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Insurance Week 7 Finals
Insurance Week 7 Finals
On a later date, the vehicle was carnapped. Spouses Lim filed a claim for loss Clearly, the risk against accident is distinct from the risk against theft. The
with Perla but this was denied on the ground that Evelyn Lim, who was using “authorized driver clause” in a typical insurance policy is in contemplation or
the vehicle before it was carnapped, was in possession of an expired driver’s anticipation of accident in the legal sense in which it should be understood,
license at the time of the loss, in violation of the authorized driver clause of and not in contemplation or anticipation of an event such as theft. The
the insurance policy. distinction – often seized upon by insurance companies in resisting claims
from their assureds – between death occurring as a result of accident and
ISSUE: death occurring as a result of intent may, by analogy, apply to the case at
bar. Thus, if the insured vehicle had figured in an accident at the time she
drove it with an expired license, then, appellee Perla Compania could Prior conviction of Catiben is not necessary. The insurance company is liable to pay the
association.
properly resist appellant’s claim for indemnification for the loss or
destruction of the vehicle resulting from the accident. But in the present Rationale:
case, the loss of the insured vehicle did not result from an accident where The comprehensive policy issued by the insurance company includes loss of or damage
intent was involved; the loss in the present case was caused by theft, the to the motor vehicle by burglary or theft. It is settled that the act of Catiben in taking the
vehicle for a joy ride to Toril, Davao City, constitutes theft within the meaning of the
commission of which was attended by intent.”
insurance policy and that recovery for damage to the car is not barred by the illegal use
of the car by one of the station boys. There need be no prior conviction for the crime of
There is no causal connection between the possession of a valid driver’s theft to make an insurer liable under the theft clause of the policy. Upon the facts
license and the loss of a vehicle. To rule otherwise would render car stipulated by the parties it is admitted that Catiben had taken the vehicle for a joy ride
insurance practically a sham since an insurance company can easily escape and while the same was in his possession he bumped it against an electric post resulting
in damages. The act is theft within a policy of insurance. In a civil action for recovery on
liability by citing restrictions which are not applicable or germane to the an automobile insurance, the question whether a person using a certain automobile at
claim, thereby reducing indemnity to a shadow. the time of the accident stole it or not is to be determined by a fair preponderance of
Association of Baptists for World Evangelism, Inc. v. evidence and not by the rule of criminal law requiring proof of guilt beyond reasonable
Fieldmen’s Insurance Co., Inc. doubt. Besides, there is no provision in the policy requiring prior criminal conviction for
theft.
Petitioner: Association of Baptists for World Evangelism, Inc. Sherman Shaper v. Hon. Judge RTC of Olongapo City
Respondent: Fieldmen’s Insurance Co., Inc.
GR. No. 78848, 14 November 1988, 167 SCRA 368
Facts: FACTS:
Association of Baptists for World Evangelism, Inc., a domestic religious corporation, had Petitioner Sherman Shafer obtained a private car policy over his Ford
an insurable interest in a Chevrolet Carry-all which was insured with the Fieldmen’s Laser car from Makati Insurance Company, Inc., for third party liability
Insurance Co., Inc under its Private Car Comprehensive Policy. Dr. Antonio Lim, the (TPL). During the effectivity of the policy, an information for reckless
representative of the association, placed the Chevrolet at the Jones Monument Mobilgas
imprudence resulting in damage to property and serious physical injuries
Service Station at Davao City for it to be displayed as being for sale. The Chevrolet was
under the care of the station’s operator Rene Te. Romeo Catiben, one of the boys at the
was filed against petitioner. The owner of the damaged Volkswagen car
Jones Monument Mobilgas Service Station, and a nephew of the wife of Rene Te, took filed a separate civil action against petitioner for damages. The court a
the Chevrolet for a joy ride to Toril, Davao City without the prior permission of Lim or Te quo issued an order dismissing the third party complaint on the ground
and on its way back to Davao City, the Chevrolet, due to some mechanical defect, that it was premature, based on the premise that unless the accused
accidentally bumped an electric post causing actual damages. The trial court ordered (herein petitioner) is found guilty and sentenced to pay the offended party
the insurance company to pay the association P5000 as indemnity for the damage indemnity or damages, the third party complaint is without cause of
sustained by the vehicle. Dissatisfied, the insurance company filed an appeal to the
appellate court.
action. The court further stated that the better procedure is for the accused
(petitioner) to wait for the outcome of the criminal aspect of the case to
Issue: determine whether or not the accused, also the third party plaintiff, has a
Whether there must be prior criminal conviction of Romeo Catiben for theft for the cause of action against the third party defendant for the enforcement of
damage to the Chevrolet to be compensable under the Fieldman’s Private Car its third party liability (TPL) under the insurance contract.
Comprehensive Policy
ISSUE:
Held: Whether or not the accused in a criminal action for reckless imprudence,
where the civil action is jointly prosecuted, can legally implead the
insurance company as third party defendant under its private car Whether or not there is a cause of action against the company.
insurance policy.
RULING: Held:
YES. In the instant case, the court a quo erred in dismissing petitioner’s YES.
third party complaint on the ground that petitioner had no cause of action The right of a person injured to sue the insurer of the party at fault
yet against the insurance company (third party defendant). There is no depends on whether the contract of insurance was intended to benefit
need on the part of the insured to wait for the decision of the trial court third persons. The test applied here is: Where the contract provides for
finding him guilty of reckless imprudence. The occurrence of the injury indemnity against liability to third persons, then third persons to whom
to the third party immediately gave rise to the liability of the Insure under the insured is liable, can sue the insurer. On the other hand, where the
its policy. contract is for indemnity against actual loss or payment, then third
A third party complaint is a device allowed by the rules of procedure by persons cannot proceed against the insurer, the contract being solely to
which the defendant can bring into the original suit a party against whom reimburse the insured for liability actually discharged by him through
he will have a claim for indemnity or remuneration as a result of a payment to third persons, said third persons' recourse being thus limited
liability established against him in the original suit. Third party to the insured alone
complaints are allowed to minimize the number of lawsuits and avoid the
necessity of bringing two (2) or more actions involving the same subject The policy in the present case, is one whereby the insurer agreed to
matter. They are predicated on the need for expediency and the avoidance indemnify the insured "against all sums . which the Insured shall
of unnecessary lawsuits. If it appears probable that a second action will become legally liable to pay in respect of: a. death of or bodily injury to
result if the plaintiff prevails, and that this result can be avoided by any person . . ." Clearly, therefore, it is one for indemnity against
allowing the third party complaint to remain, then the motion to dismiss liability from the fact then that the insured is liable to the third person,
the third party complaint should be denied. such third person is entitled to sue the insurer.
Guingon v. Del Monte
Since the policy in questioned contained a stipulation pour autrui, then
80 SCRA 181
the insurance company must deliver the proceeds to the claimants.
Facts: MALAYAN INSURANCE CO., INC., petitioner, vs. THE HON. COURT
> The insured owned a fleet of jeepneys. He insured the operation of OF APPEALS (THIRD DIVISION) MARTIN C. VALLEJOS, SIO CHOY,
his jeepneys against “accidents with third part liability” with Capital SAN LEON RICE MILL, INC. and PANGASINAN TRANSPORTATION
Insurance and Surety Co. CO., INC., respondents.
> One day, one of his jeepney dirivers, bumped and killed Guingon. [G.R. No. L-36413 September 26, 1988 PADILLA, J.:]
> An action for damages was then filed against the owner-insured, the TOPIC: Casualty Insurance
driver and the company. FACTS:
> The company sough to dismiss the charges against it on the ground 1. Petitioner Malayan Insurance Co. Inc. issued a Private Car
of lack of cause of action against it. Comprehensive Policy in favor of respondent Sio Choy covering a
Willys jeep.
Issue: a. The insurance coverage was for "own damage" not to
exceed P600.00 and "third-party liability" in the amount
of P20,000.00.
2. 19 December 1967: the insured jeep collided with a passenger 6. CFI’s RULING: favored Vallejos and ordered Sio Choy, Malayan
bus Insurance Co., Inc., and third-party defendant San Leon Rice Mill,
a. Insured jeep was driven by Juan P. Campollo an Inc to pay jointly and severally liable.
employee of the respondent San Leon Rice Mill, Inc., 7. CA affirmed CFI’s decision.
b. Passenger bus belongs to the respondent Pangasinan a. It ruled, however, that the San Leon Rice Mill, Inc. has
Transportation Co., Inc. (PANTRANCO) no obligation to indemnify or reimburse the petitioner
c. Collision happened at the national highway in Pangasinan insurance company for whatever amount it has been
d. Damage was caused to the insured vehicle and injuries to ordered to pay on its policy, since the San Leon Rice
the driver, Juan P. Campollo, and the respondent Martin Mill, Inc. is not a privy to the contract of insurance
C. Vallejos, who was riding in the ill-fated jeep. between Sio Choy and the insurance company
3. Vallejos filed an action for damages against Sio Choy, Malayan ISSUE:
Insurance Co, Inc and Pantranco before the CFI of Pangasinan 1. W/N Malayan Insurance Co Inc is solidarily liable to pay Vallejos the
a. Vallejos prayed that defendants be ordered to pay him ordered amount. No.
jointly and severally 2. W/N San Leon Rice Mill has the obligation to indemnify or reimburse
b. PANTRANCO claimed that the jeep of Sio Choy was Malayan Insurcance Co., Inc. for the amount the latter has been ordered
then operated at an excessive speed and bumped the to pay. Yes
PANTRANCO bus which had moved to, and stopped at,
the shoulder of the highway in order to avoid the jeep HELD:
i. It also claimed that it had observed the diligence of 1. NO. Only respondents Sio Choy and San Leon Rice Mill, Inc, (to
a good father of a family to prevent damage, the exclusion of the petitioner) that are solidarily liable to
especially in the selection and supervision of its respondent Vallejos for the damages awarded to Vallejos.
employees and in the maintenance of its motor a. Sio Choy and San Leon Rice Mill, Inc. are the principal
vehicles. tortfeasors who are primarily liable to respondent
ii. It prayed that it be absolved from any and all Vallejos. The law states that the responsibility of two
liability. or more persons who are liable for a quasi-delict is
c. Defendants Sio Choy and the petitioner insurance solidarily.
company claimed that the fault in the accident was solely i. Sio Choy is liable as the owner of the ill-fated
imputable to the PANTRANCO Willys jeep under Art. 2184 of the Civil Code.
4. Sio Choy then filed a separate answer with a cross-claim against ii. San Leon Rice Mill Inc. is liable being the employer
Malayan Insurance Co, Inc. alleging that he had actually paid of the driver of the Willys jeep at the time of the
Vallejos the amount of P5,000.00 for hospitalization and other motor vehicle mishap under Art. 2180 of the Civil
expenses Code.
a. he prayed for the reimbursement by the insurance b. Malayan’s basis of liability is its insurance contract with
company for the amount he may be ordered to pay respondent Sio Choy.
pursuant to the Private Car Comprehensive Policy i. If he is ordered to pay only up to the extent of what
enforced during the accident the insurance contract provides which is P20,000
5. Malayan Insurance filed a third-party complaint against the San under the “third-party liability”
Leon Rice Mill, Inc. for the reason that the person driving the c. The liability of the insurer is based on contract; that of
jeep of Sio Choy, at the time of the accident, was an employee the insured is based on tort
of the San Leon Rice Mill, Inc. performing his duties within the i. the direct liability of the insurer under indemnity
scope of his assigned task, and not an employee of Sio Choy thus contracts against third party liability does not mean
San Leon should be held liable for the acts of its employee
that the insurer can be held solidarily liable with the The lower court rendered a decision finding that Destrajo had not
insured and/or the other parties found at fault. exercised extraordinary diligence as the operator of the jeepney and
ii. In the present case: Malayan as insurer of Sio ordered him to pay for the damages. The second paragraph of the
Choy is liable to Vallejos but it cannot be made a
solidarily liable with the 2 principal tortfeasor for it
decision also ordered AFISCO to reimburse Destrajo whatever amounts
will result in a violation of the principles the latter shall have paid only up to the extent of its insurance coverage,
underlying solidary obligation and insurance signifying only secondary liability. The heirs however, filed a motion for
contracts. reconsideration with respect to the said second paragraph arguing that
1. Solidary obligation: the creditor may AFISCO should not merely be held secondarily liable because the
enforce the entire obligation against one of Insurance Code providesthat the insurer’s liability is “direct and primary
the solidary debtors and/or jointly and severally with theoperator of the vehicle”, although
2. Insurance Contract: a contract whereby
one undertakes for a consideration to
only up to the extent of the insurance coverage.
indemnify another against loss, damage, or ISSUE:
liability arising from an unknown or Whether or not AFISCO’s liability is direct and primary and/or solidary
contingent event with Destrajo.
iii. In this case the TC held Malayan as solidary liable HELD:
but qualified that only up to P20,000.00 Although the insurance policy clearly provides that AFISCO can be held
1. This ruling is a breach of the concept of directly liable by petitioners on the basis of the insurance contract,
a solidary obligation
2. Yes, Malayan upon paying Vallejos the amount exceeding
nonetheless, AFISCO may not be held solidarily liable with Destrajo
P20,000 shall become the subrogee of the insured, Sio Choy; since their respective liabilities are based on different grounds. The
as such, it is subrogated to whatever rights the latter has liability of the insurer is based on contract; that of the insured is based
against respondent San Leon Rice Mill,Inc. on tort. As such, petitioners have the option either to claim from AFISCO
Figuracion Vda. De Maglana v. Hon. Francisco to the extent agreed upon in the contract and the balance from Destrajo
or enforce the entire judgment from Destrajo subject to reimbursement
Consolacion from AFISCO to the extent of the insurance coverage.
G.R. No. 60506, 6 August 1992, 212 SCRA 268
FACTS:
Lope Maglana met an accident that resulted to his death while driving
his motorcycle on his way to work station. He was bumped by a PUJ jeep
which was driven by Pepito Into and was operated and owned by
defendant Destrajo, when he overtook another passenger jeep that was
going towards the city. The point of impact was on the lane of the
motorcycle and the deceased was thrown from the road and met his
untimely death. Thereafter, the heirs of the deceased filed an action
against Destrajo and the Afisco Insurance Corporation (AFISCO) for
damages and attorney’s fees.