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Virginia Perez v CA 2000
Gulf Resorts Inc v Philippine Charter Insurance Corp 2005
Pacific timbher Export Corp v CA 1982
Great pacific life assurance company v CA 1979
Melecio Coquyila v Fieldmens Insurance co Inc 1968
Great pacific life assurance corp v CA
Bankers insurance corp v CA
Perez v CA G.R. No. 112329. January 28, 2000
J. Ynares-Santiago
Facts:
Primitivo B. Perez had been insured with the BF Lifeman Insurance
Corporation for P20,000.00. Sometime in October 1987, an agent
of the insurance corporation, visited Perez in Quezon and
convinced him to apply for additional insurance coverage of
P50,000.00. Virginia A. Perez, Primitivo’s wife, paid P2,075.00 to
the agent. The receipt issued indicated the amount received was a
"deposit." Unfortunately, the agent lost the application form
accomplished by Perez and he asked the latter to fill up another
application form. The agent sent the application for additional
insurance of Perez to the Quezon office. Such was supposed to
forwarded to the Manila office.
Perez drowned. His application papers for the additional
insurance of P50,000.00 were still with the Quezon. It was only
after some time that the papers were brought to Manila. Without
knowing that Perez died, BF Lifeman Insurance Corporation
approved the application and issued the corresponding policy for
the P50,000.00.
Petitioner Virginia Perez went to Manila to claim the benefits
under the insurance policies of the deceased. She was paid
P40,000.00 under the first insurance policy for P20,000.00 but the
insurance company refused to pay the claim under the additional
policy coverage of P50,000.00, the proceeds of which amount to
P150,000.00.
The insurance company maintained that the insurance for
P50,000.00 had not been perfected at the time of the death of
Primitivo Perez. Consequently, the insurance company refunded
the amount paid.
BF Lifeman Insurance Corporation filed a complaint against
Virginia Perez seeking the rescission and declaration of nullity of
the insurance contract in question.
Petitioner Virginia A. 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.
On October 25, 1991, the trial court rendered a decision in favor
of petitioner ordering respondent to pay 150,000 pesos. The
Court of Appeals, however, reversed the decision of the trial court
saying that the insurance contract for P50,000.00 could not have
been perfected since at the time that the policy was issued,
Primitivo was already dead.
Petitioner’s motion for reconsideration having been denied by
respondent court, the instant petition for certiorari was filed on
the ground that there was a consummated contract of insurance
between the deceased and BF Lifeman Insurance Corporation.
Issue: WON the widow can receive the proceeds of the 2nd
insurance policy
Held: No. Petition dismissed.
Ratio:
Perez’s application was subject to the acceptance of private
respondent BF Lifeman Insurance Corporation. The perfection of
the contract of insurance between the deceased and respondent
corporation was further conditioned with the following requisites
stated in the application form:
"there shall be no contract of insurance unless and until a policy is
issued on this application and that the said policy shall not take
effect until the premium has been paid and the policy delivered to
and accepted by me/us in person while I/We, am/are in good
health."
BF Lifeman didn’t give its assent when it merely received the
application form and all the requisite supporting papers of the
applicant. This happens only when it gives a policy.
It is not disputed, however, that when Primitivo died on
November 25, 1987, his application papers for additional
insurance coverage were still with the branch office of respondent
corporation in Quezon. Consequently, there was absolutely no
way the acceptance of the application could have been
communicated to the applicant for the latter to accept inasmuch
as the applicant at the time was already dead.
Petitioner insists that the condition imposed by BF that a policy
must have been delivered to and accepted by the proposed
insured in good health is potestative, being dependent upon the
will of the corporation and is therefore void. The court didn’t
agree. A potestative condition depends upon the exclusive will of
one of the parties and is considered void. The Civil Code states:
When the fulfillment of the condition depends upon the sole will
of the debtor, the conditional obligation shall be void.
The following conditions were imposed by the respondent
company for the perfection of the contract of insurance: a policy
must have been issued, the premiums paid, and the policy must
have been delivered to and accepted by the applicant while he is
in good health.
The third condition isn’t potestative, because the health of the
applicant at the time of the delivery of the policy is beyond the
control or will of the insurance company. Rather, the condition is
a suspensive one whereby the acquisition of rights depends upon
the happening of an event which constitutes the condition. In this
case, the suspensive condition was the policy must have been
delivered and accepted by the applicant while he is in good
health. There was non-fulfillment of the condition, because the
applicant was already dead at the time the policy was issued.
As stated above, a contract of insurance, like other contracts,
must be assented to by both parties either in person or by their
agents. So long as an application for insurance has not been either
accepted or rejected, it is merely an offer or proposal to make a
contract. The contract, to be binding from the date of application,
must have been a completed contract.
The insurance company wasn’t negligent because delay in acting
on the application does not constitute acceptance even after
payment. The corporation may not be penalized for the delay in
the processing of the application papers due to the fact that
process in a week wasn’t the usual timeframe in fixing the
application. Delay could not be deemed unreasonable so as to
constitute gross negligence
Gulf Resorts Inc. V. Philippine Charter Insurance Corp. (2005)
FACTS:
Gulf Resorts, Inc at Agoo, La Union was insured with American
Home Assurance Company which includes loss or damage to
shock to any of the property insured by this Policy occasioned by
or through or in consequence of earthquake
July 16, 1990: an earthquake struck Central Luzon and Northern
Luzon so the properties and 2 swimming pools in its Agoo Playa
Resort were damaged
August 23, 1990: Gulf's claim was denied on the ground that its
insurance policy only afforded earthquake shock coverage to the
two swimming pools of the resort
Petitioner contends that pursuant to this rider, no qualifications
were placed on the scope of the earthquake shock coverage.
Thus, the policy extended earthquake shock coverage to all of the
insured properties.
RTC: Favored American Home - endorsement rider means that
only the two swimming pools were insured against earthquake
shock
CA: affirmed RTC
ISSUE: W/N Gulf can claim for its properties aside from the 2
swimming pools
HELD: YES. Affirmed.
It is basic that all the provisions of the insurance policy should be
examined and interpreted in consonance with each other.
All its parts are reflective of the true intent of the parties.
Insurance Code
Section 2(1)
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
An insurance premium is the consideration paid an insurer for
undertaking to indemnify the insured against a specified peril.

In the subject policy, no premium payments were made with
regard to earthquake shock coverage, except on the two
swimming pools.
Pacific Timber v CA G.R. No. L-38613 February 25, 1982
J. De Castro
Facts:
The plaintiff secured temporary insurance from the defendant for
its exportation of 1,250,000 board feet of Philippine Lauan and
Apitong logs to be shipped from Quezon Province to Okinawa and
Tokyo, Japan.
Workmen’s Insurance issued a cover note insuring the cargo of
the plaintiff subject to its terms and conditions.
The two marine policies bore the numbers 53 HO 1032 and 53 HO
1033. Policy No. 53 H0 1033 was for 542 pieces of logs equivalent
to 499,950 board feet. Policy No. 53 H0 1033 was for 853 pieces
of logs equivalent to 695,548 board feet. The total cargo insured
under the two marine policies consisted of 1,395 logs, or the
equivalent of 1,195.498 bd. ft.
After the issuance of the cover note, 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 in the Diapitan Bay.
While the logs were alongside the vessel, bad weather developed
resulting in 75 pieces of logs which were rafted together co break
loose from each other. 45 pieces of logs were salvaged, but 30
pieces were verified to have been lost or washed away as a result
of the accident.
Pacific Timber informed Workmen’s about the loss of 32 pieces of
logs during loading of SS woodlock.
Although dated April 4, 1963, the letter was received in the office
of the defendant only on April 15, 1963. The plaintiff claimed for
insurance to the value of P19,286.79.
Woodmen’s requested an adjustment company to assess the
damage. It submitted its report, where it found that the loss of 30
pieces of logs is not covered by Policies Nos. 53 HO 1032 and 1033
but within the 1,250,000 bd. ft. covered by Cover Note 1010
insured for $70,000.00.
The adjustment company submitted a computation of the
defendant's probable liability on the loss sustained by the
shipment, in the total amount of P11,042.04.
Woodmen’s wrote the plaintiff denying the latter's claim on the
ground they defendant's investigation revealed that the entire
shipment of logs covered by the two marine policies 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.
The denial of the claim by the defendant was brought by the
plaintiff to the attention of the Insurance Commissioner. The
Insurance Commissioner ruled in favor of indemnifying Pacific
Timber. The company added that the cover note is null and void
for lack of valuable consideration. The trial court ruled in
petitioner’s favor while the CA dismissed the case. Hence this
appeal.
Issues:
WON the cover note was null and void for lack of valuable
consideration
WON the Insurance company was absolved from responsibility
due to unreasonable delay in giving notice of loss.
Held: No. No. Judgment reversed.
Ratio:
1. The fact that no separate premium was paid on the Cover Note
before the loss occurred does not militate against the validity of
the contention even if no such premium was paid. All Cover Notes
do not contain particulars of the shipment that would serve as
basis for the computation of the premiums. Also, no separate
premiums are required to be paid on a Cover Note.
The petitioner paid in full all the premiums, hence there was no
account unpaid on the insurance coverage and the cover note. If
the note is to be treated as a separate policy instead of
integrating it to the regular policies, the purpose of the note
would be meaningless. It is a contract, not a mere application for
insurance.
It may be true that the marine insurance policies issued were for
logs no longer including those which had been lost during loading
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operations. This had to be so because the risk insured against is
for loss during transit, because the logs were safely placed
aboard.
The non-payment of premium on the Cover Note is, therefore, no
cause for the petitioner to lose what is due it as if there had been
payment of premium, for non-payment by it was not chargeable
against its fault. Had all the logs been lost during the loading
operations, but after the issuance of the Cover Note, liability on
the note would have already arisen even before payment of
premium. Otherwise, the note would serve no practical purpose
in the realm of commerce, and is supported by the doctrine that
where a policy is delivered without requiring payment of the
premium, the presumption is that a credit was intended and
policy is valid.
2. The defense of delay can’t be sustained. The facts show that
instead of invoking the ground of delay in objecting to petitioner's
claim of recovery on the cover note, the insurer never had this in
its mind. It has a duty to inquire when the loss took place, so that
it could determine whether delay would be a valid ground of
objection.
There was enough time for insurer to determine if petitioner was
guilty of delay in communicating the loss to respondent company.
It never did in the Insurance Commission. Waiver can be raised
against it under Section 84 of the Insurance Act.
16 SCRA 677 (1999)
INSURANCE LAW: Parties in Insurance Contract
FACTS:
Great Pacific Life Assurance Corporation (Grepalife) executed a
contract of group life insurance with Development Bank of the
Philippines (DBP) wherein Grepalife agreed to insure the lives of
eligible housing loan mortgagors of DBP.
One such loan mortgagor is Dr. Wilfredo Leuterio. In an
application form, Dr. Leuterio answered questions concerning his
test, attesting among others that he does not have any heart
conditions and that he is in good health to the best of his
knowledge.
However, after about a year, Dr. Leuterio died due to “massive
cerebral hemorrhage.” When DBP submitted a death claim to
Grepalife, the latter denied the claim, alleging that Dr. Leuterio
did not disclose he had been suffering from hypertension, which
caused his death. Allegedly, such non-disclosure constituted
concealment that justified the denial of the claim.
Hence, the widow of the late Dr. Leuterio filed a complaint against
Grepalife for “Specific Performance with Damages.” Both the trial
court and the Court of Appeals found in favor of the widow and
ordered Grepalife to pay DBP.
ISSUE:
Whether the CA erred in holding Grepalife liable to DBP as
beneficiary in a group life insurance contract from a complaint
filed by the widow of the decedent/mortgagor
HELD:
The rationale of a group of insurance policy of mortgagors,
otherwise known as the “mortgage redemption insurance,” is a
device for the protection of both the mortgagee and the
mortgagor. On the part of the mortgagee, it has to enter into such
form of contract so that in the event of the unexpected demise of
the mortgagor during the subsistence of the mortgage contract,
the proceeds from such insurance will be applied to the payment
of the mortgage debt, thereby relieving the heirs of the
mortgagor from paying the obligation. In a similar vein, ample
protection is given to the mortgagor under such a concept so that
in the event of death, the mortgage obligation will be
extinguished by the application of the insurance proceeds to the
mortgage indebtedness. In this type of policy insurance, the
mortgagee is simply an appointee of the insurance fund. Such
loss-payable clause does not make the mortgagee a party to the
contract.
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The insured, being the person with whom the contract was made,
is primarily the proper person to bring suit thereon. Subject to
some exceptions, insured may thus sue, although the policy is
taken wholly or in part for the benefit of another person, such as
a mortgagee.
And since a policy of insurance upon life or health may pass by
transfer, will or succession to any person, whether he has an
insurable interest or not, and such person may recover it
whatever the insured might have recovered, the widow of the
decedent Dr. Leuterio may file the suit against the insurer,
Grepalife
20-year endowment insurance plan to children, pointing out that
since the customers were asking for such coverage.
Helen Go died of influenza. Ngo Hing sought the payment of the
proceeds of the insurance, but having failed in his effort, he filed
the action for the recovery before the Court of First Instance of
Cebu, which ruled against him.
Issues:
1. Whether the binding deposit receipt constituted a temporary
contract of the life insurance in question
2. Whether Ngo Hing concealed the state of health and physical
condition of Helen Go, which rendered void the policy

Held: No. Yes. Petition dismissed.

Coquia V. Fieldmen's Insurance Co., Inc. (1968).
Lessons Applicable: stipulation pour autrui (Insurance)
FACTS:
December 1, 1961: Fieldmen's Insurance Company, Inc. issued in
favor of the Manila Yellow Taxicab Co., Inc. (Manila) from
December 1, 1961 to December 1, 1962
February 10, 1962: A taxicab of Manila driven by Carlito Coquia,
met a vehicular accident at Mangaldan, Pangasinana and died
The insured filed a claim for P5,000 in which Fieldmen's replied
with an offer to pay P2,000 by way of compromise
The insured rejected it and countered with P4,000
September 18, 1962: Carlito's parents filed a complaint against
the Company for collection
The company pleaded lack of cause of action
RTC: ordered to pay the parents
ISSUE: W/N there is a stipulation pour autrui that exempts the
general rule that the parents are not a party to the contract
HELD: YES. RTC affirmed.
There is a stipulation that the Company "will indemnify any
authorized Driver who is driving the Motor Vehicle" of the Insured
and, in the event of death of said driver, the Company shall,
likewise, "indemnify his personal representatives."
typical of contracts pour autrui, this character being made more
manifest by the fact that the deceased driver paid 50% of the
corresponding premiums, which were deducted from his weekly
commissions
expressly stipulated and declared that it shall be a condition
precedent to any right of action or suit upon this Policy that the
award by such arbitrator, arbitrators or umpire of the amount of
the Company's liability hereunder if disputed shall be first
obtained
both parties from the inception of their dispute proceeded in
entire disregard of the provisions of the contract relating to
arbitration
conduct was as effective a rejection of the right to arbitrate
Ratio:
The receipt was intended to be merely a provisional insurance
contract. Its perfection was subject to compliance of the following
conditions: (1) that the company shall be satisfied that the
applicant was insurable on standard rates; (2) that if the company
does not accept the application and offers to issue a policy for a
different plan, the insurance contract shall not be binding until
the applicant accepts the policy offered; otherwise, the deposit
shall be refunded; and (3) that if the company disapproves the
application, the insurance applied for shall not be in force at any
time, and the premium paid shall be returned to the applicant.
The receipt is merely an acknowledgment that the latter's branch
office had received from the applicant the insurance premium and
had accepted the application subject for processing by the
insurance company. There was still approval or rejection the same
on the basis of whether or not the applicant is "insurable on
standard rates." Since Pacific Life disapproved the insurance
application of respondent Ngo Hing, the binding deposit receipt in
question had never become in force at any time. The binding
deposit receipt is conditional and does not insure outright. This
was held in Lim v Sun.
The deposit paid by private respondent shall have to be refunded
by Pacific Life.
2. Ngo Hing had deliberately concealed the state of health of his
daughter Helen Go. When he supplied data, he was fully aware
that his one-year old daughter is typically a mongoloid child. He
withheld the fact material to the risk insured.
“The contract of insurance is one of perfect good faith uberrima
fides meaning good faith, absolute and perfect candor or
openness and honesty; the absence of any concealment or
demotion, however slight.”
The concealment entitles the insurer to rescind the contract of
insurance.

Great Pacific v CA G.R. No. L-31845 April 30, 1979

J. De Castro

Facts:
Ngo Hing filed an application with the Great Pacific for a twenty-
year endowment policy in the amount of P50,000.00 on the life of
his one-year old daughter Helen. He supplied the essential data
which petitioner Mondragon, the Branch Manager, wrote on the
form. The latter paid the annual premium the sum of P1,077.75
going over to the Company, but he retained the amount of
P1,317.00 as his commission for being a duly authorized agent of
Pacific Life.
Upon the payment of the insurance premium, the binding deposit
receipt was issued Ngo Hing. Likewise, petitioner Mondragon
handwrote at the bottom of the back page of the application form
his strong recommendation for the approval of the insurance
application. Then Mondragon received a letter from Pacific Life
disapproving the insurance application. The letter stated that the
said life insurance application for 20-year endowment plan is not
available for minors below seven years old, but Pacific Life can
consider the same under the Juvenile Triple Action Plan, and
advised that if the offer is acceptable, the Juvenile Non-Medical
Declaration be sent to the company.
The non-acceptance of the insurance plan by Pacific Life was
allegedly not communicated by petitioner Mondragon to private
respondent Ngo Hing. Instead, on May 6, 1957, Mondragon wrote
back Pacific Life again strongly recommending the approval of the