3.
After an investigation, a case was filed against the driver Benjamin
GULF RESORTS INC. V. PHILIPPINE CHARTER INSURANCE CORP.
DOCTRINE
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. The
policy cannot be construed piecemeal. Certain stipulations cannot be
segregated and then made to control; neither do particular words or
phrases necessarily determine its
character. Petitioner cannot focus on the earthquake shock
endorsement to the exclusion of the other provisions. All the
provisions and riders, taken and interpreted together, indubitably show
the intention of the parties to extend earthquake shock coverage to
the two swimming pools only.
FACTS
1. Gulf Resorts, Inc at Agoo, La Union was insured with American Home
Assurance Company. The policy states what it covers, being [that]
“which includes loss or damage to shock to any of the property
insured by this Policy occasioned by or through or in consequence of
an earthquake.” The premium covered only two swimming pools that
belonged to Gulf Resorts.
2. 16 July 1990: an earthquake struck Central Luzon and Northern Luzon.
The two swimming pools were damaged alongside a number of
other properties belonging to Gulf Resorts.
3. Gulf Resorts thereafter filed a claim that included the other damaged
properties.
4. 23 August 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.
5. Gulf Resorts contends that pursuant to the premium, no qualifications
were placed on the scope of the earthquake shock coverage. Thus,
the policy extended earthquake shock coverage to all properties
belonging to the insured.
Exhibit 7-C:
In consideration of the payment by the insured to the company of the
sum included additional premium the Company agrees,
notwithstanding what is stated in the printed conditions of this policy
due to the contrary, that this insurance covers loss or damage to shock
to any of the property insured by this Policy occasioned by or through or
in consequence of earthquake (Exhs. "1-D", "2-D", "3-A", "4-B", "5-A", "6-D"
and "7-C");
6. American Home Assurance presented the original copy that did not under the general exceptions clause thereof -
include the underlined words as presented in Exhibit 7-C.
7. The RTC decided on American Home Assurance, stating that the
endorsement rider means that only the two swimming pools were It should be noted that the insurance policy entered into by the parties is a
insured against earthquake shock.
“The above schedule clearly shows that plaintiff paid only a premium of
P393.00 against the peril of earthquake shock, the same premium it
paid against earthquake shock only on the two swimming pools in all
the policies issued by AHAC(AIU) (Exhibits "C", "D", "E", "F" and "G"). From
this fact the Court must consequently agree with the position of
defendant that the endorsement rider (Exhibit "7-C") means that only
the two swimming pools were insured against earthquake shock.”
8. The CA affirmed RTC.
ISSUE
Whether Gulf can claim insurance for the other properties.
NO. Only the two swimming pools were covered. Affirmed CA.
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.A careful
examination of the premium recapitulation will show that it is the clear
intent of the parties to extend earthquake shock coverage only to the
two swimming pools.
Despite orally instructing their insurance company to include the
provision that would cover all other properties in the premium, this was
not complied with. Gulf Resorts had every opportunity to correct the
missing provision but were unable to do so by their own negligence. It
cannot therefore be presumed to exist just because of their “intent”.
FORTUNE INSURANCE AND SURETY CO VS CA AND PRODUCERS BANK OF
THE PHILIPPINES (MAY 23, 1995)
FACTS
1. The Producers Bank of the Philippines was insured by Fortune
Insurance and Surety Co., and an insurance policy (Money, Security,
and Payroll Robbery Policy) was issued
2. On June 29, 1987, an armored car of Producers Bank, while in the
process of transferring cash (P725,000.00) from its Pasay Branch to its
Head Office at Roxas, Makati, Metro Manila, was robbed of the said
cash along Taft Avenue in Pasay City.
Magalong and guard Saturnina Atiga, together with Edelmer Bantigue Y
Eulalio, Reynaldo Aquino and John Doe, with violation of P.D. 532 (Anti-
Highway Robbery Law)
4. Demands were made by the Producers Bank upon Fortune Insurance to pay
the amount of the loss of P725,000.00, but the latter refused to pay as the loss
is excluded from the coverage of the insurance policy. The "General
Exceptions" clause provides that any loss caused by any dishonest,
fraudulent or criminal act of the insured or any officer, employee, partner,
director, trustee or authorized representative of the Insured whether acting
alone or in conjunction with others are non-insurable.
5. Producers Bank opposes the contention of the defendant and contends that
Atiga and Magalong are not its "officer, employee, . . . trustee or authorized
representative . . . at the time of the robbery.
6. Trial court rendered its decision in favor of Producers. It ruled that Magalong
and Atiga were not employees of Producers as their services were merely
offered by PRC Management and by Unicorn Security and which latter firms
assigned them to Producers. Neither the driver and guard were the
“authorized representatives” of Producers as they were merely assigned for
the June 29 money transfer.
7. Fortune appealed to the Court of Appeals
8. CA affirmed in toto the appealed decision. It ruled that a policy or contract
of insurance is to be construed liberally in favor of the insured and strictly
against the insurance company. Said driver and security guard cannot be
considered as employees of plaintiff-appellee bank because it has no power
to hire or to dismiss said driver and security guard under the contracts except
only to ask for their replacements from the contractors.
9. Fortune filed this petition for review on certiorari contending that loss falls
within the general exceptions clause considering that driver Magalong and
security guard Atiga were Producers' authorized representatives or
employees in the transfer of the money and payroll from its branch office in
Pasay City to its head office in Makati. When Producers commissioned a
guard and a driver to transfer its funds from one branch to another, they
effectively and necessarily became its authorized representatives in the care
and custody of the money. Assuming that they could not be considered
authorized representatives, they were, nevertheless, employees of Producers.
Fortune further insists that PRC Management System and Unicorn Security
Services are but "labor-only" contractors under Article 106 of the Labor Code
wherein under this provision, there exists an employer-employee relationship
between the owner of the project and the employees of the "labor-only"
contractor.
ISSUE WITH HOLDING
W/N Fortune Insurance is liable under the Money, Security, and Payroll Robbery
policy it issued to Producer’s Bank or whether recovery thereunder is precluded
NO
theft or robbery insurance policy which is a form of casualty insurance.
Section 174 of the Insurance Code provides:
Sec. 174. Casualty insurance is insurance covering loss or liability arising from
accident or mishap, excluding certain types of loss which by law or custom are
considered as falling exclusively within the scope of insurance such as fire or
marine. It includes, but is not limited to, employer's liability insurance, public
liability insurance, motor vehicle liability insurance, plate glass insurance,
burglary and theft insurance, personal accident and health insurance as
written by non-life insurance companies, and other substantially similar kinds of
insurance. (emphases supplied)
Except with respect to compulsory motor vehicle liability insurance, the
Insurance Code contains no other provisions applicable to casualty insurance
or to robbery insurance in particular. These contracts are, therefore, governed
by the general provisions applicable to all types of insurance. Outside of these,
the rights and obligations of the parties must be determined by the terms of
their contract, taking into consideration its purpose and always in accordance
with the general principles of insurance law.
In burglary, robbery, and theft insurance, "the opportunity to defraud the insurer
— the moral hazard — is so great that insurers have found it necessary to fill up
their policies with countless restrictions, many designed to reduce this hazard.
Seldom does the insurer assume the risk of all losses due to the hazards insured
against." Persons frequently excluded under such provisions are those in the
insured's service and employment. The purpose of the exception is to guard
against liability should the theft be committed by one having unrestricted
access to the property. In such cases, the terms specifying the excluded
classes are to be given their meaning as understood in common speech. If the
terms of the contract are clear and unambiguous, there is no room for
construction and such terms cannot be enlarged or diminished by judicial
construction.
Insofar as Fortune is concerned, it was its intention to exclude and exempt from
protection and coverage losses arising from dishonest, fraudulent, or criminal
acts of persons granted or having unrestricted access to Producers' money or
payroll. When it used then the term "employee," it must have had in mind any
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.
Magalong and Atiga were, in respect of the transfer of Producer's 8. Petitioner Western filed a Petition for Review alleging that it is not liable to
money from its Pasay City branch to its head office in Makati, its pay beyond the limits set forth in the Schedule of Indemnities. Further, it
"authorized representatives" who served as such with its teller Maribeth cannot be held liable for loss of earnings, moral damages and attorney's fees
Alampay. Howsoever viewed, Producers entrusted the three with the because these items are not among those included in the Schedule of
specific duty to safely transfer the money to its head office, with Indemnities set forth in the insurance policy
Alampay to be responsible for its custody in transit; Magalong to drive
the armored vehicle which would carry the money; and Atiga to ISSUE WITH HOLDING
provide the needed security for the money, the vehicle, and his two W/N Western is not liable to pay beyond the limits provided in Schedule of
other companions. In short, for these particular tasks, the three acted as Indemnities (specific compensation for specific injury)
agents of Producers. A "representative" is defined as one who
represents or stands in the place of another; one who represents others NO. Schedule of Indemnities establishes monetary limits which Western may
or another in a special capacity, as an agent, and is interchangeable invoke in case of occurrence of the particular kinds of physical injury there
with "agent." listed. However, it does not purport to limit, or to enumerate exhaustively, the
species of bodily injury occurrence of which generate liability for petitioner
FINMAN GENERAL ASSURANCE CORPORATION V. CA AND JULIA Western. A car accident may, for instance, result in injury to internal organs of a
SURPOSA passenger or third party, without any accompanying amputation or loss of an
external member (e.g., a foot or an arm or an eye). But such internal injuries are
DOCTRINE surely covered by Section I of the Master Policy, since they certainly constitute
bodily injuries.
“The terms ‘accident’ and ‘accidental’... [are] taken to mean that
which happen by chance or fortuitously, without intention and design, W/N Western is liable for damages.
and which is unexpected, unusual, and unforeseen... The generally
accepted rule is that death or injury does not result from accident or YES. Schedule of Indemnities does not purport to restrict the kinds of damages
accidental means within the terms of an accident-policy if it is, the that may be awarded against Western once liability has arisen. Section 1,
natural result of the insured’s voluntary act, unaccompanied by quoted above, does refer to certain "Limits of Liability" which in the case of the
anything unforeseen except the death or injury. There is no accident third party liability section of the Master Policy, is apparently P50,000.00 per
when a deliberate act is performed unless some additional, person per accident.
unexpected, independent, and unforeseen happening occurs which
produces or brings about the result of injury or death.” Within this over-all quantitative limit, all kinds of damages allowable by law" —
actual or compensatory damages"; "moral damages'; "nominal damages";
FACTS "temperate or moderate damages"; "liquidated damages"; and "exemplary
damages" 2 — may be awarded by a competent court against the insurer
1. 22 October 1982: Charlie Surposa was insured with Finman General once liability is shown to have arisen, and the essential requisites or conditions
Assurance Corp. in a policy that included Surposa’s parents and for grant of each species of damages are present.
brothers as beneficiaries.
2. 18 October 1988: Charlie Surposa was attacked and stabbed to Schedule of Indemnities was not intended to be an enumeration, much less a
death by three unidentified men while he was waiting to be picked closed enumeration, of the specific kinds of damages which may be awarded
up by his cousin. It is important to note that he did not provoke the under the Master Policy Western has issued. The schedule was merely meant to
assailants nor did he know them in any way. set limits to the amounts the movant would be liable for in cases of claims for
3. Charlie’s mother (private respondent) and other respondents filed a death, bodily injuries of, professional services and hospital charges, for services
written notice of claim to Finman. This was denied. rendered to traffic accident victims,' and not necessarily exclude claims
4. Respondents filed a case with the Insurance Commission which against the insurance policy for other kinds of damages, such as those in
ordered Finman to pay. question.
5. Upon appeal, the CA affirmed the Insurance Commission’s decision. Petitioner Western would have us construe the Schedule of Indemnities as
comprising contractual limitations of liability. It is well settled, however, that
ISSUE contractual limitations of liability found in insurance contracts should be
regarded by courts with a jaundiced eye and extreme care and should be so
Whether a stabbing constitutes an ‘accident’ as to make Finman construed as to preclude the insurer from evading compliance with its just
obligated to make good on the insurance policy. obligations.
An insurance contract is a contract of adhesion. The rule is well entrenched in
YES. [Go back to the Doctrine] our jurisprudence that the terms of such contract are to be construed strictly
against the party which prepared the contract, which in this case happens to
The happening was a pure accident on the part of the victim. be petitioner Western.

“The insured died from an event that took place without his foresight or
expectation, an event that proceeded from an unusual effect of a
known cause and, therefore, not expected. Neither can it be said that
there was a capricious desire on the part of the accused to expose his
life to danger considering that he was just going home after attending
a festival.”

WESTERN GUARANTY CORP VS CA AND PRISCILLA RODRIGUEZ AND DE

DIES TRANSPORTATION CO., INC (JULY 20, 1990)

FACTS
1. Respondent bus company was insured with petitioner Western
Guaranty Corporation ("Western") under its Master Policy which
provided, among other things, for protection against third party
liability, including death or bodily injury or damage to property of any
passenger
2. At around 4:30 in the afternoon of 27 March 1982, Respondent
Priscilla E. Rodriguez was struck by a De Dios passenger bus owned by
respondent De Dios Transportation Co., Inc., then driven by one
Walter Saga y Aspero
3. She was treated at the Protacio Emergency Hospital and later on
hospitalized at the San Juan De Dios Hospital. Her face was
permanently disfigured, causing her serious anxiety and moral
distress.
4. Respondent Priscilla Rodriguez filed a complaint for damages against
De Dios Transportation Co. and Walter A. Saga
5. Respondent De Dios Transportation Co., in turn, filed a third-party
complaint against its insurance carrier, petitioner Western.
6. Trial court rendered a decision in favor of respondent Priscilla E.
Rodriguez ordering De Dios, Saga jointly and severally liable to
Prisicilla and for Western Guaranty to pay to Priscilla, by way of
contribution, indemnity or subrogation whatever amount may be left
unpaid by De Dios Transportation Company, Inc. to the extent of not
more than P50,000.00, as well as moral and exemplary damages,
atty’s fees and cost of suit.
7. On appeal, the Court of Appeals affirmed in toto the decision of the
trial court. Western moved for the reconsideration of the appellate
court's decision but it was denied