION
vs.
THE HON. COURT OF APPEALS, BORDER MACHINERY & HEAVY
EQUIPMENT, INC., (BORMAHECO), CONSTANCIO M. MAGLANA
and JACOB S. LIM
On June 10, 1965, Lim doing business under the name and
style of SAL executed in favor of Pioneer as deed of chattel mortgage as
security for the latter's suretyship in favor of the former. It was stipulated
therein that Lim transfer and convey to the surety the two aircrafts. The
deed (Exhibit D) was duly registered with the Office of the Register of
Deeds of the City of Manila and with the Civil Aeronautics Administration
pursuant to the Chattel Mortgage Law and the Civil Aeronautics Law
(Republic Act No. 776), respectively.
Lim defaulted on his subsequent installment payments
prompting JDA to request payments from the surety. Pioneer paid a total
sum of P298,626.12.
ISSUE:
Whether or not Pioneer is the real party in interest with regard
to the portion of the indemnity paid.
It is clear from the records that Pioneer sued in its own name
and not as an attorney-in-fact of the reinsurer.
Facts:
On 22 Januar y 1987, For tune Li fe and Genera l
In surance Co., In c. (For tune) issued Fire Insuran ce Policy
136171 in favor of Violeta R. Tibay and/or Nicolas Roraldo on their twostorey residential building located at 5855 Zobel Street, Makati City,
together with all their personal effects therein. The insurance was for
P600, 000.00 covering the period from 23 January 1987 to 23 January
1988. On 23 January 1987, of the total premium of P2,983.50, petitioner
Violeta Tibay only paid P600.00 thus leaving a considerable balance
unpaid. On 8 March 1987 the insured build ing was
comple tel y destroyed by fi re. Two days later Violeta Tibay paid
the balance of the premium. On the same day, she filed with Fortune a
claim on the fire insurance policy. Her claim was accordingly referred
to its adjuster, Goodwill Adjustment Services,Inc. (GASI), which
immediately wrote Violeta requesting her to furnish it with the necessary
documents for the investigation and processing of her claim. Petitioner
Argument:
Petitioners maintain otherwise. Insisting that
FORTUNE is liable on the policy despite partial payment of the premium
due and the express stipulation thereof to the contrary, petitioners rely
heavily on the 1967 case of Philippine Phoenix and Insurance Co.,
Inc. v. Woodworks, Inc. 8 where the Court through Mr. Justice Arsenio P.
Dizon sustained the ruling of the trial court that partial payment of the
premium made the policy effective during the whole period of the policy.
In that case, the insurance company commenced action against the
insured for the unpaid balance on a fire insurance policy. In its defense
the insured claimed that nonpayment of premium produced the
cancellation of the insurance contract.
disputed phrase must ultimately yield to the clear mandate of the law.
The principle that where the law does not distinguish the court should
neither distinguish assumes that the legislature made no qualification on
the use of a general word or expression and it cannot be disputed that
premium is the elixir vitae of the insurance business because by law the
insurer must maintain a legal reserve fund to meet its contingent
obligations to the public, hence, the imperative need for its prompt
payment
and
full satisfaction. It must be emphasized here that al
l actuarial calculations and various tabulations of
probabilities of losses under the risks insured against are based on
the sound hypothesis of prompt payment of premiums. Upon this
bedrock insurance firms are enabled to offer the assurance of security to
the public at fa vorable rate s. Bu t once payment o f premiu m i s
left to the whim and capri ce of the insured , as when the
courts tolerate the payment of a mere P600.00 as partial undertaking out
of the stipulated total premium ofP2,983.50 and the balance to be paid
even after the risk insured against has occurred, as Tibay et al. have
done in this case, on the principle that the strength of the vinculum juris
is not measured by any specific amount of premium payment, we will
surely wreak havoc on the business and set to naught what has taken
actuarians centuries to devise to arrive at a fair and equitable distribution
of risks and benefits between the insurer and the insured.
Held:
Held:
SC took note of the fact that Canilang failed to disclose that hat he had
twice consulted Dr. Wilfredo B. Claudio who had found him to be
suffering from "sinus tachycardia" and "acute bronchitis. Under the
relevant provisions of the Insurance Code, the information concealed
must be information which the concealing party knew and "ought to
[have] communicate[d]," that is to say, information which was "material to
the contract.
Case # 57
FACTS: The plaintiff secured temporary insurance from the defendant
for its exportation of 1,250,000 board feet logs.The defendant issued
Cover Note No. 1010, insuring the said cargo of the plaintiff. The regular
marine cargo policies were issued by the defendant in favor of the
plaintiff. The two marine policies bore the numbers 53 HO 1032 and 53
HO 1033. After the issuance of Cover Note No. 1010, but before the
issuance of the two marine policies Nos. 53 HO 1032 and 53 HO 1033,
some of the logs intended to be exported were lost during loading
operations.
The plaintiff subsequently submitted a 'Claim Statement
demanding payment of the loss under Policies Nos. 53 HO 1032 and 53
HO 1033.
ARGUMENTS:
the diagnosis made and the medicines prescribed by such doctor, in the
RESPONDENT:
The defendant denied the claim, on the ground they
defendant's investigation revealed that the entire shipment of logs
covered by the two marines policies No. 53 110 1032 and 713 HO 1033
were received in good order at their point of destination. It was further
stated that the said loss may be considered as covered under Cover
Note No. 1010 because the said Note had become 'null and void by
virtue of the issuance of Marine Policy Nos. 53 HO 1032 and 1033.
PETITIONER:
Petitioner contendd that the Cover Note was issued
with a consideration when, by express stipulation, the cover note is
made subject to the terms and conditions of the marine policies, and the
payment of premiums is one of the terms of the policies.
not depend upon the state of mind of Jaime Canilang. A man's state of
mind or subjective belief is not capable of proof in our judicial process,
ISSUE:
RULING: It is not disputed that petitioner paid in full all the premiums as
called for by the statement issued by private respondent after the
issuance of the two regular marine insurance policies, thereby leaving no
account unpaid by petitioner due on the insurance coverage, which must
be deemed to include the Cover Note. If the Note is to be treated as a
separate policy instead of integrating it to the regular policies
subsequently issued, the purpose and function of the Cover Note would
be set at naught or rendered meaningless, for it is in a real sense a
contract, not a mere application for insurance which is a mere offer.
DISCUSSION:
It may be true that the marine insurance policies
issued were for logs no longer including those which had been lost
during loading operations. This had to be so because the risk insured
against is not for loss during operations anymore, but for loss during
transit, the logs having already been safely placed aboard. This would
make no difference, however, insofar as the liability on the cover note is
concerned, for the number or volume of logs lost can be determined
Case # 59
FACTS: Tan Lee Siong, applied for life insurance with respondent
company, with petitioners the beneficiaries thereof. Tan Lee Siong died
of hepatoma. Petitioners then filed with respondent company their claim
for the proceeds of the life insurance policy. However, respondent
company denied petitioners' claim and rescinded the policy .
ARGUMENTS:
Case # 58
FACTS: Fire Policy, an open policy, was issued to the Paramount Shirt
Manufacturing Co. by which private respondent Oriental Assurance
Corporation bound itself to indemnify the insured for any loss or damage
caused by fire to its property.
Said policy was duly endorsed to petitioner as mortgagee/ trustor of the
properties insured, with the knowledge and consent of private
respondent to the effect that "loss if any under the policy is payable to
the Pacific Banking Corporation".
While the aforesaid policy was in full force and effect, a fire broke out on
the subject premises destroying the goods . Petitioner sent a letter of
demand to private respondent for indemnity .
At the trial, petitioner presented evidence, a communication of the
insurance adjuster to Asian Surety Insurance Co., Inc., revealing
undeclared co-insurances with the following: with Wellington Insurance;
with Empire Surety and with Asian Surety; undertaken by insured
Paramount on the same property covered by its policy with private
respondent whereas the only co-insurances declared in the subject
policy are those of with Malayan, with South Sea and with Victory.
ARGUMENTS:
RESPONDENT:
Private respondent raised the defense of fraud
and/or violation of Condition No. 3 in the Policy, in the form of nondeclaration of co-insurances.
PETITIONER:
suspicion.
ISSUE:
RULING: It is not disputed that the insured failed to reveal before the
loss three other insurances. By reason of said unrevealed insurances,
the insured had been guilty of a false declaration; a clear
misrepresentation and a vital one because where the insured had been
asked to reveal but did not, that was deception. Otherwise stated, had
the insurer known that there were many co-insurances, it could have
hesitated or plainly desisted from entering into such contract. Hence, the
insured was guilty of clear fraud
DISCUSSION:
Concrete evidence of fraud or false declaration by
the insured was furnished by the petitioner itself when the facts alleged
in the policy under clauses "Co-Insurances Declared" and "Other
Insurance Clause" are materially different from the actual number of coinsurances taken over the subject property. Consequently, "the whole
foundation of the contract fails, the risk does not attach and the policy
never becomes a contract between the parties. Representations of facts
are the foundation of the contract and if the foundation does not exist,
the superstructure does not arise. Falsehood in such representations is
not shown to vary or add to the contract, or to terminate a contract which
has once been made, but to show that no contract has ever existed.
TAN vs. CA and THE PHILIPPINE AMERICAN LIFE INSURANCE
COMPANY
G.R. No. 48049
PETITIONERS:
Contend that the respondent company no longer
had the right to rescind the contract of insurance as rescission must
allegedly be done during the lifetime of the insured within two years and
prior to the commencement of action.
ISSUE:
RULING: Sec. 48. xxx After a policy of life insurance made payable on
the death of the insured shall have been in force during the lifetime of the
insured for a period of two years from the date of its issue or of its last
reinstatement, the insurer cannot prove that the policy is void ab initio or
is rescindable by reason of the fraudulent concealment or
misrepresentation of the insured or his agent.
The so-called "incontestability clause" precludes the insurer
from raising the defenses of false representations or concealment of
material facts insofar as health and previous diseases are concerned if
the insurance has been in force for at least two years during the
insured's lifetime. The phrase "during the lifetime" found in Section 48
simply means that the policy is no longer considered in force after the
insured has died. The key phrase in the second paragraph of Section 48
is "for a period of two years."
DISCUSSION:
The insurer has two years from the date of issuance
of the insurance contract or of its last reinstatement within which to
contest the policy, whether or not, the insured still lives within such
period. After two years, the defenses of concealment or
misrepresentation, no matter how patent or well founded, no longer lie.
Congress felt this was a sufficient answer to the various tactics
employed by insurance companies to avoid liability. The petitioners'
interpretation would give rise to the incongruous situation where the
beneficiaries of an insured who dies right after taking out and paying for
a life insurance policy, would be allowed to collect on the policy even if
the insured fraudulently concealed material facts.
QUA CHEE GAN vs. LAW UNION AND ROCK INSURANCE CO., LTD.,
represented by its agent, WARNER, BARNES AND CO., LTD.,
G.R. No. L-4611
Case no. 60
FACTS: Qua Chee Gan owned four warehouses or bodegas used for
the storage of stocks of copra and of hemp, baled and loose, in which
the appellee dealth extensively. They had been, with their contents,
insured with the defendant Company.
Fire of undetermined origin that broke out and lasted almost
one week, gutted and completely destroyed Bodegas Nos. 1, 2 and 4,
with the merchandise stored theren. Plaintiff-appellee informed the
insurer by telegram, the fire adjusters engaged by appellant insurance
company arrived and proceeded to examine and photograph the
premises, pored over the books of the insured and conducted an
extensive investigation. The plaintiff having submitted the corresponding
fire claims, the Insurance Company resisted payment.
ARGUMENTS:
RESPONDENT:
warranty.
DISCUSSION:
It is usually held that where the insurer, at the time
of the issuance of a policy of insurance, has knowledge of existing facts
which, if insisted on, would invalidate the contract from its very inception,
such knowledge constitutes a waiver of conditions in the contract
inconsistent with the facts, and the insurer is estopped thereafter from
asserting the breach of such conditions. The law is charitable enough to
assume, in the absence of any showing to the contrary, that an
insurance company intends to executed a valid contract in return for the
premium received; and when the policy contains a condition which
renders it voidable at its inception, and this result is known to the insurer,
it will be presumed to have intended to waive the conditions and to
execute a binding contract, rather than to have deceived the insured into
thinking he is insured when in fact he is not, and to have taken his
money without consideration
Case no. 64
G.R. No. L-50997 June 30, 1987
SUMMIT GUARANTY AND INSURANCE COMPANY, INC., petitioner,
vs.
HON. JOSE C. DE GUZMAN, in his capacity as Presiding Judge of
Branch III, CFI of Tarlac, GERONIMA PULMANO and ARIEL
PULMANO, respondents.
No. L-48679 June 30, 1987
SUMMIT GUARANTY AND INSURANCE COMPANY, INC., petitioner,
vs.
THE HONORABLE GREGORIA C. ARNALDO, in her capacity as
Insurance Commissioner, and JOSE G. LEDESMA, JR.,
respondents.
No. L-48758 June 30, 1987
SUMMIT GUARANTY AND INSURANCE COMPANY, INC., petitioner,
vs.
HONORABLE RAMON V. JABSON, in his capacity as Presiding
Judge of Branch XXVI, Court of First Instance of Rizal, Pasig, Metro
Manila and AMELIA GENERAO, respondents.
Facts: Jose Ledesma was the owner of a tractor which was bumped by
a minibus insured with petitioner for Third Party Liability. Ledesma
immediately made a notice of claim. Petitioner company advised private
respondent to have car repaired by G.A. Machineries, which was later
estimated at an amount of Php21,000 and made assurance of payment.
Upon repair, respondent made several demands on insurance company
because of repair shops warning that failure to pay would result in the
auctioning of the tractor to pay expenses. Petitioner Company continued
giving assurance and promises to pay. Eventually, private respondent
filed a formal complaint with the Insurance Commission, which petitioner
company moved to dismiss on ground of prescription.
Geronima Pulmano was the owner of a jeep insured with petitioner
company in the amount of Php20,000. The jeep got into a vehicular
accident which resulted in the death of one of the victims and private
respondent immediately filed a notice of accident and claim. Petitioner
company took no steps to process the claim so private respondents
Ruling: NO. The Supreme Court finds absolutely nothing in the law
which mandates that the two periods must always concur. On the
contrary, it is very clear that the one year period is only required in
proper cases. It is very obvious that petitioner Company is trying to use
Section 384 of as a cloak to hide itself from its liabilities. In violation of its
duties to adopt and implement reasonable standards for the prompt
investigation of claims and to effectuate prompt, fair and equitable
settlement of claims, and with manifest bad faith, petitioner Company
devised means and ways of stalling the settlement proceedings.
The one year period should be counted from the date of rejection by the
insurer as this is the time the cause of action accrues. Since in these
cases there has yet been no accrual of cause of action, prescription has
not yet set in.
Section 384 has been amended as follows, Action or suit for recovery
of damage due to loss or injury must be brought in proper cases, with the
Commissioner or the Courts within one year from denial of the claim,
otherwise the claimant right of action shall prescribe.
Facts:
Enrique Mora, owner of an Oldsman sedan mortgaged the same to the
HS Reyes Inc. Thereafter, the automobile was insured with the State
Bonding & Insurance Co., Inc with the provision that Loss, if any, is
payable to HS Reyes Inc. by virtue of the fact that said Oldsman sedan
was mortgaged in favor of the latter.
During the effectivity of the insurance contract, the car met with an
accident. Enrique Mora, without the knowledge and consent of HS
Reyes Inc. authorized Bonifacio Bros. Inc. to furnish the labor and
materials and some of which were supplied by the Ayala Auto Parts Co.
Proceeds of the insurance policy was not given to Bonifacio Bros. Inc.
and Ayala Auto Parts Co., hence, complaint was filed before Municipal
Court of Manila against Enrique Mora and the insurance company for the
labor and materials supplied.
The appellants argued that they are privy to the contract. On the other
hand, the insurance company maintains that appellants are not
this prohibition was binding upon Pinca, who made the payment to Adora
at her own risk as she was bound to first check his authority to receive it.
Issue: Whether there exists an insurance contract at the time of the loss
sustained by Pinca.
Ruling:
The appellants are not privy to the contract, hence, they have no right of
action against the insurance company.
Ruling:
Yes. There exists a valid contract of insurance.
Facts:
On June 7, 1981, petitioner MICO issued to the private respondent,
Coronacion Pinca, Fire Insurance Policy on her property effective July
22, 1981 until July 22, 1982.
On October 15, 1981, MICO allegedly cancelled the policy for nonpayment of the premium and sent the corresponding notice to Pinca.
On December 24, 1981, payment of the premium for Pinca was received
by Domingo Adora, agent of MICO.
On January 15, 1982, Adora remitted this payment to MICO, together
with other payments.
Facts:
Pinca made demands for payment but MICO rejected. Such demand
was sustained by the respondent Insurance Commission, hence this
petition. The petitioner argues that there was no payment of premium
and that the policy had been cancelled before the occurrence of the loss.
Also, Adora was not authorized to accept the premium payment because
six months had elapsed since the issuance of the insurance policy and
such acceptance was prohibited by the policy itself. It is also argued that
On May 12, 1962, Kwong Nam applied for a 20-year endowment insurance on his life
for the sum of P20,000.00, with his wife, appellee Ng Gan Zee, as beneficiary. On the
same date, appellant, upon receipt of the required premium from the insured, approved
the application and issued the corresponding policy.
Upon Kwong Nams death due to cancer of the liver with metastasis, appellant denied
the claim on the ground that the answers given by the insured to the questions
appearing in his application for life insurance were untrue. Appellant further maintains
that when the insured was examined in connection with his application for life insurance
he gave the appellants medical examiner false and misleading information as to his
aliment and previous operation. Appellant argues that the insureds statement in hi
application that a tumor hard and of a hens egg size was removed during said
operation, constituted material concealment.
the beneficiaries in the policy has been made without reserving the right
to change said beneficiary/beneficiaries, such designation may not be
Issue:
surrendered to the Company, released or assigned; and no right or
privilege under the Policy may be exercised, or agreement made with the
Company to any change in or amendment to the Policy, without the
consent of the said beneficiary/beneficiaries. On the other hand, the
Whether the insurance company, because of the insureds representation, was mislead private respondent contends that said designation can be amended if the
or deceived into entering the contract.
Court finds a just, reasonable ground to do so.
Ruling:
Facts:
The contract between the parties is the law binding on both of them and
for so many times, this court has consistently issued pronouncements
upholding the validity and effectivity of contracts. Where there is nothing
in the contract which is contrary to law, good morals, good customs,
public policy or public order the validity of the contract must be
sustained. Likewise, contracts which are the private laws of the
contracting parties should be fulfilled according to the literal sense of
their stipulations, if their terms are clear and leave no room for doubt as
to the intention of the contracting parties, for contracts are obligatory, no
matter in what form they may be, whenever the essential requisites for
their validity are present (Phoenix Assurance Co., Ltd. vs. United States
Lines, 22 SCRA 675, Phil. American General Insurance Co., Inc. vs.
Mutuc, 61 SCRA 22.)