Compiled Insurance Digest Comrev Under Dean Sundiang

INSURANCE LAW
Under Dean Jose R. Sundiang Sr.

Digested Cases
October 03, 2017
Case No. 3
FINMAN GENERAL ASSURANCE CORPORATION vs. COURT OF APPEALS and JULIA
SURPOSA
Topic: Construction and interpretation of Insurance Contract
Facts: Carlie Surposa was insured with petitioner Finman General Assurance Corporation
under Finman General Teachers Protection Plan with his parents, Julia and Carlos
Surposa, and his brothers as beneficiaries. While said insurance policy was in f effect, the
insured, died as a result of a stab wound inflicted by one of the three (3) unidentified men
without provocation and warning on the part of the former as he and his cousin, were
waiting for a ride on their way home. Thereafter, beneficiaries of said insurance policy filed
a written notice of claim with the petitioner insurance company which denied said claim
contending that murder and assault are not included in the insurance policy. Private
respondent filed a complaint with the Insurance Commission which subsequently rendered
a decision in favor of the respondents ordering finman to pay insurance proceeds with costs
and interest. The CA affirmed said decision. Petitioner filed this petition alleging grave
abuse of discretion on the part of the appellate court in applying the principle of
"expressouniusexclusioalterius" in a personal accident insurance policy since death
resulting from murder and/or assault are impliedly excluded in said insurance policy
considering that the cause of death of the insured was not accidental but rather a
deliberate and intentional act of the assailant in killing the former as indicated by the
location of the lone stab wound on the insured.
Issue: Whether or not the death resulting from murder is excluded in the policy the same
being deliberate and not accidental?
Held: The terms "accident" and "accidental" as used in insurance contracts have not
acquired any technical meaning, and are construed by the courts in their ordinary and
common acceptation. Thus, the terms have been taken to mean that which happen by
chance or fortuitously, without intention and design, and which is unexpected, unusual,
and unforeseen.
An accident is an event that takes place without one's foresight or expectation — an
event that proceeds from an unknown cause, or is an unusual effect of a known cause and,
therefore, not expected. Where the death or injury is not the natural or probable result of
the insured's voluntary act, or if something unforeseen occurs in the doing of the act which
produces the injury, the resulting death is within the protection of the policies insuring
against death or injury from accident.
The principle of " expressouniusexclusioalterius" — the mention of one thing
implies the exclusion of another thing — is therefore applicable in the instant case since
murder and assault, not having been expressly included in the enumeration of the
circumstances that would negate liability in said insurance policy cannot be considered by
implication to discharge the petitioner insurance company from liability for, any injury,
disability or loss suffered by the insured.
It is well settled that contracts of insurance are to be construed liberally in favor of

the insured and strictly against the insurer. Thus ambiguity in the words of an insurance
contract should be interpreted in favor of its beneficiary.
Case No. 5
Sun Insurance Office Ltd vs. CA 211 SCRA 554
Topic: CONSTRUCTION OF INSURANCE CONTRACT
Facts: Felix Lim, Jr. was playing with his handgun, having removed the magazine. In order
to assure another that the gun was not loaded, he pointed it to his temple and pulled the
trigger. The next moment there was an explosion and Felix was dead. The wife of Felix, as
Contributors: ALEXIS S. AGTARAP • JARVISH F. BALINDAN • ROLAND DAVE S. BAUTISTA • THEODORE CABUS • EZEQUIEL B. DACANAY •
JEFFERSON B. FERNANDEZ • ROMMEL BRIAN P. FLORES• JOHN CARLO PATIAG• REXFORD P. RAMOS• JOMER C. REALES• OLIVER I. SANTOS•
JUAN BERNARDO Z. YULO• NINA FEREN A. AGUILAR• KRISTINA CAROL A. BAUTISTA• SHIRLEE MAE V. CAMONIAS• JULIE ANNE PRINCESS A.
CIAR• FIONA B. ELUMBA• NINNA BEATRICE S. FLORES• IVY A. GARCIA• JACELUD A. JOCSON• KAREN MAE C. NEPACINA• REZZA MARNELLI A.
PANIS• MARIA CHRISTINA V. TILA• MA.BLESILDA D. VELASCO• MARGARETH CLAUDIA V. YABUT
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Digested Cases
October 03, 2017
beneficiary under a Personal Accident Policy, sued Sun Life Insurance seeking payment on
the P200,000.00 policy.
Under the policy, the company would not be liable in respect of ―attempting suicide‖ or
―willfully exposing himself to needless peril except in an attempt to save human life‖.Sun
Life agreed that there was no suicide, but there was no accident either, since Felix
endangered his own life.
The trial court and appellate courts sustained the claim of the wife of Felix. Hence, this
appeal.
Issue: Whether or not Sun Life Insurance is liable to pay the claim under the Personal
Accident Policy
Held: Yes, Sun Life Insurance is liable to the wife of Felix under the Personal Accident
Policy.The Court is convinced that the incident that resulted in Felix‘s death was an
accident.
When used in an insurance contract, the words ―accident‖ and ―accidental‖ are to be
construed according to the ordinary understanding and common usage and speech of
people generally. An accident is an event that takes place without one‘s foresight or
expectation – an event that proceeds from an unknown cause, or is an unusual effect of a
known case, and therefore not expected.
Here, the firing of the gun was the additional unexpected and independent and unforeseen
occurrence that led to Felix‘s death. The exception of ―willfully exposing himself to needless
peril‖ does not apply, because the fact is that Felix did not willfully expose himself to
needless peril, as he thought it was safe to point the gun to his temple. Lim did not know
that the gun was loaded.
It bears noting that insurance contracts are as a rule supposed to be interpreted liberally in
favor of the assured. There is no reason to deviate from this rule, especially in view of the
circumstances of this case.
Case No. 6
Villacorta vs. Insurance Commission
G.R. No. L-54171; October 28, 1980
Topic: Construction of Insurance Contract
Facts: Jewel Villacorta entrusted her car to Sunday Machine Works, Inc., to do general
check-up and repairs. While the car was in custody of Sunday Machine Works, Inc., the
car was allegedly taken by 6 persons and was taken to Montalban, Rizal where it figured in
an accident extensive damage. Villacorta filed a claim for the total loss with Empire
Insurance Company which insured the car for own damage, theft and third party liability.
The claim was denied?
Issue: Whether or not Empire East Company was correct in denying the claim on the
ground that the ―authorized driver clause‖ was violated and the ―theft clause‖ cannot be
invoked?
Held: No. Empire East Company was not correct in denying the claim because the
―authorized driver clause was not violated‖ despite the fact that Villacorta did not know the
driver of the car at the time of the accident. In addition, the ―theft clause‖ can be invoked
because the elements of the crime of theft were present in the case.
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On the “authorized driver clause”
Insurance contracts are contracts of adhesion. Being a contract of adhesion calls for
greater strictness and vigilance in the court of justice with a view of protecting the weaker
party from abuse and imposition, and prevent them from being traps for the unwary. To
interpret that the ―authorized driver clause‖ was violated due to the fact that the driver at
the time of the accident was unknown to the insured will be too restrictive against the
insured.
A car owner who entrusts her car to a repair shop is presumed to have given permission to
the owner of the repair shop and its employees to drive the car of legitimate purposes like
test drives. The mere illicit use of the car of the employees of the repair shop does not
mean that the ―authorized driver clause‖ was violated.
On the “theft clause”
Intent to gain is evident when a person takes the property of another and uses it without
the consent of the owner because he derives utility, satisfaction, enjoyment and pleasure.
The use of the thing taken constitutes gain.
Case No. 7
FiguracionVda. De Maglana vs Hon. Francisco Consolacion
GR No. 60506; August 6, 1992
Facts: Lope Maglana was an employee of the Bureau of Customs whose work station was at
Lasa. Early morning when Maglana was on his way to his work station riding a motorcycle
owned by the Bureau, he met an accident resulting in his death. The PUJ jeep that bumped
the deceased was driven by Pepito Into, operated and owned by defendant Destrajo. From
the investigation conducted by the traffic investigator, the PUJ jeep was overtaking another
passenger jeep that was going towards the city poblacion. While overtaking, the PUJ jeep of
defendant Destrajo running abreast with the overtaken jeep, bumped the motorcycle driven
by the deceased who was going towards the direction of Lasa, Davao 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.
Consequently, the heirs of Lope Maglana, Sr., here petitioners, filed an action for damages
and attorney's fees against operator Patricio Destrajo and the Afisco Insurance Corporation
(AFISCO for brevity) before the then Court of First Instance of Davao. The trial court ruled
in favor of the plaintiffs against defendant Destrajo and the defendant insurance company
is ordered to reimburse defendant Destrajo whatever amounts the latter shall have paid
only up to the extent of its insurance coverage.
Petitioners filed a motion for the reconsideration contending that AFISCO should not merely
be held secondarily liable because the Insurance Code provides that the insurer's liability is
"direct and primary and/or jointly and severally with the operator of the vehicle, although
only up to the extent of the insurance coverage.
The lower court denied the Motion for Reconsideration. Another second MR was filed but
was likewise denied for lack of merit. Hence, petitioners filed the instant petition for
certiorari which, although it does not seek the reversal of the lower court's decision in its
entirety, they only reassert their position that the insurance company is directly and
solidarily liable with the negligent operator up to the extent of its insurance coverage.
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Issue: Whether or not the insurance contract which provides for indemnity against liability
to third persons would mean that the insurer can likewise be held solidarily liable with the
insured and/or the parties found at fault.
Held: NO. While in solidary obligations, the creditor may enforce the entire obligation
against one of the solidary debtors, in an insurance contract, the insurer undertakes for a
consideration to indemnify the insured against loss, damage or liability arising from an
unknown or contingent event.Thus, petitioner therein can not be made solidarily liable with
the insured for the entire obligation otherwise there would result "an evident breach of the
concept of solidary obligation."
Case No. 9
Armando Geagonia vs. CA and Country Bankers Insurance Corporation
GR No. 114427; February 6, 1995
Facts: On 27 May 1990, fire of accidental origin broke out at around 7:30 p.m. at the
public market of San Francisco, Agusan del Sur. The petitioner's insured stock-in-trade
were completely destroyed prompting him to file with the private respondent a claim under
the policy. On 28 December 1990, the private respondent denied the claim because it found
that at the time of the loss the petitioner's stocks-in-trade were likewise covered by two fire
insurance policies for P100,000.00 each, issued by the Cebu Branch of the Philippines First
Insurance Co., Inc. (PFIC).These policies indicate that the insured was Messrs. Discount
Mart (Mr. Armando Geagonia, Prop.) with a mortgage clause reading:“MORTGAGE: Loss, if
any shall be payable to Messrs. Cebu Tesing Textiles, Cebu City as their interest may appear
subject to the terms of this policy. CO-INSURANCE DECLARED: P100,000. — Phils. First
CEB/F 24758.”
The basis of the private respondent's denial was the petitioner's alleged violation of
Condition 3 of the policy, i.e., the insured shall give notice to the Company of any insurance
or insurances already effected, or which may subsequently be effected, covering any of the
property or properties consisting of stocks in trade, goods in process and/or inventories only
hereby insured, and unless such notice be given and the particulars of such insurance or
insurances be stated therein or endorsed in this policy pursuant to Section 50 of the
Insurance Code, by or on behalf of the Company before the occurrence of any loss or damage,
all benefits under this policy shall be deemed forfeited, provided however, that this condition
shall not apply when the total insurance or insurances in force at the time of the loss or
damage is not more than P200,000.00.
Issue: Whether the petitioner had prior knowledge of the two insurance policies issued by
PFIC when he obtained the fire insurance policy from the private respondent, thereby, for
not disclosing such fact, violating condition 3 of the policy; and if he had, whether he is
precluded from recovering therefrom.
Held: Yes, the petitioner knew of the prior policies issued by the PFIC. His letter of 18
January 1991 to private respondent, specifically stating the two policies, conclusively
proves this knowledge.
Condition 3 of the policy is a condition which is not proscribed by law. Its incorporation in
the policy is allowed by Section 75 of the Insurance Code. It is intended to prevent an
increase in the moral hazard, and is commonly known as the additional or ―other
insurance‖ clause and has been upheld as valid and as a warranty that no other insurance
exists. Its violation would thus avoid the policy. However, in order to constitute a violation,
the other insurance must be upon same subject matter, the same interest therein, and the
same risk.
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It is a cardinal rule on insurance that a policy or insurance contract is to be interpreted

liberally in favor of the insured and strictly against the company, the reason being,
undoubtedly, to afford the greatest protection which the insured was endeavoring to secure
when he applied for insurance. It is also a cardinal principle of law that provisions,
conditions or exceptions in policies which tend to work a forfeiture of insurance policies
should be construed most strictly against those for whose benefits they are inserted, and
most favorably toward those against whom they are intended to operate. The reason for this
is that, except for riders which may later be inserted, the insured sees the contract already
in its final form and has had no voice in the selection or arrangement of the words
employed therein. On the other hand, the language of the contract was carefully chosen
and deliberated upon by experts and legal advisers who had acted exclusively in the interest
of the insurers and the technical language employed therein is rarely understood by
ordinary laymen.
With these principles in mind, the court is of the opinion that Condition 3 of the subject
policy is not totally free from ambiguity and must, perforce, be meticulously analyzed. Such
analysis leads the court to the conclusion that (a) the prohibition applies only to double
insurance, and (b) the nullity of the policy shall only be to the extent exceeding
P200,000.00 of the total policies obtained.
The first conclusion is supported by the portion of the condition referring to other insurance
"covering any of the property or properties consisting of stocks in trade, goods in process
and/or inventories only hereby insured," and the portion regarding the insured's
declaration on the subheading CO-INSURANCE that the co-insurer is Mercantile Insurance
Co., Inc. in the sum of P50,000.00. A double insurance exists where the same person is
insured by several insurers separately in respect of the same subject and interest. As stated
by the court, the insurable interests of a mortgagor and a mortgagee on the mortgaged
property are distinct and separate. Since the two policies of the PFIC do not cover the same
interest as that covered by the policy of the private respondent, no double insurance exists.
The non-disclosure then of the former policies was not fatal to the petitioner's right to
recover on the private respondent's policy.
Furthermore, by stating within Condition 3 itself that such condition shall not apply if the
total insurance in force at the time of loss does not exceed P200,000.00, the private
respondent was amenable to assume a co-insurer's liability up to a loss not exceeding
P200,000.00. What it had in mind was to discourage over-insurance.
Case No. 10
FORTUNE INSURANCE AND SURETY CO., INC. vs. COURT OF APPEALS
G.R. No. 115278 May 23, 1995
TOPIC: CONSTRUCTION OF INSURANCE CONTRACT
FACTS: The plaintiff was insured by the defendants.
An armored car of the plaintiff, while in the process of transferring cash in the sum of
P725,000.00 under the custody of its teller from its Pasay Branch to its Head Office at
Makati, Metro Manila on June 29, 1987, was robbed of the said cash. The robbery took
place while the armored car was traveling along Taft Avenue in Pasay City.
The said armored car was driven by Benjamin Magalong Y de Vera, escorted by Security
Guard Saturnino Atiga Y Rosete. Driver Magalong was assigned by PRC Management
Systems with the plaintiff by virtue of an Agreement.
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Demands were made by the plaintiff upon the defendant 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, specifically under page 1 thereof, "General Exceptions".
GENERAL EXCEPTIONS
The company shall not be liable under this policy in report of
xxx xxx xxx
(b) 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. .
The plaintiff 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.
ISSUE: Whether the petitioner is liable under the Money, Security, and Payroll Robbery
policy it issued to the private respondent or whether recovery thereunder is precluded
under the general exceptions clause thereof.
HELD: No. Fortune is exempt from liability under the general exceptions clause of the
insurance policy.
A contract of insurance is a contract of adhesion, thus any ambiguity therein should be
resolved against the insurer, or it should be construed liberally in favor of the insured and
strictly against the insurer. Limitations of liability should be regarded with extreme
jealousy and must be construed
in such a way, as to preclude the insurer from non-compliance with its obligation. It goes
without saying then that 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.
An insurance contract is a contract of indemnity upon the terms and conditions specified
therein. It is settled that the terms of the policy constitute the measure of the insurer's
liability. In the absence of statutory prohibition to the contrary, insurance companies have
the same rights as individuals to limit their liability and to impose whatever conditions they
deem best upon their obligations not inconsistent with public policy.
It is clear to us that 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.
Producers entrusted the three with the specific duty to safely transfer the money to its head
office, with Alampay to be responsible for its custody in transit; Magalong to drive the
armored vehicle which would carry the money; and Atiga to provide the needed security for
the money, the vehicle, and his two other companions.
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."
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Case no. 8
PerlaCompania de Seguros vs. CA
G.R. No. 96493 ; May 7, 1992
Facts: Private respondent spouses executed a promissory note in favor of Supercars

payable in monthly instalments and secured a chattel mortgage over a brand new red Ford
Lser 1300 5DR Hatchback 1981 which is insured with petitioner Perla for comprehensive
coverage.
At around 2:30 P.M. of November 9, 1982, said vehicle was carnapped while parked at the
back of Broadway Centrum along N. Domingo Street, Quezon City. Private respondent
Evelyn Lim, who was driving said car before it was carnapped, immediately called up the
Anti-Carnapping Unit of the Philippine Constabulary to report said incident and
thereafter, went to the nearest police substation at Araneta, Cubao to make a police
report regarding said incident, as shown by the certification issued by the Quezon City
police.7 Private respondents then complied with the insurance requirements.
Perla denied the claim of loss by private respondent on the ground that Evelyn was in
possession of an expired driver‘s license at the time of the theft which is claimed to be a
violation of the authorized driver clause of the policy, to wit:
―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 with the
licensing or other laws or regulations, to drive the Scheduled Vehicle, or has been
permitted and is not disqualified by order of a Court of Law or by reason of any enactment
or regulation in that behalf.‖
(RTC decided in favour of Perla then CA for private respondents.)
Issue: Whether or not the lack of a valid driver‘s license is a ground to deny a claim for loss
of a vehicle due to theft.
Held: NO. The comprehensive motor car insurance policy issued by petitioner Perla
undertook to indemnify the private respondents against loss or damage to the car (a) by
accidental collision or overturning, or collision or overturning consequent upon
mechanical breakdown or consequent upon wear and tear; (b) by fire, external explosion,
selfignition 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 the
owner‘s consent or knowledge, such taking constitutes theft, and, therefore, it is the
―THEFT‖ clause, and not the ―AUTHORIZED DRIVER‖ clause, that should apply. As
correctly stated by the respondent court in its decision:
―x xx Theft is an entirely different legal concept from that of accident. Theft is committed
by a person with the intent to gain or, to put it in another way, with the concurrence of the
doer‘s will. On the other hand, accident, although it may proceed or result from
negligence, is the happening of an event without the concurrence of the will of the person
by whose agency it was caused. Clearly, the risk against accident is distinct from the risk
against theft. The ‗authorized driver clause‘ in a typical insurance policy is in
contemplation or anticipation of accident in the legal sense in which it should be
understood, and not in contemplation or anticipation of an event such as theft. The
distinction—often seized upon by insurance companies in resisting claims from their
assureds—between death occurring as a result of accident and death occurring as a result
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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
PerlaCompania could properly resist appellants‘ claim for indemnification for the loss or
destruction of the vehicle resulting from the accident. But in the present case. The loss of
the insured vehicle did not result from an accident where intent was involved; the loss in
the present case was caused by theft, the commission of which was attended by intent.‖
It is worthy to note that there is no causal connection between the possession of a valid
driver‘s license and the loss of a vehicle. To rule otherwise would render car insurance
practically a sham since an insurance company can easily escape liability by citing
restrictions which are not applicable or germane to the claim, thereby reducing indemnity
to a shadow.
Case No. 14
White Gold Marine Services, Inc. vs. Pioneer Insurance and Surety Corporation and
The Steamship Mutual Underwriting Association (BERMUDA) LTD.
G.R. No. 154514. July 28, 2005
Topic: Construction of Insurance Contract
Facts: White Gold procured a protection and indemnity coverage for its vessels from The
Steamship Mutual through Pioneer Insurance and Surety Corporation. White Gold was
issued a Certificate of Entry and Acceptance. Pioneer also issued receipts. When White
Gold failed to fully pay its accounts, Steamship Mutual refused to renew the coverage.
Steamship Mutual thereafter filed a case against White Gold for collection of sum of
money to recover the unpaid balance. White Gold on the other hand, filed a complaint
before the Insurance Commission claiming that Steamship Mutual and Pioneer violated
provisions of the Insurance Code.
The Insurance Commission dismissed the complaint. It said that there was no need
for Steamship Mutual to secure a license because it was not engaged in
the insurance business and that it was a P & I club. Pioneer was not required to obtain
another license as insurance agent because Steamship Mutual was not engaged in
the insurance business.
The Court of Appeals affirmed the decision of the Insurance Commissioner. In its decision,
the appellate court distinguished between P & I Clubs vis-à-vis conventional insurance.
The appellate court also held that Pioneer merely acted as a collection agent of Steamship
Mutual.
Hence this petition by White Gold.
Issues: 1. Is Steamship Mutual, a P & I Club, engaged in the insurance business in the
Philippines?
2. Does Pioneer need a license as an insurance agent/broker for Steamship Mutual?
Held: Yes, Petition granted.
Ratio: White Gold insists that Steamship Mutual as a P & I Club is engaged in
the insurance business. To buttress its assertion, it cites the definition as ―an association
composed of ship owners in general who band together for the specific purpose of
providing insurance cover on a mutual basis against liabilities incidental to shipowning that
the members incur in favor of third parties.‖
They argued that Steamship Mutual‘s primary purpose is to solicit and provide protection
and indemnity coverage and for this purpose, it has engaged the services of Pioneer to act
as its agent.
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Respondents contended that although Steamship Mutual is a P & I Club, it is not

engaged in the insurance business in the Philippines. It is merely an association of vessel
owners who have come together to provide mutual protection against liabilities incidental to
shipowning.
Is Steamship Mutual engaged in the insurance business?
A P & I Club is ―a form of insurance against third party liability, where the third
party is anyone other than the P & I Club and the members.‖ By definition then, Steamship
Mutual as a P & I Club is a mutual insurance association engaged in the
marine insurance business.
The records reveal Steamship Mutual is doing business in the country albeit without the
requisite certificate of authority mandated by Section 187 of the Insurance Code. It
maintains a resident agent in the Philippines to solicit insurance and to collect payments in
its behalf. Steamship Mutual even renewed its P & I Club cover until it was cancelled due
to non-payment of the calls. Thus, to continue doing business here, Steamship Mutual or
through its agent Pioneer, must secure a license from the Insurance Commission.
Since a contract of insurance involves public interest, regulation by the State is

necessary. Thus, no insurer or insurance company is allowed to engage in
the insurance business without a license or a certificate of authority from the Insurance
Commission.
2. Pioneer is the resident agent of Steamship Mutual as evidenced by the certificate

of registration issued by the Insurance Commission. It has been licensed to do or
transact insurance business by virtue of the certificate of authority issued by the same
agency. However, a Certification from the Commission states that Pioneer does not have a
separate license to be an agent/broker of Steamship Mutual.
Although Pioneer is already licensed as an insurance company, it needs a separate

license to act as insurance agent for Steamship Mutual. Section 299 of the Insurance Code
clearly states:
SEC. 299 No person shall act as an insurance agent or as an insurance broker in

the solicitation or procurement of applications for insurance, or receive for services in
obtaining insurance, any commission or other compensation from any insurance company
doing business in the Philippines or any agent thereof, without first procuring a license so
to act from the Commissioner. . .
Case No. 15
Republic vs. SunlifeAssurance Company of Canada
G.R. No. 158085. October 14, 2005
Topic: Mutual Insurance Company
Facts On October 20, 1997, Sun Life filed with the Commissioner of Internal Revenue
(CIR) its insurance premium tax return for the third quarter of 1997 and paid the premium
tax in the amount of P31,485,834.51. For the period covering August 21 to December 18,
1997, petitioner filed with the CIR its [documentary stamp tax (DST)] declaration returns
and paid the total amount of P30,000,000.00.
―On December 29, 1997, the Court of Tax Appeals rendered its decision in Insular
Life Assurance Co. Ltd. v. CIR, which held that mutual life insurance companies are purely
cooperative companies and are exempt from the payment of premium tax and DST. This
pronouncement was later affirmed by this court in CIR v. Insular Life Assurance Company,
Ltd. Sun Life surmised that, being a mutual life insurance company, it was likewise exempt
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from the payment of premium tax and DST. Hence, on August 20, 1999, Sun Life filed with
the CIR an administrative claim for tax credit of its alleged erroneously paid premium tax
and DST for the aforestated tax periods.
Issue: (1) Whether respondent is a cooperative.

(2) Whether or not respondent is exempted from payment of tax on life insurance
premiums and documentary stamp tax.‖
Held: (1) Yes. The Tax Code defines a cooperative as an association ―conducted by the
members thereof with the money collected from among themselves and solely for their own
protection and not for profit.‖ Without a doubt, respondent is a cooperative engaged in a
mutual life insurance business.The member-policyholders constitute ―both insurer and
insured‖ who ―contribute, by a system of premiums or assessments, to the creation of a
fund from which all losses and liabilities are paid.‖ The premiums pooled into this fund are
earmarked for the payment of their indemnity and benefit claims.
(2) Yes. Having determined that respondent is a cooperative that does not have to be
registered with the CDA, we hold that it is entitled to exemption from both premium taxes
and documentary stamp taxes (DST).
Case No. 16
PHILAMCARE HEALTH SYSTEMS, INC. vs. COURT OF APPEALS and JULITA TRINOS
G.R. No. 125678, March 18, 2002
TOPIC: CONSTRUCTION OF INSURANCE CONTRACT
FACTS: Ernani Trinos, deceased husband of respondent Julita Trinos, applied for a health
care coverage with Philamcare Health Systems, Inc. In the standard application form, he
answered no to the following question:
Have you or any of your family members ever consulted or been treated for
high blood pressure, heart trouble, diabetes, cancer, liver disease, asthma or
peptic ulcer? (If Yes, give details).
The application was approved and he was issued Health Care Agreement wherein Ernani
was entitled to avail of hospitalization benefits, whether ordinary or emergency, listed
therein.
During the period of his coverage, Ernani suffered a heart attack and was confined. While
her husband was in the hospital, respondent Julita tried to claim the benefits under the
health care agreement. However, PhilamCare denied her claim on the ground that the
agreement was void due to the concealment regarding Ernani‘s medical history.
After Ernani‘s death, Julita instituted with the RTC Manila, an action for damages against
PhilamCare.
After trial, the lower court ruled against PhilamCare.
On appeal, the Court of Appeals affirmed the decision of the trial court with modification as
to damages.
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ISSUE: Whether PhilamCare is liable under the terms of the health care agreement.
RULING: YES. The health care agreement was in the nature of non-life insurance, which is
primarily a contract of indemnity. Once the member incurs hospital, medical or any other
expense arising from sickness, injury or other stipulated contingent, the health care
provider must pay for the same to the extent agreed upon under the contract.
The fraudulent intent on the part of the insured must be established to warrant rescission
of the insurance contract. Concealment as a defense for the health care provider or insurer
to avoid liability is an affirmative defense and the duty to establish such defense by
satisfactory and convincing evidence rests upon the provider or insurer. In any case, with or
without the authority to investigate, petitioner is liable for claims made under the contract.
Having assumed a responsibility under the agreement, petitioner is bound to answer the
same to the extent agreed upon. In the end, the liability of the health care provider attaches
once the member is hospitalized for the disease or injury covered by the agreement or
whenever he avails of the covered benefits which he has prepaid.
Under Section 27 of the Insurance Code, "a concealment entitles the injured party to
rescind a contract of insurance." The right to rescind should be exercised previous to the
commencement of an action on the contract. In this case, no rescission was made. Besides,
the cancellation of health care agreements as in insurance policies require the concurrence
of the following conditions:
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 of the above pre-conditions was fulfilled in this case. When the terms of insurance
contract contain limitations on liability, courts should construe them in such a way
as to preclude the insurer from non-compliance with his obligation. Being a contract
of adhesion, the terms of an insurance contract are to be construed strictly against
the party which prepared the contract – the insurer. By reason of the exclusive control
of the insurance company over the terms and phraseology of the insurance contract,
ambiguity must be strictly interpreted against the insurer and liberally in favor of the
insured, especially to avoid forfeiture. This is equally applicable to Health Care Agreements.
The phraseology used in medical or hospital service contracts, such as the one at bar, must
be liberally construed in favor of the subscriber, and if doubtful or reasonably susceptible of
two interpretations the construction conferring coverage is to be adopted, and exclusionary
clauses of doubtful import should be strictly construed against the provider.
Case No. 19
General Pacific Life Insurance v. Court of Appeals
89 SCRA 543; 30 April 1979
Topic: Perfection of Insurance Contract
Facts: Respondent is a duly authorized agent of Pacific Life, applied for 20-year
endowment policy on the life of his one-year old daughter , a mongoloid. He did not divulge
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each physical defect of his daughter. He paid the premium and was issued a biding deposit
receipt. Despite the branch manger‘s favorable recommendation, the company disapproved
because a 20-year plan is not available to minors. The manager wrote back and strongly
recommended. At this point, the child died of influenza with complication of broncho-
pneumonia.
Issue: Whether or not the binding deposit receipt constituted a temporary contract of the
life insurance?
Held: No. The SC held that a binding receipt does not insure by itself; that no insurance
contract was perfected with the parties with the non-compliance of the condition provided
in the binding receipt and concealment having been committed by the respondent. The
binding deposit receipt is intended to be merely a provisional or temporary insurance
contract, and that the receipt merely acknowledged on behalf of the insurance company.
Principle/Doctrine: To be binding from the date of application, the contract must
have been a completed contract, one that leaves nothing to be done, nothing to be
completed, nothing to be passed upon or determined, before it shall take effect. There can
be no contract of insurance unless the minds of the parties have met in agreement .
Case No. 22
Gulf Resorts Inc. vs. Philippine Charter Insurance Corp.
GR. No. 156167; May 16, 2005
Topic: Perfection of Insurance Contract
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 a policy
occasioned by or through or in consequence of earthquake. On July 16, 1990, an
earthquake struck Central Luzon and Northern Luzon, as a result, the properties of the
petitionerand two swimming pools in its Agoo Playa Resort were damaged. Thereafter, the
latter filed a claim to the insurance company.
On August 23, 1990, such claim of the petitioner 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. However, the RTC favored the insurance company,
reiterating that the endorsement rider means that only the two swimming pools were
insured against earthquake shock.
Issue: Whether or not Gulf can claim to the insurance company for its properties aside from
the two swimming pools.
Held: YES.
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.
Section 2(1) of Insurance Code provides that the 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.
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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.
Case No. 25
Pan Malayan Insurance Corp vs Court of Appeals
G.R. No. 81026
April 3, 1990
Topic: SUBROGATION
Facts: On December 10, 1985, PANMALAY filed a complaint for damages with the RTC of
Makati against private respondents Erlinda Fabie and her driver. PANMALAY averred the
following: that it insured a Mitsubishi Colt Lancer car with plate No. DDZ-431 and
registered in the name of Canlubang Automotive Resources Corporation [CANLUBANG];
that on May 26, 1985, due to the "carelessness, recklessness, and imprudence" of the
unknown driver of a pick-up with plate no. PCR-220, the insured car was hit and suffered
damages in the amount of P42,052.00; that PANMALAY defrayed the cost of repair of the
insured car and, therefore, was subrogated to the rights of CANLUBANG against the driver
of the pick-up and his employer, Erlinda Fabie; and that, despite repeated demands,
defendants, failed and refused to pay the claim of PANMALAY.
Issue: Whether Pan Malayan subrogated to the rights of Canlubang against the driver and
his employer?
Held: YES. Article 2207 of the Civil Code is founded on the well-settled principle of
subrogation. If the insured property is destroyed or damaged through the fault or
negligence of a party other than the assured, then the insurer, upon payment to the
assured, will be subrogated to the rights of the assured to recover from the wrongdoer to
the extent that the insurer has been obligated to pay. Payment by the insurer to the
assured operates as an equitable assignment to the former of all remedies which the latter
may have against the third party whose negligence or wrongful act caused the loss. The
right of subrogation is not dependent upon, nor does it grow out of, any privity of contract
or upon written assignment of claim. It accrues simply upon payment of the insurance
claim by the insurer [Compania Maritima v. Insurance Company of North America, G.R. No.
L-18965, October 30, 1964, 12 SCRA 213; Fireman's Fund Insurance Company v. Jamilla
& Company, Inc., G.R. No. L-27427, April 7, 1976, 70 SCRA 323]. There are a few
recognized exceptions to this rule. For instance, if the assured by his own act releases the
wrongdoer or third party liable for the loss or damage, from liability, the insurer's right of
subrogation is defeated [Phoenix Ins. Co. of Brooklyn v. Erie & Western Transport, Co., 117
US 312, 29 L. Ed. 873 (1886); Insurance Company of North America v. Elgin, Joliet &
Eastern Railway Co., 229 F 2d 705 (1956)]. Similarly, where the insurer pays the assured
the value of the lost goods without notifying the carrier who has in good faith settled the
assured's claim for loss, the settlement is binding on both the assured and the insurer, and
the latter cannot bring an action against the carrier on his right of subrogation [McCarthy
v. Barber Steamship Lines, Inc., 45 Phil. 488 (1923)]. And where the insurer pays the
assured for a loss which is not a risk covered by the policy, thereby effecting "voluntary
payment", the former has no right of subrogation against the third party liable for the loss
[Sveriges Angfartygs Assurans Forening v. Qua Chee Gan, G. R. No. L-22146, September 5,
1967, 21 SCRA 12]. None of the exceptions are availing in the present case.
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CASE No. 27
G.R. No. 149019 August 15, 2006
DELSAN TRANSPORT LINES, INC vs. AMERICAN HOME ASSURANCE CORPORATION,
FACTS: Delsan, a domestic corporation, owns and operates the vessel MT Larusan. On the
other hand, American Home Assurance Corporation (AHAC) is a foreign insurance company
duly licensed to do business in the Philippines through its agent, the American-
International Underwriters, Inc. (Phils.) It is engaged, among others, in insuring cargoes for
transportation within the Philippines.
Delsan received, on board MT Larusan, a shipment of Automotive Diesel Oil (diesel oil), at
the Bataan Refinery Corporation, for transportation and delivery to the bulk depot in
Bacolod City of Caltex Phils., Inc. (Caltex), pursuant to a Contract of Afreightment.
The shipment was insured by respondent AHAC against all risks under an Inland Floater
Policy.
Unloading operations commenced upon the shipment arrival in Bacolod City. The
discharging of the diesel oil started on the same day. However, the discharging had to be
stopped due to unforeseen circumstances that causedspillage and backflow of diesel oil.
Caltex sought recovery of the loss from Delsan, but the latter refused to pay. As insurer,
AHAC paid Caltex for spillage, pursuant to a Marine as well as with for backflow of the
diesel oil pursuant to an Inland Floater Policy.
AHAC, as Caltex‘s subrogee, institutedCivil Cases against Delsan for loss caused by the
spillage and backflow, praying to be indemnified for damages suffered.
The trial court ruled in favor of AHAC, holding Delsan liable for the loss of the cargo for its
negligence in its duty as a common carrier.
On appeal, the CA affirmed the findings of the trial court,declaring that Delsan failed to
exercise the extraordinary diligence of a good father of a family in the handling of its cargo.
ISSUE: May Delsan be absolved from liability for the loss of its cargo?
RULING: Delsan would have the Court absolve it from liability on two grounds.
First, the loss through spillage was partly due to the contributory negligence of Caltex; and
Second, the loss through backflow should not be borne by Delsan because it was already
delivered to Caltex‘s shore tank.
Common carriers are bound to observe extraordinary diligence in the vigilance over the
goods transported by them. They are presumed to have been at fault or to have acted
negligently if the goods are lost, destroyed or deteriorated. To overcome the presumption of
negligence in case of loss, destruction or deterioration of the goods, the common carrier
must prove that it exercised extraordinary diligence. There are, however, exceptions to this
rule.
Article 1734 of the Civil Code enumerates the instances when the presumption of
negligence does not attach:
Art. 1734. Common carriers are responsible for the loss, destruction, or deterioration of the
goods, unless the same is due to any of the following causes only:
1) Flood storm, earthquake, lightning, or other natural disaster or calamity;
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2) Act of the public enemy in war, whether international or civil;

3) Act or omission of the shipper or owner of the goods;
4) The character of the goods or defects in the packing or in the containers;
5) Order or act of competent public authority.
Both the trial court and the CA uniformly ruled that Delsan failed to prove its claim that
there was a contributory negligence on the part of the owner of the goods – Caltex. It had
been established that the proximate cause of the spillage and backflow of the diesel oil was
due to the severance of the port bow mooring line of the vessel and the failure of the shore
tender to close the storage tank gate valve even as a check on the drain cock showed that
there was still a product on the pipeline.
Delsan, as the owner of the vessel, was obliged to prove that the loss was caused by one of
the excepted causes if it were to seek exemption from responsibility. Unfortunately, it
miserably failed to discharge this burden by the required quantum of proof. The
extraordinary responsibility of common carrier lasts from the time the goods are
unconditionally placed in the possession of, and received by, the carrier for transportation
until the same are delivered, actually or constructively, by the carrier to the consignee, or to
a person who has the right to receive them. The discharging of oil products to Caltex Bulk
Depot has not yet been finished, Delsan still has the duty to guard and to preserve the
cargo. The carrier still has in it the responsibility to guard and preserve the goods, a duty
incident to its having the goods transported.
Common carriers, from the nature of their business and for reasons of public policy, are
bound to observe extraordinary diligence in vigilance over the goods and for the safety of the
passengers transported by them, according to all the circumstances of each case. The mere
proof of delivery of goods in good order to the carrier, and their arrival in the place of
destination in bad order, make out a prima facie case against the carrier, so that if no
explanation is given as to how the injury occurred, the carrier must be held responsible. It
is incumbent upon the carrier to prove that the loss was due to accident or some other
circumstances inconsistent with its liability.
Delsan, being a common carrier, should have exercised extraordinary diligence in the
performance of its duties. Consequently, it is obliged to prove that the damage to its cargo
was caused by one of the excepted causes if it were to seek exemption from responsibility.
Having failed to do so, Delsan must bear the consequences.
Case No. 28
FEDEX vs. AHAC
FACTS: Shipper SMITHKLINE USA delivered to carrier Burlington Air Express

(BURLINGTON), an agent of [Petitioner] Federal Express Corporation, a shipment of 109
cartons of veterinary biologicals for delivery to consignee SMITHKLINE and French Overseas
Company in Makati City. The shipment was covered by Burlington Airway Bill No.
11263825 with the words, ‗REFRIGERATE WHEN NOT IN TRANSIT‘ and ‗PERISHABLE‘
stamp marked on its face. That same day, Burlington insured the cargoes with American
Home Assurance Company (AHAC). The following day, Burlington turned over the custody
of said cargoes to FEDEX which transported the same to Manila.
The shipments arrived in Manila and was immediately stored at [Cargohaus Inc.‘s]
warehouse. Prior to the arrival of the cargoes, FEDEX informed GETC Cargo International
Corporation, the customs broker hired by the consignee to facilitate the release of its
cargoes from the Bureau of Customs, of the impending arrival of its client‘s cargoes.
12 days after the cargoes arrived in Manila, DIONEDA, a non-licensed custom‘s broker who
was assigned by GETC, found out, while he was about to cause the release of the said
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cargoes, that the same [were] stored only in a room with 2 air conditioners running, to cool
the place instead of a refrigerator. DIONEDA, upon instructions from GETC, did not
proceed with the withdrawal of the vaccines and instead, samples of the same were taken
and brought to the Bureau of Animal Industry of the Department of Agriculture in the
Philippines by SMITHKLINE for examination wherein it was discovered that the ‗ELISA
reading of vaccinates sera are below the positive reference serum.‘
As a consequence of the foregoing result of the veterinary biologics test, SMITHKLINE

abandoned the shipment and, declaring ‗total loss‘ for the unusable shipment, filed a claim
with AHAC through its representative in the Philippines, the Philam Insurance Co., Inc.
(PHILAM) which recompensed SMITHKLINE for the whole insured amount. Thereafter,
PHILAM filed an action for damages against the FEDEX imputing negligence on either or
both of them in the handling of the cargo.
Trial ensued and ultimately concluded with the FEDEX being held solidarily liable for the
loss. Aggrieved, petitioner appealed to the CA. The appellate court ruled in favor of PHILAM
and held that the shipping Receipts were a prima facie proof that the goods had indeed
been delivered to the carrier in good condition.
ISSUE: Is FEDEX liable for damage to or loss of the insured goods.
HELD: Petition granted. Assailed decision reversed insofar as it pertains to FEDEX
Prescription of Claim
From the initial proceedings in the trial court up to the present, petitioner has tirelessly
pointed out that respondents‘ claim and right of action are already barred. Indeed, this fact
has never been denied by respondents and is plainly evident from the records.
Airway Bill No. 11263825, issued by Burlington as agent of petitioner, states:
―6. No action shall be maintained in the case of damage to or partial loss of the shipment
unless a written notice, sufficiently describing the goods concerned, the approximate date of
the damage or loss, and the details of the claim, is presented by shipper or consignee to an
office of Burlington within (14) days from the date the goods are placed at the disposal of
the person entitled to delivery, or in the case of total loss (including non-delivery) unless
presented within (120) days from the date of issue of the [Airway Bill]. xxx
Relevantly, petitioner‘s airway bill states:
―12./12.1 The person entitled to delivery must make a complaint to the carrier in writing in
the case:
12.1.1 of visible damage to the goods, immediately after discovery of the damage and at the
latest within fourteen (14) days from receipt of the goods; xxx
Article 26 of the Warsaw Convention, on the other hand, provides:
Xxx (2) In case of damage, the person entitled to delivery must complain to the carrier
forthwith after the discovery of the damage, and, at the latest, within 3 days from the date
of receipt in the case of baggage and 7 days from the date of receipt in the case of goods. xx
(3) Every complaint must be made in writing upon the document of transportation or by
separate notice in writing dispatched within the times aforesaid.
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(4) Failing complaint within the times aforesaid, no action shall lie against the carrier,
save in the case of fraud on his part.‖ xxx
Condition Precedent
In this jurisdiction, the filing of a claim with the carrier within the time limitation therefor
actually constitutes a condition precedent to the accrual of a right of action against a
carrier for loss of or damage to the goods. The shipper or consignee must allege and prove
the fulfillment of the condition. If it fails to do so, no right of action against the carrier can
accrue in favor of the former. The aforementioned requirement is a reasonable condition
precedent; it does not constitute a limitation of action.
The requirement of giving notice of loss of or injury to the goods is not an empty formalism.
The fundamental reasons for such a stipulation are (1) to inform the carrier that the cargo
has been damaged, and that it is being charged with liability 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 safeguard itself from false and fraudulent claims.
NOTES: as to proper payee:
The Certificate specifies that loss of or damage to the insured cargo is ―payable to order x x
x upon surrender of this Certificate.‖ Such wording conveys the right of collecting on any
such damage or loss, as fully as if the property were covered by a special policy in the name
of the holder itself. At the back of the Certificate appears the signature of the
representative of Burlington. This document has thus been duly indorsed in blank and is
deemed a bearer instrument.
Since the Certificate was in the possession of Smithkline, the latter had the right of
collecting or of being indemnified for 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 holder. Hence, being the
holder of the Certificate and having an insurable interest in the goods, Smithkline was the
proper payee of the insurance proceeds.
Subrogation
Upon receipt of the insurance proceeds, the consignee (Smithkline) executed a subrogation
Receipt in favor of respondents. The latter were thus authorized ―to file claims and begin
suit against any such carrier, vessel, person, corporation or government.‖ Undeniably, the
consignee had a legal right to receive the goods in the same condition it was delivered for
transport to petitioner. If that right was violated, the consignee would have a cause of
action against the person responsible therefor.
Case No. 30
Great Pacific Life Assurance Corp. vs. Court of Appeals
G.R. No. 113899. October 13, 1999
Topic: Insurable Interest
Facts: A contract of group life insurance was executed between petitioner Great Pacific
Life Assurance Corporation (hereinafter Grepalife) and Development Bank of the
Philippines (hereinafter DBP).Grepalife agreed to insure the lives of eligible housing loan
mortgagors of DBP. On November 11, 1983, Dr. Wilfredo Leuterio, a physician and a
housing debtor of DBP applied for membership in the group life insurance plan. On
August 6, 1984, Dr.Leuterio died due to ―massive cerebral hemorrhage.‖
Consequently, DBP submitted adeath claim to Grepalife. Grepalife denied the claim
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alleging that Dr.Leuterio was not physically healthy when he applied for an insurance
coverage on November 15, 1983. Grepalife insisted 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. Petitioner
alleges that the complaint was instituted by the widow of Dr.Leuterio, not the real
party in interest, hence the trial court acquired no jurisdiction over the case. It
argues that when the Court of Appeals affirmed the trial court‘s judgment,
Grepalifewas held liable to pay the proceeds of insurance contract in favor of DBP,
the indispensable party who was not joined in the suit.
Issue: Whether the widow of Dr.Leuterio areal party in interest.
Held: Yes. The insured may be regarded as the real party in interest, although he
has assigned the policy for the purpose of collection, or has assigned as collateral
security any judgment he may obtain.—The insured private respondent did not cede
to the mortgagee all his rights or interests in the insurance, the policy stating that:
―In the event of the debtor‘s death before his indebtedness with the Creditor [DBP]
shall have been fully paid, an amount to pay the outstanding indebtedness shall
first be paid to the creditor and the balance of sum assured, if there is any, shall
then be paid to the beneficiary/ies designated by the debtor.‖ When DBP submitted
the insurance claim against petitioner, the latter denied payment thereof, interposing
the defense of concealment committed by the insured. Thereafter, DBP collected the
debt from the mortgagor and took the necessary action of foreclosure on the
residential lot of private respondent. In Gonzales La O vs. Yek Tong Lin Fire &
Marine Ins. Co. we held: ―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 named or unnamed, and although it is expressly made
payable to another as his interest may appear or otherwise. * * * Although a policy
issued to a mortgagor is taken out for the benefit of the mortgagee and is made
payable to him, yet the mortgagor may sue thereon in his own name, especially
where the mortgagee‘s interest is less than the full amount recoverable under the
policy, * * *.‘ And in volume 33, page 82, of the same work, we read the following:
‗Insured may be regarded as the real party in interest, although he has assigned
the policy for the purpose of collection, or has assigned as collateral security any
judgment he may obtain. 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.
Case No. 32
ANG KA YU vs PHOENIX ASSURANCE CO LTD
1 CARs 2 710 September 28, 1961
Topic: Insurable Interest
Facts: Ang Ka Yu had a piece of property in his possession. He insured it with respondent
Phoenix Assurance. Later on, the property was lost. For that reason, petitioner Ang Ka Yu
soght to claim the proceeds from the respondent. However, Phoenix denied liability thereof
on the ground that Ang was not the owner but a mere possessor and as such, had no
insurable interest over the subject property.
Issue: WON a mere possession of the property obtains insurable interest thereof
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Held: Yes. A person having a mere right or possession of property may insure it to its full
value and in his own name even when he is not responsible for its safekeeping. The reason
is that even if a person is not interested in the safety of preservation of the material in his
possession because they belong to third party, said person still has insurable interest,
because he stands either to benefit from their continued existence or to be prejudiced by
their destruction.
Case No. 33
Insular Life Insurance v. Feliciano
G.R. No. L-47593; September 13, 1941
G.R. No. L-47593; December 29, 1943
TOPIC: CONCEALMENT
Facts: Evaristo Feliciano filed an application for insurance with the herein petitioner upon
the solicitation of one of its agents. Two insurance policies to the aggregate amount of
P25,000 were issued to him. Feliciano died on September 29, 1935. The defendant company
refused to pay on the ground that the policies were fraudulently obtained, the insured
having given false answers and statements in the application as well as in the medical
report. Action was brought to recover on said policies. The lower court, after an exhaustive
examination, found that Feliciano was made to sign the application and the examiner's
report in blank, and that afterwards the blank spaces therein were filled in by the agent and
the medical examiner, who made it appear therein that Feliciano was a fit subject for
insurance. The lower court held that neither the insured nor any member of his family
concealed the real state of health of the insured. This finding of facts of the lower court was
sustained by the Court of Appeals. In G.R. No. L-47593, a decision promulgated on
September 13, 1941, this Court affirmed the judgment of the Court of Appeals in favor of
the respondents and against the petitioner for the sum of P25,000, representing the value
of two insurance policies issued by the petitioner on the life of Evaristo Feliciano. A motion
to reconsider and set aside said decision has been filed by the petitioner, and both parties
have submitted arguments in support of their respective contentions.
Issue: Whether the Court of Appeals erred in holding that an insurance company has no
right to avoid a policy where its agent knowingly and intentionally wrote down the answers
in the application differing from those made by the insured
Held: The September 13, 1941 decision affirmed the judgment of the Court of Appeals on
the ground of absence of bad faith on the part of the agent. The Court went on to hold that
it is not negligence for the insured to sign an application without first reading it if the
insurer by its conduct in appointing the agent influenced the insured to place trust and
confidence in the agent.
However, upon reconsideration of the case, the conclusion that the insured acted in
connivance with the soliciting agent and the medical examiner of the Company in accepting
the policies in question prevailed. From all the facts and circumstances of this case, the
Court was constrained to conclude that the insured was a coparticipant, and coresponsible
with Agent David and Medical Examiner Valdez, in the fraudulent procurement of the
policies in question and that by reason thereof said policies are void ab initio.
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Case No. 34
SUNLIFE ASSURANCE COMPANY OF CANADA vs. COURT OF APPEALS
105135, 22 June 1995
TOPIC: Concealment and Representation
FACTS:
> On April 15, 1986, Bacani procured a life insurance contract for himself from Sun Life.
He was issued a life insurance policy with double indemnity in case of accidental death. The
designated beneficiary was his mother, Bernarda.
> On June 26, 1987, the insured died in a plane crash. Bernarda Bacani filed a claim with
Sun Life, seeking the benefits of the insurance. Sun Life conducted an investigation and its
findings prompted it to reject the claim.
> Sun Life discovered that 2 weeks prior to his application, Bacani was examined and
confined at the Lung Center of the Philippines, where he was diagnosed for renal failure.
During his confinement, the deceased was subjected to urinalysis, ultra-sonography and
hematology tests. He did not reveal such fact in his application.
> In its letter, Sun Life informed Berarda, that the insured did not disclosed material facts
relevant to the issuance of the policy, thus rendering the contract of insurance voidable. A
check representing the total premiums paid in the amount of P10,172.00 was attached to
said letter.
> Bernarda and her husband, filed an action for specific performance against Sun Life.
RTC ruled for Bernarda holding that the facts concealed by the insured were made in good
faith and under the belief that they need not be disclosed. Moreover, it held that the health
history of the insured was immaterial since the insurance policy was "non-medical." CA
affirmed.
Issue:
Whether or not the beneficiary can claim despite the concealment.
Held: NO.
Section 26 of the Insurance Code is explicit in requiring a party to a contract of insurance
to communicate to the other, in good faith, all facts within his knowledge which are
material to the contract and as to which he makes no warranty, and which the other has no
means of ascertaining.
Materiality is to be determined not by the event, but solely by the probable and reasonable
influence of the facts upon the party to whom communication is due, in forming his
estimate of the disadvantages of the proposed contract or in making his inquiries (The
Insurance Code, Sec 31)
The terms of the contract are clear. The insured is specifically required to disclose to the
insurer matters relating to his health. The information which the insured failed to disclose
were material and relevant to the approval and the issuance of the insurance policy. The
matters concealed would have definitely affected petitioner's action on his application,
either by approving it with the corresponding adjustment for a higher premium or rejecting
the same. Moreover, a disclosure may have warranted a medical examination of the insured
by petitioner in order for it to reasonably assess the risk involved in accepting the
application.
Thus, "good faith" is no defense in concealment. The insured's failure to disclose the fact
that he was hospitalized for two weeks prior to filing his application for insurance, raises
grave doubts about his bonafides. It appears that such concealment was deliberate on his
part.
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Case No. 35
Vda. De Canilang v. Court of Appeals
223 SCRA 443, June 17, 1993
Topic: Concealment and Representation
Facts: Canilang consulted Dr. Claudio and was diagnosed as suffering from "sinus
tachycardia." Mr. Canilang consulted the same doctor again on 3 August 1982 and this
time was found to have "acute bronchitis."
On the next day, 4 August 1982, Canilang applied for a "non-medical" insurance
policy with Grepalife naming his wife, as his beneficiary. Canilang was issued ordinary life
insurance with the face value of P19,700.
On 5 August 1983, Canilang died of "congestive heart failure," "anemia," and

"chronic anemia." The wife as beneficiary filed a claim with Grepalife which the insurer
denied on the ground that the insured had concealed material information from it.
Vda. Canilang filed a complaint with the Insurance Commissioner against Grepalife
contending that as far as she knows her husband was not suffering from any disorder and
that he died of kidney disorder.
Grepalife was ordered to pay the widow by the Insurance Commissioner holding that
there was no intentional concealment on the Part of Canilang and that Grepalife had waived
its right to inquire into the health condition of the applicant by the issuance of the policy
despite the lack of answers to "some of the pertinent questions" in the insurance
application. CA reversed.
Issue: Whether or not Grepalife is liable to the insurance contract.
Held: SC took note of the fact that Canilang failed to disclose that hat he had twice
consulted Dr. Wilfredo B. Claudio who had found him to be suffering from "sinus
tachycardia" and "acute bronchitis. Under the relevant provisions of the Insurance Code,
the information concealed must be information which the concealing party knew and "ought
to [have] communicate[d]," that is to say, information which was "material to the contract.
The information which Canilang failed to disclose was material to the ability of
Grepalife to estimate the probable risk he presented as a subject of life insurance. Had
Canilang disclosed his visits to his doctor, the diagnosis made and the medicines prescribed
by such doctor, in the insurance application, it may be reasonably assumed that Grepalife
would have made further inquiries and would have probably refused to issue a non-medical
insurance policy or, at the very least, required a higher premium for the same coverage.
The materiality of the information withheld by Canilang from Grepalife did not
depend upon the state of mind of Jaime Canilang. A man's state of mind or subjective belief
is not capable of proof in our judicial process, except through proof of external acts or
failure to act from which inferences as to his subjective belief may be reasonably drawn.
Neither does materiality depend upon the actual or physical events which ensue. Materiality
relates rather to the "probable and reasonable influence of the facts" upon the party to
whom the communication should have been made, in assessing the risk involved in making
or omitting to make further inquiries and in accepting the application for insurance; that
"probable and reasonable influence of the facts" concealed must, of course, be determined
objectively, by the judge ultimately.
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SC found it difficult to take seriously the argument that Grepalife had waived
inquiry into the concealment by issuing the insurance policy notwithstanding Canilang's
failure to set out answers to some of the questions in the insurance application. Such
failure precisely constituted concealment on the part of Canilang. Petitioner's argument, if
accepted, would obviously erase Section 27 from the Insurance Code of 1978.
Case No. 38
Sherman Shaper vs Hon. Judge RTC of Olongapo City
167 SCRA 368
FACTS: Petitioner Sherman Shafer obtained a private car policy over his Ford Laser car
from Makati Insurance Company, Inc., for third party liability (TPL). During the effectivity of
the policy, an information for reckless imprudence resulting in damage to property and
serious physical injuries was filed against petitioner. The owner of the damaged Volkswagen
car filed a separate civil action against petitioner for damages. The court a quo issued an
order dismissing the third party complaint on the ground that it was premature, based in
the premise that unless the accused (herein petitioner) is found guilty and sentenced to pay
the offended party indemnity or damages, the third party complaint is without cause of
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 determine whether or not the
accused, also the third party plaintiff, has a cause of action against the party defendant for
the enforcement of its party liability (TPL) under the insurance contract.
ISSUE: Whether or Not the accused in criminal action for reckless imprudence, where the
civil action civil action is jointly prosecuted, can legally implead the insurance company as
third party defendant under its private car insurance policy
HELD: YES
In the instant case, the court a quo erred in dismissing petitioner‘s third party complaint on
the ground that petitioner had no course of action yet against the insurance company (third
party defendant). There is no need on the part of the insured to wait for the decision of the
trial court finding him guilty of reckless imprudence. The occurrence of the injury to the
third party immediately gave rise to the liability of the insurer under its policy.
A third party complaint is a device allowed by the rules of procedure by which the
defendant can bring into the original suit a party against whom he will have a claim for
indemnity or remuneration as a result of a liability established against him in the original
suit. Third party complaints are allowed to minimize the number of lawsuit and avoid the
necessity of bringing two (2) or more actions involving the same subject matter.
WHEREFORE, the instant petition is GRANTED. The questioned order dated 24, and a new
one entered admitting petitioner‘s third party complaint against the Makati Insurance
Company, Inc.
Case Doctrine: In the event that the injured fails or refuses to include the insurer as party
defendant in his claim for indemnity against the insured, the latter is not prevented by law
to avail of the procedural rules intended to avoid multiplicity of suits. Not even a ―no action‖
clause under the policy which requires that a final judgement be first obtained against the
insured and that only thereafter can the person insured recover on the policy can prevail
over the Rules of Court provisions aimed at avoiding multiplicity of suits.
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Case No. 39
Tan v Court Appeals
Topic: Incontestability Clause
Facts: Tan Lee Siong, father of the petitioners, applied for life insurance in the amount of P
80,000.00 with Philamlife. It was approved. Tan Lee Siong died of hepatoma. Petitioners
then filed a claim for the proceeds. The company denied petitioners' claim and rescinded
the policy by reason of the alleged misrepresentation and concealment of material facts. The
premiums paid on the policy were refunded. The petitioners filed a complaint in the
Insurance Commission. The latter dismissed the complaint.
The Court of Appeals dismissed ' the petitioners' appeal from the Insurance Commissioner's
decision for lack of merit. Hence, this petition.
Issue: WON Philam didn‘t have the right to rescind the contract of insurance as rescission
must allegedly be done during the lifetime of the insured within two years and prior to the
commencement of action.
Held: No. Petition dismissed.The Insurance Code states in Section 48:

―Whenever a right to rescind a contract of insurance is given to the insurer by any provision
of this chapter, such right must be exercised previous to the commencement of an action
on the contract.
After a policy of life insurance made payable on the death of the insured shall have been in
force during the lifetime of the insured for a period of two years from the date of its issue or
of its last reinstatement, the insurer cannot prove that the policy is void ab initio or is
rescindable by reason of the fraudulent concealment or misrepresentation of the insured or
his agent.‖
The so-called "incontestability clause" in the second paragraph prevents the insurer
from raising the defenses of falserepresentations insofar as health and
previous diseases are concerned if the insurance has been in force for at least two years
during the insured's lifetime.
The policy was in force for a period of only one year and five months. Considering that the
insured died before the two-yearperiod had lapsed, respondent company is not, therefore,
barred from proving that the policy is void ab initio by reason of the
insured's fraudulent concealment or misrepresentation.
The "incontestability clause" added by the second paragraph of Section 48 is in force for two
years. After this, the defenses of concealment or misrepresentation no longer lie.
The petitioners argue that no evidence was presented to show that the medical terms were
explained in a layman's language to the insured. They also argue that no evidence was
presented by respondent company to show that the questions appearing in Part II of
the application for insurance were asked, explained to and understood by the deceased so
as to prove concealment on his part. This couldn‘t be accepted because the insured
signed the form. He affirmed the correctness of all the entries.
The company records show that the deceased was examined by Dr. Victoriano Lim and was
found to be diabetic and hypertensive. He was also found to have suffered from hepatoma.
Because of the concealment made by the deceased, the company was thus misled into
accepting the risk and approving his application as medically fit.
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Case No. 40
Development Insurance Bank vs. IAC
G.R. NO. 71360; July 16, 1986
Topic: Liability Under and Open Policy

Facts: A fire occurred in the building of the private respondent (Philippine Union Realty
Development Corporation) and it sued for recovery of damages from the petitioner on the
basis of an insurance contract between them. The petitioner allegedly failed to answer on
time and was declared in default by the trial court. A judgment of default was subsequently
rendered on the strength of the evidence submitted ex parte by the private respondent,
which was allowed full recovery of its claimed damages.
The petitioner argues that since at the time of the fire the building insured was worth
P5,800,000.00, the private respondent should be considered its own insurer for the
difference between that amount and the face value of the policy and should share pro rata
in the loss sustained. Accordingly, the private respondent is entitled to an indemnity of only
P67,629.31, the rest of the loss to be shouldered by it alone.In support of this contention,
the petitioner cites Condition 17 of the policy, which provides: ―If the property hereby
insured shall, at the breaking out of any fire, be collectively of greater value than the sum
insured thereon then the insured shall be considered as being his own insurer for the
difference, and shall bear a ratable proportion of the loss accordingly. Every item, if more
than one, of the policy shall be separately subject to this condition.‖
Issue: Whether or not the private respondent can only claim P67,629.31 since it should
share pro rata in the loss sustained.
Held:No. There is no evidence on record that the building was worth P5,800,000.00 at the
time of the loss; only the petitioner says so and it does not back up its self-serving estimate
with any independent corroboration. On the contrary, the building was insured at
P2,500,000.00, and this must be considered, by agreement of the insurer and the insured,
the actual value of the property insured on the day the fire occurred.This valuation becomes
even more believable if it is remembered that at the time the building was burned it was
still under construction and not yet completed.
The Court notes that Policy RY/F-082 is an open policy and is subject to the express
condition that "an open policy is one in which the value of the thing insured is not agreed
upon but is left to be ascertained in case of loss. " This means that the actual loss, as
determined, will represent the total indemnity due the insured from the insurer except only
that the total indemnity shall not exceed the face value of the policy. (Sec. 60 of Insurance
Code).
The actual loss has been ascertained in this case and, to repeat, this Court will respect
such factual determination in the absence of proof that it was arrived at arbitrarily. There is
no such showing. Hence, applying the open policy clause as expressly agreed upon by the
parties in their contract, we hold that the private respondent is entitled to the payment of
indemnity under the said contract in the total amount of P508,867.00.
Page 24 of 36
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Case No. 42
JACQUELINE JIMENEZ VDA. DE GABRIEL vs. COURT OF APPEALS
Topic: Prescription of Action to Recover Insurance Proceeds
Facts: Marcelino Gabriel, the insured, was employed by Emerald Construction &
Development Corporation ("ECDC") at its construction project in Iraq. He was covered by a
personal accident insurance in the amount of P100,000.00 under a group policy procured
from private respondent by ECDC for its overseas workers. The insured risk was for bodily
injury caused by violent accidental external and visible means which injury would solely
and independently of any other cause result in death or disability.On 22 May 1982, within
the life of the policy, Gabriel died in Iraq. A year later, or on 12 July 1983, ECDC reported
Gabriel's death to private respondent by telephone. Private respondent referred the
insurance claim to Mission Adjustment Service, Inc.Following a series of communications
between petitioner and private respondent, the latter, on 22 September 1983, ultimately
denied the claim of ECDC on the ground of prescription. Petitioner filed acomplaint withthe
RTC of Manila. She averred that her husband died of electrocution while in the performance
of his work and prayed for the recovery of P100,000.00 for insurance indemnification and
other damages.Private respondent filed its answer, which was not verified, admitting the
genuineness and due execution of the insurance policy; it alleged, however, that since both
the death certificate issued by the Iraqi Ministry of Health and the autopsy report of the NBI
failed to disclose the cause of Gabriel's death, it denied liability under the policy. In
addition, private respondent raised the defense of prescription invoking Section 384 of the
Insurance Code. On 28 May 1987, the trial court rendered its decision partly in favor of
petitioner's claim. In arriving at its conclusion, the trial court held that private respondent
was deemed to have waived the defense because the cause of Gabriel's death was not
covered by the policy, when the latter failed to impugn by evidence petitioner's averment on
the matter. With regard to the defense of prescription, the court considered the complaint to
have been timely filed or within one (1) year from private respondent's denial of the claim.
CA reversed the decision of the RTC.
Issue: Whether or not the action to recover insurance proceeds has prescribed?
Held: Yes the action has prescribed. Sec. 384 of the Insurance Code provides that any
person having any claim upon the policy issued pursuant to this chapter shall, without any
unnecessary delay, present to the insurance company concerned a written notice of claim
setting forth the nature, extent and duration of the injuries sustained as certified by a duly
licensed physician. Notice of claim must be filed within six months from date of the
accident, otherwise, the claim shall be deemed waived.
Action or suit for recovery of damage due to loss or injury must be brought, in
proper cases, with the Commissioner or the Courts within one year from denial of the claim,
otherwise, the claimant's right of action shall prescribe.
The notice of death was given to private respondent, concededly, more than a year
after the death of petitioner's husband. Private respondent, in invoking prescription, was
not referring to the one-year period from the denial of the claim within which to file an
action against an insurer but obviously to the written notice of claim that had to be
submitted within six months from the time of the accident.
Case No. 44
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Makati Tuscany Condominium Corp. vs. CA

215 SCRA462
Topic: PREMIUM PAYMENTS
Facts: American Home Assurance Co. issued in favor of Makati Tuscany Condominium
Corp. an insurance policy on the latter‘s building and premises. The premium was to be
paid in installments, which American Home accepted. The policy was replaced and renewed
two more times within the next two years, again the premium to be paid in installments. On
the third renewed policy, Makati Tuscany paid two installments, then later refused to pay
the balance.
Consequently, an action to recover the unpaid balance of premiums was filed by American
Home. Makati Tuscany claimed the policy was never valid and binding, and further pleaded
in a counterclaim that premiums already be paid be returned. The trial court dismissed the
complaint and counterclaim, but the appellate court ordered Makati Tuscany to pay the
unpaid balance of premiums. Hence, this appeal.
Makati Tuscany claimed the policy was invalidated by its payment of premiums by
installment because of Sec. 77 of the Insurance Code saying ―no policy or contract of
insurance issued by an insurance company is valid and binding unless and until the
premium thereof has been paid, except in the case of a life or an industrial life policy
whenever the grace period provision applies‖. It argues that where the premiums is not
actually paid in full, the policy would only be effective if there is an acknowledgment in the
policy of the receipt of premium pursuant to Sec. 78 of the Insurance Code. The absence of
an express acknowledgment in the policies of such receipt of the corresponding premium
payments, and petitioner's failure to pay said premiums on or before the effective dates of
said policies rendered them invalid. Petitioner thus concludes that there cannot be a
perfected contract of insurance upon mere partial payment.
Makati Tuscany also explained it stopped paying because the receipts of American Home
contained reservations that it did not waive its right to deny liability on any claim arising
before such installment payments or after expiration of the credit clause, and that it was
subject to no loss prior to premium payment.
Issue: Whether payment by installment of the premiums due on an insurance policy

invalidates the contract of insurance
Held: No, the subject policies are valid even if the premiums were paid on installments.
While Section 77 requires prepayment of premiums as a condition to the validity of the

contract, it does not mean that the request to make installment payments would prevent
the contract from going into effect despite payment and acceptance of initial premium
installment. Section 77 merely precludes the parties from stipulating that the policy is valid
even if NO premiums are paid. It does not expressly prohibit an agreement granting credit
extension or allowing payment of premiums in installments.
Also, Section 78 allows waiver by the insurer of the condition of prepayment by making an
acknowledgement of receipt of premium as conclusive evidence of payment so as to make
the policy binding.
Here, the parties clearly intended the insurance policies to be binding and effective
notwithstanding the staggered payment of premiums.
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Case No. 45
South Sea Surety and Insurance Company, Inc., vs. Court of Appeals
G.R. No. 102253; June 2, 1995
Topic: Premium Payments
Facts: Valenzuela Hardwood and Industrial Supply, Inc., undertook to deliver lauan round
logs to Manila. The logs were transported via M/V Seven Ambassador owned by Seven
Brothers. On January 20, 1984, Valenzuela Hardwood insured the cargo for PHP
2,000,000.00 with South Sea Surety and Insurance Company, Inc., as the insurer. The
latter issued a marine insurance policy covering the cargo on the same day. On January 24,
1984, a check was delivered to Victorio Chua for the payment of the insurance premium.
On January 25, 2017, the ship containing the cargo sank. On January 30, 2017, the check
covering the premium payment to the insurer by Victorio Chua. However, the tender was
not accepted by the insurer and the policy was cancelled due to non-payment of premiums.
The claim for the loss of the cargo was eventually denied by South Sea Surety.
Issue: Whether or not there was a valid premium payment when the check was delivered to
Victorio Chua?
Held: Yes. There was a valid premium payment when Valenzuela Hardwood delivered the
check to Victorio Chua because the latter is deemed to be an agent of South Sea Surety and
Insurance Company, Inc.
Section 306 of the Insurance Code provides that when an insurer delivers an insurance
policy to an insurance agent or insurance broker, it is deemed that the insurer has
authorized such agent or broker to receive premium payments on behalf of the insurer.
South Sea Surety delivered the policy to Victorio Chua. Given this, the insurer authorized
Mr. Chua to also accept premium payments from Valenzuela Hardwood. Therefore, at the
time of the loss, there was already premium payment made by Valenzueal Hardwood to
South Sea Surety.
Case No. 48
American Home Assurance Company vs. Antonio Chua
GR No. 130421; June 28, 1999
Topic: PREMIUM PAYMENTS
Facts: On 6 April 1990 Moonlight Enterprises was completely razed by fire. Total loss was
estimated between 4 and 5 million. Petitioner refused to honor the claim notwithstanding
several demands by respondent, thus the latter filed an action against petitioner before the
trial court.
Petitioners refusal was anchored on the following: (a) there was no existing contract when
the fire occurred since respondent did not pay the premium, invoking Section 77 of the
Insurance Code; and (b) assuming there was a contract, the insured submitted fraudulent
income tax return and financial statements and failed to notify the petitioner of any
insurance already effected to cover the insured goods.
Petitioner emphasizes that when the fire occurred on 6 April 1990 the insurance contract
was not yet subsisting pursuant to Article 1249 of the Civil Code which recognizes that a
check can only effect payment once it has been cashed. Although respondent testified that
he gave the check to a certain James Uy, petitioner‘s agent, the check drawn against a
Manila bank and deposited in a Cagayn de Oro City bank, could not have been cleared by 6
Page 27 of 36
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April, the date of the fire. In fact, the official receipt issued for respondents check payment
was dated 10 April 1990, four days after the fire occurred.
Issues:
1. Whether there was a valid payment of premium considering that respondents check was
cashed after the occurrence of the fire; and
2. Whether respondent violated the policy by his submission of fraudulent documents and
non-disclosure of the other existing insurance contracts.(additional issue related to
insurance)
Held:
1. Yes, there is valid payment of premium.
The general rule in insurance laws is that unless the premium is paid, the insurance policy
is not valid and binding, and the only exception are life and industrial life insurance
(Section 77, Insurance Code). However, Section 78 of the Insurance Code establishes a legal
fiction of payment and should be interpreted as an exception to Section 77. Section 78
provides that an acknowledgement in a policy or contract of insurance of the receipt of
premium is conclusive evidence of its payment, so far as to make the policy binding,
notwithstanding any stipulation therein that it shall not be binding until the premium is
actually paid.
In the case at bar, the trial court found that the renewal certificate issued to respondent
contained the acknowledgement that premium had been paid. It is not disputed that the
check drawn by respondent in favor of petitioner and delivered to its agent was honored
when presented and petitioner forthwith issued its official receipt to respondent on 10 April
1990. Section 306 of the Insurance Code provides that any insurance company which
delivers a policy or contract of insurance to an insurance agent or insurance broker shall be
deemed to have authorized such agent or broker to receive on its behalf payment of any
premium which is due on such policy or contract of insurance at the time of its issuance or
delivery or which becomes due thereon. In the instant case, the best evidence of such
authority is the fact that petitioner accepted the check and issued the official receipt for the
payment. It is, as well, bound by its agent‘s acknowledgment of receipt of payment.
2. No, the respondent did not violate the policy.
Ordinarily, where the insurance policy specifies as a condition the disclosure of existing co-
insurers, non-disclosure thereof is a violation that entitles the insurer to avoid the
policy. This condition is common in fire insurance policies and is known as the other
insurance clause. The purpose for the inclusion of this clause is to prevent an increase in
the moral hazard. However, the court sees exception in the case at bar.
Citing Section 29 of the Insurance Code, the trial court reasoned that respondents failure to
disclose was not intentional and fraudulent. The application of Section 29 is misplaced, as
the same concerns concealment which is intentional. Indubitably, it cannot be said that
petitioner was deceived by respondent by the latter‘s non-disclosure of the other insurance
contracts when petitioner actually had prior knowledge thereof. Petitioner‘s loss adjuster
had known all along of the other existing insurance contracts, yet, he did not use that as
basi for his recommendation of denial. The loss adjuster, being an employee of petitioner, is
deemed a representative of the latter whose awareness of the other insurance contacts
binds petitioner. Therefore, it was held that there was no violation of the other insurance
clause by respondent.
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Case No. 49
Paulin v. Insular Life Assurance. Co. Ltd.
47 OG 3012 [1949]
TOPIC: PREMIUM PAYMENTS
Facts: This action was instituted by the minors Vicentita Antigua Paulin and Silvina
Paulin, who are sisters assisted by their guardian ad-litem, for the purpose of collecting the
amount of three life insurance policies issued by the defendant, the Insular Life Assurance
Co. ltd. In favor of their father, Estaban Paulin, who is alleged to have been killed by the
guerillas, on or about December 10, 1943.
The aforementioned policies are Policy no. 84029 in the sum of P 2,000, issued on August
1, 1940, with premiums payable on the first day of August of each year, for 20 years and
the second Policy No. 84683, in the sum of P 2, 000, issued on October 1, 1940, with
premiums payable on the first day of October of each year, for 20 years and Policy No.
85061, in the sum of P7, 000 issued on October 1, 1940, with premiums payable on the
first day of every month, for 20 years. The three policies carried an accidental death benefit
clause, providing for double indemnity in case of death, under the conditions therein set
forth, and named the plaintiffs as beneficiaries in such case.
Upon demand, made on behalf of the plaintiffs, the defendant refused to pay the sums
stated in said policies, on the ground that the same had lapsed, prior to the date of death of
Esteban Paulin, for non-payment of premiums. Hence complaint herein, which, after due
trial, was dismissed by the RTC.
Appellee admits having received, in connection with policy no 84029, the annual premiums
due on August 1, 1940 and August 1, 1941; in connection with policy no. 84683, the
annual premiums due on October 1, 1940, and October 1, 1941; and in connection with
policy no. 85061, fifteen monthly premiums which fell due from October 1, 9140 to
December 1, 1941, inclusive.
ISSUE: Whether or not the policies have lapsed for the non-payment of premium.
HELD: YES. Despite appellant‘s assertion to the contrary, no evidence whatsoever of such
payment, in relation to the policies nos. 84029 and 84683, has been introduced. Despite
appellant‘s testimonial and documentary evidence, they do not bear any contention.
Exhibit B only showed a provisional receipt for the initial premium paid on October 11,
1940 and the acceptance letter by Esteban Paulin were only submitted in connection with
Policy No. 84683.
Exhibit c, with reference to Policy no. 85061, were letters written by Esteban Paulin to the
defendant on the first day of May, July and November 1942 and March, April, June and
July 1943, respectively, each stating that it enclosed a post office money order for P36.12,
which, presumably represented the monthly premiums falling due in the months already
mentioned. But these were not part of the records of the defendant company but found
among the personal belongings of the deceased Esteban Paulin. Each of the letters in the
exhibit bore the signature of Esteban which the Court finds them to be originals. Having
remained in the possession of its writer, it tends to show that the premiums for the months
specified were not forwarded to the defendant.
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It is urged also that, in view of the Executive Order No. 25, series of 1944, as amended by
Executive Order No. 32, series of 1945, providing for a moratorium in the enforcement of
payment of all debts or monetary obligations contracted prior to the liberalization of the
Philippines by the American forces, the policies could not and did not lapse for non-
payment of the premiums. This contention is untenable, for an insured is not under the
obligation to pay premiums. The same do not constitute a debt and the insurance company
cannot compel payment thereof, which is one only of the conditions for the subsistence or
effectively of an insurance policy.
While the payment of premiums or assessments as specified in the insurance contract is
necessary to bind the insurer to discharge its obligations imposed by the contract, it is
generally true in the case of life insurance contracts that there is no absolute undertaking
to pay the premiums or assessment and, consequently, no personal liability of the insurer,
and the insured, if he has not expressly promised to pay, is at liberty to refuse to make the
payment.
Case No. 53
ISABELA ROQUE vs. HON. INTERMEDIATE APPELATE COURT and PIONEER
INSURANCE AND SURETY CORPORATION,
G.R. No. L-66935, November 11, 1985
Topic:MARINE INSURANCE
Facts: Manila Bay Lighterage Corporation (Manila Bay), a common carrier, entered into a
contract with the petitioners whereby the former would load and carry on board its barge
meters of logs from Palawan to Manila. The petitioners insured the logs against loss with
respondent Pioneer Insurance and Surety Corporation. On February 29, 1972, the
petitioners loaded on the barge, 811 pieces of logs at Palawan for carriage and delivery to
Manila, but the shipment never reached its destination because the barge sank with the
811 pieces of logs in Palawan on its way to Manila. As alleged by the petitioners in their
complaint and as found by both the trial and appellate courts, the barge where the logs
were loaded was not seaworthy such that it developed a leak. The appellate court further
found that one of the hatches was left open causing water to enter the barge and because
the barge was not provided with the necessary cover or tarpaulin, the ordinary splash of sea
waves brought more water inside the barge.
On March 8, 1972, the petitioners wrote a letter to Manila Bay demanding payment
of for the loss of the shipment plus P100,000.00 as unrealized profits but the latter ignored
the demand. Another letter was sent to respondent Pioneer claiming the full amount under
the insurance policy but respondent refused to pay on the ground that its liability depended
upon the "Total loss by Total Loss of Vessel only". Hence, petitioners commenced a case
against respondents. Respondent Pioneer appealed to the Intermediate Appellate Court. On
January 30, 1984, the appellate court modified the trial court's decision and absolved
Pioneer from liability after finding that there was a breach of implied warranty of
seaworthiness on the part of the petitioners and that the loss of the insured cargo was
caused by the "perils of the ship" and not by the "perils of the sea". It ruled that the loss is
not covered by the marine insurance policy.
Issue:
1. Whether or not there is a warranty of seaworthiness by the cargo owner in cases of
marine cargo insurance.
2. Whether or not the loss of the cargo was caused by the perils of the sea, not by the
perils of the ship.
Held: 1. YES.The liability of the insurance company is governed by law. Section 113 of the
Insurance Code provides:
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In every marine insurance upon a ship or freight, or freightage, or upon anything which is
the subject of marine insurance, a warranty is implied that the ship is seaworthy.
Section 99 of the same Code also provides in part.

Marine insurance includes:
(1) Insurance against loss of or damage to:
(a) Vessels, craft, aircraft, vehicles, goods, freights, cargoes, merchandise, ...
From the above-quoted provisions, there can be no mistaking the fact that the term
"cargo" can be the subject of marine insurance and that once it is so made, the implied
warranty of seaworthiness immediately attaches to whoever is insuring the cargo whether
he be the shipowner or not.
Since the law provides for an implied warranty of seaworthiness in every contract of
ordinary marine insurance, it becomes the obligation of a cargo owner to look for a reliable
common carrier which keeps its vessels in seaworthy condition. The shipper of cargo may
have no control over the vessel but he has full control in the choice of the common carrier
that will transport his goods. Or the cargo owner may enter into a contract of insurance
which specifically provides that the insurer answers not only for the perils of the sea but
also provides for coverage of perils of the ship.
2. No. It is quite unmistakable that the loss of the cargo was due to the perils of the ship
rather than the perils of the sea. The facts clearly negate the petitioners' claim under the
insurance policy.In fact, in the petitioners' complaint, it is alleged that "the barge Mable 10
of defendant carrier developed a leak which allowed water to come in and that one of the
hatches of said barge was negligently left open by the person in charge thereof causing
more water to come in and that "the loss of said plaintiffs' cargo was due to the fault,
negligence, and/or lack of skill of defendant carrier and/or defendant carrier's
representatives on barge Mable 10."
Case No. 55
CHOA TIEK SENG vs. COURT OF APPEALS, FILIPINO MERCHANTS' INSURANCE COMPANY ET
AL.
G.R. No. 84507, March 15, 1990
TOPIC: MARINE INSURANCE
FACTS: Petitioner Seng imported some lactose crystals from Holland. The importation
involved 15 metric tons packed in 600 6-ply paper bags with polythelene inner bags, each
bag at 25 kilos net. The goods were loaded at the port at Rotterdam in sea vans on board
the vessel "MS Benalder' as the mother vessel, and thereafter aboard the feeder vessel
"Wesser Broker V-25" of respondent Ben Lines Container, Ltd. The goods were insured by
the respondent Filipino Merchants' Insurance Co., Inc. against all risks under the terms of
the insurance cargo policy. Upon arrival at the port of Manila, the cargo was discharged
into the custody of the arrastre operator respondent E. Razon, Inc., prior to the delivery to
petitioner through his broker. Of the 600 bags delivered to petitioner, 403 were in bad
order. The surveys showed that the bad order bags suffered spillage and loss.
Consequently, Seng filed a claim for said loss against the insurance company.
Respondent insurance company rejected the claim alleging that assuming that spillage took
place while the goods were in transit, Seng and his agent failed to avert or minimize the loss
by failing to recover spillage from the sea van, thus violating the terms of the insurance
policy sued upon; and that assuming that the spillage did not occur while the cargo was in
transit, the said 400 bags were loaded in bad order, and that in any case, the van did not
carry any evidence of spillage.
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Hence, Seng filed the complaint RTC Manila against insurance company seeking payment of
the damages, among others.
After the pre-trial conference and trial on the merits, the court rendered a judgment
dismissing the complaint, the counterclaim and the third-party complaint with costs
against the Seng.
On appeal the Court of Appeals affirmed the judgment of the trial court. A motion for
reconsideration of said judgment was denied.
ISSUE: Whether "all risks" coverage covers only losses occasioned by or resulting from
"extra and fortuitous events" despite the clear and unequivocal definition of the term made
and contained in the policy sued upon.
RULING: No. In the present case, the "all risks" clause of the policy sued upon reads as
follows:
5.This insurance is against all risks of loss or damage to the subject matter insured
but shall in no case be deemed to extend to cover loss, damage, or expense
proximately caused by delay or inherent vice or nature of the subject matter insured.
Claims recoverable hereunder shall be payable irrespective of percentage.
The terms of the policy are so clear and require no interpretation. The insurance policy
covers all loss or damage to the cargo except those caused by delay or inherent vice or
nature of the cargo insured. It is the duty of the respondent insurance company to establish
that said loss or damage falls within the exceptions provided for by law, otherwise it is liable
therefor.
An "all risks" provision of a marine policy creates a special type of insurance which
extends coverage to risks not usually contemplated and avoids putting upon the
insured the burden of establishing that the loss was due to peril falling within the
policy's coverage. The insurer can avoid coverage upon demonstrating that a specific
provision expressly excludes the loss from coverage.
In this case, the damage caused to the cargo has not been attributed to any of the
exceptions provided for nor is there any pretension to this effect. Thus, the liability of
respondent insurance company is clear.
Case No. 61
Development Bank of the Philippines vs. CA
231 SCRA 370; March 21, 1994
Topic: Suretyship
Facts: Juan B. Dans, together with his family applied for a loan of P500,000 with DBP. As
principal mortgagor, Dans, then 76 years of age was advised by DBP to obtain a mortgage
redemption insurance (MRI) with DBP MRI-Pool. A loan in the reduced amount was
approved and released by DBP. From the proceeds of loan, DBP deducted the payment for
the MRI premium. The MRI premium of Dans, less the DBP service fee of 10% was credited
by DBP to the savings account of DBP MRI-Pool. Accordingly, the DBP MRI-Pool was
advised of the credit.
Dans died of cardiac arrest. DBP MRI-Pool notified DBP that Dans was not eligible for MRI
coverage, being over the acceptance age limit of 60 years at the time of application. DBP
apprised the decedent‘s widow, Candida Dans of the disapproval of her late husband's MRI
application. DBP offered to refund the premium which the deceased had paid, but Candida
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Dans refused to accept the same demanding payment of the face value of the MRI of an
amount equivalent of the loan. She, likewise, refused to accept an ex gratia settlement
which DBP later offered. Hence, the case at bar.
Issue: Whether or not the DBP MRI-Pool should be held liable on the ground that the
contract was already perfected.
Held: NO. It is not liable. The power to approve MRI application is lodged with the DBP
MRI-Pool. The pool, however, did not approve the application. There is also no showing that
it accepted the sum which DBP credited to its account with full knowledge that it was
payment for the premium. There was as a result no perfected contract of insurance. Hence,
the DBP MRI-Pool cannot be held liable on a contract that does not exist.
In dealing with Dans, DBP was wearing 2 legal hats—the first as a lender and the second as
an insurance agent. As an insurance agent, DBP made Dans go through the motion of
applying for said insurance, thereby leading him and his family to believe that they had
already fulfilled all the requirements for the MRI and that the issuance of their policy was
forthcoming. DBP had full knowledge that the application was never going to be approved.
The DBP is not authorized to accept applications for MRI when its clients are more than 60
years of age. Knowing all the while that Dans was ineligible, DBP exceeded the scope of its
authority when it accepted the application for MRI by collecting the insurance premium and
deducting its agent's commission and service fee. Since the third person dealing with an
agent is unaware of the limits of the authority conferred by the principal on the agent and
he has been deceived by the non-disclosure thereof by the agent, then the latter is liable for
damages to him.
Case No. 64
Finman Assurance Corporation vs Court of Appeals
G.R. No. 100970 September 2, 1992
Topic: CLAIM SETTLEMENT
Facts: It appears on record that on October 22, 1986, deceased, Carlie Surposa was
insured with petitioner Finman General Assurance Corporation under Finman General
Teachers Protection Plan Master Policy No. 2005 and Individual Policy No. 08924 with his
parents, spouses Julia and Carlos Surposa, and brothers Christopher, Charles, Chester
and Clifton, all surnamed, Surposa, as beneficiaries. While said insurance policy was in full
force and effect, the insured, Carlie Surposa, died on October 18, 1988 as a result of a stab
wound inflicted by one of the three (3) unidentified men without provocation and warning
on the part of the former as he and his cousin, Winston Surposa, were waiting for a ride on
their way home along Rizal-Locsin Streets, Bacolod City after attending the celebration of
the "Maskarra Annual Festival.‖ Thereafter, private respondent and the other beneficiaries
of said insurance policy filed a written notice of claim with the petitioner insurance
company which denied said claim contending that murder and assault are not within the
scope of the coverage of the insurance policy.
Issue: Whether CA erred in applying the principle of "expresso unius exclusio alterius" in a
personal accident insurance policy since death resulting from murder and/or assault are
impliedly excluded in said insurance policy considering that the cause of death of the
insured was not accidental but rather a deliberate and intentional act of the assailant in
killing the former as indicated by the location of the lone stab wound on the insured?
Held: No. In the case at bar, it cannot be pretended that Carlie Surposa died in the course
of an assault or murder as a result of his voluntary act considering the very nature of these
crimes. In the first place, the insured and his companion were on their way home from
attending a festival. They were confronted by unidentified persons. The record is barren of
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any circumstance showing how the stab wound was inflicted. Nor can it be pretended that
the malefactor aimed at the insured precisely because the killer wanted to take his life. In
any event, while the act may not exempt the unknown perpetrator from criminal liability,
the fact remains that the happening was a pure accident on the part of the victim. 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 where 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.
Furthermore, the personal accident insurance policy involved herein specifically

enumerated only ten (10) circumstances wherein no liability attaches to petitioner
insurance company for any injury, disability or loss suffered by the insured as a result of
any of the stimulated causes. The principle of "expresso unius exclusio alterius"— the
mention of one thing implies the exclusion of another thing — is therefore applicable in the
instant case since murder and assault, not having been expressly included in the
enumeration of the circumstances that would negate liability in said insurance policy
cannot be considered by implication to discharge the petitioner insurance company from
liability for, any injury, disability or loss suffered by the insured. Thus, the failure of the
petitioner insurance company to include death resulting from murder or assault among the
prohibited risks leads inevitably to the conclusion that it did not intend to limit or exempt
itself from liability for such death.
Case No. 67
G.R. No. 98414 February 8, 1993
FIRST QUEZON CITY INSURANCE COMPANY, INC vs.
THE HON. COURT OF APPEALS and DE DIOS MARIKINA TRANSPORTATION CO.
FACTS: While waiting for a passenger bus bound for Quezon City at a bus stop, Jose del
Rosariosaw a DMTC bus. As it approached the bus stop, the bus slowed down with all its
doors wide open as it took on several passengers. Some passengers boarded the bus at the
bus stop itself, Jose was the last one to do so.
While Jose 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, causing Jose to lose his balance. As
Jose fell off the bus, he clung instinctively to the handle bar and was dragged by the bus
along the asphalted road. The bus driver, Gil Agpalo, employee of DE DIOS MARIKINA
TRANSPORTATION CO. (DMTC), abruptly stopped the bus but fled from the scene, leaving
the bus and the injured Jose behind.
Jose later underwent medical treatment via major surgical operation on his right leg. Jose
was confined at the hospital for a total period of forty (40) days and incurred medical
expenses which were advanced by his employer and wasreimbursed on a staggered basis by
way of salary deductions.
The accident left Jose with injuries that lefthim scarred and cost him lost earning by way of
unearned salaries due to the consequent hospital confinement.
Jose filed a complaint against DMTC and DMTC, in turn, filed a third-party complaint
against First Quezon City Insurance Co. Inc.
DMTC was ultimately ordered to pay Jose del Rosario damages. On the other hand, First
Quezon City Insurance Co., Inc. was ordered to indemnify DMTC.
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ISSUE: Should First Quezon City Insurance Company, Inc.‘sliability to indemnify DMTC be
reduced based on the limit of the insurer's liability as specified in the provisions of the
insurance contract?
RULING: 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 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 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 P 12,000.00 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.
Case No. 70
Philippine American Life Insurance Company vs. Hon. Armando Ansaldo
G.R. No. 76452. July 26, 1994
Topic: Jurisdiction of the Insurance Commission
Facts: The instant case arose from a lettercomplaint of private respondent Ramon M.
Paterno, Jr. dated to respondent Commissioner, alleging certain problems encountered
by agents, supervisors, managers and public consumers of the Philippine American
Life Insurance Company (Philamlife) as a result of certain practices by said company.
Issue: Whether the resolution of the legality of theContract of Agency falls within the
jurisdiction of the Insurance Commissioner.
Held: No. Quasi-judicial power of Insurance Commissioner does not cover the
relationship affecting the insurance company and its agents but is limited to
adjudicating claims and complaints filed by the
insured against the insurance company.—Section 416 of the Insurance Code shows
that the quasi-judicial power of the Insurance Commissioner is limited by law ―to claims
and complaints involving any loss, damage or liability for which an insurer may be
answerable under any kind of policy or contract of insurance, xxx.‖ Hence, this power
does not cover the relationship affecting the insurance company and its agents but
is limited to adjudicating claims and complaints filed by the insured against the
insurance company.
Insurance company cannot assume jurisdiction over controversies between the

insurance companies and their agents.—The Insurance Code does not have provisions
governing the relations between insurance companies and their agents. It follows that
the Insurance Commissioner cannot, in the exercise of its quasi-judicial powers,
assume jurisdiction over controversies between the insurance companies and their
agents.
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ADDITIONAL CASES
Republic v. Del Monte Motors, Inc.

G.R. No. 156956; October 9, 2006
TOPIC: BREACH OF WARRANTY
FACTS: Petitioner Insurance Commissioner Eduardo T. Malinis representing the Republic

of the Philippines was cited for contempt of court by the Regional Trial Court (RTC) of
Quezon City for his refusal to refusal to obey the resolution of the trial court. The RTC
resolution required petitioner, then Insurance Commissioner, to allow the withdrawal of the
security deposit of Capital Insurance and Surety Co. (CISCO) in the amount of
P11,835,375.50 for the satisfaction of a judgment debt of in a civil case before the RTC. The
security deposits were being held by the Insurance Commissioner pursuant to Section 203
of the Insurance Code.
ISSUE: Whether the security deposit held by the Insurance Commissioner pursuant to
Section 203 of the Insurance Code may be levied or garnished in favor of only one insured
HELD: No. To allow the garnishment of that deposit would impair the fund by decreasing it
to less than the percentage of paid-up capital that the law requires to be maintained.
Further, this move would create, in favor of respondent, a preference of credit over the other
policy holders and beneficiaries. Also, the securities are held as a contingency fund to
answer for the claims against the insurance company by all its policy holders and
their beneficiaries. This step is taken in the event that the company becomes insolvent or
otherwise unable to satisfy the claims against it. Thus, a single claimant may not lay stake
on the securities to the exclusion of all others. The other parties may have their own claims
against the insurance company under other insurance contracts it has entered into. Section
203 of the Insurance Code expressly and clearly states that the security deposit shall be (1)
answerable for all the obligations of the depositing insurer under its insurance contracts;
(2) at all times free from any liens or encumbrance; and (3) exempt from levy by any
claimant.
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INSURANCE LAW

Under Dean Jose R. Sundiang Sr.

It is well settled that contracts of insurance are to be construed liberally in favor of

Topic: Construction of Insurance Contract

On the “authorized driver clause”

On the “theft clause”

Topic: CONSTRUCTION OF INSURANCE CONTRACT

Topic: CONSTRUCTION OF INSURANCE CONTRACT

It is a cardinal rule on insurance that a policy or insurance contract is to be interpreted

TOPIC: CONSTRUCTION OF INSURANCE CONTRACT

FACTS: The plaintiff was insured by the defendants.

Topic: CONSTRUCTION OF INSURANCE CONTRACT

Facts: Private respondent spouses executed a promissory note in favor of Supercars

Hence this petition by White Gold.

Held: Yes, Petition granted.

Respondents contended that although Steamship Mutual is a P & I Club, it is not

Is Steamship Mutual engaged in the insurance business?

Since a contract of insurance involves public interest, regulation by the State is

2. Pioneer is the resident agent of Steamship Mutual as evidenced by the certificate

Although Pioneer is already licensed as an insurance company, it needs a separate

SEC. 299 No person shall act as an insurance agent or as an insurance broker in

Topic: Mutual Insurance Company

Issue: (1) Whether respondent is a cooperative.

TOPIC: CONSTRUCTION OF INSURANCE CONTRACT

After trial, the lower court ruled against PhilamCare.

1. Prior notice of cancellation to insured;

Topic: Perfection of Insurance Contract

An insurance premium is the consideration paid an insurer for undertaking to indemnify

1) Flood storm, earthquake, lightning, or other natural disaster or calamity;

2) Act of the public enemy in war, whether international or civil;

FACTS: Shipper SMITHKLINE USA delivered to carrier Burlington Air Express

As a consequence of the foregoing result of the veterinary biologics test, SMITHKLINE

ISSUE: Is FEDEX liable for damage to or loss of the insured goods.

HELD: Petition granted. Assailed decision reversed insofar as it pertains to FEDEX

Airway Bill No. 11263825, issued by Burlington as agent of petitioner, states:

Relevantly, petitioner‘s airway bill states:

Article 26 of the Warsaw Convention, on the other hand, provides:

NOTES: as to proper payee:

Topic: Insurable Interest

Issue: Whether the widow of Dr.Leuterio areal party in interest.

Topic: Insurable Interest

TOPIC: Concealment and Representation

Topic: Concealment and Representation

On 5 August 1983, Canilang died of "congestive heart failure," "anemia," and

Issue: Whether or not Grepalife is liable to the insurance contract.

Topic: Incontestability Clause

Held: No. Petition dismissed.The Insurance Code states in Section 48:

Topic: Liability Under and Open Policy

Makati Tuscany Condominium Corp. vs. CA

Topic: PREMIUM PAYMENTS

Issue: Whether payment by installment of the premiums due on an insurance policy

While Section 77 requires prepayment of premiums as a condition to the validity of the

Topic: Premium Payments

2. No, the respondent did not violate the policy.

TOPIC: PREMIUM PAYMENTS

Section 99 of the same Code also provides in part.

TOPIC: MARINE INSURANCE