REGINA EDILLON V.

MANILA BANKERS LIFE INSURANCE The accident which resulted in the death of the insured,
CORPORATION, 1982 a risk covered by the policy, occurred on May 31, 1969 or
FORTY-FIVE (45) DAYS after the insurance coverage was
Facts: Sometime in April 1969, Carmen O, Lapuz applied
applied for. There was sufficient time for the private
with respondent insurance corporation for insurance
respondent to process the application and to notice that
coverage against accident and injuries. She filled up the
the applicant was over 60 years of age and thereby
blank application form given to her and filed the same
cancel the policy on that ground if it was minded to do
with the respondent insurance corporation. In the said
so. If the private respondent failed to act, it is either
application form which was dated April 15, 1969, she
because it was willing to waive such disqualification; or,
gave the date of her birth as July 11, 1904. On the same
through the negligence or incompetence of its
date, she paid the sum of P20.00 representing the
employees for which it has only itself to blame, it simply
premium for which she was issued the corresponding
overlooked such fact. Under the circumstances, the
receipt signed by an authorized agent of the respondent
insurance corporation is already deemed in estoppel. Its
insurance corporation. Upon the filing of said application
inaction to revoke the policy despite a departure from
and the payment of the premium on the policy applied
the exclusionary condition contained in the said policy
for, the respondent insurance corporation issued to
constituted a waiver of such condition.
Carmen O. Lapuz its Certificate of Insurance. The policy
was to be effective for a period of 90 days.

On May 31, 1969 or during the effectivity of Certificate
of Insurance No. 12886, Carmen O. Lapuz died in a
vehicular accident in the North Diversion Road. But
Manila Bankers denied her sisters claim because a
provision contained in the Certificate of Insurance,
excluding its liability to pay claims under the policy in
behalf of persons who are under the age of sixteen (16)
years of age or over the age of sixty (60) years ... It is
pointed out that the insured being over sixty (60) years
of age when she applied for the insurance coverage, the
policy was null and void, and no risk on the part of the
respondent insurance corporation had arisen therefrom.
Issue: Was the acceptance by the private respondent
insurance corporation of the premium and the issuance
of the corresponding certificate of insurance deemed a
waiver of the exclusionary condition of overage stated in
the said certificate of insurance?
Ruling: YES. The age of the insured Carmen 0. 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 such information which could hardly be
overlooked in the application form, considering its
prominence thereon and its materiality to the coverage
applied for, the respondent insurance corporation
received her payment of premium and issued the
corresponding certificate of insurance without question.
COUNTRY BANKERS INSURANCE CORPORATION V. LIANGA
BAY AND COMMUNITY MULTI -PURPOSE COOPERATIVE , INC.,
2002
Facts: the petitioner and the respondent entered into a
contract of fire insurance. Under Fire Insurance Policy
No. F-1397, the petitioner insured the respondents
stocks-in-trade against fire loss, damage or liability
during the period starting from June 20, 1989 at 4:00
p.m. to June 20, 1990 at 4:00 p.m., for the sum of Two
Hundred Thousand Pesos (200,000.00). On July 1, 1989,
at or about 12:40 a.m., the respondents building located
at Barangay Diatagon, Lianga, Surigao del Sur was gutted
by fire and reduced to ashes, resulting in the total loss of
the respondents stocks-in-trade, pieces of furnitures
and fixtures, equipments and records.
Due to the loss, the respondent filed an insurance claim
with the petitioner under its Fire Insurance Policy.
Petitioner denied the insurance claim on the ground
that, based on the submitted documents, the building
was set on fire by two (2) NPA rebels who wanted to
obtain canned goods, rice and medicines as provisions
for their comrades in the forest, and that such loss was
an excepted risk under paragraph No. 6 of the policy
conditions of Fire Insurance Policy No. F-1397, which
provides:
This insurance does not cover any loss or damage
occasioned by or through or in consequence, directly or
indirectly, of any of the following occurrences, namely:
(d) Mutiny, riot, military or popular uprising,
insurrection, rebellion, revolution, military or usurped
power.
Issue: Did petitioner satisfy the burden of proof?
Ruling: NO. Where a risk is excepted by the terms of a
policy which insures against other perils or hazards, loss
from such a risk constitutes a defense which the insurer
may urge, since it has not assumed that risk, and from
this it follows that an insurer seeking to defeat a claim
because of an exception or limitation in the policy has
the burden of proving that the loss comes within the
purview of the exception or limitation set up. If a proof is
made of a loss apparently within a contract of insurance,
the burden is upon the insurer to prove that the loss
arose from a cause of loss which is excepted or for which
it is not liable, or from a cause which limits its liability.6
Stated else wise, since the petitioner in this case is
defending on the ground of non-coverage and relying
upon an exemption or exception clause in the fire
insurance policy, it has the burden of proving the facts
upon which such excepted risk is based, by a
preponderance of evidence. But petitioner failed to do
so.
The petitioner relies on the Sworn Statements of Jose
Lomocso and Ernesto Urbiztondo as well as on the Spot
Report of Pfc. Arturo V. Juarbal dated July 1, 1989, more
particularly the following statement therein:
xxx investigation revealed by Jose Lomocso that those
armed men wanted to get can goods and rice for their
consumption in the forest PD investigation further
disclosed that the perpetrator are member (sic) of the
NPA PD end x x x
This is merely hearsay and, therefore, inadmissible. Nor
does this fall under the exceptions to the hearsay rule.
There are exceptions to the hearsay rule, among which
are entries in official records. To be admissible in
evidence, however, three (3) requisites must concur, to
wit:
(a) that the entry was made by a public officer,
or by another person specially enjoined by law to
do so;
(b) that it was made by the public officer in the
performance of his duties, or by such other
person in the performance of a duty specially
enjoined by law; and
(c) that the public officer or other person had
sufficient knowledge of the facts by him stated,
which must have been acquired by him
personally or through official information.
The third requisite was not met in this case since no
investigation, independent of the statements gathered
from Jose Lomocso, was conducted by Pfc. Arturo V.
Juarbal. In fact, as the petitioner itself pointed out, citing
the testimony of Pfc. Arturo Juarbal, the latters Spot
Report was based on the personal knowledge of the
caretaker Jose Lomocso who witnessed every single
incident surrounding the facts and circumstances of the
case.
PERLA COMPANIA DE SEGUROS, INC. V. CA, HERMINIO
LIM, AND EVELYN LIM, 1992
Facts: On December 24, 1981, private respondents
spouses Herminio and Evelyn Lim executed a promissory
note in favor Supercars, Inc. in the sum of P77,940.00,
payable in monthly installments according to the
schedule of payment indicated in said note, and secured
by a chattel mortgage over a brand new red Ford Laser
1300 5DR Hatchback 1981 model with motor and serial
No. SUPJYK-03780, which is registered under the name
of private respondent Herminio Lim and insured with the
petitioner Perla Compania de Seguros, Inc. (Perla for
brevity) for comprehensive coverage under Policy No.
PC/41PP-QCB-43383.
Supercars, Inc., with notice to private respondents
spouses, assigned to petitioner FCP Credit Corporation
(FCP for brevity) its rights, title and interest on said
promissory note and chattel mortgage as shown by the
Deed of Assignment.
At around 2:30 P.M. of November 9, 1982, said vehicle
was carnapped while parked at the back of Broadway
Centrum along N. Domingo Street, Quezon City. Private
respondent Evelyn Lim, who was driving said car before
it was carnapped, immediately called up the Anti-
Carnapping Unit of the Philippine Constabulary to report
said incident and thereafter, went to the nearest police
substation at Araneta, Cubao to make a police report
regarding said incident, as shown by the certification
issued by the Quezon City police.
Issue: Is Perla liable?
Ruling: YES. The comprehensive motor car insurance
policy issued by petitioner Perla undertook to indemnify
the private respondents against loss or damage to the car
(a) by accidental collision or overturning, or collision or
overturning consequent upon mechanical breakdown or
consequent upon wear and tear; (b) by fire, external
explosion, self-ignition or lightning or burglary,
housebreaking or theft; and (c) by malicious act.

Where a car is admittedly, as in this case, unlawfully and

wrongfully taken without the owner's consent or
knowledge, such taking constitutes theft, and, therefore,
it is the "THEFT"' clause, and not the "AUTHORIZED
DRIVER" clause that should apply.

But private respondents are not relieved of their

obligation to pay the former the installments due on the
promissory note on account of the loss of the
automobile. The chattel mortgage constituted over the
automobile is merely an accessory contract to the
promissory note. Being the principal contract, the
promissory note is unaffected by whatever befalls the
subject matter of the accessory contract. Therefore, the
unpaid balance on the promissory note should be paid,
and not just the installments due and payable before the
automobile was carnapped, as erroneously held by the
Court of Appeals.

Pacific Timber Export Corporation v. CA and Workmens

Insurance Company, Inc., 1982

Facts: