Calanoc v. CAG.R. No. L-8151 December 16, 1955J. Bautita An!

elo
Doctrine" In case of ambiguity in an insurance contract covering accidental death, the Supreme Courtheld that such terms shall be
construed strictly against the insurer and liberally in favor of the insured inorder to effect the purpose of indemnity. #act"Melencio
Basilio, a watchman of the Manila Auto Supply, secured a life insurance policy fromthe Philippine American Insurance Company in
the amount of P,!!! to which was attached asupplemental contract covering death by accident. "e later died from a gunshot wound
on the occasionof a robbery committed# subse$uently, his widow was paid P,!!! representing the face value of thepolicy. %he widow
demanded the payment of the additional sum of P,!!! representing the value of thesupplemental policy which the company refused
because the deceased died by murder during therobbery and while ma&ing an arrest as an officer of the law which were e'pressly
e'cluded in the
contract. %he company(s contention which was upheld by the Court of Appeals provides that
the
circumstances surrounding Basilio(s death was caused by one of the ris&s e'cluded by the
supplementary contract which e'empts the company from liability.$ue"Is the Philippine American )ife Insurance Co. liable to the
petitioner for the amount covered by thesupplemental contract*"eld+,es.
%he circumstances of Basilio(s death cannot be ta&en as purely intentional on the part of
Basilio to e'pose himself to the danger. %here is no proof that his death was the result of intentional&illing because there is the
possibility that the malefactor had fired the shot merely to scare away the
people around. In this case, the company(s defense points out that Basilio(s
is included among the ris&se'cluded in the supplementary contract# however, the terms and phraseology of the e'ception clauseshould
be clearly e'pressed within the understanding of the insured. Art. -.// of the 0ew Civil Codeprovides that in case ambiguity,
uncertainty or obscurity in the interpretation of the terms of thecontract, it shall be construed against the party who caused such
obscurity. Applying this to thesituation, the ambiguous or obscure terms in the insurance policy are to be construed strictly against
theinsurer and liberally in favor of the insured party. %he reason is to ensure the protection of the insuredsince these insurance
contracts are usually arranged and employed by e'perts and legal advisers actinge'clusively in the interest of the insurance company.
As long as insurance companies insist upon the useof ambiguous, intricate and technical provisions, which conceal their own
intentions, the courts must, infairness to those who purchase insurance, construe every ambiguity in favor of the insured.
Calanoc v. CA %98 &'$L (9)
Post under case digests, Commercial )aw at 1ednesday, 2ebruary , !- Posted by Schi3ophrenic Mind
#act" Basilio was a watchman of the Manila Auto Supply located at the corner of Avenida 4i3al and 5urbaran. "e secured a life
insurance policy from the Philippine American )ife Insurance Company in the amount of P,!!! to which was attached a
supplementary contract covering death by accident. 6n 7anuary 8, -98-, he died of a gunshot wound on the occasion of a robbery
committed in the house of Atty. 6:eda at the corner of 6ro$uieta and 5urbaran streets. Calanoc, the widow, was paid the sum of
P,!!!, face value of the policy, but when she demanded the payment of the additional sum of P,!!! representing the value of the
supplemental policy, the company refused alleging, as main defense, that the deceased died because he was murdered by a person who
too& part in the commission of the robbery and while ma&ing an arrest as an officer of the law which contingencies were e'pressly
e'cluded in the contract and have the effect of e'empting the company from liability.
It is contended in behalf of the company that Basilio was &illed which ;ma&ing an arrest as an officer of the law; or as a result of an
;assault or murder; committed in the place and therefore his death was caused by one of the ris&s e'cluded by the supplementary
contract which e'empts the company from liability. %his contention was upheld by the Court of Appeals. "ence, this petition.
$ue" 1hether or not the death of the victim comes within the purview of the e'ception clause of the supplementary policy and,
hence, e'empts the company from liability.
'el*" 06. Basilio was a watchman of the Manila Auto Supply which was a bloc& away from the house of Atty. 6:eda where
something suspicious was happening which caused the latter to as& for help. 1hile at first he declined the invitation of Atty. 6:eda to
go with him to his residence to in$uire into what was going on because he was not a regular policeman, he later agreed to come along
when prompted by the traffic policeman, and upon approaching the gate of the residence he was shot and died. %he circumstance that
he was a mere watchman and had no duty to heed the call of Atty. 6:eda should not be ta&en as a capricious desire on his part to
e'pose his life to danger considering the fact that the place he was in duty<bound to guard was only a bloc& away. In volunteering to
e'tend help under the situation, he might have thought, rightly or wrongly, that to &now the truth was in the interest of his employer it
being a matter that affects the security of the neighborhood. 0o doubt there was some ris& coming to him in pursuing that errand, but
that ris& always e'isted it being inherent in the position he was holding. "e cannot therefore be blamed solely for doing what he
believed was in &eeping with his duty as a watchman and as a citi3en. And he cannot be considered as ma&ing an arrest as an officer of
the law, as contended, simply because he went with the traffic policeman, for certainly he did not go there for that purpose nor was he
as&ed to do so by the policeman.
Much less can it be pretended that Basilio died in the course of an assault or murder considering the very nature of these crimes. In the
first place, there is no proof that the death of Basilio is the result of either crime for the record is barren of any circumstance showing
how the fatal shot was fired. Perhaps this may be clarified in the criminal case now pending in court as regards the incident but before
that is done anything that might be said on the point would be a mere con:ecture. 0or can it be said that the &illing was intentional for
there is the possibility that the malefactor had fired the shot merely to scare away the people around for his own protection and not
necessarily to &ill or hit the victim. In any event, while the act may not e'empt the triggerman from liability for the damage done, the
fact remains that the happening was a pure accident on the part of the victim. %he victim could have been either the policeman or Atty.
6:eda for it cannot be pretended that the malefactor aimed at the deceased precisely because he wanted to ta&e his life.
B$AG+AN v CA %G.R. L-,55(9)" Biagtan was &illed as his house was being robbed. %he insurance company paid the basic amount
of P8,!!! but refused to pay the additional P8,!!! under the accidental death benefit clause, on the ground that his death was the result
of in:uries intentionally inflicted by third parties and was not covered. %he trial court ruled that there was no proof that the robbers
intended to &ill Biagtan, or :ust to scare him away by thrusting at him with their &nives. %he Supreme Court held otherwise, pointing
out that there were nine wounds in all. %he e'ception in the accidental benefit clause does not spea& of the purpose = whether
homicidal or not = of a third party in causing the in:uries, but only of the fact that such in:uries have been intentionally inflicted. 0ine
wounds inflicted with bladed weapons at close range cannot be considered innocent insofar as intent is concerned. %he manner of
e'ecution of the crime permits no other conclusion.
>issent+ %he case of Calanoc is controlling. %he thrusts seemed to be a refle' action on the part of the robbers upon being surprised by
Biagtan. %he accidental death benefit clause carries several e'ceptions, with an ambiguous fifth paragraph saying that in:uries inflicted
intentionally by a third party were among the e'ceptions. %he ambiguous clause conflicts with all the other four e'ceptions and
seemingly e'cept all other in:uries, intentionally inflicted by a third party, regardless of any violation of law or provocation by the
insured, and defeat the very purpose of the policy of giving the insured double indemnity in case of accidental death by e'ternal and
violent means.
Applying the rule of noscitus a sociis, the double indemnity policy covers the insured against accidental death, whether caused by
fault, negligence or intent of a third party which is unforeseen and une'pected by the insured. All the associated words and concepts in
the policy plainly e'clude the accidental death from the coverage of the policy only where the in:uries are self<inflicted or attended by
some proscribed act of the insured or incurred in some e'pressly included calamity such as riot, war or atomic e'plosion. Besides, two
other insurance companies which also covered the insured paid the benefits.
#$N-AN G.N.RAL A//0RANC. C1R& v CA %G.R. 1229(2)" Carlie Suposa was &illed while on his way home from a party.
1hen his family tried to collect on the insurance proceeds, the insurer denied the claim saying that murder and assault were not within
the scope of coverage of the insurance policy, because it was not accidental but a deliberate and intentional act of the assailant. %he
Insurance Commission said the death was covered by the policy, a decision upheld by the CA.
%he CA pointed out that+
-. %he record is barren of how the stab wound was inflicted
. 1hile the act may not e'empt the un&nown perpetrator from criminal liability, the happening was a pure accident on the
part of the victim
.. %he personal accident policy enumerated -! circumstances wherein no liability attaches to insurer and murder and assault
were not e'pressly mentioned. 2ailure of the insurer to include these leads to the conclusion that it did not intend to e'empt itself from
liability for such death.
#$N-AN G.N.RAL A//0RANC. C1R&1RA+$1N v.+'. '1N1RABL. C10R+1# A&&.AL/
-. SC4A ?9., September , -9906C60, 7.+
#AC+/"
6n 6ctober , -9@A, deceased, Carlie Surposa was insured with petitioner 2inmanBeneral Assurance Corporation with his parents,
spouses 7ulia and Carlos Surposa, and brothersChristopher, Charles, Chester and Clifton, all surnamed, Surposa, as beneficiaries.
1hile saidinsurance policy was in full force and effect, the insured, Carlie Surposa, died on 6ctober -@,-9@@ as a result of a stab
wound inflicted by one of the three C.D unidentified men. Privaterespondent and the other beneficiaries of said insurance policy filed a
written notice of claimwith the petitioner insurance company which denied said claim contending that murder andassault are not
within the scope of the coverage of the insurance policy. Private respondent fileda complaint with the Insurance Commission which
rendered a favorable response for therespondent. %he appellate court ruled li&ewise.Petitioner filed this petition alleging grave abuse
of discretion on the part of the appellatecourt in applying the principle of ;e'presso unius e'clusio alterius; in a personal
accidentinsurance policy, since death resulting from murder andEor assault are impliedly e'cluded in saidinsurance policy considering
that the cause of death of the insured was not accidental but rather adeliberate and intentional act of the assailant. %herefore, said death
was committed withdeliberate intent which, by the very nature of a personal accident insurance policy, cannot beindemnified.
$//0."
1hether or not the insurer is liable for the payment of the insurance premiums
'.LD"
,es, the insurer is still liable.Contracts of insurance are to be construed liberally in favor of the insured and strictlyagainst the insurer.
%hus ambiguity in the words of an insurance contract should be interpreted infavor of its beneficiary. %he terms ;accident; and
;accidental; as used in insurance contractshave not ac$uired any technical meaning, and are construed by the courts in their ordinary
andcommon acceptation. %hus, the terms have been ta&en to mean that which happen by chance orfortuitously, without intention and
design, and which is une'pected, unusual, and unforeseen.1here the death or in:ury is not the natural or probable result of the
insuredFs voluntary act, or if something unforeseen occurs in the doing of the act which produces the in:ury, the resultingdeath is
within the protection of the policies insuring against death or in:ury from accident. Inthe case at bar, it cannot be pretended that Carlie
Surposa died in the course of an assault ormurder as a result of his voluntary act considering the very nature of these crimes. 0either
can it be said that where was a capricious desire on the part of the accused to e'pose his life to dangerconsidering that he was :ust
going home after attending a festival.2urthermore, the personal accident insurance policy involved herein specificallyenumerated only
ten C-!D circumstances wherein no liability attaches to petitioner insurancecompany for any in:ury, disability or loss suffered by the
insured as a result of any of thestimulated causes. %he principle of ; e'presso unius e'clusio alterius;
G
the mention of onething implies the e'clusion of another thing
G
is therefore applicable in the instant case sincemurder and assault, not having been e'pressly included in the enumeration of the
circumstancesthat would negate liability in said insurance policy cannot be considered by implication todischarge the petitioner
insurance company from liability for, any in:ury, disability or losssuffered by the insured. %hus, the failure of the petitioner insurance
company to include deathresulting from murder or assault among the prohibited ris&s leads inevitably to the conclusionthat it did not
intend to limit or e'empt itself from liability for such death.
2inman Beneral Assurance Corporation vs. C.A. CB.4. 0o. -!!9/!. September !, -99D
@
-A3
#$N-AN G.N.RAL A//0RANC. C1R&1RA+$1N, 4etitioner,
v.
+'. '1N1RABL. C10R+ 1# A&&.AL/ an* J0L$A /0R&1/A, re4on*ent.
A$uino and Associates for petitioner.
Public Attorney(s 6ffice for private respondent.
Ponente+ 06C60
#AC+/"
HPIetitioner filed this petition alleging grove abuse of discretion on the part of the appellate court in applying the principle of
Je'presso unius e'clusio alteriusK in a personal accident insurance policy since death resulting from murder andEor assault are
impliedly e'cluded in said insurance policy considering that the cause of death of the insured was not accidental but rather a deliberate
and intentional act of the assailant in &illing the former as indicated by the location of the lone stab wound on the insured. %herefore,
said death was committed with deliberate intent which, by the very nature of a personal accident insurance policy, cannot be
indemnified.
$//0."
1hether or not death petitioner is correct that results from assault or murder deemed are not included in the terms JaccidentK and
JaccidentalK.
'.LD"
06. Petition for certiorari with restraining order and preliminary in:unction was denied for lac& of merit.
RA+$1"
%he terms JaccidentK and JaccidentalK as used in insurance contracts have not ac$uired any technical meaning, and are construed by
the courts in their ordinary and common acceptation. %hus, the terms have been ta&en to mean that which happen by chance or
fortuitously, without intention and design, and which is une'pected, unusual, and unforeseen. An accident is an event that ta&es place
without one(s foresight or e'pectation G an event that proceeds from an un&nown cause, or is an unusual effect of a &nown cause and,
therefore, not e'pected.
HIIt is well settled that contracts of insurance are to be construed liberally in favor of the insured and strictly against the insurer. %hus
ambiguity in the words of an insurance contract should be interpreted in favor of its beneficiary.
5enit6 $nurance Cor4oration v. CA 7G.R. No. 85,96 -a8 19, 1992:
Post under case digests, Commercial )aw at Saturday, 2ebruary 8, !- Posted by Schi3ophrenic Mind
#act" 6n 7anuary 8, -9@., private respondent )awrence 2ernande3 insured his car for ;own damage; with petitioner 5enith
Insurance Corporation. 6n 7uly A, -9@., the car figured in an accident and suffered actual damages in the amount of P.,A?!.!!. After
allegedly being given a run around by 5enith for two CD months, 2ernande3 filed a complaint with the 4egional %rial Court of Cebu
for sum of money and damages resulting from the refusal of 5enith to pay the amount claimed. Aside from actual damages and
interests, 2ernande3 also prayed for moral damages in the amount of P-!,!!!.!!, e'emplary damages of P8,!!!.!!, attorneyFs fees of
P.,!!!.!! and litigation e'penses of P.,!!!.!!.
6n September @, -9@., 5enith filed an answer alleging that it offered to pay the claim of 2ernande3 pursuant to the terms and
conditions of the contract which, the private respondent re:ected. 6n 7une ?, -9@A, a decision was rendered by the trial court in favor
of private respondent 2ernande3. 6n August -/, -9@@, the Court of Appeals rendered its decision affirming in toto the decision of the
trial court.
$ue" %he propriety of the award of moral damages, e'emplary damages and attorneyFs fees is the main issue raised herein by
petitioner.
'el*" %he award of damages in case of unreasonable delay in the payment of insurance claims is governed by the Philippine
Insurance Code, which provides+
Sec. ??. In case of any litigation for the enforcement of any policy or contract of insurance, it shall be the duty of the Commissioner
or the Court, as the case may be, to ma&e a finding as to whether the payment of the claim of the insured has been unreasonably
denied or withheld# and in the affirmative case, the insurance company shall be ad:udged to pay damages which shall consist of
attorneyFs fees and other e'penses incurred by the insured person by reason of such unreasonable denial or withholding of payment
plus interest of twice the ceiling prescribed by the Monetary Board of the amount of the claim due the insured, from the date following
the time prescribed in section two hundred forty<two or in section two hundred forty<three, as the case may be, until the claim is fully
satisfied# Provided, %hat the failure to pay any such claim within the time prescribed in said sections shall be considered prima facie
evidence of unreasonable delay in payment.
It is clear that under the Insurance Code, in case of unreasonable delay in the payment of the proceeds of an insurance policy, the
damages that may be awarded are+ -D attorneyFs fees# D other e'penses incurred by the insured person by reason of such unreasonable
denial or withholding of payment# .D interest at twice the ceiling prescribed by the Monetary Board of the amount of the claim due the
in:ured# and ?D the amount of the claim.
/0N $N/0RANC. 1##$C. L+D v CA" 2eli' )im 7r shot himself dead and the family tried to claim on the policy. %he insurer
refused, saying that when he put a gun to his head, though thin&ing it was not loaded, he willfully e'posed himself to needless peril
and removed himself from the coverage of the insurance policy. %he family said that )im had removed the maga3ine before and fully
believed that the gun was not loaded. As such, it was an accident that should be covered by the policy. %he court held that while )im
was un$uestionably negligent, that should not prevent his widow from recovering from the insurance policy he obtained precisely
against accident. %here is nothing in the policy that relieves the insurer of the responsibility to pay the indemnity agreed upon if the
insured is shown to have contributed to his own accident.
0arratives CBerne BuerreroD
of the ;Mas&arra Annual 2estival.; %hereafter, 7ulia Surposa and the other beneficiaries of said insurancepolicy filed a written notice
of claim with 2inman which denied said claim contending that murder and assaultare not within the scope of the coverage of the
insurance policy. 6n ? 2ebruary -9@9, Surposa filed acomplaint with the Insurance Commission which subse$uently rendered a
decision, ordering 2inman liable topay Surposa the sum of P-8,!!!.!! representing the proceeds of the policy with interest from the
date of thefiling of the complaint until fully satisfied. As no evidence was submitted to prove the claim for mortuary aidin the sum of
P-,!!!.!!, the same was not entertained. 6n -- 7uly -99-, the appellate court affirmed saiddecision. 2inman filed the petition for
certiorari.
Issue+
1hether the death was committed with deliberate intent which, by the very nature of a personalaccident insurance policy, cannot be
indemnified.
"eld+
06. %he terms ;accident; and ;accidental,; as used in insurance contracts have not ac$uired anytechnical meaning, and are construed
by the courts in their ordinary and common acceptation. %hus, the termshave been ta&en to mean that which happen by chance or
fortuitously, without intention and design, andwhich is une'pected, unusual, and unforeseen. An accident is an event that ta&es place
without oneFs foresightor e'pectation G an event that proceeds from an un&nown cause, or is an unusual effect of a &nown causeand,
therefore, not e'pected. %he generally accepted rule is that, death or in:ury does not result from accidentor accidental means within the
terms of an accident<policy if it is, the natural result of the insuredFs voluntaryact, unaccompanied by anything unforeseen e'cept the
death or in:ury. %here is no accident when a deliberateact is performed unless some additional, une'pected, independent, and
unforeseen happening occurs whichproduces or brings about the result of in:ury or death. In other words, where the death or in:ury is
not thenatural or probable result of the insuredFs voluntary act, or if something unforeseen occurs in the doing of theact which
produces the in:ury, the resulting death is within the protection of the policies insuring against deathor in:ury from accident. "erein, it
cannot be pretended that Carlie Surposa died in the course of an assault ormurder as a result of his voluntary act considering the very
nature of these crimes. In the first place, theinsured and his companion were on their way home from attending a festival. %hey were
confronted byunidentified persons. %he record is barren of any circumstance showing how the stab wound was inflicted.0or can it be
pretended that the malefactor aimed at the insured precisely because the &iller wanted to ta&e hislife. In any event, while the act may
not e'empt the un&nown perpetrator from criminal liability, the factremains that the happening was a pure accident on the part of the
victim. %he insured died from an event thattoo& place without his foresight or e'pectation, an event that proceeded from an unusual
effect of a &nowncause and, therefore, not e'pected. 0either can it be said that there was a capricious desire on the part of theaccused
to e'pose his life to danger considering that he was :ust going home after attending a festival.2urthermore, the personal accident
insurance policy involved specifically enumerated only -! circumstanceswherein no liability attaches to 2inamn for any in:ury,
disability or loss suffered by the insured as a result ofany of the stipulated causes. %he principle of ;e'presso unius e'clusio alterius;
G the mention of one thingimplies the e'clusion of another thing G is therefore applicable in the present case since murder and
assault,not having been e'pressly included in the enumeration of the circumstances that would negate liability in saidinsurance policy
cannot be considered by implication to discharge 2inman from liability for any in:ury,disability or loss suffered by the insured. %hus,
the failure of 2inman to include death resulting from murderor assault among the prohibited ris&s leads inevitably to the conclusion
that it did not intend to limit ore'empt itself from liability for such death.
;6/un $nurance 1<<ice Lt*. v. Court o< A44eal 7GR 9,;8;, 1( Jul8 199,:
2irst >ivision, Cru3 C7D+ . concur
#act"
Sun Insurance 6ffice )td. issued Personal Accident Policy !8A@/ to 2eli' )im, 7r. with a face value ofP!!,!!!.!!. %wo months later,
he was dead with a bullet wound in his head. As beneficiary, his wife 0erissa)im sought payment on the policy but her claim was
re:ected. Sun Insurance agreed that there was no suicide.It argued, however, that there was no accident either. Pilar 0alagon, )imFs
secretary, was the only eyewitness
to his death. It happened on A 6ctober -9@, at about -! p.m., after his motherFs birthday party. According to0alagon, )im was in a
happy mood Cbut not drun&D and was playing with his handgun, from which he hadpreviously removed the maga3ine. As she watched
the television, he stood in front of her and pointed the gunat her. She pushed it aside and said it might be loaded. "e assured her it was
not and then pointed it to histemple. %he ne't moment there was an e'plosion and )im slumped to the floor. "e was dead before he
fell.%he widow sued Sun Insurance in the 4egional %rial Court of 5amboanga City and was sustained. SunInsurance was sentenced to
pay her P!!,!!!.!!, representing the face value of the policy, with interest at thelegal rate# P-!,!!!.!! as moral damages# P8,!!!.!!
as e'emplary damages# P8!,!!!.!! as actual andcompensatory damages# and P8,!!!.!! as attorneyFs fees, plus the cost of the suit.
%his decision was affirmedon appeal, and the motion for reconsideration was denied. Sun Insurance then came to the Supreme Court.
$ue"
1hether the insured willfully e'posed himself to needless peril and thus removed himself from thecoverage of the insurance policy.
'el*"
06.
An accident is an event which happens without any human agency or, if happening through humanagency, an event which, under the
circumstances, is unusual to and not e'pected by the person to whom ithappens. It has also been defined as an in:ury which happens
by reason of some violence or casualty to theinsured without his design, consent, or voluntary co<operation. "erein, the incident that
resulted in )imFsdeath was indeed an accident. 6n the other hand, the parties agree that )im did not commit suicide.0evertheless, Sun
Insurance contends that the insured willfully e'posed himself to needless peril and thusremoved himself from the coverage of the
insurance policy. It should be noted at the outset that suicide andwillful e'posure to needless peril are in pari materia because they
both signify a disregard for oneFs life. %heonly difference is in degree, as suicide imports a positive act of ending such life whereas the
second actindicates a rec&less ris&ing of it that is almost suicidal in intent. %he posture << that by the mere act ofpointing the gun to his
temple, )im had willfully e'posed himself to needless peril and so came under thee'ception << is arguable. But what is not is that )im
had removed the maga3ine from the gun and believed itwas no longer dangerous. "e e'pressed assured her that the gun was not
loaded. It is submitted that )im didnot willfully e'pose himself to needless peril when he pointed the gun to his temple because the
fact is that hethought it was not unsafe to do so. %he act was precisely intended to assure 0alagon that the gun was indeedharmless.
)im was un$uestionably negligent and that negligence cost him his own life. But it should notprevent his widow from recovering from
the insurance policy he obtained precisely against accident. %here isnothing in the policy that relieves the insurer of the responsibility
to pay the indemnity agreed upon if theinsured is shown to have contributed to his own accident. Indeed, most accidents are caused by
negligence.%here are only four e'ceptions e'pressly made in the contract to relieve the insurer from liability, and none ofthese
e'ceptions is applicable in the present case. It bears noting that insurance contracts are as a rulesupposed to be interpreted liberally in
favor of the assured. %here is no reason to deviate from this rule,especially in view of the circumstances of the case.
7.=.L >$LLAC1R+A v. +'. $N/0RANC. C1--$//$1N
B.4. 0o. )<8?-/-, @ 6ctober -9@!-!! SC4A ?A/2AC%S+Lillacorta had her Colt )ancer car insured with Mmpire InsuranceCompany
against own damage, theft and .rd
party liability.1hile the car was in the repair shop, one of the employees of the said repair shop too& it out for a :oyride after which
itfigured in a vehicular accident. %his resulted to the death of thedriver and some of the passengers as well as to e'tensivedamage to
the car.Lillacorta filed a claim for total loss with the said insurancecompany. "owever, it denied the claim on the ground that
theaccident did not fall within the provisions of the policy either forthe 6wn >amage or %heft coverage, invo&ing the policyprovision
on JAuthori3ed >river ClauseK. %his was upheld by the Insurance Commission further statingthat the car was not stolen and therefore
not covered by the %heft Clause because it is not evident that the person who too&the car for a :oyride intends to permanently deprive
the insuredof hisE her car.ISSNM+1hether or not the insurer company should pay the said claim"M)>+ ,es. 1here the insured(s car is
wrongfully ta&en without theinsured(s consent from the car service and repair shop to whomit had been entrusted for chec&<up and
repairs Cassuming thatsuch ta&ing was for a :oy ride, in the course of which it wastotally smashed in an accidentD, respondent insurer is
liable andmust pay insured for the total loss of the insured vehicle underthe %heft Clause of the policy.Assuming, despite the totally
inade$uate evidence, that theta&ing was JtemporaryK and for a J:oy rideK, the Court sustainsas the better view that which holds that
when a person, eitherwith the ob:ect of going to a certain place, or learning how todrive, or en:oying a free ride, ta&es possession of a
vehiclebelonging to another, without the consent of its owner, he isguilty of theft because by ta&ing possession of the personalproperty
belonging to another and using it, his intent to gain is evident since he derives therefrom utility, satisfaction,en:oymet and
pleasure.ACC64>I0B),, the appealed decision is set aside and :udgmentis hereby rendered sentencing private respondent to
paypetitioner the sum of P.8,!!!.!! with legal interest from thefiling of the complaint until full payment is made and to pay thecosts
of suit.
>DA. D. -AGLANA v. C1N/1LAC$1N
August A, -994omero, 7.
RA+$1 D.C$D.ND$
%he underlying reason behind the third party liability C%P)D of the Compulsory Motor Lehicle )iabilityInsurance is to protect in:ured
persons against the insolvency of the insured who causes such in:ury,and to give such in:ured person a certain beneficial interest in the
proceeds of the policy.
#AC+/
Petitioner+2iguracion Lda. >e Maglana, Mditha M. Cru3, Mrlinda M. Masesar, )eonila M. Mallari,Bilda Antonio and the minors
Maglana4espondents+"onorable 2rancisco Consolacion, Presiding 7udge of >avao City Branch II and A2ISC6Insurance Corporation
O
%he nature of the liability of an insurer sued together with the insuredEoperator<owner of acommon carrier which figured in an
accident causing the death of a third person is sought tobe defined in this petition for certiorari.
O
)ope Maglana was an employee of the Bureau of Customs whose wor& station was at )asa,>avao City.
O
6n >ecember !, -9/@, early morning, )ope Maglana was on his way to his wor& station,driving a motorcycle owned by the Bureau
of Customs.
O
Subse$uently, he met an accident that resulted in his death. "e died on the spot.
O
%he PN7 :eep that bumped the deceased was driven by Pepito Into, operated and owned bydefendant >estra:o.
O
2rom the investigation conducted by the traffic investigator, the PN7 :eep was overta&inganother passenger :eep that was going
towards the city poblacion.
O
1hile overta&ing, the PN7 :eep of defendant >estra:o running abreast with the overta&en :eep,bumped the motorcycle driven by the
deceased who was going towards the direction of )asa,>avao City.
O
%he point of impact was on the lane of the motorcycle and the deceased was thrown from theroad and met his untimely death.
O
Conse$uently, the heirs of )ope Maglana filed an action for damages and attorney(s feesagainst operator Patricio >estra:o and
A2ISC6. An information for homicide thru rec&lessimprudence was also filed against Pepito Into.
O
>uring the pendency of the civil case, Into was held to be guilty of homicide thru rec&lessimprudence and was sentenced accordingly.
%rial Court+
O
%he trial court found that >estra:o had not e'ercised sufficient diligence as the operator of the :eepney.
O
In the dispositive portion of the decision, it was e'pressly stipulated by the court that thedefendant insurance company is ordered to
reimburse defendant >estra:o whatever amountsthe latter shall have paid only up to the e'tent of his insurance coverage.
O
In denying the motions for reconsideration, the Court said that since the insurance contract isin the nature of suretyship, then the
liability of the insurer is secondary only up to the e'tent of the insurance coverage.Petitioner(s contention+
O
A2ISC6 should not merely be held secondarily liable because the Insurance Code provides thatthe insurer(s liability is direct and
primary andEor :ointly and severally with the operator of thevehicle, although only up to the e'tent of the insurance coverage.
&erla Com4ania *e /e!uro, $nc. v 'onorable Court o< A44eal an* -ila!ro Ca8a
B.4. 0o. /@@A! May @, -99!
2M40A0,
C.7.+
#AC+/"Milagros Cayas was the registered owner of a Ma3da bus. Said passenger vehicle was insuredwith Perla Compania de
Seguros, Inc. CPCSID under a policy issued on 2ebruary ., -9/@. 6n >ecember -/, -9/@, the bus figured in an accident in 0aic, Cavite
in:uring several of its passengers. 6ne of them,-9<year old Mdgardo Perea, sued Milagros Cayas for damages in the Court of 2irst
Instance# while threeothers, namely+ 4osario del Carmen, 4icardo Magsarili and Charlie Antolin, agreed to a settlement of P?,!!!.!!
each. At the pre<trial, Milagros Cayas failed to appear and hence, she was declared as indefault. After trial, the court rendered a
decision in favor of Perea to compensate the Perea with damagesof Pl!,!!!.!! for medical fees# P-!,!!!.!! for e'emplary damages#
P8,!!!.!! for moral damages#P/,!!!.!! for AttorneyFs fees.6n 0ovember --, -9@-, Milagros Cayas filed a complaint for a sum of
money and damagesagainst PCSI in the Court of 2irst Instance. Milagros Cayas filed a motion to declare PCSI in default for its failure
to file an answer. %he motion was granted and Cayas was allowed to adduce evidence e'<parte
.6n 7uly -., -9@, the court rendered :udgment by default ordering PCSI to pay Milagros Cayas P8!,!!!as compensation for the
in:ured passengers, P8,!!! as moral damages and P8,!!! as attorneyFs fees.Said decision was set aside after the PCSI filed a motion
therefor. In due course, the court promulgated a decision in favor of Cayas, but removed the award of moral damages.PCSI appealed
to the Court of Appeals, which, in its decision of May @, -9@/ the lower courtFsdecision. Its motion for reconsideration having been
denied, PCSI filed the instant petition charging theCourt of Appeals with having erred in affirmingin toto the decision of the lower
court.ISSNM+1hether or not the amount of award of damages was proper. 4N)I0B+ 06.PCSI see&s to limit its liability only to the
payment made by Cayas to Perea and only up to theamount of P-,!!!.!!. It altogether denies liability for the payments made by
Cayas to the other three C.Din:ured passengers 4osario del Carmen, 4icardo Magsarili and Charlie Antolin in the amount of P?,!!!.!!
each or a total of P-,!!!.!!.%he insurance policy involved e'plicitly limits PCSIFs liability to P-,!!!.!! per person and
toP8!,!!!.!! per accident.1e have ruled in
Sto&es vs. Malayan Insurance Co., Inc., that the terms of the contract constitutethe measure of the insurerFs liability and compliance
therewith is a condition precedent to the insuredFsright of recovery from the insurer.In the case at bar, the insurance policy clearly and
categorically placed PCSIFs liability for alldamages arising out of death or bodily in:ury sustained by one person as a result of any one
accident atP-,!!!.!!. Said amount complied with the minimum fi'ed by the law then prevailing, Section .// of Presidential >ecree
0o. A- Cwhich was retained by P.>. 0o. -?A!, the Insurance Code of -9/@D, which provided that the liability of land transportation
vehicle operators for bodily in:uries sustained by a passenger arising out of the use of their vehicles shall not be less than P-,!!!. In
other words, under thelaw, the minimum liability is P-,!!! per passenger. PCSIFs liability under the insurance contract not being less
than P-,!!!.!!, and therefore not contrary to law, morals, good customs, public order or public policy, said stipulation must be
upheld as effective, valid and binding as between the parties.In li&e manner, we rule as valid and binding upon Cayas the condition in
the policy in re$uiringher to secure the written permission of PCSI before effecting any payment in settlement of any claim


against her. %here is nothing unreasonable, arbitrary or ob:ectionable in this stipulation as would warrantits nullification. %he same
was obviously designed to safeguard the insurerFs interest against collusion between the insured and the claimants.In her cross<
e'amination before the trial court, Milagros Cayas admitted that PCSI did not giveany written authority that Cayas were supposed to
pay those claims.It being specifically re$uired that PCSIFs written consent be first secured before any payment insettlement of any
claim could be made, Cayas is precluded from see&ing reimbursement of the paymentsmade to del Carmen, Magsarili and Antolin in
view of her failure to comply with the condition containedin the insurance policy.Clearly, the fundamental principle that contracts are
respected as the law between the contracting parties finds application in the present case. %hus, it was error on the part of the trial and
appellate courtsto have disregarded the stipulations of the parties and to have substituted their own interpretation of theinsurance
policy.1e observe that although Milagros Cayas was able to prove a total loss of only P??,!!!.!!, PCSIwas made liable for the
amount of P8!,!!!.!!, the ma'imum liability per accident stipulated in the policy. %his is patent error. An insurance indemnity, being
merely an assistance or restitution insofar ascan be fairly ascertained, cannot be availed of by any accident victim or claimant as an
instrument of enrichment by reason of an accident.1"M4M264M, the decision of the Court of Appeals is hereby modified in that
petitioner shall pay Milagros Cayas the amount of %welve %housand Pesos CP-,!!!. !!D plus legal interest from the promulgation of
the decision of the lower court until it is fully paid and attorneyFs fees in the amount of P8,!!!.!!. 0o pronouncement as to costs.
&.RLA C1-&AN$A D. /.G0R1/, $NC v. CA an* CA3A/
B.4. 0o. /@@A!
May @, -99!
#AC+/" Cayas was the registered owner of a Ma3da bus which was insured with petitioner PM4)A C6MPA0IA >M SMBN46S,
I0C CPCSID. %he bus figured in an accident in Cavite, in:uring several of its passengers. 6ne of them, Perea, sued Cayas for damages
in the C2I, while three others agreed to a settlement of P?,!!!.!! each with Cayas.
After trial, the court rendered a decision in favor of Perea, Cayas ordered to compensate the latter with damages. Cayas filed a
complaint with the C2I, see&ing reimbursement from PCSI for the amounts she paid to A)) victims, alleging that the latter refused to
ma&e such reimbursement notwithstanding the fact that her claim was within its contractual liability under the insurance policy.
%he decision of the CA affirmed in toto the decision of the 4%C of Cavite, the dispositive portion of which states+
I0 LIM1 62 %"M 264MB6I0B, :udgment is hereby rendered ordering defendant PCSI to pay plaintiff Cayas the sum of P8!,!!!.!!
under its ma'imum liability as provided for in the insurance policy# P
In this petition for review on certiorari, petitioner see&s to limit its liability only to the payment made by private respondent to Perea
and only up to the amount of P-,!!!.!!. It altogether denies liability for the payments made by private respondents to the other .
in:ured passengers totaling P-,!!!.!!.
$//0." how much should PCSI pay*
'.LD" %he decision of the CA is modified, petitioner only to pay Cayas P-,!!!,!!!.!!
%he insurance policy provides+
8. 0o admission, offer, promise or payment shall be made by or on behalf of the insured without the written consent of the Company
P
It being specifically re$uired that petitioner(s written consent be first secured before any payment in settlement of any claim could be
made, private respondent is precluded from see&ing reimbursement of the payments made to the other . victims in view of her failure
to comply with the condition contained in the insurance policy.
Also, the insurance policy involved e'plicitly limits petitioner(s liability to P-,!!!.!! per person and to P8!,!!!.!! per accident
Clearly, the fundamental principle that contracts are respected as the law between the contracting parties finds application in the
present case. %hus, it was error on the part of the trial and appellate courts to have disregarded the stipulations of the parties and to
have substituted their own interpretation of the insurance policy.
1e observe that although Cayas was able to prove a total loss of only P??,!!!.!!, petitioner was made liable for the amount of
P8!,!!!.!!, the ma'imum liability per accident stipulated in the policy. %his is patent error. An insurance indemnity, being merely an
assistance or restitution insofar as can be fairly ascertained, cannot be availed of by any accident victim or claimant as an instrument
of enrichment by reason of an accident.
Gea!onia v CA G.R. No. 1199,( #ebruar8 6, 1995
#act"
Beagonia, owner of a store, obtained from Country Ban&ers fire insurance policy for P-!!,!!!.!!. %he - year policy and covered
thestoc& trading of dry goods.
%he policy noted the re$uirement that
;.. %he insured shall give notice to the Company of any insurance or insurances already effected, or which may subse$uently be
effected, covering any of the property or properties consisting of stoc&s in trade, goods in process andEor inventories only hereby
insured, and unless notice be given and the particulars of such insurance or insurances be stated therein or endorsed in this policy
pursuant to Section 8! of the Insurance Code, by or on behalf of the Company before the occurrence of any loss or damage, all
benefits under this policy shall be deemed forfeited, provided however, that this condition shall not apply when the total insurance or
insurances in force at the time of the loss or damage is not more than P!!,!!!.!!.;
%he petitioners( stoc&s were destroyed by fire. "e then filed a claim which was subse$uently denied because the petitioner(s stoc&s
were covered by two other fire insurance policies for Php !!,!!! issued by P2IC. %he basis of the private respondentFs denial was the
petitionerFs alleged violation of Condition . of the policy.
Beagonia then filed a complaint against the private respondent in the Insurance Commission for the recovery of P-!!,!!!.!! under
fire insurance policy and damages. "e claimed that he &new the e'istence of the other two policies. But, he said that he had no
&nowledge of the provision in the private respondentFs policy re$uiring him to inform it of the prior policies and this re$uirement was
not mentioned to him by the private respondentFs agent.
%he Insurance Commission found that the petitioner did not violate Condition . as he had no &nowledge of the e'istence of the two
fire insurance policies obtained from the P2IC# that it was Cebu %esing %e'tiles wEc procured the P2IC policies wEo informing him or
securing his consent# and that Cebu %esing %e'tile, as his creditor, had insurable interest on the stoc&s.
%he Insurance Commission then ordered the respondent company to pay complainant the sum of P-!!,!!!.!! with interest and
attorney(s fees.
CA reversed the decision of the Insurance Commission because it found that the petitioner &new of the e'istence of the two other
policies issued by the P2IC.
$ue"
-. 160 the petitioner had not disclosed the two insurance policies when he obtained the fire insurance and thereby violated Condition
. of the policy.
. 160 he is prohibited from recovering
'el*" ,es. 0o. Petition Branted
Ratio"
-. %he court agreed with the CA that the petitioner &new of the prior policies issued by the P2IC. "is letter of -@ 7anuary -99- to the
private respondent conclusively proves this &nowledge. "is testimony to the contrary before the Insurance Commissioner and which
the latter relied upon cannot prevail over a written admission made ante litem motam. It was, indeed, incredible that he did not &now
about the prior policies since these policies were not new or original.
. Stated differently, provisions, conditions or e'ceptions in policies which tend to wor& a forfeiture of insurance policies should be
construed most strictly against those for whose benefits they are inserted, and most favorably toward those against whom they are
intended to operate.
1ith these principles in mind, Condition . of the sub:ect policy is not totally free from ambiguity and must be meticulously analy3ed.
Such analysis leads us to conclude that CaD the prohibition applies only to double insurance, and CbD the nullity of the policy shall only
be to the e'tent e'ceeding P!!,!!!.!! of the total policies obtained.
2urthermore, by stating within Condition . itself that such condition shall not apply if the total insurance in force at the time of loss
does not e'ceed P!!,!!!.!!, the private respondent was amenable to assume a co<insurerFs liability up to a loss not e'ceeding
P!!,!!!.!!. 1hat it had in mind was to discourage over<insurance. Indeed, the rationale behind the incorporation of ;other
insurance; clause in fire policies is to prevent over<insurance and thus avert the perpetration of fraud. 1hen a property owner obtains
insurance policies from two or more insurers in a total amount that e'ceeds the propertyFs value, the insured may have an inducement
to destroy the property for the purpose of collecting the insurance. %he public as well as the insurer is interested in preventing a
situation in which a fire would be profitable to the insured.
Gea!onia v. Court o< A44eal 7GR 1199,(, 6 #ebruar8 1995:
2irst >ivision, >avide 7r. C7D+ ? concur
#act"
Armando Beagonia is the owner of 0ormanFs Mart located in the public mar&et of San 2rancisco,Agusan del Sur. 6n >ecember
-9@9, he obtained from Country Ban&ers Insurance Corporation fireinsurance policy 0o. 2<-?A for P-!!,!!!.!!. %he period of
the policy was from >ecember -9@9 to >ecember -99! and covered the following+ ;Stoc&<in<trade consisting principally of dry
goods such as 4%1Fsfor men and women wear and other usual to assuredFs business.; Beagonia declared in the policy under
thesubheading entitled C6<I0SN4A0CM that Mercantile Insurance Co., Inc. was the co<insurer for P8!,!!!.!!.2rom -9@9 to -99!,
Beagonia had in his inventory stoc&s amounting to P.9,-.!.8!, itemi3ed as follows+5enco Sales, Inc., P88,A9@.!!# 2. )egaspi Ben.
Merchandise, @A,?..8!# and Cebu %esing %e'tiles,8!,!!!.!! Con creditD# totalling P.9,-.!.8!. %he policy contained the following
condition, that ;the insuredshall give notice to the Company of any insurance or insurances already effected, or which may
subse$uentlybe effected, covering any of the property or properties consisting of stoc&s in trade, goods in process andEorinventories
only hereby insured, and unless notice be given and the particulars of such insurance or insurancesbe stated therein or endorsed in this
policy pursuant to Section 8! of the Insurance Code, by or on behalf ofthe Company before the occurrence of any loss or damage, all
benefits under this policy shall be deemedforfeited, provided however, that this condition shall not apply when the total insurance or
insurances in forceat the time of the loss or damage is not more than P!!,!!!.!!.; 6n / May -99!, fire of accidental originbro&e
out at around /+.! p.m. at the public mar&et of San 2rancisco, Agusan del Sur. BeagoniaFs insuredstoc&s<in<trade were completely
destroyed prompting him to file with Country Ban&ers a claim under thepolicy. 6n @ >ecember -99!, Country Ban&ers denied the
claim because it found that at the time of the loss BeagoniaFs stoc&s<in<trade were li&ewise covered by fire insurance policies BA<
@-?A and BA<@-??, forP-!!,!!!.!! each, issued by the Cebu Branch of the Philippines 2irst Insurance Co., Inc. CP2ICD.
%hesepolicies indicate that the insured was ;Messrs. >iscount Mart CMr. Armando Beagonia, Prop.D; with amortgage clause reading
;;M64%BABMM+ )oss, if any, shall be payable to Messrs. Cebu %esing %e'tiles,Cebu City as their interest may appear sub:ect to the
terms of this policy. C6<I0SN4A0CM >MC)A4M>+P-!!,!!!. G Phils. 2irst CMBE2<?/8@; %he basis of Country Ban&ersF denial
was BeagoniaFs allegedviolation of Condition . of the policy. Beagonia then filed a complaint against Country Ban&ers with
theInsurance Commission CCase ..?!D for the recovery of P-!!,!!!.!! under fire insurance policy 2<-?A andfor attorneyFs fees and
costs of litigation. "e attached his letter of -@ 7anuary -99- which as&ed for thereconsideration of the denial. "e admitted in the said
letter that at the time he obtained Country Ban&ersFs fireinsurance policy he &new that the two policies issued by the P2IC were
already in e'istence# however, he hadno &nowledge of the provision in Country Ban&ersF policy re$uiring him to inform it of the prior
policies# thisre$uirement was not mentioned to him by Country Ban&ersF agent# and had it been so mentioned, he wouldnot have
withheld such information. "e further asserted that the total of the amounts claimed under the threepolicies was below the actual value
of his stoc&s at the time of loss, which was P-,!!!,!!!.!!. In its decisionof - 7une -99., the Insurance Commission found that
Beagonia did not violate Condition . as he had no&nowledge of the e'istence of the two fire insurance policies obtained from the
P2IC# that it was Cebu %esing%e'tiles which procured the P2IC policies without informing him or securing his consent# and that
Cebu%esing %e'tile, as his creditor, had insurable interest on the stoc&s. %hese findings were based on BeagoniaFstestimony that he
came to &now of the P2IC policies only when he filed his claim with Country Ban&ers andthat Cebu %esing %e'tile obtained them and
paid for their premiums without informing him thereof. %heInsurance Commission ordered Country Ban&ers to pay Beagibua the sum
of P-!!,!!!.!! with legal interestfrom the time the complaint was filed until fully satisfied plus the amount of P-!,!!!.!! as
attorneyFs fees.1ith costs. Its motion for the reconsideration of the decision having been denied by the InsuranceCommission in its
resolution of ! August -99., Country Ban&ers appealed to the Court of Appeals by way ofa petition for review CCA<B4 SP .-9-AD.
In its decision of 9 >ecember -99., the Court of Appeals reversedthe decision of the Insurance Commission because it found that
Beagonia &new of the e'istence of the twoother policies issued by the P2IC. "is motion to reconsider the adverse decision having
been denied,Beagonia filed the petition for review on certiorari.
$ue 71:"
1hether the non<disclosure of other insurance policies violate condition . of the policy, so as todeny Beagonia from recovering on the
policy.
'el* 71:"
Condition . of Country Ban&ersFs Policy 2<-?A is a condition which is not proscribed by law. Itsincorporation in the policy is
allowed by Section /8 of the Insurance Code, Such a condition is a provisionwhich invariably appears in fire insurance policies and is
intended to prevent an increase in the moral ha3ard.It is commonly &nown as the additional or ;other insurance; clause and has been
upheld as valid and as awarranty that no other insurance e'ists. Its violation would thus avoid the policy. "owever, in order
toconstitute a violation, the other insurance must be upon the same sub:ect matter, the same interest therein, andthe same ris&. %he fire
insurance policies issued by the P2IC name Beagonia as the assured and contain amortgage clause which reads+ ;)oss, if any, shall be
payable to MMSS4S. %MSI0B %MQ%I)MS, Cebu City astheir interest may appear sub:ect to the terms of the policy.; %his is clearly a
simple loss payable clause, not astandard mortgage clause. %he Court concludes that CaD the prohibition in Condition . of the sub:ect
policyapplies only to double insurance, and CbD the nullity of the policy shall only be to the e'tent e'ceedingP!!,!!!.!! of the total
policies obtained. %he first conclusion is supported by the portion of the conditionreferring to other insurance ;covering any of the
property or properties consisting of stoc&s in trade, goods inprocess andEor inventories only hereby insured,; and the portion regarding
the insuredFs declaration on thesubheading C6<I0SN4A0CM that the co<insurer is Mercantile Insurance Co., Inc. in the sum of
P8!,!!!.!!.A double insurance e'ists where the same person is insured by several insurers separately in respect of thesame sub:ect
and interest. Since the insurable interests of a mortgagor and a mortgagee on the mortgagedproperty are distinct and separate# the two
policies of the P2IC do not cover the same interest as that covered by the policy of Country Ban&ers, no double insurance e'ists. %he
non<disclosure then of the former policieswas not fatal to BeagoniaFs right to recover on Country Ban&ersF policy.
$ue 7,:"
1hether the violation of Condition . of the policy renders the policy void.
'el* 7,:"
Nnli&e the ;other insurance; clauses involved in Beneral Insurance and Surety Corp. vs. 0g "ua,-!A Phil. ---/ H-9A!I, or in Pioneer
Insurance R Surety Corp. vs. ,ap, A- SC4A ?A H-9/?I which reads;%he insured shall give notice to the company of any insurance or
insurances already effected, or which maysubse$uently be effected covering any of the property hereby insured, and unless such
notice be given and theparticulars of such insurance or insurances be stated in or endorsed on this Policy by or on behalf of
theCompany before the occurrence of any loss or damage, all benefits under this Policy shall be forfeited;# or inthe -9.! case of Santa
Ana vs. Commercial Nnion Assurance Co., 88 Phil. .9, ..? H-9.!I, which provided;that any outstanding insurance upon the whole
or a portion of the ob:ects thereby assured must be declaredby the insured in writing and he must cause the company to add or insert it
in the policy, without which suchpolicy shall be null and void, and the insured will not be entitled to indemnity in case of loss,;
Condition . inCountry Ban&ersF policy 2<-?A does not absolutely declare void any violation thereof. It e'pressly providesthat the
condition ;shall not apply when the total insurance or insurances in force at the time of the loss ordamage is not more than
P!!,!!!.!!.; By stating within Condition . itself that such condition shall notapply if the total insurance in force at the time of loss
does not e'ceed P!!,!!!.!!, Country Ban&ers wasamenable to assume a co<insurerFs liability up to a loss not e'ceeding P!!,!!!.!!.
1hat it had in mind wasto discourage over<insurance. Indeed, the rationale behind the incorporation of ;other insurance; clause in
firepolicies is to prevent over<insurance and thus avert the perpetration of fraud. 1hen a property owner obtainsinsurance policies
from two or more insurers in a total amount that e'ceeds the propertyFs value, the insuredmay have an inducement to destroy the
property for the purpose of collecting the insurance. %he public aswell as the insurer is interested in preventing a situation in which a
fire would be profitable to the insured.
#ortune $nurance an* /uret8 Co., $nc., v. CA 7G.R. No. 115,(8, -a8 ,;, 1995:
Post under case digests, Commercial )aw at %uesday, 2ebruary -, !- Posted by Schi3ophrenic Mind
#act" 6n 7une 9, -9@/, Producer(s Ban& of the Philippines( armored vehicle was robbed, in transit, of seven hundred twenty<five
thousand pesos CPhp /8,!!!.!!D that it was transferring from its branch in Pasay to its main branch in Ma&ati. %o mitigate their loss,
they claim the amount from their insurer, namely 2ortune Insurance and Surety Co..
2ortune Insurance, however, assails that the general e'emption clause in the Casualty Insurance coverage had a general e'emption
clause, to wit+
BM0M4A) MQCMP%I60S
%he company shall not be liable under this policy in respect of
''' ''' '''
CbD any loss caused by any dishonest, fraudulent or criminal act of the insured or any officer, employee, partner, director, trustee or
authori3ed representative of the Insured whether acting alone or in con:unction with others. . . .
And, since the driver CMagalongD and security guard CAtigaD of the armored vehicle were charged with three others as liable for the
robbery, 2ortune denies Producer(s Ban& of its insurance claim.
%he trial court and the court appeals ruled in favor of recovery, hence, the case at bar.
$ue" 1hether recovery is precluded under the general e'emption clause.
'el*" ,es, recovery is precluded under the general e'emption clause.
"owsoever viewed, Producers entrusted the three with the specific duty to safely transfer the money to its head office, with Alampay
to be responsible for its custody in transit# Magalong to drive the armored vehicle which would carry the money# and Atiga to provide
the needed security for the money, the vehicle, and his two other companions. In short, for these particular tas&s, the three acted as
agents of Producers. A ;representative; is defined as one who represents or stands in the place of another# one who represents others or
another in a special capacity, as an agent, and is interchangeable with ;agent.; .
In view of the foregoing, 2ortune is e'empt from liability under the general e'ceptions clause of the insurance policy.
#1R+0N. $N/0RANC. AND /0R.+3 C1., $NC. v. CA
B4 0o. --8/@May ., -998
2AC%S
4espondent Producer(s Ban& of the Philippines( armored vehicle was robbed in transit, of seven hundredtwenty<five thousand pesos
CPhp /8,!!!.!!D that it was transferring from its branch in Pasay to its mainbranch in Ma&ati. %o mitigate their loss, respondent
claimed the amount from their insurer, petitioner 2ortune Insurance and Surety Co.Petitioner refused to pay as the loss is e'cluded
from the coverage of the insurance policy under thegeneral e'ceptions which states that 2ortune Insurance will not be liable for any
loss caused by anydishonest, fraudulent or criminal act of the insured or any officer, employee, partner, director, trustee or authori3ed
representative of the Insured whether acting alone or in con:unction with others. And since the driver CMagalongD and security guard
CAtigaD of the armored vehicle were charged with threeothers as liable for the robbery, 2ortune denied respondent ban& of its insurance
claim.%he 4%C and CA ruled in favor of respondent ban&.
$//0.
160 recovery is precluded under the general e'emption clause.
'.LD
,es. Producer(s Ban& entrusted the three with the specific duty to safely transfer the money to its headoffice, with Alampay Cban&
tellerD to be responsible for its custody in transit# Magalong to drive the armoredvehicle which would carry the money# and Atiga to
provide the needed security for the money, the vehicle,and his two other companions. In short, for these particular tas&s, the three
acted as agents of Producers. A;representative; is defined as one who represents or stands in the place of another# one who
representsothers or another in a special capacity, as an agent, and is interchangeable with ;agent.; As such, 2ortune is e'empt from
liability under the general e'ceptions clause of the insurance policy.