INSURANCE CASE DIGEST Compulsory Motor Vehicle Liability Insurance ...……..
ROMERO
(1) Perla Compania de Seguros v CA
Spouses Lim executed a promissory note in favor of Supercars Inc in thr sum of P77,
940 payable in monthly installments and secured by a chattel mortgage over a brand
new Ford Laser Hatchback. The car was insured with Perla Compania de Seguros. S
upercars, with notice to Spouses Lim, assigned their rights, title, and interest on the p
romissory note to FCP Credit Corp.
The vehicle was carnapped while parked in QC. Evelyn Lim, the one using the car b
efore the carnapping, immediately reported the incident to the Anti-Carnapping Unit
of the Phil. Constabulary. She also reported it to the Land Transportation Commissio
n in QC, as compliance with the insurance requirement.
When Lim filed a claim for loss, Perla denied the claim on the ground that Lim, at th
e time the vehicle was carnapped, was in possession of an expired drivers license wh
ich is in violation of the authorized drivers clause of the insurance policy.
“AUTHORIZED DRIVER:
Any of the following: (a) The Insured (b) Any person driving on the Insured's order,
or with his permission. Provided that the person driving is permitted, in accordance w
ith the licensing or other laws or regulations, to drive the Scheduled Vehicle, or has b
een permitted and is not disqualified by order of a Court of Law or by reason of any e
nactment or regulation in that behalf.”
Lim requests from FCP a suspension of monthly payments because of the loss of the
car and that Perla be made to pay the remaining balance in the promissory note becau
se they are the cars insurer.
Perla denied the claim and subsequently FCP demanded that Lim pay the balance of t
he promissory note or to return the vehicle. Lim refused prompting FCP to file a com
plaint against Lim. Lim filed a third party complaint against Perla. The trial court or
dered Lim to pay and dismissed the third party complaint. The CA reversed the decis
ion hence this petition.
Perla argued that the CA erred in finding that Lim was not in violation of the insuran
ce contract because the authorized driverd clause is not applicable to the theft clause
in the contract.
SC finds no merit in Perlas petition.
The comprehensive motor car insurance policy issued by petitioner Perla undertook t
o indemnify the private respondents against loss or damage to the car (a) by accident
al collision or overturning, or collision or overturning consequent upon mechanical b
CABIOS.ORINDAY.PADRID.PAJARITO.REYES.
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reakdown or consequent upon wear and tear; (b) by fire, external explosion, self-igni
tion 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 t
he owner's consent or knowledge, such taking constitutes theft, and, therefore, it is th
e "THEFT"' clause, and not the "AUTHORIZED DRIVER" clause that should apply
It is worthy to note that there is no causal connection between the possession of a val
id driver's license and the loss of a vehicle. To rule otherwise would render car insura
nce practically a sham since an insurance company can easily escape liability by citin
g restrictions which are not applicable or germane to the claim, thereby reducing ind
emnity to a shadow.
In view of the foregoing discussion, We hold that the Court of Appeals did not err in
requiring petitioner Perla to indemnify private respondents for the loss of their insure
d vehicle. However, the latter should be ordered to pay petitioner FCP the amount of
P55,055.93, representing the unpaid installments from December 30, 1982 up to July
1, 1983, as shown in the statement of account prepared by petitioner FCP, 18 plus le
gal interest from July 2, 1983 until fully paid.
(2) Perla Compania de Seguros v Ancheta
Private respondents car an IH Scout collided with a Superlines bus in the highway of
Camarines Norte. The car was insured with Malayan insurance; the bus was insured
with Perla. Private respondents filed with the CFI a complaint for damages against th
r bus driver, Superlines, and Perla.
Respondent judge issued an order directing Perla to pay the private resps by virtue of
the “no fault” clause in the.
Perla denied its liability under the “no fault indemnity” provision arguing 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, as the provisi
on states that "[i]n the case of an occupant of a vehicle, claim shall lie against the ins
urer of the vehicle in which the occupant is riding, mounting or dismounting from."
Still the judge denied the MR and the second MR of Perla. Perla prayed for the annul
ling and setting aside of thr judges order.
Issue: whether or not petitioner is the insurer liable to indemnify private respondents
under Sec. 378 of the Insurance Code.
INSURANCE CASE DIGEST Compulsory Motor Vehicle Liability Insurance ...……..
The law is very clear — the claim shall lie against the insurer of the vehicle in which
the "occupant" ** is riding, and no other. The claimant is not free to choose from wh
ich insurer he will claim the "no fault indemnity," as the law, by using the word "shal
l, makes it mandatory that the claim be made against the insurer of the vehicle in whi
ch 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 ag
ainst the owner of the vehicle responsible for the accident. This is precisely the essen
ce of "no fault indemnity" insurance which was introduced to and made part of our la
ws in order to provide victims of vehicular accidents or their heirs immediate compe
nsation, although in a limited amount, pending final determination of who is responsi
ble for the accident and liable for the victims'injuries or death. In turn, the "no fault i
ndemnity" provision is part and parcel of the Insurance Code provisions on compulso
ry motor vehicle ability insurance [Sec. 373-389] and should be read together with th
e requirement for compulsory passenger and/or third party liability insurance [Sec. 3
77] which was mandated in order to ensure ready compensation for victims of vehicu
lar accidents.
Irrespective of whether or not fault or negligence lies with the driver of the Superline
s bus, as private respondents were not occupants of the bus, they cannot claim the "n
o fault indemnity" provided in Sec. 378 from petitioner. The claim should be made a
gainst the insurer of the vehicle they were riding. This is very clear from the law. Un
doubtedly, in ordering petitioner to pay private respondents the 'no fault indemnity,' r
espondent judge gravely abused his discretion in a manner that amounts to lack of ju
risdiction. The issuance of the corrective writ of certiorari is therefore warranted.
(3) First QC Insurance Company v CA
Plaintiff Jose V. del Rosario proceeded to the loading and unloading zone for public
utility bus stop to wait for a bus bound at QC. When he approached a DMTC bus, th
e said bus slowed down with all its doors wide open. Plaintiff was the last person to b
oard the bus.
While the plaintiff was still on the bus' running board with his hand on the bus door's
handle bar, the slowly moving bus sped forward at a high speed, as a result of which,
the plaintiff lost his balance and fell from the bus. As plaintiff clung instinctively to t
he handle bar, he was dragged by the bus along the asphalted road for about two (2) s
econds. Plaintiff screamed of pain and anguished even as the other passengers shoute
d and the bus' driver, Gil Agpalo, an employee of defendant and third-party plaintiff
DMTC, abruptly stopped the bus. Then, Gil forthwith fled from the scene, leaving th
e bus and the injured plaintiff behind
CABIOS.ORINDAY.PADRID.PAJARITO.REYES.ROMERO
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Plaintiff was brought to the hospital and a skin grafting operation was performed on
his right leg He was confined in the hospital and incurred medical expenses amounti
ng to almost P70,000
Plaintiff filed a complaint against DMTC and its driver. DMTC filed a 3rd party com
plaint against First Insurance. The court dismissed the ordered DMTC to pay plaintif
f actual, compensatory, exemplary, and moral damages and attys fees = more than P1
20k . First Insurance was ordered to indemnify DMTC P12k with interest at the legal
rate.
CA reduced the attys fees and deleted the costs of the complaint. First Insu’s liability
towards DMTC was increased to P50k with legal interest.
CA denied the MR filed by the insurance company hence this pet for review
SC: Finds merit in the petition
The insurance company clearly passed the maximum limit of the petitioner's liability
for damages arising from death or bodily injury at P12,000.00 per passenger and its
maximum liability per accident at P50,000.00. Since only one passenger was injured
in the accident, the insurer's liability for the damages suffered by said passenger is pe
gged to the amount of P12,000.00 only. What does the limit of P50,000.00 per accid
ent mean? It means that the insurer's liability for any single accident will not exceed
P50,000.00 regardless of the number of passengers killed or injured therein. For exa
mple, if ten (10) passengers had been injured by the operation of the insured bus, the
insurer's liability for the accident would not be P120,000.00 (at the rate of P12,000.0
0 per passenger) but would be limited to only P50,000.00 for the entire accident, as p
rovided in the insurance contract
The bus company may not recover from the insurance company (herein petitioner) m
ore than P 12,000.00 per passenger killed or injured, or fifty thousand (P50,000.00) p
esos per accident even if under the judgment of the court, the erring bus operator will
have to pay more than P12,000.00 to each injured passenger. The trial court's interpr
etation of the insurance contract was the correct interpretation.
(4) FIRST QUEZON CITY INSURANCE COMPANY, INC. vs. COURT OF
APPEALS
FACTS:
Jose Del Rosario was injured while boarding a bus owned by De Dios Marikina
Transportation Company (DMTC) in the Manila International Airport. He was
hospitalized for forty days. He filed a suit against the bus company and the court
granted him of over P100,000 pesos in damages. The appellate court reduced
INSURANCE CASE DIGEST Compulsory Motor Vehicle Liability Insurance ...…….. CABIOS.ORINDAY.PADRID.PAJARITO.REYES.ROMERO
3

damages to P55,090. The insurance company’s liability was limited to 12,000. The
amount for insurance was made P50,000 in the appellate court’s decision.

First Quezon City, the insurer of DTMC, filed a motion for reconsideration to limit
the damages back to 12,000 pesos, the amount stipulated in the contract. This was
denied hence this petition for review.

ISSUE:

Can the amount of the insurance company’s liability be limited to Php 12,000?

RULING:

YES. The insurance policy clearly placed the maximum limit of the petitioner's
liability for damages arising from death or bodily injury at P12,000.00 per passenger
and its maximum liability per accident at P50,000.00. Since only one passenger was
injured in the accident, the insurer's liability for the damages suffered by said
passenger is pegged to the amount of P12,000.00 only. What does the limit of
P50,000.00 per accident mean? It means that the insurer's maximum liability for any
single accident will not exceed P50,000.00 regardless of the number of passengers
killed or injured therein. For example, if ten (10) passengers had been injured by the
operation of the insured bus, the insurer's liability for the accident would not be
P120,000.00 (at the rate of P12,000.00 per passenger) but would be limited to only
P50,000.00 for the entire accident, as provided in the insurance contract. The bus
company may not recover from the insurance company (herein petitioner) more than
P12,000.00 per passenger killed or injured, or fifty thousand (P50,000.00) pesos per
accident even if under the judgment of the court, the erring bus operator will have to
pay more than P12,000.00 to each injured passenger. The trial court's interpretation
of the insurance contract was the correct interpretation.