On January 1, 2000, Antonio Rivera secured a life insurance from SOS Insurance Corp.

for P1 Million with Gemma Rivera, his adopted daughter, as the beneficiary. Antonio
Rivera died on March 4, 2005 and in the police investigation, it was ascertained that
Gemma Rivera participated as an accessory in the killing of Antonio Rivera. Can SOS
Insurance Corp. avoid liability by setting up as a defense the participation of Gemma
Rivera in the killing of Antonio Rivera? Discuss with reasons.

No, SOS Insurance Corp. cannot avoid liability by setting up as a defense the
participation of Gemma Rivera in the killing of Antonio Rivera.

Under the jurisprudence, the claim of the beneficiary who was ascertained to be
an either principal, accomplice or accessory in the killing of the insured shall be forfeited
in other beneficiaries, if none, it shall be forfeited in favor of the heirs or nearest relative
of the insured.

Here, since it was ascertained that Gemma Rivera participated as an accessory

in the killing of the insured, Antonio, her claims shall be forfeited in favor of the nearest
relative of Antonio.

Thus, the insurance company is still liable to pay the claim.

Benny applied for life insurance for Php 1.5 Million. The insurance company
approved his application and issued an insurance policy effective Nov, 6, 2008. Benny
named his children as his beneficiaries. On April 6, 2010, Benny died of hepatoma, a
liver ailment. The insurance company denied the children’s claim for the proceeds of the
insurance policy on the ground that Benny failed to disclose in his application two
previous consultations with his doctors for diabetes and hypertension, and that he had
been diagnosed to be suffering from hepatoma. The insurance company also rescinded
the policy and refunded the premiums paid. Was the insurance company correct?

Yes, the insurance company was correct.

Under the Law on Insurance, in case of the presence of concealment, whether

intentional or not, the insurance company may validly rescind the contract within 2 years
from its effectivity. It is immaterial if the insured has died other than the reason
concealed.

Here, the policy was became effective on November 6, 2008. The insurance
company has validly denied the claim of Benny’s children since Benny failed to disclose
previous consultations with his doctors which is considered a material concealment. The
remedy of recission on the part of the insurer was validly made on April 6, 2010 which is
within the 2 year period from the effectivity of the contract.
 Thus, the insurance company was correct in denying the claim and rescinding
the contract of insurance on the ground of material concealment.

Global Transport Services, Inc. (GTSI) operates a fleet of cargo vessels plying
interisland routes. One of its vessels, MV Dona Juana, left the port of Manila for Cebu
laden with,among other goods, 10,000 television sets consigned to Romualdo, a TV
retailer in Cebu. When the vessel was about ten nautical miles away from Manila, the
ship captain heard on the radio that a typhoon which, as announced by PAG-ASA, was
on its way out of the country, had suddenly veered back into Philippine territory, the
captain realized that MV Dona Juana would traverse the storm’s path, but decided to
proceed with the voyage. True enough, the vessel sailed into the storm. The captain
ordered the jettison of the 10, 000 television sets, along with some other cargo, in order
to lighten the vessel and make it easier to steer the vessel out of the path of the
typhoon. Eventually, the vessel, with its crew intact, arrived safely in Cebu. (A) Will you
characterize the jettison of Romualdo’s TV sets as an average? If so, what kind of an
average, and why? If not, why not? (3%)

Yes, the jettison of Romualdo’s TV sets will be characterized as a general

average.

The Law on Maritime Commerce provides that an average is considered to be a

general average when the loss of a cargo owned by a particular person benefitted the
common good or save the whole during the emergency.

Here, the loss of TV sets owned by Romualdo is considered a general average

which entitles him for an indemnification by the shipowner and the owners of cargo who
benefitted from the loss.

Thus, it is a general average.

AA entered into a contract with BB for the latter to transport ladies wear from
Manila to France with transshipment via Taiwan. Somehow the goods were not loaded
in Taiwan on time, hence, these arrived in France ―off-season.‖ AA was only paid for
one half the value by the buyer. AA claimed damages from BB. BB invoked prescription
as a defense under the Carriage of Goods by Sea Act Considering the ―loss of value‖
of the ladies wear as claimed by AA, is BB’s defense tenable? Explain. (3%)

No, the defense of prescription of BB is not tenable.

Under the jurisprudence, it is a well settled rule that the one year prescription
period shall be invoked in cases where there is a damage as to the condition of the
goods transported by the carrier not the result of the delay in the transportation. Thus,
the prescription on the written contracts shall be governed in case of the latter.
 Here, the claim for damages was based on the result of the shipment, the delay,
hence, the prescription period to be applied is the ten year-prescriptive period as
governed by the law on written contracts and not the one year period.

Therefore, the action has not yet prescribed. The defense of prescription is not
tenable.