Case Facts Issue Held

White Gold Marine Services, Inc. owns several shipping vessels. Steamship
Mutual Underwriting Association, Ltd. (based in Bermuda) is a protection and
indemnity club which is an association composed of shipowners in general who
band together for the specific purpose of providing insurance cover on a mutual
Yes. The test to determine if a contract is an insurance contract or not, depends on the nature of the promise, the act
basis against liabilities incidental to shipowning that the members incur in favor of
required to be performed, and the exact nature of the agreement in the light of the occurrence, contingency, or
third parties. White Gold, through Pioneer Insurance (agent of Steamship Mutual
circumstances under which the performance becomes requisite. It is not by what it is called. If it is a contract of
here), procured a protection and indemnity coverage from Steamship Mutual.
indemnity, it must be a contract of insurance. In fact, a protection and indemnity club is a form of insurance where the
Steamship Mutual does not have authority from the Insurance Commission to Whether or not
White Gold Marine vs members are both the insurers and the insured. It is a mutual insurance company. The club indemnifies the member for
conduct insurance business in the Philippines but its collection agent here (Pioneer Steamship Mutual
Pioneer Insurance whatever risks it may incur against a third party where the third party is other than the club and the members. Hence,
Insurance) has been licensed to conduct insurance business. needs a license to
(protection and indemnity Steamship Mutual needs to procure a license from the Insurance Commission in order to continue operating here.
operate in the
club)
Later, Steamship Mutual filed a case for collection of sum of money against White Philippines
Pioneer Insurance also needs to secure another license as an insurance broker/agent of Steamship Mutual pursuant to
Gold due to the latter’s failure to pay its balance with the former. White Gold
Section 299 of the Insurance Code.
averred that Steamship Mutual has no license [hence it cannot collect]. Nor can it
collect through Pioneer Insurance because, though Pioneer Insurance is licensed
as an insurance company, it is not licensed to be an insurance broker/agent.
Steamship Mutual insisted it is not conducting insurance business here and is
merely a protection and indemnity club. The Insurance Commission as well as the
Court of Appeals ruled against White Gold.

YES. Section 13 thereof which is expressed in terms that are clear and unambiguous, that all benefits under the policy
shall be forfeited "If the claim be in any respect fraudulent, or if any false declaration be made or used in support thereof,
or if any fraudulent means or devises are used by the Insured or anyone acting in his behalf to obtain any benefit under
the policy" However, according to the investigation report, the building appeared to have
Rafael (Rex) Verendia's residential building was insured with Fidelity and Surety "no occupant" and that Mr. Roberto Garcia was "renting on the otherside (sic) portion of said compound" These pieces of
Insurance Company, Country Bankers Insurance and Development Insurance with evidence belie Verendia's uncorroborated testimony that Marcelo Garcia , whom he considered as the real lessee, was
Monte de Piedad & Savings Bank as beneficiary. While the three fire insurance occupying the building when it was burned. Robert Garcia (the purported lessee) then executed an affidavit before the
W/N there was false
Verendia vs CA policies were in force, the insured property was completely destroyed by fire one National Intelligence and Security Authority (NISA) to the effect that he was not the lessee of Verendia's house and that
declaration which would
(misrepresented lease early morning. Fidelity was accordingly informed of the loss and despite demands, his signature on the contract of lease was a complete forgery. Worse yet, by presenting a false lease contract, Verendia,
forfeit his benefits under
contract) refused payment under its policy, thus prompting Verendia to file a complaint. reprehensibly disregarded the principle that insurance contracts are uberrimae fidae and demand the most abundant
Section 13 of the policy
Fidelity refused the claim stating that there was a misrepresentation since the good faith. Verendia concocted the lease contract to deflect responsibility for the fire towards an alleged "lessee" and
lessee was not Roberto Garcia but Marcelo Garcia inflated the value of the property by the alleged monthly rent.

Finally, the subrogation receipt by itself does not prove that a settlement had been arrived at and enforced. Thus, to
interpret Fidelity's presentation of the subrogation receipt in evidence as indicative of its accession to its "terms" is not
only wanting in rational basis but would be substituting the will of the Court for that of the parties. No representative of
Fidelity has signed said receipt.
 Case Facts
Ernani Trinos applied for a health care coverage with Philam. He answered no to a
question asking if he or his family members were treated to heart trouble, asthma,
diabetes, etc. The application was approved for 1 year. He was also given
hospitalization benefits and out-patient benefits. After the period expired, he was
given an expanded coverage for Php 75,000. During the period, he suffered from
heart attack and was confined at MMC. The wife tried to claim the benefits but the
petitioner denied it saying that he concealed his medical history by answering no to
Philamcare Health the aforementioned question. She had to pay for the hospital bills amounting to
Systems Inc vs CA 76,000. Her husband subsequently passed away. She filed a case in the trial court
(healthcare agreement as for the collection of the amount plus damages. The CA affirmed but deleted
an insurance contract) awards for damages. Hence, this appeal.
Petitioner claimed that it granted benefits only when the insured is alive during the
one-year duration. It contended that there was no indemnification unlike in
insurance contracts. It supported this claim by saying that it is a health
maintenance organization covered by the DOH and not the Insurance Commission.
Lastly, it claimed that the Incontestability clause didn’t apply because at least two-
year and not one-year effectivity periods were required.
Producers Bank’s money was stolen while it was being transported from Pasay to
Makati. The security guard guarding the money and the driver of the armored
vehicle were charged with violation of Anti-Highway Robbery Law. The bank filed a
claim under the theft or robbery insurance policy, and such was refused by the
insurance corporation due to the stipulation:
Fortune Insurance and
GENERAL EXCEPTIONS
Surety Co Inc vs CA
The company shall not be liable under this policy in report of
(armored car robbery-
(b) any loss caused by any dishonest, fraudulent or criminal act of the insured or
employees or not/general
any officer, employee, partner, director, trustee or authorized representative of
exception clause)
the Insured whether acting alone or in conjunction with others. . . .
In the trial court, the bank claimed that the suspects were not any of the above
mentioned. They won the case. The appellate court affirmed on the basis that the
bank had no power to hire or dismiss the guard and could only ask for
replacements from the security agency.
Issue Held
It is an insurane contract. In this case, the husband’s health was the insurable interest. The health care agreement was
in the nature of non-life insurance, which is primarily a contract of indemnity. The provider must pay for the medical
expenses resulting from sickness or injury. While petitioner contended that the husband concealed material fact of his
sickness, the contract required Trinos to sign authorization to furnish reports about his medical condition. The contract
also authorized Philam to inquire directly to his medical history. Hence, the contention of concealment isn’t valid.
They can’t also invoke the “Invalidation of agreement” clause where failure of the insured to disclose information was a
grounds for revocation simply because the answer assailed by the company was the heart condition question was based
on the insured’s opinion. He wasn’t a medical doctor, so he can’t accurately gauge his condition. Where matters of
opinion or judgment are called for, answers made in good faith and without
intent to deceive will not avoid a policy even though they are untrue. In such case the insurer is not justified in relying
upon such statement, but is obligated to make further inquiry.
WON a health care
Fraudulent intent must be proven to rescind the contract. This was incumbent upon the provider.
agreement is not an
“Having assumed a responsibility under the agreement, petitioner is bound to answer the same to the extent agreed
insurance contract;
upon. In the end, the liability of the health care provider attaches once the member is hospitalized for the disease or
hence the
injury covered by the agreement or whenever he avails of the covered benefits which he has prepaid.”
“incontestability clause”
Section 27 of the Insurance Code- “a concealment entitles the injured party to rescind a contract of insurance.”
under the Insurance
As to cancellation procedure- Cancellation requires certain conditions:
Code does not apply.
1. Prior notice of cancellation to insured;
2. Notice must be based on the occurrence after effective date of the policy of one or more of the grounds
mentioned;
3. Must be in writing, mailed or delivered to the insured at the address shown in the policy;
4. Must state the grounds relied upon provided in Section 64 of the Insurance Code and upon request of insured, to
furnish facts on which cancellation is based None were fulfilled by the provider.
As to incontestability- The trial court said that “under the title Claim procedures of expenses, the defendant Philamcare
Health Systems Inc. had twelve months from the date of issuance of the Agreement within which to contest the
membership of the patient if he had previous ailment of asthma, and six months from the issuance of the agreement if the
patient was sick of diabetes or hypertension. The periods having expired, the defense of concealment or
misrepresentation no longer lie.”
Yes to both. Petition granted.
The insurance agency contended that the guards automatically became the authorized representatives of the bank when
they cited International Timber Corp. vs. NLRC where a contractor is a "labor-only" contractor in the sense that there is
an employer-employee relationship between the owner of the project and the employees of the "labor-only" contractor.
The bank however asserted that the guards were not its employees since it had nothing to do with their selection and
engagement, the payment of their wages, their dismissal, and the control of their conduct. They cited a case where an
employee-employer relationship was governed by (1) the selection and engagement of the employee; (2) the payment of
wages; (3) the power of dismissal; and (4) the power to control the employee's conduct.
Did the guard and the
driver fall under the
The case was governed by Article 174 of the Insurance Code on casualty insurance. It has been aptly observed that in
general exceptions
burglary, robbery, and theft insurance, "the opportunity to defraud the insurer — the moral hazard — is so great that
clause of the insurance
insurers have found it necessary to fill up their policies with countless restrictions to reduce this hazard. Persons
policy and thus
frequently excluded under such provisions are those in the insured's service and employment. The purpose of the
absolved the insurance
exception is to guard against liability should the theft be committed by one having unrestricted access to the property.
company from liability?
“The term "employee," should be read as a person who qualifies as such as generally and universally understood, or
jurisprudentially established in the light of the four standards in the determination of the employer-employee relationship,
or as statutorily declared even in a limited sense as in the case of Article 106 of the Labor Code which considers the
employees under a "labor-only" contract as employees of the party employing them and not of the party who supplied
them to the employer.”
But even if the contracts were not labor-only, the bank entrusted the suspects with the duty to safely transfer the money
to its head office, thus, they were representatives. According to the court, “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.’”
 Case Facts Issue Held

Gulf Resorts is the owner of the Plaza Resort situated at Agoo, La Union and had
its properties in said resort insured originally with the American Home Assurance
Company (AHAC). In the first 4 policies issued, the risks of loss from earthquake
shock was extended only to petitioner’s two swimming pools. Gulf Resorts agreed
to insure with Phil Charter the properties covered by the AHAC policy provided that
the policy wording and rates in said policy be copied in the policy to be issued by
Phil Charter. Phil Charter issued Policy No. 31944 to Gulf Resorts covering the
YES. An insurance policy should be examined and interpreted in consonance with each other. The policy cannot be
period of March 14, 1990 to March 14, 1991. The break-down of premiums shows
construed piecemeal. Petitioner cannot focus on the earthquake shock endorsement to the exclusion
that Gulf Resorts paid only P393.00 as premium against earthquake shock (ES). In
of the other provisions. All the provisions and riders taken and interpreted together, indubitably show the intention of the
Policy No. 31944 issued by defendant, the shock endorsement provided that “In
parties to extend earthquake shock coverage to the two swimming pools only. An insurance premium is the consideration
consideration of the payment by the insured to the company of the sum included
Whether or not the paid an insurer for undertaking to indemnify the insured against a specified peril. In fire, casualty and marine insurance,
additional premium the Company agrees, notwithstanding what is stated in the
policy covers only the the premium becomes a debt as soon as the risk attaches. In the subject policy, no premium payments were made with
printed conditions of this policy due to the contrary, that this insurance covers loss
Gulf Resorts vs PCIC two swimming pools regard to earthquake shock coverage except on the two swimming pools. There is no mention of any premium payable
or damage to shock to any of the property insured by this Policy occasioned by or
(two swimming pools owned by Gulf Resorts for the other resort properties with regard to earthquake shock. This is consistent with the history of petitioner’s insurance
through or in consequence of earthquake. In Exhibit "7-C" the word "included"
only) and does not extend to policies with AHAC.
above the underlined portion was deleted. On July 16, 1990 an earthquake struck
all properties damaged
Central Luzon and Northern Luzon and plaintiff’s properties covered by Policy No.
therein In sum, there is no ambiguity in the terms of the contract and its riders. Petitioner cannot rely on the general rule that
31944 issued by defendant, including the two swimming pools in its Agoo Playa
insurance contracts are contracts of adhesion which should be liberally construed in favor of the insured and strictly
Resort were damaged.
against the insurer company which usually prepares it. We cannot apply the general rule on contracts of adhesion to the
case at bar. Petitioner cannot claim it did not know the provisions of the policy. From the inception of the policy, petitioner
Petitioner advised respondent that it would be making a claim under its Insurance
had required the respondent to copy verbatim the provisions and terms of its latest insurance policy from AHAC-AIU.
Policy 31944 for damages on its properties. Respondent denied petitioner’s claim
on the ground that its insurance policy only afforded earthquake shock coverage to
the two swimming pools of the resort. The trial court ruled in favor of respondent. In
its ruling, the schedule clearly shows that petitioner paid only a premium of P393.00
against the peril of earthquake shock, the same premium it had paid against
earthquake shock only on the two swimming pools in all the policies issued by
AHAC.

Petitioner insured its Mercedes Benz 4-door sedan with respondent insurance
company. On 4 May 1970 the insured vehicle was bumped and damaged by a
truck owned by San Miguel Corporation. For the damage caused, respondent
company paid petitioner five thousand pesos (P5,000.00) in amicable settlement.
Petitioner's general manager executed a Release of Claim, subrogating respondent
Yes. Although petitioners right to file a deficiency claim against San Miguel Corporation is with legal basis,
company to all its right to action against San Miguel Corporation. On 11 December
without prejudice to the insurer's right of subrogation, nevertheless when Manila Mahogany executed another release
1972, respondent company wrote Insurance Adjusters, Inc. to demand
claim (Exhibit K) discharging San Miguel Corporation from "all actions, claims, demands and rights of action that now
reimbursement from San Miguel Corporation of the amount it had paid petitioner.
exist or hereafter arising out of or as a consequence of the accident" after the insurer had paid the proceeds of the policy-
Insurance Adjusters, Inc. but the latter refused reimbursement, alleging that San
the compromise agreement of P5,000 being based on the insurance policy-the insurer is entitled to recover from the
Miguel Corporation had already paid petitioner P4,500.00 for the damages to
insured the amount of insurance money paid. Since petitioner by its own acts released San Miguel Corporation, thereby
petitioner's motor vehicle, and a Release of Claim was executed by the General WON Manila Mahogany
Manila Mahogany vs CA defeating private respondents, the right of subrogation, the right of action of petitioner against the insurer was also
Manager of petitioner discharging San Miguel Corporation from "all actions, claims, is bound to return the
(subrogation of the nullified.
demands the rights of action that now exist or hereafter [sic] amount it received from
insurer)
develop arising out of or as a consequence of the accident." Respondent insurance the insurer.
Since the insurer can be subrogated to only such rights as the insured may have, should the insured, after receiving
company thus demanded from petitioner reimbursement of the sum of P4,500.00
payment from the insurer, release the wrongdoer who caused the loss, the insurer loses his rights against the latter. But
paid by San Miguel Corporation. Petitioner refused; hence, respondent company
in such a case, the insurer will be entitled to recover from the insured whatever it has paid to the latter, unless the release
filed suit.
was made with the consent of the insurer. And even if the specific amount asked for in the complaint is P4,500.00 only
and not P5,000.00, still, the respondent Court acted well within its discretion in awarding P5,000.00, the total amount paid
Petitioner argues that it was entitled to go after San Miguel Corporation to claim the
by the insurer.
additional P4,500.00 eventually paid to it by the latter, without having to turn over
said amount to respondent company as the subrogation was conditioned on
recovery of the total amount of damages petitioner had sustained (i.e., P9,486.43.)
Respondent contends that there was no qualification to its right of subrogation
under the Release of Claim.
 Case Facts Issue Held

Shipper SMITHKLINE USA delivered to carrier Burlington Air Express

No, In this jurisdiction, the filing of a claim with the carrier within the time limitation therefor actually constitutes a condition
(BURLINGTON), an agent of [Petitioner] FedEx Corporation, a shipment of 109
precedent to the accrual of a right of action against a carrier for loss of or damage to the goods. The shipper or
cartons of veterinary biologicals for delivery to consignee SMITHKLINE and French
consignee must allege and prove the fulfillment of the condition. If it fails to do so, no right of action against the carrier
Overseas Company in Makati City. The shipment was covered by Burlington
can accrue in favor of the former. The aforementioned requirement is a reasonable condition precedent; it does not
Airway Bill with the words, ‘REFRIGERATE WHEN NOT IN TRANSIT’ and
constitute a limitation of action.
‘PERISHABLE’ stamp marked on its face. Burlington insured the cargoes with
American Home Assurance Company (AHAC). The following day, Burlington
The requirement of giving notice of loss of or injury to the goods is not an empty formalism. The fundamental reasons for
turned over the custody of said cargoes to FEDEX which transported the same to
such a stipulation are (1) to inform the carrier that the cargo has been damaged, and that it is being charged with liability
Manila.
therefor; and (2) to give it an opportunity to examine the nature and extent of the injury. “This protects the carrier by
affording it an opportunity to make an investigation of a claim while the matter is fresh and easily investigated so as to
The shipments arrived in Manila and was immediately stored at. Prior to the arrival
safeguard itself from false and fraudulent claims.
of the cargoes, FEDEX informed GETC Cargo International Corporation, the
FedEx Corp vs AHAC customs broker hired to facilitate the release of its cargoes from the Bureau of
Is FEDEX liable for The Certificate specifies that loss of or damage to the insured cargo is “payable to order x x x upon surrender of this
and Phil Am Insurance Customs, of the impending arrival of its client’s cargoes.
damage to or loss of the Certificate.” Such wording conveys the right of collecting on any such damage or loss, as fully as if the property were
(veterinary biologicals-
insured goods covered by a special policy in the name of the holder itself. At the back of the Certificate appears the signature of the
condition precedent) 12 days after the cargoes arrived in Manila, DIONEDA, a non-licensed custom’s
representative of Burlington. This document has thus been duly indorsed in blank and is deemed a bearer instrument.
broker, found out, while he was about to cause the release of the said cargoes,
that the same [were] stored only in a room with 2 air conditioners running, to cool
Since the Certificate was in the possession of Smithkline, the latter had the right of collecting or of being indemnified for
the place instead of a refrigerator. DIONEDA, upon instructions from GETC, did
loss of or damage to the insured shipment, as fully as if the property were covered by a special policy in the name of the
not proceed with the withdrawal of the vaccines. It was soon discovered that the
holder. Hence, being the holder of the Certificate and having an insurable interest in the goods, Smithkline was the
‘ELISA reading of vaccinates sera are below the positive reference serum.’
proper payee of the insurance proceeds.
As a consequence of the foregoing result of the veterinary biologics test,
Subrogation
SMITHKLINE abandoned the shipment and, declaring ‘total loss’ for the unusable
shipment, filed a claim with AHAC through its representative in the Philippines, the
Upon receipt of the insurance proceeds, the consignee (Smithkline) executed a subrogation Receipt in favor of
Philam Insurance Co., Inc. (PHILAM) which recompensed SMITHKLINE for the
respondents. The latter were thus authorized “to file claims and begin suit against any such carrier, vessel, person,
whole insured amount. Thereafter, PHILAM filed an action for damages against the
corporation or government.” Undeniably, the consignee had a legal right to receive the goods in the same condition it was
FEDEX imputing negligence on either or both of them in the handling of the cargo.
delivered for transport to petitioner. If that right was violated, the consignee would have a cause of action against the
person responsible therefor.
YES

As earlier stated, Philamlife and Eternal entered into an agreement denominated as Creditor Group Life Policy No. P-
1920. In the policy, it is provided that: "The insurance of any eligible Lot Purchaser shall be effective on the date he
Philamlife) entered into an agreement denominated as Creditor Group Life Policy
contracts a loan with the Assured. However, there shall be no insurance if the application of the Lot Purchaser is not
No. P-19202 with petitioner Eternal Gardens Memorial Park Corporation (Eternal).
approved by the Company."
Under the policy, the clients of Eternal who purchased burial lots from it on
installment basis would be insured by Philamlife. The amount of insurance
An examination of the above provision would show ambiguity between its two sentences. The first sentence appears to
coverage depended upon the existing balance of the purchased burial lots.
state that the insurance coverage of the clients of Eternal already became effective upon contracting a loan with Eternal
while the second sentence appears to require Philamlife to approve the insurance contract before the same can become
Eternal was required under the policy to submit to Philamlife a list of all new lot
effective.
purchasers, together with a copy of the application of each purchaser, and the
amounts of the respective unpaid balances of all insured lot purchasers. In relation
May the inaction of the It must be remembered that an insurance contract is a contract of adhesion which must be construed liberally in favor of
Eternal Gardens to the instant petition, Eternal complied by submitting a letter dated December 29,
insurer on the insurance the insured and strictly against the insurer in order to safeguard the latter's interest.
Memorial Park vs PhilAm 1982,4 containing a list of insurable balances of its lot buyers for October 1982.
application be
(inaction on the insurance One of those included in the list as "new business" was a certain John Chuang. His
considered as approval The fact of the matter is, the letter dated December 29, 1982, which Philamlife stamped as received, states that the
application) balance of payments was PhP 100,000. On August 2, 1984, Chuang died.
of the application? insurance forms for the attached list of burial lot buyers were attached to the letter. Such stamp of receipt has the effect
of acknowledging receipt of the letter together with the attachments. Such receipt is an admission by Philamlife against its
Eternal sent a letter dated August 20, 19845 to Philamlife, which served as an
own interest. The burden of evidence has shifted to Philamlife, which must prove that the letter did not contain Chuang's
insurance claim for Chuang's death. After more than a year, Philamlife had not
insurance application. However, Philamlife failed to do so; thus, Philamlife is deemed to have received Chuang's
furnished Eternal with any reply to the latter's insurance claim. This prompted
insurance application.
Eternal to demand from Philamlife the payment of the claim for PhP 100,000 on
April 25, 1986.8
The seemingly conflicting provisions must be harmonized to mean that upon a party's purchase of a memorial lot on
installment from Eternal, an insurance contract covering the lot purchaser is created and the same is effective, valid, and
In response to Eternal's demand, Philamlife denied Eternal's insurance claim in a
binding until terminated by Philamlife by disapproving the insurance application. The second sentence of Creditor Group
letter alleging that it had not receive any insurance application.
Life Policy on the Effective Date of Benefit is in the nature of a resolutory condition which would lead to the cessation of
the insurance contract. Moreover, the mere inaction of the insurer on the insurance application must not work to prejudice
the insured; it cannot be interpreted as a termination of the insurance contract. The termination of the insurance contract
by the insurer must be explicit and unambiguous.