INSURANCE Page 1

ABOITIZ SHIPPING CORPORATION V NEW

INDIA ASSURANCE COMPANY, LTD.
[CITATION]
QUISUMBING; May 2, 2006
NATURE
Petition for revie on !ertiorari
FACTS
- Societe Francaise Des Colloides "oa#e# a !ar$o of
te%ti"e& an# a'%i"iary !(e)i!a"& fro) *ran!e on +oar#
a ve&&e" one# +y *ran!o,Be"$ian Servi!e&, In!-
, T(e !ar$o a& !on&i$ne# to Genera" Te%ti"e, In!-, in
Mani"a an# in&'re# +y re&.on#ent Ne In#ia
A&&'ran!e Co).any, /t#-
, 0(i"e in 1on$2on$, t(e !ar$o a& tran&ferre# to
M/V P. Aboitiz for tran&&(i.)ent to Mani"a-
, Before #e.artin$, t(e ve&&e" a& a#vi&e# t(at it
a& &afe to trave" to it& #e&tination, +'t (i"e at &ea,
t(e ve&&e" re!eive# a re.ort of a ty.(oon )ovin$
it(in it& .at(-
, To avoi# t(e ty.(oon, t(e ve&&e" !(an$e# it&
!o'r&e- 1oever, it a& &ti"" at t(e frin$e of t(e
ty.(oon (en it& ('"" "ea2e#-
, On O!to+er 34, 4560, t(e ve&&e" &an2, +'t t(e
!a.tain an# (i& !re ere &ave#-
, On Nove)+er 3, 4560, t(e !a.tain of M/V P.
Aboitiz fi"e# (i& 7Marine Prote&t8, &tatin$ t(at t(e
in# for!e a& at 40 to 49 2not& at t(e ti)e t(e &(i.
fo'n#ere# an# #e&!ri+e# t(e eat(er a& 7)o#erate
+ree:e, &)a"" ave&, +e!o)in$ "on$er, fair"y
fre;'ent (ite (or&e
, Petitioner notifie# t(e !on&i$nee of t(e tota" "o&& of
t(e ve&&e" an# a"" of it& !ar$oe&-
, Genera" Te%ti"e, "o#$e# a !"ai) it( re&.on#ent for
t(e a)o'nt of it& "o&&-
, <e&.on#ent .ai# Genera" Te%ti"e an# a&
&'+ro$ate# to t(e ri$(t& of t(e "atter-
, <e&.on#ent (ire# a &'rveyor to inve&ti$ate, an#
t(e &a)e !on!"'#e# t(at t(e !a'&e a& t(e f"oo#in$
of t(e (o"#& +ro'$(t a+o't +y t(e ve&&e"=&
;'e&tiona+"e &eaort(ine&&-
, <e&.on#ent fi"e# a !o)."aint for #a)a$e& a$ain&t
.etitioner A+oiti:, *ran!o,Be"$ian Servi!e& an# t(e
"atter=& "o!a" a$ent, *->- ?'e""i$, In!- @?'e""i$A
, On Nove)+er 20, 4565, t(e tria" !o'rt r'"e# in
favor of re&.on#ent an# (e"# .etitioner A+oiti: "ia+"e
for t(e tota" va"'e of t(e "o&t !ar$o ."'& "e$a" intere&t
, T(e !o)."aint it( re&.e!t to *ran!o an# ?'e""i$
a& #i&)i&&e#
, Petitioner e"evate# t(e !a&e to t(e Co'rt of
A..ea"&, (i!( in t'rn, affir)e# in toto t(e tria"
!o'rt=& #e!i&ion-
, Petitioner )ove# for re!on&i#eration +'t t(e &a)e
a& #enie#-
, 1en!e, t(i& .etition for revie
Petitioners Claim
B Petitioner !onten#& t(at re&.on#ent=& !"ai) for
#a)a$e& &(o'"# on"y +e a$ain&t t(e in&'ran!e
.ro!ee#& an# "i)ite# to it& .ro,rata &(are in vie of
t(e #o!trine of "i)ite# "ia+i"ity
Respondents Comments
B <e&.on#ent !o'nter& t(at t(e #o!trine of rea" an#
(y.ot(e!ary nat're of )ariti)e "a i& not a.."i!a+"e
in t(e .re&ent !a&e +e!a'&e .etitioner a& fo'n# to
(ave +een ne$"i$ent- 1en!e, a!!or#in$ to
re&.on#ent, .etitioner &(o'"# +e (e"# "ia+"e for t(e
tota" va"'e of t(e "o&t !ar$o
ISSUE
0ON t(e "i)ite# "ia+i"ity #o!trine a.."ie& in t(i& !a&e
HELD
NO
Ratio 0(ere t(e &(i.oner fai"& to over!o)e t(e
.re&').tion of ne$"i$en!e, t(e #o!trine of "i)ite#
"ia+i"ity !annot +e a.."ie#-
Reasoning
, *ro) t(e nat're of t(eir +'&ine&& an# for rea&on&
of .'+"i! .o"i!y, !o))on !arrier& are +o'n# to
o+&erve e%traor#inary #i"i$en!e over t(e $oo#& t(ey
tran&.ort a!!or#in$ to a"" t(e !ir!')&tan!e& of ea!(
!a&e- In t(e event of "o&&, #e&tr'!tion or
#eterioration of t(e in&'re# $oo#&, !o))on !arrier&
are re&.on&i+"e, 'n"e&& t(ey !an .rove t(at t(e "o&&,
#e&tr'!tion or #eterioration a& +ro'$(t a+o't +y
t(e !a'&e& &.e!ifie# in Arti!"e 4C3D
4
of t(e Civi"
Co#e- In a"" ot(er !a&e&, !o))on !arrier& are
.re&')e# to (ave +een at fa'"t or to (ave a!te#
ne$"i$ent"y, 'n"e&& t(ey .rove t(at t(ey o+&erve#
e%traor#inary #i"i$en!e- Moreover, (ere t(e ve&&e"
i& fo'n# 'n&eaort(y, t(e &(i.oner i& a"&o
.re&')e# to +e ne$"i$ent &in!e it i& ta&2e# it( t(e
)aintenan!e of it& ve&&e"- T(o'$( t(i& #'ty !an +e
1
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 !lood, storm, earth"ua#e, lightning, or other natural disaster or calamity$
(% Act of the public enemy in war, whether international or ci&il$
(3 Act of omission of the shipper or owner of the goods$
(4 'he character of the goods or defects in the pac#ing or in the containers$
(( )rder or act of competent public authority.
#e"e$ate#, &ti"", t(e &(i.oner )'&t e%er!i&e !"o&e
&'.ervi&ion over it& )en-
, In t(e .re&ent !a&e, .etitioner (a& t(e +'r#en of
&(oin$ t(at it e%er!i&e# e%traor#inary #i"i$en!e in
t(e tran&.ort of t(e $oo#& it (a# on +oar# in or#er to
invo2e t(e "i)ite# "ia+i"ity #o!trine- Eifferent"y .'t,
to "i)it it& "ia+i"ity to t(e a)o'nt of t(e in&'ran!e
.ro!ee#&, .etitioner (a& t(e +'r#en of .rovin$ t(at
t(e 'n&eaort(ine&& of it& ve&&e" a& not #'e to it&
fa'"t or ne$"i$en!e-
, Con&i#erin$ t(e evi#en!e .re&ente# an# t(e
!ir!')&tan!e& o+tainin$ in t(i& !a&e, e fin# t(at
.etitioner fai"e# to #i&!(ar$e t(i& +'r#en- Bot( t(e
tria" an# t(e a..e""ate !o'rt&, in t(i& !a&e, fo'n# t(at
t(e &in2in$ a& not #'e to t(e ty.(oon +'t to it&
'n&eaort(ine&&- >vi#en!e on re!or# &(oe# t(at
t(e eat(er a& )o#erate (en t(e ve&&e" &an2-
T(e&e fa!t'a" fin#in$& of t(e Co'rt of A..ea"&,
affir)in$ t(o&e of t(e tria" !o'rt are not to +e
#i&t'r+e# on a..ea", +'t )'&t +e a!!or#e# $reat
ei$(t- T(e&e fin#in$& are !on!"'&ive not on"y on
t(e .artie& +'t on t(i& Co'rt a& e""-
Disposition Petition i& #enie# for "a!2 of )erit-
PHILAMCARE HEALTH SYSTEMS, INC. V CA
(TRINOS)
3C5 SC<A 39C
FNA<>S,SANTIAGO; Mar!( 46, 2002
NATURE
Petition for revie of CA #e!i&ion
FACTS
, >rnani T<INOS, #e!ea&e# ('&+an# of re&.on#ent
G'"ita, a.."ie# for a healh !a"e !#$e"a%e &'h
Ph'la(!a"e Healh S)*e(*, I+!- In t(e &tan#ar#
a.."i!ation for), (e an&ere# no to t(e ;'e&tionH
Have you or any of your faily ebers ever
consulted or been treated for !i"! blood #ressure$
!eart trouble$ diabetes$ cancer$ liver disease$ ast!a
or #e#tic ulcer% &'f (es$ "ive details).*
, T(e a.."i!ation a& a..rove# for .erio# of one
year; '.on ter)ination, it a& e%ten#e# for anot(er
2 year&- A(#,+ #- !#$e"a%e &a* '+!"ea*e. # a
(a/'(,( *,( #- P01T 2e" .'*a3'l').
, E'rin$ t(i& .erio#, >rnani &'ffere# a 1>A<T
ATTACI an# a& !onfine# at t(e Mani"a Me#i!a"
Center @MMCA for one )ont(- 0(i"e (er ('&+an# a&
in t(e (o&.ita", G'"ita trie# to !"ai) t(e
(o&.ita"i:ation +enefit&-
, Pe''#+e" "eae. he Health Care Agreement
(HCA) a* $#'. *'+!e he"e &a* a !#+!eal(e+
INSURANCE Page 2
"e%a".'+% E"+a+'4* (e.'!al h'*#")- Eo!tor& at
t(e MMC a""e$e#"y #i&!overe# at t(e ti)e of (i&
!onfine)ent, (e a& (y.erten&ive, #ia+eti! an#
a&t()ati!- G'"ita t(en .ai# t(e (o&.ita"i:ation
e%.en&e& (er&e"f, a)o'ntin$ to a+o't PC6T-
, After (er ('&+an# #ie#, G'"ita in&tit'te# a!'#+ -#"
.a(a%e* a%a'+* Ph'la(!a"e a+. '* P"e*. After
tria", t(e "oer !o'rt r'"e# in (er favor an# or#ere#
P(i"a)!are to rei)+'r&e )e#i!a" an# (o&.ita"
!overa$e a)o'ntin$ to PC6T ."'& intere&t, 'nti" f'""y
.ai#; .ay )ora" #a)a$e& of P40T; .ay e%e)."ary
#a)a$e& of P40T; atty=& fee& of P20T-
, CA affir)e# t(e #e!i&ion of t(e tria" !o'rt +'t
#e"ete# a"" aar#& for #a)a$e& an# a+&o"ve#
.etitioner <everente-
Petitioners Claims
@4A A$ree)ent $rant& 7l'$'+% 3e+e-'*8 &'!( a&
)e#i!a" !(e!2,'.& an# (o&.ita"i:ation (i!( a
)e)+er )ay i))e#iate"y enJoy so long as he is
alive '.on effe!tivity of t(e a$ree)ent 'nti" it&
e%.iration-
@2A On"y )e#i!a" an# (o&.ita"i:ation +enefit& are
$iven 'n#er t(e a$ree)ent without any
indemnification, unli+e in an insurance contract
,!ere t!e insured is indenified for !is loss-
@3A 1CA& are #+l) -#" a 2e"'#. #- #+e )ea";
t(erefore, in!onte&ta+i"ity !"a'&e #oe& not a.."y, a& it
re;'ire& effe!tivity .erio# of at "ea&t 2 yr&-
@DA It i& not an in&'ran!e !o).any, $overne# +y
In&'ran!e Co))i&&ion, but a Healt! Maintenance
-r"anization ,+.e" he a,h#"') #- DOH-
@9A Trino& !#+!eale. a (ae"'al -a! in (i&
a.."i!ation-
@6A G'"ita a& +# he le%al &'-e &in!e at t(e ti)e
of t(eir )arria$e, t(e #e!ea&e# a& .revio'&"y
)arrie# to anot(er o)an (o a& &ti"" a"ive-K
ISSUES
4- 0ON a (ea"t( !are a$ree)ent i& an in&'ran!e
!ontra!t @If &o, 7in!onte&ta+i"ity !"a'&e8 'n#er t(e
In&'ran!e Co#e i& a.."i!a+"eA
2- 0ON t(e 1CA !an +e inva"i#ate# on t(e +a&i& of
a""e$e# !on!ea")ent
HELD
F>S
Ratio >very .er&on (a& an in&'ra+"e intere&t in t(e
"ife an# (ea"t( of (i)&e"f
2
- T(e (ea"t( !are
2
Sec.10. Every person has an insurable interest in the life and health:
(1 of himself, of his spouse and of his children$
(% of any person on whom he depends wholly or in part for education or support, or in whom he
has a pecuniary interest$
a$ree)ent a& in t(e nat're of non,"ife in&'ran!e,
(i!( i& .ri)ari"y a !ontra!t of in#e)nity- On!e t(e
)e)+er in!'r& (o&.ita", )e#i!a" or any ot(er
e%.en&e ari&in$ fro) &i!2ne&&, inJ'ry or ot(er
&ti.'"ate# !ontin$ent, t(e (ea"t( !are .rovi#er )'&t
.ay for t(e &a)e to t(e e%tent a$ree# '.on 'n#er
t(e !ontra!t-
Reasoning
- A !ontra!t of in&'ran!e
3
i& an a$ree)ent (ere+y
one 'n#erta2e& for a !on&i#eration to in#e)nify
anot(er a$ain&t "o&&, #a)a$e or "ia+i"ity ari&in$ fro)
an 'n2non or !ontin$ent event-
, An in&'ran!e !ontra!t e%i&t& (ere t(e fo""oin$
e"e)ent& !on!'rH
(a) T(e in&'re# (a& an in&'ra+"e intere&t;
(3) T(e in&'re# i& &'+Je!t to a ri&2 of "o&& +y t(e
(a..enin$ of t(e .eri";
(!) T(e in&'rer a&&')e& t(e ri&2;
(.) S'!( a&&').tion of ri&2 i& .art of a $enera"
&!(e)e to #i&tri+'te a!t'a" "o&&e& a)on$ a "ar$e
$ro'. of .er&on& +earin$ a &i)i"ar ri&2; an#
(e) In !on&i#eration of t(e in&'rer=& .ro)i&e, t(e
in&'re# .ay& a .re)i')-
2- NO
Ratio 0(ere )atter& of o.inion or J'#$)ent are
!a""e# for, an&er& )a#e in $oo# fait( an# it(o't
intent to #e!eive i"" not avoi# a .o"i!y even t(o'$(
t(ey are 'ntr'e; &in!e in &'!( !a&e t(e in&'rer i& not
J'&tifie# in re"yin$ '.on &'!( &tate)ent, +'t i&
o+"i$ate# to )a2e f'rt(er in;'iry-
Reasoning
- T(e fra'#'"ent intent on t(e .art of t(e in&'re#
)'&t +e e&ta+"i&(e# to arrant re&!i&&ion of t(e
in&'ran!e !ontra!t- T(e ri$(t to re&!in# &(o'"# +e
e%er!i&e# #revious to t!e coenceent of an
action on t(e !ontra!t- No re&!i&&ion a& )a#e-
Be&i#e&, t(e cancellation of !ealt! care a"reeents
as in insurance #olicies re.uiresH
(a) Prior noti!e of !an!e""ation to in&'re#;
(3) Noti!e )'&t +e +a&e# on t(e o!!'rren!e after
effe!tive #ate of t(e .o"i!y of one or )ore of t(e
$ro'n#& )entione#;
(!) M'&t +e in ritin$, )ai"e# or #e"ivere# to t(e
in&'re# at t(e a##re&& &(on in t(e .o"i!y;
(.) M'&t &tate t(e $ro'n#& re"ie# '.on .rovi#e# in
Se!tion 6D of t(e In&'ran!e Co#e an# '.on re;'e&t
of in&'re#, to f'rni&( fa!t& on (i!( !an!e""ation i&
+a&e#-
(3 of any person under a legal obligation to him for the payment of money, respecting property or
ser&ice, of which death or illness might delay or pre&ent the performance$ and
(4 of any person upon whose life any estate or interest &ested in him depends.
3
Section 2 (1) of the Insurance Code
, /!ese conditions !ave not been et. 0(en t(e
ter)& of in&'ran!e !ontra!t !ontain "i)itation& on
"ia+i"ity, !o'rt& &(o'"# !on&tr'e t(e) in &'!( a ay
a& to .re!"'#e in&'rer fro) non,!o)."ian!e of
o+"i$ation- Bein$ a !ontra!t of a#(e&ion, ter)& of an
in&'ran!e !ontra!t are to +e !on&tr'e# &tri!t"y
a$ain&t t(e .arty (i!( .re.are# it L t(e in&'rer-
, A"&o, P(i"a)!are (a# 42 )ont(& fro) t(e #ate of
i&&'an!e of t(e A$ree)ent it(in (i!( to !onte&t
t(e )e)+er&(i. of t(e .atient if (e (a# .revio'&
ai")ent of a&t()a, an# &i% )ont(& fro) t(e i&&'an!e
of t(e a$ree)ent if t(e .atient a& &i!2 of #ia+ete&
or (y.erten&ion-
T(e (ea"t( !are a$ree)ent i& in t(e nature of a
contract of indenity. 1en!e, .ay)ent &(o'"# +e
)a#e to t(e .arty (o in!'rre# t(e e%.en&e&- It i&
!"ear t(at re&.on#ent .ai# a"" t(e (o&.ita" an#
)e#i!a" +i""&; t('&, &(e i& entit"e# to rei)+'r&e)ent-
Disposition Petition E>NI>E-
PINEDA V CA (INSULAR LIFE INSURANCE
COMPANY)
226 SC<A C99
EAMIE>; Se.te)+er 2C, 4553
NATURE
A..ea" +y !ertiorari for revie an# &et a&i#e t(e
Ee!i&ion of t(e .'+"i! re&.on#ent Co'rt of A..ea"&
an# it& <e&o"'tion #enyin$ t(e .etitioner&N )otion for
re!on&i#eration
FACTS
, In 4563, Pri)e Marine Servi!e&, In!- @PMSIA
.ro!'re# a $ro'. .o"i!y fro) In&'"ar /ife to .rovi#e
"ife in&'ran!e !overa$e to it& &ea,+a&e# e)."oyee&
enro""e# 'n#er t(e ."an- E'rin$ t(e effe!tivity of t(e
.o"i!y, 6 !overe# e)."oyee& .eri&(e# at &ea- T(ey
ere &'rvive# +y !o)."ainant&,a..e""ee&, t(e
+enefi!iarie& 'n#er t(e .o"i!y-
, !o)."ainant&,a..e""ee& &o'$(t to !"ai) #eat(
+enefit& #'e t(e) an# a..roa!(e# Ca.t- <o+erto
N'va", Pre&i#ent an# GM of PMSI, t(en e%e!'te#
&.e!ia" .oer& of attorney a't(ori:in$ Ca.t- N'va" to
7fo""o '., a&2, #e)an#, !o""e!t an# re!eive8 for
t(eir +enefit in#e)nitie& of &')& of )oney #'e
t(e)O8
, Un2non to t(e !o)."ainant&, PMSI fi"e# it(
In&'"ar /ife !"ai)& for an# in +e(a"f of t(e) t(ro'$(
Ca.t- N'va", even '&in$ t(e 9 &.e!ia" .oer& of
attorney t(at t(ey e%e!'te# a& #o!')ent&- In&'"ar
/ife t(en re"ea&e# 6 !(e!2&, .aya+"e to t(e or#er of
t(e !o)."ainant,a..e""ee&, to t(e trea&'rer of PMSI
INSURANCE Page 3
@(o (a..ene# to +e Ca.t- N'va"=& &on,in,"aA-
Ca.t- N'va" t(en en#or&e# an# #e.o&ite# t(e&e
!(e!2& @(i!( ere for t(e !o)."ainant&A in (i& +an2
a!!o'nt-
, 3 year& after, t(e !o)."ainant&,a..e""ee& fo'n# o't
t(at t(ey ere entit"e#, a& +enefi!iarie&, to "ife
in&'"ar +enefit& 'n#er a $ro'. .o"i!y it(
re&.on#ent,a..e""ant &o t(ey &o'$(t to re!over
t(e&e +enefit& fro) In&'"ar /ife- In&'"ar /ife #enie#
t(e !"ai), &ayin$ t(at t(eir "ia+i"ity to !o)."ainant&
a& a"rea#y e%tin$'i&(e# '.on #e"ivery to an#
re!ei.t +y PMSI of t(e 6 !(e!2& i&&'e# in t(e
!o)."ainant&= na)e&- Co)."ainant& fi"e# !a&e it(
t(e In&'ran!e Co))i&&ion (i!( #e!i#e# in t(eir
favor-
, In&'ran!e Co))i&&ion (e"# t(at t(e &.e!ia" .oer&
of attorney e%e!'te# +y !o)."ainant& in favor of t(e
!o)."ainant& #o not !ontain in 'ne;'ivo!a" an# !"ear
ter)& a't(ority to Ca.t- N'va" to o+tain, re!eive,
re!ei.t fro) re&.on#ent !o).any in&'ran!e
.ro!ee#& ari&in$ fro) t(e #eat( of t(e &ea)an,
in&'re#; a"&o, t(at In&'"ar /ife #i# not !onvin!in$"y
ref'te# t(e !"ai) of Mr&- A"ar!on t(at neit(er &(e nor
(er ('&+an# e%e!'te# a &.e!ia" .oer of a't(ority in
favor of Ca.t- N'va" @an# t(erefore, t(e !o).any
&(o'"# (ave not re"ea&e# t(e !(e!2 to Ca.t- N'va",
PMSIA; an# t(at it #i# not o+&erve Se! 460@3A, a&
re.ea"e# +y Art- 229 of t(e *a)i"y Co#e, (en it
re"ea&e# t(e +enefit& #'e to t(e )inor !(i"#ren of
Ayo an# /onto2, (en t(e &ai# !o)."ainant& #i# not
.o&t a +on# a& re;'ire#
, In&'"ar /ife a..ea"e# to t(e CA; CA )o#ifie# t(e
#e!i&ion of t(e In&'ran!e Co))i&&ion, e"i)inatin$
t(e aar# to t(e /onto2& an# Ayo
ISSUES
4- 0ON In&'"ar /ife &(o'"# +e "ia+"e to t(e
!o)."ainant& (en t(ey re"ie# on t(e &.e!ia" .oer&
of attorney, (i!( Ca.t- N'va" .re&ente# a&
#o!')ent&, (en t(ey re"ea&e# t(e !(e!2& to t(e
"atter
2- 0ON In&'"ar /ife &(o'"# +e "ia+"e to t(e
!o)."ainant& (en t(ey re"ea&e# t(e !(e!2 in favor
of Ayo an# /Onto2, even if no +on# a& .o&te# a&
re;'ire#
HELD
4- F>S
Ratio T(ir# .er&on& #ea" it( a$ent& at t(eir .eri"
an# are +o'n# to in;'ire a& to t(e e%tent of t(e
.oer of t(e a$ent it( (o) t(ey !ontra!t- !he
person dealing with an agent must also act
with ordinary prudence and reasona"le
diligence# O+vio'&"y, if (e 2no& or (a& $oo#
rea&on to +e"ieve t(at t(e a$ent i& e%!ee#in$ (i&
a't(ority, (e !annot !"ai) .rote!tion- So if t(e
&'$$e&tion& of .ro+a+"e "i)itation& +e of &'!( a !"ear
an# rea&ona+"e ;'a"ity, or if t(e !(ara!ter a&&')e#
+y t(e a$ent i& of &'!( a &'&.i!io'& or 'nrea&ona+"e
nat're, or if t(e a't(ority (i!( (e &ee2& to e%er!i&e
i& of &'!( an 'n'&'a" or i).ro+a+"e !(ara!ter, a&
o'"# &'ffi!e to .'t an or#inari"y .r'#ent )an '.on
(i& $'ar#, t(e .arty #ea"in$ it( (i) )ay not &('t
(i& eye& to t(e rea" &tate of t(e !a&e, +'t &(o'"#
eit(er ref'&e to #ea" it( t(e a$ent at a"", or &(o'"#
a&!ertain fro) t(e .rin!i.a" t(e tr'e !on#ition of
affair&-
Reasoning
- T(e e%e!'tion +y t(e .rin!i.a"& of &.e!ia" .oer& of
attorney, (i!( !"ear"y a..eare# to +e in .re.are#
for)& an# on"y (a# to +e fi""e# '. it( t(eir na)e&,
re&i#en!e&, #ate& of e%e!'tion, #ate& of
a!2no"e#$e)ent an# ot(er&, e%!"'#e& any intent to
$rant a $enera" .oer of attorney or to !on&tit'te a
'niver&a" a$en!y- Bein$ &.e!ia" .oer& of attorney,
t(ey )'&t +e &tri!t"y !on&tr'e#- 'nsular 0ife +ne,
t!at a #o,er of attorney in favor of Ca#t. 1uval for
t!e collection and recei#t of suc! #roceeds ,as a
deviation fro its #ractice ,it! res#ect to "rou#
#olicies &t!at t!e e#loyer-#olicy!older is t!e a"ent
of t!e insurer).
- T(e e)."oyer a!t& a& a f'n!tionary in t(e !o""e!tion
an# .ay)ent of .re)i')& an# in .erfor)in$ re"ate#
#'tie&- /i2ei&e fa""in$ it(in t(e a)+it of
a#)ini&tration of a $ro'. .o"i!y i& t(e #i&+'r&e)ent
of in&'ran!e .ay)ent& +y t(e e)."oyer to t(e
e)."oyee&- Mo&t .o"i!ie&, &'!( a& t(e one in t(i&
!a&e, re;'ire an e)."oyee to .ay a .ortion of t(e
.re)i'), (i!( t(e e)."oyer #e#'!t& fro) a$e&
(i"e t(e re)ain#er i& .ai# +y t(e e)."oyer- T(i& i&
2non a& a !#+"'3,#") 2la+ a& !o).are# to a
non,!ontri+'tory ."an (ere t(e .re)i')& are &o"e"y
.ai# +y t(e e)."oyer-
, he la3#" #- he e(2l#)ee* '* he ",e *#,"!e
#- he 3e+e-'*, &h'!h a"e a -#"( #- a..''#+al
!#(2e+*a'#+ # he(.
, he e(2l#)e" '* he a%e+ #- he '+*,"e" '+
2e"-#"('+% he .,'e* #- a.('+'*e"'+% %"#,2
'+*,"a+!e 2#l'!'e*. It !annot +e &ai# t(at t(e
e)."oyer a!t& entire"y for it& on +enefit or for t(e
+enefit of it& e)."oyee& in 'n#erta2in$
a#)ini&trative f'n!tion&- 0(i"e a re#'!e# .re)i')
)ay re&'"t if t(e e)."oyer re"ieve& t(e in&'rer of
t(e&e ta&2&, an# t(i&, of !o'r&e, i& a#vanta$eo'& to
+ot( t(e e)."oyer an# t(e e)."oyee&, t(e in&'rer
a"&o enJoy& &i$nifi!ant a#vanta$e& fro) t(e
arran$e)ent- T(e re#'!tion in t(e .re)i') (i!(
re&'"t& fro) e)."oyer,a#)ini&tration .er)it& t(e
in&'rer to rea"i:e a "ar$er vo"')e of &a"e&, in&'rer to
rea"i:e a "ar$er vo"')e of &a"e&, an# at t(e &a)e
ti)e t(e in&'rerN& on a#)ini&trative !o&t& are
)ar2e#"y re#'!e#-
, t(e e)."oyee (a& no 2no"e#$e of or !ontro" over
t(e e)."oyerN& a!tion& in (an#"in$ t(e .o"i!y or it&
a#)ini&tration- An a$en!y re"ation&(i. i& +a&e# '.on
!on&ent +y one .er&on t(at anot(er &(a"" a!t in (i&
+e(a"f an# +e &'+Je!t to (i& !ontro"- It i& !"ear fro)
t(e evi#en!e re$ar#in$ .ro!e#'ra" te!(ni;'e& (ere
t(at t(e in&'rer,e)."oyer re"ation&(i. )eet& t(i&
a$en!y te&t it( re$ar# to t(e a#)ini&tration of t(e
.o"i!y, (erea& t(at +eteen t(e e)."oyer an# it&
e)."oyee& fai"& to ref"e!t tr'e a$en!y- T(e in&'rer
#ire!t& t(e .erfor)an!e of t(e e)."oyerN&
a#)ini&trative a!t&, an# if t(e&e #'tie& are not
'n#erta2en .ro.er"y t(e in&'rer i& in a .o&ition to
e%er!i&e )ore !on&tri!te# !ontro" over t(e
e)."oyerN& !on#'!t-
, ON G<OUP INSU<ANC>H Gro'. in&'ran!e i&
essentially a single insurance contract that
provides coverage for many individuals# In it&
ori$ina" an# )o&t !o))on for), $ro'. in&'ran!e
.rovi#e& life or health insurance coverage for
the employees of one employer- T(e !#$e"a%e
e"(* for group insurance are '&'a""y &tate# in a
)a&ter a$ree)ent or .o"i!y t(at i& i&&'e# +y t(e
in&'rer to a re.re&entative of t(e $ro'. or to an
a#)ini&trator of t(e in&'ran!e .ro$ra), &'!( a& an
e)."oyer- A"t(o'$( t(e e)."oyer )ay +e t(e tit'"ar
or na)e# in&'re#, the insurance is actually
related to the life and health of the employee-
In#ee#, t!e e#loyee is in t!e #osition of a real
#arty to t!e aster #olicy$ and even in a non-
contributory #lan$ t!e #ayent by t!e e#loyer of
t!e entire #reiu is a #art of t!e total
co#ensation #aid for t!e services of t!e e#loyee.
2- F>S
Ratio <e$ar#"e&& of t(e va"'e of t(e 'ne)an!i.ate#
!o))on !(i"#N& .ro.erty, t(e fat(er an# )ot(er i.&o
J're +e!o)e t(e "e$a" $'ar#ian of t(e !(i"#N&
.ro.erty- 1oever, if t(e )ar2et va"'e of t(e
.ro.erty or t(e ann'a" in!o)e of t(e !(i"# e%!ee#&
P90,000,00, a +on# (a& to +e .o&te# +y t(e .arent&
!on!erne# to $'arantee t(e .erfor)an!e of t(e
o+"i$ation& of a $enera" $'ar#ian-
Reasoning
INSURANCE Page 4
5 Se! 678, I+*,"a+!e C#.e9 NIn t(e a+&en!e of a
J'#i!ia" $'ar#ian, t(e fat(er, or in t(e "atterN&
a+&en!e or in!a.a!ity, t(e )ot(er of any )inor, (o
i& an in&'re# or a +enefi!iary 'n#er a !ontra!t of "ife,
(ea"t( or a!!i#ent in&'ran!e, )ay e%er!i&e, in +e(a"f
of &ai# )inor, any ri$(t 'n#er t(e .o"i!y, it(o't
ne!e&&ity of !o'rt a't(ority or t(e $ivin$ of a +on#
(ere t(e intere&t of t(e )inor in t(e .arti!'"ar a!t
invo"ve# #oe& not e%!ee# tenty t(o'&an# .e&o& P
, Ore.ea"e# +y Art- 229, *a)i"y Co#eH PA<T- 229-
T(e fat(er an# t(e )ot(er &(a"" Joint"y e%er!i&e "e$a"
$'ar#ian&(i. over t(e .ro.erty of t(eir
'ne)an!i.ate# !o))on !(i"# it(o't t(e ne!e&&ity
of a !o'rt a..oint)ent- In !a&e of #i&a$ree)ent, t(e
fat(erN& #e!i&ion &(a"" .revai", 'n"e&& t(ere i& J'#i!ia"
or#er to t(e !ontrary-
0(ere t(e )ar2et va"'e of t(e .ro.erty or t(e
ann'a" in!o)e of t(e !(i"# e%!ee#& P90,000, t(e
.arent !on!erne# &(a"" +e re;'ire# to f'rni&( a +on#
in &'!( a)o'nt a& t(e !o'rt )ay #eter)ine, +'t not
"e&& t(an ten .er !ent') @40QA of t(e va"'e of t(e
.ro.erty or ann'a" in!o)e, to $'arantee t(e
.erfor)an!e of t(e o+"i$ation& .re&!ri+e# for $enera"
$'ar#ian&-P
,:(a";e $al,e #- he 2"#2e") #" he a++,al
'+!#(e #- he !h'l.:9 t(e a$$re$ate of t(e !(i"#N&
.ro.erty or ann'a" in!o)e; if t(i& e%!ee#&
P90,000-00, a +on# i& re;'ire# , T(ere i& no
evi#en!e t(at t(e &(are of ea!( of t(e )inor& in t(e
.ro!ee#& of t(e $ro'. .o"i!y in ;'e&tion i& t(e
)inorN& on"y .ro.erty- 0it(o't &'!( evi#en!e, it
o'"# not +e &afe to !on!"'#e t(at, in#ee#, t(at i&
(i& on"y .ro.erty-
Disposition t(e in&tant .etition i& G<ANT>E- T(e
Ee!i&ion of 40 O!to+er 4554 an# t(e <e&o"'tion of 45
May 4552 of t(e .'+"i! re&.on#ent in CA,G-<- SP No-
22590 are S>T ASIE> an# t(e Ee!i&ion of t(e
In&'ran!e Co))i&&ion in IC Ca&e No- <E,096 i&
<>INSTAT>E- Co&t& a$ain&t t(e .rivate re&.on#ent-
SO O<E><>E-
CEBU SHIPYARD ENGINEERING WOR<S, INC. V
WILLIAM LINES, INC. a+. PRUDENTIAL
GUARANTEE a+. ASSURANCE COMPANY, INC.
[CITATION]
PU<ISIMA; May 9, 4555
NATURE
Petition for revie on !ertiorari
FACTS
, Ce+' S(i.yar# an# >n$ineerin$ 0or2&, In!-
@CS>0A i& en$a$e# in t(e +'&ine&& of #ry,#o!2in$
an# re.airin$ of )arine ve&&e"& (i"e t(e Pr'#entia"
G'arantee an# A&&'ran!e, In!- @Pr'#entia"A i& in t(e
non,"ife in&'ran!e +'&ine&&-
, 0i""ia) /ine&, In!- i& in t(e &(i..in$ +'&ine&&- It
a& t(e oner of MRM Mani"a City, a "'%'ry
.a&&en$er,!ar$o ve&&e", (i!( !a'$(t fire an# &an2
on *e+- 46, 4554- At t(e ti)e of t(e 'nfort'nate
o!!'rren!e &'e# '.on, &'+Je!t ve&&e" a& in&'re#
it( Pr'#entia" for PD9M for ('"" an# )a!(inery- T(e
1'"" Po"i!y in!"'#e# an 7A##itiona" Peri"&
@INC1MA<>>A8 C"a'&e !overin$ "o&& of or #a)a$e to
t(e ve&&e" t(ro'$( t(e ne$"i$en!e of, a)on$ ot(er&,
&(i. re.air)en
, Petitioner CS>0 a& a"&o in&'re# +y Pr'#entia" for
t(ir# .arty "ia+i"ity 'n#er a S(i.re.airer=& /e$a"
/ia+i"ity In&'ran!e Po"i!y- T(e .o"i!y a& for P40
)i""ion on"y, 'n#er t(e "i)ite# "ia+i"ity !"a'&e, to itH
, On *e+- 9, 4554, 0i""ia) /ine&, In!- +ro'$(t it&
ve&&e", MRM Mani"a City, to t(e Ce+' S(i.yar# in
/a.'"a.' City for ann'a" #ry,#o!2in$ an# re.air-
, On *e+- 6, 4554, an arriva" !onferen!e a& (e"#
+eteen re.re&entative& of 0i""ia) /ine&, In!- an#
CS>0 to #i&!'&& t(e or2 to +e 'n#erta2en on t(e
MRM Mani"a City- T(e !ontra!t&, #eno)inate# a&
0or2 Or#er&, ere &i$ne# t(ereafter-, it( t(e
fo""oin$ &ti.'"ation&H
740- T(e Contra!tor &(a"" re."a!e at it& on or2 an#
at it& on !o&t any or2 or )ateria" (i!( !an +e
&(on to +e #efe!tive an# (i!( i& !o))'ni!ate# in
ritin$ it(in one @4A )ont( of re#e"ivery of t(e
ve&&e" or if t(e ve&&e" a& not in t(e Contra!tor=&
Po&&e&&ion, t(e it(#raa" of t(e Contra!tor=&
or2)en, or at it& o.tion to .ay a &') e;'a" to t(e
!o&t of &'!( re."a!e)ent at it& on or2&- T(e&e
!on#ition& &(a"" a.."y to any &'!( re."a!e)ent&-
44- Save a& .rovi#e# in C"a'&e 40, t(e Contra!tor
&(a"" not +e 'n#er any "ia+i"ity to t(e C'&to)er eit(er
in !ontra!t or for #e"i!t or ;'a&i,#e"i!t or ot(eri&e
e%!e.t for ne$"i$en!e an# &'!( "ia+i"ity &(a"" it&e"f +e
&'+Je!t to t(e fo""oin$ overri#in$ "i)itation& an#
e%!e.tion&, na)e"yH
@aA T(e tota" "ia+i"ity of t(e Contra!tor to t(e
C'&to)er @over an# a+ove t(e "ia+i"ity to re."a!e
'n#er C"a'&e 40A or of any &'+,!ontra!tor &(a"" +e
"i)ite# in re&.e!t of any #efe!t or event @an# a
&erie& of a!!i#ent& ari&in$ o't of t(e &a)e #efe!t or
event &(a"" !on&tit'te one #efe!t or eventA to t(e
&') of Pe&o& P(i"i..ine C'rren!y One Mi""ion on"y-
% % %
20- T(e in&'ran!e on t(e ve&&e" &(o'"# +e
)aintaine# +y t(e !'&to)er an#Ror oner of t(e
ve&&e" #'rin$ t(e .erio# t(e !ontra!t i& in effe!t-8
, 0(i"e t(e MRM Mani"a City a& 'n#er$oin$ #ry,
#o!2in$ an# re.air& it(in t(e .re)i&e& of CS>0,
t(e )a&ter, offi!er& an# !re of MRM Mani"a City
&taye# in t(e ve&&e", '&in$ t(eir !a+in& a& "ivin$
;'arter&- Ot(er e)."oyee& (ire# +y 0i""ia) /ine& to
#o re.air& an# )aintenan!e or2 on t(e ve&&e" ere
a"&o .re&ent #'rin$ t(e #ry,#o!2in$-
, On *e+r'ary 46, 4554, after &'+Je!t ve&&e" a&
tran&ferre# to t(e #o!2in$ ;'ay, it !a'$(t fire an#
&an2, re&'"tin$ to it& event'a" tota" "o&&-
, On *e+r'ary 24, 4554, 0i""ia) /ine&, In!- fi"e# a
!o)."aint for #a)a$e& a$ain&t CS>0, a""e$in$ t(at
t(e fire (i!( +ro2e o't in MRM Mani"a City a&
!a'&e# +y CS>0=& ne$"i$en!e an# "a!2 of !are-
, On G'"y 49, 4554 a& fi"e# an A)en#e# Co)."aint
i)."ea#in$ Pr'#entia" a& !o,."aintiff, after t(e "atter
(a# .ai# 0i""ia) /ine&, In!- t(e va"'e of t(e ('"" an#
)a!(inery in&'ran!e on t(e MRM Mani"a City- A& a
re&'"t of &'!( .ay)ent Pr'#entia" a& &'+ro$ate# to
t(e !"ai) of PD9 )i""ion, re.re&entin$ t(e va"'e of
t(e &ai# in&'ran!e it .ai#-
On G'ne 40, 455D, t(e tria" !o'rt a .uo !a)e o't
it( a J'#$)ent a$ain&t CS>0H
4- To .ay 'nto ."aintiff Pr'#entia" G'arantee an#
A&&'ran!e, In!-, t(e &'+ro$ee, t(e a)o'nt of PD9M,
it( intere&t at t(e "e$a" rate 'nti" f'"" .ay)ent i&
)a#e; t(e a)o'nt of P96,C49,000 re.re&entin$ "o&&
of in!o)e of MRM MANI/A CITF, it( intere&t at t(e
"e$a" rate 'nti" f'"" .ay)ent i& )a#e;
2- To .ay 'nto ."aintiff, 0i""ia) /ine&, In!- t(e
a)o'nt of P44M a& .ay)ent, in a##ition to (at it
re!eive# fro) t(e in&'ran!e !o).any to f'""y !over
t(e inJ'ry or "o&&, in or#er to re."a!e t(e MRM
MANI/A CITF, it( intere&t at t(e "e$a" rate 'nti" f'""
.ay)ent i& )a#e; t(e &') of P52C,035 for t(e "o&&
of f'e" an# "'+ oi" on +oar# t(e ve&&e" (en &(e a&
!o)."ete"y $'tte# +y fire at #efen#ant, Ce+'
S(i.yar#=& ;'ay, it( intere&t at t(e "e$a" rate 'nti"
f'"" .ay)ent i& )a#e; t(e &') of P3,09D,6CC-59 a&
.ay)ent for t(e &.are .art& an# )ateria"& '&e# in
t(e MRM MANI/A CITF #'rin$ #ry,#o!2in$ it(
intere&t at t(e "e$a" rate 'nti" f'"" .ay)ent i& )a#e;
P900,000 in )ora" #a)a$e&;t(e a)o'nt of P40Min
attorney=& fee&; an# to .ay t(e !o&t& of t(i& &'it-
, On Se.te)+er 3, 455C, t(e Co'rt of A..ea"&
affir)e# t(e a..ea"e# #e!i&ion of t(e tria" !o'rt,
or#erin$ CS>0 to .ay Pr'#entia", t(e &'+ro$ee, t(e
&') of PD9 Mi""ion, it( intere&t at t(e "e$a" rate
'nti" f'"" .ay)ent i& )a#e-
INSURANCE Page 5
CSEW4* $e"*'#+9
On *e+- 43, 4554, t(e CS>0 !o)."ete# t(e
#ry#o!2in$ of MRM Mani"a City at it& $rave #o!2- It
a& t(en tran&ferre# to t(e #o!2in$ ;'ay of CS>0
(ere t(e re)ainin$ re.air to +e #one a& t(e
re."atin$ of t(e to. of 0ater Ba""a&t Tan2 No- 42
(i!( a& &'+!ontra!te# +y CS>0 to GNB Genera"
Servi!e&- Tan2 To. No- 42 a& at t(e rear &e!tion of
t(e ve&&e", on "eve" it( t(e f"oorin$ of t(e !re
!a+in& "o!ate# on t(e ve&&e"=& &e!on# #e!2-
At aro'n# CAM of *e+- 46, 4554, t(e GNB or2er&
tri))e# an# !"eane# t(e tan2 to. fra)in$ (i!(
invo"ve# )inor (otor2& @e"#in$R!'ttin$ or2&A-
T(e &ai# or2 a& !o)."ete# at a+o't 40AM- T(e
GNB or2er& t(en .ro!ee#e# to ri$ t(e &tee" ."ate&,
after (i!( t(ey (a# t(eir "'n!( +rea2- T(e ri$$in$
a& re&')e# at 4PM
0(i"e in t(e .ro!e&& of ri$$in$ t(e &e!on# &tee"
."ate, t(e GNB or2er& noti!e# &)o2e !o)in$ fro)
t(e .a&&a$eay a"on$ t(e !re !a+in&- 0(en one of
t(e or2er&, Mr- Ca&a&, .ro!ee#e# to t(e
.a&&a$eay to a&!ertain t(e ori$in of t(e &)o2e, (e
noti!e# t(at &)o2e a& $at(erin$ on t(e !ei"in$ of
t(e .a&&a$eay +'t #i# not &ee any fire a& t(e !re
!a+in& on eit(er &i#e of t(e .a&&a$eay ere "o!2e#-
1e i))e#iate"y &o'$(t o't t(e .ro.rietor of GNB,
Mr- B'enavi&ta, an# t(e Safety Offi!er of CS>0, Mr-
Ave&, (o &o'n#e# t(e fire a"ar)- CS>0=& fire
+ri$a#e i))e#iate"y re&.on#e# a& e"" a& t(e ot(er
fire fi$(tin$ 'nit& in Metro Ce+'- 1oever, t(ere
ere no 0/I re.re&entative, offi!er or !re to $'i#e
t(e fire)en in&i#e t(e ve&&e"-
, Ee&.ite t(e !o)+ine# effort& of t(e fire)en of t(e
/a.'"a.' City *ire Ee.t-, Man#a'e *ire Ee.t-,
Cor#ova *ire Ee.t- >)er$en!y <e&!'e Unit
*o'n#ation, an# fire +ri$a#e of CS>0, t(e fire a&
not !ontro""e# 'nti" 2AM of t(e fo""oin$ #ay-
, On t(e ear"y )ornin$ of *e+- 4C, 4554, $'&ty in#&
re2in#"e# t(e f"a)e& on t(e ve&&e" an# fire a$ain
+ro2e o't- T(en t(e ('$e a)o'nt& of ater .').e#
into t(e ve&&e", !o'."e# it( t(e &tron$ !'rrent,
!a'&e# t(e ve&&e" to ti"t 'nti" it !a.&i:e# an# &an2
, 0(en MRM Mani"a City !a.&i:e#, &tee" an# an$"e
+ar& ere noti!e# to (ave +een ne"y e"#e# a"on$
t(e .ort &i#e of t(e ('"" of t(e ve&&e", at t(e "eve" of
t(e !re !a+in&- 0i""ia) /ine& #i# not .revio'&"y
a.."y for a .er)it to #o (otor2& on t(e &ai# .ortion
of t(e &(i. a& it &(o'"# (ave #one .'r&'ant to it&
or2 or#er it( CS>0-
Prudentials version
B At aro'n# CAM of *e+- 46, 4554, t(e C(ief Mate of
MRM Mani"a City a& in&.e!tin$ t(e vario'& or2&
+ein$ #one +y CS>0 on t(e ve&&e", (en (e &a
t(at &o)e or2er& of CS>0 ere !ro..in$ o't &tee"
."ate& on Tan2 To. No- 42 '&in$ a!ety"ene, o%y$en
an# e"#in$ tor!(- 1e a"&o o+&erve# t(at t(e r'++er
in&'"ation ire !o)in$ o't of t(e air,!on#itionin$
'nit a& a"rea#y +'rnin$, .ro).tin$ (i) to &!o"# t(e
or2er&-
B At 2HD9 PM of t(e &a)e #ay, itne&&e& &a &)o2e
!o)in$ fro) Tan2 No- 42- T(e ve&&e"=& reefer)an
re.orte# &'!( o!!'ren!e to t(e C(ief Mate (o
i))e#iate"y a&&e)+"e# t(e !re )e)+er& to .'t
o't t(e fire- 0(en it a& too (ot for t(e) to &tay on
+oar# an# &eein$ t(at t(e fire !annot +e !ontro""e#,
t(e ve&&e"=& !re ere for!e# to it(#ra fro)
CS>0=& #o!2in$ ;'ay-
, In t(e )ornin$ of *e+- 4C, 4554, MRM Mani"a City
&an2- A& t(e ve&&e" a& in&'re# it( Pr'#entia"
G'arantee, 0i""ia) /ine& fi"e# a !"ai) for
!on&tr'!tive tota" "o&&, an# after a t(oro'$(
inve&ti$ation of t(e &'rro'n#in$ !ir!')&tan!e& of t(e
tra$e#y, Pr'#entia" fo'n# t(e &ai# in&'ran!e !"ai) to
+e )eritorio'& an# i&&'e# a !(e!2 in favor of
0i""ia) /ine& in t(e a)o'nt of PD9 )i""ion .e&o&
re.re&entin$ t(e tota" va"'e of MRM Mani"a City=& ('""
an# )a!(inery in&'ran!e-
ISSUES
4- 0ON CS>0 (a# 7)ana$e)ent an# &'.ervi&ory
!ontro"7 of t(e )Rv )ani"a !ity at t(e ti)e t(e fire
+ro2e o't
2- 0ON t(e #o!trine of re& i.&a "o;'it'r a.."ie&
a$ain&t t(e !re
3- 0ON CS>0=S e%.ert evi#en!e i& a#)i&&i+"e or of
.ro+ative va"'e
D- 0ON Pr'#entia" (a& t(e ri$(t of &'+ro$ation
a$ain&t it& on in&'re# T1> CONT<ACTUA/ 9- 9- 9-
9- 0ON t(e .rovi&ion& "i)itin$ !&e=& "ia+i"ity for
ne$"i$en!e to a )a%i)') of .4 )i""ion are va"i#
HELD
4- F>S
, T(e t(at fa!t'a" fin#in$& +y t(e CA are !on!"'&ive
on t(e .artie& an# are not reviea+"e +y t(i& Co'rt-
T(ey are entit"e# to $reat ei$(t an# re&.e!t, even
fina"ity, e&.e!ia""y (en, a& in t(i& !a&e, t(e CA
affir)e# t(e fa!t'a" fin#in$& arrive# at +y t(e tria"
!o'rt- 0(en &'..orte# +y &'ffi!ient evi#en!e,
fin#in$& of fa!t +y t(e CA affir)in$ t(o&e of t(e tria"
!o'rt, are not to +e #i&t'r+e# on a..ea"- T(e
rationa"e +e(in# t(i& #o!trine i& t(at revie of t(e
fin#in$& of fa!t of t(e CA i& not a f'n!tion t(at t(e
S'.re)e Co'rt nor)a""y 'n#erta2e&-
, T(e CA an# t(e Ce+' <TC are a$ree# t(at t(e fire
(i!( !a'&e# t(e tota" "o&& of &'+Je!t MRM Mani"a
City a& #'e to t(e ne$"i$en!e of t(e e)."oyee& an#
or2er& of CS>0- Bot( !o'rt& fo'n# t(at t(e MRM
Mani"a City a& 'n#er t(e !'&to#y an# !ontro" of
.etitioner CS>0, (en t(e i"",fate# ve&&e" !a'$(t
fire- T(e #e!i&ion& of +ot( t(e "oer !o'rt an# t(e CA
&et fort( !"ear"y t(e evi#en!e &'&tainin$ t(eir fin#in$
of a!tiona+"e ne$"i$en!e on t(e .art of CS>0- T(i&
fa!t'a" fin#in$ i& a!!or#e# $reat ei$(t an# i&
!on!"'&ive on t(e .artie&- T(e !o'rt #i&!ern& no +a&i&
for #i&t'r+in$ &'!( fin#in$ fir)"y an!(ore# on
eno'$( evi#en!e-
, *'rt(er)ore, in .etition& for revie on certiorari,
on"y ;'e&tion& of "a )ay +e .'t into i&&'e-
Q'e&tion& of fa!t !annot +e entertaine#- T(e fin#in$
of ne$"i$en!e +y t(e CA i& a ;'e&tion (i!( t(i&
Co'rt !annot "oo2 into a& it o'"# entai" $oin$ into
fa!t'a" )atter& on (i!( t(e fin#in$ of ne$"i$en!e
a& +a&e#- S'!( an a..roa!( !annot +e a""oe# +y
t(i& Co'rt in t(e a+&en!e of !"ear &(oin$ t(at t(e
!a&e fa""& 'n#er any of t(e e%!e.tion& to t(e e"",
e&ta+"i&(e# .rin!i."e-
T(e fin#in$ +y t(e tria" !o'rt an# t(e Co'rt of
A..ea"& t(at MRM Mani"a City !a'$(t fire an# &an2 +y
rea&on of t(e ne$"i$en!e of t(e or2er& of CS>0,
(en t(e &ai# ve&&e" a& 'n#er t(e e%!"'&ive
!'&to#y an# !ontro" of CS>0 i& a!!or#in$"y '.(e"#-
2- F>S
, *or t(e #o!trine of re& i.&a "o;'it'r to a.."y to a
$iven &it'ation, t(e fo""oin$ !on#ition& )'&t !on!'rH
@4A t(e a!!i#ent a& of a 2in# (i!( #oe& not
or#inari"y o!!'r 'n"e&& &o)eone i& ne$"i$ent; an# @2A
t(at t(e in&tr')enta"ity or a$en!y (i!( !a'&e# t(e
inJ'ry a& 'n#er t(e e%!"'&ive !ontro" of t(e .er&on
!(ar$e# it( ne$"i$en!e-
T(e fa!t& an# evi#en!e on re!or# revea" t(e
!on!'rren!e of &ai# !on#ition& in t(e !a&e 'n#er
&!r'tiny- *ir&t, t(e fire t(at o!!'rre# an# !on&')e#
MRM Mani"a City o'"# not (ave (a..ene# in t(e
or#inary !o'r&e of t(in$& if rea&ona+"e !are an#
#i"i$en!e (a# +een e%er!i&e#- In ot(er or#&, &o)e
ne$"i$en!e )'&t (ave o!!'rre#- Se!on#, t(e a$en!y
!(ar$e# it( ne$"i$en!e, a& fo'n# +y t(e tria" !o'rt
an# t(e CA an# a& &(on +y t(e re!or#&, i& t(e
(erein .etitioner, CS>0, (i!( (a# !ontro" over
&'+Je!t ve&&e" (en it a& #o!2e# for ann'a" re.air&-
So a"&o, a& fo'n# +y t(e <TC, 7ot(er re&.on&i+"e
!a'&e&, in!"'#in$ t(e !on#'!t of t(e ."aintiff, an#
t(ir# .er&on&, are &'ffi!ient"y e"i)inate# +y t(e
evi#en!e-8
INSURANCE Page 6
0(at i& )ore, in t(e .re&ent !a&e t(e tria" !o'rt
fo'n# #ire!t evi#en!e to .rove t(at t(e or2er&
an#Ror e)."oyee& of CS>0 ere re)i&& in t(eir #'ty
of e%er!i&in$ #'e #i"i$en!e in t(e !are of &'+Je!t
ve&&e"- T(e #ire!t evi#en!e &'+&tantiate& t(e
!on!"'&ion t(at CS>0 a& rea""y ne$"i$ent- T('&,
even it(o't a.."yin$ t(e #o!trine of re& i.&a
"o;'it'r, in "i$(t of t(e #ire!t evi#en!e on re!or#, t(e
ine"'!ta+"e !on!"'&ion i& t(at CS>0 a& ne$"i$ent
an# !on&e;'ent"y "ia+"e for #a)a$e& to t(e
re&.on#ent, 0i""ia) /ine&, In!-
3- NO
, Petitioner )aintain& t(at t(e CA erre# in
#i&re$ar#in$ t(e te&ti)onie& of t(e fire e%.ert&,
Me&&r&- Eavi# Grey an# Gre$ory Mi!(ae" So't(ear#,
(o te&tifie# on t(e .ro+a+"e ori$in of t(e fire in MRM
Mani"a City- Petitioner aver& t(at &in!e t(e &ai# fire
e%.ert& ere one in t(eir o.inion t(at t(e fire #i# not
ori$inate in t(e area of Tan2 To. No- 42 (ere t(e
GNB or2er& ere #oin$ (otor2& +'t on t(e !re
a!!o))o#ation !a+in& on t(e .ort&i#e No- 2 #e!2,
t(e <TC an# t(e CA &(o'"# (ave $iven ei$(t to
&'!( fin#in$ +a&e# on t(e te&ti)onie& of fire e%.ert&;
.etitioner ar$'e&-
B't !o'rt& are not +o'n# +y t(e te&ti)onie& of
e%.ert itne&&e&- A"t(o'$( t(ey )ay (ave .ro+ative
va"'e, re!e.tion in evi#en!e of e%.ert te&ti)onie& i&
it(in t(e #i&!retion of t(e !o'rt, 'n#er Se!tion D5,
<'"e 430 of t(e <evi&e# <'"e& of Co'rt- It i& never
)an#atory for J'#$e& to $ive &'+&tantia" ei$(t to
e%.ert te&ti)onie&- If fro) t(e fa!t& an# evi#en!e on
re!or#, a !on!"'&ion i& rea#i"y a&!ertaina+"e, t(ere i&
no nee# for t(e J'#$e to re&ort to e%.ert o.inion
evi#en!e- In t(e !a&e 'n#er !on&i#eration, t(e
te&ti)onie& of t(e fire e%.ert& ere not t(e on"y
avai"a+"e evi#en!e on t(e .ro+a+"e !a'&e an# ori$in
of t(e fire- T(ere ere itne&&e& (o ere a!t'a""y
on +oar# t(e ve&&e" (en t(e fire o!!'rre#- Beteen
t(e te&ti)onie& of t(e fire e%.ert& (o )ere"y +a&e#
t(eir fin#in$& an# o.inion& on intervie& an# t(e
te&ti)onie& of t(o&e .re&ent #'rin$ t(e fire, t(e
"atter are of )ore .ro+ative va"'e-
D- F>S
, Petitioner !onten#& t(at Pr'#entia" i& not entit"e# to
+e &'+ro$ate# to t(e ri$(t& of 0i""ia) /ine&, In!-,
t(eori:in$ t(at @4A t(e fire (i!( $'tte# MRM Mani"a
City a& an e%!"'#e# ri&2 an# @2A it i& a !o,a&&'re#
'n#er t(e Marine 1'"" In&'ran!e Po"i!y-
, It i& .etitioner=& &'+)i&&ion t(at t(e "o&& of MRM
Mani"a City or #a)a$e t(ereto i& e%.re&&"y e%!"'#e#
fro) t(e !overa$e of t(e in&'ran!e +e!a'&e t(e
&a)e re&'"te# fro) 7ant of #'e #i"i$en!e +y t(e
A&&'re#, Oner& or Mana$er&8 (i!( i& not in!"'#e#
in t(e ri&2& in&'re# a$ain&t- A$ain, t(i& t(eory of
.etitioner i& +ereft of any fa!t'a" or "e$a" +a&i&- It
.ro!ee#& fro) a ron$ .re)i&e t(at t(e fire (i!(
$'tte# &'+Je!t ve&&e" a& !a'&e# +y t(e ne$"i$en!e
of t(e e)."oyee& of 0i""ia) /ine&, In!- To re.eat,
t(e i&&'e of (o +eteen t(e .artie& a& ne$"i$ent
(a& a"rea#y +een re&o"ve# a$ain&t CS>0- U.on .roof
of .ay)ent +y Pr'#entia" to 0i""ia) /ine&, In!-, t(e
for)er a& &'+ro$ate# to t(e ri$(t of t(e "atter to
in#e)nifi!ation fro) CS>0- A& a.t"y r'"e# +y t(e
Co'rt of A..ea"&, t(e "a on t(e )atter i& &'!!in!t
an# !"ear, to itH
- Art. 2234. 'f t!e #laintiff5s #ro#erty !as been
insured$ and !e !as received indenity fro t!e
insurance co#any for t!e in6ury or loss arisin" out
of t!e ,ron" or breac! of contract co#lained of$
t!e insurance co#any s!all be subro"ated to t!e
ri"!ts of t!e insured a"ainst t!e ,ron"doer or t!e
#erson ,!o !as violated t!e contract. 'f t!e aount
#aid by t!e insurance co#any does not fully cover
t!e in6ury or loss$ t!e a""rieved #arty s!all be
entitled to recover t!e deficiency fro t!e #erson
causin" t!e loss or in6ury.
, T('&, (en Pr'#entia", after #'e verifi!ation of t(e
)erit an# va"i#ity of t(e in&'ran!e !"ai) of 0i""ia)
/ine&, In!-, .ai# t(e "atter t(e tota" a)o'nt !overe#
+y it& in&'ran!e .o"i!y, it a& &'+ro$ate# to t(e ri$(t
of t(e "atter to re!over t(e in&'re# "o&& fro) t(e
"ia+"e .arty, CS>0-
, Petitioner t(eori:e& f'rt(er t(at t(ere !an +e no
ri$(t of &'+ro$ation a& it i& #ee)e# a !o,a&&'re#
'n#er t(e &'+Je!t in&'ran!e .o"i!y- To +'ttre&& it&
&tan!e t(at it i& a !o,a&&'re#, .etitioner ."a!e#
re"ian!e on C"a'&e 20 of t(e 0or2 Or#er (i!(
&tate&H
23. /!e insurance on t!e vessel s!ould be
aintained by t!e custoer and/or o,ner of t!e
vessel durin" t!e #eriod t!e contract is in effect.
, A!!or#in$ to .etitioner, 'n#er t(e afore!ite# !"a'&e,
0i""ia) /ine&, In!-, a$ree# to a&&')e t(e ri&2 of "o&&
of t(e ve&&e" (i"e 'n#er #ry#o!2 or re.air an# to
&'!( e%tent, it i& +enefite# an# effe!tive"y
!on&tit'te# a& a !o,a&&'re# 'n#er t(e .o"i!y-
, T(i& t(eory of .etitioner i& #evoi# of &'&taina+"e
)erit- C"a'&e 20 of t(e 0or2 Or#er in ;'e&tion i&
!"ear in t(e &en&e t(at it re;'ire& 0i""ia) /ine& to
)aintain in&'ran!e on t(e ve&&e" #'rin$ t(e .erio# of
#ry,#o!2in$ or re.air- Con!e#e#"y, &'!( a &ti.'"ation
or2& to t(e +enefit of CS>0 a& t(e &(i.re.airer-
1oever, t(e fa!t t(at CS>0 +enefit& fro) t(e &ai#
&ti.'"ation #oe& not a'to)ati!a""y )a2e it a& a !o,
a&&'re# of 0i""ia) /ine&- T(e intention of t(e .artie&
to )a2e ea!( ot(er a !o,a&&'re# 'n#er an in&'ran!e
.o"i!y i& to +e $"eane# .rin!i.a""y fro) t(e in&'ran!e
!ontra!t or .o"i!y it&e"f an# not fro) any ot(er
!ontra!t or a$ree)ent +e!a'&e t(e in&'ran!e .o"i!y
#eno)inate& t(e a&&'re# an# t(e +enefi!iarie& of t(e
in&'ran!e- T(e ('"" an# )a!(inery in&'ran!e
.ro!'re# +y 0i""ia) /ine&, In!- fro) Pr'#entia"
na)e# on"y 70i""ia) /ine&, In!-8 a& t(e a&&'re#-
T(ere a& no )anife&tation of any intention of
0i""ia) /ine&, In!- to !on&tit'te CS>0 a& a !o,
a&&'re# 'n#er &'+Je!t .o"i!y- It i& a%io)ati! t(at
(en t(e ter)& of a !ontra!t are !"ear it& &ti.'"ation&
!ontro"-
i]
T('&, (en t(e in&'ran!e .o"i!y invo"ve#
na)e# on"y 0i""ia) /ine&, In!- a& t(e a&&'re#
t(ere'n#er, t(e !"ai) of CS>0 t(at it i& a !o,a&&'re#
i& 'nfo'n#e#-
, T(en too, in t(e A##itiona" Peri"& C"a'&e of t(e
&a)e Marine In&'ran!e Po"i!y, it i& .rovi#e# t(atH
Sub6ect to t!e conditions of t!is Policy$ t!is
insurance also covers loss of or daa"e to vessel
directly caused by t!e follo,in"7
888
1e"li"ence of C!arterers and/or 9e#airers$ #rovided
suc! C!arterers and/or 9e#airers are not an
Assured !ereunder.
, A& !orre!t"y .ointe# o't +y re&.on#ent Pr'#entia",
if CS>0 ere #ee)e# a !o,a&&'re# 'n#er t(e .o"i!y,
it o'"# n'""ify any !"ai) of 0i""ia) /ine&, In!- fro)
Pr'#entia" for any "o&& or #a)a$e !a'&e# +y t(e
ne$"i$en!e of CS>0- Certain"y, no &(i.oner o'"#
a$ree to )a2e a &(i.re.airer a !o,a&&'re# 'n#er
&'!( in&'ran!e .o"i!y; ot(eri&e, any !"ai) for "o&&
or #a)a$e 'n#er t(e .o"i!y o'"# +e inva"i#ate#-
S'!( re&'"t !o'"# not (ave +een inten#e# +y 0i""ia)
/ine&, In!-
9- NO
, A"t(o'$( in t(i& J'ri&#i!tion, !ontra!t& of a#(e&ion
(ave +een !on&i&tent"y '.(e"# a& va"i# .er &e; a&
+in#in$ a& an or#inary !ontra!t, t(e Co'rt re!o$ni:e&
in&tan!e& (en re"ian!e on &'!( !ontra!t& !annot +e
favore# e&.e!ia""y (ere t(e fa!t& an# !ir!')&tan!e&
arrant t(at &'+Je!t &ti.'"ation& +e #i&re$ar#e#-
T('&, in r'"in$ on t(e va"i#ity an# a.."i!a+i"ity of t(e
&ti.'"ation "i)itin$ t(e "ia+i"ity of CS>0 for
ne$"i$en!e to P4M on"y, t(e fa!t& an# !ir!')&tan!e&
vi&,a,vi& t(e nat're of t(e .rovi&ion &o'$(t to +e
INSURANCE Page 7
enfor!e# &(o'"# +e !on&i#ere#, +earin$ in )in# t(e
.rin!i."e& of e;'ity an# fair ."ay-
, It i& ort(y to note t(at MRM Mani"a City a&
in&'re# it( Pr'#entia" for PD9M- To #eter)ine t(e
va"i#ity an# &'&taina+i"ity of t(e !"ai) of 0i""ia)
/ine&, In!-, for a tota" "o&&, Pr'#entia" !on#'!te# it&
on in;'iry- U.on t(oro'$( inve&ti$ation +y it& ('""
&'rveyor, MRM Mani"a City a& fo'n# to +e +eyon#
e!ono)i!a" &a"va$e an# re.air- T(e eva"'ation of t(e
avera$e a#J'&ter a"&o re.orte# a !on&tr'!tive tota"
"o&&- T(e &ai# !"ai) of 0i""ia) /ine&, In!-, a& t(en
fo'n# to +e va"i# an# !o).en&a+"e &'!( t(at
Pr'#entia" .ai# t(e "atter t(e tota" va"'e of it&
in&'ran!e !"ai)- *'rt(er)ore, it a& a&!ertaine# t(at
t(e re."a!e)ent !o&t of t(e ve&&e" @t(e .ri!e of a
ve&&e" &i)i"ar to MRM Mani"a CityA, a)o'nt& to P99M-
, Con&i#erin$ t(e afore&tate# !ir!')&tan!e&, "et
a"one t(e fa!t t(at ne$"i$en!e on t(e .art of
.etitioner (a& +een &'ffi!ient"y .roven, it o'"#
in#ee# +e 'nfair an# ine;'ita+"e to "i)it t(e "ia+i"ity
of .etitioner to One Mi""ion Pe&o& on"y- A& a.t"y (e"#
+y t(e tria" !o'rt, 7it i& rat(er 'n!on&!iona+"e if not
over&traine#-8 To a""o CS>0 to "i)it it& "ia+i"ity to
P4M notit(&tan#in$ t(e fa!t t(at t(e tota" "o&&
&'ffere# +y t(e a&&'re# an# .ai# for +y Pr'#entia"
a)o'nte# to PD9M o'"# &an!tion t(e e%er!i&e of a
#e$ree of #i"i$en!e &(ort of (at i& or#inari"y
re;'ire# +e!a'&e, t(en, it o'"# not +e #iffi!'"t for
.etitioner to e&!a.e "ia+i"ity +y t(e &i)."e e%.e#ient
of .ayin$ an a)o'nt very )'!( "oer t(an t(e
a!t'a" #a)a$e or "o&& &'ffere# +y 0i""ia) /ine&, In!-
Disposition Petition i& E>NI>E- <e&o"'tion of t(e
CA i& A**I<M>E-
NEW LIFE ENTERPRISES V CA
20C SC<A 665
<>GA/AEO; Mar!( 34, 4552
NATURE
A..ea" +y !ertiorari
FACTS
, T(e ante!e#ent& of t(i& !a&e &(o t(at G'"ian Sy
an# Go&e Sy Ban$ (ave for)e# a +'&ine&&
.artner&(i. in t(e City of /'!ena- Un#er t(e +'&ine&&
na)e of Ne /ife >nter.ri&e&, t(e .artner&(i.
en$a$e# in t(e &a"e of !on&tr'!tion )ateria"& at it&
."a!e of +'&ine&&, a to &torey +'i"#in$ &it'ate# at
Iya), /'!ena City- T(e fa!t& &(o t(at G'"ian Sy
in&'re# t(e &to!2& in tra#e of Ne /ife >nter.ri&e&
it( 0e&tern G'aranty Cor.oration, <e"ian!e S'rety
an# In&'ran!e Co- In!-, an# >;'ita+"e In&'ran!e
Cor.oration-
, On May 49, 4564, 0e&tern G'aranty Cor.oration
i&&'e# *ire In&'ran!e Po"i!y No- 3C204 in t(e a)o'nt
of P390,000-00- T(i& .o"i!y a& renee# on May 43,
4562-
, On G'"y 30, 4564, <e"ian!e S'rety an# In&'ran!e
Co-, In!- i&&'e# *ire In&'ran!e Po"i!y No- 65439 in
t(e a)o'nt of P300,000-00 @<enee# 'n#er
<enea" Certifi!ate No- D455CA- An a##itiona"
in&'ran!e a& i&&'e# +y t(e &a)e !o).any on
Nove)+er 42, 4564 'n#er *ire In&'ran!e Po"i!y No-
C49DC in t(e a)o'nt of PC00,000-00-
, On *e+r'ary 6, 4562, >;'ita+"e In&'ran!e
Cor.oration i&&'e# *ire In&'ran!e Po"i!y No- 35326
in t(e a)o'nt of P200,000-00-
, T('& (en t(e +'i"#in$ o!!'.ie# +y t(e Ne /ife
>nter.ri&e& a& $'tte# +y fire at a+o't 2H00 oN!"o!2
in t(e )ornin$ of O!to+er 45, 4562, t(e &to!2& in
tra#e in&i#e &ai# +'i"#in$ ere in&'re# a$ain&t fire in
t(e tota" a)o'nt of P4,990,000-00- A!!or#in$ to t(e
!ertifi!ation i&&'e# +y t(e 1ea#;'arter&, P(i"i..ine
Con&ta+'"aryRInte$rate# Nationa" Po"i!e, Ca).
Cra)e, t(e !a'&e of fire a& e"e!tri!a" in nat're-
A!!or#in$ to t(e ."aintiff&, t(e +'i"#in$ an# t(e
&to!2& in&i#e ere +'rne#- After t(e fire, G'"ian Sy
ent to t(e a$ent of <e"ian!e In&'ran!e (o) (e
a&2e# to a!!o).any (i) to t(e offi!e of t(e
!o).any &o t(at (e !an fi"e (i& !"ai)- 1e averre#
t(at in &'..ort of (i& !"ai), (e &'+)itte# t(e fire
!"earan!e, t(e in&'ran!e .o"i!ie& an# inventory of
&to!2&-
1e f'rt(er te&tifie# t(at t(e t(ree in&'ran!e
!o).anie& are &i&ter !o).anie&, an# a& a )atter of
fa!t (en (e a& fo""oin$,'. (i& !"ai) it(
>;'ita+"e In&'ran!e, t(e C"ai)& Mana$er to"# (i) to
$o fir&t to <e"ian!e In&'ran!e an# if &ai# !o).any
a$ree& to .ay, t(ey o'"# a"&o .ay- T(e &a)e
treat)ent a& $iven (i) +y t(e ot(er in&'ran!e
!o).anie&- U"ti)ate"y, t(e t(ree in&'ran!e
!o).anie& #enie# ."aintiff&N !"ai) for .ay)ent-
Respondents comments
B 0e&tern G'aranty Cor.oration t(ro'$( C"ai)&
Mana$er Bernar# S- <a:on to"# t(e ."aintiff t(at (i&
!"ai) Ni& #enie# for +rea!( of .o"i!y !on#ition&-N
<e"ian!e In&'ran!e .'rveye# t(e &a)e )e&&a$e a&
e"" a& >;'ita+"e In&'ran!e Cor.oration-
, T(e &ai# .o"i!y in ;'e&tion fo""o&H
PT(e in&'re# &(a"" $ive noti!e to t(e Co).any of any
in&'ran!e or in&'ran!e& a"rea#y effe!te#, or (i!(
)ay &'+&e;'ent"y +e effe!te#, !overin$ any of t(e
.ro.erty or .ro.ertie& !on&i&tin$ of &to!2& in tra#e,
$oo#& in .ro!e&& an#Ror inventorie& on"y (ere+y
in&'re#, an# 'n"e&& &'!( noti!e +e $iven an# t(e
.arti!'"ar& of &'!( in&'ran!e or in&'ran!e& +e &tate#
t(erein or en#or&e# on t(i& .o"i!y .'r&'ant to
Se!tion 90 of t(e In&'ran!e Co#e, +y or on +e(a"f of
t(e Co).any +efore t(e o!!'rren!e of any "o&& or
#a)a$e, a"" +enefit& 'n#er t(i& .o"i!y &(a"" +e
#ee)e# forfeite#, .rovi#e# (oever, t(at t(i&
!on#ition &(a"" not a.."y (en t(e tota" in&'ran!e or
in&'ran!e& in for!e at t(e ti)e of "o&& or #a)a$e i&
not )ore t(an P200,000-00-P
Petitioners comments
B Petitioner& !onten# t(at t(ey are not to +e +"a)e#
for t(e o)i&&ion&, a""e$in$ t(at in&'ran!e a$ent /eon
A"vare: @for 0e&ternA an# Fa. Ia) C('an @for
<e"ian!e an# >;'ita+"eA 2ne a+o't t(e e%i&ten!e of
t(e a##itiona" in&'ran!e !overa$e an# t(at t(ey ere
not infor)e# a+o't t(e re;'ire)ent t(at &'!( ot(er
or a##itiona" in&'ran!e &(o'"# +e &tate# in t(e .o"i!y,
a& t(ey (ave not even rea# &ai# .o"i!ie&-
ISSUE
0ON Ne /ife >nter.ri&e&= !"ai) for .ay)ent +e
#enie#
HELD
F>S
Ratio *'rt(er)ore, (en t(e or#& an# "an$'a$e of
#o!')ent& are !"ear an# ."ain or rea#i"y
'n#er&tan#a+"e +y an or#inary rea#er t(ereof, t(ere
i& a+&o"'te"y no roo) for inter.retation or
!on&tr'!tion any)ore- Co'rt& are not a""oe# to
)a2e !ontra!t& for t(e .artie&; rat(er, t(ey i""
intervene on"y (en t(e ter)& of t(e .o"i!y are
a)+i$'o'&, e;'ivo!a", or 'n!ertain- T(e .artie&
)'&t a+i#e +y t(e ter)& of t(e !ontra!t +e!a'&e
&'!( ter)& !on&tit'te t(e )ea&'re of t(e in&'rerN&
"ia+i"ity an# !o)."ian!e t(ereit( i& a !on#ition
.re!e#ent to t(e in&'re#N& ri$(t of re!overy fro) t(e
in&'rer-
, 0(i"e it i& a !ar#ina" .rin!i."e of in&'ran!e "a t(at
a .o"i!y or !ontra!t of in&'ran!e i& to +e !on&tr'e#
"i+era""y in favor of t(e in&'re# an# &tri!t"y a$ain&t
t(e in&'rer !o).any, yet !ontra!t& of in&'ran!e, "i2e
ot(er !ontra!t&, are to +e !on&tr'e# a!!or#in$ to t(e
&en&e an# )eanin$ of t(e ter)& (i!( t(e .artie&
t(e)&e"ve& (ave '&e#- If &'!( ter)& are !"ear an#
'na)+i$'o'&, t(ey )'&t +e ta2en an# 'n#er&too# in
t(eir ."ain, or#inary an# .o.'"ar &en&e- Moreover,
o+"i$ation& ari&in$ fro) !ontra!t& (ave t(e for!e of
"a +eteen t(e !ontra!tin$ .artie& an# &(o'"# +e
!o)."ie# it( in $oo# fait(-
INSURANCE Page 8
Reasoning
a- T(e ter)& of t(e !ontra!t are !"ear an#
'na)+i$'o'&- T(e in&'re# i& &.e!ifi!a""y re;'ire# to
#i&!"o&e to t(e in&'rer any ot(er in&'ran!e an# it&
.arti!'"ar& (i!( (e )ay (ave effe!te# on t(e &a)e
&'+Je!t )atter- T(e 2no"e#$e of &'!( in&'ran!e +y
t(e in&'rerN& a$ent&, even a&&')in$ t(e a!;'i&ition
t(ereof +y t(e for)er, i& not t(e Pnoti!eP t(at o'"#
&to. t(e in&'rer& fro) #enyin$ t(e !"ai)- Be&i#e&,
t(e &o,!a""e# t(eory of i).'te# 2no"e#$e, t(at i&,
2no"e#$e of t(e a$ent i& 2no"e#$e of t(e .rin!i.a",
a&i#e fro) +ein$ of #'+io'& a.."i!a+i"ity (ere (a&
"i2ei&e +een ro'n#"y ref'te# +y re&.on#ent !o'rt
(o&e fa!t'a" fin#in$& e fin# a!!e.ta+"e-
+- Petitioner& &(o'"# +e aare of t(e fa!t t(at a
.arty i& not re"ieve# of t(e #'ty to e%er!i&e t(e
or#inary !are an# .r'#en!e t(at o'"# +e e%a!te# in
re"ation to ot(er !ontra!t&- T(e !onfor)ity of t(e
in&'re# to t(e ter)& of t(e .o"i!y i& i)."ie# fro) (i&
fai"'re to e%.re&& any #i&a$ree)ent it( (at i&
.rovi#e# for-
FIRST =UEZON CITY INSURANCE CO. $. CA (DE
DIOS MARI<INA TRANSPORT CO)
246 SC<A 926
G<INO,AQUINO; *e+r'ary 26, 4553
NATURE
P>TITION for revie of t(e #e!i&ion of t(e Co'rt of
A..ea"&- *QCIC &ee2& to "i)it to P42000, t(e a)o'nt
&.e!ifie# in t(e in&'ran!e !ontra!t, it=& "ia+i"ity to
in#e)nify t(e re&.o)#e)t EMTC, for t(e #a)a$e&
&'ffere# +y a .a&&en$er, (o a!!i#enta""y fe"" off t(e
+'$-
FACTS
5 After &en#in$ off !ertain &ea)en at t(e #e.art're
area of MIA, Go&e M- #e" <o&ario .ro!ee#e# to t(e
.'+"i! 'ti"ity +'& &to.- 0(i"e at t(e +'& &to., t(e
."aintiff &a a EMTC +'&- 0(i"e )ovin$ at a !ra"in$
.a!e, it a& ta2in$ &evera" .a&&en$er&, a"" of (o)
)ana$e# to +oar# t(e +'& (i"e it a& a"rea#y at t(e
+'& &to.; ."aintiff a& t(e "a&t one to +oar# t(e +'&-
0(i"e t(e ."aintiff a& &ti"" on t(e +'& it( (i& (an#
on t(e +'& #oor, t(e &"o"y )ovin$ +'& &.e# forar#
at a (i$( &.ee#, a& a re&'"t of (i!(, t(e ."aintiff "o&t
+a"an!e an# fe"" fro) t(e +'&- A& ."aintiff !"'n$
in&tin!tive"y to t(e (an#"e +ar, (e a& #ra$$e# +y
t(e +'& a"on$ t(e a&.(a"te# roa#- T(e +'& #river, Gi"
A$.a"o, a+r'.t"y &to..e# t(e +'&- T(en f"e# fro) t(e
&!ene, "eavin$ t(e +'& an# t(e inJ're# ."aintiff
+e(in#-
, T(e ."aintiff a& +ro'$(t to t(e Mani"a Sanitari')
an# 1o&.ita" (ere t(e #o!tor& .erfor)e# 2 )aJor
&'r$i!a" o.eration& on ."aintiff& ri$(t "e$-
, P"aintiff a& !onfine# at t(e (o&.ita" for @D0A #ay&,
fro) G'ne 40, 456D to A'$'&t 26, 456D- Me#i!a"
e%.en&e& tota"e# t(e a)o'nt of P65,DDD-D4-
P"aintiff=& )e#i!a" e%.en&e& ere a#van!e# +y (i&
e)."oyer Ma$"ine& +'t (e a& re;'ire# to rei)+'r&e
Ma$"ine& on a &ta$$ere# +a&i& +y ay of &a"ary
#e#'!tion&- After (i& re"ea&e fro) t(e (o&.ita", (e
ret'rne# to t(e (o&.ita" for f'rt(er treat)ent an#
!(e!2'.- T(e inJ'rie& (a# "eft ."aintiff it( a ('$e
&!ar on (i& ri$(t "e$- A"&o, t(e ."aintiff in!'rre# "o&t
earnin$ +y ay of 'nearne# &a"arie& a)o'ntin$ to
PC,900-00 #'e to &ai# .(y&i!a" inJ'rie& an# t(e
!on&e;'ent (o&.ita" !onfine)ent-
, P"aintiff fi"e# on G'ne 26, 4569 t(e !o)."aint
a$ain&t EMTC an# it& #river- A$.a"o a& "ater
#ro..e# a& a .arty #efen#ant +e!a'&e (e !o'"# not
+e &erve# it( &'))on&- U.on fi"in$ it& an&er,
#efen#ant EMTC fi"e# a t(ir#.arty !o)."aint a$ain&t
*ir&t Q'e:on City In&'ran!e Co-, In!- Se.te)+er 4C,
4569, t(ir#,.arty #efen#ant fi"e# it& an&er to t(e
t(ir#,.arty !o)."aint-
, TC (e"# EMTC !o)."aint #i&)i&&e# for "a!2 of )erit
an# a& re$ar#& t(e t(ir#,.arty !o)."aint *ir&t
Q'e:on City In&'ran!e Co-, In!- a& to in#e)nify
t(ir#,.arty ."aintiff EMTC in t(e &') of P42,000-00
it( intere&t- T(ere +ein$ no &ati&fa!tory arrant t(e
!o'rt #i&)i&&e# t(e re&t of t(e !"ai)& in t(e
!o)."aint an# t(ir#,.arty !o)."aint-
, T(e +'& !o).any a..ea"e# to t(e CA, (i!(
)o#ifie# t(e #i&.o&itive a& re$ar#& t(e t(ir#,.arty
!o)."aint, t(at t(e t(ir#,.arty #efen#ant *ir&t
Q'e:on City In&'ran!e Co-, In!- +e or#ere# to
in#e)nify t(ir#,.arty ."aintiff EMTC t(e SUM of
P90,000-00 it( "e$a" intere&t- In&'ran!e !o).any
fi"e# a M*< (i!( a& #enie#-
1en!e, t(i& .etition for revie, a&&ai"in$ t(e
a..e""ate !o'rt&N inter.retation of t(e .rovi&ion of t(e
in&'ran!e !ontra!t on t(e "i)it of t(e in&'rerN&
"ia+i"ity-
ISSUE
0ON t(e CA erre# in t(e inter.retation of t(e
in&'ran!e !ontra!t on t(e "i)it of t(e in&'rer=&
"ia+i"ity
HELD
F>S
, T(e in&'ran!e .o"i!y !"ear"y ."a!e# t(e )a%i)')
"i)it of t(e .etitionerN& "ia+i"ity for #a)a$e& ari&in$
fro) #eat( or +o#i"y inJ'ry at P42,000-00 .er
.a&&en$er an# it& )a%i)') "ia+i"ity .er a!!i#ent at
@P90,000-00- Sin!e on"y one .a&&en$er a& inJ're#
in t(e a!!i#ent, t(e in&'rerN& "ia+i"ity for t(e #a)a$e&
&'ffere# +y &ai# .a&&en$er i& .e$$e# to t(e a)o'nt
of P42,000-00 on"y-
, T(e "i)it of P90,000-00 .er a!!i#ent )ean& t(at
t(e in&'rerN& )a%i)') "ia+i"ity for any &in$"e
a!!i#ent i"" not e%!ee# P90,000-00 re$ar#"e&& of t(e
n')+er of .a&&en$er& 2i""e# or inJ're# t(erein-
T(e +'& !o).any )ay not re!over fro) t(e
in&'ran!e !o).any )ore t(an P42,000-00 .er
.a&&en$er 2i""e# or inJ're#, or @P90,000-00A .er
a!!i#ent even if 'n#er t(e J'#$)ent of t(e !o'rt, t(e
errin$ +'& o.erator i"" (ave to .ay )ore t(an
P42,000-00 to ea!( inJ're# .a&&en$er- T(e tria"
!o'rtN& inter.retation of t(e in&'ran!e !ontra!t a&
t(e !orre!t inter.retation-
Disposition .etition for revie i& G<ANT>E- T(e
#e!i&ion .ro)'"$ate# +y t(e CA, or#erin$ t(e t(ir#
.arty #efen#ent, *ir&t Q'e:on City In&'ran!e Co-,
In!- to in#e)nify t(eI .rivate re&.on#ent, @EMTCA,
t(e &') of P90,000-00 for t(e #a)a$e& of t(e
.a&&en$er, Go&e M- Ee" <o&ario, i& (ere+y )o#ifie#
+y re#'!in$ t(e aar# to 42,000-00 on"y- Co&t&
a$ain&t t(e .rivate re&.on#ent Ee Eio& Mari2ina
Tran&.ortation Co-, In!-
TY V FIRST NATIONAL SURETY
4 SC<A 432D
/AB<AEO<; A.ri" 25, 4564
FACTS
, At #ifferent ti)e& it(in a .erio# of to )ont(&
.rior to 2D Ee!e)+er 4593, Eio&#a#o C- Ty,
e)."oye# a& o.erator )e!(ani! fore)an in t(e
Broa#ay Cotton *a!tory in&'re# (i)&e"f in 46 "o!a"
in&'ran!e !o).anie&, a)on$ (i!( +ein$ t(e 6
a+ove,na)e# #efen#ant&, (i!( i&&'e# to (i)
.er&ona" a!!i#ent .o"i!ie&- P"aintiff=& +enefi!iary a&
(i& e)."oyer, Broa#ay Cotton *a!tory, (i!( .ai#
t(e in&'ran!e .re)i')&- On 2D Ee!e)+er 4593, a
fire +ro2e o't (i!( tota""y #e&troye# t(e Broa#ay
Cotton *a!tory- *i$(tin$ (i& ay o't of t(e fa!tory,
."aintiff a& inJ're# on t(e "eft (an# +y a (eavy
o+Je!t- 1e a& +ro'$(t to t(e Mani"a Centra"
Univer&ity (o&.ita", an# after re!eivin$ fir&t,ai#, (e
ent to t(e Nationa" Ort(o.e#i! 1o&.ita" for
treat)ent of (i& inJ'rie& @fra!t're& in in#e%, )i##"e,
fo'rt(, an# fift( fin$er& of "eft (an#A- *ro) 26
Ee!e)+er 4593 to 6 *e+r'ary 459D, (e 'n#erent
)e#i!a" treat)ent in t(e (o&.ita"- T(e a+ove,
INSURANCE Page 9
#e&!ri+e# .(y&i!a" inJ'rie& (ave !a'&e# te).orary
tota" #i&a+i"ity of ."aintiff=& "eft (an#- P"aintiff fi"e# t(e
!orre&.on#in$ noti!e of a!!i#ent an# noti!e of !"ai)
it( a"" of t(e a+ove,na)e# #efen#ant& to re!over
in#e)nity- Eefen#ant& reJe!te# ."aintiff=& !"ai) for
in#e)nity for t(e rea&on t(at t(ere +ein$ no
&everan!e of a).'tation of t(e "eft (an#, t(e
#i&a+i"ity &'ffere# +y (i) a& not !overe# +y (i&
.o"i!y-
, P"aintiff &'e# t(e #efen#ant& in t(e M'ni!i.a"ity
Co'rt of t(i& City, (i!( #i&)i&&e# (i& !o)."aint&-
T(ereafter, t(e ."aintiff a..ea"e# to t(e Co'rt of *ir&t
In&tan!e Mani"a, .re&i#e# +y G'#$e Gre$orio S-
Narva&a, (i!( a+&o"ve# t(e #efen#ant& fro) t(e
!o)."aint&- 1en!e, t(e a..ea"-
ISSUE
0ON Eio&#a#o Ty i& entit"e# to in#e)nity 'n#er t(e
in&'ran!e .o"i!y for t(e #i&a+i"ity of (i& "eft (an#
HELD
, T(e a$ree)ent !ontaine# in t(e in&'ran!e .o"i!ie&
i& t(e "a +eteen t(e .artie&- A& t(e ter)& of t(e
.o"i!ie& are !"ear, e%.re&& an# &.e!ifi! t(at on"y
a).'tation of t(e "eft (an# &(o'"# +e !on&i#ere# a&
a "o&& t(ereof, an inter.retation t(at o'"# in!"'#e
t(e )ere fra!t're or ot(er te).orary #i&a+i"ity not
!overe# +y t(e .o"i!ie& o'"# !ertain"y +e
'narrante#- In t(e !a&e at +ar, #'e to t(e !"arity of
t(e &ti.'"ation, #i&tin!tion +eteen 7te).orary
#i&a+i"ity8 an# 7tota" #i&a+i"ity8 nee# not +e )a#e in
re"ation to one=& o!!'.ation )ean& t(at t(e !on#ition
of t(e in&'ran!e i& &'!( t(at !o))on .r'#en!e
re;'ire& (i) to #e&i&t fro) tran&a!tin$ (i& +'&ine&&
or ren#er& (i) in!a.a+"e of or2in$- 0(i"e t(e Co'rt
&y).at(i:e& it( t(e ."aintiff or (i& e)."oyer, for
(o&e +enefit t(e .o"i!ie& ere i&&'e#, it !an not $o
+eyon# t(e !"ear an# e%.re&& !on#ition& of t(e
in&'ran!e .o"i!ie&, a"" of (i!( #efine .artia" #i&a+i"ity
a& "o&& of eit(er (an# +y a a).'tation t(ro'$( t(e
+one& of t(e ri&t-8 T(ere a& no &'!( a).'tation in
t(e !a&e at +ar-
, T(e S'.re)e Co'rt affir)e# t(e a..ea"e# #e!i&ion,
it( !o&t& a$ain&t t(e ."aintiff,a..e""ant-
MISAMIS LUMBER V CAPITAL INSURANCE
4C SC<A 266
<>F>S; May 20, 4566
NATURE
Eire!t a..ea" on a .oint of "a fro) t(e J'#$)ent of
t(e Co'rt of *ir&t In&tan!e of Mani"a
FACTS
, Mi&a)i& /')+er Cor.oration, 'n#er it& for)er
na)e, /anao Ti)+er Mi""&, In!-, in&'re# it& *or#
*a"!on )otor !ar for t(e a)o'nt of P4D,000 it(
Ca.ita" In&'ran!e S S'rety Co).any, In!- T(e
.ertinent .rovi&ion& of t(e .o"i!y .rovi#e#, a&
fo""o&H
4- T(e Co).any i"" &'+Je!t to t(e /i)it& of
/ia+i"ity in#e)nify t(e In&'re# a$ain&t "o&& or
#a)a$e to t(e Motor Me(i!"e an# it& a!!e&&orie&
an# &.are .art& (i"&t t(ereon-
2- @aA +y a!!i#enta" !o""i&ion or overt'rnin$ or
!o""i&ion or overt'rnin$ !on&e;'ent (en
)e!(ani!a" +rea2#on or !on&e;'ent '.on ear
an# tear-
3- At it& o.tion, t(e Co).any )ay .ay in !a&( t(e
a)o'nt of t(e "o&& or #a)a$e or )ay re.air,
rein&tate or re."a!e t(e Motor Me(i!"e or any .art
t(ereof or it& a!!e&&orie& or &.are .art&- T(e
"ia+i"ity of t(e Co).any &(a"" not e%!ee# t(e va"'e
of t(e .art& "o&t or #a)a$e# an# t(e rea&ona+"e
!o&t of fittin$ &'!( .art& or t(e va"'e of t(e Motor
Me(i!"e at t(e ti)e of t(e "o&& or #a)a$e
(i!(ever i& t(e "o&&- T(e In&'re#N& e&ti)ate of
va"'e &tate# in t(e &!(e#'"e &(a"" +e t(e )a%i)')
a)o'nt .aya+"e +y t(e Co).any in re&.e!t of any
!"ai) for "o&& or #a)a$e-
D- T(e In&'re# )ay a't(ori:e t(e re.air of t(e
Motor Me(i!"e ne!e&&itate# +y #a)a$e for (i!(
t(e Co).any )ay +e "ia+"e 'n#er t(i& .o"i!y
.rovi#e# t(atH
@aA t(e e&ti)ate# !o&t of &'!( re.air #oe& not
e%!ee# t(e a't(ori:e# <e.air /i)it-
@+A a #etai"e# e&ti)ate of t(e !o&t i& forar#e#
to t(e Co).any it(o't #e"ay an# .rovi#in$ a"&o
t(at t(e a't(ori:e# re.air "i)it i& P490-00-
, One ni$(t, t(e in&'re# !ar, (i"e trave"in$ a"on$ in
A'rora Bo'"evar#, .a&&e# over a ater (o"e (i!(
t(e #river #i# not &ee +e!a'&e an on!o)in$ !ar #i#
not #i) it& "i$(t- T(e !ran2!a&e an# f"y(ee" (o'&in$
of t(e !ar +ro2e (en it (it a (o""o +"o!2 "yin$
a"on$&i#e t(e ater (o"e- T(e !ar a& toe# an#
re.aire# +y Moro&i Motor& at a tota" !o&t of P302-2C-
, 0(en t(e re.air& on t(e !ar (a# a"rea#y +een
)a#e, Mi&a)i& )a#e a re.ort of t(e a!!i#ent to
Ca.ita" In&'ran!e-
, Sin!e Ca.ita" ref'&e# to .ay for t(e tota" !o&t of to
a$e an# re.air&, &'it a& fi"e# in t(e )'ni!i.a"
!o'rt ori$ina""y-
, T(e #efen#ant,a..e""ant a#)it& "ia+i"ity in t(e
a)o'nt of P490, +'t not for any e%!e&& t(ereof- T(e
"oer !o'rt #i# not e%onerate t(e &ai# a..e""ant for
t(e e%!e&& +e!a'&e t(e !o).anyN& a+&o"'tion o'"#
ren#er t(e in&'ran!e !ontra!t one,&i#e# an# t(at t(e
&ai# in&'rer (a# not &(on t(at t(e !o&t of re.air& in
t(e &') of P302-2C i& 'nrea&ona+"e, e%!e&&ive or
.a##e#, nor (a# it &(on t(at it !o'"# (ave
'n#erta2en t(e re.air& it&e"f at "e&& e%.en&e-
ISSUE
0ON Ca.ita" In&'ran!e !an +e )a#e to .ay )ore
t(an P490
HELD
NO
, T(e in&'ran!e .o"i!y &ti.'"ate# in .ara$ra.( D t(at
if t(e in&'re# a't(ori:e& t(e re.air t(e "ia+i"ity of t(e
in&'rer, .er it& &'+,.ara$ra.( @aA, i& "i)ite# to
P490-00- T(e "itera" )eanin$ of t(i& &ti.'"ation )'&t
!ontro", it +ein$ t(e a!t'a" !ontra!t, e%.re&&"y an#
."ain"y .rovi#e# for in t(e .o"i!y-
, <e!o'r&e to "e$a" (er)ene'ti!& i& not !a""e# for
+e!a'&e .ara$ra.( D of t(e .o"i!y i& !"ear an#
&.e!ifi! an# "eave& no roo) for inter.retation-
, T(e o.tion to 'n#erta2e t(e re.air& i& a!!or#e# to
t(e in&'ran!e !o).any .er .ara$ra.( 2- T(e &ai#
!o).any a& #e.rive# of t(e o.tion +e!a'&e t(e
in&'re# too2 it '.on it&e"f to (ave t(e re.air& )a#e,
an# on"y notifie# t(e in&'rer (en t(e re.air& ere
#one- A& a !on&e;'en!e, .ara$ra.( D, (i!( "i)it&
t(e !o).anyN& "ia+i"ity to P490-00, a.."ie&-
, T(e in&'ran!e !ontra!t )ay +e rat(er onero'&
@Pone,&i#e#P, a& t(e "oer !o'rt .'t itA, +'t t(at in
it&e"f #oe& not J'&tify t(e a+ro$ation of it& e%.re&&
ter)&, ter)& (i!( t(e in&'re# a!!e.te# or a#(ere#
to an# (i!( i& t(e "a +eteen t(e !ontra!tin$
.artie&-
, To re;'ire t(e in&'rer to .rove t(at t(e !o&t of t(e
re.air& or#ere# +y t(e in&'re# i& 'nrea&ona+"e, (en
t(e in&'rer a& not $iven an o..ort'nity to in&.e!t
an# a&&e&& t(e #a)a$e +efore t(e re.air& ere
)a#e, i& !ontrary to e"e)entary J'&ti!e an# e;'ity-
SUN INSURANCE OFFICE LTD. V CA (TAN)
459 SC<A 453
PA<AS; Mar!( 43, 4554
NATURE
Petition for !ertiorari to revie t(e #e!i&ion of t(e CA
FACTS
, Private re&.on#ent >)i"io Tan too2 fro) t(e
.etitioner a Pe&o 300,000 .ro.erty in&'ran!e .o"i!y
INSURANCE Page 10
to !over (i& intere&t in t(e e"e!tri!a" in&'ran!e &tore
of (i& +rot(er (o'&e# in a +'i"#in$ in I"oi"o City on
A'$'&t 49, 4563- *o'r #ay& after t(e i&&'an!e of t(e
.o"i!y, t(e +'i"#in$ in!"'#in$ t(e in&'re# &tore
+'rne#-
, On A'$'&t 20, 4563, Tan fi"e# (i& !"ai) for fire
"o&&- S'n In&'ran!e, on *e+r'ary 25, 456D, rote
t(e .rivate re&.on#ent #enyin$ t(e !"ai)- On A.ri" 3,
456D, .rivate re&.on#ent rote anot(er "etter to t(e
in&'ran!e !o).any re;'e&tin$ re!on&i#eration of t(e
#enia"- Tan=& "ayer rote anot(er "etter to t(e
in&'ran!e !o).any in;'irin$ a+o't t(e A.ri" 3 "etter
(i!( &o'$(t for a re!on&i#eration of t(e #enia"- In
it& re."y to t(e "ayer=& "etter, S'n In&'ran!e
reiterate# it& #enia" of t(e !"ai) an# en!"o&e# t(erein
!o.ie& of t(e to .revio'& #enia"& #ate# *e+r'ary
25, 456D an# May 4C, 4569-
, On Nove)+er 20, 4569, Tan fi"e# a !ivi" !a&e it(
t(e <TC- Petition fi"e# a )otion to #i&)i&& on t(e
a""e$e# $ro'n# t(at t(e a!tion (a& a"rea#y .re&!ri+e#
+a&e# on Con#ition 2C of t(e In&'ran!e Po"i!y (i!(
&tate# t(at t(e in#o to fi"e t(e a..ro.riate a!tion
it( eit(er t(e In&'ran!e Co))i&&ion or in any !o'rt
of !o).etent J'ri&#i!tion i& te"ve )ont(& fro) t(e
reJe!tion of t(e !"ai)- <TC #enie# t(e )otion an#
t(e &'+&e;'ent )otion for re!on&i#eration- T(e CA
"i2ei&e #enie# t(e .etition of S'n In&'ran!e-
ISSUE
4- 0ON t(e !o'rt t(e fi"in$ of a )otion for
re!on&i#eration interr'.t& t(e 42 )ont(& .re&!ri.tion
.erio# to !onte&t t(e #enia" of t(e in&'ran!e !"ai)
2- 0ON t(e reJe!tion of t(e !"ai) &(a"" +e #ee)e#
fina" on"y if it !ontain& or#& to t(e effe!t t(at t(e
#enia" i& fina"
HELD
4- NO
, T(e SC (e"# t(at Con#ition 2C of t(e In&'ran!e
.o"i!y i& very !"ear an# free fro) any #o'+t or
a)+i$'ity- It (a& to +e ta2en in it& ."ain, or#inary,
an# .o.'"ar &en&e- T(e reJe!tion "etter of *e+r'ary
25, 456D a& !"ear an# ."ain- T(e Co'rt note# t(at
t(e one year .erio# i& "i2ei&e in a!!or# it( Se!tion
23 of t(e In&'ran!e Co#e (i!( &tate& t(at any
!on#ition (i!( "i)it& t(e ti)e for !o))en!in$ an
a!tion to a .erio# of "e&& t(an one year (en t(e
!a'&e of a!tion a!!r'e& i& voi#- T(e ri$(t of a!tion,
a!!or#in$ to t(e SC, a!!r'e& at t(e ti)e t(at t(e
!"ai) i& reJe!te# at t(e fir&t in&tan!e- A re;'e&t for
re!on&i#eration of t(e #enia" !annot &'&.en# t(e
r'nnin$ of t(e .re&!ri.tive .erio#- T(e Co'rt note#
t(at t(e rationa"e for t(e one year .erio# i& to en&'re
t(at t(e evi#en!e a& to t(e ori$in an# !a'&e of t(e
#e&tr'!tion (ave not yet #i&a..eare#-
2- NO
, T(e Co'rt !"arifie# it& r'"in$ in >a$"e Star In&'ran!e
Co- v& C(ia F' (ere it r'"e# t(at 7t(e !a'&e of
a!tion in an in&'ran!e !ontra!t #oe& not a!!r'e 'nti"
t(e In&'re#=& !"ai) i& fina""y reJe!te# +y t(e In&'rer8
+y &tatin$ t(e '&e of t(e or# 7fina""y8 !annot +e
!on&tr'e# to )ean t(e reJe!tion of a .etition for
re!on&i#eration- 0(at t(e !o'rt referre# to in effe!t
i& t(e reJe!tion in t(e fir&t in&tan!e a& !"ai)e# +y
S'n In&'ran!e
Disposition T(e #e!i&ion of t(e CA i& rever&e# an#
&et a&i#e- T(e !a&e i& #i&)i&&e#
FORTUNE INSURANCE AND SURETY CO. INC.V
CA (PRODUCERS BAN< OF THE PHILIPPINES)
2DD SC<A 306
EAMIE>; May 23, 4559
NATURE
Petition for <evie on !ertiorari of CA #e!i&ion
FACTS
5 Pro#'!er& Ban2 of t(e P(i"i..ine& fi"e# a !o)."aint
a$ain&t *ort'ne In&'ran!e an# S'rety Co-, In!- for
re!overy of PC29,000-00 'n#er t(e .o"i!y i&&'e# +y
*ort'ne- T(e &') a& a""e$e#"y "o&t on G'ne 25,
456C #'rin$ a ro++ery of Pro#'!erN& ar)ore# ve(i!"e
(i"e it a& in tran&it to tran&fer t(e )oney fro) it&
Pa&ay City Bran!( to it& (ea# offi!e in Ma2ati 'n#er
t(e !'&to#y of it& te""er, Mari+et( A"a).ay- T(e
ar)ore# !ar a& #riven +y BenJa)in Ma$a"on$ F #e
Mera, e&!orte# +y Se!'rity G'ar# Sat'rnino Ati$a F
<o&ete- Eriver Ma$a"on$ a& a&&i$ne# +y P<C
Mana$e)ent Sy&te)&-
, After an inve&ti$ation +y t(e Pa&ay .o"i!e, #river
Ma$a"on$ an# $'ar# Ati$a ere !(ar$e#, to$et(er
it( Bati$'e , A;'ino an# Go(n Eoe, it( vio"ation of
P-E- 932 @Anti,1i$(ay <o++ery /aA
, Ee)an#& ere )a#e +y t(e Pro#'!er& '.on t(e
*ort'ne to .ay t(e a)o'nt of t(e "o&& of
PC29,000-00 +'t t(e "atter ref'&e# to .ay a& t(e "o&&
i& e%!"'#e# fro) t(e !overa$e of t(e in&'ran!e .o"i!y
&.e!ifi!a""y 'n#er PGenera" >%!e.tion&P
B T(e !o).any &(a"" not +e "ia+"e 'n#er t(i&
.o"i!y in re&.e!t of % % % @+A any "o&& !a'&e# +y
any #i&(one&t, fra'#'"ent or !ri)ina" a!t of t(e
in&'re# or any offi!er, e)."oyee, .artner,
#ire!tor, tr'&tee or a't(ori:e# re.re&entative of
t(e In&'re# (et(er a!tin$ a"one or in
!onJ'n!tion it( ot(er&-
5 *ort'ne o..o&e& t(e !ontention of Pro#'!er& t(at
Ati$a an# Ma$a"on$ are not it& Poffi!er, e)."oyee, %
% % tr'&tee or a't(ori:e# re.re&entative % % % at t(e
ti)e of t(e ro++ery
- /rial Court
B On +ein$ 7>MP/OF>>S8
Ma$a"on$ an# Ati$a ere not e)."oyee& or
re.re&entative& of Pro#'!er& a& t(eir &ervi!e& a&
ar)ore# !ar #river an# a& &e!'rity $'ar# (avin$
+een )ere"y offere# +y P<C Mana$e)ent an# +y
Uni!orn Se!'rity an# (i!( "atter fir)& a&&i$ne#
t(e) to ."aintiff- T(e a$e& an# &a"arie& of +ot(
Ma$a"on$ an# Ati$a are .re&')a+"y .ai# +y t(eir
re&.e!tive fir)&, (i!( a"one ie"#& t(e .oer to
#i&)i&& t(e)
B On +ein$ 7AUT1O<I?>E <>P<>S>NTATIM>8
T(ey ere )ere"y an a&&i$ne# ar)ore# !ar #river
an# &e!'rity $'ar# for t(e )oney tran&fer- It a&
te""er Mari+et( A"a).ay (o (a# P!'&to#yP of t(e
PC29,000-00 !a&( +ein$ tran&ferre# a"on$ a &.e!ifie#
)oney ro'te
- Court of A##eals
B affir)e# in toto
B A .o"i!y or !ontra!t of in&'ran!e i& to +e !on&tr'e#
"i+era""y in favor of t(e in&'re# an# &tri!t"y a$ain&t
t(e in&'ran!e !o).any @Ne /ife >nter.ri&e& v&-
Co'rt of A..ea"&; S'n In&'ran!e Offi!e, /t#- v&-
Co'rt of A..ea"&A- Contra!t& of in&'ran!e, "i2e ot(er
!ontra!t&, are to +e !on&tr'e# a!!or#in$ to t(e &en&e
an# )eanin$ of t(e ter)& (i!( t(e .artie&
t(e)&e"ve& (ave '&e#- If &'!( ter)& are !"ear an#
'na)+i$'o'&, t(ey )'&t +e ta2en an# 'n#er&too# in
t(eir ."ain, or#inary an# .o.'"ar &en&e @Ne /ife
>nter.ri&e& Ca&e; S'n In&'ran!e Offi!eA-
B T(e "an$'a$e '&e# +y *ort'ne in t(e .o"i!y i&
."ain, or#inary an# &i)."e- No ot(er inter.retation i&
ne!e&&ary- T(e or# Pe)."oyeeP &(o'"# +e ta2en to
)ean in t(e or#inary &en&e- T(e /a+or Co#e i& a
&.e!ia" "a &.e!ifi!a""y #ea"in$ it(Ran# &.e!ifi!a""y
#e&i$ne# to .rote!t "a+or an# t(erefore it& #efinition
a& to e)."oyer,e)."oyee re"ation&(i.& in&ofar a& t(e
a.."i!ationRenfor!e)ent of &ai# Co#e i& !on!erne#
)'&t ne!e&&ari"y +e ina.."i!a+"e to an in&'ran!e
!ontra!t- 1a# it inten#e# to a.."y t(e /a+or Co#e in
#efinin$ (at t(e or# Pe)."oyeeP refer& to, it
)'&tR &(o'"# (ave &o &tate# e%.re&&"y in t(e
in&'ran!e .o"i!y- Sai# #river an# &e!'rity $'ar#
!annot +e !on&i#ere# a& e)."oyee& of Pro#'!er&
+an2 +e!a'&e it (a& no .oer to (ire or to #i&)i&&
&ai# #river an# &e!'rity $'ar# 'n#er t(e !ontra!t&
INSURANCE Page 11
e%!e.t on"y to a&2 for t(eir re."a!e)ent& fro) t(e
!ontra!tor&-
- Fortune5s Contention
B (en Pro#'!er& !o))i&&ione# a $'ar# an# a
#river to tran&fer it& f'n#& fro) one +ran!( to
anot(er, t(ey effe!tive"y an# ne!e&&ari"y +e!a)e it&
a't(ori:e# re.re&entative& in t(e !are an# !'&to#y of
t(e )oney- A&&')in$ t(at t(ey !o'"# not +e
!on&i#ere# a't(ori:e# re.re&entative&, t(ey ere,
nevert(e"e&&, e)."oyee& of Pro#'!er&- It a&&ert& t(at
t(e e%i&ten!e of an e)."oyer,e)."oyee re"ation&(i.
Pi& #eter)ine# +y "a an# +ein$ &'!(, it !annot +e
t(e &'+Je!t of a$ree)ent-P T('&, if t(ere a& in
rea"ity an e)."oyer,e)."oyee re"ation&(i. +eteen
Pro#'!er&, on t(e one (an#, an# Ma$a"on$ an#
Ati$a, on t(e ot(er, t(e .rovi&ion& in t(e !ontra!t& of
Pro#'!er& it( P<C Mana$e)ent Sy&te) for
Ma$a"on$ an# it( Uni!orn Se!'rity Servi!e& for
Ati$a (i!( &tate t(at Pro#'!er& i& not t(eir
e)."oyer an# t(at it i& a+&o"ve# fro) any "ia+i"ity a&
an e)."oyer, o'"# not o+"iterate t(e re"ation&(i.-
B an e)."oyer,e)."oyee re"ation&(i. #e.en#& '.on
fo'r &tan#ar#&H
@4A t(e )anner of &e"e!tion an# en$a$e)ent of t(e
.'tative e)."oyee
@2A t(e )o#e of .ay)ent of a$e&
@3A t(e .re&en!e or a+&en!e of a .oer to #i&)i&&
an#
@DA t(e .re&en!e an# a+&en!e of a .oer to !ontro"
t(e .'tative e)."oyeeN& !on#'!t-
B Of t(e fo'r, t(e ri$(t,of,!ontro" te&t (a& +een (e"#
to +e t(e #e!i&ive fa!tor- It a&&ert& t(at t(e .oer of
!ontro" over Ma$a"on$ an# Ati$a a& ve&te# in an#
e%er!i&e# +y Pro#'!er&- *ort'ne f'rt(er in&i&t& t(at
P<C Mana$e)ent Sy&te) an# Uni!orn Se!'rity
Servi!e& are +'t P"a+or,on"yP !ontra!tor& 'n#er
Arti!"e 406 of t(e /a+or Co#e (i!( .rovi#e&H
Art- 406- Contra!tor or &'+!ontra!tor- , T(ere i&
P"a+or,on"yP !ontra!tin$ (ere t(e .er&on
&'.."yin$ or2er& to an e)."oyer #oe& not (ave
&'+&tantia" !a.ita" or inve&t)ent in t(e for) of
too"&, e;'i.)ent, )a!(inerie&, or2 .re)i&e&,
a)on$ ot(er&, an# t(e or2er& re!r'ite# an#
."a!e# +y &'!( .er&on& are .erfor)in$ a!tivitie&
(i!( are #ire!t"y re"ate# to t(e .rin!i.a" +'&ine&&
of &'!( e)."oyer- In &'!( !a&e&, t(e .er&on or
inter)e#iary &(a"" +e !on&i#ere# )ere"y a& an
a$ent of t(e e)."oyer (o &(a"" +e re&.on&i+"e to
t(e or2er& in t(e &a)e )anner an# e%tent a& if
t(e "atter ere #ire!t"y e)."oye# +y (i)-
B Internationa" Ti)+er Cor.- v&- N/<C , a P"a+or,
on"yP !ontra!tor i& e;'iva"ent to a fin#in$ t(at t(ere
i& an e)."oyer,e)."oyee re"ation&(i. +eteen t(e
oner of t(e .roJe!t an# t(e e)."oyee of t(e P"a+or,
on"yP !ontra!tor
- Producer5s Contention
B Ma$a"on$ an# Ati$a ere not it& e)."oyee& &in!e
it (a# not(in$ to #o it( t(eir &e"e!tion an#
en$a$e)ent, t(e .ay)ent of t(eir a$e&, t(eir
#i&)i&&a", an# t(e !ontro" of t(eir !on#'!t-
B Internationa" Ti)+er Cor.- i& not a.."i!a+"e to a""
!a&e& +'t on"y (en it +e!o)e& ne!e&&ary to .revent
any vio"ation or !ir!')vention of t(e /a+or Co#e, a
&o!ia" "e$i&"ation (o&e .rovi&ion& )ay &et a&i#e
!ontra!t& entere# into +y .artie& in or#er to $ive
.rote!tion to t(e or2in$ )an-
B A)eri!an Pre&i#ent /ine& v&- C"ave &(o'"# +e
a.."ie# (i!( &tate#
In #eter)inin$ t(e e%i&ten!e of e)."oyer,
e)."oyee re"ation&(i., t(e fo""oin$ e"e)ent& are
$enera""y !on&i#ere#, na)e"yH @4A t(e &e"e!tion
an# en$a$e)ent of t(e e)."oyee; @2A t(e
.ay)ent of a$e&; @3A t(e .oer of #i&)i&&a"; an#
@DA t(e .oer to !ontro" t(e e)."oyeeN& !on#'!t-
, Sin!e 'n#er Pro#'!er&N !ontra!t it( P<C
Mana$e)ent Sy&te)& it i& t(e "atter (i!( a&&i$ne#
Ma$a"on$ a& t(e #river of Pro#'!er&N ar)ore# !ar
an# a& re&.on&i+"e for (i& fait(f'" #i&!(ar$e of (i&
#'tie& an# re&.on&i+i"itie&, an# &in!e Pro#'!er& .ai#
t(e )ont("y !o).en&ation of P4,D00-00 .er #river to
P<C Mana$e)ent Sy&te)& an# not to Ma$a"on$, it i&
!"ear t(at Ma$a"on$ a& not Pro#'!er&N e)."oyee- A&
to Ati$a, Pro#'!er& re"ie& on t(e .rovi&ion of it&
!ontra!t it( Uni!orn Se!'rity Servi!e& (i!(
.rovi#e& t(at t(e $'ar#& of t(e "atter Pare in no
&en&e e)."oyee& of t(e C/I>NT-P
ISSUE
0ON *ort'ne In&'ran!e an# S'rety Co- In!- i& "ia+"e
'n#er t(e Money, Se!'rity, an# Payro"" <o++ery
.o"i!y it i&&'e# to Pro#'!er& Ban2 of t(e P(i"i..ine&
or 0ON re!overy i& .re!"'#e# 'n#er t(e $enera"
e%!e.tion& !"a'&e of t(e .o"i!y
HELD
NO
Ratio A !ontra!t of in&'ran!e i& a !ontra!t of
a#(e&ion, t('& any a)+i$'ity t(erein &(o'"# +e
re&o"ve# a$ain&t t(e in&'rer, or it &(o'"# +e
!on&tr'e# "i+era""y in favor of t(e in&'re# an# &tri!t"y
a$ain&t t(e in&'rer- /i)itation& of "ia+i"ity &(o'"# +e
re$ar#e# it( e%tre)e Jea"o'&y an# )'&t +e
!on&tr'e# in &'!( a ay a& to .re!"'#e t(e in&'rer
fro) non,!o)."ian!e it( it& o+"i$ation- It $oe&
it(o't &ayin$ t(en t(at if t(e ter)& of t(e !ontra!t
are !"ear an# 'na)+i$'o'&, t(ere i& no roo) for
!on&tr'!tion an# &'!( ter)& !annot +e en"ar$e# or
#i)ini&(e# +y J'#i!ia" !on&tr'!tion-
, An in&'ran!e !ontra!t i& a !ontra!t of in#e)nity
'.on t(e ter)& an# !on#ition& &.e!ifie# t(erein- It i&
&ett"e# t(at t(e ter)& of t(e .o"i!y !on&tit'te t(e
)ea&'re of t(e in&'rerN& "ia+i"ity- In t(e a+&en!e of
&tat'tory .ro(i+ition to t(e !ontrary, in&'ran!e
!o).anie& (ave t(e &a)e ri$(t& a& in#ivi#'a"& to
"i)it t(eir "ia+i"ity an# to i).o&e (atever !on#ition&
t(ey #ee) +e&t '.on t(eir o+"i$ation& not
in!on&i&tent it( .'+"i! .o"i!y-
Reasoning
, It &(o'"# +e note# t(at t(e in&'ran!e .o"i!y entere#
into +y t(e .artie& i& a t(eft or ro++ery in&'ran!e
.o"i!y (i!( i& a for) of !a&'a"ty in&'ran!e- Se!tion
4CD of t(e In&'ran!e Co#e .rovi#e&H
Se!- 4CD- Ca&'a"ty in&'ran!e i& in&'ran!e !overin$
"o&& or "ia+i"ity ari&in$ fro) a!!i#ent or )i&(a.,
e%!"'#in$ !ertain ty.e& of "o&& (i!( +y "a or
!'&to) are !on&i#ere# a& fai"in$ e%!"'&ive"y it(in
t(e &!o.e of in&'ran!e &'!( a& fire or )arine- It
in!"'#e&, +'t i& not "i)ite# to, e)."oyerN& "ia+i"ity
in&'ran!e, .'+"i! "ia+i"ity in&'ran!e, )otor ve(i!"e
"ia+i"ity in&'ran!e, ."ate $"a&& in&'ran!e, +'r$"ary
an# t(eft in&'ran!e, .er&ona" a!!i#ent an# (ea"t(
in&'ran!e a& ritten +y non,"ife in&'ran!e
!o).anie&, an# ot(er &'+&tantia""y &i)i"ar 2in#& of
in&'ran!e- @ita"i!& &'.."ie#A
, >%!e.t it( re&.e!t to !o).'"&ory )otor ve(i!"e
"ia+i"ity in&'ran!e, t(e In&'ran!e Co#e !ontain& no
ot(er .rovi&ion& a.."i!a+"e to !a&'a"ty in&'ran!e or
to ro++ery in&'ran!e in .arti!'"ar- T(e&e !ontra!t&
are, t(erefore, $overne# +y t(e $enera" .rovi&ion&
a.."i!a+"e to a"" ty.e& of in&'ran!e- O't&i#e of t(e&e,
t(e ri$(t& an# o+"i$ation& of t(e .artie& )'&t +e
#eter)ine# +y t(e ter)& of t(eir !ontra!t, ta2in$
into !on&i#eration it& .'r.o&e an# a"ay& in
a!!or#an!e it( t(e $enera" .rin!i."e& of in&'ran!e
"a-
, 0it( t(e fore$oin$ .rin!i."e& in )in#, it )ay no
+e a&2e# (et(er Ma$a"on$ an# Ati$a ;'a"ify a&
e)."oyee& or a't(ori:e# re.re&entative& (a& +een
a.t"y o+&erve# t(at in +'r$"ary, ro++ery, an# t(eft
in&'ran!e, Pt(e o..ort'nity to #efra'# t(e in&'rer ,
t(e )ora" (a:ar# , i& &o $reat t(at in&'rer& (ave
fo'n# it ne!e&&ary to fi"" '. t(eir .o"i!ie& it(
!o'nt"e&& re&tri!tion&, )any #e&i$ne# to re#'!e t(i&
(a:ar#- Se"#o) #oe& t(e in&'rer a&&')e t(e ri&2 of
a"" "o&&e& #'e to t(e (a:ar#& in&'re# a$ain&t-P
Per&on& fre;'ent"y e%!"'#e# 'n#er &'!( .rovi&ion&
INSURANCE Page 12
are t(o&e in t(e in&'re#N& &ervi!e an# e)."oy)ent-
T(e .'r.o&e of t(e e%!e.tion i& to $'ar# a$ain&t
"ia+i"ity &(o'"# t(e t(eft +e !o))itte# +y one (avin$
'nre&tri!te# a!!e&& to t(e .ro.erty- In &'!( !a&e&,
t(e ter)& &.e!ifyin$ t(e e%!"'#e# !"a&&e& are to +e
$iven t(eir )eanin$ a& 'n#er&too# in !o))on
&.ee!(- T(e ter)& P&ervi!eP an# Pe)."oy)entP are
$enera""y a&&o!iate# it( t(e i#ea of &e"e!tion,
!ontro", an# !o).en&ation-
, T(ere i& )ar2e# #i&a$ree)ent +eteen t(e .artie&
on t(e !orre!t )eanin$ of t(e ter)& :e(2l#)ee:
a+. :a,h#"'>e. "e2"e*e+a'$e*.:
It i& !"ear to '& t(at in&ofar a& *ort'ne i& !on!erne#,
it a& it& intention to e%!"'#e an# e%e).t fro)
.rote!tion an# !overa$e "o&&e& ari&in$ fro)
#i&(one&t, fra'#'"ent, or !ri)ina" a!t& of .er&on&
$rante# or (avin$ 'nre&tri!te# a!!e&& to Pro#'!er&N
)oney or .ayro""- 0(en it '&e# t(en t(e ter)
Pe)."oyee,P it )'&t (ave (a# in )in# any .er&on
(o ;'a"ifie& a& &'!( a& $enera""y an# 'niver&a""y
'n#er&too#, or J'ri&.r'#entia""y e&ta+"i&(e# in t(e
"i$(t of t(e fo'r &tan#ar#& in t(e #eter)ination of t(e
e)."oyer,e)."oyee re"ation&(i. or a& &tat'tori"y
#e!"are# even in a "i)ite# &en&e a& in t(e !a&e of
Arti!"e 406 of t(e /a+or Co#e (i!( !on&i#er& t(e
e)."oyee& 'n#er a P"a+or,on"yP !ontra!t a&
e)."oyee& of t(e .arty e)."oyin$ t(e) an# not of
t(e .arty (o &'.."ie# t(e) to t(e e)."oyer-
, B't even $rantin$ for t(e &a2e of ar$')ent t(at
t(e&e !ontra!t& ere not P"a+or,on"yP !ontra!t&, an#
P<C Mana$e)ent Sy&te)& an# Uni!orn Se!'rity
Servi!e& ere tr'"y in#e.en#ent !ontra!tor&, e are
&ati&fie# t(at Ma$a"on$ an# Ati$a ere, in re&.e!t of
t(e tran&fer of Pro#'!erN& )oney fro) it& Pa&ay City
+ran!( to it& (ea# offi!e in Ma2ati, it& Pa't(ori:e#
re.re&entative&P (o &erve# a& &'!( it( it& te""er
Mari+et( A"a).ay- 1o&oever viee#, Pro#'!er&
entr'&te# t(e t(ree it( t(e &.e!ifi! #'ty to &afe"y
tran&fer t(e )oney to it& (ea# offi!e, it( A"a).ay
to +e re&.on&i+"e for it& !'&to#y in tran&it; Ma$a"on$
to #rive t(e ar)ore# ve(i!"e (i!( o'"# !arry t(e
)oney; an# Ati$a to .rovi#e t(e nee#e# &e!'rity for
t(e )oney, t(e ve(i!"e, an# (i& to ot(er
!o).anion&- In &(ort, for t(e&e .arti!'"ar ta&2&, t(e
t(ree a!te# a& a$ent& of Pro#'!er&- A
Pre.re&entativeP i& #efine# a& one (o re.re&ent& or
&tan#& in t(e ."a!e of anot(er; one (o re.re&ent&
ot(er& or anot(er in a &.e!ia" !a.a!ity, a& an a$ent,
an# i& inter!(an$ea+"e it( Pa$ent-P
Disposition in&tant .etition i& (ere+y G<ANT>E- CA
#e!i&ion an# <TC Ma2ati #e!i&ion are <>M><S>E an#
S>T ASIE>- Civi" Ca&e i& EISMISS>E-
VERENDIA V CA (FIDELITY ? SURETY CO. OF
THE PHILS)
24C SC<A D4C
M>/O; Gan'ary 22, 4553
NATURE
Petition to revie #e!i&ion of t(e CA
FACTS
, *i#e"ity Co- i&&'e# a *ire In&'ran!e Po"i!y !overin$
Meren#ia=& re&i#entia" +'i"#in$ in t(e a)o'nt of
P3692- Meren#ia a"&o in&'re# t(e &a)e +'i"#in$ it(
to ot(er !o).anie& @Co'ntry Ban2er& In&'ran!e for
P962, an# Eeve"o.)ent In&'ran!e for PD002A-
, 0(i"e a"" 3 .o"i!ie& ere in for!e, t(e in&'re#
.ro.erty a& !o)."ete"y #e&troye# +y fire- Meren#ia
fi"e# a !"ai) a$ain&t *i#e"ity, +'t t(e "atter ref'&e#
.ay)ent, t('& a !o)."aint a& fi"e# in t(e <TC-
*i#e"ity=& rea&on for ref'&a"H t(e .o"i!y a& avoi#e#
+y rea&on of over,in&'ran!e, an# t(at Meren#ia
)a"i!io'&"y re.re&ente# t(at t(e +'i"#in$ a& 'n#er
"ea&e to a <o+erto Gar!ia, (en it a& a!t'a""y a
Mar!e"o Gar!ia (o a& t(e "e&&ee-
, <TCH .o"i!y a& vio"ate# +y Meren#ia (en it fai"e#
to infor) *i#e"ity of (i& ot(er in&'ran!e !overa$e&,
t('& no nee# to .ay-
, CAH rever&e# #e!i&ion
ISSUE
@T(ere i& a .ro!e#'ra" i&&'e invo"ve# (ere, +'t i&
irre"evant to o'r #i&!'&&ion- It !on!ern& t(e fi"in$ of a
)otion for e%ten&ion of ti)e to fi"e a )otion for
re!on&i#eration, (ere t(e !o'rt &ai# t(at a"t(o'$( it
no .ro(i+it& fi"in$ of &'!( )otion, t(e in&tant
)otion a& fi"e# +efore t(e effe!tivity of t(i& r'"e,
t('& a""oin$ t(e a#J'#i!ation of t(e !a&eA
0ON *i#e"ity a& "ia+"e to .ay Meren#ia !on&i#erin$
t(e !ir!')&tan!e&
HELD
4- NO
Ratio A& t(e in&'ran!e !ontra!t i& t(e "a +eteen
t(e .artie&, Meren#ia i& #ee)e# to (ave forfeite# (i&
ri$(t to !"ai) +y t(e )i&re.re&entation (e )a#e-
Reasoning
, t(e !o'rt reviee# t(e fa!t'a" fin#in$& of t(e !o'rt&
+e"o, &in!e it a..ear& t(at t(ere a& a
)i&a..re(en&ion of t(e fa!t& +y t(e CA-
, Meren#ia i& fo'n# to (ave !on!o!te# t(e "ea&e
!ontra!t to #ef"e!t re&.on&i+i"ity for t(e fire toar#&
an a""e$e# "e&&ee, even )a2in$ it a..ear t(at t(e
a""e$e# "e&&ee (a# #i&a..eare#, inf"ate# t(e va"'e of
t(e .ro.erty, an# in&'re# &a)e .ro.erty it( to
ot(er !o).anie&-
, An in&'ran!e !ontra!t i& t(e "a +eteen t(e
.artie&, it& ter)& an# !on#ition& !on&tit'te t(e
)ea&'re of t(e in&'rer=& "ia+i"ity an# !o)."ian!e
t(ereit( i& a !on#ition .re!e#ent to t(e in&'re#=&
ri$(t to re!overy fro) t(e in&'rer-
, A& it i& a"&o a !ontra!t of a#(e&ion, an in&'ran!e
!ontra!t &(o'"# +e "i+era""y !on&tr'e# in favor of t(e
in&'re# an# &tri!t"y a$ain&t t(e in&'rer !o).any
(i!( '&'a""y .re.are& it-
, Con&i#erin$, (oever, t(e fa!t t(at Meren#ia '&e#
a fa"&e "ea&e !ontra!t to &'..ort (i& !"ai), t(e ter)&
of t(e .o"i!y &(o'"# +e &tri!t"y !on&tr'e# a$ain&t t(e
in&'re#- Meren#ia fai"e# to "ive +y t(e ter)& of t(e
.o"i!y, &.e!ifi!a""y Se!tion 43 t(ereof (i!( i&
e%.re&&e# in ter)& t(at are !"ear an# 'na)+i$'o'&,
t(at a"" +enefit& 'n#er t(e .o"i!y &(a"" +e forfeite# 7If
t(e !"ai) +e in any re&.e!t fra'#'"ent, or if any fa"&e
#e!"aration +e )a#e or '&e# in &'..ort t(ereof, or if
any fra'#'"ent )ean& or #evi&e& are '&e# +y t(e
In&'re# or anyone a!tin$ in (i& +e(a"f to o+tain any
+enefit 'n#er t(e .o"i!y8- Meren#ia, (avin$ .re&ente#
a fa"&e #e!"aration to &'..ort (i& !"ai) for +enefit& in
t(e for) of a fra'#'"ent "ea&e !ontra!t, (e forfeite#
a"" +enefit& t(erein +y virt'e of Se!tion 43 of t(e
.o"i!y in t(e a+&en!e of .roof t(at *i#e"ity aive#
&'!( .rovi&ion- 0or&e yet, +y .re&entin$ a fa"&e
"ea&e !ontra!t, Meren#ia re.re(en&i+"y #i&re$ar#e#
t(e .rin!i."e t(at in&'ran!e !ontra!t& are uberriae
fidae an# #e)an# t(e )o&t a+'n#ant $oo# fait(-
Disposition Ee!i&ion of CA rever&e#, an# t(at of
<TC i& rein&tate#-
FIELDMEN@S INSURANCE CO. INC V VDA. DE
SONGCO
29 SC<A 20
*><NANEO; 4566
FACTS
5 An in&'ran!e fir), .etitioner *ie"#)enN& In&'ran!e
Co-, In!-, a& not a""oe# to e&!a.e "ia+i"ity 'n#er a
!o))on !arrier in&'ran!e .o"i!y on t(e .rete%t t(at
(at a& in&'re#, not on!e +'t ti!e, a& a .rivate
ve(i!"e an# not a !o))on !arrier, t(e .o"i!y +ein$
i&&'e# '.on t(e in&i&ten!e of it& a$ent (o
#i&!o'nte# fear& of t(e in&'re# t(at (i& .rivate"y
one# ve(i!"e )i$(t not fa"" it(in it& ter)&, t(e
in&'re# )oreover +ein$ Pa )an of &!ant e#'!ation,P
fini&(in$ on"y t(e fir&t $ra#e- So it a& (e"# in a
#e!i&ion of t(e "oer !o'rt t(ereafter affir)e# +y
re&.on#ent Co'rt of A..ea"&- Petitioner in &ee2in$
INSURANCE Page 13
t(e revie of t(e a+ove #e!i&ion of re&.on#ent Co'rt
of A..ea"& !annot +e &o &an$'ine a& to entertain t(e
+e"ief t(at a #ifferent o't!o)e !o'"# +e e%.e!te#- To
+e )ore e%."i!it, e &'&tain t(e Co'rt of A..ea"&-
, T(e fa!t& a& fo'n# +y re&.on#ent Co'rt of A..ea"&,
+in#in$ '.on '&, fo""oH PT(i& i& a .e!'"iar !a&e-
*e#eri!o Son$!o of *"ori#a+"an!a, Pa).an$a, a )an
of &!ant e#'!ation +ein$ on"y a fir&t $ra#er ---,
one# a .rivate Jee.ney it( P"ate No- D4,265 for
t(e year 4560- On Se.te)+er 49, 4560, a& &'!(
.rivate ve(i!"e oner, (e a& in#'!e# +y *ie"#)enN&
In&'ran!e Co).any Pa).an$a a$ent BenJa)in
Sa)+at to a.."y for a Co))on CarrierN& /ia+i"ity
In&'ran!e Po"i!y !overin$ (i& )otor ve(i!"e --- U.on
.ayin$ an ann'a" .re)i') of P46-90, #efen#ant
*ie"#)enN& In&'ran!e Co).any, In!- i&&'e# on
Se.te)+er 45, 4560, Co))on Carrier& A!!i#ent
In&'ran!e Po"i!y No- D9,1O, D29D --- t(e #'ration of
(i!( i"" +e for one @4A year, effe!tive Se.te)+er
49, 4560 to Se.te)+er 49, 4564- On Se.te)+er 22,
4564, t(e #efen#ant !o).any, '.on .ay)ent of t(e
!orre&.on#in$ .re)i'), renee# t(e .o"i!y +y
e%ten#in$ t(e !overa$e fro) O!to+er 49, 4564 to
O!to+er 49, 4562- T(i& ti)e *e#eri!o Son$!oN&
.rivate Jee.ney !arrie# P"ate No- G,66436,
Pa).an$a,4564- --- On O!to+er 25, 4564, #'rin$ t(e
effe!tivity of t(e renee# .o"i!y, t(e in&'re# ve(i!"e
(i"e +ein$ #riven +y <o#o"fo Son$!o, a #'"y
"i!en&e# #river an# &on of *e#eri!o @t(e ve(i!"e
onerA !o""i#e# it( a !ar in t(e )'ni!i.a"ity of
Ca"').it, .rovin!e of B'"a!an, a& a re&'"t of (i!(
)i&(a. *e#eri!o Son$!o @fat(erA an# <o#o"fo Son$!o
@&onA #ie#, Car"o& Son$!o @anot(er &onA, t(e "atterN&
ife, An$e"ita Son$!o, an# a fa)i"y frien# +y t(e
na)e of Go&e Man'e" &'&taine# .(y&i!a" inJ'rie& of
varyin$ #e$ree-P
4
, It a& f'rt(er &(on a!!or#in$ to t(e #e!i&ion of
re&.on#ent Co'rt of A..ea"&H PA)or Son$!o, D2,
year,o"# &on of #e!ea&e# *e#eri!o Son$!o, te&tifyin$
a& itne&&, #e!"are# t(at (en in&'ran!e a$ent
BenJa)in Sa)+at a& in#'!in$ (i& fat(er to in&'re
(i& ve(i!"e, (e +'tte# in &ayin$H NT(at !annot +e, Mr-
Sa)+at, +e!a'&e o'r ve(i!"e i& an PonerP .rivate
ve(i!"e an# not for .a&&en$er&,N to (i!( a$ent
Sa)+at re."ie#H N(et(er o'r ve(i!"e a& an PonerP
ty.e or for .a&&en$er& it !o'"# +e in&'re# +e!a'&e
t(eir !o).any i& not one# +y t(e Govern)ent an#
t(e Govern)ent (a& not(in$ to #o it( t(eir
!o).any- So t(ey !o'"# #o (at t(ey ."ea&e
(enever t(ey +e"ieve a ve(i!"e i& in&'ra+"eN --- In
&.ite of t(e fa!t t(at t(e .re&ent !a&e a& fi"e# an#
trie# in t(e C*I of Pa).an$a, t(e #efen#ant
!o).any #i# not even !are to re+'t A)or Son$!oN&
te&ti)ony +y !a""in$ on t(e itne&&,&tan# a$ent
BenJa)in Sa)+at, it& Pa).an$a *ie"#
<e.re&entative-P
2
, T(e ."aintiff& in t(e "oer !o'rt, "i2ei&e
re&.on#ent& (ere, ere t(e &'rvivin$ i#o an#
!(i"#ren of t(e #e!ea&e# *e#eri!o Son$!o a& e"" a&
t(e inJ're# .a&&en$er Go&e Man'e"- On t(e a+ove
fa!t& t(ey .revai"e#, a& (a# +een )entione#, in t(e
"oer !o'rt an# in t(e re&.on#ent Co'rt of A..ea"&-:a,#!;l.n<t
, T(e +a&i& for t(e favora+"e J'#$)ent i& t(e #o!trine
anno'n!e# in =ua C!ee >an v. 0a, ?nion and 9oc+
'nsurance Co.$ 0td.,
3
it( G'&ti!e G- B- /- <eye&
&.ea2in$ for t(e Co'rt- It i& no +eyon# ;'e&tion
t(at (ere ine;'ita+"e !on#'!t i& &(on +y an
in&'ran!e fir), it i& Pe&to..e# fro) enfor!in$
forfeit're& in it& favor, in or#er to fore&ta"" fra'# or
i).o&ition on t(e in&'re#-P
D
, A& )'!(, if not )'!( )ore &o t(an t(e =ua C!ee
>an #e!i&ion, t(i& i& a !a&e (ere t(e #o!trine of
e&to..e" 'n#enia+"y !a""& for a.."i!ation- After
.etitioner *ie"#)enN& In&'ran!e Co-, In!- (a# "e# t(e
in&'re# *e#eri!o Son$!o to +e"ieve t(at (e !o'"#
;'a"ify 'n#er t(e !o))on !arrier "ia+i"ity in&'ran!e
.o"i!y, an# to enter into !ontra!t of in&'ran!e .ayin$
t(e .re)i')& #'e, it !o'"# not, t(ereafter, in any
"iti$ation ari&in$ o't of &'!( re.re&entation, +e
.er)itte# to !(an$e it& &tan# to t(e #etri)ent of t(e
(eir& of t(e in&'re#- A& e&to..e" i& .ri)ari"y +a&e#
on t(e #o!trine of $oo# fait( an# t(e avoi#an!e of
(ar) t(at i"" +efa"" t(e inno!ent .arty #'e to it&
inJ'rio'& re"ian!e, t(e fai"'re to a.."y it in t(i& !a&e
o'"# re&'"t in a $ro&& trave&ty of J'&ti!e-
, T(at i& a"" t(at nee#& +e &ai# in&ofar a& t(e fir&t
a""e$e# error of re&.on#ent Co'rt of A..ea"& i&
!on!erne#, .etitioner +ein$ a#a)ant in it& far,fro),
rea&ona+"e ."ea t(at e&to..e" !o'"# not +e invo2e#
+y t(e (eir& of t(e in&'re# a& a +ar to t(e a""e$e#
+rea!( of arranty an# !on#ition in t(e .o"i!y- "t
o'"# no re"y on t(e fa!t t(at t(e in&'re# one# a
.rivate ve(i!"e, not a !o))on !arrier, &o)et(in$
(i!( it 2ne a"" a"on$ (en not on!e +'t ti!e it&
a$ent, no #o'+t it(o't any o+Je!tion in it& .art,
e%erte# t(e 't)o&t .re&&'re on t(e in&'re#, a )an
of &!ant e#'!ation, to enter into &'!( a !ontra!t-
, Nor i& t(ere any )erit to t(e &e!on# a""e$e# error
of re&.on#ent Co'rt t(at no "e$a" "ia+i"ity a&
in!'rre# 'n#er t(e .o"i!y +y .etitioner- 0(y "ia+i"ity
'n#er t(e ter)& of t(e .o"i!y
9
a& ine&!a.a+"e a&
&et fort( in t(e #e!i&ion of re&.on#ent Co'rt of
A..ea"&- T('&H PSin!e &o)e of t(e !on#ition&
!ontaine# in t(e .o"i!y i&&'e# +y t(e #efen#ant,
a..e""ant ere i).o&&i+"e to !o)."y it( 'n#er t(e
e%i&tin$ !on#ition& at t(e ti)e an# Nin!on&i&tent it(
t(e 2non fa!t&,N t(e in&'rer Ni& e&to..e# fro)
a&&ertin$ +rea!( of &'!( !on#ition&-N *ro) t(i&
J'ri&.r'#en!e, e fin# no va"i# rea&on to #eviate an#
!on&e;'ent"y (o"# t(at t(e #e!i&ion a..ea"e# fro)
&(o'"# +e affir)e#- T(e inJ're# .artie&, to it, Car"o&
Son$!o, An$e"ito Son$!o an# Go&e Man'e", for (o&e
(o&.ita" an# )e#i!a" e%.en&e& t(e #efen#ant
!o).any a& +ein$ )a#e "ia+"e, ere .a&&en$er& of
t(e Jee.ney at t(e ti)e of t(e o!!'rren!e, an#
<o#o"fo Son$!o, for (o&e +'ria" e%.en&e& t(e
#efen#ant !o).any a& a"&o +ein$ )a#e "ia+"e a&
t(e #river of t(e ve(i!"e in ;'e&tion- >%!e.t for t(e
fa!t, t(at t(ey ere not fare .ayin$ .a&&en$er&, t(eir
&tat'& a& +enefi!iarie& 'n#er t(e .o"i!y i& re!o$ni:e#
t(erein-P
6
, >ven if it +e a&&')e# t(at t(ere a& an a)+i$'ity,
an e%!er.t fro) t(e =ua C!ee >an #e!i&ion o'"#
revea" ane t(e ea2ne&& of .etitionerN& !ontention-
T('&H PMoreover, ta2in$ into a!!o'nt t(e e"" 2non
r'"e t(at a)+i$'itie& or o+&!'ritie& )'&t +e &tri!t"y
inter.rete# a$ain&t t(e .arty t(at !a'&e# t(e), t(e
N)e)o of arrantyN invo2e# +y a..e""ant +ar& t(e
"atter fro) ;'e&tionin$ t(e e%i&ten!e of t(e
a.."ian!e& !a""e# for in t(e in&'re# .re)i&e&, &in!e
it& initia" e%.re&&ion, Nt(e 'n#ernote# a.."ian!e& for
t(e e%tin!tion of fire bein" +e#t on t!e #reises
insured !ereby, --- it i& (ere+y arrante# ---,N a#)it&
of inter.retation a& an a#)i&&ion of t(e e%i&ten!e of
&'!( a.."ian!e& (i!( a..e""ant !annot no
!ontra#i!t, &(o'"# t(e .aro" evi#en!e r'"e a.."y-P
C
, To t(e &a)e effe!t i& t(e fo""oin$ !itation fro) t(e
&a)e "ea#in$ !a&eH PT(i& ri$i# a.."i!ation of t(e r'"e
on a)+i$'itie& (a& +e!o)e ne!e&&ary in vie of
!'rrent +'&ine&& .ra!ti!e&- T(e !o'rt& !annot i$nore
t(at noa#ay& )ono.o"ie&, !arte"& an# !on!entration
of !a.ita", en#oe# it( over(e")in$ e!ono)i!
.oer, )ana$e to i).o&e '.on .artie& #ea"in$ it(
t(e) !'nnin$"y .re.are# Na$ree)ent&N t(at t(e
ea2er .arty )ay not !(an$e one (it, (i&
.arti!i.ation in t(e Na$ree)entN +ein$ re#'!e# to t(e
a"ternative to Nta2e it or "eave itN "a+e""e# &in!e
<ay)on# Sa"ei""e& N!ontra!t& +y a#(eren!eN @contrats
d@ad!esionA, in !ontra&t to t(o&e entere# into +y
.artie& +ar$ainin$ on an e;'a" footin$, &'!(
!ontra!t& @of (i!( .o"i!ie& of in&'ran!e an#
internationa" +i""& of "a#in$ are .ri)e e%a)."e&A
o+vio'&"y !a"" for $reater &tri!tne&& an# vi$i"an!e on
t(e .art of !o'rt& of J'&ti!e it( a vie to .rote!tin$
t(e ea2er .arty fro) a+'&e& an# i).o&ition, an#
.revent t(eir +e!o)in$ tra.& for t(e 'nary @Ne
INSURANCE Page 14
Civi" Co#e- Arti!"e 2D; Sent- of S'.re)e Co'rt of
S.ain, 43 Ee!- 453D, 2C *e+r'ary 45D2A-P
6
, T(e "a&t error a&&i$ne# (i!( o'"# fin# fa'"t it(
t(e #e!i&ion of re&.on#ent Co'rt of A..ea"& in&ofar
a& it affir)e# t(e "oer !o'rt aar# for e%e)."ary
#a)a$e& a& e"" a& attorneyN& fee& i&, on it& fa!e, of
no .er&'a&ive for!e at a""-
, T(e !on!"'&ion t(at ine&!a.a+"y e)er$e& fro) t(e
a+ove i& t(e !orre!tne&& of t(e #e!i&ion of
re&.on#ent Co'rt of A..ea"& &o'$(t to +e reviee#-
*or, to +orro on!e a$ain fro) t(e "an$'a$e of t(e
Q'a C(ee Gan o.inionH PT(e !ontra!t of in&'ran!e i&
one of .erfe!t $oo# fait( @uberia fidesA not for t(e
in&'re# a"one,+'t e;'a""y &o for t(e in&'rer; in fa!t,
it i& )ore &o for t(e "atter, &in!e it& #o)inant
+ar$ainin$ .o&ition !arrie& it( it &tri!ter
re&.on&i+i"ity-P
5
, T(i& i& )ere"y to &tre&& t(at (i"e t(e )ora"ity of
t(e +'&ine&& or"# i& not t(e )ora"ity of in&tit'tion&
of re!tit'#e "i2e t(e .'".it an# t(e a!a#e)e, it
!annot #e&!en# &o "o a& to +e anot(er na)e for
$'i"e or #e!e.tion- Moreover, &(o'"# it (a..en t('&,
no !o'rt of J'&ti!e &(o'"# a""o it&e"f to "en# it&
a..rova" an# &'..ort-:a,#!;l.n<t
, 0e (ave no !(oi!e +'t to re!o$ni:e t(e )onetary
re&.on&i+i"ity of .etitioner *ie"#)enN& In&'ran!e Co-,
In!- It #i# not &'!!ee# in it& .er&i&tent effort to avoi#
!o)."yin$ it( it& o+"i$ation in t(e "oer !o'rt an#
t(e Co'rt of A..ea"&- M'!( "e&& &(o'"# it fin# any
re!e.tivity fro) '& for it& 'narrante# an#
'nJ'&tifie# ."ea to e&!a.e fro) it& "ia+i"ity-

MALAYAN INSURANCE CORP. V CA (T<C
MAR<ETING CORP.)
2C0 SC<A 2D2
<OM><O; Mar!( 20, 455C
NATURE
Petition for revie on !ertiorari
FACTS
, TIC Mar2etin$ Cor.- a& t(e onerR!on&i$nee of
&o)e 3,465-4C4 )etri! ton& of &oya +ean )ea"
(i!( a& "oa#e# on +oar# t(e &(i. MM A" Ia:ie)a(
for !arria$e fro) t(e .ort of <io #e" Gran#e, Bra:i",
to t(e .ort of Mani"a- Sai# !ar$o a& in&'re# a$ain&t
t(e ri&2 of "o&& +y .etitioner Ma"ayan In&'ran!e
Cor.oration for (i!( it i&&'e# to @2A Marine Car$o
Po"i!ie&-
, 0(i"e t(e ve&&e" a& #o!2e# in E'r+an, So't(
Afri!a t(e !ivi" a't(oritie& arre&te# an# #etaine# it
+e!a'&e of a "a&'it on a ;'e&tion of oner&(i. an#
.o&&e&&ion- TIC Mar2etin$ notifie# Ma"ayan of t(e
arre&t of t(e ve&&e" an# )a#e a for)a" !"ai) for t(e
#o""ar e;'iva"ent on t(e .o"i!ie& @UST546,666-66A for
non,#e"ivery of t(e !ar$o- It "i2ei&e &o'$(t t(e
a&&i&tan!e of Ma"ayan on (at to #o it( t(e !ar$o-
, Ma"ayan re."ie# t(at t(e arre&t of t(e ve&&e" +y !ivi"
a't(ority a& not a .eri" !overe# +y t(e .o"i!ie&- TIC
a#vi&e# Ma"ayan t(at it )i$(t tran&(i. t(e !ar$o an#
re;'e&te# an e%ten&ion of t(e in&'ran!e !overa$e
'nti" a!t'a" tran&(i.)ent, (i!( e%ten&ion a&
a..rove# '.on .ay)ent of a##itiona" .re)i')- T(e
in&'ran!e !overa$e a& e%ten#e# 'n#er t(e &a)e
ter)& an# !on#ition& e)+o#ie# in t(e ori$ina"
.o"i!ie& (i"e in t(e .ro!e&& of )a2in$ arran$e)ent&
for t(e tran&(i.)ent of t(e !ar$o fro) E'r+an to
Mani"a- 1oever t(e !ar$o a& &o"# in E'r+an,
So't( Afri!a, for UST49D-D0 .er )etri! ton or a tota"
of P40,30D,234-C9 #'e to it& .eri&(a+"e nat're (i!(
!o'"# no "on$er &tan# a voya$e of tenty #ay& to
Mani"a an# anot(er tenty #ay& for t(e #i&!(ar$e
t(ereof- It re#'!e# it& !"ai) to USTDD6,606-05 @or it&
.e&o e;'iva"ent of P5,6C5,526-65 at t(e e%!(an$e
rate of P22-0436 .er T4-00A re.re&entin$ it& "o&&
after t(e .ro!ee#& of t(e &a"e ere #e#'!te# fro)
t(e ori$ina" !"ai)-Ma"ayan )aintaine# it& .o&ition
t(at t(e arre&t of t(e ve&&e" +y !ivi" a't(oritie& on a
;'e&tion of oner&(i. a& an e%!e.te# ri&2 'n#er
t(e )arine in&'ran!e .o"i!ie&-
Petitioners Claim
, an arre&t +y !ivi" a't(ority i& not !o).en&a+"e
&in!e t(e ter) Parre&tP refer& to P.o"iti!a" or
e%e!'tive a!t&P an# #oe& not in!"'#e a "o&& !a'&e#
+y riot or +y or#inary J'#i!ia" .ro!e&& a& in t(i& !a&e
, t(e #e"etion of t(e *ree fro) Ca.t're or Sei:'re
C"a'&e o'"# "eave t(e a&&'re# !overe# &o"e"y for
t(e .eri"& &.e!ifie# +y t(e or#in$ of t(e .o"i!y it&e"f
, t(e rationa"e for t(e e%!"'&ion of an arre&t .'r&'ant
to J'#i!ia" a't(oritie& i& to e"i)inate !o""'&ion
+eteen 'n&!r'.'"o'& a&&'re# an# !ivi" a't(oritie&-
, any "o&& (i!( .rivate re&.on#ent )ay (ave
in!'rre# a& in t(e nat're an# for) of 'nre!overe#
a!;'i&ition va"'e +ro'$(t a+o't +y a vo"'ntary
&a!rifi!e &a"e an# not +y arre&t, #etention or &ei:'re
of t(e &(i.-
, it& a!t of reJe!tin$ t(e !"ai) a& a re&'"t of it&
(one&t +e"ief t(at t(e arre&t of t(e ve&&e" a& not a
!o).en&a+"e ri&2 'n#er t(e .o"i!ie& i&&'e#
Respondents Comments
, .etitioner, +ein$ t(e &o"e a't(or of t(e .o"i!ie&,
Parre&t&P &(o'"# +e &tri!t"y inter.rete# a$ain&t it
+e!a'&e t(e r'"e i& t(at any a)+i$'ity i& to +e ta2en
!ontra .roferent')- <i&2 .o"i!ie& &(o'"# +e
!on&tr'e# rea&ona+"y an# in a )anner a& to )a2e
effe!tive t(e intention& an# e%.e!tation& of t(e
.artie&-
, t(e .o"i!ie& !"ear"y &ti.'"ate t(at t(ey !over t(e
ri&2& of non,#e"ivery of an entire .a!2a$e an# t(at it
a& .etitioner it&e"f t(at invite# an# $rante# t(e
e%ten&ion& an# !o""e!te# .re)i')& t(ereon-
ISSUES
4- 0ON t(e arre&t of t(e ve&&e" a& a ri&2 !overe#
'n#er t(e &'+Je!t in&'ran!e .o"i!ie&
2- 0ON in&'ran!e .o"i!ie& &(o'"# +e &tri!t"y
!on&tr'e# a$ain&t t(e in&'rer
HELD
4-F>S
, 0it( t(e in!or.oration of &'+&e!tion 4-4 of Se!tion
4 of t(e In&tit'te 0ar C"a'&e&, Parre&tP !a'&e# +y
or#inary J'#i!ia" .ro!e&& i& #ee)e# in!"'#e# a)on$
t(e !overe# ri&2&- T(i& inter.retation +e!o)e&
inevita+"e (en &'+&e!tion 4-4 of Se!tion 4 of t(e
In&tit'te 0ar C"a'&e& .rovi#e# t(at Pt(i& in&'ran!e
!over& t(e ri&2& e%!"'#e# fro) t(e Stan#ar# *or) of
>n$"i&( Marine Po"i!y +y t(e !"a'&e N0arrante# free
of !a.t're, &ei:'re, arre&t, et!- % % %NP or t(e *-C- S
S- C"a'&e- G'ri&.r'#entia""y, Parre&t&P !a'&e# +y
or#inary J'#i!ia" .ro!e&& i& a"&o a ri&2 e%!"'#e# fro)
t(e Stan#ar# *or) of >n$"i&( Marine Po"i!y +y t(e
*-C- S S- C"a'&e-
, Petitioner !annot a#o.t t(e ar$')ent t(at t(e
Parre&tP !a'&e# +y or#inary J'#i!ia" .ro!e&& i& not
in!"'#e# in t(e !overe# ri&2 &i)."y +e!a'&e t(e *-C-
S S- C"a'&e 'n#er t(e In&tit'te 0ar C"a'&e& !an on"y
+e o.erative in !a&e of (o&ti"itie& or ar"i2e
o.eration& on a!!o'nt of it& (ea#in$ PIn&tit'te 0ar
C"a'&e&-P
2- F>S
Ratio In&'ran!e Po"i!ie& &(o'"# +e !on&tr'e#
"i+era""y in favor of t(e in&'re# an# &tri!t"y a$ain&t
t(e in&'rer-
Reasoning
, An in&'ran!e !ontra!t &(o'"# +e &o inter.rete# a&
to !arry o't t(e .'r.o&e for (i!( t(e .artie&
entere# into t(e !ontra!t (i!( i&, to in&'re a$ain&t
ri&2& of "o&& or #a)a$e to t(e $oo#&- S'!(
inter.retation &(o'"# re&'"t fro) t(e nat'ra" an#
rea&ona+"e )eanin$ of "an$'a$e in t(e .o"i!y- 0(ere
re&tri!tive .rovi&ion& are o.en to to inter.retation&,
t(at (i!( i& )o&t favora+"e to t(e in&'re# i&
a#o.te#-
In#e)nity an# "ia+i"ity in&'ran!e .o"i!ie& are
!on&tr'e# in a!!or#an!e it( t(e $enera" r'"e of
INSURANCE Page 15
re&o"vin$ any a)+i$'ity t(erein in favor of t(e
in&'re#, (ere t(e !ontra!t or .o"i!y i& .re.are# +y
t(e in&'rer- A !ontra!t of in&'ran!e, +ein$ a !ontra!t
of a#(e&ion, .ar e%!e""en!e, any a)+i$'ity t(erein
&(o'"# +e re&o"ve# a$ain&t t(e in&'rer-/i)itation& of
"ia+i"ity &(o'"# +e re$ar#e# it( e%tre)e Jea"o'&y
an# )'&t +e !on&tr'e# in &'!( a ay a& to .re!"'#e
t(e in&'rer fro) non!o)."ian!e it( it& o+"i$ation&
, It )'&t +e +orne in )in# t(at &'!( !ontra!t& are
invaria+"y .re.are# +y t(e !o).anie& an# )'&t +e
a!!e.te# +y t(e in&'re# in t(e for) in (i!( t(ey
are ritten- Any !on&tr'!tion of a )arine .o"i!y
ren#erin$ it voi# &(o'"# +e avoi#e#- S'!( .o"i!ie&
i"", t(erefore, +e !on&tr'e# &tri!t"y a$ain&t t(e
!o).any in or#er to avoi# a forfeit're, 'n"e&& no
ot(er re&'"t i& .o&&i+"e fro) t(e "an$'a$e '&e#-
, If a )arine in&'ran!e !o).any #e&ire& to "i)it or
re&tri!t t(e o.eration of t(e $enera" .rovi&ion& of it&
!ontra!t +y &.e!ia" .rovi&o, e%!e.tion, or e%e).tion,
it &(o'"# e%.re&& &'!( "i)itation in !"ear an#
'n)i&ta2a+"e "an$'a$e-
Be t(at a& it )ay, e%!e.tion& to t(e $enera"
!overa$e are !on&tr'e# )o&t &tron$"y a$ain&t t(e
!o).any- >ven an e%.re&& e%!e.tion in a .o"i!y i& to
+e !on&tr'e# a$ain&t t(e 'n#erriter& +y (o) t(e
.o"i!y i& fra)e#, an# for (o&e +enefit t(e e%!e.tion
i& intro#'!e#-
WESTERN GUARANTY CORPORATION V CA
(RODRIGUEZ, a+. DE DIOS TRANSPORTATION
CO)
46C SC<A 692
*>/ICIANO; G'"y 20, 4550
FACTS
, At aro'n# DH30 in t(e afternoon of 2C Mar!( 4562,
(i"e !ro&&in$ Air.ort <oa# on a .e#e&trian "ane on
(er ay to or2, re&.on#ent Pri&!i""a >- <o#ri$'e:
a& &tr'!2 +y a Ee Eio& .a&&en$er +'& one# +y
re&.on#ent Ee Eio& Tran&.ortation Co-, In!-, t(en
#riven +y one 0a"ter Sa$a y A&.ero- T(e +'& #river
#i&re$ar#e# t(e &to. &i$na" $iven +y a traffi!
.o"i!e)an to a""o .e#e&trian& to !ro&& t(e roa#-
Pri&!i""a a& t(ron to t(e $ro'n#, (ittin$ (er
fore(ea#- S(e a& treate# at t(e Prota!io >)er$en!y
1o&.ita" an# "ater on (o&.ita"i:e# at t(e San G'an Ee
Eio& 1o&.ita"- 1er fa!e a& .er)anent"y #i&fi$'re#,
!a'&in$ (er &erio'& an%iety an# )ora" #i&tre&&-
, <e&.on#ent +'& !o).any a& in&'re# it(
.etitioner 0e&tern G'aranty Cor.oration @P0e&ternPA
'n#er it& Ma&ter Po"i!y (i!( en')erate# &.e!ifi!
"ia+i"itie& of t(e in&'ran!e !o).any an# en#e# it( a
!"a'&e to !"arify t(e "i)itation& of t(e a)o'nt (i!(
!o'"# +e $rante# a& in#e)nity-
, <e&.on#ent Pri&!i""a <o#ri$'e: fi"e# a !o)."aint for
#a)a$e& +efore t(e <e$iona" Tria" Co'rt of Ma2ati
a$ain&t Ee Eio& Tran&.ortation Co- an# 0a"ter A-
Sa$a- <e&.on#ent Ee Eio& Tran&.ortation Co-, in
t'rn, fi"e# a t(ir#,.arty !o)."aint a$ain&t it&
in&'ran!e !arrier, .etitioner 0e&tern-
, On 6 A'$'&t 4569, t(e tria" !o'rt ren#ere# a
#e!i&ion in favor of re&.on#ent Pri&!i""a >- <o#ri$'e:,
, On a..ea", t(e Co'rt of A..ea"& affir)e# in toto
t(e #e!i&ion of t(e tria" !o'rt- Petitioner )ove# for
t(e re!on&i#eration of t(e a..e""ate !o'rtN& #e!i&ion-
In a <e&o"'tion #ate# 40 Gan'ary 4550, t(e Co'rt of
A..ea"& #enie# t(e )otion for re!on&i#eration for
"a!2 of )erit- Petitioner 0e&tern i& no +efore '& on
a Petition for <evie a""e$in$ t(at t(e Co'rt of
A..ea"& erre# in (o"#in$ .etitioner "ia+"e to .ay
+eyon# t(e "i)it& &et fort( in t(e S!(e#'"e
In#e)nitie& an# in fin#in$ 0e&tern "ia+"e for "o&& of
earnin$&, )ora" #a)a$e& an# attorneyN& fee&-
S'!!in!t"y &tate#, it i& .etitioner 0e&ternN& .o&ition
t(at it !annot +e (e"# "ia+"e for "o&& of earnin$&,
)ora" #a)a$e& an# attorneyN& fee& +e!a'&e t(e&e
ite)& are not a)on$ t(o&e in!"'#e# in t(e S!(e#'"e
In#e)nitie& &et fort( in t(e in&'ran!e .o"i!y-
, Petitioner 0e&tern in effe!t !onten#& +efore t(i&
Co'rt, a& it #i# +efore t(e Co'rt of A..ea"&, t(at
+e!a'&e t(e S!(e#'"e of In#e)nitie& "i)it& t(e
a)o'nt .aya+"e for !ertain 2in#& of e%.en&e&
P(o&.ita" roo)P, P&'r$i!a" e%.en&e&P, Pan
ae&t(e&io"o$i&t&N feeP, Po.eratin$ roo)P an# P)e#i!a"
e%.en&e&P t(at S!(e#'"e &(o'"# +e rea# a&
e%!"'#in$ "ia+i"ity for any ot(er ty.e of e%.en&e or
#a)a$e or "o&& even t(o'$( a!t'a""y &'&taine# or
in!'rre# +y t(e t(ir# .arty vi!ti)- 0e are not
.er&'a#e# +y 0e&ternN& !ontention-
ISSUE
0ON t(e S!(e#'"e of in#e)nitie& a& &tate# in t(e
in&'ran!e .o"i!y &(o'"# +e !on&tr'e# &tri!t"y to
e%!"'#e a"" ot(er& not e%."i!it"y &tate# t(erein
HELD
NO
Ratio An in&'ran!e .o"i!y +ein$ in t(e nat're of an
a#(e&ion !ontra!t i& to +e &tri!t"y !on&tr'e# a$ain&t
t(e in&'rer an# "i+era""y in favor of t(e in&'re#-
Reasoning
, *ir&t"y, t(e S!(e#'"e of In#e)nitie& #oe& not
.'r.ort to re&tri!t t(e 2in#& of #a)a$e& t(at )ay +e
aar#e# a$ain&t 0e&tern on!e "ia+i"ity (a& ari&en-
Se!tion 4, ;'ote# a+ove, #oe& refer to !ertain P/i)it&
of /ia+i"ityP (i!( in t(e !a&e of t(e t(ir# .arty
"ia+i"ity &e!tion of t(e Ma&ter Po"i!y, i& a..arent"y
P90,000-00 .er .er&on .er a!!i#ent- 0it(in t(i&
over,a"" ;'antitative "i)it, a"" 2in#& of #a)a$e&
a""oa+"e +y "a Pa!t'a" or !o).en&atory
#a)a$e&P; P)ora" #a)a$e&P; Pno)ina" #a)a$e&P;
Pte).erate or )o#erate #a)a$e&P; P"i;'i#ate#
#a)a$e&P; an# Pe%e)."ary #a)a$e&P )ay +e
aar#e# +y a !o).etent !o'rt a$ain&t t(e in&'rer
on!e "ia+i"ity i& &(on to (ave ari&en, an# t(e
e&&entia" re;'i&ite& or !on#ition& for $rant of ea!(
&.e!ie& of #a)a$e& are .re&ent- It a..ear& to '&
&e"f,evi#ent t(at t(e S!(e#'"e of In#e)nitie& a& not
inten#e# to +e an en')eration, )'!( "e&& a !"o&e#
en')eration, of t(e &.e!ifi! 2in#& of #a)a$e& (i!(
)ay +e aar#e# 'n#er t(e Ma&ter Po"i!y 0e&tern
(a& i&&'e#-
, Se!on#"y, t(e rea#in$ 'r$e# +y 0e&tern of t(e
S!(e#'"e of In#e)nitie& !o)e& too !"o&e to or2in$
fra'# '.on +ot( t(e in&'re# an# t(e t(ir# .arty
+enefi!iary of Se!tion 4, ;'ote# a+ove- *or 0e&ternN&
rea#in$ o'"# #ra&ti!a""y an# it(o't arnin$ "i)it
t(e ot(eri&e 'n"i)ite# @&ave for t(e over,a""
;'antitative "i)it of "ia+i"ity of P90,000-00 .er .er&on
.er a!!i#entA an# !o).re(en&ive &!o.e of "ia+i"ity
a&&')e# +y t(e in&'rer 0e&tern 'n#er Se!tion 4H
Pa"" &')& ne!e&&ary to #i&!(ar$e "ia+i"ity of t(e
in&'re# in re&.e!t of [+o#i"y inJ'ry to a t(ir# .arty]P-
T(i& re&'"t (i!( i& not e&&entia""y #ifferent fro)
ta2in$ aay it( t(e "eft (an# (at (a# +een $iven
it( t(e ri$(t (an# e )'&t avoi# a& o+vio'&"y
re.'$nant to .'+"i! .o"i!y- If (at 0e&tern no
'r$e& i& (at 0e&tern inten#e# to a!(ieve +y it&
S!(e#'"e of In#e)nitie&, it a& in!')+ent '.on
0e&tern to '&e "an$'a$e far )ore &.e!ifi! an#
.re!i&e t(an t(at '&e# in fa!t +y 0e&tern, &o t(at t(e
in&'re#, an# .otentia" .'r!(a&er& of it& Ma&ter Po"i!y,
an# t(e Offi!e of t(e In&'ran!e Co))i&&ioner, )ay
+e .ro.er"y infor)e# an# a!t a!!or#in$"y-
, Petitioner 0e&tern o'"# (ave '& !on&tr'e t(e
S!(e#'"e of In#e)nitie& a& !o).ri&in$ !ontra!t'a"
"i)itation& of "ia+i"ity (i!(, a& a"rea#y note#, i&
!o).re(en&ive"y #efine# in Se!tion 4 P/ia+i"ity to
t(e P'+"i!P of t(e Ma&ter Po"i!y- It i& e"",&ett"e#,
(oever, t(at !ontra!t'a" "i)itation& of "ia+i"ity fo'n#
in in&'ran!e !ontra!t& &(o'"# +e re$ar#e# +y !o'rt&
it( a Ja'n#i!e# eye an# e%tre)e !are an# &(o'"#
INSURANCE Page 16
+e &o !on&tr'e# a& to .re!"'#e t(e in&'rer fro)
eva#in$ !o)."ian!e it( it& J'&t o+"i$ation&-
, *ina""y, an in&'ran!e !ontra!t i& a !ontra!t of
a#(e&ion- T(e r'"e i& e"" entren!(e# in o'r
J'ri&.r'#en!e t(at t(e ter)& of &'!( !ontra!t are to
+e !on&tr'e# &tri!t"y a$ain&t t(e .arty (i!(
.re.are# t(e !ontra!t, (i!( in t(i& !a&e (a..en& to
+e .etitioner 0e&tern-

=UA CHEE GAN V LAW UNION AND ROC<
INSURANCE CO., LTD.
56 P1I/ 69
<>F>S; Ee!e)+er 4C, 4599
NATURE
An a..ea" +y #efen#ant in&'ran!e !o).any fro) t(e
#e!i&ion of C*I in favor of t(e ."aintiff
FACTS
, +efore t(e "a&t ar, ."aintiff,a..e""ee one# D
are(o'&e& or +o#e$a& in Ta+a!o, A"+ay, '&e# for
t(e &tora$e of &to!2& of !o.ra an# of (e)., +a"e#
an# "oo&e, in (i!( t(e a..e""ee #ea"t e%ten&ive"y-
T(ey (a# +een, it( t(eir !ontent&, in&'re# it( t(e
#efen#ant Co).any &in!e 453C, an# t(e "oo&e )a#e
.aya+"e to t(e P(i"i..ine Nationa" Ban2 a& )ort$a$e
of t(e (e). an# !ro.&, to t(e e%tent of it& intere&t-
, *ire of 'n#eter)ine# ori$in t(at +ro2e o't in t(e
ear"y )ornin$ of G'"y 24, 45D0, an# "a&te# a")o&t
one ee2, $'tte# an# !o)."ete"y #e&troye# Bo#e$a&
No&- 4, 2 an# D, it( t(e )er!(an#i&e &tore#
t(erein- P"aintiff,a..e""ee infor)e# t(e in&'rer +y
te"e$ra) on t(e &a)e #ate; an# on t(e ne%t #ay, t(e
fire a#J'&ter& en$a$e# +y a..e""ant in&'ran!e
!o).any arrive# an# .ro!ee#e# to e%a)ine an#
.(oto$ra.( t(e .re)i&e&, .ore# over t(e +oo2& of
t(e in&'re# an# !on#'!te# an e%ten&ive
inve&ti$ation- T(e ."aintiff (avin$ &'+)itte# t(e
!orre&.on#in$ fire !"ai)&, tota""in$ P356,962-64 @+'t
re#'!e# to t(e f'"" a)o'nt of t(e in&'ran!e,
P3C0,000A, t(e In&'ran!e Co).any re&i&te#
.ay)ent, !"ai)in$ vio"ation of arrantie& an#
!on#ition&, fi"in$ of fra'#'"ent !"ai)&, an# t(at t(e
fire (a# +een #e"i+erate"y !a'&e# +y t(e in&'re# or
+y ot(er .er&on& in !onnivan!e it( (i)-
, Q'e C(ee Gan, it( (i& +rot(er, Q'a C(ee Pao,
an# &o)e e)."oyee& of (i&, ere in#i!te# an# trie#
in 45D0 for t(e !ri)e of ar&on, it +ein$ !"ai)e# t(at
t(ey (a# &et fire to t(e #e&troye# are(o'&e& to
!o""e!t t(e in&'ran!e- T(ey ere, (oever, a!;'itte#
+y t(e tria" !o'rt-
, t(e !ivi" &'it to !o""e!t t(e in&'ran!e )oney
.ro!ee#e# to it& tria" it( t(e C*I (o"#in$ t(atH
J'#$)ent i& ren#ere# for t(e ."aintiff an# a$ain&t t(e
#efen#ant !on#e)nin$ t(e "atter to .ay t(e for)er
U @aA Un#er t(e fir&t !a'&e of a!tion, t(e &') of
P4D6,35D-D6; @+A Un#er t(e &e!on# !a'&e of a!tion,
t(e &') of P490,000; @!A Un#er t(e t(ir# !a'&e of
a!tion, t(e &') of P9,000; @#A Un#er t(e fo'rt(
!a'&e of a!tion, t(e &') of P49,000; an# @eA Un#er
t(e fift( !a'&e of a!tion, t(e &') of PD0,000; a"" of
(i!( &(a"" +ear intere&t at t(e rate of 6Q .er
ann') in a!!or#an!e it( Se!tion 54 @+A of t(e
In&'ran!e A!t fro) Se.te)+er 26, 45D0, 'nti" ea!(
i& .ai#, it( !o&t& a$ain&t t(e #efen#ant-
, In it& fir&t a&&i$n)ent of error, t(e in&'ran!e
!o).any a""e$e& t(at t(e tria" Co'rt &(o'"# (ave
(e"# t(at t(e .o"i!ie& ere avoi#e# for +rea!( of
arranty, &.e!ifi!a""y t(e one a..earin$ on a ri#er
.a&te# @it( ot(er &i)i"ar ri#er&A on t(e fa!e of t(e
.o"i!ie&-
D

- It i& ar$'e# t(at &in!e t(e +o#e$a& in&'re# (a# an
e%terna" a"" .eri)eter of 900 )eter& or 4,6D0 feet,
t(e a..e""ee &(o'"# (ave 44 fire (y#rant& in t(e
!o).o'n#, an# t(at (e a!t'a""y (a# on"y 2, it( a
f'rt(er .air near+y, +e"on$in$ to t(e )'ni!i.a"ity of
Ta+a!o-
ISSUES
4- 0ON t(e #efen#ant,a..e""ant !an !"ai) t(e
.o"i!ie& it (a# i&&'e# a& voi# a+ initio
2- 0ON t(e in&'re# vio"ate# t(e P1e). 0arrantyP
.rovi&ion& of Po"i!y No- 263C469 a$ain&t t(e &tora$e
of $a&o"ine
3- 0ON t(e in&'re# !onnive# at t(e "o&& an#
fra'#'"ent"y inf"ate# t(e ;'antity of t(e in&'re# &to!2
in t(e +'rnt +o#e$a&
HELD
4- NO
Ratio It i& '&'a""y (e"# t(at (ere t(e in&'rer, at t(e
ti)e of t(e i&&'an!e of a .o"i!y of in&'ran!e, (a&
4
Memo. of Warranty. * 'he undernoted Appliances for the e+tinction of fire being #ept on the
premises insured hereby, and it being declared and understood that there is an ample and constant
water supply with sufficient pressure a&ailable at all seasons for the same, it is hereby warranted
that the said appliances shall be maintained in efficient wor#ing order during the currency of this
policy, by reason whereof a discount of % 1,% per cent is allowed on the premium chargeable under
this policy.
Hydrants in the compound, not less in number than one for each 1(- feet of e+ternal wall
measurement of building, protected, with not less than 1-- feet of hose piping and no..les for
e&ery two hydrants #ept under co&er in con&enient places, the hydrants being supplied with water
pressure by a pumping engine, or from some other source, capable of discharging at the rate of not
less than %-- gallons of water per minute into the upper story of the highest building protected, and
a trained brigade of not less than %- men to wor# the same./
2no"e#$e of e%i&tin$ fa!t& (i!(, if in&i&te# on,
o'"# inva"i#ate t(e !ontra!t fro) it& very in!e.tion,
&'!( 2no"e#$e !on&tit'te& a aiver of !on#ition& in
t(e !ontra!t in!on&i&tent it( t(e fa!t&, an# t(e
in&'rer i& &to..e# t(ereafter fro) a&&ertin$ t(e
+rea!( of &'!( !on#ition&- T(e "a i& !(arita+"e
eno'$( to a&&')e, in t(e a+&en!e of any &(oin$ to
t(e !ontrary, t(at an in&'ran!e !o).any inten#& to
e%e!'te# a va"i# !ontra!t in ret'rn for t(e .re)i')
re!eive#; an# (en t(e .o"i!y !ontain& a !on#ition
(i!( ren#er& it voi#a+"e at it& in!e.tion, an# t(i&
re&'"t i& 2non to t(e in&'rer, it i"" +e .re&')e# to
(ave inten#e# to aive t(e !on#ition& an# to e%e!'te
a +in#in$ !ontra!t, rat(er t(an to (ave #e!eive# t(e
in&'re# into t(in2in$ (e i& in&'re# (en in fa!t (e i&
not, an# to (ave ta2en (i& )oney it(o't
!on&i#eration-
Reasoning
- T(e a..e""ant i& +arre# e&to..e" to !"ai) vio"ation
of t(e &o,!a""e# fire (y#rant& arranty, for t(e
rea&on t(at 2noin$ f'""y a"" t(at t(e n')+er of
(y#rant& #e)an#e# t(erein never e%i&te# fro) t(e
very +e$innin$, t(e a..e""ant nevert("e&& i&&'e# t(e
.o"i!ie& in ;'e&tion &'+Je!t to &'!( arranty, an#
re!eive# t(e !orre&.on#in$ .re)i')&- T(e in&'ran!e
!o).any a& aare, even +efore t(e .o"i!ie& ere
i&&'e#, t(at in t(e .re)i&e& in&'re# t(ere ere on"y
to fire (y#rant& in&ta""e# +y Q'a C(ee Gan an# to
ot(er& near+y, one# +y t(e )'ni!i.a"ity of Ta+a!o,
!ontrary to t(e re;'ire)ent& of t(e arranty in
;'e&tion
, The 2la'+, h,(a+ A,*'!e #- h'* .#!"'+e '*
2e"-e!l) a22a"e+. T# all#& a !#(2a+) #
a!!e2 #+e@* (#+e) -#" a 2#l'!) #- '+*,"a+!e
&h'!h ' he+ ;+#&* # 3e $#'. a+. #- +# e--e!,
h#,%h ' ;+#&* a* ' (,*, ha he a**,"e.
3el'e$e* ' # 3e $al'. a+. 3'+.'+%, '* *#
!#+"a") # he .'!ae* #- h#+e*) a+. -a'"
.eal'+%, a+. *# !l#*el) "elae. # 2#*''$e -"a,.,
a* # he a3h#""e+ # -a'"5('+.e. (e+. I
&#,l. 3e # all#& he !#(2a+) # "ea he
2#l'!) a* $al'. l#+% e+#,%h # %e he 2"e(',(
#+ ', a+. lea$e ' a l'3e") # "e2,.'ae ' he
+e/ (#(e+. Th'* !a++# 3e .ee(e. # 3e he
"eal '+e+'#+ #- he 2a"'e*. T# h#l. ha a
l'e"al !#+*",!'#+ #- he 2#l'!) e/2"e**e. he
",e '+e+'#+ #- he !#(2a+) &#,l. 3e #
'+.'! ', -#" -"a,.,le+ 2,"2#*e* a+. .e*'%+*
&h'!h &e !a++# 3el'e$e ' # 3e %,'l) #-.
, T(e a..e""ant !o).any &o or#e# t(e .o"i!ie& t(at
(i"e e%a!tin$ t(e $reater n')+er of fire (y#rant&
an# a.."ian!e&, it 2e.t t(e .re)i') #i&!o'nt at t(e
INSURANCE Page 17
)ini)') of 2 4R2Q, t(ere+y $ivin$ t(e in&'ran!e
!o).any a #o'+"e +enefit- S'!( a+nor)a" treat)ent
of t(e in&'re# &tron$"y .oint& at an a+'&e of t(e
in&'ran!e !o).anyN& &e"e!tion of t(e or#& an#
ter)& of t(e !ontra!t, over (i!( it (a# a+&o"'te
!ontro"-
, 9ecei#t of Preius or Assessents after Cause
for Forfeiture -t!er t!an 1on#ayent- U It i& a e""
&ett"e# r'"e of "a t(at an in&'rer (i!( it(
2no"e#$e of fa!t& entit"in$ it to treat a .o"i!y a& no
"on$er in for!e, re!eive& an# a!!e.t& a .re)i') on
t(e .o"i!y, e&to..e# to ta2e a#vanta$e of t(e
forfeit're- It !annot treat t(e .o"i!y a& voi# for t(e
.'r.o&e of #efen&e to an a!tion to re!over for a "o&&
t(ereafter o!!'rrin$ an# at t(e &a)e ti)e treat it a&
va"i# for t(e .'r.o&e of earnin$ an# !o""e!tin$ f'rt(er
.re)i')&-
, Moreover, ta2in$ into a!!o'nt t(e e"" 2non r'"e
t(at a)+i$'itie& or o+&!'ritie& )'&t +e &tri!t"y
inter.rete# a$ain&t t(e .arty t(at !a'&e# t(e),

t(e
P)e)o of arrantyP invo2e# +y a..e""ant +ar& t(e
"atter fro) ;'e&tionin$ t(e e%i&ten!e of t(e
a.."ian!e& !a""e# for in t(e in&'re# .re)i&e&
$n the alleged violations of the plaintiff T(e
a""e$e# vio"ation of t(e arranty of 400 feet of fire
(o&e for every to (y#rant&, )'&t +e e;'a""y
reJe!te#, &in!e t(e a..e""antN& ar$')ent t(ereon i&
+a&e# on t(e a&&').tion t(at t(e in&'re# a& +o'n#
to )aintain no "e&& t(an e"even (y#rant&, (i!(
re;'ire)ent a..e""ant i& e&to..e# fro) enfor!in$-
, A& to )aintenan!e of a traine# fire +ri$a#e of 20
)en, t(e re!or# i& .re.on#erant t(at t(e &a)e a&
or$ani:e#, an# #ri""e#, fro) ti)e to $ive, a"t(o'$(
not )aintaine# a& a .er)anent"y &e.arate 'nit,
(i!( t(e arranty #i# not re;'ire-
2- NO
Ratio 1ere, a$ain, +y rea&on of t(e e%!"'&ive !ontro"
of t(e in&'ran!e !o).any over t(e ter)& an#
.(ra&eo"o$y of t(e !ontra!t, t(e a)+i$'ity )'&t +e
(e"# &tri!t"y a$ain&t t(e in&'rer an# "i+era""y in favor
of t(e in&'re#, &.e!ia""y to avoi# a forfeit're-
I+*,"a+!e '*, '+ '* +a,"e, !#(2le/ a+. .'--'!,l
-#" he la)(a+ # ,+.e"*a+.. P#l'!'e* a"e
2"e2a"e. 3) e/2e"* &h# ;+#& a+. !a+
a+'!'2ae he hea"'+% a+. 2#**'3le
!#(2l'!a'#+* #- e$e") !#+'+%e+!). S# l#+% a*
'+*,"a+!e !#(2a+'e* '+*'* ,2#+ he ,*e #-
a(3'%,#,*, '+"'!ae a+. e!h+'!al 2"#$'*'#+*,
&h'!h !#+!eal "ahe" ha+ -"a+;l) .'*!l#*e,
he'" #&+ '+e+'#+*, he !#,"* (,*, '+
-a'"+e** # h#*e &h# 2,"!ha*e '+*,"a+!e,
!#+*",e e$e") a(3'%,') '+ -a$#" #- he
'+*,"e.. A+ '+*,"e" *h#,l. +# 3e all#&e., 3)
he ,*e #- #3*!,"e 2h"a*e* a+. e/!e2'#+*, #
.e-ea he $e") 2,"2#*e -#" &h'!h he 2#l'!)
&a* 2"#!,"e..
Reasoning
- A..e""ee a#)itte# t(at t(ere ere 36 !an& of
$a&o"ine in t(e +'i"#in$ #e&i$ne#- It 1oever,
$a&o"ine i& not &.e!ifi!a""y )entione# a)on$ t(e
.ro(i+ite# arti!"e& "i&te# in t(e &o,!a""e# P(e).
arranty-P T(e !a'&e re"ie# '.on +y t(e in&'rer
&.ea2& of Poi"& @ani)a" an#Ror ve$eta+"e an#Ror
)inera" an#Ror t(eir "i;'i# .ro#'!t& (avin$ a f"a&(
.oint +e"o 300 *a(ren(eitAP, an# i& #e!i#e#"y
a)+i$'o'& an# 'n!ertain; for in or#inary .ar"an!e,
POi"&P )ean P"'+ri!ant&P an# not $a&o"ine or
2ero&ene- An# (o )any in&'re#, it )ay e"" +e
on#ere#, are in a .o&ition to 'n#er&tan# or
#eter)ine Pf"a&( .oint +e"o 300 *a(ren(eit-
, If t(e !o).any inten#e# to re"y '.on a !on#ition of
t(at !(ara!ter, it o'$(t to (ave +een ."ain"y
e%.re&&e# in t(e .o"i!y-
, T(e !ontra!t of in&'ran!e i& one of .erfe!t $oo#
fait( not for t(e in&'re# a"one, +'t e;'a""y &o for t(e
in&'rer; in fa!t, it i& )ere &o for t(e "atter, &in!e it&
#o)inant +ar$ainin$ .o&ition !arrie& it( it &tri!ter
re&.on&i+i"ity-
, Anot(er .oint t(at i& in favor of t(e in&'re# i& t(at
t(e $a&o"ine 2e.t in Bo#e$a No- 2 a& on"y in!i#enta"
to (i& +'&ine&&, +ein$ no )ore t(an a !'&to)ary 2
#ayN& &'.."y for t(e five or &i% )otor ve(i!"e& '&e#
for tran&.ortin$ of t(e &tore# )er!(an#i&e- PIt i& e""
&ett"e# t(at t(e 2ee.in$ of inf"a))a+"e oi"& on t(e
.re)i&e& t(o'$( .ro(i+ite# +y t(e .o"i!y #oe& not
voi# it if &'!( 2ee.in$ i& in!i#enta" to t(e +'&ine&&-P
$n the su"mission of "oo%s& vouc"ers& etc# T(e
!(ar$e t(at t(e in&'re# fai"e# or ref'&e# to &'+)it to
t(e e%a)iner& of t(e in&'rer t(e +oo2&, vo'!(er&,
et!- #e)an#e# +y t(e) a& fo'n# 'n&'+&tantiate#
+y t(e tria" Co'rt, an# no rea&on (a& +een &(on to
a"ter t(i& fin#in$- T(e in&'re# $ave t(e in&'ran!e
e%a)iner a"" t(e #ate (e a&2e# for, an# t(e e%a)iner
even 2e.t an# .(oto$ra.(e# &o)e of t(e e%a)ine#
+oo2& in (i& .o&&e&&ion- 0(at #oe& a..ear to (ave
+een reJe!te# +y t(e in&'re# a& t(e #e)an# t(at
(e &(o'"# &'+)it Pa list of all +oo2&, vouc!ers$
recei#ts an# ot(er re!or#&P, +'t t(e ref'&a" of t(e
in&'re# in t(i& in&tan!e a& e"" J'&tifie#, &in!e t(e
#e)an# for a "i&t of a"" t(e vo'!(er& @(i!( ere not
in '&e +y t(e in&'re#A an# re!ei.t& a& .o&itive"y
'nrea&ona+"e, !on&i#erin$ t(at &'!( "i&tin$ a&
&'.erf"'o'& +e!a'&e t(e in&'rer a& not #enie#
a!!e&& to t(e re!or#&, t(at t(e vo"')e of Q'a C(ee
GanN& +'&ine&& ran into )i""ion&, an# t(at t(e
#e)an# a& )a#e J'&t after t(e fire (en
everyt(in$ a& in t'r)oi"- T(at t(e re.re&entative&
of t(e in&'ran!e !o).any ere a+"e to &e!'re a"" t(e
#ate t(ey nee#e# i& .rove# +y t(e fa!t t(at t(e
a#J'&ter A"e%an#er Steart a& a+"e to .re.are (i&
on +a"an!e &(eet t(at #i# not #iffer fro) t(at
&'+)itte# +y t(e in&'re# e%!e.t for t(e va"'ation of
t(e )er!(an#i&e, a& e%.re&&"y fo'n# +y t(e Co'rt in
t(e !ri)ina" !a&e for ar&on-
3- NO
Ratio Bot( #efen&e& are .re#i!te# on t(e
a&&').tion t(at t(e in&'re# a& in finan!ia"
#iffi!'"tie& an# &et t(e fire to #efra'# t(e in&'ran!e
!o).any, .re&')a+"y in or#er to .ay off t(e
P(i"i..ine Nationa" Ban2, to (i!( )o&t of t(e
in&'re# (e). an# !o.ra a& ."e#$e#- Bot( #efen&e&
are fata""y 'n#er)ine# +y t(e e&ta+"i&(e# fa!t t(at,
notit(&tan#in$ t(e in&'rerN& ref'&a" to .ay t(e va"'e
of t(e .o"i!ie& t(e e%ten&ive re&o'r!e& of t(e in&'re#
ena+"e# (i) to .ay off t(e Nationa" Ban2 in a &(ort
ti)e; an# if (e a& a+"e to #o &o, no )otive a..ear&
for atte).t to #efra'# t(e in&'rer- 0(i"e t(e
a!;'itta" of t(e in&'re# in t(e ar&on !a&e i& not res
6udicata on t(e .re&ent !ivi" a!tion, t(e in&'rerN&
evi#en!e, to J'#$e fro) t(e #e!i&ion in t(e !ri)ina"
!a&e, i& .ra!ti!a""y i#enti!a" in +ot( !a&e& an# )'&t
"ea# to t(e &a)e re&'"t, &in!e t(e .roof to e&ta+"i&(
t(e #efen&e of !onnivan!e at t(e fire in or#er to
#efra'# t(e in&'rer P!annot +e )ateria""y "e&&
!onvin!in$ t(an t(at re;'ire# in or#er to !onvi!t t(e
in&'re# of t(e !ri)e of ar&on-P
, A& to t(e #efen&e t(at t(e +'rne# +o#e$a& !o'"#
not .o&&i+"y (ave !ontaine# t(e ;'antitie& of !o.ra
an# (e). &tate# in t(e fire !"ai)&, t(e in&'rerN& !a&e
re&t& a")o&t e%!"'&ive"y on t(e e&ti)ate&, inferen!e&
an# !on!"'&ion& of it& a#J'&ter inve&ti$ator (o
e%a)ine# t(e .re)i&e& #'rin$ an# after t(e fire- 1i&
te&ti)ony, (oever, a& +a&e# on inferen!e& fro)
t(e .(oto$ra.(& an# tra!e& fo'n# after t(e fire, an#
)'&t yie"# to t(e !ontra#i!tory te&ti)ony of t(o&e
(o a!t'a""y &a t(e !ontent& of t(e +o#e$a& &(ort"y
+efore t(e fire, (i"e in&.e!tin$ t(e) for t(e
)ort$a$ee Ban2-
Disposition 0e fin# no rever&i+"e error in t(e
J'#$)ent a..ea"e# fro), (erefore t(e &a)e i&
(ere+y affir)e#-
DEL ROSARIO V E=UITABLE INSURANCE ?
CASUALTY CO., INC
6 SC<A 3D3
PA<>E>S; G'ne 25, 4563
INSURANCE Page 18
NATURE
A..ea" fro) J'#$)ent of C*I <i:a"
FACTS
, *ran!i&!o #e" <o&ario a& in&'re# +y >;'ita+"e
In&'ran!e an# Ca&'a"ty Co- In! 'n#er Per&ona"
A!!i#ent Po"i!y no- C436- T(e Co).any +o'n# it&e"f
to .ay P4000 to P3000 a& in#e)nity for t(e #eat(
of t(e in&'re#-
, Un#er t(e .o"i!yH
Part '. 'ndenity for Deat!
If t(e in&'re# &'&tain& any +o#i"y inJ'ry
(i!( i& effe!te# &o"e"y t(ro'$( vio"ent,
e%terna", vi&i+"e an# a!!i#enta" )ean&,
an# (i!( &(a"" re&'"t, in#e.en#ent"y of
a"" ot(er !a'&e& an# it(in &i%ty #ay&
fro) t(e o!!'rren!e t(ereof, in t(e Eeat(
of t(e In&'re#, t(e Co).any &(a"" .ay t(e
a)o'nt &et o..o&ite &'!( inJ'ryH
Se!tion 4- InJ'ry &'&taine# ot(er t(an
t(o&e &.e!ifie# +e"o 'n"e&& e%!e.te#
(ereinafter P4000
Se!tion 2- InJ'ry &'&taine# +y t(e
re!2in$ or #i&a+"e)ent of a rai"roa#
.a&&en$er !ar or &treet rai"ay !ar in or
on (i!( t(e In&'re# i& trave"in$ a& a
fare.ayin$ .a&&en$er P4900
Se!tion 3- InJ'ry &'&taine# +y t(e +'rnin$
of a !('r!(, t(eatre, .'+"i! "i+rary or
)'ni!i.a" a#)ini&tration +'i"#in$ (i"e
t(e In&'re# i& t(erein at t(e
!o))en!e)ent of t(e fire P2000
Se!tion D- InJ'ry &'&taine# +y t(e
re!2in$ or #i&a+"e)ent of a re$'"ar
.a&&en$er e"evator !ar in (i!( t(e
In&'re# i& +ein$ !onveye# a& a .a&&en$er
@>"evator in )ine& e%"'#e#A P2900
Se!tion 9- InJ'ry &'&taine# +y a &tro2e of
"i$(tnin$ or +y a !y!"oneP3000
% % % % % % % %
% % % %
Part V'. A8ce#tions
T(i& .o"i!y &(a"" not !over #i&a..earan!e
of t(e In&'re# nor &(a"" it !over Eeat(,
Ei&a+i"ity, 1o&.ita" fee&, or /o&& of ti)e,
!a'&e# to t(e in&'re#H
% % % @(A By #ronin$ e%!e.t a& a
!on&e;'en!e of t(e re!2in$ or
#i&a+"e)ent in t(e P(i"i..ine ater& of a
.a&&en$er &tea) or )otor ve&&e" in
(i!( t(e In&'re# i& trave"in$ a& a
fare.ayin$ .a&&en$er; % % %
, A ri#er to t(e Po"i!y !ontaine# t(e fo""oin$;
IM- E<O0NING
It i& (ere+y #e!"are# an# a$ree# t(at
e%e).tion !"a'&e /etter @(A in PA<T MI of
t(e .o"i!y i& (ere+y aive# +y t(e
!o).any, an# to for) a .art of t(e
.rovi&ion !overe# +y t(e .o"i!y-
, *e+ 2D, 459C, *ran!i&!o #e" <o&ario (i"e on +oar#
t(e )otor "a'n!( IS/AMA, it( (i& +enefi!iary to t(e
.o"i!y, <e)e#io& Gay)e, ere for!e# to J'). off &ai#
"a'n!( on a!!o'nt of fire (i!( +ro2e o't on &ai#
ve&&e", re&'"tin$ in t(e #eat( +y #ronin$ of t(e
in&'re# an# (i& +enefi!iary-
, Si)eon #e" <o&ario, t(e in&'re#=& fat(er, fi"e# a
!"ai) for .ay)ent it( t(e !o).any- T(e !o).any
.ai# (i) P4000 .'r&'ant to &e!tion 4 Part I of t(e
.o"i!y-
, On t(e &a)e #ate, Atty- *ran!i&!o rote to t(e
!o).any a!2no"e#$in$ re!ei.t +y (i& !"ient of t(e
P4000 +'t infor)in$ &ai# !o).any t(at &ai# a)o'nt
a& not t(e !orre!t one- 1e !"ai)e# t(at t(e a)o'nt
.aya+"e &(o'"# +e P4900 'n#er t(e .rovi&ion of
Se!tion 2 Part I, +a&e# on t(e r'"e of .ari )ateria-
, T(e !o).any referre# t(e )atter to t(e In&'ran!e
Coo)i&&ioner, (o a& of t(e o.inion t(at t(e
"ia+i"ity of t(e !o).any a& on"y P4000- t('& t(e
!o).any ref'&e# to .ay )ore t(at P4000- Atty-
*ran!i&!o rote a &'+&e;'ent "etter to !o).any
a&2in$ for .3000, (i!( t(e !o).any ref'&e# to .ay-
, A !o)."aint for re!overy of t(e +a"an!e of P2000
a& in&tit'te# it( t(e C*I <i:a", .rayin$ for a
f'rt(er &') of P40000 a& attorney=& fee&, e%.en&e&
of "iti$ation an# !o&t&-
, C*I r'"e# in favor of .etitioner, or#erin$ t(e
!o).any to .ay P2000 to #e" <o&ario-
ISSUE
1o )'!( &(o'"# t(e in#e)nity +e
HELD
, A"" t(e .artie& a$ree t(at in#e)nity (a& to +e .ai#,
+'t t(e !onf"i!t !enter& on (o )'!( it &(o'"# +e-
, 0(ere t(ere i& a)+i$'ity it( re&.e!t to t(e ter)&
an# !on#ition& of t(e .o"i!y, t(e &a)e i"" +e
re&o"ve# a$ain&t t(e one re&.on&i+"e t(ereof-
Genera""y, t(e in&'re# (a& "itt"e, if any, .arti!i.ation
in t(e .re.aration of t(e .o"i!y, to$et(er it( t(e
#raftin$ of it& ter)& an# !on#ition&- T(e
inter.retation of o+&!'re &ti.'"ation& in a !ontra!t
&(o'"# not favor t(e .arty (o !a'&e# t(e o+&!'rity-
, SC a$ree# it( t(e r'"in$ of t(e "oer !o'rtH
8 8 8 deat! by dro,nin" is a "round for recovery
a#art fro t!e bodily in6ury because deat! by
bodily in6ury is covered by Part ' of t!e #olicy
,!ile deat! by dro,nin" is covered by Part V'
t!ereof. But ,!ile t!e #olicy entions s#ecific
aounts t!at ay be recovered for deat! for
bodily in6ury$ yet$ t!ere is not s#ecific aount
entioned in t!e #olicy for deat! t!ru dro,nin"
alt!ou"! t!e latter is$ under Part V' of t!e #olicy$
a "round for recovery t!ereunder. Since t!e
defendant !as bound itself to #ay P:333 to
PC333 as indenity for t!e deat! of t!e insured
but t!e #olicy does not #ositively state any
definite aount t!at ay be recovered in case of
deat! by dro,nin"$ t!ere is an abi"uity in t!is
res#ect in t!e #olicy$ ,!ic! abi"uity ust be
inter#reted in favor of t!e insured and strictly
a"ainst t!e insurer so as to allo, a "reater
indenity. 8 8 8 #laintiff is t!erefore entitled to
recover PC333.
Disposition G'#$)ent a..ea"e# fro) i& affir)e#-
GEAGONIA $. CA (COUNTRY BAN<ERS
INSURANCE)
6 SC<A 3D3
EAMIE>; *e+r'ary 6 4559
FACTS
,Gea$onia i& t(e oner of Nor)anN& Mart "o!ate# in
t(e .'+"i! )ar2et of San *ran!i&!o, A$'&an #e" S'r-
On 22 Ee! 4565, (e o+taine# fro) t(e .rivate
re&.on#ent fire in&'ran!e .o"i!y for P400,000-00-
T(e .erio# of t(e .o"i!y a& fro) 22 Ee! 4565 to 22
Ee! 4550 an# !overe# t(e ffH PSto!2,in,tra#e
!on&i&tin$ .rin!i.a""y of #ry $oo#& &'!( a& <T0N& for
)en an# o)en ear an# ot(er '&'a" to a&&'re#N&
+'&ine&&-
,T(e .o"i!y !ontaine# t(e fo""oin$ !on#itionH
P3- T(e in&'re# &(a"" $ive noti!e to t(e Co).any of
any in&'ran!e or in&'ran!e& a"rea#y effe!te#, or
(i!( )ay &'+&e;'ent"y +e effe!te#, !overin$ any of
t(e .ro.erty or .ro.ertie& !on&i&tin$ of &to!2& in
tra#e, $oo#& in .ro!e&& an#Ror inventorie& on"y
(ere+y in&'re#, an# 'n"e&& noti!e +e $iven an# t(e
.arti!'"ar& of &'!( in&'ran!e or in&'ran!e& +e &tate#
t(erein or en#or&e# in t(i& .o"i!y .'r&'ant to Se!tion
90 of t(e In&'ran!e Co#e, +y or on +e(a"f of t(e
Co).any +efore t(e o!!'rren!e of any "o&& or
#a)a$e, a"" +enefit& 'n#er t(i& .o"i!y &(a"" +e
#ee)e# forfeite#, .rovi#e# (oever, t(at t(i&
!on#ition &(a"" not a.."y (en t(e tota" in&'ran!e or
INSURANCE Page 19
in&'ran!e& in for!e at t(e ti)e of t(e "o&& or #a)a$e
i& not )ore t(an P200,000-00-P
,On 2C May 4550, fire of a!!i#enta" ori$in +ro2e o't
at aro'n# CH30 .-)- at t(e .'+"i! )ar2et of San
*ran!i&!o, A$'&an #e" S'r- T(e .etitionerN& in&'re#
&to!2&,in,tra#e ere !o)."ete"y #e&troye#
.ro).tin$ (i) to fi"e R t(e .rivate re&.on#ent a
!"ai) 'n#er t(e .o"i!y- On 26 Ee! 4550, t(e .rivate
re&.on#ent #enie# t(e !"ai) +e!a'&e it fo'n# t(at at
t(e ti)e of t(e "o&& t(e .etitionerN& &to!2&,in,tra#e
ere "i2ei&e !overe# +y to fire in&'ran!e .o"i!ie&
for P400,000-00 ea!(, i&&'e# +y t(e Ce+' Bran!( of
t(e P(i"i..ine& *ir&t In&'ran!e Co-, In!- @P*ICA-
,T(e +a&i& of t(e .rivate re&.on#entN& #enia" a& t(e
.etitionerN& a""e$e# vio"ation of Con#ition 3 of t(e
.o"i!y-
, Gea$onia t(en fi"e# a !o)."aint a$ain&t t(e .rivate
re&.on#ent R t(e In&'ran!e Co))i&&ion for t(e
re!overy of P400,000-00 'n#er fire in&'ran!e .o"i!y,
for attorneyN& fee&, an# !o&t& of "iti$ation- 1e !"ai)&
t(at t(e ti)e (e o+taine# t(e .rivate re&.on#entN&
fire in&'ran!e .o"i!y (e 2ne t(at t(e to .o"i!ie&
i&&'e# +y t(e P*IC ere a"rea#y in e%i&ten!e;
(oever, (e (a# no 2no"e#$e of t(e .rovi&ion in
t(e .rivate re&.on#entN& .o"i!y re;'irin$ (i) to
infor) it of t(e .rior .o"i!ie&; t(i& re;'ire)ent a&
not )entione# to (i) +y t(e .rivate re&.on#entN&
a$ent; an# (a# it +een &o )entione#, (e o'"# not
(ave it((e"# &'!( infor)ation- 1e f'rt(er a&&erte#
t(at t(e tota" of t(e a)o'nt& !"ai)e# 'n#er t(e
t(ree .o"i!ie& a& +e"o t(e a!t'a" va"'e of (i&
&to!2& at t(e ti)e of "o&&, R! a& P4M-
, T(e In&'ran!e Co))i&&ion fo'n# t(at t(e
.etitioner #i# not vio"ate Con#ition 3 a& (e (a# no
2no"e#$e of t(e e%i&ten!e of t(e to fire in&'ran!e
.o"i!ie& o+taine# fro) t(e P*IC; t(at it a& Ce+'
Te&in$ Te%ti"e& R! .ro!'re# t(e P*IC .o"i!ie& Ro
infor)in$ (i) or &e!'rin$ (i& !on&ent; an# t(at Ce+'
Te&in$ Te%ti"e, a& (i& !re#itor, (a# in&'ra+"e intere&t
on t(e &to!2&- T(e&e fin#in$& ere +a&e# on t(e
.etitionerN& te&ti)ony t(at (e !a)e to 2no of t(e
P*IC .o"i!ie& on"y (en (e fi"e# (i& !"ai) it( t(e
.rivate re&.on#ent an# t(at Ce+' Te&in$ Te%ti"e
o+taine# t(e) an# .ai# for t(eir .re)i')& Ro
infor)in$ (i)- T(e In&'ran!e Co))i&&ion t(en
or#ere# t(e re&.on#ent !o).any to .ay !o)."ainant
t(e &') of P400,000-00 it( "e$a" intere&t fro) t(e
ti)e t(e !o)."aint a& fi"e# 'nti" f'""y &ati&fie# ."'&
t(e a)o'nt of P40,000-00 a& attorneyN& fee&-
,CA rever&e# t(e #e!i&ion of t(e In&'ran!e
Co))i&&ion +e!a'&e it fo'n# t(at t(e .etitioner
2ne of t(e e%i&ten!e of t(e to ot(er .o"i!ie& i&&'e#
+y t(e P*IC
ISSUES
4- 0ON t(e .etitioner (a# .rior 2no"e#$e of t(e
to in&'ran!e .o"i!ie& i&&'e# +y t(e P*IC (en (e
o+taine# t(e fire in&'ran!e .o"i!y fro) t(e .rivate
re&.on#ent, t(ere+y, for not #i&!"o&in$ &'!( fa!t,
vio"atin$ Con#ition 3 of t(e .o"i!y
2- if (e (a#, 0ON (e i& .re!"'#e# fro) re!overin$
t(erefro)
HELD
4- F>S
, 0e a$ree R t(e CA t(at t(e .etitioner 2ne of t(e
.rior .o"i!ie& i&&'e# +y t(e P*IC- 1i& "etter of 46
Gan'ary 4554 to t(e .rivate re&.on#ent !on!"'&ive"y
.rove& t(i& 2no"e#$e- 1i& te&ti)ony to t(e !ontrary
+efore t(e In&'ran!e Co))i&&ioner an# (i!( t(e
"atter re"ie# '.on !annot .revai" over a ritten
a#)i&&ion )a#e ante "ite) )ota)- It a&, in#ee#,
in!re#i+"e t(at (e #i# not 2no a+o't t(e .rior
.o"i!ie& &in!e t(e&e .o"i!ie& ere not ne or ori$ina"-
2- NO
, It )'&t, (oever, +e 'n#er&!ore# t(at ,+l';e t(e
Pot(er in&'ran!eP !"a'&e& invo"ve# in Genera"
In&'ran!e an# S'rety Cor.- v&- N$ 1'a or in
Pioneer In&'ran!e S S'rety Cor.- v&- Fa., (i!(
rea#H
PT(e in&'re# &(a"" $ive noti!e to t(e !o).any of any
in&'ran!e or in&'ran!e& a"rea#y effe!te#, or (i!(
)ay &'+&e;'ent"y +e effe!te# !overin$ any of t(e
.ro.erty (ere+y in&'re#, an# 'n"e&& &'!( noti!e +e
$iven an# t(e .arti!'"ar& of &'!( in&'ran!e or
in&'ran!e& +e &tate# in or en#or&e# on t(i& Po"i!y +y
or on +e(a"f of t(e Co).any +efore t(e o!!'rren!e
of any "o&& or #a)a$e, a"" +enefit& 'n#er t(i& Po"i!y
&(a"" +e forfeite#-P or in t(e 4530 !a&e of Santa Ana
v&- Co))er!ia" Union A&&'ran!e Co- (i!(
.rovi#e# Pt(at any o't&tan#in$ in&'ran!e '.on t(e
(o"e or a .ortion of t(e o+Je!t& t(ere+y a&&'re#
)'&t +e #e!"are# +y t(e in&'re# in ritin$ an# (e
)'&t !a'&e t(e !o).any to a## or in&ert it in t(e
.o"i!y, it(o't (i!( &'!( .o"i!y &(a"" +e n'"" an#
voi#, an# t(e in&'re# i"" not +e entit"e# to
in#e)nity in !a&e of "o&&,P C#+.''#+ B '+ he
2"'$ae "e*2#+.e+@* 2#l'!) N#. F56CDEE .#e*
+# a3*#l,el) .e!la"e $#'. a+) $'#la'#+
he"e#-. I e/2"e**l) 2"#$'.e* ha he
!#+.''#+ :*hall +# a22l) &he+ he #al
'+*,"a+!e #" '+*,"a+!e* '+ -#"!e a he '(e #-
he l#** #" .a(a%e '* +# (#"e ha+
PE88,888.88.:
5 I+e"2"ea'#+9 It i& a !ar#ina" r'"e on in&'ran!e
t(at a .o"i!y or in&'ran!e !ontra!t i& to +e
inter.rete# "i+era""y in favor of t(e in&'re# an#
&tri!t"y a$ain&t t(e !o).any, t(e rea&on +ein$,
'n#o'+te#"y, to affor# t(e $reate&t .rote!tion (i!(
t(e in&'re# a& en#eavorin$ to &e!'re (en (e
a.."ie# for in&'ran!e- It i& a"&o a !ar#ina" .rin!i."e of
"a t(at forfeit're& are not favore# an# t(at any
!on&tr'!tion (i!( o'"# re&'"t in t(e forfeit're of
t(e .o"i!y +enefit& for t(e .er&on !"ai)in$
t(ere'n#er, i"" +e avoi#e#, if it i& .o&&i+"e to
!on&tr'e t(e .o"i!y in a )anner (i!( o'"# .er)it
re!overy, a&, for e%a)."e, +y fin#in$ a aiver for
&'!( forfeit're- State# #ifferent"y, .rovi&ion&,
!#+.''#+* #" e/!e2'#+* '+ 2#l'!'e* &h'!h e+.
# &#"; a -#"-e',"e #- '+*,"a+!e 2#l'!'e* *h#,l.
3e !#+*",e. (#* *"'!l) a%a'+* h#*e -#"
&h#*e 3e+e-'* he) a"e '+*e"e., a+. (#*
-a$#"a3l) #&a". h#*e a%a'+* &h#( he) a"e
'+e+.e. # #2e"ae. T(e rea&on for t(i& i& t(at,
e%!e.t for ri#er& (i!( )ay "ater +e in&erte#, t(e
in&'re# &ee& t(e !ontra!t a"rea#y in it& fina" for) an#
(a& (a# no voi!e in t(e &e"e!tion or arran$e)ent of
t(e or#& e)."oye# t(erein- On t(e ot(er (an#, t(e
"an$'a$e of t(e !ontra!t a& !aref'""y !(o&en an#
#e"i+erate# '.on +y e%.ert& an# "e$a" a#vi&er& (o
(a# a!te# e%!"'&ive"y in t(e intere&t of t(e in&'rer&
an# t(e te!(ni!a" "an$'a$e e)."oye# t(erein i&
rare"y 'n#er&too# +y or#inary "ay)en-
, W'h he*e 2"'+!'2le* '+ ('+., &e a"e #- he
#2'+'#+ ha C#+.''#+ B #- he *,3Ae! 2#l'!) '*
+# #all) -"ee -"#( a(3'%,') a+. (,* 3e
(e'!,l#,*l) a+al)>e.. S,!h a+al)*'* lea.* ,*
# !#+!l,.e ha (a) he 2"#h'3''#+ a22l'e* #+l)
# .#,3le '+*,"a+!e, a+. (3) he +,ll') #- he
2#l'!) *hall #+l) 3e # he e/e+ e/!ee.'+%
PE88,888.88 #- he #al 2#l'!'e* #3a'+e..
, *'rt(er)ore, +y &tatin$ it(in Con#ition 3 it&e"f
t(at &'!( !on#ition &(a"" not a.."y if t(e tota"
in&'ran!e in for!e at t(e ti)e of "o&& #oe& not e%!ee#
P200,000-00, t(e .rivate re&.on#ent a& a)ena+"e
to a&&')e a !o,in&'rerN& "ia+i"ity '. to a "o&& not
e%!ee#in$ P200,000-00- 0(at it (a# in )in# a& to
#i&!o'ra$e over,in&'ran!e- In#ee#, t(e rationa"e
+e(in# t(e in!or.oration of Pot(er in&'ran!eP !"a'&e
in fire .o"i!ie& i& to .revent over,in&'ran!e an# t('&
avert t(e .er.etration of fra'#- 0(en a .ro.erty
oner o+tain& in&'ran!e .o"i!ie& fro) to or )ore
in&'rer& in a tota" a)o'nt t(at e%!ee#& t(e
.ro.ertyN& va"'e, t(e in&'re# )ay (ave an
INSURANCE Page 20
in#'!e)ent to #e&troy t(e .ro.erty for t(e .'r.o&e
of !o""e!tin$ t(e in&'ran!e- T(e .'+"i! a& e"" a& t(e
in&'rer i& intere&te# in .reventin$ a &it'ation in
(i!( a fire o'"# +e .rofita+"e to t(e in&'re#-
Disposition Petition $rante#- T(e #e!i&ion of t(e
Co'rt of A..ea"& in CA,G-<- SP No- 34546 i& S>T
ASIE> an# t(e #e!i&ion of t(e In&'ran!e Co))i&&ion
in Ca&e No- 33D0 i& <>INSTAT>E-
SUN INSURANCE OFFICE, LTD. V CA (LIM)
244 SC<A 99D
C<U?; G'"y 4C, 4552
NATURE
Petition for revie fro) t(e #e!i&ion of t(e Co'rt of
A..ea"&
FACTS
, *e"i% /i) a& i&&'e# a Per&ona" A!!i#ent Po"i!y
in&'ran!e it( .etitioner !o).any it( a fa!e va"'e
of P200,000- 1i& +enefi!iary a& (i& ife Neri&&a-
, O!to+er 6, 4562 L *e"i% a!!i#enta""y &(ot (i)&e"f in
t(e (ea# it( (i& on $'n-
, 1e a& ."ayin$ it( t(e (an#$'n after (e (a#
re)ove# t(e $'n=& )a$a:ine @+asi naanDA-
, 1e .ointe# t(e $'n at (i& &e!retary an# on"y
itne&& Pi"ar Na"a$on a& a Jo2e an# a&&'re# (er
t(at t(e $'n a& not "oa#e# @are you sureDA-
, 1e t(en .'t t(e $'n to (i& te)."e an# fire# it
@!aaay$ sabi +o na n"a baA-
, Bot( .artie& are in a$ree)ent t(at t(ere a& no
&'i!i#e-
, Neri&&a !"ai)e# a& *e"i%=& +enefi!iary +'t S'n
In&'ran!e o'"# not $rant (er !"ai), &ayin$ t(at (er
('&+an#=& #eat( a& not an a!!i#ent-
, Neri&&a &'e# S'n In&'ran!e an# on t(e !a&e-
S'n In&'ran!e a& or#ere# to .ay (er P200,000
re.re&entin$ t(e fa!e va"'e of t(e !"ai) a"on$ it(
)ora", e%e)."ary an# !o).en&atory #a)a$e& an#
attorney=& fee&- T(e #e!i&ion a& affir)e# +y t(e
CA-
Petitioners Claim
, S'n In&'ran!e !ite& one of t(e fo'r e%!e.tion& in
t(e !ontra!t of in&'ran!e (i!( in!"'#e& +o#i"y inJ'ry
!on&e;'ent '.on t(e in&'re# .er&on atte).tin$ to
!o))it &'i!i#e or i""f'""y e%.o&in$ (i)&e"f to
nee#"e&& .eri" in an atte).t to &ave a (')an "ife-
, T(ere )ere a!t of .ointin$ t(e $'n to (i& te)."e
&(oe# t(at *e"i% i""f'""y e%.o&e# (i)&e"f to #an$er
+e!a'&e a $'n &(o'"# a"ay& +e (an#"e# it(
!a'tion-
Respondents Comments
, *e"i% +e"ieve# t(e $'n to +e &afe +e!a'&e (e (a#
re)ove# t(e )a$a:ine-
, 1e re.eate#"y a&&'re# (i& &e!retary t(at t(e $'n
a& not "oa#e#-
ISSUES
4- 0ON *e"i% /i)=& #eat( a& an a!!i#ent, t('&
)a2in$ (i& i#o Neri&&a "ia+"e to !"ai) t(e a!!i#ent
in&'ran!e
2- 0ON t(e aar# of #a)a$e& to Neri&&a /i) a&
J'&tifie#
HELD
4- F>S, *e"i% /i)=& #eat( a& an a!!i#ent-
Ratio T(ere i& no a!!i#ent (en a #e"i+erate a!t i&
.erfor)e# 'n"e&& &o)e a##itiona", 'ne%.e!te#,
in#e.en#ent an# 'nfore&een (a..enin$ o!!'r& (i!(
.ro#'!e& or +rin$& +o't t(eir inJ'ry or #eat(-
Reasoning
, An a!!i#ent (a& +een #efine# to +e t(at (i!(
(a..en& +y !(an!e or fort'ito'&"y it(o't intention
or #e&i$n an# (i!( i& 'ne%.e!te#, 'n'&'a" an#
'nfore&een- It an event t(at ta2e& .a!e it(o't
one=& fore&i$(t or e%.e!ta&tion L an event t(at
.ro!ee#& fro) an 'n2non !a'&e or i& an 'n'&'a"
effe!t of a 2non !a&e an# t(erefore not e%.e!te#-
It (a..en& it(o't any (')an a$en!y, an event
(i!(, 'n#er t(e !ir!')&tan!e&, i& 'n'&'a" to an#
not e%.e!te# +y t(e .er&on to (o) it (a..en&-
, T(e firin$ of t(e $'n a& #ee)e# to +e t(e
'ne%.e!te# an# in#e.en#ent an# 'nfore&een
o!!'rren!e t(at "e# to t(e in&'re# .er&on=& #eat(-
, T(ere a& no i""f'" e%.o&'re to nee#"e&& .eri" for
t(e .art of *e"i%- S'i!i#e an# e%.o&'re to nee#"e&&
.eri" are &i)i"ar in t(e &en&e t(at +ot( &i$nify
#i&re$ar# for one=& "ife- S'i!i#e i).art& a .o&itive
a!t of en#in$ one=& "ife (erea& t(e "atter in#i!ate&
re!2"e&&ne&& t(at i& a")o&t &'i!i#a" in intent-
, A!!i#ent in&'ran!e .o"i!ie& ere never )eant to
rear# t(e in&'re# for (i& ten#en!y to &(o off or
for (i& )i&!a"!'"ation&- T(ey ere inten#e# to
.rovi#e for !ontin$en!ie&-
, /i) a& 'n;'e&tiona+"y ne$"i$ent +'t it &(o'"# not
.revent (i& i#o fro) re!overin$ fro) t(e
in&'ran!e .o"i!y (e o+taine# .re!i&e"y a$ain&t
a!!i#ent-
, In&'ran!e !ontra!t& are, a& a r'"e, &'..o&e# to +e
inter.rete# "i+era""y in favor of t(e a&&'re#-
2- NO, t(e !"ai) for #a)a$e& &(o'"# not +e $rante#
for +ein$ 'nJ'&t-
Ratio A .er&on )ay +e )a#e "ia+"e to t(e .ay)ent
of )ora" #a)a$e& if (i& a!t i& ron$f'"- T(e a#ver&e
re&'"t of an a!tion #oe& not .er &e )a2e t(e a!t
ron$f'" an# &'+Je!t t(e a!t or to t(e .ay)ent of
)ora" #a)a$e&-
Reasoning
, Petitioner a& a!tin$ in $oo# fait( (en it re&i&te#
t(e .rivate re&.on#ent=& !"ai) on t(e $ro'n# t(at
t(e #eat( of t(e in&'re# a& !overe# +y t(e
e%!e.tion-
, T(e i&&'e a& #e+ata+"e an# a& !"ear"y not rai&e#
on"y for t(e .'r.o&e of eva#in$ a "e$iti)ate
o+"i$ation-
RIZAL SURETY ? INSURANCE COMPANY V CA
(TRANSWORLD <NITTING MILLS, INC.)
336 SC<A 42
PU<ISIMA; G'"y 46, 2000
NATURE
Petition for <evie on Certiorari 'n#er <'"e D9 of t(e
<'"e& of Co'rt
FACTS
, <i:a" S'rety S In&'ran!e Co).any @<i:a"
In&'ran!eA i&&'e# *ire In&'ran!e Po"i!y No- D9C2C in
favor of Tran&or"# Inittin$ Mi""&, In!- @Tran&or"#A-
, Pertinent .ortion& of &'+Je!t .o"i!y on t(e +'i"#in$&
in&'re#, an# "o!ation t(ereof, rea#H
PVOn &to!2& of fini&(e# an#Ror 'nfini&(e#
.ro#'!t&, ra )ateria"& an# &'.."ie& of every
2in# an# #e&!ri.tion, t(e .ro.ertie& of t(e
In&'re#& an#Ror (e"# +y t(e) in tr'&t, on
!o))i&&ion or on Joint a!!o'nt it( ot(er&
an#Ror for (i!( t(ey @&i!A re&.on&i+"e in !a&e
of "o&& (i"&t !ontaine# an#Ror &tore# #'rin$
t(e !'rren!y of t(i& Po"i!y in t(e .re)i&e&
o!!'.ie# +y t(e) for)in$ .art of t(e +'i"#in$&
&it'ate @&i!A it(in on Co).o'n# at
MAGEA/O ST<>>T, BA<<IO UGONG, PASIG,
M>T<O MANI/A, P1I/IPPIN>S, B/OCI NO-
604-=
%
%%------------
---%%%-------
--------%%%
VSai# +'i"#in$ of fo'r,&.an "ofty one &torey in
(ei$(t it( )e::anine .ortion& i& !on&tr'!te#
of reinfor!e# !on!rete an# (o""o +"o!2&
an#Ror !on!rete 'n#er $a"vani:e# iron roof
an# o!!'.ie# a& (o&iery )i""&, $ar)ent an#
"in$erie fa!tory, tran&i&tor,&tereo a&&e)+"y
."ant, offi!e&, are(o'&e an# !areta2erN&
;'arter&-
INSURANCE Page 21
@Bounds in front #artly by one-storey concrete
buildin" under "alvanized iron roof occu#ied
as canteen and "uard!ouse$ #artly by buildin"
of t,o and #artly one storey constructed of
concrete belo,$ tiber above under"alvanized
iron roof occu#ied as "ara"e and .uarters and
#artly by o#en s#ace and/or trac+in"/
#ac+in"$ beyond ,!ic! is t!e aforeentioned
Ma"dalo StreetE on its ri"!t and left by
drive,ay$ t!ence o#en s#aces$ and at t!e rear
by o#en s#aces.@F
, T(e &a)e .ie!e& of .ro.erty in&'re# it( t(e
.etitioner ere a"&o in&'re# it( Ne In#ia
A&&'ran!e Co).any, /t#-, @Ne In#iaA-
, *ire +ro2e o't in t(e !o).o'n# of Tran&or"#,
ra:in$ t(e )i##"e .ortion of it& fo'r,&.an +'i"#in$
an# .art"y $'ttin$ t(e "eft an# ri$(t &e!tion&
t(ereof- A to,&torey +'i"#in$ @+e(in# &ai# fo'r,
&.an +'i"#in$A (ere f'n an# a)'&e)ent
)a!(ine& an# &.are .art& ere &tore#, a& a"&o
#e&troye# +y t(e fire-
, Tran&or"# fi"e# it& in&'ran!e !"ai)& it( <i:a"
S'rety S In&'ran!e Co).any an# Ne In#ia
A&&'ran!e Co).any +'t to no avai"-
, Private re&.on#ent +ro'$(t a$ain&t t(e &ai#
in&'ran!e !o).anie& an a!tion for !o""e!tion of
&') of )oney an# #a)a$e&-
, Petitioner <i:a" In&'ran!e !o'ntere# t(at it& fire
in&'ran!e .o"i!y &'e# '.on !overe# on"y t(e
!ontent& of t(e fo'r,&.an +'i"#in$, (i!( a&
.art"y +'rne#, an# not t(e #a)a$e !a'&e# +y t(e
fire on t(e to,&torey anne% +'i"#in$-
, T(e tria" !o'rt #i&)i&&e# t(e !a&e a& a$ain&t T(e
Ne In#ia A&&'ran!e Co-, /t#- +'t or#ere#
#efen#ant <i:a" S'rety An# In&'ran!e Co).any to
.ay Tran&ro"# @&i!A Inittin$ Mi""&, In!-
, Bot( t(e .etitioner, <i:a" In&'ran!e Co).any,
an# .rivate re&.on#ent, Tran&or"# Inittin$ Mi""&,
In!-, ent to t(e Co'rt of A..ea"&, (i!( re;'ire#
Ne In#ia A&&'ran!e Co).any to .ay ."aintiff,
a..e""ant t(e a)o'nt of P4,646,60D-45 (i"e t(e
<i:a" S'rety (a& to .ay t(e ."aintiff,a..e""ant
PDC0,326-6C-
, Ne In#ia a..ea"e# to t(e Co'rt t(eori:in$ inter
alia t(at t(e .rivate re&.on#ent !o'"# not +e
!o).en&ate# for t(e "o&& of t(e f'n an#
a)'&e)ent )a!(ine& an# &.are .art& &tore# at
t(e to,&torey +'i"#in$ +e!a'&e it @Tran&or"#A
(a# no in&'ra+"e intere&t in &ai# $oo#& or ite)&-
, T(e Co'rt #enie# t(e a..ea" it( fina"ity-
, Petitioner <i:a" In&'ran!e an# .rivate re&.on#ent
Tran&or"#, inter.o&e# a Motion for
<e!on&i#eration +efore t(e Co'rt of A..ea"&, (i!(
re!on&i#ere# it& #e!i&ion of G'"y 49, 4553, a&
re$ar#& t(e i).o&ition of intere&t-
, Un#a'nte#, .etitioner <i:a" S'rety S In&'ran!e
Co).any fo'n# it& ay to t(e Co'rt-
ISSUE
0ON t(e fire in&'ran!e .o"i!y "iti$ate# '.on
.rote!te# on"y t(e !ontent& of t(e )ain +'i"#in$
@fo'r,&.anA, an# #i# not in!"'#e t(o&e &tore# in t(e
to,&torey anne% +'i"#in$
HELD
NO
, <e&o"'tion of t(e i&&'e .o&ite# (in$e& on t(e
.ro.er inter.retation of t(e &ti.'"ation in &'+Je!t fire
in&'ran!e .o"i!y re$ar#in$ it& !overa$e, (i!( rea#&H
P%%% !ontaine# an#Ror &tore# #'rin$ t(e !'rren!y of
t(i& Po"i!y in t(e .re)i&e& o!!'.ie# +y t(e) for)in$
.art of t(e +'i"#in$& &it'ate @&i!A it(in on
Co).o'n# %%%P
, It !an +e $"eane# 'nerrin$"y t(at t(e fire in&'ran!e
.o"i!y in ;'e&tion #i# not "i)it it& !overa$e to (at
ere &tore# in t(e fo'r,&.an +'i"#in$- A& o.ine# +y
t(e tria" !o'rt of ori$in, to re;'ire)ent& )'&t
!on!'r in or#er t(at t(e &ai# f'n an# a)'&e)ent
)a!(ine& an# &.are .art& o'"# +e #ee)e#
.rote!te# +y t(e fire in&'ran!e .o"i!y 'n#er &!r'tiny,
to itH
P*ir&t, &ai# .ro.ertie& )'&t +e !ontaine# an#Ror
&tore# in t(e area& o!!'.ie# +y Tran&or"# an#
&e!on#, &ai# area& )'&t for) .art of t(e +'i"#in$
#e&!ri+e# in t(e .o"i!y %%%P
, Sai# +'i"#in$ of fo'r,&.an "ofty one &torey in (ei$(t
it( )e::anine .ortion& i& !on&tr'!te# of reinfor!e#
!on!rete an# (o""o +"o!2& an#Ror !on!rete 'n#er
$a"vani:e# iron roof an# o!!'.ie# a& (o&iery )i""&,
$ar)ent an# "in$erie fa!tory, tran&i&tor,&tereo
a&&e)+"y ."ant, offi!e&, are (o'&e an# !areta2erN&
;'arter-
, T(e Co'rt i& )in#f'" of t(e e"",entren!(e#
#o!trine t(at fa!t'a" fin#in$& +y t(e Co'rt of A..ea"&
are !on!"'&ive on t(e .artie& an# not reviea+"e +y
t(i& Co'rt, an# t(e &a)e !arry even )ore ei$(t
(en t(e Co'rt of A..ea"& (a& affir)e# t(e fin#in$&
of fa!t arrive# at +y t(e "oer !o'rt-
, In t(e !a&e 'n#er !on&i#eration, +ot( t(e tria" !o'rt
an# t(e Co'rt of A..ea"& fo'n# t(at t(e &o !a""e#
Panne% P a& not an anne% +'i"#in$ +'t an inte$ra"
an# in&e.ara+"e .art of t(e fo'r,&.an +'i"#in$
#e&!ri+e# in t(e .o"i!y an# !on&e;'ent"y, t(e
)a!(ine& an# &.are .art& &tore# t(erein ere
!overe# +y t(e fire in&'ran!e in #i&.'te-
, Meri"y, t(e to,&torey +'i"#in$ invo"ve#, a
.er)anent &tr'!t're (i!( a#Join& an#
inter!o))'ni!ate& it( t(e Pfir&t ri$(t &.an of t(e
"ofty &torey +'i"#in$P, for)e# .art t(ereof, an#
)eet& t(e re;'i&ite& for !o).en&a+i"ity 'n#er t(e
fire in&'ran!e .o"i!y &'e# '.on-
, So a"&o, !on&i#erin$ t(at t(e to,&torey +'i"#in$
afore)entione# a& a"rea#y e%i&tin$ (en &'+Je!t
fire in&'ran!e .o"i!y !ontra!t a& entere# into,
.etitioner &(o'"# (ave &.e!ifi!a""y e%!"'#e# t(e &ai#
to,&torey +'i"#in$ fro) t(e !overa$e of t(e fire
in&'ran!e if )in#e# to e%!"'#e t(e &a)e +'t if #i#
not, an# in&tea#, ent on to .rovi#e t(at &'!( fire
in&'ran!e .o"i!y !over& t(e .ro#'!t&, ra )ateria"&
an# &'.."ie& &tore# it(in t(e .re)i&e& of
re&.on#ent Tran&or"# (i!( a& an inte$ra" .art of
t(e fo'r,&.an +'i"#in$ o!!'.ie# +y Tran&or"#,
2noin$ f'""y e"" t(e e%i&ten!e of &'!( +'i"#in$
a#Joinin$ an# inter!o))'ni!atin$ it( t(e ri$(t
&e!tion of t(e fo'r,&.an +'i"#in$-
, In#ee#, t(e &ti.'"ation a& to t(e !overa$e of t(e
fire in&'ran!e .o"i!y 'n#er !ontrover&y (a& !reate# a
#o'+t re$ar#in$ t(e .ortion& of t(e +'i"#in$ in&'re#
t(ere+y- Arti!"e 43CC of t(e Ne Civi" Co#e .rovi#e&H
:A".6B00. The '+e"2"ea'#+ #- #3*!,"e &#".*
#" *'2,la'#+* '+ a !#+"a! *hall +# -a$#" he
2a") &h# !a,*e. he #3*!,"'):
, Confor)a+"y, it &tan#& to rea&on t(at t(e #o'+t
&(o'"# +e re&o"ve# a$ain&t t(e .etitioner, <i:a"
S'rety In&'ran!e Co).any, (o&e "ayer or
)ana$er& #rafte# t(e fire in&'ran!e .o"i!y !ontra!t
'n#er &!r'tiny- Citin$ t(e afore!ite# .rovi&ion of "a
in .oint, t(e Co'rt in 0andic!o vs. >overnent
Service 'nsurance Syste, r'"e#H
F/!is is #articularly true as re"ards insurance
#olicies$ in res#ect of ,!ic! it is settled t!at t!e
@ters in an insurance #olicy$ ,!ic! are
abi"uous$ e.uivocal$ or uncertain 8 8 8 are to
be construed strictly and ost stron"ly a"ainst
t!e insurer$ and liberally in favor of t!e insured
so as to effect t!e doinant #ur#ose of
indenity or #ayent to t!e insured$ es#ecially
,!ere forfeiture is involved@ and t!e reason for
t!is is t!at t!e @insured usually !as no voice in
t!e selection or arran"eent of t!e ,ords
e#loyed and t!at t!e lan"ua"e of t!e contract
is selected ,it! "reat care and deliberation by
e8#erts and le"al advisers e#loyed by$ and
actin" e8clusively in t!e interest of$ t!e
insurance co#any.@ F
INSURANCE Page 22
, >;'a""y re"evant i& t(e fo""oin$ #i&;'i&ition of t(e
Co'rt in Fielden@s 'nsurance Co#any$ 'nc. vs.
Vda. De Son"co$ to itH
F@/!is ri"id a##lication of t!e rule on abi"uities
!as becoe necessary in vie, of current
business #ractices. /!e courts cannot i"nore
t!at no,adays ono#olies$ cartels and
concentration of ca#ital$ endo,ed ,it!
over,!elin" econoic #o,er$ ana"e to
i#ose u#on #arties dealin" ,it! t!e
cunnin"ly #re#ared @a"reeents@ t!at t!e
,ea+er #arty ay not c!an"e one ,!it$ !is
#artici#ation in t!e @a"reeent@ bein" reduced to
t!e alternative to @ta+e it or leave it@ labelled
since 9ayond Saleilles @contracts by
ad!erence@ &contrats GsicH d@ad!esion)$ in
contrast to t!ese entered into by #arties
bar"ainin" on an e.ual footin"$ suc! contracts
&of ,!ic! #olicies of insurance and international
bills of ladin" are #rie e8a#le) obviously call
for "reater strictness and vi"ilance on t!e #art
of courts of 6ustice ,it! a vie, to #rotectin" t!e
,ea+er #arty fro abuses and i#osition$ and
#revent t!eir becoin" tra#s for t!e un,ary.@F
, T(e i&&'e of (et(er or not Tran&or"# (a& an
in&'ra+"e intere&t in t(e f'n an# a)'&e)ent
)a!(ine& an# &.are .art&, (i!( entit"e& it to +e
in#e)nifie# for t(e "o&& t(ereof, (a# +een &ett"e# in
G-<- No- /,444446, entit"e# 1e, 'ndia Assurance
Co#any$ 0td.$ vs. Court of A##eals, (ere t(e
a..ea" of Ne In#ia fro) t(e #e!i&ion of t(e Co'rt of
A..ea"& 'n#er revie, a& #enie# it( fina"ity +y
t(i& Co'rt on *e+r'ary 2, 455D-
, T(e r'"e on !on!"'&ivene&& of J'#$)ent, (i!(
o+tain& 'n#er t(e .re)i&e&, .re!"'#e& t(e re"iti$ation
of a .arti!'"ar fa!t or i&&'e in anot(er a!tion +eteen
t(e &a)e .artie& +a&e# on a #ifferent !"ai) or !a'&e
of a!tion- P%%% t(e J'#$)ent in t(e .rior a!tion
o.erate& a& e&to..e" on"y a& to t(o&e )atter& in
i&&'e or .oint& !ontroverte#, '.on t(e #eter)ination
of (i!( t(e fin#in$ or J'#$)ent a& ren#ere#- In
fine, t(e .revio'& J'#$)ent i& !on!"'&ive in t(e
&e!on# !a&e, on"y a& t(o&e )atter& a!t'a""y an#
#ire!t"y !ontroverte# an# #eter)ine# an# not a& to
)atter& )ere"y invo"ve# t(erein-P
Disposition Ee!i&ion, an# t(e <e&o"'tion of t(e CA
0><> A**I<M>E in toto- No .rono'n!e)ent a& to
!o&t&-
PAN MALAYAN INSURANCE CORPORATION v&-
COURT OF APPEALS (ERLINDA FABIE ? HER
UN<NOWN DRIVER)
46D SC<A 99; G-<- No- 64026
CO<T>S; A.ri" 3, 4550
FACTS
, Ee!e)+er 40, 4569H PANMA/AF fi"e# a !o)."aint
for #a)a$e& it( t(e <TC of Ma2ati a$ain&t .rivate
re&.on#ent& >r"in#a *a+ie an# (er #river- PANMA/AF
averre# t(e fo""oin$H t(at it in&'re# a Mit&'+i&(i
Co"t /an!er !ar re$i&tere# in t(e na)e of Can"'+an$
A'to)otive <e&o'r!e& Cor.oration [CAN/UBANG];
t(at on May 26, 4569, #'e to t(e P!are"e&&ne&&,
re!2"e&&ne&&, an# i).r'#en!eP of t(e 'n2non
#river of a .i!2,'., t(e in&'re# !ar a& (it an#
&'ffere# #a)a$e& in t(e a)o'nt of PD2,092-00; t(at
PANMA/AF #efraye# t(e !o&t of re.air of t(e in&'re#
!ar an#, t(erefore, a& &'+ro$ate# to t(e ri$(t& of
CAN/UBANG a$ain&t t(e #river of t(e .i!2,'. an# (i&
e)."oyer, >r"in#a *a+ie; an# t(at, #e&.ite re.eate#
#e)an#&, #efen#ant&, fai"e# an# ref'&e# to .ay t(e
!"ai) of PANMA/AF- PANMA/AF !"arifie# t(at t(e
#a)a$e !a'&e# to t(e in&'re# !ar a& &ett"e# 'n#er
t(e Pon #a)a$eP, !overa$e of t(e in&'ran!e .o"i!y-
, Private re&.on#ent& fi"e# a Motion to Ei&)i&&
a""e$in$ t(at PANMA/AF (a# no !a'&e of a!tion
a$ain&t t(e)- <TC #i&)i&&e# PANMA/AFN& !o)."aint
for no !a'&e of a!tion an# #enie# PANMA/AFN&
)otion for re!on&i#eration- CA affir)e#- 1en!e, t(i&
.etition for revie-
ISSUE
0ON t(e in&'rer PANMA/AF )ay in&tit'te an a!tion
to re!over t(e a)o'nt it (a# .ai# it& a&&'re# in
&ett"e)ent of an in&'ran!e !"ai) a$ain&t .rivate
re&.on#ent& a& t(e .artie& a""e$e#"y re&.on&i+"e for
t(e #a)a$e !a'&e# to t(e in&'re# ve(i!"e
HELD
F>S
, Arti!"e 220C of t(e Civi" Co#e i& fo'n#e# on t(e
e"",&ett"e# .rin!i."e of &'+ro$ation- If t(e in&'re#
.ro.erty i& #e&troye# or #a)a$e# t(ro'$( t(e fa'"t
or ne$"i$en!e of a .arty ot(er t(an t(e a&&'re#, t(en
t(e in&'rer, '.on .ay)ent to t(e a&&'re#, i"" +e
&'+ro$ate# to t(e ri$(t& of t(e a&&'re# to re!over
fro) t(e ron$#oer to t(e e%tent t(at t(e in&'rer
(a& +een o+"i$ate# to .ay-
, 'eneral Rule( Pay)ent +y t(e in&'rer to t(e
a&&'re# o.erate& a& an e;'ita+"e a&&i$n)ent to t(e
for)er of a"" re)e#ie& (i!( t(e "atter )ay (ave
a$ain&t t(e t(ir# .arty (o&e ne$"i$en!e or ron$f'"
a!t !a'&e# t(e "o&&- T(e ri$(t of &'+ro$ation i& not
#e.en#ent '.on, nor #oe& it $ro o't of, any .rivity
of !ontra!t or '.on ritten a&&i$n)ent of !"ai)- It
a!!r'e& &i)."y '.on .ay)ent of t(e in&'ran!e !"ai)
+y t(e in&'rer-
, )*ceptions(
a-A if t(e a&&'re# +y (i& on a!t re"ea&e& t(e
ron$#oer or t(ir# .arty "ia+"e for t(e "o&& or
#a)a$e, fro) "ia+i"ity
+-A (ere t(e in&'rer .ay& t(e a&&'re# t(e va"'e of
t(e "o&t $oo#& it(o't notifyin$ t(e !arrier (o (a&
in $oo# fait( &ett"e# t(e a&&'re#N& !"ai) for "o&&
!-A (ere t(e in&'rer .ay& t(e a&&'re# for a "o&&
(i!( i& not a ri&2 !overe# +y t(e .o"i!y, t(ere+y
effe!tin$ Pvo"'ntary .ay)entP
, None of t(e e%!e.tion& are avai"in$ in t(e .re&ent
!a&e-
, 0(en PANMA/AF 'ti"i:e# t(e .(ra&e Pon #a)a$eP
U a .(ra&e (i!(, in!i#enta""y, i& not fo'n# in t(e
in&'ran!e .o"i!y U to #efine t(e +a&i& for it&
&ett"e)ent of CAN/UBANGN& !"ai) 'n#er t(e .o"i!y, it
&i)."y )eant t(at it (a# a&&')e# to rei)+'r&e t(e
!o&t& for re.airin$ t(e daa"e to t!e insured
ve!icle.
- 't is a basic rule in t!e inter#retation of contracts
t!at t!e ters of a contract are to be construed
accordin" to t!e sense and eanin" of t!e ters
,!ic! t!e #arties t!ereto !ave used. 'n t!e case of
#ro#erty insurance #olicies$ t!e evident intention of
t!e contractin" #arties$ i.e .$ t!e insurer and t!e
assured$ deterine t!e i#ort of t!e various ters
and #rovisions ebodied in t!e #olicy. 't is only
,!en t!e ters of t!e #olicy are abi"uous$
e.uivocal or uncertain$ suc! t!at t!e #arties
t!eselves disa"ree about t!e eanin" of #articular
#rovisions$ t!at t!e courts ,ill intervene. 'n suc! an
event$ t!e #olicy ,ill be construed by t!e courts
liberally in favor of t!e assured and strictly a"ainst
t!e insurer-
, Con&i#erin$ t(at t(e very .artie& to t(e .o"i!y ere
not &(on to +e in #i&a$ree)ent re$ar#in$ t(e
)eanin$ an# !overa$e of Se!tion III,4, &.e!ifi!a""y
&'+,.ara$ra.( @aA t(ereof, it a& i).ro.er for t(e
a..e""ate !o'rt to in#'"$e in !ontra!t !on&tr'!tion, to
a.."y t(e e6usde "eneris r'"e, an# to a&!ri+e
)eanin$ !ontrary to t(e !"ear intention an#
'n#er&tan#in$ of t(e&e .artie&-
, A"t(o'$( t(e ter)& Pa!!i#entP or Pa!!i#enta"P a&
'&e# in in&'ran!e !ontra!t& (ave not a!;'ire# a
te!(ni!a" )eanin$, t(e Co'rt (a& on &evera"
o!!a&ion& #efine# t(e&e ter)& to )ean t(at (i!(
ta2e& ."a!e Pit(o't oneN& fore&i$(t or e%.e!tation,
an event t(at .ro!ee#& fro) an 'n2non !a'&e, or i&
an 'n'&'a" effe!t of a 2non !a'&e an#, t(erefore,
INSURANCE Page 23
not e%.e!te#-P T(e !on!e.t Pa!!i#entP i& not
ne!e&&ari"y &ynony)o'& it( t(e !on!e.t of Pno
fa'"tP- It )ay +e 'ti"i:e# &i)."y to #i&tin$'i&(
intentiona" or )a"i!io'& a!t& fro) ne$"i$ent or
!are"e&& a!t& of )an-
, -biter Dicta7 >ven if 'n#er t(e a+ove
!ir!')&tan!e& PANMA/AF !o'"# not +e #ee)e#
&'+ro$ate# to t(e ri$(t& of it& a&&'re# 'n#er Arti!"e
220C of t(e Civi" Co#e, PANMA/AF o'"# &ti"" (ave a
!a'&e of a!tion a$ain&t .rivate re&.on#ent&- T(e
in&'rer (o )ay (ave no ri$(t& of &'+ro$ation #'e
to Pvo"'ntaryP .ay)ent )ay nevert(e"e&& re!over
fro) t(e t(ir# .arty re&.on&i+"e for t(e #a)a$e to
t(e in&'re# .ro.erty 'n#er Arti!"e 4236 of t(e Civi"
Co#e-
Disposition Petition i& G<ANT>E- PetitionerN&
!o)."aint for #a)a$e& a$ain&t .rivate re&.on#ent&
i& <>INSTAT>E- Ca&e re)an#e# to t(e "oer !o'rt
for tria" on t(e )erit&-
AMERICAN HOME ASSURANCE COMPANY V
TANTUCO ENTERPRISES
366 SC<A CD0
PUNO; O!to+er 6, 2004
NATURE
Petition for <evie on Certiorari a&&ai"in$ t(e
Ee!i&ion of t(e Co'rt of A..ea"&-
FACTS
, <e&.on#ent Tant'!o >nter.ri&e&, In!- i& en$a$e# in
t(e !o!on't oi" )i""in$ an# refinin$ in#'&try- It on&
to oi" )i""&- Bot( are "o!ate# at it& fa!tory
!o).o'n# at Iya), /'!ena City- <e&.on#ent
!o))en!e# it& +'&ine&& o.eration& it( on"y one oi"
)i""- In 4566, it &tarte# o.eratin$ it& &e!on# oi" )i""
@ t(e ne oi" )i""A-
, T(e to oi" )i""& ere &e.arate"y !overe# +y fire
in&'ran!e .o"i!ie& i&&'e# +y .etitioner A)eri!an
1o)e A&&'ran!e Co- T(e fir&t oi" )i"" a& in&'re#
Po"i!y No- 306,CD3232D,3 for t(e .erio# Mar!( 4,
4554 to 4552-T(e ne oi" )i"" a& in&'re# 'n#er
Po"i!y No- 306,CD32324,5 for t(e &a)e ter)- Offi!ia"
re!ei.t& in#i!atin$ .ay)ent for t(e f'"" a)o'nt of t(e
.re)i') ere i&&'e# +y t(e .etitionerN& a$ent-
, Po"i!y #e&!ri.tionH
*rontH +y a #riveay t(en!e at 46 )eter& #i&tan!e
+y B"#$- No- 2-
<i$(tH +y an o.en &.a!e t(en!e +y B"#$- No- D-
/eftH A#Joinin$ t(en!e an i).erfe!t a"" +y B"#$-
No- D-
<earH +y an o.en &.a!e t(en!e at 6 )eter&
#i&tan!e-8
, A fire t(at +ro2e o't in t(e ear"y )ornin$ of
Se.te)+er 30,4554 $'tte# an# !on&')e# t(e ne
oi" )i""- Petitioner reJe!te# re&.on#ent=& !"ai) for
t(e in&'ran!e .ro!ee#& on t(e $ro'n# t(at no .o"i!y
a& i&&'e# +y it !overin$ t(e +'rne# oi" )i""- It
&tate# t(at t(e #e&!ri.tion of t(e in&'re#
e&ta+"i&()ent referre# to anot(er +'i"#in$-
Petitioners Claim
T(e .o"i!ie& referre# to t(e o"# )i"", a& &tate# in t(e
#e&!ri.tion !ontaine# in t(e .o"i!y-
ISSUE
0ON ne oi" )i"" i& in&'re# +y fire in&'ran!e .o"i!y
HELD
F>S, ne oi" )i"" i& in&'re#-
Ratio In !on&tr'in$ t(e or#& '&e# #e&!ri.tive of a
+'i"#in$ in&'re#, t(e $reate&t "i+era"ity i& &(on +y
t(e !o'rt& in $ivin$ effe!t to t(e in&'ran!e- In vie
of t(e !'&to) of in&'ran!e a$ent& to e%a)ine
+'i"#in$& +efore ritin$ .o"i!ie& '.on t(e), an#
&in!e a )i&ta2e a& to t(e i#entity an# !(ara!ter of
t(e +'i"#in$ i& e%tre)e"y 'n"i2e"y, t(e !o'rt& are
in!"ine# to !on&i#er t(at t(e .o"i!y of in&'ran!e
!over& any +'i"#in$ (i!( t(e .artie& )anife&t"y
inten#e# to in&'re, (oever ina!!'rate t(e
#e&!ri.tion )ay +e-
Reasoning
, T(e .artie& )anife&t"y inten#e# to in&'re t(e ne
oi" )i""- 7On )a!(inerie& an# e;'i.)ent it(
!o)."ete a!!e&&orie& '&'a" to a !o!on't oi" )i""
in!"'#in$ &to!2& of !o.ra, !o.ra !a2e an# !o.ra )i""&
(i"&t !ontaine# in t(e ne oi" )i"" +'i"#in$, &it'ate
@&i!A at UNNO- A/ONG NATIONA/ 1IG1 0AF, BO-
IFAM, /UC>NA CITF UNB/OCI>E-8
, If t(e .artie& rea""y inten#e# to .rote!t t(e fir&t oi"
)i"", t(en t(ere i& no nee# to &.e!ify it a& ne- It
o'"# +e a+&'r# to a&&')e t(at re&.on#ent o'"#
.rote!t it& fir&t oi" )i"" for #ifferent a)o'nt& an#
"eave 'n!overe# it& &e!on# one-
, A& )ay +e $"eane# fro) t(e te&ti)ony of t(e
.etitioner=& e)."oyee, t(e &o'r!e of t(e #i&!re.an!y
(a..ene# #'rin$ t(e .re.aration of t(e ritten
!ontra!t-
, <e&.on#ent i& not e&to..e# fro) !"ai)in$ t(at t(e
.o"i!y #e&!ri.tion i& ron$- >vi#en!e on re!or#
revea"& t(at re&.on#ent=& o.eratin$ )ana$er, Mr-
>#i&on Tant'!o, notifie# t(e .etitioner=& a$ent it(
(o) re&.on#ent ne$otiate# for t(e !ontra!t a+o't
t(e ina!!'rate #e&!ri.tion in t(e .o"i!y- 1oever,
Mr- BorJa a&&'re# Mr- Tant'!o t(at t(e '&e of t(e
a#Je!tive ne i"" #i&tin$'i&( t(e in&'re# .ro.erty-
, <e$ar#in$ .o"i!y re;'ire)ent& t(at fire
e%tin$'i&()ent a.."ian!e& &(o'"# +e avai"a+"e an# in
$oo# or2in$ !on#ition, arranty #i# not re;'ire
re&.on#ent to .rovi#e for a"" t(e fire e%tin$'i&(in$
a.."ian!e& en')erate# t(erein- Neit(er #i# it
re;'ire t(at t(e a.."ian!e& are re&tri!te# to t(o&e
)entione# in t(e arranty- @0it(in t(e vi!inity of t(e
ne oi" )i"" !an +e fo'n# t(e fo""oin$ #evi!e&H
n')ero'& .orta+"e fire e%tin$'i&(er&, to fire (o&e&,
fire (y#rant, an# an e)er$en!y fire en$ine-A
, T(e o+Je!t of t(e !o'rt in !on&tr'in$ a !ontra!t i&
to a&!ertain t(e intent of t(e .artie& to t(e !ontra!t
an# to enfor!e t(e a$ree)ent (i!( t(e .artie& (ave
entere# into- In #eter)inin$ (at t(e .artie&
inten#e#, t(e !o'rt& i"" rea# an# !on&tr'e t(e .o"i!y
a& a (o"e an# if .o&&i+"e, $ive effe!t to a"" t(e .art&
of t(e !ontra!t-
D'*2#*''#+ Petition i& #i&)i&&e#-
PERLA COMPANIA DE SEGUROS, INC. $, CA
(MILAGROS CAYAS)
469 SC<A CD4
*><NAN; May 26, 4550
NATURE
Petition for revie on certiorari of a #e!i&ion of t(e
Co'rt of A..ea"&
FACTS
, Private re&.on#ent Mi"a$ro& Caya& a& t(e
re$i&tere# oner of a Ma:#a +'&, in&'re# it( Per"a
Co).ania #e Se$'ro&, In!- @PCSIA 'n#er a .o"i!y
i&&'e# on *e+r'ary 3, 45C6-
, On Ee!e)+er 4C, 45C6, t(e +'& fi$'re# in an
a!!i#ent in Nai!, Cavite inJ'rin$ &evera" of it&
.a&&en$er&-
, One of t(e), 45,year o"# >#$ar#o Perea, &'e#
Mi"a$ro& Caya& for #a)a$e& in t(e C*I of Cavite,
(i"e t(ree ot(er& a$ree# to a &ett"e)ent of
PD,000-00 ea!(-
, After tria", t(e !o'rt ren#ere# a #e!i&ion in favor of
Perea, or#erin$ Caya& to !o).en&ate (i), it( an
aar# of e%e)."ary an# )ora" #a)a$e&, a& e"" a&
attorney=& fee&- @ P32,000 tota"A
, On Nove)+er 44, 4564, Mi"a$ro& Caya& fi"e# a
!o)."aint for a &') of )oney an# #a)a$e& a$ain&t
PCSI in t(e Co'rt of *ir&t In&tan!e of Cavite-
, In vie of Mi"a$ro& Caya&N fai"'re to .ro&e!'te t(e
!a&e, t(e !o'rt otu #ro#io or#ere# it& #i&)i&&a"
it(o't .reJ'#i!e-
INSURANCE Page 24
, A""e$in$ t(at &(e (a# not re!eive# a !o.y of t(e
an&er to t(e !o)."aint, an# t(at Po't of
&.ort&)an&(i.P, &(e #i# not fi"e a )otion to (o"#
PCSI in #efa'"t, Mi"a$ro& Caya& )ove# for t(e
re!on&i#eration of t(e #i&)i&&a" or#er- Sai# )otion
for re!on&i#eration a& a!te# '.on favora+"y +y t(e
!o'rt-
, A+o't to )ont(& "ater, Mi"a$ro& Caya& fi"e# a
)otion to #e!"are PCSI in #efa'"t for it& fai"'re to fi"e
an an&er-
, T(e )otion a& $rante# an# ."aintiff a& a""oe#
to a##'!e evi#en!e e8-#arte-
, On G'"y 43, 4562, t(e !o'rt ren#ere# J'#$)ent +y
#efa'"t or#erin$ PCSI to .ay Mi"a$ro& Caya& P90,000
a& !o).en&ation for t(e inJ're# .a&&en$er&, P9,000
a& )ora" #a)a$e& an# P9,000 a& attorneyN& fee&-
, Sai# #e!i&ion a& &et a&i#e after t(e PCSI fi"e# a
)otion t(erefor- Tria" of t(e !a&e en&'e#-
, In #'e !o'r&e, t(e !o'rt .ro)'"$ate# a #e!i&ion
or#erin$ #efen#ant Per"a Co).ania #e Se$'ro&, In!-
to .ay ."aintiff Mi"a$ro& Caya& t(e &') of
P90,000-00 'n#er it& )a%i)') "ia+i"ity a& .rovi#e#
for in t(e in&'ran!e .o"i!y; an# t(e &') of P9,000-00
a& rea&ona+"e attorneyN& fee
, PCSI a..ea"e# to t(e Co'rt of A..ea"&, (i!(
affir)e# in toto t(e "oer !o'rtN& #e!i&ion-
, It& )otion for re!on&i#eration (avin$ +een #enie#
+y &ai# a..e""ate !o'rt, PCSI fi"e# t(i& .etition
ISSUE
0ON, a& )aintaine# +y .etitioner, it& "ia+i"ity i&
"i)ite# on"y to t(e .ay)ent )a#e +y .rivate
re&.on#ent to Perea an# on"y '. to t(e a)o'nt of
P42,000-00
HELD
F>S
5 T(e in&'ran!e .o"i!y invo"ve# e%."i!it"y "i)it&
.etitionerN& "ia+i"ity to P42,000-00 .er .er&on an# to
P90,000-00 .er a!!i#ent-
, In Sto+es vs. Malayan 'nsurance Co.$ 'nc.$ t(e
Co'rt (e"# t(at t(e ter)& of t(e !ontra!t !on&tit'te
t(e )ea&'re of t(e in&'rerN& "ia+i"ity an# !o)."ian!e
t(ereit( i& a !on#ition .re!e#ent to t(e in&'re#N&
ri$(t of re!overy fro) t(e in&'rer-
, In t(e !a&e at +ar, t(e in&'ran!e .o"i!y !"ear"y an#
!ate$ori!a""y ."a!e# .etitionerN& "ia+i"ity for a""
#a)a$e& ari&in$ o't of #eat( or +o#i"y inJ'ry
&'&taine# +y one .er&on a& a re&'"t of any one
a!!i#ent at P42,000-00-
, Sai# a)o'nt !o)."ie# it( t(e )ini)') fi%e# +y
t(e "a t(en .revai"in$, Se!tion 3CC of Pre&i#entia"
Ee!ree No- 642, (i!( .rovi#e# t(at t(e "ia+i"ity of
"an# tran&.ortation ve(i!"e o.erator& for +o#i"y
inJ'rie& &'&taine# +y a .a&&en$er ari&in$ o't of t(e
'&e of t(eir ve(i!"e& &(a"" not +e "e&& t(an P42,000-
, In ot(er or#&, 'n#er t(e "a, t(e iniu
"ia+i"ity i& P42,000 .er .a&&en$er- PetitionerN& "ia+i"ity
'n#er t(e in&'ran!e !ontra!t not +ein$ "e&& t(an
P42,000-00, an# t(erefore not !ontrary to "a,
)ora"&, $oo# !'&to)&, .'+"i! or#er or .'+"i! .o"i!y,
&ai# &ti.'"ation )'&t +e '.(e"# a& effe!tive, va"i#
an# +in#in$ a& +eteen t(e .artie&-
, In "i2e )anner, e r'"e a& va"i# an# +in#in$ '.on
.rivate re&.on#ent t(e !on#ition re;'irin$ (er to
&e!'re t(e ritten .er)i&&ion of .etitioner +efore
effe!tin$ any .ay)ent in &ett"e)ent of any !"ai)
a$ain&t (er-
, T(ere i& not(in$ 'nrea&ona+"e, ar+itrary or
o+Je!tiona+"e in t(i& &ti.'"ation a& o'"# arrant it&
n'""ifi!ation- T(e &a)e a& o+vio'&"y #e&i$ne# to
&afe$'ar# t(e in&'rerN& intere&t a$ain&t !o""'&ion
+eteen t(e in&'re# an# t(e !"ai)ant&-
, It +ein$ &.e!ifi!a""y re;'ire# t(at .etitionerN&
ritten !on&ent +e fir&t &e!'re# +efore any .ay)ent
in &ett"e)ent of any !"ai) !o'"# +e )a#e, .rivate
re&.on#ent i& .re!"'#e# fro) &ee2in$ rei)+'r&e)ent
of t(e .ay)ent& )a#e to t(e t(ree ot(er .a&&an$er&
in vie of (er fai"'re to !o)."y it( t(e !on#ition
!ontaine# in t(e in&'ran!e .o"i!y-
, C"ear"y, t(e f'n#a)enta" .rin!i."e t(at !ontra!t&
are re&.e!te# a& t(e "a +eteen t(e !ontra!tin$
.artie& fin#& a.."i!ation in t(e .re&ent !a&e-
, It a& error on t(e .art of t(e tria" an# a..e""ate
!o'rt& to (ave #i&re$ar#e# t(e &ti.'"ation& of t(e
.artie& an# to (ave &'+&tit'te# t(eir on
inter.retation of t(e in&'ran!e .o"i!y-
, In P!il. Aerican >eneral 'nsurance Co.$ 'nc vs.
Mutuc$ e r'"e# t(at !ontra!t& (i!( are t(e .rivate
"a& of t(e !ontra!tin$ .artie& &(o'"# +e f'"fi""e#
a!!or#in$ to t(e "itera" &en&e of t(eir &ti.'"ation&, if
t(eir ter)& are !"ear an# "eave no roo) for #o'+t a&
to t(e intention of t(e !ontra!tin$ .artie&, for
!ontra!t& are o+"i$atory, no )atter (at for) t(ey
)ay +e, (enever t(e e&&entia" re;'i&ite& for t(eir
va"i#ity are .re&ent-
, In Pacific -8y"en I Acetylene Co. vs. Central
Ban+,P it a& &tate# t(at t(e fir&t an# f'n#a)enta"
#'ty of t(e !o'rt& i& t(e a.."i!ation of t(e "a
a!!or#in$ to it& e%.re&& ter)&, inter.retation +ein$
!a""e# for on"y (en &'!( "itera" a.."i!ation i&
i).o&&i+"e-
, 0e o+&erve t(at a"t(o'$( Mi"a$ro& Caya& a& a+"e
to .rove a tota" "o&& of on"y PDD,000-00, .etitioner
a& )a#e "ia+"e for t(e a)o'nt of P90,000-00, t(e
)a%i)') "ia+i"ity .er a!!i#ent &ti.'"ate# in t(e
.o"i!y- T(i& i& .atent error- An in&'ran!e in#e)nity,
+ein$ )ere"y an a&&i&tan!e or re&tit'tion in&ofar a&
!an +e fair"y a&!ertaine#, !annot +e avai"e# of +y any
a!!i#ent vi!ti) or !"ai)ant a& an in&tr')ent of
enri!()ent +y rea&on of an a!!i#ent-
Disposition Petition $rante#- T(e #e!i&ion of t(e
Co'rt of A..ea"& i& )o#ifie# in t(at .etitioner &(a""
.ay Mi"a$ro& Caya& t(e a)o'nt of Te"ve T(o'&an#
Pe&o& @P42,000- 00A ."'& "e$a" intere&t fro) t(e
.ro)'"$ation of t(e #e!i&ion of t(e "oer !o'rt 'nti"
it i& f'""y .ai# an# attorneyN& fee& in t(e a)o'nt of
P9,000-00-
POLTAN $. BPI ? FOHN DOE
G-<- No- 46D30C
C1ICO,NA?A<IO; Mar!( 9, 200C
NATURE
Petition for revie of CA #e!i&ion
FACTS
, Petitioner& PO/TAN o+taine# a "oan evi#en!e# +y a
.ro)i&&ory note fro) t(e MANT<AE> Eev=t Cor.-
T(i& a& &e!'re# +y a !(atte" )ort$a$e over a 4,'nit
Ni&&an Sentra ve(i!"e-
, 0it( noti!e to .etitioner&, MANT<AE> a&&i$ne# to
BPI, +y ay of a Eee# of A&&i$n)ent, a"" it& ri$(t&,
tit"e an# intere&t to t(e .ro)i&&ory note an# !(atte"
)ort$a$e-
, Petitioner& #efa'"te# an# &o BPI #e)an#e# t(e
(o"e +a"an!e of P266-9T in!"'#in$ a!!r'e# intere&t,
or to ret'rn to BPI t(e .o&&e&&ion of t(e )otor
ve(i!"e for fore!"o&'re- It i& &.e!ifi!a""y .rovi#e# in
t(e .ro)i&&ory note an# !(atte" )ort$a$e t(at
fai"'re to .ay any in&ta"")ent (en #'e &(a"" )a2e
&'+&e;'ent in&ta"")ent& an# t(e entire +a"an!e of
t(e o+"i$ation #'e an# .aya+"e-
, After t(ey ref'&e# to #o &o, BPI t(en fi"e#
!o)."aint-
, Petitioner& !"ai)e# t(at BPI re;'ire# t(e) to
o+tain a )otor ve(i!"e in&'ran!e .o"i!y fro) *GU
In&'ran!e Cor.oration @*GU In&'ran!eA- T(i& i& a
&i&ter !o).any of BPI- T(ey (a# +een .ayin$ t(e
)ont("y in&ta"")ent& on t(e ve(i!"e 'nti" it fi$'re# in
an a!!i#ent (ere it +e!a)e a tota" re!2- Un#er t(e
ter)& of t(e in&'ran!e .o"i!y fro) *GU In&'ran!e,
t(e ve(i!"e (a# to +e re."a!e# or it& va"'e .ai# to
t(e)- E'e to t(e fai"'re an# ref'&a" of *GU
In&'ran!e to re."a!e t(e ve(i!"e or .ay it& va"'e,
t(ey &to..e# .ay)ent of t(e )ont("y in&ta"")ent&-
INSURANCE Page 25
, <TC or#ere# PO/TANS to .ay BPI t(e &ai# a)o'nt-
, CA rever&e# an# re)an#e# !a&e to <TC for tria" on
t(e )erit&-
, <TC a$ain r'"e# in favor of BPI- CA affir)e#-

ISSUES
4- 0ON !ontra!t& .re&ente# in evi#en!e +y BPI ere
'nJ'&t an# 'na!!e.ta+"e !ontra!t& of a#(e&ion
2- 0ON t(e ter)& an# !on#ition& of t(e
!o).re(en&ive !ar in&'ran!e .o"i!y i&&'e# +y *GU
&(o'"# +e #ee)e# a& (avin$ a'to)ati!a""y o.erate#
in favor of BPI a& t(e a&&'re# )ort$a$ee, an# if &o,
it &(o'"# +e #ee)e# a& re&'"tin$ in t(e
e%tin$'i&()ent of .etitioner=& o+"i$ation
HELD
4- NO
Ratio A !ontra!t of a#(e&ion i& one in (i!( one of
t(e .artie& i).o&e& a rea#y,)a#e for) of !ontra!t,
(i!( t(e ot(er .arty )ay a!!e.t or reJe!t, +'t
(i!( t(e "atter !annot )o#ify- It i& J'&t a& +in#in$
a& or#inary !ontra!t&-
Reasoning
- Petitioner& fai"e# to &(o t(at t(ey ere 'n#er
#'re&& or for!e# to &i$n t(e "oan #o!')ent&- T(e
nat'ra" .re&').tion i& t(at one #oe& not &i$n a
#o!')ent it(o't fir&t infor)in$ (i)&e"f of it&
!ontent& an# !on&e;'en!e&-
- Contra!t& of a#(e&ion are not entire"y .ro(i+ite#
even a& t(e !o'rt& re)ain !aref'" in &!r'tini:in$ t(e
fa!t'a" !ir!')&tan!e& 'n#er"yin$ ea!( !a&e to
#eter)ine t(e re&.e!tive !"ai)& of !onten#in$
.artie& on t(eir effi!a!y-
2- NO
Reasoning
- Petitioner& fai"e# to &(o any .rovi&ion in t(e
in&'ran!e .o"i!y or )ort$a$e !ontra!t .rovi#in$ t(at
t(e "o&& of t(e )ort$a$e# ve(i!"e e%tin$'i&(e& t(eir
.rin!i.a" o+"i$ation to BPI-
, 0(i"e it i& tr'e t(at t(e .ro!ee#& fro) t(e
in&'ran!e .o"i!y over t(e )ort$a$e# !(atte" i& for
t(e +enefit of BPI, t(i& i"" re&'"t in .artia" or f'""
&ati&fa!tion of t(e o+"i$ation only if t(e in&'rer .ay&
t(e )ort$a$ee, BPI, or if t(e in&'ran!e .ro!ee#&
ere .ai# to BPI- In t(i& !a&e, '.on t(e "o&& of t(e
ve(i!"e #'e to tota" re!2, t(e .etitioner& fi"e# a
!"ai) 'n#er t(e in&'ran!e .o"i!y, !o""e!te# an#
re!eive# t(e .ro!ee#& t(ereof, +'t #i# not &ett"e t(eir
o+"i$ation it( BPI (i!( re)aine# o't&tan#in$
#e&.ite t(e "o&& of t(e ve(i!"e-
Disposition CA #e!i&ion A**I<M>E it( t(e
)o#ifi!ation t(at t(e intere&t rate +e re#'!e# to 42Q
.er ann') fro) 2D May 455D 'nti" f'""y .ai#, an#
t(e aar# of attorney=& fee& +e re#'!e# to P90T-
FILIPINO MERCHANTS INS. $. CA (CHOA TIE<
SENG)
4C5 SC<A 636
<>GA/AEO; Nove)+er 26, 4565
NATURE
<evie of t(e #e!i&ion of t(e CA
FACTS
5 P"aintiff in&'re# &ai# &(i.)ent it( #efen#ant
in&'ran!e !o).any 'n#er &ai# !ar$o for t(e $oo#&
#e&!ri+e# a& 600 )etri! ton& of fi&()ea" in ne
$'nny +a$& of 50 2i"o& ea!( fro) Ban$2o2, T(ai"an#
to Mani"a a$ain&t a"" ri&2& 'n#er are(o'&e to
are(o'&e ter)&-
, So)e of t(e $oo#& arrive# in +a# !on#ition- P"aintiff
)a#e a !"ai) a$ain&t *i"i.ino Mer!(ant& In&'ran!e
Co).any- T(e "atter ref'&e# to .ay- P"aintiff +ro'$(t
an a!tion a$ain&t t(e)- T(e #efen#ant in&'ran!e
!o).any .re&ente# a t(ir# .arty !o)."aint a$ain&t
t(e ve&&e" an# t(e arra&tre !ontra!tor-
, G'#$)ent a& ren#ere# a$ain&t t(e in&'ran!e
!o).any- On t(e t(ir# .arty !o)."aint, t(e t(ir#
.arty #efen#ant& ere or#ere# to .ay t(e t(ir# .arty
."aintiff&- T(e CA affir)e#, +'t )o#ifie# t(e &a)e
it( re$ar# to t(e a#J'#i!ation of t(e t(ir#,.arty
!o)."aint
ISSUES
4- 0ON &o)e fort'ity, !a&'a"ty or a!!i#enta" !a'&e i&
nee#e# to +e .rove# #e&.ite t(e 7a"" ri&2&8 .o"i!y @a&
a&&erte# +y t(e in&'ran!e !o).anyA
2- 0ON t(e re&.on#ent (a& an in&'ra+"e intere&t
HELD
4- NO
, T(e very nat're of t(e ter) Pa"" ri&2&P )'&t +e
$iven a +roa# an# !o).re(en&ive )eanin$ a&
!overin$ any "o&& ot(er t(an a i""f'" an# fra'#'"ent
a!t of t(e in&'re#-
0
T(i& i& .'r&'ant to t(e very
.'r.o&e of an Pa"" ri&2&P in&'ran!e to $ive .rote!tion
to t(e in&'re# in t(o&e !a&e& (ere #iffi!'"tie& of
"o$i!a" e%."anation or &o)e )y&tery &'rro'n# t(e
"o&& or #a)a$e to .ro.erty-
, Genera""y, t(e +'r#en of .roof i& '.on t(e in&'re#
to &(o t(at a "o&& aro&e fro) a !overe# .eri", +'t
'n#er an Pa"" ri&2&P .o"i!y t(e +'r#en i& not on t(e
in&'re# to .rove t(e .re!i&e !a'&e of "o&& or #a)a$e
for (i!( it &ee2& !o).en&ation- T(e in&'re# 'n#er
an Pa"" ri&2& in&'ran!e .o"i!yP (a& t(e initia" +'r#en
of .rovin$ t(at t(e !ar$o a& in $oo# !on#ition (en
t(e .o"i!y atta!(e# an# t(at t(e !ar$o a& #a)a$e#
(en 'n"oa#e# fro) t(e ve&&e"; t(ereafter, t(e
+'r#en t(en &(ift& to t(e in&'rer to &(o t(e
e%!e.tion to t(e !overa$e- A& e (e"# in Paris-
Manila Perfuery Co. vs. P!oeni8 Assurance Co.$
0td. t(e +a&i! r'"e i& t(at t(e in&'ran!e !o).any (a&
t(e +'r#en of .rovin$ t(at t(e "o&& i& !a'&e# +y t(e
ri&2 e%!e.te# an# for ant of &'!( .roof, t(e
!o).any i& "ia+"e- In t(e .re&ent !a&e, t(ere +ein$
no &(oin$ t(at t(e "o&& a& !a'&e# +y any of t(e
e%!e.te# .eri"&, t(e in&'rer i& "ia+"e 'n#er t(e .o"i!y-
2- F>S
, Se!tion 43 of t(e In&'ran!e Co#e #efine& in&'ra+"e
intere&t in .ro.erty a& every intere&t in .ro.erty,
(et(er rea" or .er&ona", or any re"ation t(ereto, or
"ia+i"ity in re&.e!t t(ereof, of &'!( nat're t(at a
!onte)."ate# .eri" )i$(t #ire!t"y #a)nify t(e
in&'re#- In .rin!i."e, anyone (a& an in&'ra+"e
intere&t in .ro.erty (o #erive& a +enefit fro) it&
e%i&ten!e or o'"# &'ffer "o&& fro) it& #e&tr'!tion
(et(er (e (a& or (a& not any tit"e in, or "ien '.on
or .o&&e&&ion of t(e .ro.erty y-
6D
In&'ra+"e intere&t
in .ro.erty )ay !on&i&t in @aA an e%i&tin$ intere&t;
@+A an in!(oate intere&t fo'n#e# on an e%i&tin$
intere&t; or @!A an e%.e!tan!y, !o'."e# it( an
e%i&tin$ intere&t in t(at o't of (i!( t(e e%.e!tan!y
ari&e&-
, <e&.on#ent=& intere&t over t(e $oo#& i& +a&e# on
t(e .erfe!te# !ontra!t of &a"e- T(e .erfe!te# !ontra!t
of &a"e +eteen (i) an# t(e &(i..er of t(e $oo#&
o.erate& to ve&t in (i) an e;'ita+"e tit"e even +efore
#e"ivery or +efore +e .erfor)e# t(e !on#ition& of t(e
&a"e-
, *'rt(er, Arti!"e 4923 of t(e Civi" Co#e .rovi#e& t(at
(ere, in .'r&'an!e of a !ontra!t of &a"e, t(e &e""er
i& a't(ori:e# or re;'ire# to &en# t(e $oo#& to t(e
+'yer, #e"ivery of t(e $oo#& to a !arrier, (et(er
na)e# +y t(e +'yer or not, for, t(e .'r.o&e of
tran&)i&&ion to t(e +'yer i& #ee)e# to +e a #e"ivery
of t(e $oo#& to t(e +'yer, t(e e%!e.tion& to &ai# r'"e
not o+tainin$ in t(e .re&ent !a&e- T(e Co'rt (a&
(eretofore r'"e# t(at t(e #e"ivery of t(e $oo#& on
+oar# t(e !arryin$ ve&&e"& .arta2e of t(e nat're of
a!t'a" #e"ivery &in!e, fro) t(at ti)e, t(e forei$n
+'yer& a&&')e# t(e ri&2& of "o&& of t(e $oo#& an#
.ai# t(e in&'ran!e .re)i') !overin$ t(e)
, Moreover, t(e i&&'e of "a!2 of in&'ra+"e intere&t
a& not rai&e# in .etitioner=& an&er-
Disposition Petition #enie#
INSURANCE Page 26
GAISANO CAGAYAN $. INSURANCE C#. OF
NORTH AMERICA
D50 SC<A 256
A'&tria,Martine:; G'ne 6, 2006
NATURE
Petition for revie on certiorari of t(e Ee!i&ion of t(e
Co'rt of A..ea"&
FACTS
, Inter!a.ito" Mar2etin$ Cor.oration @IMCA i& t(e
)a2er of 0ran$"er B"'e Gean&- /evi Stra'&& @P(i"&-A
In!- @/SPIA i& t(e "o!a" #i&tri+'tor of .ro#'!t& +earin$
tra#e)ar2& one# +y /evi Stra'&& S Co-- IMC an#
/SPI &e.arate"y o+taine# fro) re&.on#ent fire
in&'ran!e .o"i!ie& it( +oo2 #e+t en#or&e)ent&-
T(e in&'ran!e .o"i!ie& .rovi#e for !overa$e on 7+oo2
#e+t& in !onne!tion it( rea#y,)a#e !"ot(in$
)ateria"& (i!( (ave +een &o"# or #e"ivere# to
vario'& !'&to)er& an# #ea"er& of t(e In&'re#
any(ere in t(e P(i"i..ine&-8 T(e .o"i!ie& #efine#
+oo2 #e+t& a& t(e 7'n.ai# a!!o'nt &ti"" a..earin$ in
t(e Boo2 of A!!o'nt of t(e In&'re# D9 #ay& after t(e
ti)e of t(e "o&& !overe# 'n#er t(i& Po"i!y-8 T(e
.o"i!ie& a"&o .rovi#e for t(e fo""oin$ !on#ition&H
4- 0arrante# t(at t(e Co).any &(a"" not
+e "ia+"e for any 'n.ai# a!!o'nt in
re&.e!t of t(e )er!(an#i&e &o"# an#
#e"ivere# +y t(e In&'re# (i!( are
o't&tan#in$ at t(e #ate of "o&& for a
.erio# in e%!e&& of &i% @6A )ont(& fro)
t(e #ate of t(e !overin$ invoi!e or
a!t'a" #e"ivery of t(e )er!(an#i&e
(i!(ever &(a"" fir&t o!!'r-
2- 0arrante# t(at t(e In&'re# &(a"" &'+)it to t(e
Co).any it(in te"ve @42A #ay& after t(e !"o&e of
every !a"en#ar )ont( a"" a)o'nt &(on in t(eir
+oo2& of a!!o'nt& a& 'n.ai# an# t('& +e!o)e
re!eiva+"e ite) fro) t(eir !'&to)er& an# #ea"er&- %
% %
, Petitioner i& a !'&to)er an# #ea"er of t(e .ro#'!t&
of IMC an# /SPI- On *e+r'ary 29, 4554, t(e Gai&ano
S'.er&tore Co)."e% in Ca$ayan #e Oro City, one#
+y .etitioner, a& !on&')e# +y fire- In!"'#e# in t(e
ite)& "o&t or #e&troye# in t(e fire ere &to!2& of
rea#y,)a#e !"ot(in$ )ateria"& &o"# an# #e"ivere# +y
IMC an# /SPI- On *e+r'ary D, 4552, re&.on#ent
fi"e# a !o)."aint for #a)a$e& a$ain&t .etitioner- It
a""e$e& t(at IMC an# /SPI fi"e# it( re&.on#ent t(eir
!"ai)& 'n#er t(eir re&.e!tive fire in&'ran!e .o"i!ie&
it( +oo2 #e+t en#or&e)ent&; t(at a& of *e+r'ary
29, 4554, t(e 'n.ai# a!!o'nt& of .etitioner on t(e
&a"e an# #e"ivery of rea#y,)a#e !"ot(in$ )ateria"&
it( IMC a& P2,445,209-00 (i"e it( /SPI it a&
P939,643-00; t(at re&.on#ent .ai# t(e !"ai)& of IMC
an# /SPI an#, +y virt'e t(ereof, re&.on#ent a&
&'+ro$ate# to t(eir ri$(t& a$ain&t .etitioner; t(at
re&.on#ent )a#e &evera" #e)an#& for .ay)ent '.on
.etitioner +'t t(e&e ent 'n(ee#e#- In it& An&er
it( Co'nter C"ai) #ate# G'"y D, 4559, .etitioner
!onten#& t(at it !o'"# not +e (e"# "ia+"e +e!a'&e t(e
.ro.erty !overe# +y t(e in&'ran!e .o"i!ie& ere
#e&troye# #'e to fort'itie& event or force a6eure;
t(at re&.on#ent=& ri$(t of &'+ro$ation (a& no +a&i&
ina&)'!( a& t(ere a& no +rea!( of !ontra!t
!o))itte# +y it &in!e t(e "o&& a& #'e to fire (i!(
it !o'"# not .revent or fore&ee; t(at IMC an# /SPI
never !o))'ni!ate# to it t(at t(ey in&'re# t(eir
.ro.ertie&; t(at it never !on&ente# to .ayin$ t(e
!"ai) of t(e in&'re#-
, At t(e .re,tria" !onferen!e t(e .artie& fai"e# to
arrive at an a)i!a+"e &ett"e)ent- T('&, tria" on t(e
)erit& en&'e#- On A'$'&t 34, 4556, t(e <TC
ren#ere# it& #e!i&ion #i&)i&&in$ re&.on#ent=&
!o)."aint- It (e"# t(at t(e fire a& .'re"y a!!i#enta";
t(at t(e !a'&e of t(e fire a& not attri+'ta+"e to t(e
ne$"i$en!e of t(e .etitioner; t(at it (a& not +een
e&ta+"i&(e# t(at .etitioner i& t(e #e+tor of IMC an#
/SPI; t(at &in!e t(e &a"e& invoi!e& &tate t(at 7it i&
f'rt(er a$ree# t(at )ere"y for .'r.o&e of &e!'rin$
t(e .ay)ent of .'r!(a&e .ri!e, t(e a+ove,#e&!ri+e#
)er!(an#i&e re)ain& t(e .ro.erty of t(e ven#or
'nti" t(e .'r!(a&e .ri!e i& f'""y .ai#8, IMC an# /SPI
retaine# oner&(i. of t(e #e"ivere# $oo#& an# )'&t
+ear t(e "o&&- Ei&&ati&fie#, .etitioner a..ea"e# to t(e
CA- On O!to+er 44, 2000, t(e CA ren#ere# it&
#e!i&ion &ettin$ a&i#e t(e #e!i&ion of t(e <TC- T(e
CA (e"# t(at t(e &a"e& invoi!e& are .roof& of &a"e,
+ein$ #etai"e# &tate)ent& of t(e nat're, ;'antity an#
!o&t of t(e t(in$ &o"#; t(at "o&& of t(e $oo#& in t(e
fire )'&t +e +orne +y .etitioner &in!e t(e #roviso
!ontaine# in t(e &a"e& invoi!e& i& an e%!e.tion 'n#er
Arti!"e 490D @4A of t(e Civi" Co#e, to t(e $enera" r'"e
t(at if t(e t(in$ i& "o&t +y a fort'ito'& event, t(e ri&2
i& +orne +y t(e oner of t(e t(in$ at t(e ti)e t(e
"o&& 'n#er t(e .rin!i."e of res #erit doino; t(at
.etitioner=& o+"i$ation to IMC an# /SPI i& not t(e
#e"ivery of t(e "o&t $oo#& +'t t(e .ay)ent of it&
'n.ai# a!!o'nt an# a& &'!( t(e o+"i$ation to .ay i&
not e%tin$'i&(e#, even if t(e fire i& !on&i#ere# a
fort'ito'& event; t(at +y &'+ro$ation, t(e in&'rer (a&
t(e ri$(t to $o a$ain&t .etitioner; t(at, +ein$ a fire
in&'ran!e it( +oo2 #e+t en#or&e)ent&, (at a&
in&'re# a& t(e ven#or=& intere&t a& a !re#itor-
Petitioner fi"e# a )otion for re!on&i#eration +'t it
a& #enie# +y t(e CA in it& <e&o"'tion #ate# A.ri"
44, 2004-
ISSUES
4- 0ON t(e CA erre# in !on&tr'in$ a fire in&'ran!e
.o"i!y on +oo2 #e+t& a& one !overin$ t(e 'n.ai#
a!!o'nt& of IMC an# /SPI &in!e &'!( in&'ran!e
a.."ie& to "o&& of t(e rea#y,)a#e !"ot(in$ )ateria"&
&o"# an# #e"ivere# to .etitioner-
2- 0ON IMC +ear& t(e ri&2 of "o&& +e!a'&e it
e%.re&&"y re&erve# oner&(i. of t(e $oo#& +y
&ti.'"atin$ in t(e &a"e& invoi!e& t(at 7[i]t i& f'rt(er
a$ree# t(at )ere"y for .'r.o&e of &e!'rin$ t(e
.ay)ent of t(e .'r!(a&e .ri!e t(e a+ove #e&!ri+e#
)er!(an#i&e re)ain& t(e .ro.erty of t(e ven#or
'nti" t(e .'r!(a&e .ri!e t(ereof i& f'""y .ai#-8
3- 0ON t(e .etitioner "ia+"e for t(e 'n.ai# a!!o'nt&
HELD
4- NO
, It i& e"",&ett"e# t(at (en t(e or#& of a !ontra!t
are ."ain an# rea#i"y 'n#er&too#, t(ere i& no roo)
for !on&tr'!tion- In t(i& !a&e, t(e ;'e&tione#
in&'ran!e .o"i!ie& .rovi#e !overa$e for 7+oo2 #e+t&
in !onne!tion it( rea#y,)a#e !"ot(in$ )ateria"&
(i!( (ave +een &o"# or #e"ivere# to vario'&
!'&to)er& an# #ea"er& of t(e In&'re# any(ere in
t(e P(i"i..ine&-8; an# #efine# +oo2 #e+t& a& t(e
7'n.ai# a!!o'nt &ti"" a..earin$ in t(e Boo2 of
A!!o'nt of t(e In&'re# D9 #ay& after t(e ti)e of t(e
"o&& !overe# 'n#er t(i& Po"i!y-8 No(ere i& it
.rovi#e# in t(e ;'e&tione# in&'ran!e .o"i!ie& t(at t(e
&'+Je!t of t(e in&'ran!e i& t(e $oo#& &o"# an#
#e"ivere# to t(e !'&to)er& an# #ea"er& of t(e
in&'re#-
, In#ee#, (en t(e ter)& of t(e a$ree)ent are !"ear
an# e%."i!it t(at t(ey #o not J'&tify an atte).t to
rea# into it any a""e$e# intention of t(e .artie&, t(e
ter)& are to +e 'n#er&too# "itera""y J'&t a& t(ey
a..ear on t(e fa!e of t(e !ontra!t- T('&, (at ere
in&'re# a$ain&t ere t(e a!!o'nt& of IMC an# /SPI
it( .etitioner (i!( re)aine# 'n.ai# D9 #ay& after
t(e "o&& t(ro'$( fire, an# not t(e "o&& or #e&tr'!tion
of t(e $oo#& #e"ivere#-
2- NO
, T(e .re&ent !a&e !"ear"y fa""& 'n#er .ara$ra.( @4A,
Arti!"e 490D of t(e Civi" Co#eH
A<T- 490D- Un"e&& ot(eri&e a$ree#, t(e $oo#&
re)ain at t(e &e""er=& ri&2 'nti" t(e oner&(i.
t(erein i& tran&ferre# to t(e +'yer, +'t (en t(e
INSURANCE Page 27
oner&(i. t(erein i& tran&ferre# to t(e +'yer t(e
$oo#& are at t(e +'yer=& ri&2 (et(er a!t'a"
#e"ivery (a& +een )a#e or not$ e%!e.t t(atH
@4A 0(ere #e"ivery of t(e $oo#& (a& +een )a#e to
t(e +'yer or to a +ai"ee for t(e +'yer, in
.'r&'an!e of t(e !ontra!t an# t(e #&+e"*h'2 '+
he %##.* ha* 3ee+ "ea'+e. 3) he *elle"
(e"el) # *e!,"e 2e"-#"(a+!e 3) he 3,)e" #-
h'* #3l'%a'#+* ,+.e" he !#+"a!, he %##.*
a"e a he 3,)e"4* "'*; -"#( he '(e #- *,!h
.el'$e"); @>).(a&i& &'.."ie#A
, T('&, (en t(e &e""er retain& oner&(i. on"y to
in&'re t(at t(e +'yer i"" .ay it& #e+t, t(e ri&2 of "o&&
i& +orne +y t(e +'yer- A!!or#in$"y, .etitioner +ear&
t(e ri&2 of "o&& of t(e $oo#& #e"ivere#-
, IMC an# /SPI #i# not "o&e !o)."ete intere&t over
t(e $oo#&- T(ey (ave an in&'ra+"e intere&t 'nti" f'""
.ay)ent of t(e va"'e of t(e #e"ivere# $oo#&- Un"i2e
t(e !ivi" "a !on!e.t of res #erit doino, (ere
oner&(i. i& t(e +a&i& for !on&i#eration of (o +ear&
t(e ri&2 of "o&&, '+ 2"#2e") '+*,"a+!e, #+e4*
'+e"e* '* +# .ee"('+e. 3) !#+!e2 #- 'le,
3, &hehe" '+*,"e. ha* *,3*a+'al e!#+#('!
'+e"e* '+ he 2"#2e").
, Se!tion 43 of o'r In&'ran!e Co#e #efine& in&'ra+"e
intere&t a& 7every intere&t in .ro.erty, (et(er rea"
or .er&ona", or any re"ation t(ereto, or "ia+i"ity in
re&.e!t t(ereof, of &'!( nat're t(at a !onte)."ate#
.eri" )i$(t #ire!t"y #a)nify t(e in&'re#-8
Parent(eti!a""y, 'n#er Se!tion 4D of t(e &a)e Co#e,
an in&'ra+"e intere&t in .ro.erty )ay !on&i&t inH @aA
an e%i&tin$ intere&t; @+A an in!(oate intere&t fo'n#e#
on e%i&tin$ intere&t; or @!A an e%.e!tan!y, !o'."e#
it( an e%i&tin$ intere&t in t(at o't of (i!( t(e
e%.e!tan!y ari&e&-
, T(erefore, an in&'ra+"e intere&t in .ro.erty #oe&
not ne!e&&ari"y i)."y a .ro.erty intere&t in, or a "ien
'.on, or .o&&e&&ion of, t(e &'+Je!t )atter of t(e
in&'ran!e, an# neit(er t(e tit"e nor a +enefi!ia"
intere&t i& re;'i&ite to t(e e%i&ten!e of &'!( an
intere&t, it i& &'ffi!ient t(at t(e in&'re# i& &o &it'ate#
it( referen!e to t(e .ro.erty t(at (e o'"# +e "ia+"e
to "o&& &(o'"# it +e inJ're# or #e&troye# +y t(e .eri"
a$ain&t (i!( it i& in&'re#- Anyone (a& an in&'ra+"e
intere&t in .ro.erty (o #erive& a +enefit fro) it&
e%i&ten!e or o'"# &'ffer "o&& fro) it& #e&tr'!tion-
In#ee#, a ven#or or &e""er retain& an in&'ra+"e
intere&t in t(e .ro.erty &o"# &o "on$ a& (e (a& any
intere&t t(erein, in ot(er or#&, &o "on$ a& (e o'"#
&'ffer +y it& #e&tr'!tion, a& (ere (e (a& a ven#or=&
"ien- In t(i& !a&e, t(e in&'ra+"e intere&t of IMC an#
/SPI .ertain to t(e 'n.ai# a!!o'nt& a..earin$ in
t(eir Boo2& of A!!o'nt D9 #ay& after t(e ti)e of t(e
"o&& !overe# +y t(e .o"i!ie&-
3- F>S
, Petitioner=& ar$')ent t(at it i& not "ia+"e +e!a'&e
t(e fire i& a fort'ito'& event 'n#er Arti!"e 44CD of t(e
Civi" Co#e i& )i&."a!e#- A& (e"# ear"ier, .etitioner
+ear& t(e "o&& 'n#er Arti!"e 490D @4A of t(e Civi"
Co#e-
, Moreover, it )'&t +e &tre&&e# t(at t(e in&'ran!e in
t(i& !a&e i& not for "o&& of $oo#& +y fire +'t for
.etitioner=& a!!o'nt& it( IMC an# /SPI t(at
re)aine# 'n.ai# D9 #ay& after t(e fire- A!!or#in$"y,
.etitioner=& o+"i$ation i& for t(e .ay)ent of )oney-
0(ere t(e o+"i$ation !on&i&t& in t(e .ay)ent of
)oney, t(e fai"'re of t(e #e+tor to )a2e t(e
.ay)ent even +y rea&on of a fort'ito'& event &(a""
not re"ieve (i) of (i& "ia+i"ity- T(e rationa"e for t(i& i&
t(at t(e r'"e t(at an o+"i$or &(o'"# +e (e"# e%e).t
fro) "ia+i"ity (en t(e "o&& o!!'r& t(r' a fort'ito'&
event on"y (o"#& tr'e (en t(e o+"i$ation !on&i&t& in
t(e #e"ivery of a #eter)inate t(in$ an# t(ere i& no
&ti.'"ation (o"#in$ (i) "ia+"e even in !a&e of
fort'ito'& event- It #oe& not a.."y (en t(e
o+"i$ation i& .e!'niary in nat're-
, Un#er Arti!"e 4263 of t(e Civi" Co#e, 7[i]n an
o+"i$ation to #e"iver a $eneri! t(in$, t(e "o&& or
#e&tr'!tion of anyt(in$ of t(e &a)e 2in# #oe& not
e%tin$'i&( t(e o+"i$ation-8 If t(e o+"i$ation i& $eneri!
in t(e &en&e t(at t(e o+Je!t t(ereof i& #e&i$nate#
)ere"y +y it& !"a&& or $en'& it(o't any .arti!'"ar
#e&i$nation or .(y&i!a" &e$re$ation fro) a"" ot(er& of
t(e &a)e !"a&&, t(e "o&& or #e&tr'!tion of anyt(in$ of
t(e &a)e 2in# even it(o't t(e #e+tor=& fa'"t an#
+efore (e (a& in!'rre# in #e"ay i"" not (ave t(e
effe!t of e%tin$'i&(in$ t(e o+"i$ation- T(i& r'"e i&
+a&e# on t(e .rin!i."e t(at t(e $en'& of a t(in$ !an
never .eri&(- >enus nun.uan #erit- A+ #3l'%a'#+
# 2a) (#+e) '* %e+e"'!G he"e-#"e, ' '* +#
e/!,*e. 3) -#",'#,* l#** #- a+) *2e!'-'!
2"#2e") #- he .e3#".
, T('&, (et(er fire i& a fort'ito'& event or .etitioner
a& ne$"i$ent are )atter& i))ateria" to t(i& !a&e-
0(at i& re"evant (ere i& (et(er it (a& +een
e&ta+"i&(e# t(at .etitioner (a& o't&tan#in$ a!!o'nt&
it( IMC an# /SPI-
, 0it( re&.e!t to IMC, t(e re&.on#ent (a&
a#e;'ate"y e&ta+"i&(e# it& !"ai)- Petitioner (a& an
o't&tan#in$ a!!o'nt it( IMC in t(e a)o'nt of
P2,445,209-00, !(e!2 vo'!(er evi#en!in$ .ay)ent
to IMC, &'+ro$ation re!ei.t e%e!'te# +y IMC in favor
of re&.on#ent '.on re!ei.t of t(e in&'ran!e
.ro!ee#&- A"" t(e&e #o!')ent& (ave +een .ro.er"y
i#entifie#, .re&ente# an# )ar2e# a& e%(i+it& in !o'rt-
T(e &'+ro$ation re!ei.t, +y it&e"f, i& &'ffi!ient to
e&ta+"i&( not on"y t(e re"ation&(i. of re&.on#ent a&
in&'rer an# IMC a& t(e in&'re#, +'t a"&o t(e a)o'nt
.ai# to &ett"e t(e in&'ran!e !"ai)- T(e ri$(t of
&'+ro$ation a!!r'e& &i)."y '.on .ay)ent +y t(e
in&'ran!e !o).any of t(e in&'ran!e !"ai)-
<e&.on#ent=& a!tion a$ain&t .etitioner i& &;'are"y
&an!tione# +y Arti!"e 220C of t(e Civi" Co#e (i!(
.rovi#e&H
Art- 220C- If t(e ."aintiff=& .ro.erty (a& +een
in&'re#, an# (e (a& re!eive# in#e)nity fro) t(e
in&'ran!e !o).any for t(e inJ'ry or "o&& ari&in$
o't of t(e ron$ or +rea!( of !ontra!t !o)."aine#
of, t(e in&'ran!e !o).any &(a"" +e &'+ro$ate# to
t(e ri$(t& of t(e in&'re# a$ain&t t(e ron$#oer or
t(e .er&on (o (a& vio"ate# t(e !ontra!t- % % %
, Petitioner fai"e# to ref'te re&.on#ent=& evi#en!e-
, A& to /SPI, re&.on#ent fai"e# to .re&ent &'ffi!ient
evi#en!e to .rove it& !a'&e of a!tion- No evi#entiary
ei$(t !an +e $iven to >%(i+it 7* /evi Stra'&&8, a
"etter #ate# A.ri" 23, 4554 fro) .etitioner=& Genera"
Mana$er, Ste.(en S- Gai&ano, Gr-, &in!e it i& not an
a#)i&&ion of .etitioner=& 'n.ai# a!!o'nt it( /SPI-
It on"y !onfir)& t(e "o&& of /evi=& .ro#'!t& in t(e
a)o'nt of P939,643-00 in t(e fire t(at ra:e#
.etitioner=& +'i"#in$ on *e+r'ary 29, 4554-
, Moreover, t(ere i& no .roof of f'"" &ett"e)ent of t(e
in&'ran!e !"ai) of /SPI; no &'+ro$ation re!ei.t a&
offere# in evi#en!e- T('&, t(ere i& no evi#en!e t(at
re&.on#ent (a& +een &'+ro$ate# to any ri$(t (i!(
/SPI )ay (ave a$ain&t .etitioner- *ai"'re to
&'+&tantiate t(e !"ai) of &'+ro$ation i& fata" to
.etitioner=& !a&e for re!overy of t(e a)o'nt of
P939,643-00-
Disposition Petition i& .art"y GRANTED- T(e
a&&ai"e# Ee!i&ion #ate# O!to+er 44, 2000 an#
<e&o"'tion #ate# A.ri" 44, 2004 of t(e Co'rt of
A..ea"& in CA,G-<- CM No- 646D6 are AFFIRMED
it( t(e MODIFICATION t(at t(e or#er to .ay t(e
a)o'nt of P939,643-00 to re&.on#ent i& DELETED
for "a!2 of fa!t'a" +a&i&-
TAI TONG CHUACHE ? CO $. INSURANCE
COMMISSION a+. TRAVELLERS MULTI5
INDEMNITY CORPORATION
496 SC<A 366
GANCAFCO; *e+r'ary 25, 4566
NATURE
Petition for revie on !ertiorari of t(e #e!i&ion of t(e
In&'ran!e Co))i&&ion
INSURANCE Page 28
FACTS
, Co)."ainant& Pa"o)o a!;'ire# a .ar!e" of "an# an#
a +'i"#in$ "o!ate# in Eavao City- T(ey a&&')e# t(e
)ort$a$e of t(e +'i"#in$ in favor of SSS, (i!(
+'i"#in$ a& in&'re# it( re&.on#ent SSS A!!re#ite#
Gro'. of In&'rer& for P29I-
, -n A#ril :J$ :J4K$ Azucena Paloo obtained a
P:33L loan fro /ai /on" C!uac!e 'nc. @TTCCA an#
e%e!'te# a )ort$a$e over t(e "an# an# t(e +'i"#in$
in favor of Tai Ton$ C('a!(e S Co- a& &e!'rity of
.ay)ent -On A.ri" 29, 45C9, Ar&enio C('a,
re#resentative of //CC in&'re# t(e "atterN& intere&t
it( Trave""er& M'"ti,In#e)nity Cor.oration
@Trave""er&A for P400I @PC0I for +"#$ an# P30I for
t(e !ontent& t(ereofA
, On G'ne 44, 45C9, Pe#ro Pa"o)o &e!'re# a *ire
In&'ran!e Po"i!y, !overin$ t(e +'i"#in$ for P90I it(
re&.on#ent ?enit( In&'ran!e Cor.oration @?ICA-
Anot(er *ire In&'ran!e Po"i!y a& "ater .ro!'re#
fro) re&.on#ent P(i"i..ine Briti&( A&&'ran!e
Co).any @PBACA, !overin$ t(e &a)e +'i"#in$ for
P90I an# !ontent& t(ereof for PC0I- On G'"y 34,
45C9, t(e +'i"#in$ an# t(e !ontent& ere tota""y
ra:e# +y fire-
, Ba&e# on t(e !o).'tation of t(e "o&&, in!"'#in$ t(e
Trave""er&, re&.on#ent&, ?IC, PBAC, an# SSS .ai#
t(eir !orre&.on#in$ &(are& of t(e "o&&- Co)."ainant&
ere .ai# t(e fo""oin$H PD4,9D6-C5 +y PBAC,
P44,6CC-4D +y ?IC, an# P9,536-9C +y SSS- Ee)an#
a& )a#e fro) re&.on#ent Trave""er& for it& &(are in
t(e "o&& +'t a& ref'&e#- 1en!e, !o)."ainant&
#e)an#e# fro) t(e ot(er 3 re&.on#ent& t(e +a"an!e
of ea!( &(are in t(e "o&& +a&e# on t(e !o).'tation
e%!"'#in$ Trave""er& M'"ti,In#e)nity in t(e a)o'nt
of P30,65D-34 @P9,C32-C5,?ICH P22,25D-62, PBACH
an# P2,666-50, SSSA +'t a& ref'&e#, (en!e, t(i&
a!tion-
ISSUE
0ON .etitioner Tai Ton$ (a& in&'ra+"e intere&t in t(e
&ai# .o"i!y
HELD
F>S
, *ir&t, re&.on#ent in&'ran!e !o))i&&ion +a&e# it&
fin#in$& on )ere inferen!e- <e&.on#ent In&'ran!e
Co))i&&ion a+&o"ve# re&.on#ent in&'ran!e !o).any
fro) "ia+i"ity on t(e +a&i& of t(e !ertifi!ation i&&'e#
+y t(e t(en C*I, t(at in a !ertain !ivi" a!tion a$ain&t
t(e Pa"o)o&, Ar&enio /o.e: C('a &tan#& a& t(e
!o)."ainant an# not Tai Ton$ C('a!(e- *ro) &ai#
evi#en!e re&.on#ent !o))i&&ion inferre# t(at t(e
!re#it e%ten#e# +y (erein .etitioner to t(e Pa"o)o&
&e!'re# +y t(e in&'re# .ro.erty )'&t (ave +een
.ai#- S'!( i& a $"arin$ error (i!( t(i& Co'rt !annot
&an!tion-
, Se!on#, it (a& +een (e"# in a "on$ "ine of !a&e& t(at
(en t(e !re#itor i& in .o&&e&&ion of t(e #o!')ent of
!re#it, (e nee# not .rove non,.ay)ent for it i&
.re&')e#- T(e va"i#ity of t(e in&'ran!e .o"i!y ta2en
+ .etitioner a& not a&&ai"e# +y .rivate re&.on#ent-
Moreover, .etitionerN& !"ai) t(at t(e "oan e%ten#e#
to t(e Pa"o)o& (a& not yet +een .ai# a&
!orro+orate# +y A:'!ena Pa"o)o (o te&tifie# t(at
t(ey are &ti"" in#e+te# to (erein .etitioner- So at t(e
ti)e of t(e fire, .etitioner a& )ort$a$ee &ti"" (a#
in&'ra+"e intere&t t(erein-
, An# t(ir#, .etitionerN& #e!"aration t(at Ar&enio
/o.e: C('a a!t& a& t(e )ana$in$ .artner of t(e
.artner&(i. a& !orro+orate# +y re&.on#ent
in&'ran!e !o).any- T('& C('a a& t(e )ana$in$
.artner of t(e .artner&(i. )ay e%e!'te a"" a!t& of
a#)ini&tration in!"'#in$ t(e ri$(t to &'e #e+tor& of
t(e .artner&(i. in !a&e of t(eir fai"'re to .ay t(eir
o+"i$ation& (en it +e!a)e #'e an# #e)an#a+"e- Or
at t(e "ea&t, C('a +ein$ a .artner of .etitioner Tai
Ton$ C('a!(e S Co).any i& an a$ent of t(e
.artner&(i.- Bein$ an a$ent, it i& 'n#er&too# t(at (e
a!te# for an# in +e(a"f of t(e fir)-
Disposition A..ea"e# #e!i&ion S>T ASIE> an#
ANOT1>< J'#$)ent i& ren#ere# or#er .rivate
re&.on#ent Trave""er& to .ay .etitioner t(e fa!e
va"'e of *ire In&'ran!e Po"i!y in t(e a)o'nt of
P400I- Co&t& a$ain&t &ai# .rivate re&.on#ent-
PEREZ $. CA (BF LIFEMAN INSURANCE CORP.)
323 SC<A 643
FNA<>S,SANTIAGO; Gan'ary 26, 2000
NATURE
Petition for revie on !ertiorari
FACTS
, Pri)itivo Pere: (a& +een in&'re# it( t(e B*
/ife)an In&'ran!e Cor.oration @B* (ereafterA &in!e
4560 for P(.20,000-
So)eti)e in 456C, <o#o"fo /a"o$ @a$ent of B*A
!onvin!e# (i) to a.."y for a##itiona" in&'ran!e
!overa$e of P(.90,000-
Pere: a!!o)."i&(e# t(e a.."i!ation for) an# .a&&e#
t(e re;'ire# )e#i!a" e%a)ination- 1e a"&o .ai#
P(.2,0C9 .re)i')A to /a"o$-
, On Nove)+er 29, 456C, Pere: #ie# (i"e ri#in$ a
+an!a (i!( !a.&i:e# #'rin$ a &tor)- E'rin$ t(i&
ti)e (i& a.."i!ation .a.er& for t(e a##itiona"
in&'ran!e !overa$e a& &ti"" it( t(e G')a!a,
Q'e:on
offi!e of B*-
, 0it(o't 2noin$ t(at Pere: #ie# on Nove)+er 29,
456C, B* a..rove# Pere:N& a.."i!ation an# i&&'e# t(e
!orre&.on#in$ .o"i!y for t(e P(.90,000 on Ee!e)+er
2, 456C-
, Mir$inia Pere: @ife of t(e #e!ea&e#A !"ai)e# t(e
+enefit& 'n#er t(e in&'ran!e .o"i!ie& of t(e
#e!ea&e#, +'t &(e a& on"y a+"e to re!eive
P(.D0,000 'n#er t(e fir&t in&'ran!e .o"i!y-
B* ref'&e# to .ay t(e .ro!ee#& a)o'ntin$ to
P(.490,000 'n#er t(e a##itiona" .o"i!y !overa$e of
P(.90,000 +e!a'&e t(ey )aintain t(at &'!( .o"i!y
(a# not +een .erfe!te#-
, On Se.te)+er 24, 4550, B* fi"e# a !o)."aint
a$ain&t Mr&- Pere: &ee2in$ re!i&&ion an# #e!"aration
of n'""ity of t(e in&'ran!e !ontra!t in ;'e&tion- Mr&-
Pere: fi"e# a !onter!"ai)
for t(e !o""e!tion of P(.490,000 ."'& #a)a$e&-
ISSUE
0ON t(ere a& a !on&'))ate# !ontra!t of
in&'ran!e +eteen Pere: an# B*
HELD
NO
, An e&&entia" re;'i&ite of a va"i# !ontra!t i& !on&ent-
Con&ent )'&t +e )anife&te# +y t(e )eetin$ of t(e
offer an# t(e a!!e.tan!e '.on t(e t(in$ an# t(e
!a'&e (i!( are to !on&tit'te t(e !ontra!t-
, T(e offer )'&t +e !ertain an# t(e a!!e.tan!e
a+&o"'te- 0(en Pere: fi"e# t(e a.."i!ation, it a&
&'+Je!t to t(e a!!e.tan!e of B*- T(e .erfe!tion a&
a"&o f'rt(er !on#itione# '.on @4A t(e i&&'an!e of t(e
.o"i!y,
@2A t(e .ay)ent of t(e .re)i'), an# @3A t(e
#e"ivery to an# a!!e.tan!e +y t(e a.."i!ant in $oo#
(ea"t(-
, T(e #e"ivery an# a!!e.tan!e +y t(e a.."i!ant a& a
&'&.en&ive !on#ition (i!( a& not f'"fi""e#
ina&)'!( a& t(e a.."i!ant a& a"rea#y #ea# at t(e
ti)e t(e .o"i!y a& i&&'e#- T(e non,f'"fi"")ent of t(e
!on#ition re&'"te#
in t(e non,.erfe!tion of t(e !ontra!t-
, An a.."i!ation for in&'ran!e i& )ere"y an offer
(i!( re;'ire& t(e overt a!t of t(e in&'rer for it to
ri.en to a !ontra!t- Ee"ay in a!tin$ on t(e a.."i!ation
INSURANCE Page 29
#oe& not !on&tit'te a!!e.tan!e even t(o'$( t(e
in&'re# (a& forar#e#
(i& fir&t .re)i') it( (i& a.."i!ation- Ee"ay, in t(i&
!a&e, #oe& not !on&tit'te $ro&& ne$"i$en!e +e!a'&e
t(e a.."i!ation a& $rante# it(in t(e nor)a"
.ro!e&&in$ ti)e-
Disposition Ee!i&ion of CA affir)e# in &o far a& it
#e!"are# t(e in&'ran!e .o"i!y for P(.90,000 i&&'e#
+y B* n'"" an# voi# @no re!i&&ion +e!a'&e it
.re&'..o&e& a va"i# !ontra!tA
VDA. DE SINDAYEN $. INSULAR
62 P(i" 94
BUTT>; Se.te)+er D, 4539
FACTS
, Art'ro Sin#ayen, '. to t(e ti)e of (i& #eat( on
Gan'ary 45, 4533, a& e)."oye# a& a "inoty.e
o.erator in t(e B'rea' of Printin$ at Mani"a an# (a#
+een &'!( for e"even year& .rior t(ereto- 0(i"e t(ere
(e )a#e a ritten a.."i!ation on Ee!e)+er 26,
4532, to t(e #efen#ant In&'"ar /ife A&&'ran!e Co-,
/t#-, t(ro'$( it& a$ent, Cri&to+a" Men#o:a, for a
.o"i!y of in&'ran!e on (i& "ife in t(e &') of P4,000
an# (e .ai# to t(e a$ent P49 !a&( a& .art of t(e fir&t
.re)i')- It a& a$ree# it( t(e a$ent t(at t(e
.o"i!y, (en an# if i&&'e#, &(o'"# +e #e"ivere# to (i&
a'nt- *e"i!i#a# >&tra#a, it( (o) Sin#ayen "eft t(e
&') of P26-06 to !o)."ete t(e .ay)ent of t(e fir&t
ann'a" .re)i') of PD0-06-
, On Gan'ary 4, 4533, Sin#ayen, (o a& t(en
tenty,nine year& of a$e, a& e%a)ine# +y t(e
!o).anyN& #o!tor (o )a#e a favora+"e re.ort, to
t(e !o).any- On Gan'ary 44, 4533, T(e !o).any
a!!e.te# t(e ri&2 an# i&&'e# .o"i!y No- DCC40 #ate#
+a!2 to Ee!e)+er 4, 4532, an# )ai"e# t(e &a)e to
it& a$ent, Cri&to+a" Men#o:a, in Ca)i"in$, Tar"a!, for
#e"ivery to t(e in&'re#- ,On Gan'ary 44, 4533,
Sin#ayen a& at or2 in t(e B'rea' of Printin$- On
Gan'ary 42, (e !o)."aine# of a &evere (ea#a!(e an#
re)aine# at (o)e- On Gan'ary 49, (e !a""e# a
.(y&i!ian (o fo'n# t(at (e a& &'fferin$ fro)
a!'te ne.(riti& an# 're)ia an# on Gan'ary 45, 4533,
(e #ie#-
, On Gan'ary 46, 4533, t(e a$ent, in a!!or#an!e it(
(i& a$ree)ent it( t(e in&'re#, #e"ivere# t(e .o"i!y
to *e"i!i#a# >&tra#a '.on (er .ay)ent of t(e +a"an!e
of t(e fir&t yearN& ann'a" .re)i')- T(e a$ent a&2e#
*e"i!i#a# >&tra#a if (er ne.(e a& in $oo# (ea"t(
an# &(e re."ie# t(at &(e +e"ieve# &o +e!a'&e &(e (a#
no infor)ation t(at (e a& &i!2 an# (e t(ere'.on
#e"ivere# to (er t(e .o"i!y-
, On Gan'ary 20, 4533, t(e a$ent "earne# of t(e
#eat( of Art'ro Sin#ayen an# !a""e# on *e"i!i#a#
>&tra#a an# a&2e# (er to ret'rn t(e .o"i!y- B't (e
#i# not ret'rn or offer to ret'rn t(e .re)i') .ai#-
*e"i!i#a# >&tra#a on (i& afore&ai# &tate)ent $ave
(i) t(e .o"i!y-
, On *e+r'ary D, 4533 In&'"ar /ife o+taine# fro) t(e
+enefi!iary, Sin#ayen=& ife, (er &i$nat're to a "e$a"
#o!')ent entit"e# PACCO<E, SATIS*ACTION ANE
<>/>AS>P (ere+y in !on&i#eration of t(e &') of
PD0-06 .ai# to (er +y a !(e!2 of t(e !o).any, &(e
Pa&&i$n&, re"ea&e& an# forever #i&!(ar$e& &ai# I&'"ar
/ife A&&'ran!e Co-, /t#-, it& &'!!e&&or& an# a&&i$n&,
of a"" !"ai)&, o+"i$ation in or in#e+te#ne&&- T(e &ai#
!(e!2 for PD0-06 a& never !a&(e# +'t ret'rne# to
t(e !o).any an# a..ear& in t(e re!or# of t(i& !a&e
a& >%(i+it E- T(ere'.on t(i& a!tion a& +ro'$(t to
enfor!e .ay)ent of t(e .o"i!y-
By t(e ter)& of t(e .o"i!y, an ann'a" .re)i') of
PD0-06 i& #'e on t(e fir&t #ay of Ee!e)+er of ea!(
year, t(e fir&t .re)i') a"rea#y .ai# +y t(e in&'re#
!overin$ t(e .erio# fro) Ee!e)+er 4, 4532- It i& to
Ee!e)+er 4, 4533- It i& to +e note# t(at t(e .o"i!y
a& not i&&'e# an# t(e !o).any a&&')e# no a!t'a"
ri&2 .rior to Gan'ary 44, 4533-T(e a.."i!ation (i!(
t(e in&'re# &i$ne# in Ca)i"in$, Tar"a!, on Ee!e)+er
26, 4532, !ontaine# a)on$ ot(er& t(e fo""oin$
.rovi&ion&H
73 T(at t(e &ai# .o"i!y &(a"" not ta2e effe!t 'nti" t(e
fir&t .re)i') (a& +een .ai# an# t(e .o"i!y (a& +een
#e"ivere# to an# a!!e.te# +y )e, (i"e I a) in $oo#
(ea"t(-8
,Main #efen&e of t(e !o).any in t(i& !a&e, na)e"y,
t(at t(e &ai# .o"i!y never too2 effe!t +e!a'&e of
.ara$ra.( 3 of t(e a.."i!ation a+ove ;'ote#, for at
t(e ti)e of it& #e"ivery +y t(e a$ent a& afore&ai# t(e
in&'re# a& not in $oo# (ea"t(
ISSUE
0ON t(e in&'ran!e .o"i!y i& va"i#
HELD
F>S
, T(ere i& one "ine of !a&e& (i!( (o"#& t(at t(e
&ti.'"ation !ontaine# in .ara$ra.( 3 i& in t(e nat're
of a !on#ition .re!e#ent, t(at i& to &ay, t(at t(ere
!an +e no va"i# #e"ivery to t(e in&'re# unless (e i& in
$oo# (ea"t( at t(e ti)e; t(at t(i& !on#ition
.re!e#ent $oe& to t(e very e&&en!e of t(e !ontra!t
an# !annot +e aive# +y t(e a$ent )a2in$ #e"ivery
of t(e .o"i!y
, On t(e ot(er (an#, a n')+er of A)eri!an #e!i&ion&
(o"# t(at an a$ent to (o) a "ife in&'ran!e .o"i!y
&i)i"ar to t(e one (ere invo"ve# a& &ent it(
in&tr'!tion& to #e"iver it to t(e in&'re# (a& a't(ority
to +in# t(e !o).any +y )a2in$ &'!( #e"ivery,
a"t(o'$( t(e in&'re# a& not in $oo# (ea"t( at t(e
ti)e of #e"ivery, on t(e t(eory t(at t(e #e"ivery of
t(e .o"i!y +ein$ t(e fina" a!t to t(e !on&'))ation of
t(e !ontra!t, t(e !on#ition a& to t(e in&'rerN& $oo#
(ea"t( a& aive# +y t(e !o).any-
, e are in!"ine# to t(e vie t(at it i& )ore
!on&onant it( t(e e"" 2non .ra!ti!e of "ife
in&'ran!e !o).anie& an# t(e evi#en!e in t(e .re&ent
!a&e to re&t o'r #e!i&ion on t(e .ro.o&ition t(at
Men#o:a a& a't(ori:e# +y t(e !o).any to )a2e
t(e #e"ivery of t(e .o"i!y (en (e re!eive# t(e
.ay)ent of t(e fir&t .re)i') an# (e a& &ati&fie#
t(at t(e in&'re# a& in $oo# (ea"t(- A& a& e"" &ai#
in t(e !a&e of Me/a'rin vs. M't'a" /ife In&'ran!e Co-
7It i& ."ain, t(erefore, t(at '.on t(e fa!t& it i& not
ne!e&&ari"y a !a&e of aiver or of e&to..e", +'t a
!a&e (ere t(e "o!a" a$ent&, in t(e e%er!i&e of t(e
.oer& "o#$e# in t(e), a!!e.te# t(e .re)i') an#
#e"ivere# t(e .o"i!y- T(at a!t +in#& t(eir .rin!i.a",
t(e #efen#ant-8
, Men#o:a a& #'"y "i!en&e# +y t(e In&'ran!e
Co))i&&ioner to a!t a& t(e a$ent of t(e #efen#ant
in&'ran!e !o).any- T(e e"" 2non !'&to) of t(e
in&'ran!e +'&ine&& an# t(e evi#en!e in t(i& !a&e
.rove t(at Men#o:a a& not re$ar#e# +y t(e
!o).any a& a )ere !on#'it or a'to)aton for t(e
.erfor)an!e of t(e .(y&i!a" a!t of ."a!in$ t(e .o"i!y
in t(e (an#& of t(e in&'re#
, Grante# t(at Men#o:aN& #e!i&ion t(at t(e !on#ition
(a# +een )et +y t(e in&'re# an# t(at it a& .ro.er
to )a2e a #e"ivery of t(e .o"i!y to (i) i& J'&t a&
+in#in$ on t(e !o).any a& if t(e #e!i&ion (a# +een
)a#e +y it& +oar# of #ire!tor&- Grante# t(at
Men#o:a )a#e a )i&ta2e of J'#$e)ent +e!a'&e (e
a!te# on in&'ffi!ient evi#en!e a& to t(e &tate of
(ea"t( of t(e in&'re#- B't it i& not !(ar$e# t(at t(e
)i&ta2e a& in#'!e# +y any )i&!on#'!t or o)i&&ion
of #'ty of t(e in&'re#-
, It i& t(e intere&t not on"y t(e a.."i!ant +'t of a""
in&'ran!e !o).anie& a& e"" t(at t(ere &(o'"# +e
&o)e a!t (i!( $ive& t(e a.."i!ant t(e #efinite
a&&'ran!e t(at t(e !ontra!t (a& +een !on&'))ate#-
T(i& &en&e of &e!'rity an# of .ea!e of )in# t(at
oneN& #efen#ant& are .rovi#e# for it(o't ri&2 eit(er
of "o&& or of "iti$ation i& t(e +e#ro!2 of "ife in&'ran!e-
0(en t(e .o"i!y i& i&&'e# an# #e"ivere#, in t(e
a+&en!e of fra'# or ot(er $ro'n#& for re&!i&&ion, it i&
INSURANCE Page 30
."ain"y not it(in t(e intention of t(e .artie& t(at
t(ere &(o'"# +e any ;'e&tion& (e"# in a+eyan!e or
re&erve# for f't're #eter)ination t(at "eave t(e very
e%i&ten!e of t(e !ontra!t in &'&.en&e an# #o'+t-
, It i& t(erefore in t(e .'+"i! intere&t, for t(e .'+"i! i&
.rofo'n#"y an# $enera""y intere&te# in "ife in&'ran!e,
a& e"" a& in t(e intere&t of t(e in&'ran!e !o).anie&
t(e)&e"ve& +y $ivin$ !ertain"y an# &e!'rity to t(eir
.o"i!ie&, t(at e are !on&traine# to (o"#, a& e, #o,
t(at t(e #e"ivery of t(e .o"i!y to t(e in&'re# +y an
a$ent of t(e !o).any (o i& a't(ori:e# to )a2e
#e"ivery or it(o't #e"ivery i& t(e fina" a!t (i!(
+in#& t(e !o).any @an# t(e in&'re# a& e""A in t(e
a+&en!e of fra'# or ot(er "e$a" $ro'n# for re&!i&&ion
, T(e !o).any t(erefore (avin$ #e!i#e# t(at a"" t(e
!on#ition& .re!e#ent to t(e ta2in$ effe!t of t(e .o"i!y
(a# +een !o)."ie# it( an# (avin$ a!!e.te# t(e
.re)i') an# #e"ivere# t(e .o"i!y t(ereafter to t(e
in&'re#, t(e !o).any i& no e&to..e# to a&&ert t(at
it never inten#e# t(at t(e .o"i!y &(o'"# ta2e effe!t-
SEPARATE OPINION
IMPERIAL H.'**e+I
, PA "o!a" a$ent of an in&'ran!e !o).any, (o&e
on"y .oer i& to &o"i!it a.."i!ation& for in&'ran!e, an#
forar# t(e) to t(e !o).any for a..rova", (en, if
a..rove# to t(e in&'re#, (a& no .oer to aive any
of t(e .rovi&ion of t(e .o"i!y &o #e"ivere#-P
, It i& !"ear, t(erefore, t(at t(e #e"ivery of t(e .o"i!y
+y Men#o:a #oe& not +in# t(e #efen#ant, nor i& t(e
#efen#ant e&to..e# fro) a""e$in$ it& #efen&e, for t(e
&i)."e rea&on t(at Men#o:a a& not an a$ent it(
a't(ority to i&&'e .o"i!ie& or to a!!e.t ri&2& in t(e
na)e of (i& .rin!i."e-
,T(ere i& anot(er $ro'n# '.on (i!( t(e )aJority
o.inion i& +a&e#, na)e"y, t(at t(e #efen#ant aive#
t(e #efen&e it no invo2e&, +y rea&on of t(e #e"ivery
of t(e .o"i!y +y it& invo2e&, +y rea&on of t(e #e"ivery
of t(e .o"i!y +y it& a$ent- It i& a#)itte# t(at if t(e
#e"ivery of t(e .o"i!y a& #'e to fra'#, "e$a""y t(ere
!o'"# (ave +een no aiver- In vie of t(e fa!t&
e&ta+"i&(e# an# a#)itte#, t(ere i& no #o'+t, a& to
t(e e%i&ten!e of t(e fra'#- ,>&tra#a, a& a
re.re&entative of t(e in&'re# a& not on"y +o'n# to
$ive a tr't(f'" infor)ation on t(e &tate of (ea"t( of
t(e in&'re#, +'t it a& (er #'ty to fin# o't it (i& tr'e
&tate of (ea"t( in or#er to $ive tr'e an# !orre!t
infor)ation- 0(en &(e $ave Men#o:a an in!orre!t
infor)ation ten#in$ to !reate t(e i).re&&ion t(at t(e
in&'re# a& e"" (en in fa!t (e a& &erio'&"y i"",
t(ere i& no #o'+t t(at &(e !o))itte# fra'# an#
i).arte# a #e!eitf'" infor)ation to t(e #efen#ant
a$ent
ENRI=UEZ $. SUN LIFE OF CANADA
D4 P1I/ 265
MA/CO/M; Nove)+er 25, 4520
NATURE
A..ea" fro) J'#$)ent of tria" !o'rt #enyin$
."aintiff=& @a#)ini&trator of t(e e&tate of t(e "ate
Goa;'in Ma- 1errerA a!tion to re!over fro) t(e
#efen#ant "ife in&'ran!e !o).any t(e &') of .e&o&
6,000 .ai# +y t(e #e!ea&e# for a "ife ann'ity-
FACTS
, On Se.te)+er 2D, 454C, Goa;'in 1errer )a#e
a.."i!ation to t(e S'n /ife A&&'ran!e Co).any of
Cana#a t(ro'$( it& offi!e in Mani"a for a "ife ann'ity-
To #ay& "ater (e .ai# t(e &') of P6,000 to t(e
)ana$er of t(e !o).anyN& Mani"a offi!e an# a&
$iven a re!ei.t-
, T(e a.."i!ation a& i))e#iate"y forar#e# to t(e
(ea# offi!e of t(e !o).any at Montrea", Cana#a- On
Nove)+er 26, 454C, t(e (ea# offi!e $ave noti!e of
a!!e.tan!e +y !a+"e to Mani"a- @0(et(er on t(e
&a)e #ay t(e !a+"e a& re!eive#, noti!e a& &ent +y
t(e Mani"a offi!e of 1errera t(at t(e a.."i!ation (a#
+een a!!e.te#, i& a #i&.'te# .oint, (i!( i"" +e
#i&!'&&e# "ater-A On Ee!e)+er D, 454C, t(e .o"i!y
a& i&&'e# at Montrea"- On Ee!e)+er 46, 454C,
attorney A're"io A- Torre& rote to t(e Mani"a offi!e
of t(e !o).any &tatin$ t(at 1errer #e&ire# to
it(#ra (i& a.."i!ation- T(e fo""oin$ #ay t(e "o!a"
offi!e re."ie# to Mr- Torre&, &tatin$ t(at t(e .o"i!y
(a# +een i&&'e#, an# !a""e# attention to t(e
notifi!ation of Nove)+er 26, 454C- T(i& "etter a&
re!eive# +y Mr- Torre& on t(e )ornin$ of Ee!e)+er
24, 454C- Mr- 1errer #ie# on Ee!e)+er 20, 454C-
, T(e !(ief !"er2 of t(e Mani"a offi!e of S'n /ife
te&tifie# t(at (e .re.are# t(e "etter an# (an#e# it to
t(e "o!a" )ana$er, Mr- >- >- 0(ite, for &i$nat're-
T(e "o!a" )ana$er, Mr- 0(ite, te&tifie# to (avin$
re!eive# t(e !a+"e$ra) a!!e.tin$ t(e a.."i!ation of
Mr- 1errer fro) t(e (o)e offi!e on Nove)+er 26,
454C- 1e &ai# t(at on t(e &a)e #ay (e &i$ne# a
"etter notifyin$ Mr- 1errer of t(i& a!!e.tan!e- T(e
itne&& f'rt(er &ai# t(at "etter&, after +ein$ &i$ne#,
ere &ent to t(e !(ief !"er2 an# ."a!e# on t(e
)ai"in$ #e&2 for tran&)i&&ion- Mr- T'a&on, (o a&
t(e !(ief !"er2 on Nove)+er 26, 454C, a& not
!a""e# a& a itne&&-
, *or t(e #efen&e, attorney Man'e" Torre& te&tifie# to
(avin$ .re.are# t(e i"" of Goa;'in Ma- 1errer- T(at
on t(i& o!!a&ion, Mr- 1errer )entione# (i&
a.."i!ation for a "ife ann'ity, an# t(at (e &ai# t(at
t(e on"y #o!')ent re"atin$ to t(e tran&a!tion in (i&
.o&&e&&ion a& t(e .rovi&iona" re!ei.t- <afae"
>nri;'e:, t(e a#)ini&trator of t(e e&tate, te&tifie#
t(at (e (a# $one t(ro'$( t(e effe!t& of t(e #e!ea&e#
an# (a# fo'n# no "etter of notifi!ation fro) t(e
in&'ran!e !o).any to Mr- 1errer-
ISSUE
0ON t(ere e%i&t& a !ontra!t for "ife ann'ity +eteen
1errer an# #efen#ant
HELD
NO
Ratio T(e "a a.."i!a+"e to t(e !a&e i& fo'n# to +e
t(e &e!on# .ara$ra.( of arti!"e 4262 of t(e Civi"
Co#e .rovi#in$ t(at an a!!e.tan!e )a#e +y "etter
&(a"" not +in# t(e .er&on )a2in$ t(e offer e%!e.t
fro) t(e ti)e it !a)e to (i& 2no"e#$e-
Reasoning
- Unti" ;'ite re!ent"y, a"" of t(e .rovi&ion& !on!ernin$
"ife in&'ran!e in t(e P(i"i..ine& ere fo'n# in t(e
Co#e of Co))er!e an# t(e Civi" Co#e- After G'"y 4,
4549, t(ere a&, (oever, in for!e t(e In&'ran!e
A!t- No- 2D2C- C(a.ter IM of t(i& A!t !on!ern& "ife
an# (ea"t( in&'ran!e- T(e A!t e%.re&&"y re.ea"e#
Tit"e MIII of Boo2 II an# Se!tion III of Tit"e III of
Boo2 III of t(e !o#e of Co))er!e- T(e "a of
in&'ran!e i& !on&e;'ent"y no fo'n# in t(e
In&'ran!e A!t an# t(e Civi" Co#e-
, 0(i"e, a& J'&t noti!e#, t(e In&'ran!e A!t #ea"& it(
"ife in&'ran!e, it i& &i"ent a& to t(e )et(o#& to +e
fo""oe# in or#er t(at t(ere )ay +e a !ontra!t of
in&'ran!e- On t(e ot(er (an#, t(e Civi" Co#e, in
arti!"e 4602, not on"y #e&!ri+e& a !onta!t of "ife
ann'ity )ar2e#"y &i)i"ar to t(e one e are
!on&i#erin$, +'t in to ot(er arti!"e&, $ive& &tron$
!"'e& a& to t(e .ro.er #i&.o&ition of t(e !a&e- *or
in&tan!e, arti!"e 46 of t(e Civi" Co#e .rovi#e& t(at
PIn )atter& (i!( are $overne# +y &.e!ia" "a&, any
#efi!ien!y of t(e "atter &(a"" +e &'.."ie# +y t(e
.rovi&ion& of t(i& Co#e-P On t(e &'..o&ition,
t(erefore, (i!( i& in!onte&ta+"e, t(at t(e &.e!ia" "a
on t(e &'+Je!t of in&'ran!e i& #efi!ient in en'n!iatin$
t(e .rin!i."e& $overnin$ a!!e.tan!e, t(e &'+Je!t,
)atter of t(e Civi" !o#e, if t(ere +e any, o'"# +e
!ontro""in$- In t(e Civi" Co#e i& fo'n# arti!"e 4262
.rovi#in$ t(at PCon&ent i& &(on +y t(e !on!'rren!e
of offer an# a!!e.tan!e it( re&.e!t to t(e t(in$ an#
t(e !on&i#eration (i!( are to !on&tit'te t(e
INSURANCE Page 31
!ontra!t- An a!!e.tan!e )a#e +y "etter &(a"" not +in#
t(e .er&on )a2in$ t(e offer e%!e.t fro) t(e ti)e it
!a)e to (i& 2no"e#$e-
, A!!or#in$ to t(e .rovi&iona" re!ei.t, t(ree t(in$&
(a# to +e a!!o)."i&(e# +y t(e in&'ran!e !o).any
+efore t(ere a& a !ontra!tH @4A T(ere (a# to +e a
)e#i!a" e%a)ination of t(e a.."i!ant; @2A t(ere (a#
to +e a..rova" of t(e a.."i!ation +y t(e (ea# offi!e of
t(e !o).any; an# @3A t(i& a..rova" (a# in &o)e ay
to +e !o))'ni!ate# +y t(e !o).any to t(e
a.."i!ant- T(e f'rt(er a#)itte# fa!t& are t(at t(e
(ea# offi!e in Montrea" #i# a!!e.t t(e a.."i!ation, #i#
!a+"e t(e Mani"a offi!e to t(at effe!t, #i# a!t'a""y
i&&'e t(e .o"i!y an# #i#, t(ro'$( it& a$ent in Mani"a,
a!t'a""y rite t(e "etter of notifi!ation an# ."a!e it in
t(e '&'a" !(anne"& for tran&)i&&ion to t(e a##re&&ee-
, T(e !ontra!t for a "ife ann'ity in t(e !a&e at +ar
a& not .erfe!te# +e!a'&e it (a& not +een .rove#
&ati&fa!tori"y t(at t(e a!!e.tan!e of t(e a.."i!ation
ever !a)e to t(e 2no"e#$e of t(e a.."i!ant-
Disposition G'#$)ent i& rever&e#, an# t(e ."aintiff
&(a"" (ave an# re!over fro) t(e #efen#ant t(e &')
of P6,000 it( "e$a" intere&t fro) Nove)+er 20,
4546, 'nti" .ai#, it(o't &.e!ia" fin#in$ a& to !o&t& in
eit(er in&tan!e-
VELASCO a+. ACOSTA $. APOSTOL a+.
MAHARLI<A INSURANCE CO., INC.
4C3 SC<A 226
<>GA/AEO-; May 5, 4565

NATURE
Petition for revie on !ertiorari
FACTS
, Petitioner& ere ."aintiff& in a !ivi" !a&e of (i!(
.'+"i! re&.on#ent 1on- A.o&to" a& t(e J'#$e-
, T(e !a&e a& an off&(oot of an in!i#entH ."aintiff&
ere ri#in$ in t(eir !ar, (en a ta%i!a+ !ro&&e# a
!enter i&"an# in t(e roa# an# !o""i#e# it( t(eir !ar-
Private re&.on#ent Ma(ar"i2a a& event'a""y
i)."ea#e# a& a #efen#ant in t(i& !a&e, it( an
a""e$ation t(at t(e ta%i!a+ invo"ve# a& in&'re#
a$ain&t t(ir# .arty "ia+i"ity for P20,000-00 it(
.rivate re&.on#ent at t(e ti)e of t(e a!!i#ent
, Ma(ar"i2a !"ai)e# t(ere a& no !a'&e of a!tion
a$ain&t it +e!a'&e at t(e ti)e of t(e a!!i#ent, t(e
a""e$e# in&'ran!e .o"i!y a& not in for!e #'e to t(e
non,.ay)ent of t(e .re)i') t(ereon- A"&o, even if
t(e !a+ (a# +een in&'re#, t(e !o)."aint o'"# +e
.re)at're &in!e t(e .o"i!y .rovi#e& t(at t(e in&'rer
o'"# +e "ia+"e on"y (en t(e in&'re# +e!o)e&
"e$a""y "ia+"e-
, Tria" !o'rt r'"e# in favor of t(e ."aintiff, (o"#in$ t(e
#efen#ant& "ia+"e for re.air of t(e !ar, )e#i!a"
e%.en&e&, et!- BUT Ma(ar"i2e a& e%onerate# on t(e
$n# t(at t(e .o"i!y a& not in for!e-
, Petitioner& e"evate# t(i& !a&e to t(i& !o'rt, fa'"tin$
t(e re&.on#ent J'#$e for !on&i#erin$ t(e #efen&e of
"ate .ay)ent of .re)i') (en 7t(e &a)e a&
aive# at t(e .re,tria"8, (en!e t(e evi#en!e of "ate
.ay)ent &(o'"# +e #i&re$ar#e# &'..o&e#"y +e!a'&e
t(e .rivate re&.on#ent (a# a#)itte# t(at &'!( fa!t
a& not in i&&'e-
, @More .ertinent to t(i& !"a&&H A .etitioner& a&&ert
t(at t(e .rivate re&.on#ent (a# a$ree# to $rant t(e
t(en .ro&.e!tive in&'re# a !re#it e%ten&ion of t(e
.re)i') #'e-
, T(i& !ontrover&y aro&e 'n#er t(e o"# in&'ran!e "a,
A!t No- 2D2C-
, T(e a!!i#ent o!!'rre# in 45C3- T(e !o)."aint a&
fi"e# on G'"y 20, 45CD- +ot( +efore t(e
effe!tivity of Pre&i#entia" Ee!ree no- 642, t(e
&'+&e;'ent in&'ran!e "a (i!( re.ea"e# it&
.re#e!e&&or
, T(e for)er in&'ran!e "a, (i!( a.."ie& to t(e !a&e
(ere, .rovi#e#H An in&'rer i& entit"e# to t(e .ay)ent
of .re)i') a& &oon a& t(e t(in$ in&'re# i& e%.o&e#
to t(e .eri" in&'re# a$ain&t, 'n"e&& t(ere i& !"ear
a$ree)ent to $rant t(e in&'re# !re#it e%ten&ion of
t(e .re)i') #'e- No .o"i!y i&&'e# +y an in&'ran!e
!o).any i& va"i# an# +in#in$ 'n"e&& an# 'nti" t(e
.re)i') t(ereof (a& +een .ai#-
ISSUE
0ON t(e in&'ran!e .o"i!y o'"# +e va"i# an# +in#in$
notit(&tan#in$ t(e non,.ay)ent of t(e .re)i')
HELD
NO
Ratio A!t No- 2D2CH an in&'ran!e .o"i!y o'"# +e
va"i# an# +in#in$ notit(&tan#in$ t(e non,.ay)ent
of t(e .re)i') if t(ere a& a !"ear a$ree)ent to
$rant to t(e in&'re# !re#it e%ten&ion- S'!(
a$ree)ent )ay +e e%.re&& or i)."ie#-
Reasoning
, Petitioner& )aintain t(at in &.ite of t(eir "ate
.ay)ent, t(e .o"i!y i& +in#in$ +e!a'&e t(ere a& an
i)."ie# a$ree)ent to $rant a !re#it e%ten&ion &o a&
to )a2e t(e .o"i!y effe!tive- To t(e), t(e
&'+&e;'ent a!!e.tan!e of t(e .re)i') an# #e"ivery
of t(e .o"i!y e&to.& t(e re&.on#ent !o).any fro)
a&&ertin$ t(at t(e .o"i!y i& ineffe!tive-
T(e !o'rt (oever &ee& no .roof of any &'!( i)."ie#
a$ree)ent- T(e .'r.orte# ne%'& +eteen t(e
#e"ivery of t(e .o"i!y an# t(e $rant of !re#it
e%ten&ion i& too ten'o'& to &'..ort t(e !on!"'&ion
for (i!( .etitioner& !onten#-
Parent(eti!a""y )entionH in t(e .re&ent "a,
Se!tion CC of t(e In&'ran!e Co#e of 45C6 (a&
#e"ete# t(e !"a'&e P'n"e&& t(ere i& !"ear a$ree)ent
to $rant t(e in&'re# !re#it e%ten&ion of t(e .re)i')
#'eP (i!( a& t(en invo"ve# in t(i& !ontrover&y-
Disposition *n#in$ no rever&i+"e error, t(e
J'#$)ent a..ea"e# fro) i& (ere+y A**I<M>E-
TIBAY $. CA (FORTUNE LIFE ? GENERAL
INSURANCE)
29C SC<A 426
B>//OSI//O; May 2D, 4556
FACTS
, On 22 Gan'ary 456C *ort'ne /ife an# Genera"
In&'ran!e Co-, In!- @*O<TUN>A i&&'e# *ire In&'ran!e
Po"i!y No- 4364C4 in favor of Mio"eta <- Ti+ay an#Ror
Ni!o"a& <ora"#o on t(eir to,&torey re&i#entia"
+'i"#in$ "o!ate# at 9699 ?o+e" Street, Ma2ati City,
to$et(er it( a"" t(eir .er&ona" effe!t& t(erein- T(e
in&'ran!e a& for P600,000 !overin$ t(e .erio# fro)
23 Gan'ary 456C to 23 Gan'ary 4566- On 23 Gan'ary
456C, of t(e tota" .re)i') of P2,563-90, Mio"eta
Ti+ay on"y .ai# P600 t('& "eavin$ a !on&i#era+"e
+a"an!e 'n.ai#-
, On 6 Mar!( 456C t(e in&'re# +'i"#in$ a&
!o)."ete"y #e&troye# +y fire- To #ay& "ater, Mio"eta
Ti+ay .ai# t(e +a"an!e of t(e .re)i')- On t(e &a)e
#ay, &(e fi"e# it( *O<TUN> a !"ai) on t(e fire
in&'ran!e .o"i!y- 1er !"ai) a& a!!or#in$"y referre#
to it& a#J'&ter, Goo#i"" A#J'&t)ent Servi!e&, In!-
@GASIA, (i!( i))e#iate"y rote Mio"eta re;'e&tin$
(er to f'rni&( it it( t(e ne!e&&ary #o!')ent& for
t(e inve&ti$ation an# .ro!e&&in$ of (er !"ai)-
Petitioner fort(it( !o)."ie#- On 26 Mar!( 456C &(e
&i$ne# a nonaiver a$ree)ent it( GASI to t(e
effe!t t(at any a!tion ta2en +y t(e !o).anie& &(a""
not +e, or +e !"ai)e# to +e, an a#)i&&ion of "ia+i"ity-
INSURANCE Page 32
, *O<TUN> #enie# t(e !"ai) of Mio"eta for vio"ation of
Po"i!y Con#ition No- 2

an# of Se!- CC of t(e

In&'ran!e Co#e- >ffort& to &ett"e t(e !a&e +efore t(e
In&'ran!e Co))i&&ion .rove# f'ti"e- On 3 Mar!(
4566 Mio"eta an# t(e ot(er .etitioner& &'e#
*O<TUN> for #a)a$e& in t(e a)o'nt of P600,000
re.re&entin$ t(e tota" !overa$e of t(e fire in&'ran!e
.o"i!y ."'& 42Q intere&t .er ann'), P400,000
)ora" #a)a$e&, an# attorneyN& fee& e;'iva"ent to
20Q of t(e tota" !"ai)- T(e tria" !o'rt r'"e# for
.etitioner&- CA rever&e#-
ISSUE
0ON a fire in&'ran!e .o"i!y i& va"i#, +in#in$ an#
enfor!ea+"e '.on )ere .artia" .ay)ent of .re)i')
HELD
NO
Ratio 0(ere t(e in&'rer an# t(e in&'re# e%.re&&"y
&ti.'"ate# t(at t(e .o"i!y i& not in for!e 'nti" t(e
.re)i') (a& +een f'""y .ai# t(e .ay)ent of .artia"
.re)i') +y t(e a&&'re# in t(i& .arti!'"ar in&tan!e
&(o'"# not +e !on&i#ere# t(e .ay)ent re;'ire# +y
t(e "a an# t(e &ti.'"ation of t(e .artie&- <at(er, it
)'&t +e ta2en in t(e !on!e.t of a #e.o&it to +e (e"#
in tr'&t +y t(e in&'rer 'nti" &'!( ti)e t(at t(e f'""
a)o'nt (a& +een ten#ere# an# #'"y re!ei.te# for-
Reasoning
5 A& e%.re&&"y a$ree# '.on in t(e !ontra!t, f'""
.ay)ent )'&t +e )a#e +efore t(e ri&2 o!!'r& for t(e
.o"i!y to +e !on&i#ere# effe!tive an# in for!e- T('&,
no vin!'"') J'ri& (ere+y t(e in&'rer +o'n# it&e"f to
in#e)nify t(e a&&'re# a!!or#in$ to "a ever re&'"te#
fro) t(e fra!tiona" .ay)ent of .re)i')- T(e
in&'ran!e !ontra!t it&e"f e%.re&&"y .rovi#e# t(at t(e
.o"i!y o'"# +e effe!tive on"y (en t(e .re)i') a&
.ai# in f'""- It o'"# (ave +een a"to$et(er #ifferent
ere it not &o &ti.'"ate#- >r$o, .etitioner& (a#
a+&o"'te free#o) of !(oi!e (et(er or not to +e
in&'re# +y *O<TUN> 'n#er t(e ter)& of it& .o"i!y
an# t(ey free"y o.te# to a#(ere t(ereto-
, In#ee#, an# far )ore i).ortant"y, t(e !ar#ina"
.o"e&tar in t(e !on&tr'!tion of an in&'ran!e !ontra!t
i& t(e intention of t(e .artie& a& e%.re&&e# in t(e
.o"i!y- Co'rt& (ave no ot(er f'n!tion +'t to enfor!e
t(e &a)e- T(e r'"e t(at !ontra!t& of in&'ran!e i"" +e
!on&tr'e# in favor of t(e in&'re# an# )o&t &tron$"y
a$ain&t t(e in&'rer &(o'"# not +e .er)itte# to (ave
t(e effe!t of )a2in$ a ."ain a$ree)ent a)+i$'o'&
an# t(en !on&tr'e it in favor of t(e in&'re#- Meri"y, it

'his policy including any renewal thereof and,or any endorsement thereon is not in force until the
premium has been fully paid to and duly receipted by the Company in the manner pro&ided herein.
i& e"e)enta" "a t(at t(e .ay)ent of .re)i') i&
re;'i&ite to 2ee. t(e .o"i!y of in&'ran!e in for!e- If
t(e .re)i') i& not .ai# in t(e )anner .re&!ri+e# in
t(e .o"i!y a& inten#e# +y t(e .artie& t(e .o"i!y i&
ineffe!tive- Partia" .ay)ent even (en a!!e.te# a& a
.artia" .ay)ent i"" not 2ee. t(e .o"i!y a"ive even
for &'!( fra!tiona" .art of t(e year a& t(e .art
.ay)ent +ear& to t(e (o"e .ay)ent-
Disposition Petition i& E>NI>E- Ee!i&ion of t(e CA
i& A**I<M>E-
SEPARATE OPINION
VITUG H.'**e+I
, T(e "a neit(er re;'ire&, nor )ea&'re& t(e
&tren$t( of t(e vin!'"') J'ri& +y, any &.e!ifi!
a)o'nt of .re)i') .ay)ent- It &(o'"# t('& +e
eno'$( t(at .ay)ent on t(e .re)i'), .art"y or in
f'"", i& )a#e +y t(e in&'re# (i!( t(e in&'rer
a!!e.t&- In fine, it i& eit(er t(at a J'ri#i!a" tie e%i&t&
@+y &'!( .ay)entA or t(at it i& not e%tant at a"" @+y
an a+&en!e t(ereofA- On!e t(e J'ri#i!a" re"ation
!o)e& into +ein$, t(e f'"" effi!a!y, not )ere"y .ro
tanto, of t(e in&'ran!e !ontra!t nat'ra""y fo""o&-
Meri"y, not on"y i& t(ere an in&'ran!e .erfe!te# +'t
a"&o a .artia""y .erfor)e# !ontra!t- In !a&e of "o&&,
re!overy on t(e +a&i& of t(e f'"" !ontra!t va"'e, "e&&
t(e 'n.ai# .re)i') !an a!!or#in$"y +e (a#;
!onver&e"y, if no "o&& o!!'r&, t(e in&'rer !an #e)an#
t(e .ay)ent of t(e 'n.ai# +a"an!e of t(e .re)i')-
T(e in&'re#, on t(e one (an#, !annot avoi# t(e
o+"i$ation of .ayin$ t(e +a"an!e of t(e .re)i')
(i"e t(e in&'rer, '.on t(e ot(er (an#, !annot treat
t(e !ontra!t a& va"i# on"y for t(e .'r.o&e of
!o""e!tin$ .re)i')& an# a& inva"i# for t(e .'r.o&e of
in#e)nity-
MA<ATI TUSCANY $. CA ( AMERICAN HOME
ASSURANCE CO.)
249 SC<A D62
B>//OSI//O; Nove)+er 6, 4552
NATURE
A..ea" fro) #e!i&ion of t(e CA
FACTS
, A)eri!an 1o)e A&&'ran!e Co- @A1ACA,
re.re&ente# +y A)eri!an Internationa" Un#erriter&
@P(i"&-A, In!-, i&&'e# in favor of .etitioner Ma2ati
T'&!any Con#o)ini') Cor.oration an in&'ran!e
.o"i!y on t(e "atterN& +'i"#in$ an# .re)i&e&, for t(e
.erio# 4 Mar!( 4562 to4 Mar!( 4563- T(e .re)i')
a& .ai# on in&ta"")ent& a"" of (i!( ere a!!e.te#
+y A1AC-
, A &e!on# .o"i!y a& i&&'e# to rene t(e fir&t one,
t(i& ti)e !overin$ t(e .erio# 4 Mar!( 4563 to 4
Mar!( 456D- T(i& a& a"&o .ain in in&ta"")ent +a&i&-
, A t(ir# .o"i!y a& a$ain i&&'e# for t(e .erio# 4
Mar!( 456D to 4 Mar!( 4569- *or t(i&, .etitioner
)a#e to in&ta"")ent .ay)ent&, +ot( a!!e.te# +y
A1AC- T(ereafter, .etitioner ref'&e# to .ay t(e
+a"an!e of t(e .re)i')- A1AC fi"e# an a!tion to
re!over t(e 'n.ai# +a"an!e of P34D,403-09-
, Petitioner e%."aine# t(at it #i&!ontin'e# t(e
.ay)ent of .re)i')& +e!a'&e t(e .o"i!y #i# not
!ontain a !re#it !"a'&e in it& favor an# t(e re!ei.t&
for t(e in&ta"")ent .ay)ent& !overin$ t(e .o"i!y for
456D,69, a& e"" a& t(e to @2A .revio'& .o"i!ie&,
&tate# t(e fo""oin$ re&ervation&H
2. Acce#tance of t!is #ayent s!all not ,aive
any of t!e co#any ri"!ts to deny liability on any
clai under t!e #olicy arisin" before suc!
#ayents or after t!e e8#iration of t!e credit
clause of t!e #olicyE and
C. Sub6ect to no loss #rior to #reiu #ayent.
'f t!ere be any loss suc! is not covered.
, Petitioner f'rt(er !"ai)e# t(at t(e .o"i!y a& never
+in#in$ an# va"i#, an# no ri&2 atta!(e# to t(e .o"i!y-
It t(en ."ea#e# a !o'nter!"ai) for P4922 for t(e
.re)i')& a"rea#y .ai# for 456D,69, an# in it&
an&er it( a)en#e# !o'nter!"ai), &o'$(t t(e
ref'n# of P52D,206-40 re.re&entin$ t(e .re)i')
.ay)ent& for 4562,69-
, Tria" !o'rt #i&)i&&e# t(e !o)."aint an# t(e
!o'nter!"ai) '.on t(e fo""oin$ fin#in$&H @4A
.ay)ent of t(e .re)i')& of t(e t(ree .o"i!ie& ere
)a#e #'rin$ t(e ter) of &ai# .o"i!ie&, (en!e, it !o'"#
not +e &ai#, in&.ite of t(e re&ervation&, t(at no ri&2
atta!(e# 'n#er t(e .o"i!ie&; @2A a& re$ar#& t(e
'n.ai# .re)i')&, in vie of t(e re&ervation in t(e
re!ei.t& or#inari"y i&&'e# +y A1AC on .re)i')
.ay)ent& t(e on"y ."a'&i+"e !on!"'&ion i& t(at A1AC
(a& no ri$(t to #e)an# t(eir .ay)ent after t(e "a.&e
of t(e ter) of &ai# .o"i!y on Mar!( 4, 4569-
T(erefore, T'&!any a& J'&tifie# in ref'&in$ to .ay
t(e &a)e-
, CA )o#ifie# t(e #e!i&ion +y or#erin$ T'&!any to
.ay t(e +a"an!e of t(e .re)i')& #'e on t(e t(ir#
.o"i!y ."'& "e$a" intere&t 'nti" f'""y .ai#, an#
affir)in$ t(e #enia" of t(e !o'nter!"ai)-
Petitioners Claims
INSURANCE Page 33
Petitioner ar$'e& t(at (ere t(e .re)i')& i& not
a!t'a""y .ai# in f'"", t(e .o"i!y o'"# on"y +e effe!tive
if t(ere i& an a!2no"e#$)ent in t(e .o"i!y of t(e
re!ei.t of .re)i') .'r&'ant to Se!- C6 of t(e
In&'ran!e Co#e- T(e a+&en!e of an e%.re&&
a!2no"e#$)ent in t(e .o"i!ie& of &'!( re!ei.t of t(e
!orre&.on#in$ .re)i') .ay)ent&, an# .etitionerN&
fai"'re to .ay &ai# .re)i')& on or +efore t(e
effe!tive #ate& of &ai# .o"i!ie& ren#ere# t(e) inva"i#-
Petitioner t('& !on!"'#e& t(at t(ere !annot +e a
.erfe!te# !ontra!t of in&'ran!e '.on )ere .artia"
.ay)ent of t(e .re)i')& +e!a'&e 'n#er Se!- CC of
t(e In&'ran!e Co#e, no !ontra!t of in&'ran!e i& va"i#
an# +in#in$ 'n"e&& t(e .re)i') t(ereof (a& +een
.ai#, notit(&tan#in$ any a$ree)ent to t(e
!ontrary-
ISSUE
0ON .ay)ent +y in&ta"")ent of t(e .re)i')& #'e
on an in&'ran!e .o"i!y inva"i#ate& t(e !ontra!t of
in&'ran!e
HELD
Ratio 0(ere t(e ri&2 i& entire an# t(e !ontra!t i&
in#ivi&i+"e, t(e in&'re# i& not entit"e# to a ref'n# of
t(e .re)i')& .ai# if t(e in&'rer a& e%.o&e# to t(e
ri&2 in&'re# for any .erio#, (oever +rief or
)o)entary-
Reasoning
, T(e o+"i$ation to .ay .re)i')& (en #'e i&
or#inari"y a& in#ivi&i+"e o+"i$ation to .ay t(e entire
.re)i')- 1ere, t(e .artie& (erein a$ree# to )a2e
t(e .re)i')& .aya+"e in in&ta"")ent&, an# t(ere i&
no .reten&e t(at t(e .artie& never envi&ione# to
)a2e t(e in&'ran!e !ontra!t +in#in$ +eteen t(e)-
An# t(e in&'re# never infor)e# t(e in&'rer t(at it
a& ter)inatin$ t(e .o"i!y +e!a'&e t(e ter)& ere
'na!!e.ta+"e-
, T(ere i& not(in$ in Se!tion CC (i!( &'$$e&t& t(at
t(e .artie& )ay not a$ree to a""o .ay)ent of t(e
.re)i')& in in&ta"")ent, or to !on&i#er t(e !ontra!t
a& va"i# an# +in#in$ '.on .ay)ent of t(e fir&t
.re)i')-
- T(e re!or#& !"ear"y &(o t(at .etitioner an# .rivate
re&.on#ent inten#e# &'+Je!t in&'ran!e .o"i!ie& to +e
+in#in$ an# effe!tive notit(&tan#in$ t(e &ta$$ere#
.ay)ent of t(e .re)i')&- A!!e.tan!e of .ay)ent&
&.ea2& "o'#"y of t(e in&'rerN& intention to (onor t(e
.o"i!ie& it i&&'e# to .etitioner-
- Se!tion C6 of t(e In&'ran!e Co#e in effe!t a""o&
aiver +y t(e in&'rer of t(e !on#ition of .re.ay)ent
+y )a2in$ an a!2no"e#$)ent in t(e in&'ran!e
.o"i!y of re!ei.t of .re)i') a& !on!"'&ive evi#en!e
of .ay)ent &o far a& to )a2e t(e .o"i!y +in#in$
#e&.ite t(e fa!t t(at .re)i') i& a!t'a""y 'n.ai#-
Se!tion CC )ere"y .re!"'#e& t(e .artie& fro)
&ti.'"atin$ t(at t(e .o"i!y i& va"i# even if .re)i')&
are not .ai#, +'t #oe& not e%.re&&"y .ro(i+it an
a$ree)ent $rantin$ !re#it e%ten&ion, an# &'!( an
a$ree)ent i& not !ontrary to )ora"&, $oo# !'&to)&,
.'+"i! or#er or .'+"i! .o"i!y-
, At t(e very "ea&t, +ot( .artie& &(o'"# +e #ee)e# in
e&to..e" to ;'e&tion t(e arran$e)ent t(ey (ave
vo"'ntari"y a!!e.te#-
Disposition G'#$)ent affir)e#- Co&t& a$ain&t
.etitioner-
SOUTH SEA SURETY AND INSURANCE $. CA
(VALENZUELA HARDWOOD)
2DD SC<A CDD
MITUG; G'ne 2, 4559
NATURE
Petition for revie on !ertiorari
FACTS
, 1ar#oo# entere# into a$ree)ent it( Seven Bro&
S(i..in$, (ere "atter 'n#ertoo2 to "oa# t(e for)er=&
"o$& on ve&&e"- 1ar#oo# in&'re# t(e "o$& it(
So't( Sea S'rety (i!( i&&'e# Marine Car$o
In&'ran!e Po"i!y- T(e ve&&e" &an2 Gan 29, 456D-
, 1ar#oo# fi"e# !"ai) it( So't( Sea an# Seven
Bro&- Tria" Co'rt favore# 1ar#oo#- CA #e!i#e#
a$ain&t So't( Sea, +'t a+&o"ve# Seven Bro&- So't(
Sea fi"e# t(i& in&tant .etition-
ISSUES
0ON t(e in&'ran!e !ontra!t a& a"rea#y in effe!t
(en t(e ve&&e" &an2
HELD
F>S
, It i& a"rea#y in effe!t +e!a'&e 1ar#oo# (a&
a"rea#y .ai# t(e in&'ran!e .re)i')-
It #e"ivere# t(e !(e!2 to Mi!torio C('a +efore t(e
ve&&e" &an2, +'t Mi!torio C('a a& on"y to #e"iver t(e
!(e!2 to So't( Sea five #ay& after t(e ve&&e" &an2-
A..e""ant ar$'e& t(at C('a a& not it& +ro2er, +'t it
a& fo'n# t(at C('a a& a't(ori:e# +y So't( Sea to
re!eive t(e .re)i') on it& +e(a"f-
AREOLA $. CA (PRUDENTIAL GUARANTEE AND
ASSURANCE, INC.)
236 SC<A 6D3
<OM><O; Se.te)+er 22, 455D
NATURE C><TIO<A<I
FACTS
, G'ne 25, 4569, C )ont(& after t(e i&&'an!e of
Santo& Areo"aN& Per&ona" A!!i#ent In&'ran!e Po"i!y
No- PA,20049 @!overin$ a .erio# of one yearA,
Pr'#entia" 'ni"atera""y !an!e""e# t(e &a)e &in!e
!o).any re!or#& revea"e# t(at Areo"a fai"e# to .ay
(i& .re)i')&-
o Un#er t(e ter)& of t(e &tate)ent of a!!o'nt
i&&'e# +y Pr'#entia", Areo"a a& &'..o&e# to
.ay t(e tota" a)o'nt of P4,605-69 (i!(
in!"'#e# t(e .re)i') of P4,DC0-00,
#o!')entary &ta). of P440-29 an# 2Q
.re)i') ta% of P25-D0-
o T(e &tate)ent of a!!o'nt &tate# t(at it )'&t not
+e !on&i#ere# a re!ei.t a& an offi!ia" re!ei.t i""
+e i&&'e# '.on .ay)ent of t(e a!!o'nt- An# if
.ay)ent a& )a#e to a re.re&entative, t(e
!"ient )'&t #e)an# for a Provi&iona" <e!ei.t an#
if Offi!ia" <e!ei.t& aren=t re!eive# it(in C #ay&,
Pr'#entia" &(o'"# +e notifie#- If .ay)ent i&
)a#e to t(eir offi!e, !"ient& &(o'"# #e)an# for
an O<-
, A'$'&t 3, 4569, Pr'#entia" offere# to rein&tate
&a)e .o"i!y it (a# .revio'&"y !an!e""e# an# even
.ro.o&e# to e%ten# it& "ifeti)e to Ee!e)+er 4C,
4569, '.on a fin#in$ t(at t(e !an!e""ation a&
erroneo'& an# t(at t(e .re)i')& ere .ai# in f'"" +y
Areo"a +'t ere not re)itte# +y Teofi"o M- Ma"a.it,
Pr'#entia"N& +ran!( )ana$er-
Pe''#+e"*4 Cla'(*
, T(e fra'#'"ent a!t of in )i&a..ro.riatin$ Areo"a=&
.re)i') .ay)ent& i& t(e .ro%i)ate !a'&e of t(e
!an!e""ation of t(e in&'ran!e .o"i!y-
, Areo"a t(eori:e# t(at Ma"a.itN& a!t of &i$nin$ an#
even &en#in$ t(e noti!e of !an!e""ation (i)&e"f,
notit(&tan#in$ (i& .er&ona" 2no"e#$e of
.etitioner,in&'re#N& f'"" .ay)ent of .re)i')&,
f'rt(er reinfor!e& t(e a""e$ation of +a# fait(-
, S'!( fra'#'"ent a!t !o))itte# +y Ma"a.it i&
attri+'ta+"e to Pr'#entia"-
, Ma"a.itN& a!t'ation& are t(erefore not &e.arate an#
#i&tin!t fro) t(at of Pr'#entia"=&- It )'&t, t(erefore,
+ear t(e !on&e;'en!e& of t(e erroneo'& !an!e""ation
of &'+Je!t in&'ran!e .o"i!y !a'&e# +y t(e non,
re)ittan!e +y it& on e)."oyee of t(e .re)i')&
.ai#-
INSURANCE Page 34
, S'+&e;'ent rein&tate)ent !o'"# not .o&&i+"y
a+&o"ve re&.on#ent in&'ran!e !o).any fro) "ia+i"ity,
t(ere +ein$ an o+vio'& +rea!( of !ontra!t- After a""
#a)a$e (a# a"rea#y +een inf"i!te# on (i) an# no
a)o'nt of re!tifi!ation !o'"# re)e#y t(e &a)e-
Re*2#+.e+4* A"%,(e+
, Pr'#entia" ar$'e& t(at (ere rein&tate)ent, t(e
e;'ita+"e re"ief &o'$(t +y Areo"a a& $rante# at an
o..ort'ne )o)ent, i-e- .rior to t(e fi"in$ of t(e
!o)."aint, Areo"a i& "eft it(o't a !a'&e of a!tion on
(i!( to .re#i!ate (i& !"ai) for #a)a$e&-
, <ein&tate)ent effe!tive"y re&tore# Areo"a to a"" (i&
ri$(t& 'n#er t(e .o"i!y-
ISSUES
4- 0ON t(e erroneo'& a!t of !an!e"in$ &'+Je!t
in&'ran!e .o"i!y entit"e .etitioner,in&'re# to .ay)ent
of #a)a$e&
2- 0ON t(e &'+&e;'ent a!t of rein&tatin$ t(e
ron$f'""y !an!e""e# in&'ran!e .o"i!y o+"iterate
(atever "ia+i"ity for #a)a$e& Pr'#entia" (a&
HELD
4- F>S
2- NO
Reasoning
, Ma"a.itN& fra'#'"ent a!t of )i&a..ro.riatin$ t(e
.re)i')& .ai# +y .etitioner,in&'re# i& +eyon# #o'+t
#ire!t"y i).'ta+"e to Pr'#entia"-
, A !or.oration, &'!( a& re&.on#ent in&'ran!e
!o).any, a!t& &o"e"y t(r' it& e)."oyee&- T(e "atter=&
a!t& are !on&i#ere# a& it& on for (i!( it !an +e
(e"# to a!!o'nt-
, T(e fa!t& are !"ear a& to t(e re"ation&(i. +eteen
.rivate re&.on#ent in&'ran!e !o).any an# Ma"a.it-
1i& a!t of re!eivin$ t(e .re)i')& !o""e!te# i& e""
it(in t(e .rovin!e of (i& a't(ority a& )ana$er-
T('&, (i& re!ei.t of &ai# .re)i')& i& re!ei.t +y
.rivate re&.on#ent in&'ran!e !o).any (o, +y
.rovi&ion of "a, .arti!'"ar"y 'n#er Arti!"e 4540 of
t(e Civi" Co#e, i& +o'n# +y t(e a!t& of it& a$ent-
, Arti!"e 4540 t('& rea#&H
Art- 4540- T(e .rin!i.a" )'&t !o)."y it( a"" t(e
o+"i$ation& (i!( t(e a$ent )ay (ave !ontra!te#
it(in t(e &!o.e of (i& a't(ority-
A& for any o+"i$ation (erein t(e a$ent (a&
e%!ee#e# (i& .oer, t(e .rin!i.a" i& not +o'n#
e%!e.t (en (e ratifie& it e%.re&&"y or ta!it"y-
, Ma"a.itN& fai"'re to re)it t(e .re)i')& (e re!eive#
!annot !on&tit'te a #efen&e for .rivate re&.on#ent
in&'ran!e !o).any; no e%oneration fro) "ia+i"ity
!o'"# re&'"t t(erefro)-
, Pr'#entia"=& ear"ier a!t of rein&tatin$ t(e in&'ran!e
.o"i!y !an not o+"iterate t(e inJ'ry inf"i!te# on
.etitioner,in&'re#-
, <e&.on#ent !o).any &(o'"# +e re)in#e# t(at a
!ontra!t of in&'ran!e !reate& re!i.ro!a" o+"i$ation&
for +ot( in&'rer an# in&'re#-
, <e!i.ro!a" o+"i$ation& are t(o&e (i!( ari&e fro)
t(e &a)e !a'&e an# in (i!( ea!( .arty i& +ot( a
#e+tor an# a !re#itor of t(e ot(er, &'!( t(at t(e
o+"i$ation of one i& #e.en#ent '.on t(e o+"i$ation of
t(e ot(er-
, Un#er t(e !ir!')&tan!e& of in&tant !a&e, t(e
re"ation&(i. a& !re#itor an# #e+tor +eteen t(e
.artie& aro&e fro) a !o))on !a'&eH i-e-, +y rea&on
of t(eir a$ree)ent to enter into a !ontra!t of
in&'ran!e 'n#er (o&e ter)&, Pr'#entia" .ro)i&e# to
e%ten# .rote!tion to Areo"a a$ain&t t(e ri&2 in&'re#
for a !on&i#eration in t(e for) of .re)i')& to +e
.ai# +y t(e "atter-
, Un#er t(e "a $overnin$ re!i.ro!a" o+"i$ation&,
.arti!'"ar"y t(e &e!on# .ara$ra.( of Arti!"e 4454, t(e
inJ're# .arty, Areo"a in t(i& !a&e, i& $iven a !(oi!e
+eteen f'"fi"")ent or re&!i&&ion of t(e o+"i$ation in
!a&e one of t(e o+"i$or&, &'!( a& re&.on#ent
in&'ran!e !o).any, fai"& to !o)."y it( (at i&
in!')+ent '.on (i)-
, 1oever, &ai# arti!"e entit"e& t(e inJ're# .arty to
.ay)ent of #a)a$e&, re$ar#"e&& of (et(er (e
#e)an#& f'"fi"")ent or re&!i&&ion of t(e o+"i$ation-
, Untena+"e t(en i& rein&tate)ent in&'ran!e
!o).anyN& ar$')ent, na)e"y, t(at rein&tate)ent
+ein$ e;'iva"ent to f'"fi"")ent of it& o+"i$ation,
#ive&t& .etitioner,in&'re# of a ri$(tf'" !"ai) for
.ay)ent of #a)a$e&- S'!( a !"ai) fin#& no &'..ort
in o'r "a& on o+"i$ation& an# !ontra!t&-
EAMAG>SH
, T(e nat're of #a)a$e& to +e aar#e#, (oever,
o'"# +e in t(e for) of no)ina" #a)a$e&
, A"t(o'$( t(e erroneo'& !an!e""ation of t(e
in&'ran!e .o"i!y !on&tit'te# a +rea!( of !ontra!t,
Pr'#entia" it(in a rea&ona+"e ti)e too2 &te.& to
re!tify t(e ron$ !o))itte# +y rein&tatin$ t(e
in&'ran!e .o"i!y of .etitioner-
, Moreover, no a!t'a" or &'+&tantia" #a)a$e or inJ'ry
a& inf"i!te# on .etitioner Areo"a at t(e ti)e t(e
in&'ran!e .o"i!y a& !an!e""e#-
, No)ina" #a)a$e& are Pre!overa+"e (ere a "e$a"
ri$(t i& te!(ni!a""y vio"ate# an# )'&t +e vin#i!ate#
a$ain&t an inva&ion t(at (a& .ro#'!e# no a!t'a"
.re&ent "o&& of any 2in#, or (ere t(ere (a& +een a
+rea!( of !ontra!t an# no &'+&tantia" inJ'ry or a!t'a"
#a)a$e& (at&oever (ave +een or !an +e &(on-
Disposition Petition for revie on certiorari i&
(ere+y G<ANT>E- <TC= & E>CISION i& <>INSTAT>E-
UCPB GENERAL INSURANCE CO., INC. $.
MASAGANA TELAMART, INC.
306 SC<A 295
PA<EO; G'ne 49, 4555
NATURE
Petition for revie on !ertiorari of a #e!i&ion of t(e
Co'rt of A..ea"&-
FACTS
, On A.ri" 49, 4554, .etitioner i&&'e# five @9A
in&'ran!e .o"i!ie& !overin$ re&.on#entN& vario'&
.ro.erty #e&!ri+e# t(erein a$ain&t fire, for t(e .erio#
fro) May 22, 4554 to May 22, 4552-
, In Mar!( 4552, .etitioner eva"'ate# t(e .o"i!ie&
an# #e!i#e# not to rene t(e) '.on e%.iration of
t(eir ter)& on May 22, 4552- Petitioner a#vi&e#
re&.on#entN& +ro2er, ?'e""i$ In&'ran!e Bro2er&, In!-
of it& intention not to rene t(e .o"i!ie&-
, On A.ri" 6, 4552, .etitioner $ave ritten noti!e to
re&.on#ent of t(e non,renea" of t(e .o"i!ie& at t(e
a##re&& &tate# in t(e .o"i!ie&-
, On G'ne 43, 4552, fire ra:e# re&.on#entN& .ro.erty
!overe# +y t(ree of t(e in&'ran!e .o"i!ie& .etitioner
i&&'e#-
, On G'"y 43, 4552, re&.on#ent .re&ente# to
.etitionerN& !a&(ier at it& (ea# offi!e five @9A
)ana$erN& !(e!2& in t(e tota" a)o'nt of
P229,C93-59, re.re&entin$ .re)i') for t(e renea"
of t(e .o"i!ie& fro) May 22, 4552 to May 22, 4553-
No noti!e of "o&& a& fi"e# +y re&.on#ent 'n#er t(e
.o"i!ie& .rior to G'"y 4D, 4552-
, On G'"y 4D, 4552, re&.on#ent fi"e# it( .etitioner
it& for)a" !"ai) for in#e)nifi!ation of t(e in&'re#
.ro.erty ra:e# +y fire- On t(e &a)e #ay, .etitioner
ret'rne# to re&.on#ent t(e five )ana$erN& !(e!2&
t(at it ten#ere#, an# at t(e &a)e ti)e reJe!te#
re&.on#entN& !"ai) for t(e rea&on& @aA t(at t(e
.o"i!ie& (a# e%.ire# an# ere not renee#, an# @+A
t(at t(e fire o!!'rre# on G'ne 43, 4552, +efore
re&.on#entN& ten#er of .re)i') .ay)ent-
, On G'"y, 24, 4552, re&.on#ent fi"e# it( t(e
<e$iona" Tria" Co'rt, Bran!( 96, Ma2ati City, a !ivi"
!o)."aint a$ain&t .etitioner for re!overy, of
P46-6D9,000-00, re.re&entin$ t(e fa!e va"'e of t(e
.o"i!ie& !overin$ re&.on#entN& in&'re# .ro.erty ra:e#
+y fire, an# for attorneyN& fee&-
, On O!to+er 23, 4552, after it& )otion to #i&)i&&
(a# +een #enie#, .etitioner fi"e# an an&er to t(e
INSURANCE Page 35
!o)."aint- It a""e$e# t(at t(e !o)."aint Pfai"& to &tate
a !a'&e of a!tionP; t(at .etitioner a& not "ia+"e to
,re&.on#ent for in&'ran!e .ro!ee#& 'n#er t(e
.o"i!ie& +e!a'&e at t(e ti)e of t(e "o&& of
re&.on#entN& .ro.erty #'e to fire, t(e .o"i!ie& (a#
"on$ e%.ire# an# ere not renee#-
After #'e tria", on Mar!( 40, 4553, t(e <e$iona" Tria"
Co'rt, Bran!( 96, Ma2ati, ren#ere# #e!i&ion, t(e
#i&.o&itive .ortion of (i!( rea#&H
P01><>*O<>, .re)i&e& !on&i#ere#, J'#$)ent i&
(ere+y ren#ere# in favor of t(e ."aintiff an# a$ain&t
t(e #efen#ant, a& fo""o&-
P@4A A't(ori:in$ an# a""oin$ t(e ."aintiff to
!on&i$nR#e.o&it it( t(i& Co'rt t(e &') of
P229,C93-59 @ref'&e# +y t(e #efen#antA a& f'""
.ay)ent of t(e !orre&.on#in$ .re)i')& for t(e
re."a!e)ent,renea" .o"i!ie& for >%(i+it& A, B, C, E
an# >; P@2A Ee!"arin$ ."aintiff to (ave f'""y !o)."ie#
it( it& o+"i$ation to .ay t(e .re)i') t(ere+y
ren#erin$ t(e re."a!e)ent,renea" .o"i!y of >%(i+it&
A, B, C, E an# > effe!tive an# +in#in$ for t(e
#'ration May 22, 4552 'nti" May 22, 4553; an#,
or#erin$ #efen#ant to #e"iver fort(it( to ."aintiff t(e
&ai# re."a!e)ent,renea" .o"i!ie&; P@3A Ee!"arin$
>%(i+it& A S B, in for!e fro) A'$'&t 22, 4554 '. to
A'$'&t 23, 4552 an# A'$'&t 5, 4554 to A'$'&t 5,
4552, re&.e!tive"y; an# P@DA Or#erin$ t(e #efen#ant
to .ay ."aintiff t(e &')& of- @aA P46,6D9,000-00
re.re&entin$ t(e "atterN& !"ai) for in#e)nity 'n#er
>%(i+it& A, B S C an#Ror it& re."a!e)ent,renea"
.o"i!ie&; @+A 29Q of t(e tota" a)o'nt #'e a& an# for
attorneyN& fee&; @!A P29,000-00 a& ne!e&&ary
"iti$ation e%.en&e&; an#, @#A t(e !o&t& of &'it-
7%%% 8
, In #'e ti)e, .etitioner a..ea"e# to t(e Co'rt of
A..ea"& @CAA- T(e CA .ro)'"$ate# it& #e!i&ion
affir)in$ t(at of t(e <e$iona" Tria" Co'rt it( t(e
)o#ifi!ation t(at ite) No- 3 of t(e #i&.o&itive .ortion
a& #e"ete#, an# t(e aar# of attorneyN& fee& a&
re#'!e# to 40Q of t(e tota" a)o'nt #'e-
It (e"# t(at fo""oin$ .revio'& .ra!ti!e, re&.on#ent
a& a""oe# a 60, to 50,#ay !re#it ter) for t(e
renea" of it& .o"i!ie&, an# t(at t(e a!!e.tan!e of t(e
"ate .re)i') .ay)ent &'$$e&te# an 'n#er&tan#in$
t(at .ay)ent !o'"# +e )a#e "ater- 1en!e, t(i&
a..ea"-
ISSUE
0ON t(e fire in&'ran!e .o"i!ie& i&&'e# +y .etitioner
to t(e re&.on#ent !overin$ t(e .erio# May 22, 4554
to May 22, 4552, (a# e%.ire# on t(e "atter #ate or
(a# +een e%ten#e# or renee# +y an i)."ie# !re#it
arran$e)ent t(o'$( a!t'a" .ay)ent of .re)i') a&
ten#ere# on a "ater #ate after t(e o!!'rren!e of t(e
ri&2 @fireA in&'re# a$ain&t
HELD
NO
, An in&'ran!e .o"i!y, ot(er t(an "ife, i&&'e#
ori$ina""y or on renea", i& not va"i# an# +in#in$ 'nti"
a!t'a" .ay)ent of t(e .re)i')- Any a$ree)ent to
t(e !ontrary i& voi#- T(e .artie& )ay not a$ree
e%.re&&"y or i)."ie#"y on t(e e%ten&ion of !re#it or
ti)e to .ay t(e .re)i') an# !on&i#er t(e .o"i!y
+in#in$ +efore a!t'a" .ay)ent-
Disposition G'#$)ent rever&e# an# &et a&i#e
UCPB GENERAL INSURANCE CO., INC. $.
MASAGANA TELAMART, INC. (EN BANC)
396 SC<A 30C
EAMIE>; A.ri" D, 2004
NATURE
Motion for re!on&i#eration of t(e #e!i&ion of t(e
S'.re)e Co'rt-
FACTS
, In it& #e!i&ion of 49 G'ne 4555, t(e SC #efine# t(e
)ain i&&'e to +e 7(et(er t(e fire in&'ran!e .o"i!ie&
i&&'e# +y .etitioner to t(e re&.on#ent !overin$ t(e
.erio# fro) May 22, 4554 to May 22, 4552 (a# +een
e%ten#e# or renee# +y an i)."ie# !re#it
arran$e)ent t(o'$( a!t'a" .ay)ent of .re)i') a&
ten#ere# on a "ater #ate an# after t(e o!!'rren!e of
t(e @fireA ri&2 in&'re# a$ain&t-8 T(e Co'rt re&o"ve#
t(i& i&&'e in t(e ne$ative in vie of Se!tion CC of t(e
In&'ran!e Co#e an# it& #e!i&ion& in Valenzuela v.
Court of A##eals; Sout! Sea Surety and 'nsurance
Co.$ 'nc. v. Court of A##eals; an# /ibay v. Court of
A##eals- A!!or#in$"y, it rever&e# an# &et a&i#e t(e
#e!i&ion of t(e Co'rt of A..ea"&-
, <e&.on#ent &ea&ona+"y fi"e# a )otion for t(e
re!on&i#eration of t(e a#ver&e ver#i!t- It a""e$e& in
t(e )otion t(at t(e SC (a# )a#e in t(e #e!i&ion it&
on fin#in$& of fa!t&, (i!( are not in a!!or# it(
t(o&e of t(e tria" !o'rt an# t(e Co'rt of A..ea"&-
T(e !o'rt& +e"o !orre!t"y fo'n# t(at no noti!e of
non,renea" a& )a#e it(in D9 #ay& +efore 22 May
4552, or +efore t(e e%.iration #ate of t(e fire
in&'ran!e .o"i!ie&- T('&, t(e .o"i!ie& in ;'e&tion
ere renee# +y o.eration of "a an# ere effe!tive
an# va"i# on 30 G'ne 4552 (en t(e fire o!!'rre#,
&in!e t(e .re)i')& ere .ai# it(in t(e 60, to 50,
#ay !re#it ter)-
, <e&.on#ent "i2ei&e #i&a$ree& it( it& r'"in$ t(at
.artie& )ay neit(er a$ree e%.re&&"y or i)."ie#"y on
t(e e%ten&ion of !re#it or ti)e to .ay t(e .re)i')
nor !on&i#er a .o"i!y +in#in$ +efore a!t'a" .ay)ent-
It 'r$e& t(e Co'rt to ta2e J'#i!ia" noti!e of t(e fa!t
t(at #e&.ite t(e e%.re&& .rovi&ion of Se!tion CC of
t(e In&'ran!e Co#e, e%ten&ion of !re#it ter)& in
.re)i') .ay)ent (a& +een t(e .reva"ent .ra!ti!e in
t(e in&'ran!e in#'&try- Mo&t in&'ran!e !o).anie&,
in!"'#in$ Petitioner, e%ten# !re#it ter)& +e!a'&e
Se!tion CC of t(e In&'ran!e Co#e i& not a .ro(i+itive
inJ'n!tion +'t i& )ere"y #e&i$ne# for t(e .rote!tion
of t(e .artie& to an in&'ran!e !ontra!t- T(e Co#e
it&e"f, in Se!tion C6, a't(ori:e& t(e va"i#ity of a
.o"i!y notit(&tan#in$ non,.ay)ent of .re)i')&-
, <e&.on#ent a"&o a&&ert& t(at t(e .rin!i."e of
e&to..e" a.."ie& to Petitioner- Ee&.ite it& aarene&&
of Se!tion CC Petitioner .er&'a#e# an# in#'!e#
<e&.on#ent to +e"ieve t(at .ay)ent of .re)i') on
t(e 60, to 50,#ay !re#it ter) a& .erfe!t"y a"ri$(t;
in fa!t it a!!e.te# .ay)ent& it(in 60 to 50 #ay&
after t(e #'e #ate&- By e%ten#in$ !re#it an#
(a+it'a""y a!!e.tin$ .ay)ent& 60 to 50 #ay& fro)
t(e effe!tive #ate& of t(e .o"i!ie&, it (a& i)."i!it"y
a$ree# to )o#ify t(e tenor of t(e in&'ran!e .o"i!y
an# in effe!t aive# t(e .rovi&ion t(erein t(at it
o'"# .ay on"y for t(e "o&& or #a)a$e in !a&e t(e
&a)e o!!'rre# after .ay)ent of t(e .re)i')-
, Petitioner fi"e# an o..o&ition to t(e <e&.on#ent=&
)otion for re!on&i#eration- It ar$'e& t(at +ot( t(e
tria" !o'rt an# t(e Co'rt of A..ea"& over"oo2e# t(e
fa!t t(at on 6 A.ri" 4552 Petitioner &ent +y or#inary
)ai" to <e&.on#ent a noti!e of non,renea" an# &ent
+y .er&ona" #e"ivery a !o.y t(ereof to <e&.on#ent=&
+ro2er, ?'e""i$- Bot( !o'rt& "i2ei&e i$nore# t(e fa!t
t(at <e&.on#ent a& f'""y aare of t(e noti!e of
non,renea"- A rea#in$ of Se!tion 66 of t(e
In&'ran!e Co#e rea#i"y &(o& t(at in or#er for an
in&'re# to +e entit"e# to a renea" of a non,"ife
.o"i!y, .ay)ent of t(e .re)i') #'e on t(e effe!tive
#ate of renea" &(o'"# fir&t +e )a#e- <e&.on#ent=&
ar$')ent t(at Se!tion CC i& not a .ro(i+itive
.rovi&ion fin#& no a't(oritative &'..ort-
INSURANCE Page 36
, T(e fo""oin$ fa!t&, a& fo'n# +y t(e tria" !o'rt an#
t(e Co'rt of A..ea"&, are in#ee# #'"y e&ta+"i&(e#H
4- *or year&, Petitioner (a# +een i&&'in$ fire
.o"i!ie& to t(e <e&.on#ent, an# t(e&e .o"i!ie&
ere ann'a""y renee#-
2- Petitioner (a# +een $rantin$ <e&.on#ent a
60, to 50,#ay !re#it ter) it(in (i!( to .ay
t(e .re)i')& on t(e renee# .o"i!ie&-
3- T(ere a& no va"i# noti!e of non,renea" of
t(e .o"i!ie& in ;'e&tion, a& t(ere i& no .roof at
a"" t(at t(e noti!e &ent +y or#inary )ai" a&
re!eive# +y <e&.on#ent, an# t(e !o.y t(ereof
a""e$e#"y &ent to ?'e""i$ a& ever tran&)itte#
to <e&.on#ent-
D- T(e .re)i')& for t(e .o"i!ie& in ;'e&tion in
t(e a$$re$ate a)o'nt of P229,C93-59 ere
.ai# +y <e&.on#ent it(in t(e 60, to 50,#ay
!re#it ter) an# ere #'"y a!!e.te# an#
re!eive# +y Petitioner=& !a&(ier-
ISSUE
0ON Se!- CC of t(e In&'ran!e Co#e of 45C6 )'&t +e
&tri!t"y a.."ie# to Petitioner=& a#vanta$e #e&.ite it&
.ra!ti!e of $rantin$ a 60, to 50,#ay !re#it ter) for
t(e .ay)ent of .re)i')&
HELD
NO
, Se!tion CC of t(e In&'ran!e Co#e of 45C6 .rovi#e&H
S>C- CC- An in&'rer i& entit"e# to .ay)ent of t(e
.re)i') a& &oon a& t(e t(in$ in&'re# i& e%.o&e#
to t(e .eri" in&'re# a$ain&t- Notit(&tan#in$ any
a$ree)ent to t(e !ontrary, no .o"i!y or !ontra!t of
in&'ran!e i&&'e# +y an in&'ran!e !o).any i& va"i#
an# +in#in$ 'n"e&& an# 'nti" t(e .re)i') t(ereof
(a& +een .ai#, e%!e.t in t(e !a&e of a "ife or an
in#'&tria" "ife .o"i!y (enever t(e $ra!e .erio#
.rovi&ion a.."ie&-
, T(i& Se!tion i& a re.ro#'!tion of Se!tion CC of P-E-
No- 642 @T(e In&'ran!e Co#eA .ro)'"$ate# on 46
Ee!e)+er 45CD- In t'rn, t(i& Se!tion (a& it& &o'r!e
in Se!tion C2 of A!t No- 2D2C ot(eri&e 2non a&
t(e In&'ran!e A!t a& a)en#e# +y <-A- No- 39D0,
a..rove# on 24 G'ne 4563, (i!( rea#H
S>C- C2- An in&'rer i& entit"e# to .ay)ent of
.re)i') a& &oon a& t(e t(in$ in&'re# i& e%.o&e#
to t(e .eri" in&'re# a$ain&t, 'n"e&& t(ere i& !"ear
a$ree)ent to $rant t(e in&'re# !re#it e%ten&ion of
t(e .re)i') #'e- No .o"i!y i&&'e# +y an
in&'ran!e !o).any i& va"i# an# +in#in$ 'n"e&& an#
'nti" t(e .re)i') t(ereof (a& +een .ai#-
@Un#er&!orin$ &'.."ie#A
, It !an +e &een at on!e t(at Se!tion CC #oe& not
re&tate t(e .ortion of Se!tion C2 e%.re&&"y
.er)ittin$ an a$ree)ent to e%ten# t(e .erio# to .ay
t(e .re)i')- B't t(ere are e%!e.tion& to Se!tion
CC-
T(e fir&t e%!e.tion i& .rovi#e# +y Se!tion CC it&e"f,
an# t(at i&, in !a&e of a "ife or in#'&tria" "ife .o"i!y
(enever t(e $ra!e .erio# .rovi&ion a.."ie&-
T(e &e!on# i& t(at !overe# +y Se!tion C6 of t(e
In&'ran!e Co#e, (i!( .rovi#e&H
S>C- C6- Any a!2no"e#$)ent in a .o"i!y or
!ontra!t of in&'ran!e of t(e re!ei.t of .re)i') i&
!on!"'&ive evi#en!e of it& .ay)ent, &o far a& to
)a2e t(e .o"i!y +in#in$, notit(&tan#in$ any
&ti.'"ation t(erein t(at it &(a"" not +e +in#in$ 'nti"
.re)i') i& a!t'a""y .ai#-
, A t(ir# e%!e.tion a& "ai# #on in Ma+ati /uscany
Condoiniu Cor#oration vs. Court of A##eals,
(erein e r'"e# t(at Se!tion CC )ay not a.."y if
t(e .artie& (ave a$ree# to t(e .ay)ent in
in&ta"")ent& of t(e .re)i') an# .artia" .ay)ent (a&
+een )a#e at t(e ti)e of "o&&- /uscany (a&
.rovi#e# a fo'rt( e%!e.tion to Se!tion CC, na)e"y,
t(at t(e in&'rer )ay $rant !re#it e%ten&ion for t(e
.ay)ent of t(e .re)i')- T(i& &i)."y )ean& t(at if
t(e in&'rer (a& $rante# t(e in&'re# a !re#it ter) for
t(e .ay)ent of t(e .re)i') an# "o&& o!!'r& +efore
t(e e%.iration of t(e ter), re!overy on t(e .o"i!y
&(o'"# +e a""oe# even t(o'$( t(e .re)i') i& .ai#
after t(e "o&& +'t it(in t(e !re#it ter)-
Moreover, t(ere i& not(in$ in Se!tion CC (i!(
.ro(i+it& t(e .artie& in an in&'ran!e !ontra!t to
.rovi#e a !re#it ter) it(in (i!( to .ay t(e
.re)i')&- T(at a$ree)ent i& not a$ain&t t(e "a,
)ora"&, $oo# !'&to)&, .'+"i! or#er or .'+"i! .o"i!y-
T(e a$ree)ent +in#& t(e .artie&- Arti!"e 4306 of t(e
Civi" Co#e .rovi#e&H
A<T- 4306- T(e !ontra!tin$ .artie& )ay e&ta+"i&(
&'!( &ti.'"ation& !"a'&e&, ter)& an# !on#ition& a&
t(ey )ay #ee) !onvenient, .rovi#e# t(ey are not
!ontrary to "a, )ora"&, $oo# !'&to)&, .'+"i!
or#er, or .'+"i! .o"i!y-
, *ina""y, it o'"# +e 'nJ'&t an# ine;'ita+"e if
re!overy on t(e .o"i!y o'"# not +e .er)itte#
a$ain&t Petitioner, (i!( (a# !on&i&tent"y $rante# a
60, to 50,#ay !re#it ter) for t(e .ay)ent of
.re)i')& #e&.ite it& f'"" aarene&& of Se!tion CC-
>&to..e" +ar& it fro) ta2in$ ref'$e 'n#er &ai#
Se!tion &in!e <e&.on#ent re"ie# in $oo# fait( on &'!(
.ra!ti!e- >&to..e" t(en i& t(e fift( e%!e.tion to
Se!tion CC-
Disposition G'#$)ent re!on&i#ere# an# &et a&i#e,
t(at of t(e Co'rt of A..ea"& affir)e# in toto-
SEPARATE OPINION
VITUG
, An e&&entia" !(ara!teri&ti! of an in&'ran!e i& it&
+ein$ &yna""a$)ati!, a (i$("y re!i.ro!a" !ontra!t
(ere t(e ri$(t& an# o+"i$ation& of t(e .artie&
!orre"ate an# )'t'a""y !orre&.on#-
, By ei$(t of a't(ority, e&to..e" !annot !reate a
!ontra!t of in&'ran!e, neit(er !an it +e &'!!e&&f'""y
invo2e# to !reate a .ri)ary "ia+i"ity, nor !an it $ive
va"i#ity to (at t(e "a &o .ro!ri+e& a& a )atter of
.'+"i! .o"i!y-
PARDO H.'**e+I
, An a&&'re#=& fai"'re to $ive noti!e of t(e fire
i))e#iate"y '.on it& o!!'rren!e +"atant"y &(oe#
t(e fra'#'"ent !(ara!ter of it& !"ai)&- <e&.on#ent i&
re;'ire# +y "a an# +y e%.re&& ter)& of t(e .o"i!y to
$ive i))e#iate ritten noti!e of "o&&- T(i& )'&t +e
!o)."ie# it( in t(e 't)o&t $oo# fait(-
, A&&')in$ ar$'en#o t(at t(e 60, to 50,#ay !re#it
(a& +een a$ree# +eteen t(e .artie&, re&.on#ent
!o'"# not &ti"" invo2e e&to..e" to +a!2 '. it& !"ai)-
>&to..e" !annot $ive va"i#ity to an a!t t(at i&
.ro(i+ite# +y "a or a$ain&t .'+"i! .o"i!y- T(e a!t'a"
.ay)ent of .re)i')& i& a !on#ition .re!e#ent to t(e
va"i#ity of an in&'ran!e !ontra!t ot(er t(an "ife
in&'ran!e .o"i!y- Any a$ree)ent to t(e !ontrary i&
voi# a& a$ain&t "a an# .'+"i! .o"i!y-
ACME SHOE RUBBER ? PLASTIC CORP. $. CA
(DOMESTIC INSURANCE COMPANY OF THE
PHILS.)
43D SC<A 499
M>/>NCIO,1><<><A; Gan'ary 4C, 4569-
NATURE
Petition for <evie on Certiorari of t(e Ee!i&ion of
t(e t(en Co'rt of A..ea"& @CA,G- <- No- 9654C,<A,
#enyin$ re!overy on an in&'ran!e .o"i!y, t(ere+y
rever&in$ t(e J'#$)ent of t(e Co'rt of *ir&t In&tan!e
of <i:a", Bran!( WII, at Ca"oo!an City, (i!( (a#
a""oe# &'!( re!overy-
FACTS
, ACM> S(oe <'++er an# P"a&ti! Cor.oration @ACM>A
(a# +een in&'rin$ year"y a$ain&t fire it& +'i"#in$,
)a!(ine& an# $enera" )er!(an#i&e it( Eo)e&ti!
In&'ran!e Co).any @INSU<><A &in!e 45D6- On May
4D, 4562, ACM> !ontin'e# to in&'re it& .ro.ertie&
INSURANCE Page 37
it( INSU<>< in t(e a)o'nt of P200,000 for t(e
.erio# May 49, 4562 '. to May 49, 4563-
, On May 4D, 4563, INSU<>< i&&'e# <enea" <e!ei.t
to !over t(e .erio# May 49, 4563 to May 49, 456D-
, On Gan'ary 6, 456D, ACM> .ai# P3,334-26 a&
.re)i')- T(e INSU<>< a.."ie# t(e .ay)ent a&
renea" .re)i') for t(e .erio# of May 49, 4563 to
May 49, 456D-
, On May 49, 456D, INSU<>< i&&'e# a <enea"
<e!ei.t for t(e .erio# of May 49, 456D to May 49,
4569 @for renea" .re)i') of P3,334-26 yet to +e
.ai#A it( a &ta).e# note t(at &ay& t(at t(e
in&'ran!e i"" +e #ee)e# va"i# an# +in#in$ on"y
(en t(e .re)i') an# #o!')entary &ta).& (ave
a!t'a""y +een .ai# in f'"" an# #'"y a!2no"e#$e# in
an offi!ia" re!ei.t- ACM> a& $iven 50 #ay& to .ay
ot(eri&e t(e .o"i!y o'"# a'to)ati!a""y +e!o)e
voi# an# ineffe!tive- @ACM> &(o'"# .ay &(ort .erio#
.re)i') for 50 #ay& +efore t(e .erio# e%.ire&- If
t(ey are a+"e to .ay t(e (o"e a)o'nt +efore t(e
50,#ay .erio#, t(e a'to)ati! ter)ination on=t a.."y
any)oreA-
, On May 26, 456D, ACM>, t(ro'$( it& Pre&i#ent,
&i$ne# a .ro)i&&ory note &ayin$ t(at t(ey .ro)i&e to
.ay t(e .re)i') an# #o!')entary &ta).& an#
a$ree# to t(e a'to)ati! !an!e""ation .ena"ty for not
!o)."yin$-
, On O!to+er 43, 456D, ACM>=& .ro.ertie& ere
!o)."ete"y #e&troye# +y fire- ACM> fi"e# in&'ran!e
!"ai) +'t t(e INSU<>< #i&!"ai)e# "ia+i"ity on t(e
$ro'n# t(at a& of t(e #ate of "o&&, t(e .ro.ertie&
+'rne# ere not !overe# +y in&'ran!e-
, ACM> !"ai)& t(at t(e Gan'ary 6, 456D .ay)ent
a& for t(e .erio# 456D,4569 an# t(at INSU<>< (a#
no ri$(t to a.."y it to t(e .erio# 4563,456D +e!a'&e
'n#er <A 39D0, t(e .o"i!y a& voi# an# INSU<><
!o'"# (ave va"i#"y #i&!"ai)e# "ia+i"ity for "o&& (a# one
o!!'rre# t(en-
, TC fo'n# INSU<>< "ia+"e for P2002 an# o.ine# t(at
t(ere a& a !"ear intention on t(e INSU<><N& .art to
$rant ACM> a !re#it e%ten&ion for t(e .ay)ent of t(e
.re)i') #'e; an# t(at to a""o t(e INSU<>< to
a.."y t(e .re)i') ACM> .ai# on Gan'ary 6, 456D-
CA rever&e# TC an# #i&)i&&e# t(e &'it on t(e $ro'n#
t(at, a& of t(e )o)ent of "o&&, ACM>N& .ro.ertie&
ere not in&'re# an# t(e INSU<>< !o'"# not +e (e"#
"ia+"e for any in#e)nity a& a re&'"t of t(e "o&&-
ISSUE
0ON t(e .re)i') .ay)ent for 456D,4569 a& .ai#
HELD
NO
, Not (avin$ .ai# t(e 456D,4569 .re)i') it(in t(e
e%ten&ion $rante#, an# .'r&'ant to <-A- No- 39D0,
t(e .o"i!y a& a'to)ati!a""y !an!e""e# an# t(ere a&
no in&'ran!e !overa$e to &.ea2 of a& of t(e #ate of
t(e fire on O!to+er 43, 456D-
, T(e .ertinent .rovi&ion of <e.'+"i! A!t No- 39D0
rea#&H
FSec. 42. An insurer is entitled to #ayent of t!e
#reiu as soon as t!e t!in" insured is e8#osed
to t!e #eril insured a"ainst$ unless t!ere is clear
a"reeent to "rant t!e insured credit e8tension of
t!e #reiu due. 1o #olicy issued by an
insurance co#any is valid and bindin" unless and
until t!e #reiu t!ereof !as been #aid.F
, <A 39D0 a& a..rove# on G'ne 20, 2563 an# a&
.'t into effe!t on O!t 4, 4563- It !o'"# not +e a.."ie#
retroa!tive"y to t(e renea" of t(e .o"i!y for t(e
4563,456D .erio# +e!a'&e &ai# .o"i!y a& renee#
on May 4D, 4563- @/a& (ave no retroa!tive effe!t
'n"e&& t(e !ontrary i& .rovi#e#-A T(erefore, t(e Gan
6, 456D .ay)ent a& .ro.er"y a.."ie# to t(e 4563,
456D .re)i')- T(e Tria" Co'rtN& o.inion t(at t(ere
a& a !"ear a$ree)ent to $rant ACM> !re#it
e%ten&ion for 456D,4569 i& ne$ate# +y ACM>N&
Pro)i&&ory Note +in#in$ it&e"f to .ay it(in ninety
#ay& fro) t(e effe!tive #ate of t(i& .o"i!y, 49t( May,
456D- T(e !re#it e%ten&ion a& $rante# for 50 #ay&
on"y- @So a"a na +y A'$'&t 46, 456D-A
, If ACM> a& $rante# !re#it e%ten&ion& in t(e .a&t,
t(e .ro)i&&ory note it &i$ne# #i# aay it( &'!(
!re#it arran$e)ent- A"&o, +efore <A 39D0, t(e
<enea" <e!ei.t& i&&'e# +y INSU<>< #i# not !ontain
t(e a'to,!an!e""ation after 50 #ay& note- By 456D,
(oever, t(e &it'ation (a# !(an$e# +y t(e .a&&a$e
of t(e <AH +# 2#l'!) !#,l. 3e $al'. a+. 3'+.'+%
,+le** a+. ,+'l he 2"e(',( he"e#- ha. 3ee+
2a'..
, 0(at +e!a)e a'to)ati!a""y !an!e""e# +y <-A- No-
39D0 a& t(e 456D,4569 .o"i!y for ACM>N& fai"'re to
.ay t(e .re)i') it(in t(e 50,#ay e%ten&ion
$rante#, an# in a!!or#an!e it( t(e e%.re&& ter)& of
t(e Pro)i&&ory Note t(at it (a# &i$ne#-
Disposition T(e J'#$)ent 'n#er revie i& (ere+y
affir)e#- 0it(o't .rono'n!e)ent a& to !o&t&-
PEDRO ARCE $. THE CAPITAL INSURANCE ?
SURETY CO., INC.
44 SC<A 63
ABAE SANTOS; Se.te)+er 30, 4562-
NATURE
A..ea" fro) C*I #e!i&ion on ;'e&tion of "a-
FACTS
, Ar!e @INSU<>EA one# a re&i#entia" (o'&e (i!(
a& in&'re# it( t(e a..e""ant COMPANF &in!e 4564-
In Nove)+er 4569, t(e COMPANF &ent to t(e
INSU<>E a <enea" Certifi!ate to !over t(e .erio#
fro) Ee!e)+er 9, 4569 to Ee!e)+er 9,4566, an#
re;'e&te# .ay)ent of t(e !orre&.on#in$ .re)i')-
Anti!i.atin$ t(at t(e .re)i') !o'"# not +e .ai# on
ti)e, t(e INSU<>E a&2e# for an e%ten&ion (i!( a&
$rante# +y t(e COMPANF- After t(e "a.&e of t(e
re;'e&te# e%ten&ion, INSU<>E &ti"" fai"e# to .ay t(e
.re)i')- T(ereafter, t(e (o'&e of t(e INSU<>E a&
tota""y #e&troye# +y fire- U.on INSU<>EN&
.re&entation of !"ai) for in#e)nity, (e a& to"# t(at
no in#e)nity a& #'e +e!a'&e t(e .re)i') a& not
.ai#- T(e INSU<>E &'e# t(e COMPANF for
in#e)nity-
, T(e tria" !o'rt (e"# t(e COMPANF "ia+"e to
in#e)nify t(e INSU<>E on t(e $ro'n# t(at &in!e t(e
COMPANF !o'"# (ave #e)an#e# .ay)ent of t(e
.re)i'), )'t'a"ity of o+"i$ation re;'ire# t(at it
&(o'"# +e "ia+"e on t(e .o"i!y-
ISSUE
0ON t(e COMPANF !an +e (e"# "ia+"e on it& .o"i!y
HELD
NO-
, T(e Co'rt !o))i&erate& it( t(e INSU<>E- T(ey
are e"" aare t(at )any in&'ran!e !o).anie& (ave
fa""en into t(e !on#e)na+"e .ra!ti!e of !o""e!tin$
.re)i')& .ro).t"y +'t re&ort to a"" 2in#& of e%!'&e&
to #eny or #e"ay .ay)ent of J'&t !"ai)&- Un(a..i"y
t(e in&tant !a&e i& one (ere t(e in&'rer (a& t(e "a
on it& &i#e-
, Se!- C2 of t(e In&'ran!e A!t, a& a)en#e# +y <-A-
No- 39D0 rea#&H
PS>C- C2- An in&'rer i& entit"e# to .ay)ent of
.re)i') a& &oon a& t(e t(in$ in&'re# i& e%.o&e#
to t(e .eri"& in&'re# a$ain&t, 'n"e&& t(ere i& !"ear
a$ree)ent to $rant !re#it e%ten&ion for t(e
.re)i') #'e- 1o #olicy issued by an insurance
co#any is valid and bindin" unless and until t!e
#reiu t!ereof !as been #aid.P
, It i& o+vio'& fro) +ot( t(e In&'ran!e A!t, a&
a)en#e#, an# t(e &ti.'"ation of t(e .artie& t(at ti)e
i& of t(e e&&en!e in re&.e!t of t(e .ay)ent of t(e
in&'ran!e .re)i') &o t(at if it i& not .ai# t(e
!ontra!t #oe& not ta2e effe!t 'n"e&& t(ere i& &ti""
anot(er &ti.'"ation to t(e !ontrary- In t(e in&tant
INSURANCE Page 38
!a&e, t(e INSU<>E a& $iven a $ra!e .erio# to .ay
t(e .re)i') +'t t(e .erio# (avin$ e%.ire# it( no
.ay)ent )a#e, (e !annot in&i&t t(at t(e COMPANF i&
nonet(e"e&& o+"i$ate# to (i)-
, Prior to t(e a)en#)ent @ita"i!i:e# .ortion a+oveA,
an in&'ran!e !ontra!t a& effe!tive even if t(e
.re)i') (a# not +een .ai# &o t(at an in&'rer a&
o+"i$ate# to .ay in#e)nity in !a&e of "o&& an#
!orre"ative"y (e (a# a"&o t(e ri$(t to &'e for .ay)ent
of t(e .re)i')- B't t(e a)en#)ent to Se!- C2 (a&
ra#i!a""y !(an$e# t(e "e$a" re$i)e in t(at 'n"e&& t(e
.re)i') i& .ai# t(ere i& no in&'ran!e-
Disposition T(e #e!i&ion of t(e !o'rt a ;'o i&
rever&e#; t(e a..e""eeN& !o)."aint i& #i&)i&&e#- No
&.e!ia" .rono'n!e)ent a& to !o&t&-
, Irre"evant fa!t&H T(e .re)i') !o&t& P36-40- After
t(e fire, t(e COMPANF i&&'e# a !(e!2 for P300 to
Ar!e a& #onation- Ar!e a!!e.te# t(e !(e!2, +'t &ti""
&'e# t(e !o).any-
CAPITAL INC. $. PLASTIC ERA CO.
69 SC<A 43D
MA<TIN; G'"y 46, 45C9
NATURE
Petition for revie of a #e!i&ion of t(e CA affir)in$
t(e #e!i&ion of t(e C*I of Mani"a
FACTS
, On Ee!e)+er 4C, 4560, .etitioner Ca.ita"
In&'ran!e S S'rety Co-, In!- #e"ivere# to t(e
re&.on#ent P"a&ti! >ra Man'fa!t'rin$ Co-, In!-, it&
o.en *ire Po"i!y No- 22C60 (erein t(e for)er
'n#ertoo2 to in&'re t(e "atterN& +'i"#in$, e;'i.)ent&,
ra )ateria"&, .ro#'!t& an# a!!e&&orie& "o!ate# at
S(eri#an Street, Man#a"'yon$, <i:a"- T(e .o"i!y
e%.re&&"y .rovi#e& t(at if t(e .ro.erty in&'re# o'"#
+e #e&troye# or #a)a$e# +y fire after t(e .ay)ent
of t(e .re)i')&, at anyti)e +eteen t(e 49t( #ay
of Ee!e)+er 4560 an# one oN!"o!2 in t(e afternoon
of t(e 49t( #ay of Ee!e)+er 4564, t(e in&'ran!e
!o).any &(a"" )a2e $oo# a"" &'!( "o&& or #a)a$e in
an a)o'nt not e%!ee#in$ P400,000-00- 0(en t(e
.o"i!y a& #e"ivere#, P"a&ti! >ra fai"e# to .ay t(e
!orre&.on#in$ in&'ran!e .re)i')- On Gan'ary 6,
4564, in .artia" .ay)ent of t(e in&'ran!e .re)i'),
P"a&ti! >ra #e"ivere# to Ca.ita" In&'ran!e, a !(e!2 for
t(e a)o'nt of P4,000-00 .o&t#ate# Gan'ary 46,
4564- 1oever, Ca.ita" In&'ran!e trie# to #e.o&it
t(e !(e!2 on"y on *e+r'ary 20, 4564 an# t(e &a)e
a& #i&(onore# +y t(e +an2 for "a!2 of f'n#&-
, To #ay& after t(e in&'ran!e .re)i') +e!a)e
#'e, at a+o't DH00 to 9H00 oN!"o!2 in t(e )ornin$,
t(e .ro.erty in&'re# +y P"a&ti! >ra a& #e&troye# +y
fire- In "e&& t(an a )ont( P"a&ti! >ra #e)an#e# fro)
Ca.ita" In&'ran!e t(e .ay)ent of t(e &') of
P400,000-00 a& in#e)nity for t(e "o&& of t(e in&'re#
.ro.erty 'n#er Po"i!y No- 22C60 +'t t(e "atter
ref'&e# for t(e rea&on t(at, a)on$ ot(er&, P"a&ti!
>ra fai"e# to .ay t(e in&'ran!e .re)i')-
ISSUES
4- 0ON a !ontra!t of in&'ran!e (a& +een #'"y
.erfe!te# +eteen .etitioner an# re&.on#ent
2- 0ON t(e #i&(onore# !(e!2 !on&tit'te# .ay)ent
HELD
4- F>S
, Ten#er of #raft or !(e!2 in or#er to effe!t .ay)ent
t(at o'"# e%tin$'i&( t(e #e+torN& "ia+i"ity &(o'"# +e
a!t'a""y !a&(e#- If t(e #e"ivery of t(e !(e!2 of P"a&ti!
>ra to Ca.ita" In&'ran!e ere to +e viee# in t(e
"i$(t of t(e fore$oin$, no .ay)ent of t(e .re)i')
(a# +een effe!te#- Si$nifi!ant"y, Ca.ita" In&'ran!e
a!!e.te# t(e .ro)i&e of P"a&ti! >ra to .ay t(e
in&'ran!e .re)i') it(in 30 #ay& fro) t(e effe!tive
#ate of .o"i!y- By &o #oin$, it (a& i)."i!it"y a$ree# to
)o#ify t(e tenor of t(e in&'ran!e .o"i!y an# in
effe!t, aive# t(e .rovi&ion t(erein t(at it o'"# on"y
.ay for t(e "o&& or #a)a$e in !a&e t(e &a)e o!!'r&
after t(e .ay)ent of t(e .re)i')- Con&i#erin$ t(at
t(e in&'ran!e .o"i!y i& &i"ent a& to t(e )o#e of
.ay)ent, Ca.ita" In&'ran!e i& #ee)e# to (ave
a!!e.te# t(e .ro)i&&ory note in .ay)ent of t(e
.re)i')- T(i& ren#ere# t(e .o"i!y i))e#iate"y
o.erative on t(e #ate it a& #e"ivere#-
2- F>S
, A"t(o'$( t(e !(e!2 a& #'e for .ay)ent on
Gan'ary 46, 4564 an# P"a&ti! >ra (a# &'ffi!ient f'n#&
to !over it a& of Gan'ary 45, 4564, Ca.ita" In&'ran!e
#e!i#e# to (o"# t(e &a)e for t(irty,five @39A #ay&
+efore .re&entin$ it for .ay)ent- 1avin$ (e"# t(e
!(e!2 for &'!( an 'nrea&ona+"e .erio# of ti)e,
Ca.ita" In&'ran!e a& e&to..e# fro) !"ai)in$ a
forfeit're of it& .o"i!y for non,.ay)ent even if t(e
!(e!2 (a# +een #i&(onore# "ater- 0(ere t(e !(e!2 i&
(e"# for an 'nrea&ona+"e ti)e +efore .re&entin$ it
for .ay)ent, t(e in&'rer )ay +e (e"# e&to..e# fro)
!"ai)in$ a forfeit're if t(e !(e!2 i& #i&(onore#-
Disposition T(e #e!i&ion of t(e CA i& A**I<M>E in
toto-
MALAYAN INSURANCE CO., INC. $. ARNALDO
a+. PINCA
49D SC<A 6C2
C<U?; O!to+er 42, 456C
FACTS
, On G'ne C, 4564, Ma"ayan In&'ran!e Co- @MICOA,
i&&'e# fire in&'ran!e for t(e a)o'nt of P4D,000 on
t(e .ro.erty of .rivate re&.on#ent, Pin!a, effe!tive
G'"y 4564,4562- MICO "ater a""e$e#"y !an!e""e# t(e
.o"i!y for non,.ay)ent of t(e .re)i') an# &ent a
noti!e to Pin!a- On Ee!- 2D A#ora, an a$ent of MICO,
re!eive# Pin!a=& .ay)ent, (i!( a& re)itte# to
MICO- On Gan- 46, 4562, Pin!a=& .ro.erty a&
!o)."ete"y +'rne#- On *e+- 9, MICO ret'rne# Pin!a=&
.ay)ent to A#ora on t(e $ro'n# t(at (er .o"i!y (a#
+een !an!e""e#; t(e "atter ref'&e# to a!!e.t it- 1er
#e)an# for .ay)ent (avin$ +een reJe!te# +y MICO,
Pin!a ent to t(e In&'ran!e Co))i&&ion- P'+"i!
re&.on#ent Arna"#o, t(e In&'ran!e Co))i&&ioner,
&'&taine# Pin!a, (en!e t(i& .etition fro) MICO-
<e!or#& &(o MICO re!eive# Arna"#o=& #e!i&ion on
A.ri" 40; MICO fi"e# a M*< on A.ri" 29 (i!( a&
#enie# on G'ne D; MICO re!eive# noti!e of t(i& #enia"
on G'ne 4D; in&tant .etition a& fi"e# on G'"y 2-
ISSUES
Procedural
4- 0ON t(e .etition &(o'"# +e #i&)i&&e# for "ate
fi"in$
+u"stantive
2- 0ON t(ere a& a va"i# in&'ran!e !ontra!t at t(e
ti)e of t(e "o&&
3- 0ON A#ora a& a't(ori:e# to re!eive &'!(
.ay)ent
D- 0ON an a#J'&ter i& in#i&.en&a+"e in t(e
va"'ation of t(e "o&&
HELD
Procedural
4- F>S
, Petitioner invo2e& Se! D46 of t(e In&'ran!e Co#e
(i!( $rant& it 30 #ay& fro) noti!e of t(e In&'ran!e
Co))i&&ion it(in (i!( to a..ea" +y !ertiorari it(
t(e Co'rt- MICO fi"e# it& M*< on A.ri" 29, 49 #ay&
after t(e noti!e; t(e re$"e)entary .erio# +e$an to
r'n a$ain after G'ne 43- Sin!e t(e .etition a& fi"e#
on"y on G'"y 2, it a& tar#y +y D #ay&- A"ternative"y it
invo2e& <'"e D9 of t(e <'"e& of Co'rt for !ertiorari
+'t t(e .etition &ti"" e%!ee#& t(e 49 #ay "i)it fro)
t(e G'ne 43 noti!e-
,<e&.on#ent&, on t(e ot(er (an#, invo2e Se!- 35 of
B-P- 425 (i!( .e$& t(e .erio# for a..ea" fro)
#e!i&ion& of any !o'rt in a"" !a&e& at 49 #ay& fro)
t(e noti!e of t(e #e!i&ion a..ea"e# fro)- Sin!e t(e
INSURANCE Page 39
M*< a& fi"e# on"y 49 #ay& after re!eivin$ noti!e of
t(e #e!i&ion, it a& a"rea#y 46 #ay& "ate +y G'"y 2-
So (i!(ever i& a.."ie#, t(e .etition i& &ti"" "ate-
+u"stantive
2- F>S
, A va"i# !an!e""ation re;'ire& t(e fo""oin$
!on#ition& +a&e# on Se!tion& 6D,69 of t(e Co#eH
.rior noti!e (i!( )'&t +e +a&e# on t(e o!!'rren!e
of one or )ore of t(e $ro'n#& )entione# in Se! 6D
@in t(i& !a&e, non,.ay)ent of .re)i')A, after t(e
effe!tive #ate of t(e .o"i!y; t(e noti!e )'&t +e
ritten an# )ai"e# to t(e a##re&& on t(e .o"i!y; it
)'&t &tate t(e $ro'n#@&A for !an!e""ation an# t(e
in&'rer )'&t f'rni&( #etai"& '.on t(e re;'e&t of t(e
in&'re#-
, It i& 'n#i&.'te# t(at .ay)ent of .re)i') a&
)a#e- Petitioner re"ie& (eavi"y on Se! CC of t(e
In&'ran!e Co#e to !onte&t t(i&, t(e &ai# .rovi&ion
re;'irin$ .ay)ent of .re)i') a& &oon a& t(e t(in$
i& e%.o&e# to t(e .eri" in&'re# a$ain&t an# t(at t(e
.o"i!y i& inva"i# it(o't it- 1oever, t(i& i& not
a.."i!a+"e in t(e in&tant !a&e a& .ay)ent a&
event'a""y )a#e- It i& to +e note# t(at t(e .re)i')
invoi!e a& &ta).e# 7Pay)ent <e!eive#8, in#i!atin$
an 'n#er&tan#in$ +eteen t(e .artie& t(at .ay)ent
!o'"# +e )a#e "ater- T(i& i& f'rt(ere# +y t(e fa!t
t(at A#ora (a# ear"ier to"# (er to !a"" (i) anyti)e
&(e a& rea#y it( (er .ay)ent- T(e Co'rt a"&o
fin#& it &tran$e t(at MICO on"y &o'$(t to ret'rn
Pin!a=& Gan- 49 .ay)ent on"y on *e+- 9, "on$ after
(er (o'&e (a# +'rne# #onUt(i& )a2e& .etitioner=&
)otive& (i$("y &'&.e!t-
, MICO !"ai)& to (ave &ent a noti!e to Pin!a, (o
f"at"y #enie# re!eivin$ one- Pin!a #i# not (ave to
.rove t(i& &in!e t(e &tri!t "an$'a$e of Se! 6D
re;'ire& t(at MICO en&'re t(e !an!e""ation a&
a!t'a""y &ent to an# re!eive# +y t(e in&'re#-
, MICO a"&o &'$$e&t& t(at Pin!a 2ne t(e .o"i!y (a#
+een !an!e""e# an# a& .ayin$ t(e .re)i') in or#er
to rene t(e .o"i!y- A !"o&e &t'#y of t(e tran&!ri.t&
&(o, (oever, t(at Pin!a on"y )eant to rene t(e
.o"i!y (a# it +een !an!e""e# +'t not if it a& &ti"" in
effe!tUit a& !on#itiona"- Pay)ent a& t('& "e$a""y
)a#e on t(e ori$ina" tran&a!tion an# va"i#"y re!eive#
+y A#ora, (o a& not infor)e# of t(e a""e$e#
!an!e""ation an# t('& &a no rea&on to reJe!t t(e
.ay)ent-
3- F>S
, Se!- 306 of t(e In&'ran!e Co#e .rovi#e& t(at any
in&'ran!e !o).any t(at #e"iver& a .o"i!y to it& a$ent
i& #ee)e# to (ave a't(ori:e# &'!( a$ent to re!eive
.ay)ent of .re)i') on it& +e(a"f- It i& a e"",2non
.rin!i."e 'n#er t(e "a of a$en!y t(at .ay)ent to an
a't(ori:e# a$ent i& e;'iva"ent to .ay)ent to t(e
.rin!i.a" (i)&e"f- MICO=& a!2no"e#$e)ent of A#ora
a& it& a$ent t('& #efeat& it& !ontention t(at (e a&
not a't(ori:e# to re!eive .ay)ent& on it& +e(a"f-
D- NO
, In a+&en!e of fra'#, t(e a)o'nt of t(e "o&& )ay +e
#eter)ine# on t(e +a&i& of &'!( .roof offere# +y t(e
in&'re#- 1ere- T(e !ertifi!ation of t(e Inte$rate#
Nationa" Po"i!e a& t(e e%tent of t(e "o&& &(o'"#
&'ffi!e-
Disposition #etition is DA1'AD
MANUFACTURERS LIFE INSURANCE CO. $ . MEER
65 P1I/ 394
B>NG?ON, G'ne 25, 4594
NATURE
APP>A/ fro) a J'#$)ent of t(e Co'rt of *ir&t
In&tan!e of Mani"a
FACTS
@t(i& i& a ta% !a&e- 0(at=& rea""y i).ortant (ere i&
t(e #efinition of CAS1 SU<<>NE>< MA/U>A-
, Man'fa!t'rer& /ife In&'ran!e Co).any i& a #'"y
or$ani:e# !or.oration (i!( (a& it& (ea# offi!e at
Toronto- It i& #'"y re$i&tere# an# "i!en&e# to en$a$e
in "ife in&'ran!e +'&ine&& in t(e P(i"i..ine&, an#,
)aintain& a +ran!( offi!e in Mani"a- It a& en$a$e#
in &'!( +'&ine&& in t(e P(i"i..ine& for )ore t(an five
year& +efore an# in!"'#in$ t(e year 45D4- B't #'e to
t(e e%i$en!ie& of t(e ar It !"o&e# t(e +ran!( offi!e
at Mani"a #'rin$ 45D2 '. to Se.te)+er 45D9-
, P"aintiff i&&'e# a n')+er of "ife in&'ran!e .o"i!ie& in
t(e P(i"i..ine& !ontainin$ &ti.'"ation& referre# to a&
NON*O<*>ITU<> C/AUS>S
9
, *ro) Gan'ary 4, 45D2 to Ee!e)+er 34, 45D6,
P"aintiff (ea# offi!e at Toronto a.."ie# t(e .rovi&ion&
of t(e a'to)ati! .re)i') "oan !"a'&e& '.on t(e
non.ay)ent of t(e !orre&.on#in$ .re)i')& +y t(e
5
0/1. Automatic 2remium 3oan.4'his 2olicy shall not lapse for non4payment of any premium after it has been three full years in force, it, at the due date of such premium,
the Cash 5alue of this 2olicy and of any bonus additions and di&idends left on accumulation (after deducting any indebtedness to the company and the interest accrued
thereon shall e+ceed the amount of said premium. 6n which e&ent the company will, without further re"uest, treat the premium then due as paid, and the amount of such
premium, with interest from its actual due date at si+ per cent per annum, compounded yearly, and one per cent, compounded yearly, for e+penses, shall be a first lien on
this 2olicy in the Company/s fa&our in priority to the claim of any assignee or any other person. 'he accumulated lien may at any time, while the 2olicy is in force, be paid in
whole or in part.
/7hen the premium falls due and is not paid in cash within the month/s grace, if the Cash 5alue of this policy and of any bonus additions and di&idends left on accumulation
(after deducting any accumulated indebtedness be less than the premium then due, the Company will, without further re"uests, continue this insurance in force for a period
8 8 8.
/1-. Cash and 2aid49p 6nsurance 5alues.4At the end of the third policy year or thereafter, upon the legal surrender of this 2olicy to the Company while there is no default in
premium payments or within two months after the due date of the premium in default, the Company will (1 grant a cash &alue as specified in Column (A increased by the
cash &alue of any bonus additions and di&idends left on accumulation, which ha&e been alloted to this 2olicy, less all indebtedness to the Company on this 2olley an the
date of ouch surrender, or (% endorse this 2olicy as a :on42articipating 2aid4up 2olley for the amount as specified 6n Column (; of the 'able of <uaranteed 5alues 8 8 8.
/11. =+tended 6nsurance4After the premiums for three or more full years ha&e been paid hereunder in cash, if any subse"uent premium is not paid when due, and there is no
indebtedness to the Company on the written re"uest of the insured 8 8 8.0
.eo."e (o &'+&!ri+e# to t(e in&'ran!e- T(e net
a)o'nt of .re)i')& a#van!e# @+y t(e !o).anyA or
"oane# @to t(e in&'re#A a& .ay)ent for t(e .re)i')
#'e tota"e# P6,8DJ,E1C.J7.
, Meer, t(e Co""e!tor of t(e Nationa" Interna"
<even'e a&&e&&e# t(e net a)o'nt of .re)i') at
P4C,54C-42 .'r&'ant to S>C-299, Nationa" Interna"
<even'e Co#e
6
, Co).any .rote&te# t(e a&&e&&)ent, +'t .ai# t(e
ta%e& anyay- T(en t(ey fi"e# a !o)."aint to re!over
)oney .ai# 'n#er .rote&t for ta%e&
, C*IH Ei&&)i&& !o)."aint
, P/AINTI**=& MAIN CONT>NTIONH (en it )a#e
.re)i') "oan& or .re)i') a#van!e& +y virt'e of t(e
non,forfeit're !"a'&e&, it #i# not !o""e!t .re)i')&
it(in t(e )eanin$ of t(e a+ove &e!tion& of t(e "a,
an# t(erefore it i& not a)ena+"e to t(e ta% t(erein
.rovi#e#-
ISSUES
4- 0ON .re)i') a#van!e& )a#e +y ."aintiff,
a..e""ant 'n#er t(e a'to)ati! .re)i') "oan !"a'&e
of it& .o"i!ie& are .re)i')& !o""e!te#N +y t(e
Co).any &'+Je!t to ta%
2- 0ON, in t(e a.."i!ation of t(e a'to)ati! .re)i')
"oan !"a'&e of ."aintiff,a..e""antN& .o"i!ie&, t(ere i&
N.ay)ent in )oney, note&, !re#it&, or any &'+&tit'te&
for )oney
3- 0ON t(e !o""e!tion of t(e a""e$e# #efi!ien!y
.re)i') ta%e& !on&tit'te& #o'+"e ta%ation
D- 0ON t(e )a2in$ of .re)i') a#van!e&, $rantin$
for t(e &a2e of ar$')ent t(at it a)o'nte# to
!o""e!tion of .re)i')&, ere #one in Toronto,
Cana#a
9- 0ON t(e fa!t t(at ."aintiff,a..e""ant a& not #oin$
+'&ine&& in t(e P(i"i..ine& #'rin$ t(e .erio# fro)
Gan'ary 4, 45D2 to Se.te)+er 30, 45D9, in!"'&ive,
e%e).t& it fro) .ay)ent of .re)i') ta%e&
!orre&.on#in$ to &ai# .erio#
HELD
,$!) (e/a(2le %'$e+ 3) he 2la'+'--)9
PS'..o&e t(at NAN, 30 year& of a$e, &e!'re& a 20,year
en#o)ent .o"i!y for P9,000 fro) ."aintiff,a..e""ant
Co).any an# .ay& an ann'a" .re)i') of P290- NAN
.ay& t(e fir&t ten year"y .re)i')& a)o'ntin$ to
P2,900 an# on t(i& a)o'nt ."aintiff,a..e""ant .ay&
6
0>=C. %((. 'a+es on insurance premiums.4'here shall be collected from e&ery person, company, or corporation (e+cept purely cooperati&e companies or associations
doing insurance business of any sort in the 2hilippines a ta+ of one per centum of the total premiums collected 8 8 8 whether such permiums are paid in money, notes,
credits, or any substitute for money but premiums refunded within si+ months after payment on account of re?ection of ris# or returned for other reason to person insured
shall not be included in the ta+able receipts 8 8 8.0
INSURANCE Page 40
t(e !orre&.on#in$ ta%e& 'n#er &e!tion 299 of t(e
Nationa" Interna" <even'e Co#e- S'..o&e a"&o t(at
t(e !a&( va"'e of &ai# .o"i!y after t(e .ay)ent of t(e
40t( ann'a" .re)i') a)o'nt& to P4,000-P 0(en on
t(e e"event( year t(e ann'a" .re)i') fe"" #'e an#
t(e in&'re# re)itte# no )oney it(in t(e )o't(
$ra!e, t(e in&'rer treate# t(e .re)i') t(en over
#'e a& #aid fro t!e cas! value, he a(#,+ 3e'+%
a l#a+ # he 2#l'!)h#l.e"6 (o !o'"# #i&!(ar$e it
at any ti)e it( intere&t at 6 .er !ent- T(e in&'ran!e
!ontra!t, t(erefore, !ontin'e# in for!e for t(e
e"event( year-
4- F>S
, Ba&e# on t(e e%a)."e $iven +y t(e ."aintiff, t(e
in&'rer !o""e!te# t(e a)o'nt of P290 a& t(e ann'a"
.re)i') for t(e e"event( year on t(e &ai# .o"i!y
(en it "oane# to 7A8 t(e &') of P290- T(e in&'rer
7+e!a)e a !re#itor8 of t(e l#a+, +'t not of t(e
2"e(',( t(at (a# a"rea#y +een .ai# @a#van!e# +y
t(e in&'rerA- T(e in&'rer i& entit"e# to !o""e!t intere&t
on t(e "oan, not on t(e .re)i')- PAP .ai# t(e
.re)i') for t(e e"event( year; +'t in t'rn (e
+e!a)e a #e+tor of t(e !o).any for t(e &') of
P290- T(i& #e+t (e !o'"# re.ay eit(er +y "ater
re)ittin$ t(e )oney to t(e in&'rer or +y "ettin$ t(e
!a&( va"'e !o).en&ate for it- T(e #e+t )ay a"&o +e
#e#'!te# fro) t(e a)o'nt of t(e .o"i!y &(o'"# PAP
#ie t(ereafter #'rin$ t(e !ontin'an!e of t(e .o"i!y-
, ON A<GUM>NT T1AT T1> ASS>TS O* T1> INSU<><
<>MAIN>E T1> SAM> A*T>< T1> APP/ICATION O* T1>
AUTOMATIC P<>MIUM /OAN C/AUS>H t(ere a& an in!rea&e
in a&&et& in t(e for) of C<>EIT for t(e a#van!e&
)a#e @in t(e e%a)."e, t(e P290 for t(e 44
t(
yearA-
, ON A<GUM>NT T1AT I* T1> C<>EIT IS PAIE OUT O* T1>
CAS1 SU<<>NE>< MA/U>, T1><> 0><> NO N>0 *UNES AEE>E
TO T1> COMPANFNS ASS>TS8H Ca*h *,""e+.e" $al,e Pa&
a.."ie# to a "ife in&'ran!e .o"i!y, i& t(e a)o'nt of
)oney t(e !o).any a$ree& to .ay to t(e (o"#er of
t(e .o"i!y if (e &'rren#er& it an# re"ea&e& (i& !"ai)&
'.on it- T(e )ore .re)i')& t(e in&'re# (a& .ai# t(e
$reater i"" +e t(e &'rren#er va"'e; +'t t(e
&'rren#er va"'e i& a"ay& a "e&&er &') t(an t(e tota"
a)o'nt of .re)i')& .ai#-P @Cy!"o.e#ia /a
Ei!tionary 3#- e#- 40CC-A T(e !a&( va"'e or !a&(
&'rren#er va"'e i& t(erefore an a)o'nt (i!( t(e
in&'ran!e !o).any (o"#& In tr'&t for t(e in&'re# to
+e #e"ivere# to (i) '.on #e)an#- It i& t(erefore a
"ia+i"ity of t(e !o).any to t(e in&'re#- No t(en,
(en t(e !o).anyN& !re#it for a#van!e& i& .ai# o't
of t(e !a&( va"'e or !a&( &'rren#er va"'e, t(at va"'e
an# t(e !o).anyN& "ia+i"ity i& t(ere+y #i)ini&(e# .ro
tanto-
2- F>S
, t(e in&'rer a$ree# to !on&i#er t(e .re)i') .ai# on
t(e &tren$t( of t(e a'to)ati! "oan- T(e .re)i') a&
t(erefore .ai# +y )ean& of a PnoteP or P!re#itP or
Pot(er &'+&tit'te for )oneyP an# t(e ta% i& #'e
+e!a'&e &e!tion 299 a+ove ;'ote# "evie& ta%e&
a!!or#in$ to t(e tota" .re)i')& !o""e!te# +y t(e
in&'rer P(et(er &'!( .re)i')& are .ai# in )oney,
note&, !re#it& or any &'+&tit'te for )oney-
3- NO
5 No !on&tit'tiona" .ro(i+ition a$ain&t #o'+"e
ta%ation-
D- NO
, T(e "oan& are )a#e to .o"i!y(o"#er& in t(e
P(i"i..ine&, (o in t'rn .ay t(ereit( t(e .re)i')
to t(e in&'rer t(r' t(e Mani"a +ran!(- A..rova" of
a..e""antN& .o&ition i"" ena+"e forei$n in&'rer& to
eva#e t(e ta% +y !ontrivin$ to re;'ire t(at .re)i')
.ay)ent& &(a"" +e )a#e at t(eir (ea# offi!e&- 0(at
i& i).ortant, t(e "a #oe& not !onte)."ate
.re)i')& !o""e!te# in t(e P(i"i..ine&- It i& eno'$(
t(at t(e in&'rer i& #oin$ in&'ran!e +'&ine&& in t(e
P(i"i..ine&, irre&.e!tive of t(e ."a!e of it&
or$ani:ation or e&ta+"i&()ent-
9- NO
, A"t(o'$( #'rin$ t(o&e year& t(e a..e""ant a& not
o.en for ne +'&ine&& +e!a'&e it& +ran!( offi!e a&
!"o&e#, &ti"" it a& .ra!ti!a""y an# "e$a""y, o.eratin$ in
t(i& !o'ntry +y !o""e!tin$ .re)i')& on it&
o't&tan#in$ .o"i!ie&, in!'rrin$ t(e ri&2& an#Ror
enJoyin$ t(e +enefit& !on&e;'ent t(ereto, it(o't
(avin$ .revio'&"y ta2en any &te.& in#i!atin$
it(#raa" in $oo# fait( fro) t(i& fie"# of e!ono)i!
a!tivity-
Disposition fin#in$ no .reJ'#i!ia" error in t(e
a..ea"e# #e!i&ion, e (ere+y affir) it it( !o&t&-
ANDRES $. CROWN LIFE INSURANCE
402 P(i"- 545
<>F>S, G-B-/-, Gan-26, 4596
NATURE
A..ea" fro) J'#$)ent of C*I
FACTS
, *e+- 43, 4590H *or t(e &') of P9,000, #efen#ant,
a..e""ee Cron /ife i&&'e# an in&'ran!e .o"i!y in t(e
na)e of ."aintiff,a..e""ant <'fino an# (i& ife, it(
t(e &ti.'"ation t(at t(e .re)i')& are to +e .ai#
&e)i,ann'a""y-
, T(e .re)i')& for t(e 4
&t
an# 2
n#
&e)e&ter of t(e 4
&t
year, in t(e a)o'nt of P469-49 ere .ai# +y <'fino
+'t t(e .re)i') for t(e t(ir# &e)e&ter, in t(e &a)e
a)o'nt, a& not .ai#-
5 Gan- 6, 4594, Cron /ife, t(ro'$( it& +ran!(
&e!retary, rote to Mr- an# Mr&- An#re& a#vi&in$
t(e) t(at t(eir in&'ran!e .o"i!y "a.&e# on Ee!- 26,
4590 an# t(e a)o'nt of P469-49 a& over#'e,
$ivin$ t(e) 60 #ay& fro) t(e #ate of "a.&e to fi"e an
a.."i!ation for rein&tate)ent- Cron /ife "ater &ent
anot(er "etter te""in$ t(e &.o'&e& An#re& t(at t(eir
in&'ran!e .o"i!y a& no "on$er in for!e-
, *e+- 4594H P"aintiff an# (i& ife e%e!'te# a
State)ent of 1ea"t( an# a.."i!ation for
rein&tate)ent of t(e afore&ai# .o"i!y-
, *e+- 20, 4594H P"aintiff rote a "etter to t(e
#efen#ant, en!"o&e# it( a )oney or#er for P400-
U.on a!!e.tan!e, #efen#ant a#vi&e# <'fino t(at it&
)ain offi!e (a# a..rove# t(e a.."i!ation an# t(at
t(e rein&tate)ent of t(e "a.&e# .o"i!y a& &'+Je!t to
t(e .ay)ent of t(e re)ainin$ .re)i') +a"an!e of
P69-49-
, May 3, 4594H Severa An#re& #ie# of #y&to!ia,
!ontra!te# .e"vi&-
, May 9, 4594H P"aintiff &ent a "etter en!"o&e# it( a
)oney or#er in t(e a)o'nt of P69, for t(e re)ainin$
+a"an!e #'e-
, May 49, 4594H Eefen#ant &ent a "etter it( offi!ia"
re!ei.t of t(e P469-49 .ai# +y <'fino a& e"" a& a
Certifi!ate of <ein&tate)ent-
5 G'ne C, 4594H <'fino .re&ente# a #eat( !"ai) a&
&'rvivor,+enefi!iary of (i& #e!ea&e# ife- Pay)ent
a& #enie# +y t(e #efen#ant-
5 A.ri" 4592H <'fino fi"e# a !o)."aint in C*I a$ain&t
Cron /ife for t(e re!overy of t(e a)o'nt of P9,000
a& t(e fa!e va"'e of a Joint 20,year en#o)ent
in&'ran!e .o"i!y i&&'e# +y #efen#ant in favor of
."aintiff an# (i& ife, on *e+- 43, 4590- In it&
an&er, Cron /ife #i&!"ai)e# "ia+i"ity an# &et fort(
t(e &.e!ia" #efen&e t(at t(e afore)entione# .o"i!y
(a# a"rea#y "a.&e#-
5 A'$- 9, 459DH C*I ren#ere# a #e!i&ion a+&o"vin$
t(e #efen#ant !o).any fro) any "ia+i"ity on t(e
$ro'n# t(at t(e .o"i!y (a# "a.&e# an# it a& not
rein&tate# at t(e ti)e of t(e ."aintiff=& ife=& #eat(-
P"aintiff "ater a..ea"e# to t(e CA +'t t(e &a)e a&
INSURANCE Page 41
!ertifie# +y t(e CA to t(e SC for (avin$ no ;'e&tion
of fa!t-
ISSUE
0ON t(e in&'ran!e .o"i!y, (i!( (a& +een in a &tate
of "a.&e +efore May 3, 4594, (a& +een va"i#"y an#
!o)."ete"y rein&tate# after &ai# #ate @0a& t(ere a
.erfe!te# !ontra!t of rein&tate)ent after t(e .o"i!y
"a.&e# #'e to non,.ay)ent of .re)i')&XA
HELD
NO
Ratio T(e &ti.'"ation in a "ife in&'ran!e .o"i!y $ivin$
t(e in&'re# t(e .rivi"e$e to rein&tate it '.on ritten
a.."i!ation #oe& not $ive t(e in&'re# a+&o"'te ri$(t
to &'!( rein&tate)ent +y t(e )ere fi"in$ of an
a.."i!ation- T(e Co).any (a& t(e ri$(t to #eny t(e
rein&tate)ent if it i& not &ati&fie# a& to t(e
in&'ra+i"ity of t(e in&'re# an# if t(e "atter #oe& not
.ay a"" over#'e .re)i')& an# a"" ot(er in#e+te#ne&&
to t(e Co).any- After t(e #eat( of t(e in&'re# t(e
in&'ran!e Co).any !annot +e !o).e""e# to entertain
an a.."i!ation for rein&tate)ent of t(e .o"i!y
+e!a'&e t(e !on#ition& .re!e#ent to rein&tate)ent
!an no "on$er +e #eter)ine# an# &ati&fie#-
Reasoning
- T(e &ti.'"ation& of fa!t& ren#er it 'n#i&.'ta+"e t(at
t(e ori$ina" .o"i!y "a.&e# for non,.ay)ent of
.re)i')& on Ee!- 26, 4590, '.on e%.iration of t(e
34,#ay $ra!e .erio#-
, A& fo'n# +y t(e "oer !o'rt, t(e !on#ition& &et
fort( in t(e .o"i!y for rein&tate)ent a& .rovi#e# in
t(e !ontra!t it&e"f are t(e fo""oin$H @AA a.."i!ation
&(a"" +e )a#e it(in 3 year& fro) t(e #ate of "a.&e;
@BA t(ere &(o'"# +e a .ro#'!tion of evi#en!e of t(e
$oo# (ea"t( of t(e in&'re#; @CA if t(e rate of
.re)i') #e.en#& '.on t(e a$e of t(e Benefi!iary,
t(ere &(o'"# "i2ei&e +e a .ro#'!tion of evi#en!e of
(i& or (er $oo# (ea"t(; @EA t(ere &(o'"# +e
.re&ente# &'!( ot(er evi#en!e of in&'ra+i"ity at t(e
#ate of a.."i!ation for rein&tate)ent; @>A t(ere
&(o'"# +e no !(an$e (i!( (a& ta2en ."a!e in &'!(
$oo# (ea"t( an# in&'ra+i"ity &'+&e;'ent to t(e #ate
of &'!( a.."i!ation an# +efore t(e .o"i!y i&
rein&tate#; an# @*A a"" over#'e .re)i')& an# ot(er
in#e+te#ne&& in re&.e!t of t(e .o"i!y, to$et(er it(
intere&t at 6Q, !o).o'n#e# ann'a""y, &(o'"# fir&t +e
.ai#-
, T(e ."aintiff #i# not !o)."y it( t(e "a&t !on#ition;
for (e on"y .ai# P400 +efore (i& ife=& #eat(; an#
#e&.ite t(e Co).any=& re)in#er&, (e on"y re)itte#
t(e +a"an!e of P69-49 to #ay& after (i& ife #ie#-
On t(e fa!e of &'!( fa!t&, t(e Co).any (a# t(e ri$(t
to treat t(e !ontra!t a& "a.&e# an# ref'&e .ay)ent of
t(e .o"i!y-
, <'fino !onten#& t(at t(e !on#ition re$ar#in$
.ay)ent of t(e .re)i') a& aive# +y t(e
in&'ran!e Co).any t(ro'$( it& "etter&, (erein it
)a#e &tate)ent& &'!( a&H 7If yo' are 'na+"e to .ay
t(e f'"" a)o'nt i))e#iate"y, &en# a& "ar$e a)o'nt
a& .o&&i+"e an# a#vi&e '& (o &oon yo' e%.e!t to +e
a+"e to .ay t(e +a"an!e; e i"" or2 o't an
a#J'&t)ent )o&t +enefi!ia" to yo'-8 T(e Co'rt fo'n#
t(e &tate)ent& to +e too va$'e an# in#efinite to
in#i!ate an intention on t(e in&'rer=& .art to aive
t(e f'"" .ay)ent a& .rere;'i&ite to t(e rein&tate)ent
of t(e "a.&e# .o"i!y- T(e Co'rt reiterate# t(e r'"e
t(at a aiver )'&t +e !"ear an# .o&itive, t(e intent
to aive &(on !"ear"y an# !onvin!in$"y- On t(e
ot(er (an#, It fo'n# &'+&e;'ent "etter& &ent +y
#efen#ant in#i!atin$ t(at t(ey in&i&te# on f'""
.ay)ent of t(e .re)i') +efore t(e .o"i!y a&
rein&tate# an# t(at #efen#ant #i# not !on&i#er .artia"
.ay)ent a& &'ffi!ient !on&i#eration for t(e
rein&tate)ent- P"aintiff,A..e""ant=& fai"'re to re)it
t(e +a"an!e +efore t(e #eat( of (i& ife o.erate# to
#e.rive (i) of any ri$(t to aive t(e .o"i!y an#
re!over t(e fa!e va"'e t(ereof-
Disposition G'#$)ent a..ea"e# fro) i& affir)e#-
VALENZUELA $. CA (PHILIPPINE AMERICAN
GENERAL INSURANCE COMPANY, INC.)
454 SC<A 4
GUTI><<>?; O!to+er 45, 4550
NATURE
Petition for revie of t(e #e!i&ion of t(e!a-
FACTS
, Petitioner Art'ro P- Ma"en:'e"a i& a Genera" A$ent
of .rivate re&.on#ent P(i"i..ine A)eri!an Genera"
In&'ran!e Co).any, In!- @P(i"a)$en for &(ortA &in!e
4569- A& &'!(, (e a& a't(ori:e# to &o"i!it an# &e""
in +e(a"f of P(i"a)$en a"" 2in#& of non,"ife in&'ran!e,
an# in !on&i#eration of &ervi!e& ren#ere# a&
entit"e# to re!eive t(e f'"" a$entN& !o))i&&ion of
32-9Q fro) P(i"a)$en 'n#er t(e &!(e#'"e#
!o))i&&ion rate&-
, *ro) 45C3 to 45C9, Ma"en:'e"a &o"i!ite# )arine
in&'ran!e fro) one of (i& !"ient&, t(e Ee"ta Motor&,
In!- @Eivi&ion of >"e!troni!& Air!on#itionin$ an#
<efri$erationA in t(e a)o'nt of PD-D Mi""ion fro)
(i!( (e a& entit"e# to a !o))i&&ion of 32Q-
1oever, Ma"en:'e"a #i# not re!eive (i& f'""
!o))i&&ion (i!( a)o'nte# to P4-6 Mi""ion fro) t(e
PD-D Mi""ion in&'ran!e !overa$e of t(e Ee"ta Motor&-
E'rin$ t(e .erio# 45C6 to 45C6, .re)i') .ay)ent&
a)o'ntin$ to P4,5D6,666-00 ere .ai# #ire!t"y to
P(i"a)$en an# Ma"en:'e"aN& !o))i&&ion to (i!( (e
i& entit"e# a)o'nte# to P632,C3C-00-
, In 45CC, P(i"a)$en &tarte# to +e!o)e intere&te# in
an# e%.re&&e# it& intent to &(are in t(e !o))i&&ion
#'e Ma"en:'e"a on a fifty,fifty +a&i&- Ma"en:'e"a
ref'&e#-
, Be!a'&e of t(e ref'&a" of Ma"en:'e"a, P(i"a)$en
an# it& offi!er& too2 #ra&ti! a!tion a$ain&t
Ma"en:'e"a- T(eyH @aA rever&e# t(e !o))i&&ion #'e
(i) +y not !re#itin$ in (i& a!!o'nt t(e !o))i&&ion
earne# fro) t(e Ee"ta Motor&, In!- in&'ran!e ; @+A
."a!e# a$en!y tran&a!tion& on a !a&(,an#,!arry
+a&i&; @!A t(reatene# t(e !an!e""ation of .o"i!ie&
i&&'e# +y (i& a$en!y; an# @#A &tarte# to "ea2 o't
ne& t(at Ma"en:'e"a (a& a &'+&tantia" a!!o'nt it(
P(i"a)$en- A"" of t(e&e a!t& re&'"te# in t(e #e!"ine of
(i& +'&ine&& a& in&'ran!e a$ent-
, T(en on Ee!e)+er 2C, 45C6, P(i"a)$en ter)inate#
t(e Genera" A$en!y A$ree)ent of Ma"en:'e"a-
, /oer !o'rtH t(e ter)ination of Ma"en:'e"a a&
Genera" A$ent a& i).ro.er +e!a'&e t(e re!or# i""
&(o t(e .rin!i.a" !a'&e of t(e ter)ination of t(e
."aintiff a& Genera" A$ent of #efen#ant P(i"a)$en
a& (i& ref'&a" to &(are (i& Ee"ta !o))i&&ion-
5 CA9 In any event t(e .rin!i.a"N& .oer to revo2e an
a$en!y at i"" i& &o .erva&ive, t(at t(e S'.re)e
Co'rt (a& !on&i&tent"y (e"# t(at ter)ination )ay +e
effe!te# even if t(e .rin!i.a" a!t& in +a# fait(,
&'+Je!t on"y to t(e .rin!i.a"N& "ia+i"ity for #a)a$e&-
@CA or#ere# Ma"en:'e"a to .ay P(i"a)$en t(e
a)o'nt of One Mi""ion Nine 1'n#re# T(irty,To
T(o'&an# *ive 1'n#re# T(irty,To an# 4CR400
Pe&o& @P4,532,932-4CA it( "e$a" intere&tA
ISSUES
4- 0ON (et(er or not P(i"a)$en an#Ror it& offi!er&
!an +e (e"# "ia+"e for #a)a$e& #'e to t(e
ter)ination of t(e Genera" A$en!y A$ree)ent it
entere# into it( t(e .etitioner&
2- 0ON .etitioner& are "ia+"e to P(i"a)$en for t(e
'n.ai# an# 'n!o""e!te# .re)i')&
HELD
4- F>S
, If a .rin!i.a" a!t& in +a# fait( an# it( a+'&e of
ri$(t in ter)inatin$ t(e a$en!y, t(en (e i& "ia+"e in
#a)a$e&-
INSURANCE Page 42
, T(ere i& an e%!e.tion to t(e .rin!i."e t(at an
a$en!y i& revo!a+"e at i"" an# t(at i& (en t(e
a$en!y (a& +een $iven not on"y for t(e intere&t of
t(e .rin!i.a" +'t for t(e intere&t of t(ir# .er&on& or
for t(e )'t'a" intere&t of t(e .rin!i.a" an# t(e a$ent-
In t(e&e !a&e&, it i& evi#ent t(at t(e a$en!y !ea&e&
to +e free"y revo!a+"e +y t(e &o"e i"" of t(e .rin!i.a"
@P<OC>EU<A/H 0(ere t(e fin#in$& of t(e Co'rt of
A..ea"& an# t(e tria" !o'rt are !ontrary to ea!(
ot(er, t(i& Co'rt )ay &!r'tini:e t(e evi#en!e on
re!or#
, After a .ain&ta2in$ revie of t(e entire re!or#& of
t(e !a&e an# t(e fin#in$& of fa!t& of +ot( t(e !o'rt a
;'o an# re&.on#ent a..e""ate !o'rt, t(e Co'rt
affir)e# t(e tria" !o'rt=& fin#in$&-A
, T(e .rin!i.a" !a'&e of t(e ter)ination of Ma"en:'e"a
a& Genera" A$ent of P(i"a)$en aro&e fro) (i& ref'&a"
to &(are (i& Ee"ta !o))i&&ion- T(e re!or#& &'&tain
t(e !on!"'&ion& of t(e tria" !o'rt on t(e a..arent +a#
fait( of t(e .rivate re&.on#ent& in ter)inatin$ t(e
Genera" A$en!y A$ree)ent of .etitioner&-
, It i& a"&o evi#ent fro) t(e re!or#& t(at t(e a$en!y
invo"vin$ .etitioner an# .rivate re&.on#ent i& one
P!o'."e# it( an intere&t,P an#, t(erefore, &(o'"# not
+e free"y revo!a+"e at t(e 'ni"atera" i"" of t(e "atter-
, T(e .rivate re&.on#ent& +y t(e &i)."e e%.e#ient of
ter)inatin$ t(e Genera" A$en!y A$ree)ent
a..ro.riate# t(e entire in&'ran!e +'&ine&& of
Ma"en:'e"a- 0it( t(e ter)ination of t(e Genera"
A$en!y A$ree)ent, Ma"en:'e"a o'"# no "on$er +e
entit"e# to !o))i&&ion on t(e renea" of in&'ran!e
.o"i!ie& of !"ient& &o'r!e# fro) (i& a$en!y- 0or&e,
#e&.ite t(e ter)ination of t(e a$en!y, P(i"a)$en
!ontin'e# to (o"# Ma"en:'e"a Joint"y an# &evera""y
"ia+"e it( t(e in&'re# for 'n.ai# .re)i')&- Un#er
t(e&e !ir!')&tan!e&, it i& !"ear t(at Ma"en:'e"a (a#
an intere&t in t(e !ontin'ation of t(e a$en!y (en it
a& 'n!ere)onio'&"y ter)inate# not on"y +e!a'&e of
t(e !o))i&&ion& (e &(o'"# !ontin'e to re!eive fro)
t(e in&'ran!e +'&ine&& (e (a& &o"i!ite# an# .ro!'re#
+'t a"&o for t(e fa!t t(at +y t(e very a!t& of t(e
re&.on#ent&, (e a& )a#e "ia+"e to P(i"a)$en in t(e
event t(e in&'re# fai" to .ay t(e .re)i')& #'e- T(ey
are e&to..e# +y t(eir on .o&itive aver)ent& an#
!"ai)& for #a)a$e&-
, PT(e .rin!i.a" )ay not #efeat t(e a$entN& ri$(t to
in#e)nifi!ation +y a ter)ination of t(e !ontra!t of
a$en!y @>r&2ine v- C(evro"et Motor& Co- 469 NC DC5,
44C S> C06, 32 A/< 456A-
, *or t(e .ivota" fa!tor ren#erin$ P(i"a)$en an# t(e
ot(er .rivate re&.on#ent& "ia+"e in #a)a$e& i& t(at
he e"('+a'#+ 3) he( #- he Ge+e"al A%e+!)
A%"ee(e+ &a* a'+e. &'h 3a. -a'h. T(i& i& in
a!!or#an!e it( t(e .re!e.t& in 1')an <e"ation&
en&(rine# in o'r Civi" Co#e-
2- NO- T(e re&.on#ent !o'rt erre# in (o"#in$
Ma"en:'e"a "ia+"e- T(ere a& no fa!t'a" an# "e$a"
+a&i& for t(e aar#- Un#er Se!'#+ 00 #- he
I+*,"a+!e C#.e, t(e re)e#y for t(e non,.ay)ent
of .re)i')& i& to .'t an en# to an# ren#er t(e
in&'ran!e .o"i!y not +in#in$ , PSe!. 00 - - -
[N]otit(&tan#in$ any a$ree)ent to t(e !ontrary, no
.o"i!y or !ontra!t of in&'ran!e i& va"i# an# +in#in$
'n"e&& an# 'nti" t(e .re)i')& t(ereof (ave +een
.ai# e%!e.t in t(e !a&e of a "ife or in#'&tria" "ife
.o"i!y (enever t(e $ra!e .erio# .rovi&ion a.."ie&
@P-E- 642, a& a)en#e# ot(eri&e 2non a& t(e
In&'ran!e Co#e of 45CDA
, T(i& i& +'ttre&&e# +y Se!'#+ 00D #- he
I+*,"a+!e C#.e @Pre&i#entia" Ee!ree No- 642,
.ro)'"$ate# on Ee!e)+er 46, 45CDA, (i!( no
.rovi#e& t(at no !ontra!t of In&'ran!e +y an
in&'ran!e !o).any i& va"i# an# +in#in$ 'n"e&& an#
'nti" t(e .re)i') t(ereof (a& +een .ai#,
notit(&tan#in$ any a$ree)ent to t(e !ontrary-P
Disposition Petition i& G<ANT>E- CA #e!i&ion S>T
ASIE>- T(e #e!i&ion of t(e TC <>INSTAT>E it( t(e
MOEI*ICATIONS- An# t(at t(e !ontra!t'a"
re"ation&(i. +eteen Art'ro P- Ma"en:'e"a an#
P(i"i..ine A)eri!an Genera" In&'ran!e Co).any
&(a"" +e #ee)e# ter)inate# '.on t(e &ati&fa!tion of
t(e J'#$)ent a& )o#ifie#-
CHAPTER V K THE POLICY, PARTIES THERETO,
? RIGHTS THEREON
DE LIM $. SUN LIFE ASSURANCE COMPANY OF
CANADA
D4 P1I/ 263
MA/CO/M; Nove)+er 25, 4520
NATURE
A..ea" fro) an or#er of t(e C*I of ?a)+oan$a
&'&tainin$ a #e)'rrer to ."aintiffN& !o)."aint '.on
t(e $ro'n# t(at it fai"& to &tate a !a'&e of a!tion-
FACTS
, On G'"y 6, 454C, /'i& /i) of ?a)+oan$a )a#e
a.."i!ation to t(e S'n /ife A&&'ran!e Co).any of
Cana#a for a .o"i!y of in&'ran!e on (i& "ife in t(e
&') of P9,000- In (i& a.."i!ation /i) #e&i$nate# (i&
ife, Pi"ar #e /i), t(e ."aintiff (erein, a& t(e
+enefi!iary- T(e fir&t .re)i') of PD33 a& .ai# +y
/i), an# '.on &'!( .ay)ent t(e !o).any i&&'e#
(at a& !a""e# a NN.rovi&iona" .o"i!y-P /'i& /i) #ie#
on A'$'&t 23, 454C, after t(e i&&'an!e of t(e
.rovi&iona" .o"i!y +'t +efore a..rova" of t(e
a.."i!ation +y t(e (o)e offi!e of t(e in&'ran!e
!o).any- Pi"ar #e /i) +ro'$(t an a!tion to re!over
fro) t(e S'n /ife &') of P9,000, t(e a)o'nt na)e#
in t(e .rovi&iona" .o"i!y-
, T(e P.rovi&iona" .o"i!yP rea#&H P<e!eive# @&'+Je!t
to t(e fo""oin$ &ti.'"ation& an# a$ree)ent&A t(e
&') of PD33, +ein$ t(e a)o'nt of t(e fir&t yearN&
.re)i') for a /ife A&&'ran!e Po"i!y on t(e "ife of Mr-
/'i& E- /i) of ?a)+oan$a for P9,000, for (i!( an
a.."i!ation #ate# t(e 6t( #ay of G'"y, 454C, (a& +een
)a#e to t(e S'n /ife A&&'ran!e Co).any of Cana#a-
, T(e a+ove,)entione# "ife i& to +e a&&'re# in
a!!or#an!e it( t(e ter)& an# !on#ition& !ontaine#
or in&erte# +y t(e Co).any in t(e .o"i!y (i!( )ay
+e $rante# +y it in t(i& .arti!'"ar !a&e for fo'r
)ont(& on"y fro) t(e #ate of t(e a.."i!ation,
#rovided t(at t(e Co).any &(a"" !onfir) t(i&
a$ree)ent +y i&&'in$ a .o"i!y on &ai# a.."i!ation
(en t(e &a)e &(a"" +e &'+)itte# to t(e 1ea# Offi!e
in Montrea"- S(o'"# t(e Co).any not i&&'e &'!( a
.o"i!y, t(en t(i& a$ree)ent s!all be null and void ab
initio, an# t(e Co).any &(a"" +e (e"# not to (ave
+een on t(e ri&2 at a"", +'t in &'!( !a&e t(e a)o'nt
(erein a!2no"e#$e# &(a"" +e ret'rne#-
ISSUE
0ON t(e !ontra!t of in&'ran!e +eteen /'i& /i) an#
S'n /ife A&&'ran!e Co).any of Cana#a a&
.erfe!te#
HELD
NO-
5 T(e #o!')ent it i& to +e a .rovi&iona" .o"i!y Pfor
fo'r )ont(& on"y fro) t(e #ate of t(i& a.."i!ation-P
I))e#iate"y fo""oin$ t(e or#& fi%in$ t(e fo'r
)ont(& .erio# !o)e& t(e or# P.rovi#e#P (i!( (a&
t(e )eanin$ of Pif-P Ot(eri&e &tate#, t(e .o"i!y for
fo'r )ont(& i& e%.re&&"y )a#e &'+Je!t to t(e
affir)ative !on#ition t(at t(e !o).any &(a"" !onfir)
t(i& a$ree)ent +y i&&'in$ a .o"i!y on &ai# a.."i!ation
(en t(e &a)e &(a"" +e &'+)itte# to t(e (ea# offi!e
in Montrea"- To re,enfor!e t(e &a)e t(ere fo""o& t(e
ne$ative !on#ition , PS(o'"# t(e !o).any not i&&'e
&'!( a .o"i!y, t(en t(i& a$ree)ent &(a"" +e n'"" an#
voi# a+ initio, an# t(e !o).any &(a"" +e (e"# not to
(ave +een on t(e ri&2&-P Certain"y "an$'a$e !o'"#
(ar#"y +e '&e# (i!( o'"# )ore !"ear"y &ti.'"ate
t(at t(e a$ree)ent &(o'"# not $o into effe!t 'nti" t(e
(o)e offi!e of t(e !o).any &(o'"# !onfir) it +y
INSURANCE Page 43
i&&'in$ a .o"i!y- A& e rea# an# 'n#er&tan# t(e &o,
!a""e# .rovi&iona" .o"i!y, it aounts to not!in" but
an ac+no,led"ent on be!alf of t!e co#any$ t!at
it !as received fro t!e #erson naed t!erein t!e
su of oney a"reed u#on as t!e first year@s
#reiu u#on a #olicy to be issued u#on t!e
a##lication$ if t!e a##lication is acce#ted by t!e
co#any.
, It i& of !o'r&e a .ri)ary r'"e t(at a !ontra!t of
in&'ran!e, "i2e ot(er !ontra!t&, )'&t +e a&&ente# to
+y +ot( .artie& eit(er in .er&on or +y t(eir a$ent&-
So lon" as an a##lication for insurance !as not been
eit!er acce#ted or re6ected$ it is erely an offer or
#ro#osal to a+e a contract. /!e contract$ to be
bindin" fro t!e date of t!e a##lication ust !ave
been a co#leted contract$ one t!at leaves not!in"
to be done$ not!in" to be co#leted$ not!in" to be
#assed u#on$ or deterined$ before it s!all ta+e
effect. /!ere can be no contract of insurance unless
t!e inds of t!e #arties !ave et in a"reeent- O'r
vie i&, t(at a !ontra!t of in&'ran!e a& not (ere
!on&'))ate# +y t(e .artie&-
, T(e tria" !o'rt !o))itte# no error in &'&tainin$ t(e
#e)'rrer an# #i&)i&&in$ t(e !a&e- It i& to +e note#,
(oever t(at !o'n&e" for a..e""ee a#)it& t(e "ia+i"ity
of t(e !o).any for t(e return of t!e first #reiu to
t!e estate of t!e deceased.

GREAT PACIFIC LIFE $. CA (LEUTERIO)
346 SC<A 6CC
QUISUMBING; O!to+er 43, 4555
NATURE
Petition for <evie of CA #e!i&ion
FACTS
, A !ontra!t of $ro'. "ife in&'ran!e a& e%e!'te#
+eteen .etitioner Great Pa!ifi! /ife A&&'ran!e
Cor.oration @(ereinafter Gre.a"ifeA an# Eeve"o.)ent
Ban2 of t(e P(i"i..ine& @(ereinafter EBPA- Gre.a"ife
a$ree# to in&'re t(e "ive& of e"i$i+"e (o'&in$ "oan
)ort$a$or& of EBP-
, In Nov- 4563, Er- 0i"fre#o /e'terio, a .(y&i!ian
an# a (o'&in$ #e+tor of EBP a.."ie# for )e)+er&(i.
in t(e $ro'. "ife in&'ran!e ."an- In an a.."i!ation
for), Er- /e'terio an&ere# Q& !on!ernin$ (i& (ea"t(
!on#ition a& fo""o&H
=7 Have you ever !ad$ or consulted$ a #!ysician for
a !eart condition$ !i"! blood #ressure$ cancer$
diabetes$ lun"$ +idney or stoac! disorder or any
ot!er #!ysical i#airent% 1o.
=7 Are you no,$ to t!e best of your +no,led"e$ in
"ood !ealt!% (es.
, Gre.a"ife i&&'e# an in&'ran!e !overa$e of Er-
/e'terio, to t(e e%tent of (i& EBP )ort$a$e
in#e+te#ne&& of P66,200-00- In A'$- 456D, Er-
/e'terio #ie# #'e to P)a&&ive !ere+ra" (e)orr(a$e-P
EBP &'+)itte# a #eat( !"ai) to Gre.a"ife- Gre.a"ife
#enie# t(e !"ai) +e!a'&e Er- /e'terio a& not
.(y&i!a""y (ea"t(y (en (e a.."ie# for an in&'ran!e-
Gre.a"ife in&i&te# t(at Er- /e'terio #i# not #i&!"o&e
(e (a# +een &'fferin$ fro) (y.erten&ion, (i!(
!a'&e# (i& #eat(- A""e$e#"y, &'!( non,#i&!"o&'re
!on&tit'te# !on!ea")ent t(at J'&tifie# t(e #enia" of
t(e !"ai)-
, 1erein re&.on#ent Me#ar#a /e'terio, i#o, fi"e# a
!o)."aint it( <TC a$ain&t Gre.a"ife for PS.e!ifi!
Perfor)an!e it( Ea)a$e&-P Er- MeJia, (o i&&'e#
t(e #eat( !ertifi!ate, te&tifie# t(at Er- /e'terio
!o)."aine# of (ea#a!(e& .re&')a+"y #'e to (i$(
+"oo# .re&&'re- T(e inferen!e a& not !on!"'&ive
+e!a'&e Er- /e'terio a& not a'to.&ie#, (en!e, ot(er
!a'&e& ere not r'"e# o't-
, <TC r'"e# in favor of re&.on#ent i#o an# a$ain&t
Gre.a"ife- CA &'&taine# t(e <TC #e!i&ion- 1en!e, t(e
.re&ent .etition-
ISSUES
4- 0ON CA erre# in (o"#in$ .etitioner "ia+"e to EBP
a& +enefi!iary in a $ro'. "ife in&'ran!e !ontra!t fro)
a !o)."aint fi"e# +y t(e i#o of t(e
#e!e#entR)ort$a$or
2- 0ON CA erre# in not fin#in$ t(at Er- /e'terio
!on!ea"e# t(at (e (a# (y.erten&ion, (i!( o'"#
vitiate t(e in&'ran!e !ontra!t
3- 0ON CA erre# in (o"#in$ Gre.a"ife "ia+"e for
P66,200-00 it(o't .roof of t(e a!t'a" o't&tan#in$
)ort$a$e .aya+"e +y t(e )ort$a$or to EBP
HELD
4- NO
Ratio In&'re#, +ein$ t(e .er&on it( (o) t(e
!ontra!t a& )a#e, i& .ri)ari"y t(e .ro.er .er&on to
+rin$ &'it- S'+Je!t to &o)e e%!e.tion&, in&'re# )ay
t('& &'e, a"t(o'$( t(e .o"i!y i& ta2en (o""y or in
.art for t(e +enefit of anot(er .er&on na)e# or
'nna)e#, an# a"t(o'$( it i& e%.re&&"y )a#e .aya+"e
to anot(er a& (i& intere&t )ay a..ear or ot(eri&e-
A"t(o'$( a .o"i!y i&&'e# to a )ort$a$or i& ta2en o't
for t(e +enefit of t(e )ort$a$ee an# i& )a#e .aya+"e
to (i), yet t(e )ort$a$or )ay &'e t(ereon in (i&
on na)e, e&.e!ia""y (ere t(e )ort$a$eeN& intere&t
i& "e&& t(an t(e f'"" a)o'nt re!overa+"e 'n#er t(e
.o"i!y- &See Sec. M$ 'nsurance Code)
Reasoning
-a. T(e in&'re# .rivate re&.on#ent #i# not !e#e to
t(e )ort$a$ee a"" (i& ri$(t& or intere&t& in t(e
in&'ran!e, t(e .o"i!y &tatin$ t(atH 7In t(e event of
t(e #e+torN& #eat( +efore (i& in#e+te#ne&& it( t(e
Cre#itor @EBPA &(a"" (ave +een f'""y .ai#, an a)o'nt
to .ay t(e o't&tan#in$ in#e+te#ne&& &(a"" fir&t +e
.ai# to t(e !re#itor an# t(e +a"an!e of &') a&&'re#,
if t(ere i& any, &(a"" t(en +e .ai# to t(e
+enefi!iaryRie& #e&i$nate# +y t(e #e+tor-8 0(en EBP
&'+)itte# t(e in&'ran!e !"ai) a$ain&t Gre.a"ife, t(e
"atter #enie# .ay)ent t(ereof, inter.o&in$ t(e
#efen&e of !on!ea")ent !o))itte# +y t(e in&'re#-
T(ereafter, EBP !o""e!te# t(e #e+t fro) t(e
)ort$a$or an# too2 t(e ne!e&&ary a!tion of
fore!"o&'re on t(e re&i#entia" "ot of .rivate
re&.on#ent-
-". Sin!e a .o"i!y of in&'ran!e '.on "ife or (ea"t(
)ay .a&& +y tran&fer, i"" or &'!!e&&ion to any
.er&on, (et(er (e (a& an in&'ra+"e intere&t or not,
an# &'!( .er&on )ay re!over it (atever t(e in&'re#
)i$(t (ave re!overe#, t(e i#o of t(e #e!e#ent Er-
/e'terio )ay fi"e t(e &'it a$ain&t t(e in&'rer,
Gre.a"ife-
2- NO
Ratio T(e fra'#'"ent intent on t(e .art of t(e
in&'re# )'&t +e e&ta+"i&(e# to entit"e t(e in&'rer to
re&!in# t(e !ontra!t- Mi&re.re&entation a& a #efen&e
of t(e in&'rer to avoi# "ia+i"ity i& an affir)ative
#efen&e an# t(e #'ty to e&ta+"i&( &'!( #efen&e +y
&ati&fa!tory an# !onvin!in$ evi#en!e re&t& '.on t(e
in&'rer- In t(e !a&e at +ar, t(e .etitioner fai"e# to
!"ear"y an# &ati&fa!tori"y e&ta+"i&( it& #efen&e, an# i&
t(erefore "ia+"e to .ay t(e .ro!ee#& of t(e in&'ran!e-
Reasoning
-a. T(e in&'re#, Er- /e'terio, (a# an&ere# in (i&
in&'ran!e a.."i!ation t(at (e a& in $oo# (ea"t( an#
t(at (e (a# not !on&'"te# a #o!tor or any of t(e
en')erate# ai")ent&, in!"'#in$ (y.erten&ion; (en
(e #ie# t(e atten#in$ .(y&i!ian (a# !ertifie# in t(e
#eat( !ertifi!ate t(at t(e for)er #ie# of !ere+ra"
(e)orr(a$e, .ro+a+"y &e!on#ary to (y.erten&ion-
*ro) t(i& re.ort, .etitioner Gre.a"ife ref'&e# to .ay
t(e in&'ran!e !"ai)- It a""e$e# t(at t(e in&'re# (a#
!on!ea"e# t(e fa!t t(at (e (a# (y.erten&ion-
-". Contrary to Gre.a"ife=& a""e$ation&, t(ere a& no
&'ffi!ient .roof t(at t(e in&'re# (a# &'ffere# fro)
(y.erten&ion- A&i#e fro) t(e &tate)ent of t(e
in&'re#N& i#o (o a& not even &'re if t(e
INSURANCE Page 44
)e#i!ine& ta2en +y Er- /e'terio ere for
(y.erten&ion, t(e a..e""ant (a# not .roven nor
.ro#'!e# any itne&& (o !o'"# atte&t to Er-
/e'terioN& )e#i!a" (i&tory-
-c. Gre.a"ife (a# fai"e# to e&ta+"i&( t(at t(ere a&
!on!ea")ent )a#e +y t(e in&'re#, (en!e, it !annot
ref'&e .ay)ent of t(e !"ai)-
3- NO
, Con&i#erin$ t(e &'.ervenin$ event t(at EBP
fore!"o&e# in 4559 t(eir re&i#entia" "ot, in &ati&fa!tion
of )ort$a$orN& o't&tan#in$ "oan, t(e in&'ran!e
.ro!ee#& &(a"" in're to t(e +enefit of t(e (eir& of t(e
#e!ea&e# .er&on or (i& +enefi!iarie&- >;'ity #i!tate&
t(at EBP &(o'"# not 'nJ'&t"y enri!( it&e"f at t(e
e%.en&e of anot(er- 1en!e, it !annot !o""e!t t(e
in&'ran!e .ro!ee#&, after it a"rea#y fore!"o&e# on t(e
)ort$a$e- T(e .ro!ee#& no ri$(t"y +e"on$ to Er-
/e'terioN& (eir& re.re&ente# +y (i& i#o, (erein
.rivate re&.on#ent-
, T(e Co'rt r'"e# t(i& i&&'e +a&e# on t(e !"ear
.rovi&ion& of t(e .o"i!y- T(e )ort$a$or .ai# t(e
.re)i') a!!or#in$ to t(e !overa$e of (i& in&'ran!e,
(i!( &tate& t(atH PT(e .o"i!y &tate& t(at '.on
re!ei.t of #'e .roof of t(e Ee+torN& #eat( #'rin$ t(e
ter)& of t(i& in&'ran!e, a #eat( +enefit in t(e
a)o'nt of P66,200-00 &(a"" +e .ai#O In t(e event of
t(e #e+torN& #eat( +efore (i& in#e+te#ne&& it( t(e
!re#itor &(a"" (ave +een f'""y .ai#, an a)o'nt to .ay
t(e o't&tan#in$ in#e+te#ne&& &(a"" fir&t +e .ai# to
t(e Cre#itor an# t(e +a"an!e of t(e S') A&&'re#, if
t(ere i& any &(a"" t(en +e .ai# to t(e +enefi!iaryRie&
#e&i$nate# +y t(e #e+tor-P *ro) t(i&, it i& !"ear t(at
Gre.a"ife i& "ia+"e an# t(at Er- /e'terio=& (eir& )'&t
$et t(e .ro!ee#&-
Disposition Petition E>NI>E- CA Ee!i&ion A**I<M>E
it( )o#ifi!ation-
PACIFIC TIMBER ELPORT CORPORATION $. CA
(WOR<MEN4S INSURANCE CO)
442 SC<A 455
E> CAST<O; *e+r'ary 29, 4562
FACTS
, Mar!( 45, 4563 , t(e ."aintiff &e!'re# te).orary
in&'ran!e fro) t(e #efen#ant for it& e%.ortation of
4,290,000 +oar# feet of P(i"i..ine /a'an an# A.iton$
"o$& to +e &(i..e# fro) t(e Eia.itan Bay, Q'e:on to
O2inaa an# To2yo, Ga.an- T(e #efen#ant i&&'e# on
&ai# #ate Cover Note No- 4040, in&'rin$ t(e &ai#
!ar$o of t(e ."aintiff PS'+Je!t to t(e Ter)& an#
Con#ition& of t(e 0O<IM>NNS INSU<ANC>
COMPANF, INC- .rinte# Marine Po"i!y for) a& fi"e#
it( an# a..rove# +y t(e Offi!e of t(e In&'ran!e
Co))i&&ioner-
, A.ri" 2, 4563 , T(e to @2A re$'"ar )arine !ar$o
.o"i!ie& ere i&&'e# +y t(e #efen#ant in favor of t(e
."aintiff- T(e tota" !ar$o in&'re# 'n#er t(e to
)arine .o"i!ie& a!!or#in$"y !on&i&te# of 4,359 "o$&,
or t(e e;'iva"ent of 4,459,D56 +#- ft-
, After t(e i&&'an!e of !over note +'t +efore t(e
i&&'an!e of t(e to )arine .o"i!ie& &o)e of t(e "o$&
inten#e# to +e e%.orte# ere "o&t #'rin$ "oa#in$
o.eration& in t(e Eia.itan Bay #'e to +a# eat(er-
, A.ri" D, 4563 , T(e ."aintiff infor)e# t(e #efen#ant
a+o't t(e "o&& of Na..ro%i)ate"y 32 .ie!e& of "o$&N
#'rin$ "oa#in$ t(ro'$( a "etter-
, T(e ."aintiff &'+&e;'ent"y &'+)itte# a NC"ai)
State)entN #e)an#in$ .ay)ent of t(e "o&& 'n#er t(e
&e!on# )arine !ar$o .o"i!y-
, G'"y 4C, 4563 , t(e #efen#ant re;'e&te# t(e *ir&t
P(i"i..ine A#J'&t)ent Cor.oration to in&.e!t t(e "o&&
an# a&&e&& t(e #a)a$e-
, A'$'&t 23, 4563 , t(e a#J'&ter re.orte# t(at Nt(e
"o&& of 30 .ie!e& of "o$& i& not !overe# +y t(e to
.o"i!ie& ina&)'!( a& &ai# .o"i!ie& !overe# t(e a!t'a"
n')+er of "o$& "oa#e# on +oar#- B't it i& !overe# +y
Cover Note-
, On Gan'ary 43, 456D , t(e #efen#ant rote t(e
."aintiff #enyin$ t(e "atterN& !"ai), on t(e $ro'n#
t(at #efen#antN& inve&ti$ation revea"e# t(at t(e
entire &(i.)ent of "o$& !overe# +y t(e to )arine&
.o"i!ie& ere re!eive# in $oo# or#er at t(eir .oint of
#e&tination- It a& f'rt(er &tate# t(at t(e &ai# "o&&
)ay not +e !on&i#ere# a& !overe# 'n#er !over note
+e!a'&e t(e &ai# note (a# +e!o)e Nn'"" an# voi# +y
virt'e of t(e i&&'an!e of to )arine .o"i!ie&-
, T(e C*I of Mani"a r'"e# in favo'r of t(e .etitioner-
, T(e Co'rt of A..ea"& rever&e# t(e #e!i&ion of t(e
C*I-
ISSUES
4- 0ON t(e !over note i& n'"" an# voi# for "a!2 of
va"'a+"e !on&i#eration +e!a'&e no &e.arate
.re)i')& are !o""e!te# +y .rivate re&.on#ent on a""
it& !over note&
2- 0ON t(e !o'rt of a..ea"& erre# in (o"#in$ t(at
.rivate re&.on#ent a& re"ea&e# fro) "ia+i"ity 'n#er
t(e !over note #'e to 'nrea&ona+"e #e"ay in $ivin$
noti!e of "o&& +e!a'&e t(e !o'rt #i&re$ar#e# t(e
.roven fa!t t(at .rivate re&.on#ent #i# not .ro).t"y
an# &.e!ifi!a""y o+Je!t to t(e !"ai) on t(e $ro'n# of
#e"ay in $ivin$ noti!e of "o&& an#, !on&e;'ent"y,
o+Je!tion& on t(at $ro'n# are aive# 'n#er &e!tion
6D of t(e in&'ran!e a!t
HELD
4- NO
Ratio Cover note i& i&&'e# it( a !on&i#eration
(en, +y e%.re&& &ti.'"ation, t(e !over note i& )a#e
&'+Je!t to t(e ter)& an# !on#ition& of t(e )arine
.o"i!ie&, an# t(e .ay)ent of .re)i')& i& one of t(e
ter)& of t(e .o"i!ie&-
Reasoning
a- t(e !over note in ;'e&tion i& &'+Je!t to t(e ter)&
an# !on#ition& of t(e )arine .o"i!ie&
+- Nat're of t(e Cover NoteH T(e fa!t t(at no
&e.arate .re)i') a& .ai# on t(e Cover Note
+efore t(e "o&& in&'re# a$ain&t o!!'rre#, #oe& not
)i"itate a$ain&t t(e va"i#ity of .etitionerN& !ontention,
for no &'!( .re)i') !o'"# (ave +een .ai#, &in!e +y
t(e nat're of t(e Cover Note, it #i# not !ontain, a&
a"" Cover Note& #o not !ontain .arti!'"ar& of t(e
&(i.)ent t(at o'"# &erve a& +a&i& for t(e
!o).'tation of t(e .re)i')&- A& a "o$i!a"
!on&e;'en!e, no &e.arate .re)i')& are inten#e# or
re;'ire# to +e .ai# on a Cover Note-
!- T(e .etitioner .ai# in f'"" a"" t(e .re)i')& a&
!a""e# for +y t(e &tate)ent i&&'e# +y .rivate
re&.on#ent after t(e i&&'an!e of t(e to re$'"ar
)arine in&'ran!e .o"i!ie&, t(ere+y "eavin$ no
a!!o'nt 'n.ai# +y .etitioner #'e on t(e in&'ran!e
!overa$e, (i!( )'&t +e #ee)e# to in!"'#e t(e
Cover Note- If t(e Note i& to +e treate# a& a &e.arate
.o"i!y in&tea# of inte$ratin$ it to t(e re$'"ar .o"i!ie&
&'+&e;'ent"y i&&'e#, t(e .'r.o&e an# f'n!tion of t(e
Cover Note o'"# +e &et at na'$(t or ren#ere#
)eanin$"e&&, for it i& in a rea" &en&e a !ontra!t, not a
)ere a.."i!ation for in&'ran!e (i!( i& a )ere offer-
1a# a"" t(e "o$& +een "o&t #'rin$ t(e "oa#in$
o.eration&, +'t after t(e i&&'an!e of t(e Cover Note,
"ia+i"ity on t(e note o'"# (ave a"rea#y ari&en even
+efore .ay)ent of .re)i')- T(i& i& (o t(e !over
note a& a P+in#erP &(o'"# "e$a""y o.erate; ot(eri&e,
it o'"# &erve no .ra!ti!a" .'r.o&e in t(e rea") of
!o))er!e, an# i& &'..orte# +y t(e #o!trine t(at
(ere a .o"i!y i& #e"ivere# it(o't re;'irin$
.ay)ent of t(e .re)i'), t(e .re&').tion i& t(at a
!re#it a& inten#e# an# .o"i!y i& va"i#-
2- NO
, T(e .rivate re&.on#ent !o).any never rai&e# t(i&
$ro'n# in t(e .ro!ee#in$&- It )'&t +e +e!a'&e it #i#
not fin# any #e"ay, a& t(i& Co'rt fai"& to fin# a rea"
an# &'+&tantia" &i$n t(ereof- B't even on t(e
a&&').tion t(at t(ere a& #e"ay, t(i& Co'rt i&
&ati&fie# an# !onvin!e# t(at a& e%.re&&"y .rovi#e# +y
"a, aiver !an &'!!e&&f'""y +e rai&e# a$ain&t .rivate
INSURANCE Page 45
re&.on#ent- T('& Se!tion 6D of t(e In&'ran!e A!t
.rovi#e&H
PSe!tion 6D- , Ee"ay in t(e .re&entation to an
in&'rer of noti!e or .roof of "o&& i& aive# if
!a'&e# +y any a!t of (i& or if (e o)it& to ta2e
o+Je!tion .ro).t"y an# &.e!ifi!a""y '.on t(at
$ro'n#-P
, *ro) (at (a& +een &ai#, 0e fin# #'"y
&'+&tantiate# .etitionerN& a&&i$n)ent& of error-
Disposition T(e a..ea"e# #e!i&ion i& &et a&i#e an#
t(e #e!i&ion of t(e Co'rt of *ir&t In&tan!e i&
rein&tate# in toto it( t(e affir)an!e of t(i& Co'rt-
DEVELOPMENT INSURANCE $. IAC (PHIL UNION
REALTY DEVELOPMENT CORP)
4D3 SC<A 62
C<U?; G'"y 46, 4566
FACTS
, A fire o!!'rre# in t(e +'i"#in$ of t(e .rivate
re&.on#ent an# it &'e# for re!overy of #a)a$e& fro)
t(e .etitioner on t(e +a&i& of an in&'ran!e !ontra!t
+eteen t(e)- T(e .etitioner a""e$e#"y fai"e# to
an&er on ti)e an# a& #e!"are# in #efa'"t +y TC- A
J'#$)ent of #efa'"t a& ren#ere# on t(e &tren$t( of
t(e evi#en!e &'+)itte# e% .arte +y t(e .rivate
re&.on#ent, (i!( a& a""oe# f'"" re!overy of it&
!"ai)e# #a)a$e&-
, On "earnin$ of t(i& #e!i&ion, t(e .etitioner )ove#
to "ift t(e or#er of #efa'"t, invo2in$ e%!'&a+"e
ne$"e!t, an# to va!ate t(e J'#$)ent +y #efa'"t- It&
)otion a& #enie#-
, On a..ea", IAC affir)e# t(e TC #e!i&ion in toto-
ISSUE
4- 0ON #efa'"t of .etitioner i& +a&e# on e%!'&a+"e
ne$"e!t
2- 0(at i& t(e a)o'nt of in#e)nity #'e to t(e
.rivate re&.on#ent 'n#er it& in&'ran!e !ontra!tX
0ON C*I a& !orre!t in inter.retin$ t(e !ontra!t
HELD
4- NO
, S'))on& a& &erve# t(ro'$( it& vi!e,.re&i#ent-
T(ere ere even &evera" e%ten&ion& to t(e ori$ina"
.erio# to an&er- A& a !on&e;'en!e, t(e TC, on
)otion of t(e .rivate re&.on#ent fi"e# #e!"are# t(e
.etitioner in #efa'"t- T(i& a& #one a")o&t one
)ont( "ater- >ven &o, t(e .etitioner )a#e no )ove
at a"" for to )ont(& t(ereafter- It a& on"y )ore
t(an one )ont( after t(e J'#$)ent of #efa'"t a&
ren#ere# +y t(e TC t(at it fi"e# a )otion to "ift t(e
or#er of #efa'"t an# va!ate t(e J'#$)ent +y #efa'"t-
, T(ere i& a .attern of ine%!'&a+"e ne$"e!t-
2- T(e .o"i!y i& an o.en .o"i!y (i!( )ean& t(at t(e
a!t'a" "o&&, a& #eter)ine#, i"" re.re&ent t(e tota"
in#e)nity #'e t(e in&'re# fro) t(e in&'rer e%!e.t
on"y t(at t(e tota" in#e)nity &(a"" not e%!ee# t(e
fa!e va"'e of t(e .o"i!y-
, T(e .etitioner ar$'e& t(at &in!e at t(e ti)e of t(e
fire t(e +'i"#in$ in&'re# a& ort( P9,600,000-00,
t(e .rivate re&.on#ent &(o'"# +e !on&i#ere# it& on
in&'rer for t(e #ifferen!e +eteen t(at a)o'nt an#
t(e fa!e va"'e of t(e .o"i!y an# &(o'"# &(are .ro rata
in t(e "o&& &'&taine#- A!!or#in$"y, t(e .rivate
re&.on#ent i& entit"e# to an in#e)nity of on"y
P6C,625-34, t(e re&t of t(e "o&& to +e &(o'"#ere# +y
it a"one- T(e .etitioner !ite& Con#ition 4C of t(e
.o"i!y, (i!( .rovi#e&H
PIf t(e .ro.erty (ere+y in&'re# &(a"", at t(e
+rea2in$ o't of any fire, +e !o""e!tive"y of $reater
va"'e t(an t(e &') in&'re# t(ereon t(en t(e
in&'re# &(a"" +e !on&i#ere# a& +ein$ (i& on
in&'rer for t(e #ifferen!e, an# &(a"" +ear a rata+"e
.ro.ortion of t(e "o&& a!!or#in$"y- >very ite), if
)ore t(an one, of t(e .o"i!y &(a"" +e &e.arate"y
&'+Je!t to t(i& !on#ition-P
, 1oever, t(ere i& no evi#en!e on re!or# t(at t(e
+'i"#in$ a& ort( P9,600,000-00 at t(e ti)e of t(e
"o&&- On t(e !ontrary, t(e +'i"#in$ a& in&'re# at
P2,900,000-00, an# t(i& )'&t +e !on&i#ere#, +y
a$ree)ent, t(e a!t'a" va"'e of t(e .ro.erty in&'re#
on t(e #ay t(e fire o!!'rre#- T(i& va"'ation +e!o)e&
even )ore +e"ieva+"e if it i& re)e)+ere# t(at at t(e
ti)e t(e +'i"#in$ a& +'rne# it a& &ti"" 'n#er
!on&tr'!tion an# not yet !o)."ete#-
, T(e Co'rt note& t(at t(e .o"i!y in t(i& !a&e i& an
o.en .o"i!y an# i& &'+Je!t to t(e e%.re&& !on#ition
t(atH
PO.en Po"i!y-
T(i& i& an o.en .o"i!y a& #efine# in Se!9C of t(e
In&'ran!e A!t- In t(e event of "o&&, (et(er tota"
or .artia", it i& 'n#er&too# t(at t(e a)o'nt of t(e
"o&& &(a"" +e &'+Je!t to a..rai&a" an# t(e "ia+i"ity of
t(e !o).any, if e&ta+"i&(e#, &(a"" +e "i)ite# to t(e
a!t'a" "o&&, &'+Je!t to t(e a.."i!a+"e ter)&,
!on#ition&, arrantie& an# !"a'&e& of t(i& Po"i!y,
an# in no !a&e &(a"" e%!ee# t(e a)o'nt of t(e
.o"i!y-P
, A& #efine# in t(e afore&tate# .rovi&ion, (i!( i&
no Se!60 of t(e In&'ran!e Co#e, Pan o.en .o"i!y i&
one in (i!( t(e va"'e of t(e t(in$ in&'re# i& not
a$ree# '.on +'t i& "eft to +e a&!ertaine# in !a&e of
"o&&-P-
, T(e a!t'a" "o&& (a& +een a&!ertaine# in t(i& !a&e
an# t(e Co'rt i"" re&.e!t &'!( fa!t'a" #eter)ination
in t(e a+&en!e of .roof t(at it a& arrive# at
ar+itrari"y- T(ere i& no &'!( &(oin$- 1en!e,
a.."yin$ t(e o.en .o"i!y !"a'&e a& e%.re&&"y a$ree#
'.on +y t(e .artie& in t(eir !ontra!t, e (o"# t(at
t(e .rivate re&.on#ent i& entit"e# to t(e .ay)ent of
in#e)nity 'n#er t(e &ai# !ontra!t in t(e tota"
a)o'nt of P906,66C-00-
, T(e ref'&a" of it& vi!e,.re&i#ent to re!eive t(e
.rivate re&.on#entN& !o)."aint, a& re.orte# in t(e
&(eriffN& ret'rn, a& t(e fir&t in#i!ation of t(e
.etitionerN& intention to .ro"on$ t(i& !a&e an#
.o&t.one t(e #i&!(ar$e of it& o+"i$ation to t(e .rivate
re&.on#ent 'n#er t(i& a$ree)ent- T(at intention a&
revea"e# f'rt(er in it& &'+&e;'ent a!t& ,,,, or
ina!tion ,,,, (i!( in#ee# ena+"e# it to avoi#
.ay)ent for )ore t(an five year& fro) t(e fi"in$ of
t(e !"ai) a$ain&t it in 4560-
Disposition T(e a..ea"e# #e!i&ion i& affir)e# in
f'"", it( !o&t& a$ain&t t(e .etitioner-
HARDING $. COMMERCIAL UNION ASSURANCE
36 P1I/ D6D
*IS1><; A'$'&t 40, 4546
FACTS
, Mr&- 1ar#in$ a& t(e oner of a St'#e+a2er
a'to)o+i"e; in !on&i#eration of t(e .ay)ent to t(e
#efen#ant of t(e .re)i') of P490, +y &ai# ."aintiff,
Mr&- 1enry >- 1ar#in$, it( t(e !on&ent of (er
('&+an#, t(e #efen#ant +y it& #'"y a't(ori:e# a$ent,
S)it(, Be"" S Co).any @"i)ite#A, )a#e it& .o"i!y of
in&'ran!e in ritin$ '.on &ai# a'to)o+i"e a& &et
fort( in &ai# .o"i!y to +e P3,000 t(at t(e va"'e of
&ai# a'to)o+i"e a& &et fort( in &ai# .o"i!y to +e
P3,000; t(at on Mar!( 2D, 4546, &ai# a'to)o+i"e
a& tota""y #e&troye# +y fire; t(at t(e "o&& t(ere+y to
."aintiff& a& t(e &') of P3,000-
, T(e #efen#ant=& ver&ion i& t(at +y re;'e&t of Mr&-
1ar#in$, it i&&'e# t(e .o"i!y of in&'ran!e on an
a'to)o+i"e a""e$e# +y t(e &ai# ."aintiff to +e (er
.ro.erty- It a& )a#e +y )ean& of a .ro.o&a" in
ritin$ &i$ne# an# #e"ivere# +y &ai# ."aintiff to t(e
#efen#ant, $'aranteein$ t(e tr't( of t(e &tate)ent&
!ontaine# t(erein (i!( &ai# .ro.o&a" i& referre# to
in t(e &ai# .o"i!y of in&'ran!e )a#e a .art t(ereof;
t(at !ertain of t(e &tate)ent& an# re.re&entation&
!ontaine# in &ai# .ro.o&a" an# arrante# +y &ai#
."aintiff to +e tr'e, to itH @aA t(e .ri!e .ai# +y t(e
INSURANCE Page 46
.ro.o&er for t(e &ai# a'to)o+i"e; @bA t(e va"'e of
&ai# a'to)o+i"e at t(e ti)e of t(e e%e!'tion an#
#e"ivery of t(e &ai# .ro.o&a" an# @cA t(e oner&(i. of
&ai# a'to)o+i"e, ere fa"&e an# 2non to +e fa"&e +y
t(e &ai# ."aintiff at t(e ti)e of &i$nin$ an# #e"iverin$
t(e &ai# .ro.o&a" an# ere )a#e for t(e .'r.o&e of
)i&"ea#in$ an# #e!eivin$ t(e #efen#ant, an#
in#'!in$ t(e #efen#ant, re"yin$ '.on t(e arrantie&,
&tate)ent&, an# re.re&entation& !ontaine# in t(e
&ai# .ro.o&a" an# +e"ievin$ t(e &a)e to +e tr'e,
i&&'e# t(e &ai# .o"i!y of in&'ran!e-
, T(e evi#en!e &(o& t(at 1er)ano&, t(e Mani"a
a$ent& for t(e St'#e+a2er a'to)o+i"e, &o"# t(e
a'to)o+i"e to Can&on for P3,200 @te&ti)ony of Mr-
Eie("A; (o &o"# t(e &ai# a'to)o+i"e to 1enry
1ar#in$ for t(e &') of P4,900- 1ar#in$ &o"# t(e &ai#
a'to)o+i"e to G- Branni$an for t(e &') of P2,000
(o &o"# t(e &ai# a'to)o+i"e 1enry 1ar#in$ for t(e
&') of P2,600; 1enry 1ar#in$ $ave t(e &ai#
a'to)o+i"e to (i& ife a& a .re&ent; t(at &ai#
a'to)o+i"e a& re.aire# an# re.ainte# at t(e /'neta
Gara$e at a !o&t of &o)e P500; t(at (i"e t(e &ai#
a'to)o+i"e a& at t(e /'neta Gara$e; t(e "atter
&o"i!ite# of Mr&- 1ar#in$ t(e in&'ran!e of &ai#
a'to)o+i"e +y t(e Co).any; t(at a .ro.o&a" a&
fi""e# o't +y t(e &ai# a$ent an# &i$ne# +y t(e ."aintiff
Mr&- 1enry >- 1ar#in$, an# in &ai# .ro.o&a" 'n#er
t(e (ea#in$ PPri!e .ai# +y .ro.o&er,P i& t(e a)o'nt
of P3,900P an# 'n#er anot(er (ea#in$ PPre&ent
va"'eP i& t(e a)o'nt of P3,000P-
, After t(e &ai# .ro.o&a" a& )a#e a re.re&entative
of t(e Mani"a a$ent of #efen#ant ent to t(e /'neta
Gara$e an# e%a)ine# &ai# a'to)o+i"e an# Mr-
Server, t(e Genera" Mana$er of t(e /'neta Gara$e,
an e%.erien!e# a'to)o+i"e )e!(ani!, te&tifie# t(at
at t(e ti)e t(i& a'to)o+i"e a& in&'re# it a& ort(
a+o't P3,000, an# t(e #efen#ant, +y an# t(ro'$( it&
&ai# a$ent S)it(, Be"" S Co).any @"i)ite#A,
t(ereafter i&&'e# a .o"i!y of in&'ran!e '.on .ro.o&a"
in (i!( .o"i!y t(e &ai# a'to)o+i"e a& #e&!ri+e# a&
of t(e P.re&ent va"'eP of P3,000 an# t(e &ai#
#efen#ant !(ar$e# t(e &ai# ."aintiff Mr&- 1enry >-
1ar#in$ a& .re)i') on &ai# .o"i!y t(e &') of P490,
or 9 .er !ent of t(e t(en e&ti)ate# va"'e of P3,000-
, T(e PS!(e#'"eP in &ai# .o"i!y of in&'ran!e #e&!ri+e&
t(e a'to)o+i"e (ere in ;'e&tion, an# .rovi#e& in .art
of fo""o&H
PT(at #'rin$ t(e .erio# a+ove &et fort( an# #'rin$
any .erio# for (i!( t(e !o).any )ay a$ree to
rene t(i& .o"i!y t(e !o).any i"" &'+Je!t to t(e
e%!e.tion an# !on#ition& !ontaine# (erein or
en#or&e# (ereon in#e)nify t(e in&'re# a$ain&t "o&&
of or #a)a$e to any )otor !ar #e&!ri+e# in t(e
&!(e#'"e (ereto @in!"'#in$ a!!e&&orie&A +y (atever
!a'&e &'!( "o&& or #a)a$e )ay +e o!!a&ione# an#
i"" f'rt(er in#e)nify t(e in&'re# '. to t(e va"'e of
t(e !ar or P3,000 (i!(ever i& t(e $reater a$ain&t
any !"ai) at !o))on "a )a#e +y any .er&on @not
+ein$ a .er&on in t(e &ai# )otor !ar nor in t(e
in&'re#N& &ervi!eA for "o&& of "ife or for a!!i#enta"
+o#i"y inJ'ry or #a)a$e to .ro.erty !a'&e# +y t(e
&ai# )otor !ar in!"'#in$ "a !o&t& .aya+"e in
!onne!tion it( &'!( !"ai) (en in!'rre# it( t(e
!on&ent of t(e !o).any-P
, On Mar!( 2D, 4546, t(e &ai# a'to)o+i"e a& tota""y
#e&troye# +y fire, an# t(at t(e iron an# &tee"
.ortion& of &ai# a'to)o+i"e (i!( #i# not +'rn ere
ta2en into t(e .o&&e&&ion of t(e #efen#ant +y an#
t(ro'$( it& a$ent S)it(, Be"" S Co).any @"i)ite#A,
an# &o"# +y it for a &)a"" &'), (i!( (a# never +een
ten#ere# to t(e ."aintiff .rior to t(e tria" of t(i& !a&e,
+'t in o.en !o'rt #'rin$ t(e tria" t(e &') of P40 a&
t(e .ro!ee#& of &'!( &a"e a& ten#ere# to ."aintiff
an# ref'&e#-
, Tria" J'#$e #e!i#e# t(at t(ere a& no .roof of fra'#
on t(e .art of ."aintiff in (er &tate)ent of t(e va"'e
of t(e a'to)o+i"e, or it( re&.e!t to it& oner&(i.;
t(at &(e (a# an in&'ra+"e intere&t t(erein; an# t(at
#efen#ant, (avin$ a$ree# to t(e e&ti)ate# va"'e,
P3,000, an# (avin$ in&'re# t(e a'to)o+i"e for t(at
a)o'nt, '.on t(e +a&i& of (i!( t(e .re)i') a&
.ai#, i& +o'n# +y it an# )'&t .ay t(e "o&& in
a!!or#an!e it( t(e &ti.'"ate# in&'re# va"'e-
ISSUE
4- 0ON Mr&- 1ar#in$ a& not t(e oner of t(e
a'to)o+i"e at t(e ti)e of t(e i&&'an!e of t(e .o"i!y,
an#, t(erefore, (a# no in&'ra+"e intere&t in it
2- 0ON t(e &tate)ent re$ar#in$ t(e !o&t of t(e
a'to)o+i"e a& a arranty, t(at t(e &tate)ent a&
fa"&e, an# t(at, t(erefore, t(e .o"i!y never atta!(e#
to t(e ri&2
HELD
4- NO
, Arti!"e 433D of t(e Civi" Co#e (i!( .rovi#e& t(at
PA"" $ift& +eteen &.o'&e& #'rin$ t(e )arria$e &(a""
+e voi#- Mo#erate $ift& (i!( t(e &.o'&e& +e&to on
ea!( ot(er on fe&tive #ay& of t(e fa)i"y are not
in!"'#e# in t(i& r'"e-P
, >ven a&&')in$ t(at #efen#ant )i$(t (ave invo2e#
arti!"e 433D a& a #efen&e, t(e +'r#en o'"# +e '.on
it to &(o t(at t(e $ift in ;'e&tion #oe& not fa""
it(in t(e e%!e.tion t(erein e&ta+"i&(e#- 0e !annot
&ay, a& a )atter of "a, t(at t(e $ift of an
a'to)o+i"e +y a ('&+an# to (i& ife i& not a
)o#erate one- 0(et(er it i& or i& not o'"# #e.en#
'.on t(e !ir!')&tan!e& of t(e .artie&, a& to (i!(
not(in$ i& #i&!"o&e# +y t(e re!or#-
, 0e are of t(e o.inion t(at it o'"# +e 'nfair to (o"#
t(e .o"i!y voi# &i)."y +e!a'&e t(e o't"ay
re.re&ente# +y t(e a'to)o+i"e a& )a#e +y t(e
."aintiffN& ('&+an# an# not +y (i& ife, to (o) (e
(a# $iven t(e a'to)o+i"e- It !annot +e a&&')e# t(at
#efen#ant &(o'"# not (ave i&&'e# t(e .o"i!y 'n"e&& it
ere &tri!t"y tr'e t(at t(e .ri!e re.re&entin$ t(e !o&t
of t(e )a!(ine (a# +een .ai# +y t(e in&'re# an# +y
no ot(er .er&on % t(at it o'"# no event in&'re an
a'to)o+i"e a!;'ire# +y $ift, in(eritan!e, e%!(an$e,
or any ot(er tit"e not re;'irin$ t(e oner to )a2e a
&.e!ifi! !a&( o't"ay for it& a!;'i&ition-
2- NO
, It (a& not +een &(on +y t(e evi#en!e t(at t(e
&tate)ent a& fa"&e; on t(e !ontrary e +e"ieve t(at
it &(o& t(at t(e a'to)o+i"e (a# in fa!t !o&t )ore
t(an t(e a)o'nt )entione#- T(e !o'rt +e"o fo'n#,
an# t(e evi#en!e &(o&, t(at t(e a'to)o+i"e a&
+o'$(t +y ."aintiffN& ('&+an# a fe ee2& +efore t(e
i&&'an!e of t(e .o"i!y in ;'e&tion for t(e &') of
P2,600, an# t(at +eteen t(at ti)e an# t(e i&&'an!e
of t(e .o"i!y &o)e P500 a& &.ent '.on it in re.air&
an# re.aintin$-
, T(e itne&& Server, an e%.ert a'to)o+i"e
)e!(ani!, te&tifie# t(at t(e a'to)o+i"e a&
.ra!ti!a""y a& $oo# a& ne at t(e ti)e t(e in&'ran!e
a& effe!te#- T(e for) of .ro.o&a" '.on (i!( t(e
.o"i!y a& i&&'e# #oe& not !a"" for a &tate)ent
re$ar#in$ t(e va"'e of t(e a'to)o+i"e at t(e ti)e of
it& a!;'i&ition +y t(e a.."i!ant for t(e in&'ran!e, +'t
)ere"y a &tate)ent of it& !o&t- T(e a)o'nt &tate#
a& "e&& t(an t(e a!t'a" o't"ay (i!( t(e a'to)o+i"e
re.re&ente# to Mr- 1ar#in$, in!"'#in$ re.air&, (en
t(e in&'ran!e .o"i!y a& i&&'e#-
, T(e !o'rt +e"o fo'n# an# t(e evi#en!e &(o&,
it(o't #i&.'te, t(at t(e .ro.o&a" '.on (i!( t(e
.o"i!y in ;'e&tion a& i&&'e# a& )a#e o't +y
#efen#antN& a$ent +y (o) t(e in&'ran!e a&
&o"i!ite#, an# t(at a..e""ee &i)."y &i$ne# t(e &a)e-
It a"&o a..ear& t(at an e%a)iner e)."oye# +y t(e
#efen#ant )a#e an in&.e!tion of t(e a'to)o+i"e
+efore t(e a!!e.tan!e of t(e ri&2, an# t(at t(e &')
after t(i& e%a)ination- T(e tria" !o'rt fo'n# t(at Mr&-
1ar#in$, in fi%in$ t(e va"'e of t(e a'to)o+i"e at
P3,000, a!te# '.on infor)ation $iven (er +y (er
('&+an# an# +y Mr- Server, t(e )ana$er of t(e
/'neta Gara$e- S(e )ere"y re.eate# t(e infor)ation
INSURANCE Page 47
(i!( (a# +een $iven (er +y (er ('&+an#, an# at
t(e &a)e ti)e #i&!"o&e# to #efen#antN& a$ent t(e
&o'r!e of (er infor)ation- T(ere i& no evi#en!e to
&'&tain t(e !ontention t(at t(i& !o))'ni!ation a&
)a#e in +a# fait(- 0e #o not t(in2 t(at t(e fa!t&
&tate# in t(e .ro.o&a" !an +e (e"# a& a arranty of
t(e in&'re#, even if it &(o'"# (ave +een &(on t(at
t(ey ere in!orre!t in t(e a+&en!e of .roof of i""f'"
)i&&tate)ent- Un#er &'!( !ir!')&tan!e, t(e
.ro.o&a" i& to +e re$ar#e# a& t(e a!t of t(e in&'rer
an# not of t(e in&'re#-
Disposition P"aintiff a& t(e oner of t(e
a'to)o+i"e in ;'e&tion an# (a# an in&'ra+"e intere&t
t(erein; t(at t(ere a& no fra'# on (er .art in
.ro!'rin$ t(e in&'ran!e; t(at t(e va"'ation of t(e
a'to)o+i"e, for t(e .'r.o&e& of t(e in&'ran!e, i&
+in#in$ '.on t(e #efen#ant !or.oration, an# t(at t(e
J'#$)ent of t(e !o'rt +e"o i&, t(erefore, !orre!t
an# )'&t +e affir)e#, it( intere&t, t(e !o&t& of t(i&
a..ea" to +e .ai# +y t(e a..e""ant-
WHITE GOLD MARINE SERVICES $. PIONEER
INSURANCE
D6D SC<A DD6
QUISUMBING; G'"y 26, 2009
NATURE
T(i& .etition for revie a&&ai"& t(e Ee!i&ion of t(e
Co'rt of A..ea"&, affir)in$ t(e Ee!i&ion of t(e
In&'ran!e Co))i&&ion- Bot( #e!i&ion& (e"# t(at
t(ere a& no vio"ation of t(e In&'ran!e Co#e an# t(e
re&.on#ent& #o not nee# "i!en&e a& in&'rer an#
in&'ran!e a$entR+ro2er-
FACTS
, 0(ite Go"# .ro!'re# a .rote!tion an# in#e)nity
!overa$e for it& ve&&e"& fro) Stea)&(i. M't'a"
t(ro'$( Pioneer In&'ran!e- S'+&e;'ent"y, 0(ite
Go"# a& i&&'e# a Certifi!ate of >ntry an#
A!!e.tan!e- Pioneer a"&o i&&'e# re!ei.t& evi#en!in$
.ay)ent& for t(e !overa$e- 0(en 0(ite Go"# fai"e#
to f'""y .ay it& a!!o'nt&, Stea)&(i. M't'a" ref'&e#
to rene t(e !overa$e-
, Stea)&(i. M't'a" t(ereafter fi"e# a !a&e a$ain&t
0(ite Go"# for !o""e!tion of &') of )oney to re!over
t(e "atter=& 'n.ai# +a"an!e- 0(ite Go"# on t(e ot(er
(an#, fi"e# a !o)."aint +efore t(e In&'ran!e
Co))i&&ion !"ai)in$ t(at Stea)&(i. M't'a" vio"ate#
Se!tion& 466 an# 46C of t(e In&'ran!e Co#e, (i"e
Pioneer vio"ate# Se!tion& 255, 300 an# 304 in
re"ation to Se!tion& 302 an# 303, t(ereof-
, T(e In&'ran!e Co))i&&ion #i&)i&&e# t(e
!o)."aint- It &ai# t(at t(ere a& no nee# for
Stea)&(i. M't'a" to &e!'re a "i!en&e +e!a'&e it a&
not en$a$e# in t(e in&'ran!e +'&ine&&- It e%."aine#
t(at Stea)&(i. M't'a" a& a Prote!tion an#
In#e)nity C"'+ @P S I C"'+A- /i2ei&e, Pioneer nee#
not o+tain anot(er "i!en&e a& in&'ran!e a$ent an#Ror
a +ro2er for Stea)&(i. M't'a" +e!a'&e Stea)&(i.
M't'a" a& not en$a$e# in t(e in&'ran!e +'&ine&&-
Moreover, Pioneer a& a"rea#y "i!en&e#, (en!e, a
&e.arate "i!en&e &o"e"y a& a$entR+ro2er of Stea)&(i.
M't'a" a& a"rea#y &'.erf"'o'&-
, T(e Co'rt of A..ea"& affir)e# t(e #e!i&ion of t(e
In&'ran!e Co))i&&ioner- In it& #e!i&ion, t(e
a..e""ate !o'rt #i&tin$'i&(e# +eteen P S I C"'+&
vis-N-vis !onventiona" in&'ran!e- T(e a..e""ate !o'rt
a"&o (e"# t(at Pioneer )ere"y a!te# a& a !o""e!tion
a$ent of Stea)&(i. M't'a"-
ISSUES
4- 0ON Stea)&(i. M't'a", a P S I C"'+, i& en$a$e#
in t(e in&'ran!e +'&ine&& in t(e P(i"i..ine&
2- 0ON Pioneer nee#& a "i!en&e a& an in&'ran!e
a$entR+ro2er for Stea)&(i. M't'a"
HELD
4- F>S
, T(e te&t to #eter)ine if a !ontra!t i& an in&'ran!e
!ontra!t or not, #e.en#& on t(e nat're of t(e
.ro)i&e, t(e a!t re;'ire# to +e .erfor)e#, an# t(e
e%a!t nat're of t(e a$ree)ent in t(e "i$(t of t(e
o!!'rren!e, !ontin$en!y, or !ir!')&tan!e& 'n#er
(i!( t(e .erfor)an!e +e!o)e& re;'i&ite- It i& not
+y (at it i& !a""e#- Ba&i!a""y, an in&'ran!e !ontra!t
i& a !ontra!t of in#e)nity- In it, one 'n#erta2e& for
a !on&i#eration to in#e)nify anot(er a$ain&t "o&&,
#a)a$e or "ia+i"ity ari&in$ fro) an 'n2non or
!ontin$ent event-
, In .arti!'"ar, a )arine in&'ran!e 'n#erta2e& to
in#e)nify t(e a&&'re# a$ain&t )arine "o&&e&, &'!( a&
t(e "o&&e& in!i#ent to a )arine a#vent're- Se!tion 55
of t(e In&'ran!e Co#e en')erate& t(e !overa$e of
)arine in&'ran!e-
, <e"ate#"y, a )'t'a" in&'ran!e !o).any i& a
!oo.erative enter.ri&e (ere t(e )e)+er& are +ot(
t(e in&'rer an# in&'re#- In it, t(e )e)+er& a""
!ontri+'te, +y a &y&te) of .re)i')& or
a&&e&&)ent&, to t(e !reation of a f'n# fro) (i!( a""
"o&&e& an# "ia+i"itie& are .ai#, an# (ere t(e .rofit&
are #ivi#e# a)on$ t(e)&e"ve&, in .ro.ortion to t(eir
intere&t- A##itiona""y, )'t'a" in&'ran!e a&&o!iation&,
or !"'+&, .rovi#e t(ree ty.e& of !overa$e, na)e"y,
.rote!tion an# in#e)nity, ar ri&2&, an# #efen&e
!o&t&-
, A P S I C"'+ i& 7a for) of in&'ran!e a$ain&t t(ir#
.arty "ia+i"ity, (ere t(e t(ir# .arty i& anyone ot(er
t(an t(e P S I C"'+ an# t(e )e)+er&-8 By #efinition
t(en, Stea)&(i. M't'a" a& a P S I C"'+ i& a )'t'a"
in&'ran!e a&&o!iation en$a$e# in t(e )arine
in&'ran!e +'&ine&&-
, T(e re!or#& revea" Stea)&(i. M't'a" i& #oin$
+'&ine&& in t(e !o'ntry a"+eit it(o't t(e re;'i&ite
!ertifi!ate of a't(ority )an#ate# +y Se!tion 46C of
t(e In&'ran!e Co#e- It )aintain& a re&i#ent a$ent in
t(e P(i"i..ine& to &o"i!it in&'ran!e an# to !o""e!t
.ay)ent& in it& +e(a"f- 0e note t(at Stea)&(i.
M't'a" even renee# it& P S I C"'+ !over 'nti" it a&
!an!e""e# #'e to non,.ay)ent of t(e !a""&- T('&, to
!ontin'e #oin$ +'&ine&& (ere, Stea)&(i. M't'a" or
t(ro'$( it& a$ent Pioneer, )'&t &e!'re a "i!en&e
fro) t(e In&'ran!e Co))i&&ion-
, Sin!e a !ontra!t of in&'ran!e invo"ve& .'+"i!
intere&t, re$'"ation +y t(e State i& ne!e&&ary- T('&,
no in&'rer or in&'ran!e !o).any i& a""oe# to
en$a$e in t(e in&'ran!e +'&ine&& it(o't a "i!en&e or
a !ertifi!ate of a't(ority fro) t(e In&'ran!e
Co))i&&ion-
2- F>S
, S>C- 255 - - -
, No .er&on &(a"" a!t a& an in&'ran!e a$ent or a& an
in&'ran!e +ro2er in t(e &o"i!itation or .ro!'re)ent of
a.."i!ation& for in&'ran!e, or re!eive for &ervi!e& in
o+tainin$ in&'ran!e, any !o))i&&ion or ot(er
!o).en&ation fro) any in&'ran!e !o).any #oin$
+'&ine&& in t(e P(i"i..ine& or any a$ent t(ereof,
it(o't fir&t .ro!'rin$ a "i!en&e &o to a!t fro) t(e
Co))i&&ioner, (i!( )'&t +e renee# ann'a""y on
t(e fir&t #ay of Gan'ary, or it(in &i% )ont(&
t(ereafter-
Disposition T(e .etition i& PA<TIA//F G<ANT>E-
T(e Ee!i&ion #ate# G'"y 30, 2002 of t(e Co'rt of
A..ea"& affir)in$ t(e Ee!i&ion #ate# May 3, 2000 of
t(e In&'ran!e Co))i&&ion i& (ere+y <>M><S>E ANE
S>T ASIE>- T(e Stea)&(i. M't'a" Un#erritin$
A&&o!iation @Ber)'#aA /t#-, an# Pioneer In&'ran!e
an# S'rety Cor.oration are O<E><>E to o+tain
"i!en&e& an# to &e!'re .ro.er a't(ori:ation& to #o
+'&ine&& a& in&'rer an# in&'ran!e a$ent,
re&.e!tive"y- T(e .etitioner=& .rayer for t(e
revo!ation of Pioneer=& Certifi!ate of A't(ority an#
re)ova" of it& #ire!tor& an# offi!er&, i& E>NI>E-
PANDIMAN $. MARINE MANNING MNGT CORP.
D60 SC<A D46
INSURANCE Page 48
GA<CIA; G'ne 24, 2009
NATURE
Petition for !ertiorari to revie CA #e!i&ion
FACTS
, Benito Sin$(i# a& (ire# a& !(ief !oo2 on +oar# t(e
ve&&e" MM S'n <i!(ie *ive for a ter) of one year +y
*'""in Mariti)e /i)ite# t(ro'$( it& P(i"i..ine a$ent,
Marine Mannin$ an# Mana$e)ent Cor.oration- 0(i"e
t(e &ai# ve&&e" a& on it& ay to S(an$(ai fro) 1o
C(i( Min( City, Benito &'ffere# a (eart atta!2 an#
&'+&e;'ent"y #ie# on G'ne 2D, 455C-
, A..arent"y, t(e ve&&e" an# t(e !re ere in&'re#
it( O!ean Marine M't'a" In&'ran!e A&&o!iation
/i)ite# @OMMIA/A, a Prote!tive an# In#e)nity C"'+
of (i!( S'n <i!(ie *ive B'"2er& S-A- i& a )e)+er-
Pan#i)an P(i"i..ine&, t(e .etitioner, i& t(e "o!a"
!orre&.on#ent of OMMIA/-
, Benito=& i#o, <o&ita, fi"e# a !"ai) for #eat(
+enefit& it( Marine (i!( referre# (er to Pan#i)an-
After (er &'+)i&&ion of t(e re;'ire# #o!')entation,
Pan#i)an re!o))en#e# .ay)ent of t(e #eat(
+enefit& a)o'ntin$ to TC5,000- 1oever, .ay)ent
(a& not +een )a#e-
, <o&ita fi"e# a !o)."aint it( t(e /a+or Ar+iter
na)in$ Marine, Pan#i)an, OMMIA/, an# *'""in a&
re&.on#ent&- T(e Ar+iter or#ere# a"" t(e
re&.on#ent&, e%!e.t Pan#i)an, to Joint"y an#
&evera""y .ay t(e i#o t(e #eat( +enefit& ."'& "e$a"
fee&- T(e N/<C, on a..ea" +y Marine, "i)ite# t(e
"ia+"e .artie& to Pan#i)an an# OMMIA/ +'t
)aintaine# t(e )oney aar#- T(e CA &'&taine# t(e
#e!i&ion of t(e N/<C- 1en!e t(i& a..ea"-
ISSUE
4- 0ON Pan#i)an )ay +e (e"# "ia+"e for t(e #eat(
+enefit&
2- 0ON Marine an# it& forei$n .rin!i.a", *'""in,
&(o'"# +e a+&o"ve# fro) t(e #eat( !"ai) "ia+i"itie&
HELD
4- NO
, Pan#i)an i& not an in&'ran!e a$ent a& #efine# +y
Se!tion 300
C
of t(e In&'ran!e Co#e- In t(i& !a&e,
t(ere a& no &(oin$ t(at Pn#i)an in fa!t
ne$otiate# t(e in&'ran!e !ontra!t +eteen S'n
7
>ection 3--. Any person who for compensation solicits or obtains on behalf of any insurance
company transmits for a person other than himself an application for a policy or contract of
insurance to or from such company or offers or assumes to act in the negotiating of such insurance
shall be an insurance agent within the intent of this section and shall thereby become liable to all
the duties, re"uirements, liabilities, and penalties to which an insurance agent is sub?ect.
<i!(ie *ive an# t(e in&'rer OMMIA/- >ven, if
Pan#i)an ere an a$ent, .ay)ent for !"ai)& ari&in$
fro) .eri" in&'re# a$ain&t, to (i!( t(e in&'rer i&
"ia+"e, i& #efinite"y not one of t(e "ia+i"itie& of an
in&'ran!e a$ent- T('&, t(ere i& no "e$a" +a&i&
(at&oever for (o"#in$ .etitioner &o"i#ari"y "ia+"e it(
in&'rer OMMIA/ for t(e i#o=& !"ai) for #eat(
+enefit&- A"&o, Pan#i)an i& not a .arty to t(e
in&'ran!e !ontra!t an# (en!e 'n#er Arti!"e 4344 of
t(e Civi" Co#e, it i& not "ia+"e for t(e o+"i$ation
ari&in$ o't of t(e in&'ran!e !ontra!t-
2- NO
, *'""in, a& Benito=& .rin!i.a" e)."oyer i& "ia+"e
'n#er t(e e)."oy)ent !ontra!t- Marine i& a"&o
+o'n# +y it& 'n#erta2in$ .'r&'ant to t(e <'"e& an#
<e$'"ation& Governin$ Over&ea& >)."oy)ent t(at 7it
&(a"" a&&')e Joint an# &o"i#ary "ia+i"ity it( t(e
e)."oyer for a"" t(e !"ai)& an# "ia+i"itie& (i!( )ay
ari&e in !onne!tion it( t(e i)."e)entation of t(e
!ontra!t, in!"'#in$ +'t not "i)ite# to t(e .ay)ent of
a$e&, (eat( an# #i&a+i"ity !o).en&ation an#
re.atriation8- In ot(er or#&, +ot( *'""in an#
Marine &(o'"# +e (e"# "ia+"e for (atever #eat(
+enefit& t(e i#o of Benito )ay +e entit"e# to-
Disposition T(e .etition i& $rante# an# t(e CA
#e!i&ion i& rever&e# an# &et a&i#e-
FILIPINAS COMPANIA DE SEGUROS V
CHRISTERN, HUENEFELD AND CO INC
65 P1I/ 9D
PA<AS; May 29, 4594
FACTS
, O!to+er 4, 45D4 , C(ri&tern 1'enefe"#, S Co-, In!-,
after .ay)ent of !orre&.on#in$ .re)i'), o+taine#
fro) t(e *i"i.ina& Cia- #e Se$'ro& a fire .o"i!y in t(e
&') of P4000,000, !overin$ )er!(an#i&e !ontaine#
in No- C44 <o)an Street, Binon#o Mani"a-
, *e+r'ary 2C, 45D2 or #'rin$ t(e Ga.ane&e )i"itary
o!!'.ation , +'i"#in$ an# in&'re# )er!(an#i&e ere
+'rne#- In #'e ti)e t(e 1'enefe"# Co &'+)itte# to
t(e *i"i.ina& Cia it& !"ai) 'n#er t(e .o"i!y- T(e
&a"va$e $oo#& ere &o"# at .'+"i! a'!tion an#, after
#e#'!tin$ t(eir va"'e, t(e tota" "o&& &'ffere# +y t(e
re&.on#ent a& fi%e# at P52,690-
, *i"i.ina& Cia ref'&e# to .ay t(e !"ai) on t(e $ro'n#
t(at t(e .o"i!y in favor of t(e re&.on#ent (a# !ea&e#
to +e in for!e on t(e #ate t(e Unite# State& #e!"are#
ar a$ain&t Ger)any, t(e re&.on#ent Cor.oration
@t(o'$( or$ani:e# 'n#er an# +y virt'e of t(e "a& of
t(e P(i"i..ine&A +ein$ !ontro""e# +y t(e Ger)an
&'+Je!t& an# t(e *i"i.ina& Cia +ein$ a !o).any 'n#er
A)eri!an J'ri&#i!tion (en &ai# .o"i!y a& i&&'e# on
O!to+er 4, 45D4- *i"i.ina& Cia, (oever, in .'r&'an!e
of t(e or#er of t(e Eire!tor of B'rea' of *inan!in$,
P(i"i..ine >%e!'tive Co))i&&ion, #ate# A.ri" 5,
45D3, .ai# to t(e 1'enefe"# Co t(e &') of P52,690
on A.ri" 45, 45D3-
, A'$'&t 6, 45D6 L a!tion fi"e# in C*I Mani"a to
re!over fro) t(e 1'enefe"# Co t(e &') of P52,690
a+ove )entione#- T(e t(eory of t(e *i"i.ina& Cia i&
t(at t(e in&'re# )er!(an#i&e ere +'rne# '. after
t(e .o"i!y i&&'e# in 45D4 in favor of 1'enefe"# Co
(a& !ea&e# to +e effe!tive +e!a'&e of t(e o't+rea2 of
t(e ar +eteen t(e Unite# State& an# Ger)any on
Ee!e)+er 40, 45D4, an# t(at t(e .ay)ent )a#e +y
t(e *i"i.ina& Cia to 1'enefe"# Co #'rin$ t(e Ga.ane&e
)i"itary o!!'.ation a& 'n#er .re&&'re-
, C*IH #i&)i&&e# t(e a!tion it(o't .rono'n!e)ent
a& to !o&t&-
, CAH C*I J'#$)ent affir)e#, it( !o&t&- T(e !a&e i&
no +efore '& on a..ea" +y certiorari fro) t(e
#e!i&ion of t(e Co'rt of A..ea"&-
ISSUE
0ON t(e .o"i!y in ;'e&tion +e!a)e n'"" an# voi#
'.on t(e #e!"aration of ar +eteen Unite# State&
an# Ger)any
HELD
F>S
Ratio T(e P(i"i..ine In&'ran!e /a @A!t No- 2D2C,
a& a)en#e#,A in &e!tion 6, .rovi#e& t(at Panyone
e%!e.t a .'+"i! ene)y )ay +e in&'re#-P It &tan#& to
rea&on t(at an in&'ran!e .o"i!y !ea&e& to +e
a""oa+"e a& &oon a& an in&'re# +e!o)e& a .'+"i!
ene)y-
O Affect of ,ar$ "enerally. , A"" inter!o'r&e
+eteen !iti:en& of +e""i$erent .oer& (i!( i&
in!on&i&tent it( a &tate of ar i& .ro(i+ite# +y
t(e "a of nation&- S'!( .ro(i+ition in!"'#e& a""
ne$otiation&, !o))er!e, or tra#in$ it( t(e
ene)y; a"" a!t& (i!( i"" in!rea&e, or ten# to
in!rea&e, it& in!o)e or re&o'r!e&; a"" a!t& of
vo"'ntary &'+)i&&ion to it; or re!eivin$ it&
.rote!tion; a"&o a"" a!t& !on!ernin$ t(e
tran&)i&&ion of )oney or $oo#&; an# a"" !ontra!t&
re"atin$ t(ereto are t(ere+y n'""ifie#- It f'rt(er
.ro(i+it& in&'ran!e '.on tra#e it( or +y t(e
ene)y, '.on t(e "ife or "ive& of a"ien& en$a$e# in
&ervi!e it( t(e ene)y; t(i& for t(e rea&on t(at
t(e &'+Je!t& of one !o'ntry !annot +e .er)itte# to
"en# t(eir a&&i&tan!e to .rote!t +y in&'ran!e t(e
!o))er!e or .ro.erty of +e""i$erent, a"ien
INSURANCE Page 49
&'+Je!t&, or to #o anyt(in$ #etri)enta" too t(eir
!o'ntryN& intere&t- T(e .'r.o&e of ar i& to !ri.."e
t(e .oer an# e%(a'&t t(e re&o'r!e& of t(e
ene)y, an# it i& in!on&i&tent t(at one !o'ntry
&(o'"# #e&troy it& ene)yN& .ro.erty an# re.ay in
in&'ran!e t(e va"'e of (at (a& +een &o
#e&troye#, or t(at it &(o'"# in &'!( )anner
in!rea&e t(e re&o'r!e& of t(e ene)y, or ren#er it
ai#, an# t(e !o))en!e)ent of ar #eter)ine&,
for "i2e rea&on&, a"" tra#in$ inter!o'r&e it( t(e
ene)y, (i!( .rior t(ereto )ay (ave +een "af'"-
A"" in#ivi#'a"& t(erefore, (o !o).o&e t(e
+e""i$erent .oer&, e%i&t, a& to ea!( ot(er, in a
&tate of 'tter e%!"'&ion, an# are .'+"i! ene)ie&- @6
Co'!(, Cy!- of In&- /a, ..- 9392,9393-A
B In t(e !a&e of an or#inary fire .o"i!y, (i!(
$rant& in&'ran!e on"y fro) year, or for &o)e ot(er
&.e!ifie# ter) it i& ."ain t(at (en t(e .artie&
+e!o)e a"ien ene)ie&, t(e !ontra!t'a" tie i&
+ro2en an# t(e !ontra!t'a" ri$(t& of t(e .artie&, so
far as not vested - "o&t- @Man!e, t(e /a on
In&'ran!e, Se!- DD, .- 442-A
Reasoning
, T(e Co'rt of A..ea"& overr'"e# t(e !ontention of
t(e .etitioner t(at t(e re&.on#ent !or.oration
+e!a)e an ene)y (en t(e Unite# State& #e!"are#
ar a$ain&t Ger)any, re"yin$ on >n$"i&( an#
A)eri!an !a&e& (i!( (e"# t(at a !or.oration i& a
!iti:en of t(e !o'ntry or &tate +y an# 'n#er t(e "a&
of (i!( it a& !reate# or or$ani:e#- It reJe!te# t(e
t(eory t(at nationa"ity of .rivate !or.oration i&
#eter)ine# +y t(e !(ara!ter or !iti:en&(i. of it&
!ontro""in$ &to!2(o"#er&-
, T(ere i& no ;'e&tion t(at )aJority of t(e
&to!2(o"#er& of t(e re&.on#ent !or.oration ere
Ger)an &'+Je!t&- T(erefore, 1'enefe"# Co +e!a)e
an ene)y !or.oration '.on t(e o't+rea2 of t(e ar
+eteen t(e Unite# State& an# Ger)any- T(e >n$"i&(
an# A)eri!an !a&e& re"ie# '.on +y t(e Co'rt of
A..ea"& (ave "o&t t(eir for!e in vie of t(e "ate&t
#e!i&ion of t(e S'.re)e Co'rt of t(e Unite# State& in
C"ar2 vs. Ue+er&ee *inan: Ior.oration, #e!i#e# on
Ee!e)+er 6, 45DC, in (i!( t(e !ontro"& te&t (a&
+een a#o.te#- In P>ne)y Cor.orationP +y Martin
Eo)2e, a .a.er .re&ente# to t(e Se!on#
Internationa" Conferen!e of t(e /e$a" Profe&&ion (e"#
at t(e 1a$'e @Net(er"an#&A in A'$'&t- 45D6 a"&o
#i&!'&&e# t(i& #i"e))a
B In C"ar2 vs. Ue+er&ee *inan: Ior.oration, A- G-,
#ea"in$ it( a Si&& !or.oration a""e$e#"y
!ontro""e# +y Ger)an intere&t, t(e Co'rtH PT(e
.ro.erty of a"" forei$n intere&t a& ."a!e# it(in
t(e rea!( of t(e ve&tin$ .oer @of t(e A"ien
Pro.erty C'&to#ianA not to a..ro.riate frien#"y or
ne'tra" a&&et& +'t to rea!( ene)y intere&t (i!(
)a&;'era#e# 'n#er t(o&e inno!ent front&- - - - T(e
.oer of &ei:'re an# ve&tin$ a& e%ten#e# to a""
.ro.erty of any forei$n !o'ntry or nationa" &o t(at
no inno!ent a..earin$ #evi!e !o'"# +e!o)e a
TroJan (or&e-P
, T(e re&.on#ent (avin$ +e!o)e an ene)y
!or.oration on Ee!e)+er 40, 45D4, t(e in&'ran!e
.o"i!y i&&'e# in it& favor on O!to+er 4, 45D4, +y t(e
.etitioner @a P(i"i..ine !or.orationA (a# !ea&e# to +e
va"i# an# enfor!i+"e, an# &in!e t(e in&'re# $oo#&
ere +'rne# after Ee!e)+er 40, 45D4, an# #'rin$
t(e ar, t(e re&.on#ent a& not entit"e# to any
in#e)nity 'n#er &ai# .o"i!y fro) t(e .etitioner-
1oever, e"e)entary r'"e& of J'&ti!e @in t(e a+&en!e
of &.e!ifi! .rovi&ion in t(e In&'ran!e /aA re;'ire
t(at t(e .re)i') .ai# +y t(e re&.on#ent for t(e
.erio# !overe# +y it& .o"i!y fro) Ee!e)+er 44,
45D4, &(o'"# +e ret'rne# +y t(e .etitioner-
Disposition t(e a..ea"e# #e!i&ion i& (ere+y
rever&e# an# t(e re&.on#ent !or.oration i& or#ere#
to .ay to t(e .etitioner t(e &') of PCC,206-33,
P(i"i..ine !'rren!y, "e&& t(e a)o'nt of t(e .re)i'),
in P(i"i..ine !'rren!y, t(at &(o'"# +e ret'rne# +y t(e
.etitioner for t(e 'ne%.ire# ter) of t(e .o"i!y in
;'e&tion, +e$innin$ Ee!e)+er 44, 45D4-
INSULAR LIFE ASSURANCE CO. $. EBRADO
60 SC<A 464
MA<TIN; O!to+er 26, 45CC
NATURE
A..ea" fro) J'#$)ent of <TC-
FACTS
, B'enavent'ra >+ra#o o+taine# a (o"e,"ife
in&'ran!e .o"i!y fro) In&'"ar, for P9,662-00 it( a
ri#er for a!!i#enta" #eat( +enefit& for t(e &a)e
a)o'nt- 1e #e&i$nate# Car.onia >+ra#o a& t(e
revo!a+"e +enefi!iary, referrin$ to (er a& t(e ife-
, Afterar#&, (e #ie# a& a re&'"t of an a!!i#ent (en
(e a& (it +y a fa""in$ +ran!( of a tree- Car.onia
fi"e# a !"ai) for t(e .ro!ee#& a& t(e #e&i$nate#
+enefi!iary in t(e .o"i!y, a"t(o'$( &(e a#)it& t(at
&(e an# B'enavent'ra ere )ere"y "ivin$ a& ('&+an#
an# ife it(o't t(e +enefit of )arria$e- T(e "e$a"
ife, Pa&!'a"a M#a Ee >+ra#o, a"&o fi"e# (er !"ai) a&
t(e i#o of t(e #e!ea&e#-
, In&'"ar t(en fi"e# an inter."ea#er in !o'rt @C*I
<i:a"A to #eter)ine to (o) t(e .ro!ee#& &(o'"# +e
.ai#- C*I #e!"are# t(at Car.onia a& #i&;'a"ifie#
fro) +e!o)in$ +enefi!iary of t(e in&'re# an#
#ire!tin$ t(e In&'"ar to .ay t(e .ro!ee#& to t(e
e&tate of B'enavent'ra-
ISSUE
4- 0ON a !o))on,"a ife na)e# a& +enefi!iary in
t(e in&'ran!e .o"i!y of a "e$a""y )arrie# )an !"ai)
t(e .ro!ee#& of t(e &a)e
HELD
4- NO
Ratio T(e .ro(i+ition t(at ('&+an# an# ife !annot
#onate to ea!( ot(er a.."ie& to !o))on,"a
re"ation&(i.&- A& t(e a..oint)ent of a +enefi!iary in
in&'ran!e )ay +e !on&i#ere# a #onation, one !annot
na)e a& +enefi!iary (i& !o))on,"a ife-
Reasoning
, It i& ;'ite 'nfort'nate t(at t(e In&'ran!e Co#e
#oe& not !ontain any &.e!ifi! .rovi&ion $ro&&"y
re&o"'tory of t(e .ri)e ;'e&tion at (an#-
, <at(er, $enera" r'"e& of !ivi" "a &(o'"# +e a.."ie#
to re&o"ve t(e i&&'e- Art-2044, CC &tate&H 7T(e
!ontra!t of in&'ran!e i& $overne# +y &.e!ia" "a&-
Matters not e8#ressly #rovided for in suc! s#ecial
la,s s!all be re"ulated by t!is Code-8 T('&, (en
not ot(eri&e &.e!ifi!a""y .rovi#e# for +y t(e
In&'ran!e /a, t(e !ontra!t of "ife in&'ran!e i&
$overne# +y t(e $enera" r'"e& of t(e !ivi" "a
re$'"atin$ !ontra!t&-
, A"&o, Art-2042 7any .er&on (o i& for+i##en fro)
re!eivin$ any #onation 'n#er Arti!"e C35 !annot +e
na)e# +enefi!iary of a "ife in&'ran!e .o"i!y +y t(e
.er&on (o !annot )a2e a #onation to (i)-8
Co))on,"a &.o'&e& are, #efinite"y, +arre# fro)
re!eivin$ #onation& fro) ea!( ot(er-
, Art-C35, CCH T(e fo""oin$ #onation& &(a"" +e voi#H
4- /!ose ade bet,een #ersons ,!o ,ere "uilty of
adultery or concubina"e at t!e tie of donationE
, In e&&en!e, a "ife in&'ran!e .o"i!y i& no #ifferent
fro) a !ivi" #onation in&ofar a& t(e +enefi!iary i&
!on!erne#- Bot( are fo'n#e# '.on t(e &a)e
!on&i#erationH "i+era"ity- A +enefi!iary i& "i2e a #onee,
+e!a'&e fro) t(e .re)i')& of t(e .o"i!y (i!( t(e
in&'re# .ay& o't of "i+era"ity, t(e +enefi!iary i""
re!eive t(e .ro!ee#& or .rofit& of &ai# in&'ran!e- A&
INSURANCE Page 50
a !on&e;'en!e, t(e .ro&!ri.tion in Art-C35 CC &(o'"#
e;'a""y o.erate in "ife in&'ran!e !ontra!t&- T(e
)an#ate of Art-2042 !annot +e "ai# a&i#eH any
.er&on (o !annot re!eive a #onation !annot +e
na)e# a& +enefi!iary in t(e "ife in&'ran!e .o"i!y of
t(e .er&on (o !annot )a2e t(e #onation-
, Po"i!y !on&i#eration& an# #i!tate& of )ora"ity
ri$(t"y J'&tify t(e in&tit'tion of a +arrier +eteen
!o))on,"a &.o'&e& in re$ar# to .ro.erty re"ation&
&in!e &'!( re"ation&(i. '"ti)ate"y en!roa!(e& '.on
t(e n'.tia" an# fi"ia" ri$(t& of t(e "e$iti)ate fa)i"y-
T(ere i& every rea&on to (o"# t(at t(e +ar in
#onation& +eteen "e$iti)ate &.o'&e& an# t(o&e
+eteen i""e$iti)ate one& &(o'"# +e enfor!e# in "ife
in&'ran!e .o"i!ie& &in!e t(e &a)e are +a&e# on
&i)i"ar !on&i#eration-
, So "on$ a& )arria$e re)ain& t(e t(re&(o"# of
fa)i"y "a&, rea&on an# )ora"ity #i!tate t(at t(e
i).e#i)ent& i).o&e# '.on )arrie# !o'."e &(o'"#
"i2ei&e +e i).o&e# '.on e%tra,)arita" re"ation&(i.-
If "e$iti)ate re"ation&(i. i& !ir!')&!ri+e# +y t(e&e
"e$a" #i&a+i"itie&, it( )ore rea&on &(o'"# an i""i!it
re"ation&(i. +e re&tri!te# +y t(e&e #i&a+i"itie&-
Disposition Ee!i&ion A**I<M>E-
CONSUEGRA $. GSIS
3C SC<A 349
?A/EIMA<; Gan'ary 30, 45C4
NATURE
A..ea" fro) t(e #e!i&ion of t(e Co'rt of *ir&t
In&tan!e of S'ri$ao #e" Norte aar#in$ t(e 6R46 .art
of t(e .ro!ee#& of t(e #e!ea&e# Con&'e$ra=&
retire)ent +enefit& to <o&ario Eia:-
FACTS
, T(e "ate Go&e Con&'e$ra, at t(e ti)e of (i& #eat(,
a& e)."oye# a& a &(o. fore)an of t(e offi!e of t(e
Ei&tri!t >n$ineer in t(e .rovin!e of S'ri$ao #e" Norte-
In (i& "ifeti)e, Con&'e$ra !ontra!te# to )arria$e&,
t(e fir&t it( (erein re&.on#ent <o&ario Eia:,
&o"e)ni:e# in t(e .ari&( !('r!( of San Ni!o"a& #e
To"entino, S'ri$ao, S'ri$ao, on G'"y 49, 453C, o't of
(i!( )arria$e ere +orn to !(i"#ren, na)e"y, Go&e
Con&'e$ra, Gr- an# Pe#ro Con&'e$ra, +'t +ot(
.re#e!ea&e# t(eir fat(er; an# t(e &e!on#, (i!( a&
!ontra!te# in $oo# fait( (i"e t(e fir&t )arria$e a&
&'+&i&tin$, it( (erein .etitioner Ba&i"ia Ber#in, on
May 4, 459C in t(e &a)e .ari&( an# )'ni!i.a"ity, o't
of (i!( )arria$e ere +orn &even !(i"#ren, na)e"y,
G'"iana, Pa!ita, Maria /o'r#e&, Go&e, <o#ri$o, /eni#a
an# /':, a"" &'rna)e# Con&'e$ra-
, Bein$ a )e)+er of t(e Govern)ent Servi!e
In&'ran!e Sy&te) @GSIS, for &(ortA (en Con&'e$ra
#ie# on Se.te)+er 26, 4569, t(e .ro!ee#& of (i& "ife
in&'ran!e 'n#er .o"i!y No- 604604 ere .ai# +y t(e
GSIS to .etitioner Ba&i"ia Ber#in an# (er !(i"#ren
(o ere t(e +enefi!iarie& na)e# in t(e .o"i!y-
, 1oever, Con&'e$ra #i# not #e&i$nate any
+enefi!iary (o o'"# re!eive t(e retire)ent
in&'ran!e +enefit& #'e to (i)- <e&.on#ent <o&ario
Eia:, t(e i#o +y t(e fir&t )arria$e, fi"e# a !"ai)
it( t(e GSIS a&2in$ t(at t(e retire)ent in&'ran!e
+enefit& +e .ai# to (er a& t(e on"y "e$a" (eir of
Con&'e$ra, !on&i#erin$ t(at t(e #e!ea&e# #i# not
#e&i$nate any +enefi!iary it( re&.e!t to (i&
retire)ent in&'ran!e +enefit&- Petitioner Ba&i"ia
Ber#in an# (er !(i"#ren, "i2ei&e, fi"e# a &i)i"ar !"ai)
it( t(e GSIS, a&&ertin$ t(at +ein$ t(e +enefi!iarie&
na)e# in t(e "ife in&'ran!e .o"i!y of Con&'e$ra, t(ey
are t(e on"y one& entit"e# to re!eive t(e retire)ent
in&'ran!e +enefit& #'e t(e #e!ea&e# Con&'e$ra-
<e&o"vin$ t(e !onf"i!tin$ !"ai)&, t(e GSIS r'"e# t(at
t(e "e$a" (eir& of t(e "ate Go&e Con&'e$ra ere
<o&ario Eia:, (i& i#o +y (i& fir&t )arria$e (o i&
entit"e# to one,(a"f, or 6R46, of t(e retire)ent
in&'ran!e +enefit&, on t(e one (an#; an# Ba&i"ia
Ber#in, (i& i#o +y t(e &e!on# )arria$e an# t(eir
&even !(i"#ren, on t(e ot(er (an#, (o are entit"e#
to t(e re)ainin$ one,(a"f, or 6R46, ea!( of t(e) to
re!eive an e;'a" &(are of 4R46-
, Ei&&ati&fie# it( t(e fore$oin$ r'"in$ an#
a..ortion)ent )a#e +y t(e GSIS, Ba&i"ia Ber#in an#
(er !(i"#ren fi"e# on O!to+er 40, 4566 a .etition for
)an#a)'& it( .re"i)inary inJ'n!tion in t(e Co'rt of
*ir&t In&tan!e of S'ri$ao-
, T(e C*I of S'ri$ao r'"e# in favor of re&.on#ent
<o&ario Eia: an# '.(e"# t(e r'"in$ of GSIS in a""
a&.e!t- T('&, Ba&i"ia Ber#in an# (er !(i"#ren
a..ea"e# &ai# #e!i&ion to t(e S'.re)e Co'rt-
ISSUE
0ON GSIS a& !orre!t in aar#in$ (a"f of t(e
retire)ent +enefit of t(e #e!ea&e# to <o&ario Eia:,
t(e fir&t ife, notit(&tan#in$ t(e fa!t t(at t(e
.etitioner& ere na)e# a& +enefi!iarie& of t(e "ife
in&'ran!e
HELD
F>S
, T(e GSIS offer& to &e.arate an# #i&tin!t &y&te)&
of +enefit& to it& )e)+er&, one i& t(e "ife in&'ran!e
an# t(e ot(er i& t(e retire)ent in&'ran!e- T(e&e to
#i&tin!t &y&te)& of +enefit& are .ai# o't fro) to
#i&tin!t an# &e.arate f'n#& t(at are )aintaine# +y
t(e GSIS- T('&, it #oe&n=t ne!e&&ari"y )ean t(at t(e
+enefi!iarie& in t(e "ife in&'ran!e are a"&o t(e
+enefi!iarie& in t(e retire)ent in&'ran!e-
5 Consue"ra started in t!e "overnent service
soetie durin" t!e early #art of :JPC$ or before
:JPC. 'n :JPC Co. Act :MQ ,as not yet aended$
and t!e only benefits t!en #rovided for in said Co.
Act :MQ ,ere t!ose t!at #roceed fro a life
insurance. ?#on enterin" t!e "overnent service
Consue"ra becae a co#ulsory eber of t!e
>S'S$ bein" autoatically insured on !is life$
#ursuant to t!e #rovisions of Co. Act :MQ ,!ic!
,as in force at t!e tie. Durin" :JPC t!e o#eration
of t!e >overnent Service 'nsurance Syste ,as
sus#ended because of t!e ,ar$ and t!e o#eration
,as resued soetie in :JPQ. R!en Consue"ra
desi"nated !is beneficiaries in !is life insurance !e
could not !ave intended t!ose beneficiaries of !is life
insurance as also t!e beneficiaries of !is retireent
insurance because t!e #rovisions on retireent
insurance under t!e >S'S cae about only ,!en
Co. Act :MQ ,as aended by 9e#. Act QQ3 on Sune
:Q$ :JK:. Hence$ it cannot be said t!at because
!erein a##ellants ,ere desi"nated beneficiaries in
Consue"ra@s life insurance t!ey autoatically
becae t!e beneficiaries also of !is retireent
insurance.
, T(e .rovi&ion& of &'+&e!tion @+A of Se!tion 44 of
Co))onea"t( A!t 466, a& a)en#e# +y <e.- A!t
660, !"ear"y in#i!ate t(at t(ere i& nee# for t(e
e)."oyee to fi"e an a.."i!ation for retire)ent
in&'ran!e +enefit& (en (e +e!o)e& a )e)+er of
t(e GSIS, an# (e &(o'"# &tate in (i& a.."i!ation t(e
+enefi!iary of (i& retire)ent in&'ran!e- 1en!e, t(e
+enefi!iary na)e# in t(e "ife in&'ran!e #oe& not
a'to)ati!a""y +e!o)e t(e +enefi!iary in t(e
retire)ent in&'ran!e 'n"e&& t(e &a)e +enefi!iary in
t(e "ife in&'ran!e i& &o #e&i$nate# in t(e a.."i!ation
for retire)ent in&'ran!e-
, In t(e !a&e of t(e .ro!ee#& of a "ife in&'ran!e, t(e
&a)e are .ai# to (oever i& na)e# t(e +enefi!iary
in t(e "ife in&'ran!e .o"i!y- A& in t(e !a&e of a "ife
in&'ran!e .rovi#e# for in t(e In&'ran!e A!t, t(e
+enefi!iary in a "ife in&'ran!e 'n#er t(e GSIS )ay
not ne!e&&ari"y +e an (eir of t(e in&'re#- The
'+*,"e. '+ a l'-e '+*,"a+!e (a) .e*'%+ae a+)
2e"*#+ a* 3e+e-'!'a") ,+le** .'*M,al'-'e. # 3e
*# ,+.e" he 2"#$'*'#+* #- he C'$'l C#.e. And in
t!e absence of any beneficiary naed in t!e life
insurance #olicy$ t!e #roceeds of t!e insurance ,ill
"o to t!e estate of t!e insured.
INSURANCE Page 51
- -n t!e ot!er !and$ t!e beneficiary of t!e
retireent insurance can only clai t!e #roceeds of
t!e retireent insurance if t!e e#loyee dies before
retireent. 'f t!e e#loyee failed or overloo+ed to
state t!e beneficiary of !is retireent insurance$ t!e
retireent benefits ,ill accrue to !is estate and ,ill
be "iven to !is le"al !eirs in accordance ,it! la,$ as
in t!e case of a life insurance if no beneficiary is
naed in t!e insurance #olicy.
Disposition Petition Eenie#- It i& O'r vie,
t(erefore, t(at t(e re&.on#ent GSIS (a# !orre!t"y
a!te# (en it r'"e# t(at t(e .ro!ee#& of t(e
retire)ent in&'ran!e of t(e "ate Go&e Con&'e$ra
&(o'"# +e #ivi#e# e;'a""y +eteen (i& fir&t "ivin$ ife
<o&ario Eia:, on t(e one (an#, an# (i& &e!on# ife
Ba&i"ia Ber#in an# (i& !(i"#ren +y (er-
SSS $. DAVAC
4C SC<A 663
BA<<><AH G'"y 30, 4566
NATURE
APP>A/ fro) a re&o"'tion Of t(e So!ia" Se!'rity
Co))i&&ion-
FACTS
, Petroni"o Eava!, +e!a)e a )e)+er of t(e So!ia"
Se!'rity Sy&te) @SSS for &(ortA on Se.te)+er 4,
459C- In t(e Me)+erN& <e!or# (e #e&i$nate#
re&.on#ent, Can#e"aria Eava! a& (i& +enefi!iary an#
in#i!ate# (i& re"ation&(i. to (er a& t(at of PifeP-
, 1e #ie# on A.ri" 9, 4595- It a..ear& t(at t(e
#e!ea&e# !ontra!te# to )arria$e&, t(e fir&t, it(
/o'r#e& T'."ano on A'$'&t 25, 45D6, (o +ore (i)
a !(i"#, <o)eo Eava!, an# t(e &e!on#, it(
Can#e"aria Eava! on Gan'ary 46, 45D5, it( (o)
(e (a# a )inor #a'$(ter, >"i:a+et( Eava!- Bot( fi"e#
t(eir !"ai)& for #eat( +enefit it( t(e SSS-
, So!ia" Se!'rity Co))i&&ion i&&'e# t(e re&o"'tion
#e!"arin$ re&.on#ent Can#e"aria Eava! a& t(e .er&on
entit"e# to re!eive t(e #eat( +enefit& .aya+"e for t(e
#eat( of Petroni"o Eava!-
ISSUES
4- 0ON t(e So!ia" Se!'rity Co))i&&ion Can#e"aria
Eava! i& entit"e# to re!eive t(e #eat( +enefit&
2- 0ON a +enefi!iary 'n#er t(e So!ia" Se!'rity
Sy&te) .arta2e& of t(e nat're of a +enefi!iary in a
"ife in&'ran!e .o"i!y an#, t(erefore t(e #e&i$nation
)a#e in t(e .er&on EAMAC a& +i$a)o'& ife i& n'""
an# voi#, +e!a'&e it !ontravene& t(e .rovi&ion& of
t(e Civi" Co#e
3- 0ON t(e +enefit& a!!r'in$ fro) )e)+er&(i. it(
SSS for)& .art of t(e !onJ'$a" .ro.erty t('& t(e
re&o"'tion #e.rive& t(e "af'" ife of (er &(are in t(e
!onJ'$a" .ro.erty a& e"" a& of (er on an# (er
!(i"#N& "e$iti)e in t(e in(eritan!e
HELD
4- F>S
, Se!tion 43, <A4464 .rovi#e& t(at t(e +enefi!iary
Pa& re!or#e#P +y t(e e)."oyeeN& e)."oyer i& t(e one
entit"e# to t(e #eat( +enefit&-
, Se!tion 43, <e.'+"i! A!t No- 4464, a& a)en#e# +y
<e.'+"i! A!t No- 4C52, in for!e at t(e ti)e of
Petroni"o Eava!N& #eat( .rovi#e&H ?#on t!e covered
e#loyee@s deat! or total and #eranent disability
under suc! conditions as t!e Coission ay
define$ before becoin" eli"ible for retireent and if
eit!er suc! deat! or disability is not co#ensable
under t!e Ror+en@s Co#ensation Act$ !e or. in
case of !is deat!$ !is beneficiaries$ as recorded by
!is e#loyer s!all be entitled to t!e follo,in"
benefit7
, In Te!&on v&- So!ia" Se!'rity Sy&te)- Se!tion 43
a& !on&tr'e#HPit )ay +e tr'e t(at t(e .'r.o&e of
t(e !overa$e 'n#er t(e So!ia" Se!'rity Sy&te) i&
.rote!tion of t(e e)."oyee a& e"" a& of (i& fa)i"y,
+'t t(i& .'r.o&e or intention of t(e "a !annot +e
enfor!e# to t(e e%tent of !ontra#i!tin$ t(e very
.rovi&ion& of &ai# "a !ontaine# in Se!tion 43,
t(ereof8
, 0(en t(e .rovi&ion& of a "a are !"ear an# e%."i!it,
t(e !o'rt& !an #o not(in$ +'t a.."y it& !"ear an#
e%."i!it .rovi&ion& @Me"a&!o v&- /o.e:A
2- NO
, T(e #i&;'a"ifi!ation )entione# in Arti!"e C35 i& not
a.."i!a+"e to (erein a..e""ee Can#e"aria Eava!
+e!a'&e &(e a& not $'i"ty of !on!'+ina$e, t(ere
+ein$ no .roof t(at &(e (a# 2no"e#$e of t(e
.revio'& )arria$e of (er ('&+an# Petroni"o-
A<T- 2042- Any .er&on (o i& for+i##en fro)
re!eivin$ any #onation 'n#er Arti!"e C35 !annot +e
na)e# +enefi!iary of a "ife in&'ran!e .o"i!y +y t(e
.er&on (o !annot )a2e any #onation to (i)
a!!or#in$ to &ai# arti!"e-
A<T- C35- T(e fo""oin$ #onation& &(a"" +e voi#H
@4A T(o&e )a#e +eteen .er&on& (o ere $'i"ty
of a#'"tery or !on!'+ina$e at t(e ti)e of t(e
#onation; @t(e !o'rt #i# not #e!i#e (et(er t(i&
.arta2e& t(e nat're of a "ife in&'ran!e .o"i!yA
3- NO
, T(e +enefit re!eiva+"e 'n#er t(e A!t i& in t(e
nat're of a &.e!ia" .rivi"e$e or an arran$e)ent
&e!'re# +y t(e "a .'r&'ant to t(e .o"i!y of t(e
State to .rovi#e &o!ia" &e!'rity to t(e or2in$)en-
T(e a)o'nt& t(at )ay t('& +e re!eive# !annot +e
!on&i#ere# a& .ro.erty earne# +y t(e )e)+er #'rin$
(i& "ifeti)e- 1i& !ontri+'tion to t(e f'n# !on&tit'te&
on"y an in&i$nifi!ant .ortion t(ereof- T(en, t(e
+enefit& are &.e!ifi!a""y #e!"are# not tran&fera+"e,
an# e%e).te# fro) ta%, "e$a" .ro!e&&e&, an# "ien-
*'rt(er)ore, in t(e &ett"e)ent of !"ai)& t(ere'n#er,
t(e .ro!e#'re to +e o+&erve# i& $overne# not +y t(e
$enera" .rovi&ion& of "a, +'t +y r'"e& an#
re$'"ation& .ro)'"$ate# +y t(e Co))i&&ion- T('&, if
t(e )oney i& .aya+"e to t(e e&tate of a #e!ea&e#
)e)+er, it i& t(e Co))i&&ion, not t(e .ro+ate or
re$'"ar !o'rt t(at #eter)ine& t(e .er&on or .er&on&
to (o) it i& .aya+"e-
, T(ey are #i&+'r&e# fro) a .'+"i! &.e!ia" f'n#
!reate# +y Con$re&&-T(e &o'r!e& of t(i& &.e!ia" f'n#
are t(e !overe# e)."oyeeN& !ontri+'tion @e;'a" to 2,
4R2 .er !ent of t(e e)."oyeeN& )ont("y
!o).en&ationA ; t(e e)."oyerN& NContri+'tion
@e;'iva"ent to 3,4R2 .er !ent of t(e )ont("y
!o).en&ation of t(e !overe# e)."oyeeA ;an# t(e
Govern)ent !ontri+'tion (i!( !on&i&t& in year"y
a..ro.riation of .'+"i! f'n#& to a&&'re t(e
)aintenan!e of an a#e;'ate or2in$ +a"an!e of t(e
f'n#& of t(e Sy&te)- A##itiona""y, Se!tion 24 of t(e
So!ia" Se!'rity A!t.rovi#e& t(at t(e +enefit&
.re&!ri+e# in t(i& A!t &(a"" not +e #i)ini&(e# an# t(e
Govern)ent of t(e <e.'+"i! of t(e P(i"i..ine&
a!!e.t& $enera" re&.on&i+i"ity for t(e &o"ven!y of t(e
Sy&te)-
, T(e +enefit& 'n#er t(e So!ia" Se!'rity A!t are not
inten#e# +y t(e "a)a2in$ +o#y to for) .art of t(e
e&tate of t(e !overe# L)e)+er&-
, So!ia" Se!'rity A!t i& not a "a of &'!!e&&ion-
Disposition <e&o"'tion of t(e So!ia" Se!'rity
Co))i&&ion a..ea"e# i& affir)e#
FRANCISCO DEL VAL $. ANDRES DEL VAL
25 P1I/ 93D
MO<>/ANE; *e+r'ary 46, 4549
NATURE
A..ea" fro) a J'#$)ent of t(e Co'rt of *ir&t
In&tan!e of t(e !ity of Mani"a #i&)i&&in$ t(e
!o)."aint it( !o&t&-
FACTS
5 P"aintiff& an# #efen#ant are +rot(er& an# &i&ter&;
t(at t(ey are t(e on"y (eir& at "a an# ne%t of 2in of
INSURANCE Page 52
Gre$orio Na!ian!eno #e" Ma", (o #ie# in Mani"a on
A'$'&t D, 4540, inte&tate
, E'rin$ t(e "ifeti)e of t(e #e!ea&e# (e too2 o't
in&'ran!e on (i& "ife for t(e &') of PD0,000 an#
)a#e it .aya+"e to t(e #efen#ant ANE<>S E>/ MA/
a& &o"e +enefi!iary- After (i& #eat( t(e #efen#ant
!o""e!te# t(e fa!e of t(e .o"i!y- *ro) &ai# .o"i!y (e
.ai# t(e &') of P46,369-20 to re#ee) !ertain rea"
e&tate (i!( t(e #e!e#ent (a# &o"# to t(ir# .er&on&
it( a ri$(t to re.'r!(a&e-
, T(e re#e).tion of &ai# .re)i&e& a& )a#e +y t(e
attorney of #efen#ant ANE<>S in t(e na)e of t(e
."aintiff& an# t(e #efen#ant a& (eir& of t(e #e!ea&e#
ven#or- It f'rt(er a..ear& fro) t(e ."ea#in$& t(at
t(e #efen#ant, on t(e #eat( of t(e #e!ea&e#, too2
.o&&e&&ion of )o&t of (i& .er&ona" .ro.erty, (i!(
(e &ti"" (a& in (i& .o&&e&&ion, an# t(at (e (a& a"&o
t(e +a"an!e on &ai# in&'ran!e .o"i!y a)o'ntin$ to
P24,63D-60-
, P"aintiff& !onten# t(at t(e a)o'nt of t(e in&'ran!e
.o"i!y +e"on$e# to t(e e&tate of t(e #e!ea&e# an#
not to t(e #efen#ant .er&ona""y; t(at, t(erefore, t(ey
are entit"e# to a .artition not on"y of t(e rea" an#
.er&ona" .ro.erty, +'t a"&o of t(e PD0,000 "ife
in&'ran!e- T(e !o)."aint .ray& a .artition of a"" t(e
.ro.erty, +ot( rea" an# .er&ona", "eft +y t(e
#e!ea&e#; t(at t(e #efen#ant a!!o'nt for
P24,63D-60, an# t(at t(e &') +e #ivi#e# e;'a""y
a)on$ t(e ."aintiff& an# #efen#ant a"on$ it( t(e
ot(er .ro.erty of #e!ea&e#-
, T(e #efen#ant #enie& t(e )ateria" a""e$ation& of
t(e !o)."aint an# &et& '. a& &.e!ia" #efen&e an#
!o'nter!"ai) t(at t(e re#e).tion of t(e rea" e&tate
&o"# +y (i& fat(er a& )a#e in t(e na)e of t(e
."aintiff& an# (i)&e"f in&tea# of in (i& na)e a"one
it(o't (i& 2no"e#$e or !on&ent- An#re& !onten#&
t(at it a& not (i& intention to '&e t(e .ro!ee#& of
t(e in&'ran!e .o"i!y for t(e +enefit of any .er&on +'t
(i)&e"f, (e a""e$in$ t(at (e a& an# i& t(e &o"e
oner t(ereof an# t(at it i& (i& in#ivi#'a" .ro.erty-
1e, t(erefore, a&2& t(at (e +e #e!"are# t(e oner of
t(e rea" e&tate re#ee)e# +y t(e .ay)ent of t(e
P46,369-20, t(e oner of t(e re)ainin$ P24,63D-60,
t(e +a"an!e of t(e in&'ran!e .o"i!y, an# t(at t(e
."aintiff& a!!o'nt for t(e '&e an# o!!'.ation of t(e
.re)i&e& &o re#ee)e# &in!e t(e #ate of t(e
re#e).tion-
, T(e tria" !o'rt ref'&e# to $ive re"ief to eit(er .arty
an# #i&)i&&e# t(e a!tion- In t(i& a..ea", it i& !"ai)e#
+y t(e attorney for t(e ."aintiff& t(at in&'ran!e
.rovi&ion& in t(e Co#e of Co))er!e are
&'+or#inate# to t(e .rovi&ion& of t(e Civi" Co#e a&
fo'n# in arti!"e 4039- T(i& arti!"e rea#&H
FAn !eir by force of la, survivin" ,it! ot!ers of t!e
sae c!aracter to a succession ust brin" into t!e
!ereditary estate t!e #ro#erty or securities !e ay
!ave received fro t!e deceased durin" t!e life of
t!e sae$ by ,ay of do,ry$ "ift$ or for any "ood
consideration$ in order to co#ute it in fi8in" t!e
le"al #ortions and in t!e account of t!e division.F
, Co'n&e" a"&o !"ai)& t(at t(e .ro!ee#& of t(e
in&'ran!e .o"i!y ere a #onation or $ift )a#e +y t(e
fat(er #'rin$ (i& "ifeti)e to t(e #efen#ant an# t(at,
a& &'!(, it& '"ti)ate #e&tination i& #eter)ine# +y
t(o&e .rovi&ion& of t(e Civi" Co#e (i!( re"ate to
#onation&, e&.e!ia""y arti!"e 645- T(i& arti!"e .rovi#e&
t(at P$ift& )a#e to !(i"#ren (i!( are not
+etter)ent& &(a"" +e !on&i#ere# a& .art of t(eir "e$a"
.ortion-P
ISSUES
4- 0ON t(e in&'ran!e +e"on$& to t(e #efen#ant an#
not to t(e #e!e#ent=& e&tate
2- 0ON t(e Civi" !o#e .rovi&ion& on &'!!e&&ion
.revai" over any ot(er "a it( re&.e!t to t(e
in&'ran!e
HELD
4- F>S
5 T(e SC a$ree# it( t(e fin#in$ of t(e tria" !o'rt
t(at t(e .ro!ee#& of t(e "ife,in&'ran!e .o"i!y +e"on$
e%!"'&ive"y to t(e #efen#ant a& (i& in#ivi#'a" an#
&e.arate .ro.erty, e a$ree- T(at t(e .ro!ee#& of an
in&'ran!e .o"i!y +e"on$ e%!"'&ive"y to t(e +enefi!iary
an# not to t(e e&tate of t(e .er&on (o&e "ife a&
in&'re#, an# t(at &'!( .ro!ee#& are t(e &e.arate
an# in#ivi#'a" .ro.erty of t(e +enefi!iary, an# not of
t(e (eir& of t(e .er&on (o&e "ife a& in&'re#, i& t(e
#o!trine in A)eri!a- 0e +e"ieve t(at t(e &a)e
#o!trine o+tain& in t(e&e I&"an#& +y virt'e of &e!tion
D26 of t(e Co#e of Co))er!e, (i!( rea#&H
F/!e aounts ,!ic! t!e under,riter ust deliver
to t!e #erson insured$ in fulfillent of t!e
contract$ s!all be t!e #ro#erty of t!e latter$ even
a"ainst t!e clais of t!e le"itiate !eirs or
creditors of any +ind ,!atsoever of t!e #erson
,!o effected t!e insurance in favor of t!e forer.F
2- NO
5 T(e !ontra!t of "ife in&'ran!e i& a &.e!ia" !ontra!t
an# t(e #e&tination of t(e .ro!ee#& t(ereof i&
#eter)ine# +y &.e!ia" "a& (i!( #ea" e%!"'&ive"y
it( t(at &'+Je!t- T(e Civi" Co#e (a& no .rovi&ion&
(i!( re"ate #ire!t"y an# &.e!ifi!a""y to "ife,in&'ran!e
!ontra!t& or to t(e #e&tination of "ife in&'ran!e
.ro!ee#&- T(at &'+Je!t i& re$'"ate# e%!"'&ive"y +y
t(e Co#e of Co))er!e (i!( .rovi#e& for t(e ter)&
of t(e !ontra!t, t(e re"ation& of t(e .artie& an# t(e
#e&tination of t(e .ro!ee#& of t(e .o"i!y-
, A&&')in$ t(at t(e .ro!ee#& of t(e "ife,in&'ran!e
.o"i!y +ein$ t(e e%!"'&ive .ro.erty of t(e #efen#ant
an# (e (avin$ '&e# a .ortion t(ereof in t(e
re.'r!(a&e of t(e rea" e&tate &o"# +y t(e #e!e#ent
.rior to (i& #eat( it( ri$(t to re.'r!(a&e, an# &'!(
re.'r!(a&e (avin$ +een )a#e an# t(e !onveyan!e
ta2en in t(e na)e& of a"" of t(e (eir& in&tea# of t(e
#efen#ant a"one, #laintiffs clai t!at t!e #ro#erty
belon"s to t!e !eirs in coon and not to t!e
defendant alone.
, T(e Co'rt reJe!te# t(i& !ontention 'n"e&& t(e fa!t
a..ear or +e &(on t(at t(e #efen#ant a!te# a& (e
#i# it( t(e intention t(at t(e ot(er (eir& &(o'"#
enJoy it( (i) t(e oner&(i. of t(e e&tate ,,,, in
ot(er or#&, t(at (e .ro.o&e#, in effe!t, to )a2e a
$ift of t(e rea" e&tate to t(e ot(er (eir&- If it i&
e&ta+"i&(e# +y t(e evi#en!e t(at a& (i& intention
an# t(at t(e rea" e&tate a& #e"ivere# to t(e
."aintiff& it( t(at 'n#er&tan#in$, t(en it i& .ro+a+"e
t(at t(eir !ontention i& !orre!t an# t(at t(ey are
entit"e# to &(are e;'a""y it( t(e #efen#ant t(erein-
If, (oever, it a..ear& fro) t(e evi#en!e in t(e !a&e
t(at t(e !onveyan!e& ere ta2en in t(e na)e of t(e
."aintiff& it(o't (i& 2no"e#$e or !on&ent, or t(at it
a& not (i& intention to )a2e a $ift to t(e) of t(e
rea" e&tate, t(en it +e"on$& to (i)- If t(e fa!t& are a&
&tate#, (e (a& to re)e#ie&- T(e one i& to !o).e"
t(e ."aintiff& to re!onvey to (i) an# t(e ot(er i& to
"et t(e tit"e &tan# it( t(e) an# to re!over fro)
t(e) t(e &') (e .ai# on t(eir +e(a"f-
, *or t(e !o)."ete an# .ro.er #eter)ination of t(e
;'e&tion& at i&&'e in t(i& !a&e, t!e Court ,as of t!e
o#inion t!at t!e cause s!ould be returned to t!e trial
court ,it! instructions to #erit t!e #arties to frae
suc! issues as ,ill #erit t!e settleent of all t!e
.uestions involved and to introduce suc! evidence as
ay be necessary for t!e full deterination of t!e
issues fraed. ?#on suc! issues and evidence ta+en
t!ereunder t!e court ,ill decide t!e .uestions
involved accordin" to t!e evidence$ subordinatin" !is
conclusions of la, to t!e rules laid do,n in t!is
o#inion. <>MANE>E-
GERCIO $. SUN LIFE ASSURANCE OF CANADA
D6 P1I/ 93
MA/CO/M; Se.te)+er 26, 4529
INSURANCE Page 53
NATURE
Man#a)'& to !o).e" S'n /ife A&&'ran!e Co- of
Cana#a to !(an$e t(e +enefi!iary in t(e .o"i!y i&&'e#
+y t(e #efen#ant !o).any on t(e "ife of t(e ."aintiff
1i"ario Ger!io
FACTS
, On Gan'ary 25, 4540, t(e S'n /ife A&&'ran!e Co- of
Cana#a i&&'e# an in&'ran!e .o"i!y on t(e "ife of
1i"ario Ger!io- T(e .o"i!y a& (at i& 2non a& a 20,
year en#o)ent .o"i!y- By it& ter)&, t(e in&'ran!e
!o).any a$ree# to in&'re t(e "ife of 1i"ario Ger!io
for t(e &') of P2,000, to +e .ai# (i) on *e+r'ary 4,
4530, or if t(e in&'re# &(o'"# #ie +efore &ai# #ate,
t(en to (i& ife, Mr&- An#rea ?ia"!ita, &(o'"# &(e
&'rvive (i); ot(eri&e to t(e e%e!'tor&,
a#)ini&trator&, or a&&i$n& of t(e in&'re#- T(e .o"i!y
#i# not in!"'#e any .rovi&ion re&ervin$ to t(e in&'re#
t(e ri$(t to !(an$e t(e +enefi!iary-
, On t(e #ate t(e .o"i!y a& i&&'e#, An#rea ?ia"!ita
a& t(e "af'" ife of 1i"ario Ger!io- Toar#& t(e
en# of t(e year 4545, &(e a& !onvi!te# of t(e !ri)e
of a#'"tery- On Se.te)+er D, 4520, a #e!ree of
#ivor!e a& i&&'e# in !ivi" !a&e no- 4C599, (i!( (a#
t(e effe!t of !o)."ete"y #i&&o"vin$ t(eir +on#& of
)atri)ony
, On Mar!( D, 4522, 1i"ario Ger!io for)a""y notifie#
t(e S'n /ife t(at (e (a# revo2e# (i& #onation in
favor of An#rea ?ia"!ita, an# t(at (e (a# #e&i$nate#
in (er &tea# (i& .re&ent ife, A#e"a Gar!ia #e Ger!io,
a& t(e +enefi!iary of t(e .o"i!y- Ger!io re;'e&te# t(e
in&'ran!e !o).any to e"i)inate An#rea ?ia"!ita a&
+enefi!iary- T(i&, t(e in&'ran!e !o).any (a& ref'&e#
an# &ti"" ref'&e& to #o-
ISSUES
4- &Preliinary) 0ON t(e .rovi&ion& of t(e Co#e of
Co))er!e an# t(e Civi" Co#e &(a"" +e in for!e in
4540, or t(e .rovi&ion& of t(e In&'ran!e A!t no in
for!e, or t(e $enera" .rin!i."e& of "a, $'i#e t(e
!o'rt in it& #e!i&ion
2- 0ON t(e in&'re#, t(e ('&+an#, (a& t(e .oer to
!(an$e t(e +enefi!iary, t(e for)er ife, an# to na)e
in&tea# (i& a!t'a" ife, (ere t(e in&'re# an# t(e
+enefi!iary (ave +een #ivor!e# an# (ere t(e .o"i!y
of in&'ran!e #oe& not e%.re&&"y re&erve to t(e
in&'re# t(e ri$(t to !(an$e t(e +enefi!iary
HELD
4- 0(et(er t(e !a&e +e !on&i#ere# in t(e "i$(t of t(e
Co#e of Co))er!e, t(e Civi" Co#e, or t(e In&'ran!e
A!t, t(e #efi!ien!ie& in t(e "a i"" (ave to +e
&'.."e)ente# +y t(e $enera" .rin!i."e& .revai"in$ on
t(e &'+Je!t- To t(at en#, e (ave $at(ere# t(e r'"e&
(i!( fo""o fro) t(e +e&t !on&i#ere# A)eri!an
a't(oritie&- In a#o.tin$ t(e&e r'"e&, e #o &o it(
t(e .'r.o&e of (avin$ t(e P(i"i..ine /a of
In&'ran!e !onfor) a& near"y a& .o&&i+"e to t(e
)o#ern /a of In&'ran!e a& fo'n# in t(e Unite#
State& .ro.er-
, Co'rt=& fir&t #'ty i& to #eter)ine (at "a &(o'"#
+e a.."ie# to t(e fa!t&- T(e in&'ran!e .o"i!y a&
ta2en o't in 4540, t(at t(e In&'ran!e A!t- No- 2D2C,
+e!a)e effe!tive in 454D, an# t(at t(e effort to
!(an$e t(e +enefi!iary a& )a#e in 4522-
, C#.e #- C#((e"!e5 t(ere !an +e fo'n# in it no
.rovi&ion eit(er .er)ittin$ or .ro(i+itin$ t(e in&'re#
to !(an$e t(e +enefi!iary-
, C'$'l C#.e5 it o'"# +e )o&t #iffi!'"t, if in#ee# it i&
.ra!ti!a+"e, to te&t a "ife in&'ran!e .o"i!y +y it&
.rovi&ion&- In t(e !a&e of Ee" Ma" v&- Ee" Ma", it
#e!"ine# to !on&i#er t(e .ro!ee#& of t(e in&'ran!e
.o"i!y a& a #onation or $ift, &ayin$ Pt(e !ontra!t of
"ife in&'ran!e i& a &.e!ia" !ontra!t an# t(e
#e&tination of t(e .ro!ee#& t(ereof i& #eter)ine# +y
&.e!ia" "a& (i!( #ea" e%!"'&ive"y it( t(at &'+Je!t-
T(e Civi" Co#e (a& no .rovi&ion& (i!( re"ate #ire!t"y
an# &.e!ifi!a""y to "ife,in&'ran!e !ontra!t& or to t(e
#e&tination of "ife,in&'ran!e .ro!ee#&- - - -P
, I+*,"a+!e A!5 t(ere i& "i2ei&e no .rovi&ion
eit(er .er)ittin$ or .ro(i+itin$ t(e in&'re# to !(an$e
t(e +enefi!iary-
2- NO
Ratio T(e ife (a& an in&'ra+"e intere&t in t(e "ife of
(er ('&+an#- T(e +enefi!iary (a& an a+&o"'te ve&te#
intere&t in t(e .o"i!y fro) t(e #ate of it& i&&'an!e
an# #e"ivery- So (en a .o"i!y of "ife in&'ran!e i&
ta2en o't +y t(e ('&+an# in (i!( t(e ife i& na)e#
a& +enefi!iary, &(e (a& a &'+&i&tin$ intere&t in t(e
.o"i!y- An# t(i& a.."ie& to a .o"i!y to (i!( t(ere are
atta!(e# t(e in!i#ent& of a "oan va"'e, !a&(
&'rren#er va"'e, an a'to)ati! e%ten&ion +y
.re)i')& .ai#, an# to an en#o)ent .o"i!y, a& e""
a& to an or#inary "ife in&'ran!e .o"i!y- If t(e ('&+an#
i&(e& to retain to (i)&e"f t(e !ontro" an# oner&(i.
of t(e .o"i!y (e )ay &o .rovi#e in t(e .o"i!y- B't if
t(e .o"i!y !ontain& no .rovi&ion a't(ori:in$ a !(an$e
of +enefi!iary it(o't t(e +enefi!iaryN& !on&ent, t(e
in&'re# !annot )a2e &'!( !(an$e- A!!or#in$"y, it i&
(e"# t(at a "ife in&'ran!e .o"i!y of a ('&+an# )a#e
.aya+"e to t(e ife a& +enefi!iary, i& t(e &e.arate
.ro.erty of t(e +enefi!iary an# +eyon# t(e !ontro" of
t(e ('&+an#-
, Un"i2e t(e &tat'te& of a fe J'ri&#i!tion&, t(ere i&
no .rovi&ion in t(e P(i"i..ine /a .er)ittin$ t(e
+enefi!iary in a .o"i!y for t(e +enefit of t(e ife of
t(e ('&+an# to +e !(an$e# after a #ivor!e- It )'&t
fo""o, t(erefore, in t(e a+&en!e of a &tat'te to t(e
!ontrary, t(at if a .o"i!y i& ta2en o't '.on a
('&+an#N& "ife t(e ife i& na)e# a& +enefi!iary
t(erein, a &'+&e;'ent #ivor!e #oe& not #e&troy (er
ri$(t& 'n#er t(e .o"i!y-
Reasoning
, Y#"e $*. B##h
. . . 't sees to be t!e settled doctrine$ ,it! but
sli"!t dissent in t!e courts of t!is country$ t!at a
#erson ,!o #rocures a #olicy u#on !is o,n life$
#ayable to a desi"nated beneficiary$ alt!ou"! !e
#ays t!e #reius !iself$ and +ee#s t!e #olicy
in !is e8clusive #ossession$ !as no #o,er to
c!an"e t!e beneficiary$ unless t!e #olicy itself$ or
t!e c!arter of t!e insurance co#any$ so #rovides.
'n #olicy$ alt!ou"! !e !as #arted ,it! not!in"$
and is si#ly t!e ob6ect of anot!er@s bounty$ !as
ac.uired a vested and irrevocable interest in t!e
#olicy$ ,!ic! !e ay +ee# alive for !is o,n benefit
by #ayin" t!e #reius or assessents if t!e
#erson ,!o effected t!e insurance fails or refuses
to do so.*
, C#++e!'!, M,,al L'-e I+*,"a+!e C#(2a+)
$* S!hae-e"
Re do not !esitate to say$ !o,ever$ t!at a #olicy
ta+en out in "ood fait! and valid at its ince#tion$ is
not avoided by t!e cessation of t!e insurable
interest$ unless suc! be t!e necessary effect of t!e
#rovisions of t!e #olicy itself.. . . .'n our 6ud"ent
of life #olicy$ ori"inally valid$ does not cease to be
so by t!e cessation of t!e assured #arty@s interest
in t!e life insured.*
5 Ce+"al Na'#+al Ba+; #- Wa*h'+%#+ C') $*.
H,(e
't is indeed t!e "eneral rule t!at a #olicy$ and t!e
oney to becoe due under it$ belon"$ t!e
oent it is issued$ to t!e #erson or #ersons
naed in it as t!e beneficiary or beneficiaries$ and
t!at t!ere is no #o,er in t!e #erson #rocurin" t!e
insurance$ by any act of !is$ by deed or by ,ill$ to
transfer to any ot!er #erson t!e interest of t!e
#erson naed.*
, I+ "e D"e,'l ? C#.
'n so far as t!e la, of 0ouisiana is concerned$ it
ay also be considered settled t!at ,!ere a #olicy
is of t!e seitontine variety$ as in t!is case$ t!e
beneficiary !as a vested ri"!t in t!e #olicy$ of
INSURANCE Page 54
,!ic! s!e cannot be de#rived ,it!out !er
consent*
, Walla!e $* M,,al Be+e-' L'-e I+*,"a+!e C#.
7As soon as t!e #olicy ,as issued Mrs. Rallace
ac.uired a vested interest t!erein$ of ,!ic! s!e
could not be de#rived ,it!out !er consent$ e8ce#t
under t!e ters of t!e contract ,it! t!e insurance
co#any. 1o ri"!t to c!an"e t!e beneficiary ,as
reserved. Her interest in t!e #olicy ,as !er
individual #ro#erty$ sub6ect to be divested only by
!er deat!$ t!e la#se of tie$ or by t!e failure of
t!e insured to #ay t!e #reius. S!e could +ee#
t!e #olicy alive by #ayin" t!e #reius$ if t!e
insured did not do so. 't ,as contin"ent u#on
t!ese events$ but it ,as free fro t!e control of
!er !usband. He !ad no interest in !er #ro#erty in
t!is #olicy$ contin"ent or ot!er,ise. Her interest
,as free fro any clai on t!e #art of t!e insured
or !is creditors. He could de#rive !er of !er
interest absolutely in but one ,ay$ by livin" ore
t!an t,enty years.*
, F'lle) $*. Ill'+#'* L'-e I+*,"a+!e C#(2a+)
/!e benefit accruin" fro a #olicy of life
insurance u#on t!e life of a arried an$ #ayable
u#on !is deat! to !is ,ife$ nain" !er$ is #ayable
to t!e survivin" beneficiary naed$ alt!ou"! s!e
ay !ave years t!ereafter secured a divorce fro
!er !usband$ and !e ,as t!ereafter a"ain arried
to one ,!o sustained t!e relation of ,ife to !i at
t!e tie of !is deat!.
/!e ri"!ts of a beneficiary in an ordinary life
insurance #olicy becoe vested u#on t!e issuance
of t!e #olicy$ and can t!ereafter$ durin" t!e life of
t!e beneficiary$ be defeated only as #rovided by
t!e ters of t!e #olicy.*
, On t(e a#)itte# fa!t& an# t(e a't(oritie&
&'..ortin$ t(e near"y 'niver&a""y a!!e.te# .rin!i."e&
of in&'ran!e, e are irre&i&ti+"y "e# to t(e !on!"'&ion
t(at t(e ;'e&tion at i&&'e )'&t +e an&ere# in t(e
ne$ative
Disposition T(e J'#$)ent a..ea"e# fro) i"" +e
rever&e# an# t(e !o)."aint or#ere# #i&)i&&e# a& to
t(e a..e""ant-
SEPARATE OPINION
FOHNSON H!#+!,"I
, I a$ree it( t(e )aJority of t(e !o'rt, t(at t(e
J'#$)ent of t(e "oer !o'rt &(o'"# +e revo2e#, +'t
for a #ifferent rea&on- T(e .'r.o&e of t(e .etition i&
to (ave #e!"are# t(e ri$(t& of !ertain .er&on& in an
in&'ran!e .o"i!y (i!( i& not yet #'e an# .aya+"e- It
)ay never +e!o)e #'e an# .aya+"e- T(e .re)i')&
)ay not +e .ai#, t(ere+y ren#erin$ t(e !ontra!t of
in&'ran!e of non effe!t, an# )any ot(er t(in$& )ay
o!!'r, +efore t(e .o"i!y +e!o)e& #'e, (i!( o'"#
ren#er it non effe!tive- T(e ."aintiff an# t(e ot(er
.artie& (o are !"ai)in$ an intere&t in &ai# .o"i!y
&(o'"# ait 'nti" t(ere i& &o)et(in$ #'e t(e) 'n#er
t(e &a)e- *or t(e !o'rt& to #e!"are no (o are t(e
.er&on& entit"e# to re!eive t(e a)o'nt& #'e, if t(ey
ever +e!o)e #'e an# .aya+"e, i& i).o&&i+"e, for t(e
rea&on t(at not(in$ )ay ever +e!o)e .aya+"e 'n#er
t(e !ontra!t of in&'ran!e, an# for )any rea&on& &'!(
.er&on& )ay never (ave a ri$(t to re!eive anyt(in$
(en t(e .o"i!y #oe& +e!o)e #'e an# .aya+"e- In
)y J'#$)ent, t(e a!tion i& .re)at're an# &(o'"#
(ave +een #i&)i&&e#-
PHIL. AMERICAN LIFE INSURANCE $. PINEDA
4C9 SC<A D46
PA<AS; G'"y 45, 4565
NATURE
Petition for revie on !ertiorari t(e or#er& of C*I
G'#$e Pine#a
FACTS
, In 4566, Private <e&.on#ent <o#o"fo Ei)ay'$a
.ro!'re# an or#inary "ife in&'ran!e .o"i!y fro) t(e
.etitioner !o).any an# #e&i$nate# (i& ife an#
!(i"#ren a& irrevo!a+"e +enefi!iarie&- On *e+- 22,
4560, Ei)ay'$a fi"e# it( t(e C*I a .etition to
a)en# t(e #e&i$nation of t(e +enefi!iarie& in (i& "ife
.o"i!y fro) irrevo!a+"e to revo!a+"e- Petitioner fi"e#
an Ur$ent Motion to re&et (earin$ a& e"" a& it&
!o))ent an#Ror O..o&ition to t(e re&.on#ent=&
.etition-
, <e&.on#ent G'#$e #enie# .etitioner=& Ur$ent
Motion, t('& a""oin$ .rivate re&.on#ent to a##'!e
evi#en!e, t(e !on&e;'en!e of (i!( a& t(e
i&&'an!e of t(e ;'e&tione# Or#er $rantin$ t(e
.etition- Petitioner t(en fi"e# a M*< (i!( a& a"&o
#enie# (en!e t(i& .etition-
ISSUE
4- 0ON t(e #e&i$nation of t(e irrevo!a+"e
+enefi!iarie& !o'"# +e !(an$e# or a)en#e# it(o't
t(e !on&ent of a"" t(e irrevo!a+"e +enefi!iarie&
2- 0ON t(e irrevo!a+"e +enefi!iarie& (erein, one of
(o) i& a"rea#y #e!ea&e# (i"e t(e ot(er& are a""
)inor& !o'"# va"i#"y $ive !on&ent to t(e !(an$e or
a)en#)ent in t(e #e&i$nation of t(e irrevo!a+"e
+enefi!iarie&
HELD
4- NO
, Ba&e# on t(e .rovi&ion of t(eir !ontra!t an# t(e "a
a.."i!a+"e, it i& on"y it( t(e !on&ent of a"" t(e
+enefi!iarie& t(at any !(an$e or a)en#)ent in t(e
.o"i!y !on!ernin$ t(e irrevo!a+"e +enefi!iarie& )ay
+e "e$a""y an# va"i#"y effe!te#- Bot( t(e "a an# t(e
Po"i!y #o not .rovi#e for any ot(er e%!e.tion-
Reasoning
- Sin!e t(e .o"i!y a& .ro!'re# in 4566, t(e
a.."i!a+"e "a in t(i& !a&e i& t(e In&'ran!e A!t an#
'n#er t(at "a, t(e +enefi!iary #e&i$nate# in a "ife
in&'ran!e !ontra!t !annot +e !(an$e# it(o't t(e
!on&ent of t(e +enefi!iary +e!a'&e (e (a& a ve&te#
intere&t in t(e .o"i!y-
, T(e Benefi!iary Ee&i$nation In#or&e)ent in t(e
.o"i!y in t(e na)e of Ei)ay'$a &tate& t(at t(e
#e&i$nation of t(e +enefi!iarie& i& irrevo!a+"eH 7no
ri"!t or #rivile"e under t!e Policy ay be e8ercised$
or a"reeent ade ,it! t!e Co#any to any
c!an"e in or aendent to t!e Policy$ ,it!out t!e
consent of t!e said beneficiary/beneficiaries.*
, Contra!t& (i!( are t(e .rivate "a& of t(e
!ontra!tin$ .artie& &(o'"# +e f'"fi""e# a!!or#in$ to
t(e "itera" &en&e of t(eir &ti.'"ation&, if t(eir ter)&
are !"ear an# "eave no roo) for #o'+t a& to t(e
intention of t(e !ontra!tin$ .artie&, for !ontra!t& are
o+"i$atory, no )atter in (at for) t(ey )ay +e,
(enever t(e e&&entia" re;'i&ite& for t(eir va"i#ity
are .re&ent-
, *ina""y, t(e fa!t t(at t(e !ontra!t of in&'ran!e #oe&
not !ontain a !ontin$en!y (en t(e !(an$e in t(e
#e&i$nation of +enefi!iarie& !o'"# +e va"i#"y effe!te#
)ean& t(at it a& never it(in t(e !onte)."ation of
t(e .artie&-
2- NO
, T(e .arent,in&'re# !annot e%er!i&e ri$(t& an#Ror
.rivi"e$e& .ertainin$ to t(e in&'ran!e !ontra!t, for
ot(eri&e, t(e ve&te# ri$(t& of t(e irrevo!a+"e
+enefi!iarie& o'"# +e ren#ere# in!on&e;'entia"- T(e
a""e$e# a!;'ie&!en!e of t(e 6 !(i"#ren +enefi!iarie&
!annot +e !on&i#ere# an effe!tive ratifi!ation to t(e
!(an$e of t(e +enefi!iarie& fro) irrevo!a+"e to
revo!a+"e- T(ey ere )inor& at t(e ti)e, an# !o'"#
not va"i#"y $ive !on&ent- Neit(er !o'"# t(ey a!t
t(ro'$( t(eir fat(er,in&'re# &in!e t(eir intere&t& are
;'ite #iver$ent fro) one anot(er-
Disposition ;'e&tione# Or#er& of re&.on#ent J'#$e
are n'""ifie# an# &et a&i#e-
SUN LIFE ASSURANCE $. INGERSOLL
INSURANCE Page 55
D4 P1I/ 334
ST<>>T; Nove)+er 6, 4524
NATURE
A!tion of inter."ea#er
FACTS
, A.ri" 46, 4546, S'n /ife A&&'ran!e Co).any of
Cana#a @S'n /ifeA, in !on&i#eration of t(e .ay)ent of
a &ti.'"ate# ann'a" .re)i') #'rin$ t(e .erio# of t(e
.o"i!y, or 'nti" t(e .re)i')& (a# +een !o)."ete"y
.ai# for tenty year&, i&&'e# a .o"i!y of in&'ran!e on
t(e "ife of Ey Po!o for UST42,900, .aya+"e to t(e
&ai# a&&'re# or (i& a&&i$n& on t(e 24&t #ay of
*e+r'ary, 4536, an# if (e &(o'"# #ie +efore t(at #ate
t(en to (i& "e$a" re.re&entative&-
, G'ne 23, 4545, t(e a&&'re#, Ey Po!o, a&
a#J'#$e# an invo"'ntary in&o"vent +y t(e C*I Mani"a,
an# *ran2 B- In$er&o"" a& a..ointe# a&&i$nee of (i&
e&tate-
, G'"y 40, 4545, Ey Po!o #ie#, an# on A'$'&t 24,
4545, Tan Sit, a& #'"y a..ointe# a& t(e
a#)ini&tratri% of (i& inte&tate e&tate-
, By t(e ter)& of t(e .o"i!y it a& .rovi#e# t(at after
t(e .ay)ent of t(ree f'"" .re)i')&, t(e a&&'re#
!o'"# &'rren#er t(e .o"i!y to t(e !o).any for a
P!a&( &'rren#er va"'e,P in#i!ate# in an anne%e#
ta+"e; +'t ina&)'!( a& no )ore t(an to .re)i')&
(a# +een .ai# '.on t(e .o"i!y no in ;'e&tion '. to
t(e ti)e of t(e #eat( of t(e a&&'re#, t(i& .rovi&ion
(a# not +e!o)e effe!tive; an# it #oe& not a..ear
t(at t(e !o).any o'"# in a!!or#an!e it( it& on
'&a$e or ot(eri&e (ave )a#e any !on!e&&ion to t(e
a&&'re# in t(e event (e (a# #e&ire#, +efore (i&
#eat(, to &'rren#er t(e .o"i!y- It )'&t t(erefore +e
a!!e.te# t(at t(i& .o"i!y (a# no !a&( &'rren#er
va"'e, at t(e ti)e of t(e a&&'re#N& #eat(, eit(er +y
!ontra!t or +y !onvention .ra!ti!e of t(e !o).any in
&'!( !a&e&-
, Bot( In$er&o"", a& a&&i$nee, an# Tan Sit, a&
a#)ini&trati% of Ey Po!oN& e&tate, a&&erte# !"ai)& to
t(e .ro!ee#& of t(e .o"i!y- T(e "oer !o'rt fo'n#
t(at In$er&o"" (a# a +etter ri$(t an# or#ere# S'n /ife
to .ay t(e in&'ran!e .ro!ee#& to (i)-
ISSUE
0ON In$er&o"", a& a&&i$nee, (a& a ri$(t to t(e
.ro!ee#& of t(e in&'ran!e
HELD
NO
On t(e P(i"i..ine In&o"ven!y /a @A!t No- 4596A
, T(e .ro.erty an# intere&t& of t(e in&o"vent (i!(
+e!o)e ve&te# in t(e a&&i$nee of t(e in&o"vent are
&.e!ifie# in &e!tion 32 of t(e In&o"ven!y /a (i!(
rea#& a& fo""o&H
PS>C- 32- A& &oon a& an a&&i$nee i& e"e!te#
or a..ointe# an# ;'a"ifie#, t(e !"er2 of t(e !o'rt
&(a"", +y an in&tr')ent 'n#er (i& (an# an# &ea" of
t(e !o'rt, a&&i$n an# !onvey to t(e a&&i$nee a"" t(e
rea" an# .er&ona" .ro.erty, e&tate, an# effe!t& of t(e
#e+tor it( a"" (i& #ee#&, +oo2&, an# .a.er& re"atin$
t(ereto, an# &'!( a&&i$n)ent &(a"" re"ate +a!2 to t(e
!o))en!e)ent of t(e .ro!ee#in$& in in&o"ven!y,
an# &(a"" re"ate +a!2 to t(e a!t& '.on (i!( t(e
a#J'#i!ation a& fo'n#e#, an# +y o.eration of "a
&(a"" ve&t t(e tit"e to a"" &'!( .ro.erty, e&tate, an#
effe!t& in t(e a&&i$nee, a"t(o'$( t(e &a)e i& t(en
atta!(e# on )e&ne .ro!e&&, a& t(e .ro.erty of t(e
#e+tor- S'!( a&&i$n)ent &(a"" o.erate to ve&t in t(e
a&&i$nee a"" of t(e e&tate of t(e in&o"vent #e+tor not
e%e).t +y "a fro) e%e!'tion-P
, t(e In&o"ven!y /a i& in $reat .art a !o.y of t(e
In&o"ven!y A!t of Ca"ifornia, ena!te# in 4659, t(o'$(
it !ontain& a fe .rovi&ion& fro) t(e A)eri!an
Ban2r'.t!y /a of 4656
, Un#er ea!( of &ai# "a& t(e a&&i$nee a!;'ire& a""
t(e rea" an# .er&ona" .ro.erty, e&tate, an# effe!t& of
t(e #e+tor, not e%e).t +y "a fro) e%e!'tion, it(
a"" #ee#&, +oo2& an# .a.er& re"atin$ t(ereto; an#
(i"e t(i& "an$'a$e i& +roa#, it nevert(e"e&& "a!2& t(e
!o).re(en&ivene&& of &e!tion C0 @aA of t(e A)eri!an
Ban2r'.t!y /a of 4656 in at "ea&t to .arti!'"ar&;
for 'n#er &'+&e!tion 3 of &e!tion C0 @aA of t(e "a&t
)entione# "a, t(e tr'&tee in +an2r'.t!y a!;'ire&
t(e ri$(t to e%er!i&e any .oer& (i!( t(e in&o"vent
)i$(t (ave e%er!i&e# for (i& on +enefit, an# 'n#er
&'+&e!tion 9 t(e tr'&tee a!;'ire& any .ro.erty of t(e
in&o"vent (i!( t(e "atter !o'"# +y any )ean& (ave
a&&i$ne# to anot(er- T(e In&o"ven!y /a (ere in
for!e, in !o))on it( t(e .re#e!e&&or "a& a+ove,
)entione#, !ontain& not(in$ &i)i"ar to t(e&e
.rovi&ion&-
On t(e a.."i!a+i"ity of t(e In&o"ven!y /a
, Se! 32 of t(e In&o"ven!y /a a)on$ ot(er t(in$&,
#e!"are& t(at t(e a&&i$n)ent to +e )a#e +y t(e !"er2
of t(e !o'rt P&(a"" o.erate to ve&t in t(e a&&i$nee a""
of t(e e&tate of t(e in&o"vent #e+tor not e%e).t +y
"a fro) e%e!'tion-P Moreover, +y &e!tion 2D, t(e
!o'rt i& re;'ire#, '.on )a2in$ an or#er a#J'#i!atin$
any .er&on in&o"vent, to &tay any !ivi" .ro!ee#in$&
.en#in$ a$ain&t (i); an# it i& #e!"are# in &e!tion 60
t(at no !re#itor (o&e #e+t i& .rova+"e 'n#er t(e A!t
&(a"" +e a""oe#, after t(e !o))en!e)ent of
.ro!ee#in$& in in&o"ven!y, to .ro&e!'te to fina"
J'#$)ent any a!tion t(erefor a$ain&t t(e #e+tor- In
!onne!tion it( t(e fore$oin$ )ay +e )entione#
&'+&e!tion& 4 an# 2 of &e!tion 36, a& e"" a& t(e
o.enin$ or#& of &e!tion 33, to t(e effe!t t(at t(e
a&&i$nee &(a"" (ave t(e ri$(t an# .oer to re!over
an# to ta2e into (i& .o&&e&&ion, a"" of t(e e&tate,
a&&et&, an# !"ai)& +e"on$in$ to t(e in&o"vent, e%!e.t
&'!( a& are e%e).t +y "a fro) e%e!'tion-
, T(e&e .rovi&ion& !"ear"y evin!e an intention to ve&t
in t(e a&&i$nee, for t(e +enefit of a"" t(e !re#itor& of
t(e in&o"vent, &'!( e"e)ent& of .ro.erty an#
.ro.erty ri$(t a& !o'"# +e rea!(e# an# &'+Je!te# +y
.ro!e&& of "a +y any &in$"e !re#itor &'in$ a"one-
An# t(i& i& e%a!t"y a& it &(o'"# +eH for it !annot +e
&'..o&e# t(at t(e /e$i&"at're o'"# &'..re&& t(e
ri$(t of a!tion of every in#ivi#'a" !re#itor '.on t(e
a#J'#i!ation of in&o"ven!y, an# at t(e &a)e ti)e
a""o t(e in&o"vent #e+tor to retain anyt(in$ &'+Je!t
to t(e .ay)ent of (i& #e+t& in a nor)a" &tate of
&o"ven!y-
, P"evia+"e a&&et&P an# Pa&&et& in in&o"ven!yP are
.ra!ti!a""y !oe%ten&ive ter)&- 1en!e, in #eter)inin$
(at e"e)ent& of va"'e !on&tit'te a&&et& in
in&o"ven!y, SC i& at "i+erty to !on&i#er (at e"e)ent&
of va"'e are &'+Je!t to +e ta2en '.on e%e!'tion, an#
vi!e ver&a-
On (et(er a .o"i!y of in&'ran!e (avin$ no !a&(
&'rren#er va"'e, +'t .aya+"e to in&'re# or (i& "e$a"
re.re&entative, i& .ro.erty t(at )ay +e ta2en '.on
e%e!'tion a$ain&t (i)-
, P(i"i..ine "a& #e!"are no e%e).tion it( re&.e!t
to in&'ran!e .o"i!ie&; an# t(i& &.e!ie& of .ro.erty i&
not en')erate#, in &e!tion D6 of t(e In&o"ven!y /a,
a)on$ ite)& fro) t(e oner&(i. of (i!( t(e
a&&i$nee i& e%!"'#e#- Moreover, a"" "ife in&'ran!e
.o"i!ie& are #e!"are# +y "a to +e a&&i$na+"e,
re$ar#"e&& of (et(er t(e a&&i$nee (a& an in&'ra+"e
intere&t in t(e "ife of t(e in&'re# or not @In&'ran!e
A!t No- 2D2C, &e!- 466A-
, SC (a& (e"# t(at in&'ran!e .o"i!ie& (avin$ a
.re&ent !a&( &'rren#er va"'e are &'+Je!t to +e ta2en
'.on e%e!'tion- @Mi&'t Gar!ia v&- 0e&t Coa&t San
*ran!i&!o /ife In&- Co-A
, a .o"i!y #evoi# of a !a&( &'rren#er va"'e !annot +e
eit(er P"evia+"e a&&et&P or Pa&&et& in in&o"ven!y-P
, t(e a&&i$nee in in&o"ven!y a!;'ire# no +enefi!ia"
intere&t in t(e .o"i!y of in&'ran!e in ;'e&tion; t(at
it& .ro!ee#& are not "ia+"e for any of t(e #e+t&
.rova+"e a$ain&t t(e in&o"vent in t(e .en#in$
.ro!ee#in$&, an# t(at &ai# .ro!ee#& &(o'"# t(erefore
+e #e"ivere# to (i& a#)ini&tratri%-
INSURANCE Page 56
On a.."i!a+"e US !a&e
, In re M!IinneyH no +enefi!ia" intere&t in t(e .o"i!y
(a# ever .a&&e# to t(e a&&i$nee over an# +eyon#
(at !on&tit'te# t(e &'rren#er va"'e, an# t(at t(e
"e$a" tit"e to t(e .o"i!y a& ve&te# in t(e a&&i$nee
)ere"y in or#er to )a2e t(e &'rren#er va"'e,
avai"a+"e to (i)- T(e a&&i$nee &(o'"# &'rren#er t(e
.o"i!y '.on t(e .ay)ent to (i) of &ai# va"'e, a& (e
a& in fa!t #ire!te# to #o- T(e a&&i$nee in
+an2r'.t!y (a# no ri$(t to 2ee. t(e e&tate 'n&ett"e#
for an in#efinite .erio#, for t(e )ere .'r.o&e of
&.e!'"atin$ '.on t(e !(an!e& of t(e +an2r'.tN&
#eat(- A& re$ar#& everyt(in$ +eyon# t(e &'rren#er
va"'e, t(e a&&i$nee in +an2r'.t!y o'"#, after t(e
#i&!(ar$e of t(e +an2r'.t, (ave no in&'ra+"e intere&t
in t(e "ife of t(e +an2r'.t-
, &'rren#er va"'e of a .o"i!y Pari&e& fro) t(e fa!t
t(at t(e fi%e# ann'a" .re)i')& i& )'!( in e%!e&& of
t(e ann'a" ri&2 #'rin$ t(e ear"ier year& of t(e .o"i!y,
an e%!e&& )a#e ne!e&&ary in or#er to +a"an!e t(e
#efi!ien!y of t(e &a)e .re)i') to )eet t(e ann'a"
ri&2 #'rin$ t(e "atter year& of t(e .o"i!y- T(i& e%!e&&
in t(e .re)i') .ai# over t(e ann'a" !o&t of
in&'ran!e, it( a!!')'"ation& of intere&t, !on&tit'te&
t(e &'rren#er va"'e- T(o'$( t(i& e%!e&& of .re)i')&
.ai# i& "e$a""y t(e &o"e .ro.erty of t(e !o).any, &ti""
in .ra!ti!a" effe!t, t(o'$( not in "a, it i& )oney& of
t(e a&&'re# #e.o&ite# it( t(e !o).any in a#van!e
to )a2e '. t(e #efi!ien!y in "ater .re)i')& to !over
t(e ann'a" !o&t of in&'ran!e, in&tea# of +ein$
retaine# +y t(e a&&'re# an# .ai# +y (i) to t(e
!o).any in t(e &(a.e of $reat"y,in!rea&e#
.re)i')&, (en t(e ri&2 i& $reate&t- It i& t(e Nnet
re&erveN re;'ire# +y "a to +e 2e.t +y t(e !o).any
for t(e +enefit of t(e a&&'re#, an# to +e )aintaine#
to t(e !re#it of t(e .o"i!y- So "on$ a& t(e .o"i!y
re)ain& in for!e t(e !o).any (a& not .ra!ti!a""y any
+enefi!ia" intere&t in it, e%!e.t a& it& !'&to#ian, it(
t(e o+"i$ation to )aintain it 'ni).aire# an# &'ita+"y
inve&te# for t(e +enefit of t(e in&'re#- T(i& i& t(e
.ra!ti!a", t(o'$( not t(e "e$a", re"ation of t(e
!o).any to t(i& f'n#- PU.on t(e &'rren#er of t(e
.o"i!y +efore t(e #eat( of t(e a&&'re#, t(e !o).any,
to +e re"ieve# fro) a"" re&.on&i+i"ity for t(e in!rea&e#
ri&2, (i!( i& re.re&ente# +y t(i& a!!')'"atin$
re&erve, !o'"# e"" affor# to &'rren#er a !on&i#era+"e
.art of it to t(e a&&'re#, or (i& re.re&entative- A
ret'rn of a .art in &o)e for) or ot(er i& no U&'a""y
)a#e-P @In re M!IinneyA
, t(e &ti.'"ation .rovi#in$ for a !a&( &'rren#er va"'e
i& a !o).arative"y re!ent innovation in "ife in&'ran!e-
*or)er"y t(e !ontra!t& .rovi#e# U a& t(ey &ti""
!o))on"y #o in t(e .o"i!ie& i&&'e# +y fraterna"
or$ani:ation& an# +enefit &o!ietie& U for t(e
.ay)ent of a .re)i') &'ffi!ient to 2ee. t(e
e&ti)ate# ri&2 !overe#; an# in !a&e of a "a.&e t(e
.o"i!y,(o"#er re!eive# not(in$- *'rt(er)ore, t(e
.ra!ti!e i& !o))on a)on$ in&'ran!e !o).anie&
even no to !on!e#e not(in$ in t(e !(ara!ter of !a&(
&'rren#er va"'e, 'nti" t(ree f'"" .re)i')& (ave +een
.ai#, a& in t(i& !a&e-
5 CON/USION @fro) t(i& !a&e an# ot(er >n$"i&( an#
A)eri!an !a&e& !ite# fo""oin$ t(e &a)e o.inionAH
t(e a&&i$nee a!;'ire& no +enefi!ia" intere&t in
in&'ran!e effe!te# on t(e "ife of t(e in&o"vent, e%!e.t
to t(e e%tent t(at &'!( in&'ran!e !ontain& a&&et&
(i!( !an +e rea"i:e# '.on a& of t(e #ate (en t(e
.etition of in&o"ven!y i& fi"e#- T(e e%."anation i& to
+e fo'n# in t(e !on&i#eration t(at t(e #e&tr'!tion of
a !ontra!t of "ife in&'ran!e i& not on"y (i$("y
.reJ'#i!ia" to t(e in&'re# an# t(o&e #e.en#ent '.on
(i), +'t i& ini)i!a" to t(e intere&t& of &o!iety-
In&'ran!e i& a &.e!ie& of .ro.erty t(at &(o'"# +e
!on&erve# an# not #i&&i.ate#- A& i& e"" 2non, "ife
in&'ran!e i& in!rea&in$"y #iffi!'"t to o+tain it(
a#van!in$ year&, an# even (en .ro!'ra+"e after t(e
a$e of fifty, t(e !o&t i& t(en &o $reat a& to +e
.ra!ti!a""y .ro(i+itive to )any- In&o"ven!y i& a
#i&a&ter "i2e"y to overta2e )en in )at're "ife; an#
one (o (a& $one t(ro'$( t(e .ro!e&& of +an2r'.t!y
'&'a""y fin#& (i)&e"f in (i& #e!"inin$ year& it( t(e
a!!')'"ate# &avin$& of year& &e.t aay an#
earnin$ .oer #i)ini&(e#- T(e !o'rt& are t(erefore
.ra!ti!a""y 'nani)o'& in ref'&in$ to .er)it t(e
a&&i$nee in in&o"ven!y to re&t fro) t(e in&o"vent a
.o"i!y of in&'ran!e (i!( !ontain& in it no .re&ent
rea"i:a+"e a&&et&-
On t(e a.."i!a+i"ity of t(e In&o"ven!y /a
, Se! 32 of t(e In&o"ven!y /a a)on$ ot(er t(in$&,
#e!"are& t(at t(e a&&i$n)ent to +e )a#e +y t(e !"er2
of t(e !o'rt P&(a"" o.erate to ve&t in t(e a&&i$nee a""
of t(e e&tate of t(e in&o"vent #e+tor not e%e).t +y
"a fro) e%e!'tion-P Moreover, +y &e!tion 2D, t(e
!o'rt i& re;'ire#, '.on )a2in$ an or#er a#J'#i!atin$
any .er&on in&o"vent, to &tay any !ivi" .ro!ee#in$&
.en#in$ a$ain&t (i); an# it i& #e!"are# in &e!tion 60
t(at no !re#itor (o&e #e+t i& .rova+"e 'n#er t(e A!t
&(a"" +e a""oe#, after t(e !o))en!e)ent of
.ro!ee#in$& in in&o"ven!y, to .ro&e!'te to fina"
J'#$)ent any a!tion t(erefor a$ain&t t(e #e+tor- In
!onne!tion it( t(e fore$oin$ )ay +e )entione#
&'+&e!tion& 4 an# 2 of &e!tion 36, a& e"" a& t(e
o.enin$ or#& of &e!tion 33, to t(e effe!t t(at t(e
a&&i$nee &(a"" (ave t(e ri$(t an# .oer to re!over
an# to ta2e into (i& .o&&e&&ion, a"" of t(e e&tate,
a&&et&, an# !"ai)& +e"on$in$ to t(e in&o"vent, e%!e.t
&'!( a& are e%e).t +y "a fro) e%e!'tion-
, T(e&e .rovi&ion& !"ear"y evin!e an intention to ve&t
in t(e a&&i$nee, for t(e +enefit of a"" t(e !re#itor& of
t(e in&o"vent, &'!( e"e)ent& of .ro.erty an#
.ro.erty ri$(t a& !o'"# +e rea!(e# an# &'+Je!te# +y
.ro!e&& of "a +y any &in$"e !re#itor &'in$ a"one-
An# t(i& i& e%a!t"y a& it &(o'"# +eH for it !annot +e
&'..o&e# t(at t(e /e$i&"at're o'"# &'..re&& t(e
ri$(t of a!tion of every in#ivi#'a" !re#itor '.on t(e
a#J'#i!ation of in&o"ven!y, an# at t(e &a)e ti)e
a""o t(e in&o"vent #e+tor to retain anyt(in$ &'+Je!t
to t(e .ay)ent of (i& #e+t& in a nor)a" &tate of
&o"ven!y-
, P"evia+"e a&&et&P an# Pa&&et& in in&o"ven!yP are
.ra!ti!a""y !oe%ten&ive ter)&- 1en!e, in #eter)inin$
(at e"e)ent& of va"'e !on&tit'te a&&et& in
in&o"ven!y, SC i& at "i+erty to !on&i#er (at e"e)ent&
of va"'e are &'+Je!t to +e ta2en '.on e%e!'tion, an#
vi!e ver&a-
On (et(er a .o"i!y of in&'ran!e (avin$ no !a&(
&'rren#er va"'e, +'t .aya+"e to t(e in&'re# or (i&
"e$a" re.re&entative, i& .ro.erty t(at )ay +e ta2en
'.on e%e!'tion a$ain&t (i)-
, P(i"i..ine "a& #e!"are no e%e).tion it( re&.e!t
to in&'ran!e .o"i!ie&; an# t(i& &.e!ie& of .ro.erty i&
not en')erate#, in &e!tion D6 of t(e In&o"ven!y /a,
a)on$ ite)& fro) t(e oner&(i. of (i!( t(e
a&&i$nee i& e%!"'#e#- Moreover, a"" "ife in&'ran!e
.o"i!ie& are #e!"are# +y "a to +e a&&i$na+"e,
re$ar#"e&& of (et(er t(e a&&i$nee (a& an in&'ra+"e
intere&t in t(e "ife of t(e in&'re# or not @In&'ran!e
A!t No- 2D2C, &e!- 466A-
, SC (a& (e"# t(at in&'ran!e .o"i!ie& (avin$ a
.re&ent !a&( &'rren#er va"'e are &'+Je!t to +e ta2en
'.on e%e!'tion- @Mi&'t Gar!ia v&- 0e&t Coa&t San
*ran!i&!o /ife In&- Co-, D4 P(i"-, 296-A
, a .o"i!y #evoi# of a !a&( &'rren#er va"'e !annot +e
eit(er P"evia+"e a&&et&P or Pa&&et& in in&o"ven!y-P
, t(e a&&i$nee in in&o"ven!y a!;'ire# no +enefi!ia"
intere&t in t(e .o"i!y of in&'ran!e in ;'e&tion; t(at
it& .ro!ee#& are not "ia+"e for any of t(e #e+t&
.rova+"e a$ain&t t(e in&o"vent in t(e .en#in$
.ro!ee#in$&, an# t(at &ai# .ro!ee#& &(o'"# t(erefore
+e #e"ivere# to (i& a#)ini&tratri%-
Disposition G'#$)ent rever&e#- S'n /ife i& #ire!te#
to .ay t(e .ro!ee#& of t(e .o"i!y to Tan Sit-
CHAPTER VI K RESCISSION OF INSURANCE
CONTRACTS9 CONCEALMENT,
INSURANCE Page 57
MISREPRESENTATION, ? BREACH OF
WARRANTIES
NG $. ASIAN CRUSADER LIFE ASSURANCE CORP
422 SC<A D64
>SCO/IN; May 30, 4563
FACTS
, On May 42, 4562, Ion$ Na) a.."ie# for a 20,
year en#o)ent in&'ran!e on (i& "ife for t(e &') of
P20,000, it( (i& ife, N$ Gan ?ee, a& +enefi!iary-
, 1e #ie# on Ee! 4563 of !an!er of t(e "iver it(
)eta&ta&i&- A"" .re)i')& (a# +een .ai# at t(e ti)e
of (i& #eat(-
, N$ .re&ente# a !"ai) for .ay)ent of t(e fa!e va"'e
of t(e .o"i!y- A..e""ant @A&ian Cr'&a#erA #enie# t(e
!"ai) on t(e $ro'n# t(at t(e an&er& $iven +y t(e
in&'re# to t(e ;'e&tion& a..earin$ in (i& a.."i!ation
for "ife in&'ran!e ere 'ntr'e-
5A22ella+9 t(e in&'re# a& $'i"ty of
)i&re.re&entation (en
4A (e an&ere# PNoP to t(e ;'e&tion @in t(e
a.."i!ationA of FHas any life insurance co#any ever
refused your a##lication for insurance or for
reinstateent of a la#sed #olicy or offered you a
#olicy different fro t!at a##lied for%F (en in fa!t,
In&'"ar /ife #enie# (i& a.."i!ation for rein&tate)ent
of (i& "a.&e# "ife in&'ran!e .o"i!y
2A (e $ave t(e a..e""antN& )e#i!a" e%a)iner fa"&e
an# )i&"ea#in$ infor)ation a& to (i& ai")ent an#
.revio'& o.eration (en (e &ai# (e a&
o#erated on for a /uor GayoaH of t!e
stoac!D associated ,it! ulcer of stoac!. /uor
ta+en out ,as !ard and of a !en@s e"" size.
-#eration ,as t,o years a"o in C!inese >eneral
Hos#ital by Dr. (a#. Clais !e is co#letely
recovered.8 Me#i!a" re.ort &(o t(at in&'re# a&
o.erate# on for P.e.ti! '"!erP, invo"vin$ t(e e%!i&ion
of a .ortion of t(e &to)a!(, not t')or-
ISSUE
0ON t(ere a& !on!ea")ent @0a& a..e""ant,
+e!a'&e of in&'re#N& afore&ai# re.re&entation, )i&"e#
or #e!eive# into enterin$ t(e !ontra!t or in a!!e.tin$
t(e ri&2 at t(e rate of .re)i') a$ree# '.onXA
HELD
NO
,P!on!ea")ent e%i&t& (ere t(e a&&'re# (a#
2no"e#$e of a fa!t )ateria" to t(e ri&2, an#
(one&ty, $oo# fait(, an# fair #ea"in$ re;'ire& t(at (e
&(o'"# !o))'ni!ate it to t(e a&&'rer, +'t (e
#e&i$ne#"y an# intentiona""y it((o"#& t(e &a)e-P
, It (a& a"&o +een (e"# Pt(at t(e !on!ea")ent )'&t,
in t(e a+&en!e of in;'irie&, +e not on"y )ateria", +'t
fra'#'"ent, or t(e fa!t )'&t (ave +een intentiona""y
it((e"#-P
Reasoning
4A T(e evi#en!e &(o& t(at t(e In&'"ar /ife
A&&'ran!e Co-, /t#- a..rove# Ion$ Na)N& re;'e&t
for rein&tate)ent an# a)en#)ent of (i& "a.&e#
in&'ran!e .o"i!y on A.ri" 2D, 4562O- It re&'"t&,
t(erefore, t(at (en on May 42, 4562 Ion$ Na)
an&ere# YNoN to t(e ;'e&tion (et(er any "ife
in&'ran!e !o).any ever ref'&e# (i& a.."i!ation for
rein&tate)ent of a "a.&e# .o"i!y (e #i# not
)i&re.re&ent any fa!t-
2A A&&')in$ t(at t(e afore&ai# an&er $iven +y t(e
in&'re# i& fa"&e, Se!- 2C
6
of t(e In&'ran!e /a
nevert(e"e&& re;'ire& t(at fra'#'"ent intent on t(e
.art of t(e in&'re# +e e&ta+"i&(e# to entit"e t(e
in&'rer to re&!in# t(e !ontra!t- An# a& !orre!t"y
o+&erve# +y t(e "oer !o'rt, P)i&re.re&entation a& a
#efen&e of t(e in&'rer to avoi# "ia+i"ity i& an
Yaffir)ative= #efen&e- T(e #'ty to e&ta+"i&( &'!( a
#efen&e +y &ati&fa!tory an# !onvin!in$ evi#en!e
re&t& '.on t(e #efen#ant- T(e evi#en!e +efore t(e
Co'rt #oe& not !"ear"y an# &ati&fa!tori"y e&ta+"i&(
t(at #efen&e-P
,Ion$ Na) (a# infor)e# t(e a..e""antN& )e#i!a"
e%a)iner t(at t(e t')or for (i!( (e a& o.erate#
on a& NNa&&o!iate# it( '"!er of t(e &to)a!(-P In t(e
a+&en!e of evi#en!e t(at t(e in&'re# (a# &'ffi!ient
)e#i!a" 2no"e#$e a& to ena+"e (i) to #i&tin$'i&(
+eteen P.e.ti! '"!erP an# Pa t')orP, (i& &tate)ent
t(at &ai# t')or a& Pa&&o!iate# it( '"!er of t(e
&to)a!(P &(o'"# +e !on&tr'e# a& an e%.re&&ion
)a#e in $oo# fait( of (i& +e"ief a& to t(e nat're of
(i& ai")ent an# o.eration- In#ee#, &'!( &tate)ent
)'&t +e .re&')e# to (ave +een )a#e +y (i)
it(o't 2no"e#$e of it& in!orre!tne&& an# it(o't
any #e"i+erate intent on (i& .art to )i&"ea# t(e
a..e""ant-
3A 0aiverH
0(i"e it )ay +e !on!e#e# t(at, fro) t(e vie.oint of
a )e#i!a" e%.ert, t(e infor)ation !o))'ni!ate# a&
i).erfe!t, t(e &a)e a& nevert(e"e&& &'ffi!ient to
(ave in#'!e# a..e""ant to )a2e f'rt(er in;'irie&
a+o't t(e ai")ent an# o.eration of t(e in&'re#-
8
0>ec. %7. >uch party to a contract of insurance must communicate to the other, in good faith, all
facts within his #nowledge which are material to the contract, and which the other has not the
means of ascertaining, and as to which he ma#es no warranty.0
Se!tion 32 of In&'ran!e /a [A!t No- 2D2C]
.rovi#e&H
7T(e ri$(t to infor)ation of )ateria" fa!t& )ay +e
aive# eit(er +y t(e ter)& of in&'ran!e or +y ne$"e!t
to )a2e in;'irie& a& to &'!( fa!t& (ere t(ey are
#i&tin!t"y i)."ie# in ot(er fa!t& of (i!( infor)ation
i& !o))'ni!ate#-8
It (a& +een (e"# t(at (ere, P'.on t(e fa!e of t(e
a.."i!ation, a ;'e&tion a..ear& to +e not an&ere#
at a"" or to +e i).erfe!t"y an&ere#, an# t(e in&'rer&
i&&'e a .o"i!y it(o't any f'rt(er in;'iry, t(ey aive
t(e i).erfe!tion of t(e an&er an# ren#er t(e
o)i&&ion to an&er )ore f'""y i))ateria"-
Disposition t(e J'#$)ent a..ea"e# fro) i& (ere+y
affir)e#, it( !o&t& a$ain&t a..e""ant
CANILANG $. CA (GREAT PACIFIC LIFE
ASSURANCE CORP.)
223 SC<A DD3
*>/ICIANO; G'ne 4C, 4553
NATURE
Petition for revie on !ertiorari of t(e #e!i&ion of t(e
Co'rt of A..ea"&
FACTS
, G'ne 46, 4562 L Gai)e Cani"an$ a& #ia$no&e# +y
Er- C"a'#io to (ave &in'& ta!(y!ar#ia- 1e a&
#ire!te# +y t(e #o!tor to ta2e a tran;'i"i:er
@Tra:e.a)A an# a +eta,+"o!2er #r'$ @A.tinA-
, A'$'&t 3, 4562 L Gai)e !on&'"te# Er- C"a'#io a$ain
an# a& #ia$no&e# to (ave a!'te +ron!(iti&-
, A'$'&t D, 4562 L Gai)e a.."ie# for a non)e#i!a"
in&'ran!e .o"i!y it( Great Pa!ifi! /ife A&&'ran!e
Co).any- 1e na)e# (i& ife T(e")a a& (i&
+enefi!iary- 1e a& i&&'e t(e .o"i!y it( a fa!e
va"'e of P45,C00 effe!tive A'$'&t 5, 4562-
, A'$'&t 9, 4563 L Gai)e #ie# of !on$e&tive (eart
fai"'re, ane)ia an# !(roni! ane)ia- T(e")a fi"e# (er
!"ai) +'t t(e in&'ran!e !o).any ref'&e# to $rant it
on t(e $ro'n# t(at Gai)e (a# !on!ea"e# infor)ation-
, T(e")a fi"e# a !o)."aint a$ain&t Great Pa!ifi! to
re!over t(e in&'ran!e .ro!ee#&- S(e te&tifie# t(at
&(e a& not aare of (er ('&+an#=& ai")ent& an#
t(at &(e t(o'$(t (e (a# #ie# fro) a 2i#ney #i&or#er-
, Great Pa!ifi! .re&ente# a& itne&& Er- Q'i&)orio
(o te&tifie# t(at Gai)e=& in&'ran!e a.."i!ation a&
t(e +a&i& of (i& )e#i!a" #e!"aration an# &(e
e%."aine# t(at an a.."i!ant a& re;'ire# to 'n#er$o
)e#i!a" e%a)ination on"y if t(e a.."i!ant (a#
#i&!"o&e# t(at (e (a# .revio'&"y +een !on&'"te# it(
a #o!tor an# (a# +een (o&.ita"i:e#-
INSURANCE Page 58
, T(e In&'ran!e Co))i&&ioner or#ere# Great Pa!ifi!
to .ay T(e")a t(e in&'ran!e .ro!ee#&, in!"'#in$
attorney=& fee&, (o"#in$ t(at Gai)e=& i""ne&& a& not
t(at &erio'& a& to Great Pa!ifi!=& #e!i&ion to in&'re
(i) an# t(at t(ere a& no !on!ea")ent on t(e .art
of Gai)e it( re$ar# to (i& i""ne&&-
Petitioners Claim(
B T(e")a ar$'e& t(at t(e non,#i&!"o&'re of Gai)e
#i# not a)o'nt to fra'#-
B S(e a"&o ar$'e& t(at t(e CA erre# in not (o"#in$
t(at t(e i&&'e in t(e !a&e a$ree# '.on +eteen t(e
.artie& +efore t(e In&'ran!e Co))i&&ion i& (et(er
or not Gai)e Nintentiona""yN )a#e )ateria"
!on!ea")ent in &tatin$ (i& &tate of (ea"t(;
Respondents Comments(
B T(e CA rever&e# t(e In&'ran!e Co))i&&ioner=&
#e!i&ion, (o"#in$ t(at t(e '&e of t(e or#
Nintentiona""yP +y t(e In&'ran!e Co))i&&ioner in
#efinin$ an# re&o"vin$ t(e i&&'e a$ree# '.on +y t(e
.artie& at .re,tria" +efore t(e In&'ran!e
Co))i&&ioner a& not &'..orte# +y t(e evi#en!e
an# t(at t(e i&&'e a$ree# '.on +y t(e .artie& (a#
+een (et(er Gai)e )a#e a )ateria" !on!ea")ent a&
to t(e &tate of (i& (ea"t( at t(e ti)e of t(e fi"in$ of
in&'ran!e a.."i!ation, J'&tifyin$ t(e #enia" of t(e
!"ai)-
B It a"&o fo'n# t(at t(e fai"'re of Gai)e to #i&!"o&e
.revio'& )e#i!a" !on&'"tation an# treat)ent
!on&tit'te# )ateria" infor)ation (i!( &(o'"# (ave
+een !o))'ni!ate# to Great Pa!ifi! to ena+"e t(e
"atter to )a2e .ro.er in;'irie&-
ISSUES
4- 0ON Gai)e intentiona""y it((e"# infor)ation
fro) Great Pa!ifi!
2- 0ON t(e infor)ation it((e"# o'"# (ave +een
)ateria" to Great Pa!ifi!=& #e!i&ion to $rant Gai)e t(e
in&'ran!e .o"i!y
HELD
4- F>S
Ratio Se!tion 2C of t(e In&'ran!e Co#e of 45C6 i&
.ro.er"y rea# a& referrin$ to Pany !on!ea")ent
it(o't re$ar# to (et(er &'!( !on!ea")ent i&
intentiona" or 'nintentiona"- T(e re&toration in 4569
+y B-P- B"$- 6CD of t(e .(ra&e P(et(er intentiona"
or 'nintentiona"P )ere"y 'n#er&!ore# t(e fa!t t(at a""
t(ro'$(o't @fro) 454D to 4569A, t(e &tat'te #i# not
re;'ire .roof t(at !on!ea")ent )'&t +e Pintentiona"P
in or#er to a't(ori:e re&!i&&ion +y t(e inJ're# .arty-
Reasoning
, Art- 2C of t(e 45C6 In&'ran!e Co#e rea#& t(at 7a
!on!ea")ent entit"e& t(e inJ're# .arty to re&!in# a
!ontra!t of in&'ran!e,8 (i!( #oe& not in!"'#e t(e
or#& 7(et(er intentiona" or 'nintentiona"8 fro) t(e
.revio'& &tat'te&- T(e In&'ran!e Co))i&&ioner
re"ie# on t(i& #e"etion in ar$'in$ t(at t(e &tat'te
inten#e# to "i)it t(e 2in#& of !on!ea")ent (i!(
$enerate a ri$(t to re&!in# on t(e .art of t(e inJ're#
.arty to Pintentiona" !on!ea")ent&-P
, In t(e !a&e at +ar, t(e nat're of t(e fa!t& not
!onveye# to t(e in&'rer a& &'!( t(at t(e fai"'re to
!o))'ni!ate )'&t (ave +een intentiona" rat(er t(an
)ere"y ina#vertent-
B Gai)e !o'"# not (ave +een 'naare t(at (i&
(eart +eat o'"# at ti)e& ri&e to (i$( an#
a"ar)in$ "eve"& an# t(at (e (a# !on&'"te# a #o!tor
ti!e to )ont(& +efore a.."yin$ for non,)e#i!a"
in&'ran!e-
B T(e "a&t )e#i!a" !on&'"tation too2 ."a!e J'&t t(e
#ay +efore t(e in&'ran!e a.."i!ation a& fi"e#-
2- F>S
Ratio Materia"ity re"ate& rat(er to t(e P.ro+a+"e an#
rea&ona+"e inf"'en!e of t(e fa!t&P '.on t(e .arty to
(o) t(e !o))'ni!ation &(o'"# (ave +een )a#e, in
a&&e&&in$ t(e ri&2 invo"ve# in )a2in$ or o)ittin$ to
)a2e f'rt(er in;'irie& an# in a!!e.tin$ t(e
a.."i!ation for in&'ran!e; t(at P.ro+a+"e an#
rea&ona+"e inf"'en!e of t(e fart&P !on!ea"e# )'&t, of
!o'r&e, +e #eter)ine# o+Je!tive"y, +y t(e J'#$e
'"ti)ate"y-
Reasoning
, T(e infor)ation (i!( Gai)e fai"e# to #i&!"o&e a&
)ateria" to t(e a+i"ity of Great Pa!ifi! to e&ti)ate t(e
.ro+a+"e ri&2 (e .re&ente# a& a &'+Je!t of "ife
in&'ran!e-
, 1a# Cani"an$ #i&!"o&e# (i& vi&it& to (i& #o!tor, t(e
#ia$no&i& )a#e an# t(e )e#i!ine& .re&!ri+e# +y
&'!( #o!tor, in t(e in&'ran!e a.."i!ation, it )ay +e
rea&ona+"y a&&')e# t(at Great Pa!ifi! o'"# (ave
)a#e f'rt(er in;'irie& an# o'"# (ave .ro+a+"y
ref'&e# to i&&'e a non,)e#i!a" in&'ran!e .o"i!y or, at
t(e very "ea&t, re;'ire# a (i$(er .re)i') for t(e
&a)e !overa$e-
, A& (e"# in t(e !a&e of Saturnino vs. P!ili##ine-
Aerican 0ife 'nsurance$ 7t(e aiver of )e#i!a"
e%a)ination in a non,)e#i!a" in&'ran!e !ontra!t
ren#er& even )ore )ateria" t(e infor)ation in;'ire#
of t(e a.."i!ant !on!ernin$ .revio'& !on#ition of
(ea"t( an# #i&ea&e& &'ffere#, for &'!( infor)ation
ne!e&&ari"y !on&tit'te& an i).ortant fa!tor (i!( t(e
in&'rer ta2e& into !on&i#eration in #e!i#in$ (et(er
to i&&'e t(e .o"i!y or not-8
Disposition t(e Petition for <evie i& E>NI>E for
"a!2 of )erit an# t(e Ee!i&ion of t(e Co'rt of A..ea"&
#ate# 46 O!to+er 4565 in C-A-,G-<- SP No- 06656 i&
(ere+y A**I<M>E-
YU PANG CHENG $. CA
409 P1I/ 530
BAUTISTA ANG>/O; May 25, 4595
FACTS
, Se.te)+er 9, 4590H F' Pan$ >n$ &'+)itte# .art&
II an# III of (i& a.."i!ation for in&'ran!e !on&i&tin$
of t(e )e#i!a" #e!"aration )a#e +y (i) to t(e
)e#i!a" e%a)iner of #efen#ant an# t(e )e#i!a"
e%a)inerN& re.ort
, Se.te)+er CH (e &'+)itte# .art I of (i& a.."i!ation
(i!( i& t(e #e!"aration )a#e +y (i) to an a$ent of
#efen#ant
, Se.te)+er 6H #efen#ant i&&'e# to t(e in&'re#
Po"i!y No- 642696
, Ee!e)+er 2C, 4590H t(e in&'re# entere# St-
/'2eN& 1o&.ita" for )e#i!a" treat)ent +'t (e #ie# on
*e+r'ary 2C, 4594-
, A!!or#in$ to t(e #eat( !ertifi!ate, (e #ie# of
Pinfi"tratin$ )e#'""ary !ar!ino)a, Gra#e D, a#van!e#
!ar#ia! an# of "e&&er !'rvat're, &to)a!( )eta&ta&e&
&."een-P
, P"aintiff, +rot(er an# +enefi!iary of t(e in&'re#,
#e)an#e# fro) #efen#ant t(e .ay)ent of t(e
.ro!ee#& of t(e in&'ran!e .o"i!y an# (en t(e
#e)an# a& ref'&e#, (e +ro'$(t t(e .re&ent a!tion-
, T(e in&'re#, in (i& a.."i!ation for in&'ran!e,
.arti!'"ar"y in (i& #e!"aration& to t(e e%a)inin$
.(y&i!ian, &tate# t(e fo""oin$ in an&erin$ t(e
;'e&tion& .ro.o'n#e# to (i)H
4D- 1ave yo' ever (a# any of t(e fo""oin$ #i&ea&e&
or &y)to)&X >a!( ;'e&tion )'&t +e rea# an#
an&ere# PFe&P or PNo-P-
PGa&triti&, U"!er of t(e Sto)a!( or any #i&ea&e of
t(at or$anX No-
PMerti$o, Ei::ine&&, *aintin$,&.e""& or
Un!on&!io'ne&&X No-
PCan!er, T')or& or U"!er& of any 2in#X No-
, 49- 1ave yo' ever !on&'"te# any .(y&i!ian riot
in!"'#e# in any of t(e a+ove an&er&X Give na)e&
an# a##re&& or .(y&i!ian& "i&t ai")ent& or a!!i#ent&
an# #ate- No-P
, It a..ear& t(at t(e in&'re# entere# t(e C(ine&e
Genera" 1o&.ita" for )e#i!a" treat)ent on Gan'ary
25, 4590 (avin$ &taye# t(ere '. to *e+r'ary 44,
4590-
INSURANCE Page 59
, An W,ray .i!t're of (i& &to)a!( a& ta2en an# t(e
#ia$no&i& )a#e of (i) +y (i& #o!tor& &(oe# t(at
(i& i""ne&& a& P.e.ti! '"!er, +"ee#in$-P
ISSUE
0ON t(e in&'re# i& $'i"ty of !on!ea")ent of &o)e
fa!t& )ateria" to t(e ri&2 in&'re# a$ain&t (i!( (a&
t(e effe!t of avoi#in$ t(e .o"i!y a& fo'n# +y
re&.on#ent !o'rt-
HELD
, It &(o'"# +e note# t(at t(e in&'re#N& !onfine)ent
in t(e C(ine&e Genera" 1o&.ita" too2 ."a!e fro)
Gan'ary 25, 4590 to *e+r'ary 44, 4590, (erea& (i&
a.."i!ation for in&'ran!e (erein (e &tate# (i&
an&er& to t(e ;'e&tion& .ro.o'n#e# to (i) +y t(e
e%a)inin$ .(y&i!ian of #efen#ant a& &'+)itte# to
#efen#ant on Se.te)+er 9, 4590-
, It i& a..arent t(at (en t(e in&'re# $ave (i&
an&er& re$ar#in$ (i& .revio'& ai")ent, .arti!'"ar"y
it( re$ar# to PGa&triti&, U"!er of t(e Sto)a!( or any
#i&ea&e of t(at or$anP an# PMerti$o, Ei::ine&&,
*aintin$,&.e""& or Un!on&!io'&ne&&P, (e !on!ea"e#
t(e ai")ent of (i!( (e a& treate# in t(e C(ine&e
Genera" 1o&.ita" (i!( .re!i&e"y (a& #ire!t
!onne!tion it( t(e &'+Je!t of t(e ;'e&tion&
.ro.o'n#e#-
, T(e ne$ative an&er& $iven +y t(e in&'re#
re$ar#in$ (i& .revio'& ai")ent, or (i& !on!ea")ent of
t(e fa!t t(at (e a& (o&.ita"i:e# an# treate# for
&o)eti)e of .e.ti! '"!er an# (a# &'ffere# fro)
P#i::ine&&, ane)ia, a+#o)ina" .ain& an# tarry
&too"&P, #e.rive# #efen#ant of t(e o..ort'nity to
)a2e t(e ne!e&&ary in;'iry a& to t(e nat're of (i&
.a&t i""ne&& &o t(at it )ay for) it& e&ti)ate re"ative
to t(e a..rova" of (i& a.."i!ation-
, 1a# #efen#ant +een $iven &'!( o..ort'nity,
!on&i#erin$ t(e .revio'& i""ne&& of t(e in&'re# a&
#i&!"o&e# +y t(e re!or#& of t(e C(ine&e Genera"
1o&.ita", #efen#ant o'"# .ro+a+"y (a# never
!on&ente# to t(e i&&'an!e of t(e .o"i!y in ;'e&tion-
In fa!t, a!!or#in$ to t(e #eat( !ertifi!ate, t(e in&'re#
#ie# of Pinfi"tratin$ )e#'""ary !ar!ino)a, Gra#e, D,
a#van!e# !ar#ia! an# of "e&&er !'rvat're, &to)a!(
)eta&ta&e& &."eenP, (i!( )ay (ave a #ire!t
!onne!tion it( (i& .revio'& i""ne&&-
, O'r In&'ran!e /a .rovi#e& t(at PA ne$"e!t to
!o))'ni!ate t(at (i!( a .arty 2no& an# o'$(t to
!o))'ni!ate, i& !a""e# !on!ea")entP @Se!tion 29,
A!t No- 2D2CA- 0(et(er intentiona" or 'nintentiona",
t(e !on!ea")ent entit"e& t(e in&'rer to re&!in# t(e
!ontra!t of in&'ran!e @Se!tion 26A-
, O'r "a even re;'ire& t(e in&'re# to !o))'ni!ate
to t(e in&'rer a"" fa!t& it(in (i& 2no"e#$e (i!(
are )ateria" to t(e !ontra!t an# (i!( t(e ot(er
.arty (a& not t(e )ean& of a&!ertainin$ @Se!tion
2CA, an# t(e )ateria"ity i& to +e #eter)ine# not +y
t(e event +'t &o"e"y +y t(e .ro+a+"e an# rea&ona+"e
inf"'en!e of t(e fa!t& '.on t(e .arty to (o) t(e
!o))'ni!ation i& #'e @Se!tion 30A-
, Ar$ente v&- 0e&t Coa&t /ife In&'ran!e Co-H POne
$ro'n# for t(e re&!i&&ion of a !ontra!t of in&'ran!e
'n#er t(e In&'ran!e A!t i& Na !on!ea")entN, (i!( in
&e!tion 29 i& #efine# NA ne$"e!t to !o))'ni!ate t(at
(i!( a .arty 2no& an# o'$(t to !o))'ni!ate-N
A..e""ant ar$'e& t(at t(e !on!ea")ent a&
i))ateria" an# in&'ffi!ient to avoi# t(e .o"i!y- 0e
!annot a$ree- In an a!tion on a "ife in&'ran!e .o"i!y
(ere t(e evi#en!e !on!"'&ive"y &(o& t(at t(e
an&er& to ;'e&tion& !on!ernin$ #i&ea&e& ere
'ntr'e, t(e tr't( or fa"&ity of t(e an&er& +e!o)e
t(e #eter)inin$ fa!tor- If t(e .o"i!y a& .ro!'re# +y
fra'#'"ent re.re&entation&, t(e !ontra!t of in&'ran!e
a..arent"y &et fort( t(erein a& never "e$a""y
e%i&tent- It !an fair"y +e a&&')e# t(at (a# t(e tr'e
fa!t& +een #i&!"o&e# +y t(e a&&'re#, t(e in&'ran!e
o'"# never (ave +een $rante#-P
Disposition Ee!i&ion affir)e#-
GREAT PACIFIC LIFE $. CA (*,2"a 2.BC)
PACIFIC BAN<ING CORP $. CA (ORIENTAL
ASSURANCE CORPORATION)
466 SC<A 4
PA<AS; Nove)+er 26, 4566
NATURE
Petition for revie on !ertiorari of t(e CA #e!i&ion,
(i!( &et a&i#e t(e #e!i&ion of C*I Mani"a, (i!( (a#
in t'rn $rante# t(e !o)."aint for a &') of )oney in
!ivi" !a&e fi"e# +y Pa!ifi! Ban2in$ a$ain&t Orienta"
A&&'ran!e-
FACTS
, O!to+er 24,4563H an o.en *ire Po"i!y a& i&&'e# to
t(e Para)o'nt S(irt Man'fa!t'rin$ Co- @in&'re#A, +y
(i!( Orienta" A&&'ran!e Cor.oration +o'n# it&e"f to
in#e)nify t(e in&'re# for any "o&& or #a)a$e, not
e%!ee#in$ P64,000-00, !a'&e# +y fire to it& .ro.erty
!on&i&tin$ of &to!2&, )ateria"& an# &'.."ie& '&'a" to
a &(irt fa!tory, in!"'#in$ f'rnit're, fi%t're&,
)a!(inery an# e;'i.)ent (i"e !ontaine# in t(e
$ro'n#, &e!on# an# t(ir# f"oor& of t(e +'i"#in$
&it'ate# at n')+er 296 Ga+onero& St-, San Ni!o"a&,
Mani"a, for a .erio# of one year !o))en!in$ fro)
t(at #ate to O!to+er 24, 456D-
, In&'re# a& at t(e ti)e of t(e i&&'an!e of t(e
.o"i!y an# i& '. to t(i& ti)e, a #e+tor of Pa!ifi!
Ban2in$ in t(e a)o'nt of not "e&& P600,000-00 an#
t(e $oo#& #e&!ri+e# in t(e .o"i!y ere (e"# in tr'&t
+y t(e in&'re# for t(e Pa!ifi! Ban2in$ 'n#er t(r'&t
re!ei.t&-
, Sai# .o"i!y a& #'"y en#or&e# to Pa!ifi! Ban2in$ a&
)ort$a$eeRtr'&tor of t(e .ro.ertie& in&'re#, it( t(e
2no"e#$e an# !on&ent of Orienta" A&&'ran!e to t(e
effe!t t(at P"o&& if any 'n#er t(i& .o"i!y i& .aya+"e to
t(e Pa!ifi! Ban2in$ Cor.orationP-
, 0(i"e t(e afore&ai# .o"i!y a& in f'"" for!e an#
effe!t, a fire +ro2e o't on t(e &'+Je!t .re)i&e&
#e&troyin$ t(e $oo#& !ontaine# in it& $ro'n# an#
&e!on# f"oor&- Co'n&e" for t(e Pa!ifi! Ban2in$ &ent a
"etter of #e)an# to Orienta" A&&'ran!e for in#e)nity
#'e to t(e "o&& of .ro.erty +y fire- Orienta"
A&&'ran!e infor)e# !o'n&e" t(at it a& not yet rea#y
to a!!e#e to t(e "atterN& #e)an# a& t(e for)er i&
aaitin$ t(e fina" re.ort of t(e in&'ran!e a#J'&ter,
1-1- Bayne A#J'&t)ent Co).any-
, Sai# in&'ran!e a#J'&ter notifie# !o'n&e" for t(e
Pa!ifi! Ban2in$ t(at t(e in&'re# 'n#er t(e .o"i!y (a#
not fi"e# any !"ai) it( it, nor &'+)itte# .roof of
"o&& (i!( i& a !"ear vio"ation of Po"i!y Con#ition
No-44, an# for (i!( rea&on, #eter)ination of t(e
"ia+i"ity of Orienta" A&&'ran!e !o'"# not +e (a#-
Pa!ifi! Ban2in$N& !o'n&e" re."ie# a&2in$ t(e in&'ran!e
a#J'&ter to verify fro) t(e re!or#& of t(e B'rea' of
C'&to)& t(e entrie& of )er!(an#i&e ta2en into t(e
!'&to)& +on#e# are(o'&e ra:e# +y fire a& a
re"ia+"e .roof of "o&&-
, *or fai"'re of t(e in&'ran!e !o).any to .ay t(e
"o&& a& #e)an#e#, Pa!ifi! Ban2in$ fie"# +efore C*I an
a!tion for a &') of )oney a$ain&t t(e Orienta"
A&&'ran!e, in t(e .rin!i.a" &') of P64,000-00 i&&'e#
in favor of Para)o'nt S(irt Man'fa!t'rin$ Co-
$riental Assurance defenses
@aA "a!2 of for)a" !"ai) +y in&'re# over t(e "o&& an#
@+A .re)at're fi"in$ of t(e &'it a& neit(er ."aintiff nor
in&'re# (a# &'+)itte# any .roof of "o&& on t(e +a&i&
of (i!( #efen#ant o'"# #eter)ine it& "ia+i"ity an#
t(e a)o'nt t(ereof, eit(er to t(e Orienta" A&&'ran!e
or it& a#J'&ter 1-1- Bayne A#J'&t)ent Co-
Pacific /an%ing
INSURANCE Page 60
B .re&ente# evi#en!e t(at in&'re# (a& 'n#e!"are#
!o,in&'ran!e& it( t(e fo""oin$H PC3$333.33 ,it!
Rellin"ton 'nsuranceE P2K$333. 33 ,it! A#ire
Surety and P2K3$333.33 ,it! Asian Surety;
'n#erta2en +y in&'re# Para)o'nt on t(e &a)e
.ro.erty !overe# +y it& .o"i!y it( Orienta"
A&&'ran!e (erea& t(e on"y !o,in&'ran!e& #e!"are#
in t(e &'+Je!t .o"i!y are t(o&e of PC3$333.33 ,it!
Malayan$ PK3$333.33 ,it! Sout! Sea$ an#
P2K.333.33 ,it! Victory
, NOT>H t(e #efen&e of fra'# an#Ror vio"ation of non,
#e!"aration of !o,in&'ran!e& a& not ."ea#e# in t(e
an&er, a"&o not ."ea#e# in t(e Motion to Ei&)i&&-
- C01 #enie# Orienta" A&&'ran!eN& )otion on t(e
$ro'n# t(at &in!e t(e #efen&e a& rai&e# for t(e fir&t
ti)e, it )'&t +e #ee)e# to (ave aive# t(e
re;'ire)ent of .roof of "o&&- Ca&e a& &'+)itte# for
#e!i&ion- B't '.on M<, Orienta" A&'ran!e a&
a""oe# to .re&ent a##itiona" evi#en!e, Pin or#er to
.rove t(at Nin&'re# (a& !o))itte# a vio"ation of
!on#ition No- 3 of t(e .o"i!y in re"ation to t(e ot(er
In&'ran!e C"a'&e-N P C*I event'a""y a#J'#$e# Orienta"
A&&'ran!e "ia+"e to t(e Pa!ifi! Ban2in$ 'n#er t(e &ai#
!ontra!t of in&'ran!e-
- Court of Appeals rever&e#- Pa!ifi! Ban2in$N& M<
#enie#-
ISSUES
4- 0ON in&'re# i& $'i"ty of fra'#
2- 0ON )ort$a$eeRa&&i$nee !an &ti"" !"ai) fro) t(e
in&'ran!e
HELD
4- F>S
, T(e !r'% of t(e !ontrover&y !enter& on to .oint&H
@aA 'nrevea"e# !o,in&'ran!e& (i!( vio"ate# .o"i!y
!on#ition& No- 3; an# @+A fai"'re of t(e in&'re# to fi"e
t(e re;'ire# .roof of "o&& .rior to !o'rt a!tion-
, Po"i!y Con#ition No- 3 e%."i!it"y .rovi#e&H 7T(e
In&'re# &(a"" $ive noti!e to t(e Co).any of any
in&'ran!e a"rea#y effe!te#, or (i!( )ay
&'+&e;'ent"y +e effe!te#, !overin$ any of t(e
.ro.erty (ere+y in&'re#, an# 'n"e&& &'!( noti!e +e
$iven an# t(e .arti!'"ar& of &'!( in&'ran!e or
in&'ran!e& +e &tate# in or en#or&e# on t(i& Po"i!y +y
or on +e(a"f of t(e Co).any +efore t(e o!!'rren!e
of any "o&& or #a)a$e, a"" +enefit 'n#er t(i& .o"i!y
&(a"" +e forfeite#-8
, It i& not #i&.'te# t(at t(e in&'re# fai"e# to revea"
+efore t(e "o&& t(ree ot(er in&'ran!e&- By rea&on of
&ai# 'nrevea"e# in&'ran!e&, t(e in&'re# (a# +een
$'i"ty of a fa"&e #e!"aration; a !"ear
)i&re.re&entation an# a vita" one +e!a'&e (ere t(e
in&'re# (a# +een a&2e# to revea" +'t #i# not, t(at
a& #e!e.tion- Ot(eri&e &tate#, (a# t(e in&'rer
2non t(at t(ere ere )any !o,in&'ran!e&, it !o'"#
(ave (e&itate# or ."ain"y #e&i&te# fro) enterin$ into
&'!( !ontra!t- 1en!e, t(e in&'re# a& $'i"ty of !"ear
fra'#-
, Pa!ifi! Ban2in$N& !ontention t(at t(e a""e$ation of
fra'# i& +'t a )ere inferen!e or &'&.i!ion i&
'ntena+"e- Con!rete evi#en!e of fra'# or fa"&e
#e!"aration +y t(e in&'re# a& f'rni&(e# +y t(e
Pa!ifi! Ban2in$ it&e"f (en t(e fa!t& a""e$e# in t(e
.o"i!y 'n#er !"a'&e& PCo,In&'ran!e& Ee!"are#P an#
POt(er In&'ran!e C"a'&eP are )ateria""y #ifferent
fro) t(e a!t'a" n')+er of !o,in&'ran!e& ta2en over
t(e &'+Je!t .ro.erty- Con&e;'ent"y, t(e (o"e
fo'n#ation of t(e !ontra!t fai"&, t(e ri&2 #oe& not
atta!( an# t(e .o"i!y never +e!o)e& a !ontra!t
+eteen t(e .artie&- <e.re&entation& of fa!t& are t(e
fo'n#ation of t(e !ontra!t an# if t(e fo'n#ation #oe&
not e%i&t, t(e &'.er&tr'!t're #oe& not ari&e-
*a"&e(oo# in &'!( re.re&entation& i& not &(on to
vary or a## to t(e !ontra!t, or to ter)inate a
!ontra!t (i!( (a& on!e +een )a#e, +'t to &(o
t(at no !ontra!t (a& ever e%i&te# @To"entinoA- A voi#
or ine%i&tent !ontra!t i& one (i!( (a& no for!e an#
effe!t fro) t(e very +e$innin$, a& if it (a# never
+een entere# into, an# (i!( !annot +e va"i#ate#
eit(er +y ti)e or +y ratifi!ation-
, A& t(e in&'ran!e .o"i!y a$ain&t fire e%.re&&"y
re;'ire# t(at noti!e &(o'"# +e $iven +y t(e in&'re#
of ot(er in&'ran!e '.on t(e &a)e .ro.erty, t(e tota"
a+&en!e of &'!( noti!e n'""ifie& t(e .o"i!y-
, Ar$')ent t(at noti!e of !o,in&'ran!e& )ay +e
)a#e ora""y i& .re.o&tero'& an# ne$ate& .o"i!y
!on#ition No- 20 (i!( re;'ire& every noti!e an#
ot(er !o))'ni!ation& to t(e in&'rer to +e ritten or
.rinte#-
2- NO
, S'+Je!t )ort$a$e !"a'&e .e!ifi!a""y .rovi#e&H 7/o&&,
if any, 'n#er t(i& .o"i!y, &(a"" +e .aya+"e to t(e
PACI*IC BANIING CO<PO<ATION Mani"a
)ort$a$eeRtr'&tor a& it& intere&t )ay a..ear, it
+ein$ (ere+y 'n#er&too# an# a$ree# t(at t(i&
in&'ran!e a& to t(e intere&t of t(e )ort$a$eeRtr'&tor
on"y (erein, &(a"" not +e inva"i#ate# +y any a!t or
ne$"e!t e8ce#t fraud or isre#resentation$ or arson
of t(e )ort$a$or or onerRtr'&tee of t(e .ro.erty
in&'re#; .rovi#e#, t(at in !a&e t(e )ort$a$or or
onerR tr'&tee ne$"e!t& or ref'&e& to .ay any
.re)i'), t(e )ort$a$eeR tr'&tor &(a"", on #e)an#
.ay t(e &a)e-8
, T(e .ara$ra.( !"ear"y &tate& t(e e%!e.tion& to t(e
$enera" r'"e t(at in&'ran!e a& to t(e intere&t of t(e
)ort$a$ee, !annot +e inva"i#ate#; na)e"yH fra'#, or
)i&re.re&entation or ar&on-
, Con!ea")ent of t(e afore!ite# !o,in&'ran!e& !an
ea&i"y +e fra'#, or in t(e very "ea&t,
)i&re.re&entation- It i& +'t fair an# J'&t t(at (ere
t(e in&'re# (o i& .ri)ari"y entit"e# to re!eive t(e
.ro!ee#& of t(e .o"i!y (a& +y it& fra'# an#Ror
)i&re.re&entation, forfeite# &ai# ri$(t, it( )ore
rea&on Pa!ifi! Ban2in$ (i!( i& )ere"y !"ai)in$ a&
in#or&ee of &ai# in&'re#, !annot +e entit"e# to &'!(
.ro!ee#&-
, T(e fa!t of fra'# a& trie# +y e%.re&& or at "ea&t
i)."ie# !on&ent of t(e .artie&- Pa!ifi! Ban2in$ #i#
not on"y o+Je!t to t(e intro#'!tion of evi#en!e +'t on
t(e !ontrary, .re&ente# t(e very evi#en!e t(at
.rove# it& e%i&ten!e-
, Be t(at a& it )ay, SC (a& a)."e a't(ority to $ive
+eyon# t(e ."ea#in$& (ere in t(e intere&t of J'&ti!e
an# t(e .ro)otion of .'+"i! .o"i!y, t(ere i& a nee# to
)a2e it& on fin#in$ to &'..ort it& !on!"'&ion-
Ot(eri&e &tate#, t(e Co'rt !an !on&i#er a fa!t (i!(
&'rfa!e# on"y after tria" .ro.er-
, Genera""y, t(e !a'&e of a!tion on t(e .o"i!y a!!r'e&
(en t(e "o&& o!!'r&, +'t (en t(e .o"i!y .rovi#e&
t(at no a!tion &(a"" +e +ro'$(t 'n"e&& t(e !"ai) i&
fir&t .re&ente# e%traJ'#i!ia""y in t(e )anner .rovi#e#
in t(e .o"i!y, t(e !a'&e of a!tion i"" a!!r'e fro) t(e
ti)e t(e in&'rer fina""y reJe!t& t(e !"ai) for .ay)ent-
, In t(e !a&e at +ar, .o"i!y !on#ition No- 44
&.e!ifi!a""y .rovi#e& t(at t(e in&'re# &(a"" on t(e
(a..enin$ of any "o&& or #a)a$e $ive noti!e to t(e
!o).any an# &(a"" it(in fifteen @49A #ay& after &'!(
"o&& or #a)a$e #e"iver to t(e Orienta" A&&'ran!e @aA
a !"ai) in ritin$ $ivin$ .arti!'"ar a!!o'nt a& to t(e
arti!"e& or $oo#& #e&troye# an# t(e a)o'nt of t(e
"o&& or #a)a$e an# @+A .arti!'"ar& of a"" ot(er
in&'ran!e&, if any- /i2ei&e, in&'re# a& re;'ire# Pat
(i& on e%.en&e to .ro#'!e, .ro!'re an# $ive to t(e
!o).any a"" &'!( f'rt(er .arti!'"ar&, ."an&,
&.e!ifi!ation&, +oo2&, vo'!(er&, invoi!e&, #'."i!ate&
or !o.ie& t(ereof, #o!')ent&, .roof& an# infor)ation
it( re&.e!t to t(e !"ai)P-
, >vi#en!e a##'!e# &(o& t(at 2D #ay& after t(e fire,
Pa!ifi! Ban2in$ )ere"y rote "etter& to Orienta"
A&&'ran!e to &erve a& a noti!e of "o&&, t(ereafter, t(e
for)er #i# not f'rni&( t(e "atter (atever .ertinent
#o!')ent& ere ne!e&&ary to .rove an# e&ti)ate it&
"o&&- In&tea#, Pa!ifi! Ban2in$ &(ifte# '.on Orienta"
A&&'ran!e t(e +'r#en of fi&(in$ o't t(e ne!e&&ary
infor)ation to a&!ertain t(e .arti!'"ar a!!o'nt of t(e
INSURANCE Page 61
arti!"e& #e&troye# +y fire a& e"" a& t(e a)o'nt of
"o&&-
, Orienta" A&&'ran!e an# it& a#J'&ter notifie# Pa!ifi!
Ban2in$ t(at in&'re# (a# not yet fi"e# a ritten !"ai)
nor &'+)itte# t(e &'..ortin$ #o!')ent& in
!o)."ian!e it( t(e re;'ire)ent& &et fort( in t(e
.o"i!y- Ee&.ite t(e noti!e, t(e "atter re)aine#
'n(ee#f'"- Sin!e t(e re;'ire# !"ai) +y in&'re#,
to$et(er it( t(e .re"i)inary &'+)itta" of re"evant
#o!')ent& (a# not +een !o)."ie# it(, it fo""o&
t(at Orienta" A&&'ran!e !o'"# not +e #ee)e# to (ave
fina""y reJe!te# Pa!ifi! Ban2in$N& !"ai) an# t(erefore
t(e "atterN& !a'&e of a!tion (a# not yet ari&en-
Co)."ian!e it( !on#ition No- 44 i& a re;'ire)ent
sine .ua non to t(e ri$(t to )aintain an a!tion a&
.rior t(ereto no vio"ation of Pa!ifi! Ban2in$N& ri$(t
!an +e attri+'ta+"e to Orienta" A&&'ran!e- A& +efore
&'!( fina" reJe!tion, t(ere a& no rea" ne!e&&ity for
+rin$in$ &'it- Pa!ifi! Ban2in$ &(o'"# (ave
en#eavore# to fi"e t(e for)a" !"ai) an# .ro!'re a""
t(e #o!')ent&, .a.er&, inventory nee#e# +y Orienta"
A&&'ran!e or it& a#J'&ter to a&!ertain t(e a)o'nt of
"o&& an# after !o)."ian!e aait t(e fina" reJe!tion of
it& !"ai)- In#ee#, t(e "a #oe& not en!o'ra$e
'nne!e&&ary "iti$ation.
, Pa!ifi! Ban2in$ .re)at're"y fi"e# t(e !ivi" !a&e an#
#i&)i&&a" t(ereof a& arrante# 'n#er t(e
!ir!')&tan!e&- 0(i"e it i& a !ar#ina" .rin!i."e of
in&'ran!e "a t(at a .o"i!y or !ontra!t of in&'ran!e i&
to +e !on&tr'e# "i+era""y in favor of t(e in&'re# an#
&tri!t"y a& a$ain&t t(e in&'rer !o).any yet, !ontra!t&
of in&'ran!e, "i2e ot(er !ontra!t&, are to +e
!on&tr'e# a!!or#in$ to t(e &en&e an# )eanin$ of t(e
ter)& (i!( t(e .artie& t(e)&e"ve& (ave '&e#- If
&'!( ter)& are !"ear an# 'na)+i$'o'&, t(ey )'&t +e
ta2en an# 'n#er&too# in t(eir ."ain, or#inary an#
.o.'"ar &en&e-
, Contra!t& of in&'ran!e are !ontra!t& of in#e)nity
'.on t(e ter)& an# !on#ition& &.e!ifie# in t(e .o"i!y-
T(e .artie& (ave a ri$(t to i).o&e &'!( rea&ona+"e
!on#ition& at t(e ti)e of t(e )a2in$ of t(e !ontra!t
a& t(ey )ay #ee) i&e an# ne!e&&ary- T(e
a$ree)ent (a& t(e for!e of "a +eteen t(e .artie&-
T(e ter)& of t(e .o"i!y !on&tit'te t(e )ea&'re of t(e
in&'rerN& "ia+i"ity, an# in or#er to re!over, t(e in&'re#
)'&t &(o (i)&e"f it(in t(o&e ter)&- T(e
!o)."ian!e of t(e in&'re# it( t(e ter)& of t(e
.o"i!y i& a !on#ition .re!e#ent to t(e "i$(t of
re!overy-
, It a..earin$ t(at in&'re# (a& vio"ate# or fai"e# to
.erfor) t(e !on#ition& 'n#er No- 3 an# 44 of t(e
!ontra!t, an# &'!( vio"ation or ant of .erfor)an!e
(a& not +een aive# +y t(e in&'rer, t(e in&'re#
!annot re!over, )'!( "e&& t(e (erein Pa!ifi! Ban2in$-
Co'rt& are not .er)itte# to )a2e !ontra!t& for t(e
.artie&; t(e f'n!tion an# #'ty of t(e !o'rt& i& &i)."y
to enfor!e an# !arry o't t(e !ontra!t& a!t'a""y )a#e-
Disposition Petition #i&)i&&e#- CA affir)e#-
SUNLIFE ASSURANCE COMPANY $. CA (SPS.
BACANI)
2D9 SC<A 266
QUIASON; G'ne 22, 4559
NATURE
A .etition for revie on !ertiorari-
FACTS
, A.ri" 49, 4566H <o+ert Go(n B- Ba!ani .ro!'re# a
"ife in&'ran!e !ontra!t for (i)&e"f fro) SUN/I*>
@.etitionerA va"'e# at P400I- T(e #e&i$nate#
+enefi!iary a& (i& )ot(er, Bernar#a Ba!ani
@re&.on#entA-
, G'ne 26, 456CH t(e in&'re# #ie# in a ."ane !ra&(-
Bernar#a Ba!ani fi"e# a !"ai) it( S'n"ife, &ee2in$
t(e +enefit& of t(e in&'ran!e .o"i!y ta2en +y (er &on-
Petitioner !on#'!te# an inve&ti$ation an# it& fin#in$&
.ro).te# it to reJe!t t(e !"ai) on t(e $ro'n# t(at
t(e in&'re# #i# not #i&!"o&e fa!t& )ateria" to t(e
i&&'an!e of t(e .o"i!y- T(e in&'re# $ave fa"&e
&tate)ent& in t(e a.."i!ation (en (e an&ere# in
t(e ne$ative to t(e ;'e&tion 7ha$e )#, e$e" ha. #"
*#,%h a.$'!e -#" ,"'+e, ;'.+e), 3la..e"
.'*#".e"N8
, S'n"ife #i&!overe# t(at to ee2& .rior to t(e
i&&'an!e, in&'re# a& #ia$no&e# it( rena" fai"'re,
a& !onfine#, an# 'n#erent te&t&-
, Nove)+er 4C, 4566H Ba!ani an# (er ('&+an# fi"e#
for &.e!ifi! .erfor)an!e a$ain&t S'n"ife- <TC $rante#
t(e ."ea on t(e $ro'n# t(at t(at t(e fa!t& !on!ea"e#
+y t(e in&'re# ere )a#e in $oo# fait( an# 'n#er
t(e +e"ief t(at t(ey nee# not +e #i&!"o&e#, an# t(at
t(e #i&!"o&'re a& not )ateria" &in!e t(e .o"i!y a&
non,)e#i!a"-
, S'n"ife a..ea"e# to t(e CA, +'t t(e "atter #enie#
t(e a..ea" on t(e $ro'n# t(at t(e !a'&e of #eat(
a& 'nre"ate# to t(e fa!t& !on!ea"e# +y t(e in&'re#-
Petitioners Claim
B T(e in&'re# #i# not #i&!"o&e fa!t& re"evant to t(e
i&&'an!e of t(e .o"i!y, t('& re&!i&&ion of t(e !ontra!t
)ay +e invo2e# +y t(e in&'ran!e !o).any-
Respondents Comments
B T(e a!t'a" !a'&e of #eat( a& not re"evant to t(e
!on!ea"e# infor)ation, an# t(e .o"i!y a& entere#
into +y t(e in&'re# in $oo# fait(-
ISSUE
0ON t(e !on!ea")ent ren#er& t(e in&'ran!e .o"i!y
re&!i&&i+"e
HELD
F>S
Ratio T(e ter)& of t(e !ontra!t are !"ear- T(e
in&'re# i& &.e!ifi!a""y re;'ire# to #i&!"o&e to t(e
in&'rer )atter& re"atin$ to (i& (ea"t(-
Reasoning
SEC. ED (IC)
A ne$"e!t to !o))'ni!ate t(at (i!( a .arty
2no& an# o'$(t to !o))'ni!ate, i& !a""e# a
!on!ea")ent-
SEC. B6 (IC)
Materia"ity i& to +e #eter)ine# not +y t(e event,
+'t &o"e"y +y t(e .ro+a+"e an# rea&ona+"e inf"'en!e
of t(e fa!t& '.on t(e .arty to (o) !o))'ni!ation
i& #'e, in for)in$ (i& e&ti)ate of t(e #i&a#vanta$e&
of t(e .ro.o&e# !ontra!t or in )a2in$ (i& in;'irie&
, T(e infor)ation (i!( t(e in&'re# fai"e# to #i&!"o&e
a& )ateria" an# re"evant to t(e a..rova" an# t(e
i&&'an!e of t(e in&'ran!e .o"i!y- T(e )atter&
!on!ea"e# o'"# (ave #efinite"y affe!te# .etitionerN&
a!tion on (i& a.."i!ation, eit(er +y a..rovin$ it it(
t(e !orre&.on#in$ a#J'&t)ent for a (i$(er .re)i')
or reJe!tin$ t(e &a)e-
, Goo# fait( i& no #efen&e in !on!ea")ent- It a..ear&
t(at &'!( !on!ea")ent a& #e"i+erate on t(e .art of
t(e in&'re#-
, T(e aiver of a )e#i!a" e%a)ination [in a non,
)e#i!a" in&'ran!e !ontra!t] ren#er& even )ore
)ateria" t(e infor)ation re;'ire# of t(e a.."i!ant
!on!ernin$ .revio'& !on#ition of (ea"t( an# #i&ea&e&
&'ffere#, for &'!( infor)ation ne!e&&ari"y !on&tit'te&
an i).ortant fa!tor (i!( t(e in&'rer ta2e& into
!on&i#eration in #e!i#in$ (et(er to i&&'e t(e .o"i!y
or not-
, Anent t(e fin#in$ t(at t(e fa!t& !on!ea"e# (a# no
+earin$ to t(e !a'&e of #eat( of t(e in&'re#, it i& e""
&ett"e# t(at t(e in&'re# nee# not #ie of t(e #i&ea&e
(e (a# fai"e# to #i&!"o&e to t(e in&'rer- It i& &'ffi!ient
t(at (i& non,#i&!"o&'re )i&"e# t(e in&'rer in for)in$
(i& e&ti)ate& of t(e ri&2& of t(e .ro.o&e# in&'ran!e
.o"i!y or in )a2in$ in;'irie&
Disposition Petition i& $rante# an# t(e #e!i&ion of
CA i& rever&e# an# &et a&i#e-
INSURANCE Page 62
EGUARAS $. GREAT EASTERN
33 P1I/- 263
TO<<>S-; Gan'ary 2D, 4546
NATURE
A..ea" fi"e# t(ro'$( +i"" of e%!e.tion& fro) t(e
J'#$)ent of t(e C*I
FACTS
, *ran!i&!a >$'ara& fi"e# a ritten !o)."aint in !o'rt,
a""e$in$ a& a !a'&e of a!tion t(at (er &on,in,"a
Eo)ina#or A"+ay (a# a.."ie# in ritin$ to t(e
#efen#ant in&'ran!e !o).any to in&'re (i& "ife for
t(e &') of P9,000, na)in$ a& t(e +enefi!iary in !a&e
of (i& #eat( t(e ."aintiff *ran!i&!a >$'ara&; t(at after
!o)."ian!e it( t(e re;'i&ite& an# t(e inve&ti$ation
!arrie# on +y t(e #efen#ant !o).any, it a!!e.te#
t(e a.."i!ation for in&'ran!e an# i&&'e# t(e .o"i!y;
t(at, &ai# .o"i!y +ein$ in for!e, t(e in&'re# #ie#, an#
#e&.ite t(e fa!t t(at t(e +enefi!iary &'+)itte#
&ati&fa!tory .roof& of (i& #eat( an# t(at t(e
#efen#ant !o).any inve&ti$ate# t(e event, &ti"" it
ref'&e# an# !ontin'e& to ref'&e to .ay to t(e ."aintiff
t(e va"'e of t(e .o"i!y-
, Eefen#ant &et fort( in &.e!ia" #efen&e t(at t(e
in&'ran!e .o"i!y i&&'e# in t(e na)e of Eo)ina#or
A"+ay (a# +een o+taine# t(ro'$( fra'# an# #e!eit
2non an# !on&ente# to +y t(e intere&te# .artie&
an# i& t(erefore !o)."ete"y i""e$a", voi#, an#
ineffe!tive-
, A !ri)ina" !a&e for fr'&trate# e&tafa a& fi"e# +y
#efen#ant a$ain&t Pon!iano <e)i$io, Ca&tor Gar!ia
an# *ran!i&!a >$'ara&- T(ey ere a!;'itte#, an#
!"ai) t(at t(e J'#$)ent .ro#'!e& t(e effe!t of res
6udicata in t(e .re&ent &'it-
ISSUE
0ON t(e "ife in&'ran!e o+taine# +y Eo)ina#or A"+ay
a& i&&'e# t(ro'$( fra'# an# #e!eit
HELD
F>S
Ratio In a !ontra!t (ere one of t(e !ontra!tin$
.artie& )ay (ave $iven (i& !on&ent t(ro'$( error,
vio"en!e, inti)i#ation, or #e!eit, an# in any of &'!(
!a&e& t(e !ontra!t i& voi#, even t(o'$(, #e&.ite t(i&
n'""ity, no !ri)e a& !o))itte#- T(ere )ay not (ave
+een e&tafa in t(e !a&e at +ar, +'t it a&
!on!"'&ive"y #e)on&trate# +y t(e tria" t(at #e!eit
entere# into t(e in&'ran!e !ontra!t, f'"fi"")ent
(ereof i& !"ai)e#, an# t(erefore t(e !on!"'&ion&
rea!(e# +y t(e !o'rt in t(e J'#$)ent it ren#ere# in
t(e !ri)ina" .ro!ee#in$& for e&tafa #o not affe!t t(i&
&'it, nor !an t(ey .ro#'!e in t(e .re&ent &'it t(e
for!e of res ad6udicata-
Reasoning
- It i& .roven t(at t(e &i$nat're& on t(e in&'ran!e
a.."i!ation& rea#in$ PEo)ina#o A"+ayP are fa"&e an#
for$e#; t(at t(e .er&on (o .re&ente# (i)&e"f to Er-
Mi#a" to +e e%a)ine# a& not t(e rea" Eo)ina#or
A"+ay, +'t Ca&tor Gar!ia (o a& .o&itive"y
i#entifie# +y Er- Mi#a"; t(at at t(e ti)e of t(e
a.."i!ation for in&'ran!e an# t(e i&&'an!e of t(e
.o"i!y (i!( i& t(e &'+Je!t )atter of t(i& &'it t(e rea"
Eo)ina#or A"+ay a& infor)e# of a"" t(o&e
)a!(ination&, (erefore it i& ."ain t(at t(e in&'ran!e
!ontra!t +eteen t(e #efen#ant an# Eo)ina#or
A"+ay i& n'"" an# voi# +e!a'&e it i& fa"&e, fra'#'"ent
an# i""e$a"-
Disposition T(e J'#$)ent a..ea"e# fro) i&
rever&e# an# t(e #efen#ant a+&o"ve# fro) t(e
!o)."aint it(o't &.e!ia" fin#in$ a& to t(e !o&t&-
=UA CHEE GAN $. LAW UNION AND ROC<
56 P1I/ 69
<>F>S; Ee!e)+er 4C, 4599
FACTS
, Q'a C(ee Gan in&'re# D of (i& +o#e$a& it( /a
Union S <o!2 In&'ran!e Co in 453C- T(e&e +o#e$a&
ere '&e# for t(e &tora$e of &to!2& of !o.ra an# of
(e)., +a"e# an# "oo&e-
, *ire of 'n#eter)ine# ori$in t(at +ro2e o't in t(e
ear"y )ornin$ of G'"y 24, 45D0, an# "a&te# a")o&t
one ee2, $'tte# an# !o)."ete"y #e&troye# Bo#e$a&
No&- 4, 2 an# D, it( t(e )er!(an#i&e &tore#
t(erein-
, Q'a C(ee Gan infor)e# t(e in&'ran!e !o).any of
t(e fire- *ire a#J'&ter& of t(e !o).any !on#'!te# an
e%ten&ive inve&ti$ation- Q'a C(ee Gan &'+)itte# t(e
!orre&.on#in$ fire !"ai)&, tota"in$ P356,962-64 @+'t
re#'!e# to t(e f'"" a)o'nt of t(e in&'ran!e,
P3C0,000A, t(e In&'ran!e Co).any re&i&te#
.ay)ent, !"ai)in$ vio"ation of arrantie& an#
!on#ition&, fi"in$ of fra'#'"ent !"ai)&, an# t(at t(e
fire (a# +een #e"i+erate"y !a'&e# +y t(e in&'re# or
+y ot(er .er&on& in !onnivan!e it( (i)-
5 Q'a C(ee Gan, (i& +rot(er an# (i& e)."oyee& ere
trie# for ar&on, (ere !o'n&e" of t(e in&'ran!e
!o).any a!te# a& a .rivate .ro&e!'tor- T(ey ere
a!;'itte#-
, T(i& !ivi" &'it a& t(en in&tit'te# to !"ai) a$ain&t
t(e in&'ran!e !o).any- T(e C*I r'"e# in favor of
Q'a C(ee Gan an# or#ere# /a Union <o!2 Co- to
.ay-
ISSUES
4- 0ON t(ere a& a +rea!( of t(e fire (y#rant
arranty
2- 0ON t(e in&'re# vio"ate# t(e 1e). arranty
3- 0ON Q'a C(ee Gan i& $'i"ty of overva"'ation
D- 0ON Q'a C(ee Gan !a'&e# t(e fire
9- 0ON t(ere a& an error in t(e a)o'nt of !o.ra
an# (e). "o&t
6- 0ON t(e !"ai)& !ontaine# fa"&e an# fra'#'"ent
&tate)ent&
HELD
4- NO
, It i& ar$'e# t(at (e &(o'"# (ave 44 fire (y#rant& in
t(e !o).o'n#, +'t (e on"y (a# 2- 0e are in
a$ree)ent it( t(e tria" Co'rt t(at t(e a..e""ant i&
+arre# +y aiver @or rat(er e&to..e"A to !"ai)
vio"ation of t(e &o,!a""e# fire (y#rant& arranty, for
t(e rea&on t(at 2noin$ f'""y a"" t(at t(e n')+er of
(y#rant& #e)an#e# t(erein never e%i&te# fro) t(e
very +e$innin$, t(e a..e""ant nevert(e"e&& i&&'e# t(e
.o"i!ie& in ;'e&tion &'+Je!t to &'!( arranty, an#
re!eive# t(e !orre&.on#in$ .re)i')&-
2- NO
, T(e in&'ran!e !o).any aver& t(at t(e in&'re#
vio"ate# t(e (e). arranty (en it a#)itte# t(at it
(a# 36 !an& of $a&o"ine in t(e +'i"#in$- It i& e"" to
note t(at $a&o"ine i& not &.e!ifi!a""y )entione#
a)on$ t(e .ro(i+ite# arti!"e& "i&te# in t(e &o,!a""e#
P(e). arranty-P T(e !a'&e re"ie# '.on +y t(e
in&'rer &.ea2& of Poi"& @ani)a" an#Ror ve$eta+"e
an#Ror )inera" an#Ror t(eir "i;'i# .ro#'!t& (avin$ a
f"a&( .oint +e"o 300o *a(ren(eitP, an# i& #e!i#e#"y
a)+i$'o'& an# 'n!ertain; for in or#inary .ar"an!e,
POi"&P )ean P"'+ri!ant&P an# not $a&o"ine or
2ero&ene- An# (o )any in&'re#, it )ay e"" +e
on#ere#, are in a .o&ition to 'n#er&tan# or
#eter)ine Pf"a&( .oint +e"o 003o *a(ren(eit- 1ere,
a$ain, +y rea&on of t(e e%!"'&ive !ontro" of t(e
in&'ran!e !o).any over t(e ter)& an# .(ra&eo"o$y
of t(e !ontra!t, t(e a)+i$'ity )'&t +e (e"# &tri!t"y
a$ain&t t(e in&'rer an# "i+era""y in favor of t(e
in&'re#, e&.e!ia""y to avoi# a forfeit're
, Anot(er .oint t(at i& in favor of t(e in&'re# i& t(at
t(e $a&o"ine 2e.t in Bo#e$a No- 2 a& on"y in!i#enta"
to (i& +'&ine&&, +ein$ no )ore t(an a !'&to)ary 2
#ayN& &'.."y for t(e five or &i% )otor ve(i!"e& '&e#
for tran&.ortin$ of t(e &tore# )er!(an#i&eA- PIt i&
e"" &ett"e# t(at t(e 2ee.in$ of inf"a))a+"e oi"& on
INSURANCE Page 63
t(e .re)i&e& t(o'$( .ro(i+ite# +y t(e .o"i!y #oe&
not voi# it if &'!( 2ee.in$ i& in!i#enta" to t(e
+'&ine&&-P @Ba!(ra!( v&- Briti&( A)eri!an A&&- Co-,
4C P(i"- 999, 960A
3- NO
, T(e !(ar$e t(at t(e in&'re# fai"e# or ref'&e# to
&'+)it to t(e e%a)iner& of t(e in&'rer t(e +oo2&,
vo'!(er&, et!- #e)an#e# +y t(e) a& fo'n#
'n&'+&tantiate# +y t(e tria" Co'rt, an# no rea&on
(a& +een &(on to a"ter t(i& fin#in$-
, In vie of t(e #i&!re.an!y in t(e va"'ation&
+eteen t(e in&'re# an# t(e a#J'&ter Steart for t(e
in&'rer, t(e Co'rt referre# t(e !ontrover&y to a
$overn)ent a'#itor, A.o"onio <a)o&; +'t t(e "atter
rea!(e# a #ifferent re&'"t fro) t(e ot(er to- Not
on"y t(at, +'t <a)o& re.orte# to #ifferent
va"'ation& t(at !o'"# +e rea!(e# a!!or#in$ to t(e
)et(o#& e)."oye#- C"ear"y t(en, t(e !(ar$e of
fra'#'"ent overva"'ation !annot +e &erio'&"y
entertaine#-
D- NO
, T(i& #efen&e i& .re#i!te# on t(e a&&').tion t(at
t(e in&'re# a& in finan!ia" #iffi!'"tie& an# &et t(e
fire to #efra'# t(e in&'ran!e !o).any, .re&')a+"y
in or#er to .ay off t(e P(i"i..ine Nationa" Ban2, to
(i!( )o&t of t(e in&'re# (e). an# !o.ra a&
."e#$e#- T(i& #efen&e i& fata""y 'n#er)ine# +y t(e
e&ta+"i&(e# fa!t t(at, notit(&tan#in$ t(e in&'rerN&
ref'&a" to .ay t(e va"'e of t(e .o"i!ie& t(e e%ten&ive
re&o'r!e& of t(e in&'re# ena+"e# (i) to .ay off t(e
Nationa" Ban2 in a &(ort ti)e; an# if (e a& a+"e to
#o &o, no )otive a..ear& for atte).t to #efra'# t(e
in&'rer- 0(i"e t(e a!;'itta" of t(e in&'re# in t(e
ar&on !a&e i& not res 6udicata on t(e .re&ent !ivi"
a!tion, t(e in&'rerN& evi#en!e, to J'#$e fro) t(e
#e!i&ion in t(e !ri)ina" !a&e, i& .ra!ti!a""y i#enti!a" in
+ot( !a&e& an# )'&t "ea# to t(e &a)e re&'"t, &in!e
t(e .roof to e&ta+"i&( t(e #efen&e of !onnivan!e at
t(e fire in or#er to #efra'# t(e in&'rer P!annot +e
)ateria""y "e&& !onvin!in$ t(an t(at re;'ire# in or#er
to !onvi!t t(e in&'re# of t(e !ri)e of ar&on-
9- NO
, A& to t(e #efen&e t(at t(e +'rne# +o#e$a& !o'"#
not .o&&i+"y (ave !ontaine# t(e ;'antitie& of !o.ra
an# (e). &tate# in t(e fire !"ai)&, t(e in&'rerN& !a&e
re&t& a")o&t e%!"'&ive"y on t(e e&ti)ate&, inferen!e&
an# !on!"'&ion& of it& a#J'&ter inve&ti$ator,
A"e%an#er E- Steart, (o e%a)ine# t(e .re)i&e&
#'rin$ an# after t(e fire- 1i& te&ti)ony, (oever,
a& +a&e# on inferen!e& fro) t(e .(oto$ra.(& an#
tra!e& fo'n# after t(e fire, an# )'&t yie"# to t(e
!ontra#i!tory te&ti)ony of en$ineer An#re& Bo"ina&,
an# &.e!ia""y of t(e t(en C(ief of t(e /oan
Ee.art)ent of t(e Nationa" Ban2N& /e$a&.i +ran!(,
Porfirio Barrio&, an# of Ban2 A..rai&er /oreto
Sa)&on, (o a!t'a""y &a t(e !ontent& of t(e
+o#e$a& &(ort"y +efore t(e fire, (i"e in&.e!tin$
t(e) for t(e )ort$a$ee Ban2
6- NO
, A..e""ant in&'ran!e !o).any a"&o !onten#& t(at
t(e !"ai)& fi"e# +y t(e in&'re# !ontaine# fa"&e an#
fra'#'"ent &tate)ent& t(at avoi#e# t(e in&'ran!e
.o"i!y- B't t(e tria" Co'rt fo'n# t(at t(e
#i&!re.an!ie& ere a re&'"t of t(e in&'re#N&
erroneo'& inter.retation of t(e .rovi&ion& of t(e
in&'ran!e .o"i!ie& an# !"ai) for)&, !a'&e# +y (i&
i).erfe!t 2no"e#$e of >n$"i&(, an# t(at t(e
)i&&tate)ent& ere inno!ent"y )a#e an# it(o't
intent to #efra'#- T(e tria" !o'rt=& r'"in$ )'&t +e
'.(e"#-
5 *or e%a)."e, t(e o!!'rren!e of .revio'& fire& in t(e
.re)i&e& in&'re# in 4535, a"t(o o)itte# in t(e
!"ai)&, >%(i+it& >> an# **, ere nevert(e"e&&
revea"e# +y t(e in&'re# in (i& !"ai)& >%(i+it& Q @fi"e#
&i)'"taneo'&"y it( t(e)A, II an# 00- Con&i#erin$
t(at a"" t(e&e !"ai)& ere &'+)itte# to t(e &)ae
a$ent, an# t(at t(i& &a)e a$ent (a# .ai# t(e "o&&
!a'&e# +y t(e 4535 fire, e fin# no error in t(e tria"
Co'rtN& a!!e.tan!e of t(e in&'re#N& e%."anation t(at
t(e o)i&&ion in >%(i+it& >> an# ** a& #'e to
ina#vertan!e, for t(e in&'re# !o'"# (ar#"y e%.e!t
'n#er &'!( !ir!')&tan!e&, t(at t(e 4535 o'"# .a&&
'nnoti!e# +y t(e in&'ran!e a$ent&- Si)i"ar"y, t(e 20
.er !ent over!"ai) on C0 .er !ent of t(e (e)o &to!2,
a& e%."aine# +y t(e in&'re# a& !a'&e# +y (i& +e"ief
t(at (e a& entit"e# to in!"'#e in t(e !"ai) (i&
e%.e!te# .rofit on t(e C0 .er !ent of t(e (e).,
+e!a'&e t(e &a)e a& a"rea#y !ontra!te# for an#
&o"# to ot(er .artie& +efore t(e fire o!!'rre#-
Co).are# it( ot(er !a&e& of over,va"'ation
re!or#e# in o'r J'#i!ia" anna"&, t(e 20 .er !ent
e%!e&& in t(e !a&e of t(e in&'re# i& not +y it&e"f
&'ffi!ient to e&ta+"i&( fra'#'"ent intent- Certain"y, t(e
in&'re#N& over!"ai) of 20 .er !ent in t(e !a&e at +ar,
#'"y e%."aine# +y (i) to t(e Co'rt a .uo, a..ear&
.'ny +y !o).ari&on @!o).are# to ot(er !a&e& !ite#
+y t(e !o'rtA, an# !an not +e re$ar#e# a& P)ore
t(an )i&&tate)ent, )ore t(an ina#verten!e of
)i&ta2e, )ore t(an a )ere error in o.inion, )ore
t(an a &"i$(t e%a$$erationP t(at o'"# entit"e t(e
in&'rer to avoi# t(e .o"i!y- It i& e"" to note t(at t(e
over!(ar$e of 20 .er !ent a& !"ai)e# on"y on a
#art @C0 .er !entA of t(e (e). &to!2; (a# t(e
in&'re# a!te# it( fra'#'"ent intent, not(in$
.revente# (i) fro) in!rea&in$ t(e va"'e of a"" of (i&
!o.ra, (e). an# +'i"#in$& in t(e &a)e .ro.ortion-
T(i& a"&o a.."ie& to t(e a""e$e# fra'#'"ent !"ai) for
+'rne# e).ty &a!2&, t(at a& "i2ei&e e%."aine# to
o'r &ati&fa!tion an# t(at of t(e tria" Co'rt- T(e r'"e i&
t(at to avoi# a .o"i!y, t(e fa"&e &earin$ )'&t +e
i""f'" an# it( intent to #efra'# (i!( a& not t(e
!a'&e- Of !o'r&e, t(e "a!2 of fra'#'"ent intent o'"#
not a't(ori:e t(e !o""e!tion of t(e e%.e!te# .rofit
'n#er t(e ter)& of t(e .o"i!e&, an# t(e tria" Co'rt
!orre!t"y #e#'!te# t(e &a)e fro) it& aar#-
Disposition Ee!i&ion affir)e#
ARGENTE $. WEST COAST LIFE
94 P1I/ C29
MA/CO/M; Mar!( 45, 4526
FACTS
, T(i& i& an a!tion '.on a Joint "ife in&'ran!e .o"i!y
for P49,000 i&&'e# +y t(e 0e&t Coa&t /ife In&'ran!e
Co-, on May 49, 4529, in favor of Bernar#o Ar$ente,
an# (i& ife, Mi!enta #e O!a).o, t(e "atter (avin$
#ie# on Nove)+er 46, 4529- *ra'# in o+tainin$ t(e
.o"i!y a& ."ea#e# +y ay of &.e!ia" #efen&e- On t(e
i&&'e t('& &'$$e&te#, t(e !o'rt a#o.te# t(e t(eory
of t(e #efen#ant, an# (e"# t(e in&'ran!e .o"i!y n'""
an# voi#, it( t(e re&'"t t(at t(e !o)."aint a&
#i&)i&&e#, it( !o&t&-
,Bernar#o Ar$ente &i$ne# an a.."i!ation for Joint
in&'ran!e it( (i& ife in t(e &') of P2,000- T(e
ife, Mi!enta #e O!a).o, &i$ne# a "i2e a.."i!ation for
t(e &a)e .o"i!y-
, Bernar#o Ar$ente an# (i& ife a& e%a)ine# +y
Er- Ce&areo Sta- Ana, a )e#i!a" e%a)iner for t(e
0e&t Coa&t /ife In&'ran!e Co- (i!( #i# not &(o
.revio'& an# e%i&tin$ (ea"t( .ro+"e)&-
, A te).orary .o"i!y for P49,000 a& i&&'e# to
Bernar#o Ar$ente an# (i& ife a& of May 49, 4529-
In vie of t(e fa!t t(at )ore t(an t(irty #ay& (a#
e"a.&e# &in!e t(e a.."i!ant& ere e%a)ine# +y t(e
!o).anyN& .(y&i!ian, ea!( of t(e) a& re;'ire# to
fi"e a !ertifi!ate of (ea"t( +efore t(e .o"i!y a&
#e"ivere# to t(e)-
, On Nove)+er 46, 4529, Mi!enta #e O!a).o #ie# of
!ere+ra" a.o."e%y- T(ereafter Bernar#o Ar$ente
.re&ente# a !"ai)- *o""oin$ inve&ti$ation !on#'!te#
+y t(e Mana$er of t(e Mani"a offi!e of t(e in&'ran!e
!o).any, it a& a..arent"y #i&!"o&e# t(at t(e
an&er& $iven +y t(e in&'re# in t(eir )e#i!a"
e%a)ination& it( re$ar# to t(eir (ea"t( an#
.revio'& i""ne&&e& an# )e#i!a" atten#an!e ere
'ntr'e- 0e&t Coa&t /ife In&'ran!e Co- ref'&e# to .ay
INSURANCE Page 64
t(e !"ai) of Bernar#o Ar$ente, an# rote (i) to t(e
effe!t t(at t(e !"ai) a& reJe!te# +e!a'&e t(e
in&'ran!e a& o+taine# t(ro'$( fra'# an#
)i&re.re&entation-
, It i& a#)itte# t(at it a..ear& in t(e Me#i!a"
>%a)inerN& <e.ort t(at Bernar#o Ar$ente $ave fa"&e
re&.on&e&- A& e"" a& it( t(e Me#i!a" >%a)inerN&
<e.ort t(at Mi!enta #e O!a).o- It i&, (oever, not
#i&.'te# t(at Mi!enta #e O!a).o a& ta2en +y a
.atro")an, at t(e re;'e&t of (er ('&+an#, Bernar#o
Ar$ente, on May 45, 452D, to t(e Mei&i! .o"i!e
&tation, an# fro) t(ere a& tran&ferre# to t(e San
/a:aro 1o&.ita"- In San /a:aro 1o&.ita", (er !a&e
a& #ia$no&e# +y t(e a#)ittin$ .(y&i!ian a&
Pa"!o(o"i&),P +'t "ater Eo!tor Eo)in$o )a#e a
#ia$no&i& of .ro+a+"e P)ani!,#e.re&&ive .&y!(o&i&,P
an# &ti"", "ater in Mary C(i"e& 1o&.ita", )a#e a fina"
#ia$no&i& of P.(y!(o,ne'ro&i&-P
, Bernar#o Ar$ente, (i"e rea#i"y !on!e#in$ )o&t of
t(e fa!t& (erein narrate#, yet a""e$e& t(at +ot( (e
an# (i& ife revea"e# to t(e !o).anyN& .(y&i!ian,
Eo!tor Sta- Ana, a"" t(e fa!t& !on!ernin$ t(eir
.revio'& i""ne&&e& an# )e#i!a" atten#an!e, +'t t(at
Eo!tor Sta- Ana, .re&')a+"y a!tin$ in !o""'&ion it(
t(e in&'ran!e a$ent, Go&e Geroni)o #e" <o&ario,
fai"e# to re!or# t(e) in t(e )e#i!a" re.ort&- T(e
evi#en!e on t(e&e .oint& !on&i&t& of t(e te&ti)ony of
t(e ."aintiff an# (i& &'+or#inate !"er2, A.o"onio
>&.irit', on t(e one (an#, an# of t(e te&ti)ony of
Eo!tor Sta- Ana an# Go&e Geroni)o #e" <o&ario on
t(e ot(er- T(i& a& reJe!te# +y t(e Tria" Co'rt- Tria"
J'#$e fo'n# it( t(e in&'ran!e !o).any it( re$ar#
to t(e ;'e&tion of fa!t- SC a$ree&- T(ere a..ear& no
)otive (atever on t(e .art of Eo!tor Sta- Ana to
fa"&ify t(e Me#i!a" >%a)inerN& <e.ort& an# t(ere+y
not on"y Jeo.ar#i:e (i& !areer a& a .(y&i!ian, +'t
a"&o $rave"y i)."i!ate (i)&e"f !ri)ina""y-
ISSUE
0ON t(e !ontra!t of in&'ran!e )ay +e re&!in#e#
HELD
F>S
, Bernar#o Ar$ente an# (i& ife a.."i!ation&= ere
fa"&e it( re&.e!t to t(eir &tate of (ea"t( #'rin$ t(e
.erio# of five year& .re!e#in$ t(e #ate of &'!(
a.."i!ation& an# t(at t(ey 2ne t(e re.re&entation&
)a#e +y t(e) in t(eir a.."i!ation& ere fa"&e- T(e
;'e&tion ari&e& a& to t(e &tate of t(e "a in re"ation
t(ereto-
, One $ro'n# for t(e re&!i&&ion of a !ontra!t of
in&'ran!e 'n#er t(e In&'ran!e A!t i& Pa
!on!ea")ent,P (i!( in &e!tion 29 i& #efine# a& PA
ne$"e!t to !o))'ni!ate t(at (i!( a .arty 2no&
an# o'$(t to !o))'ni!ate-P In an a!tion on a "ife
in&'ran!e .o"i!y (ere t(e evi#en!e !on!"'&ive"y
&(o& t(at t(e an&er& to ;'e&tion& !on!ernin$
#i&ea&e& ere 'ntr'e, t(e tr't( or fa"&ity of t(e
an&er& +e!o)e t(e #eter)inin$ fa!tor- If t(e .o"i!y
a& .ro!'re# +y fra'#'"ent re.re&entation&, t(e
!ontra!t of in&'ran!e a..arent"y &et fort( t(erein
a& never "e$a""y e%i&tent- It !an fair"y +e a&&')e#
t(at (a# t(e tr'e fa!t& +een #i&!"o&e# +y t(e
a&&'re#, t(e in&'ran!e o'"# never (ave +een
$rante#-
, In Goy!e, T(e /a of In&'ran!e, &e!on# e#ition,
vo"')e 3, C(a.ter /M, i& fo'n# t(e fo""oin$H
PT(e +a&i& of t(e r'"e vitiatin$ t(e !ontra!t in
!a&e& of !on!ea")ent i& t(at it )i&"ea#& or
#e!eive& t(e in&'rer into a!!e.tin$ t(e ri&2, or
a!!e.tin$ it at t(e rate of .re)i') a$ree# '.on;
T(e in&'rer, re"yin$ '.on t(e +e"ief t(at t(e
a&&'re# i"" #i&!"o&e every )ateria" fa!t it(in (i&
a!t'a" or .re&')e# 2no"e#$e, i& )i&"e# into a
+e"ief t(at t(e !ir!')&tan!e it((e"# #oe& not
e%i&t, an# (e i& t(ere+y in#'!e# to e&ti)ate t(e
ri&2 '.on a fa"&e +a&i& t(at it #oe& not e%i&t- T(e
.rin!i.a" ;'e&tion, t(erefore, )'&t +e, 0a& t(e
a&&'rer )i&"e# or #e!eive# into enterin$ a !ontra!t
o+"i$ation or in fi%in$ t(e .re)i') of in&'ran!e +y
a it((o"#in$ of )ateria" infor)ation or fa!t&
it(in t(e a&&'re#N& 2no"e#$e or .re&')e#
2no"e#$eX
PIt t(erefore fo""o& t(at t(e a&&'rer in a&&')in$ a
ri&2 i& entit"e# to 2no every )ateria" fa!t of (i!(
t(e a&&'re# (a& e%!"'&ive or .e!'"iar 2no"e#$e,
a& e"" a& a"" )ateria" fa!t& (i!( #ire!t"y ten# to
in!rea&e t(e (a:ar# or ri&2 (i!( are 2non +y t(e
a&&'re#, or (i!( o'$(t to +e or are .re&')e# to
+e 2non +y (i)- An# a !on!ea")ent of &'!( fa!t&
vitiate& t(e .o"i!y- NIt #oe& not &ee) to +e
ne!e&&ary - - - t(at t(e - - - &'..re&&ion of t(e
tr't( &(o'"# (ave +een i""f'"-N If it ere +'t an
ina#vertent o)i&&ion, yet if it ere )ateria" to t(e
ri&2 an# &'!( a& t(e ."aintiff &(o'"# (ave 2non to
+e &o, it o'"# ren#er t(e .o"i!y voi#- B't it i& (e"#
t(at if 'ntr'e or fa"&e an&er& are $iven in
re&.on&e to in;'irie& an# t(ey re"ate to )ateria"
fa!t& t(e .o"i!y i& avoi#e# it(o't re$ar# to t(e
2no"e#$e or fra'# of a&&'re#, a"t(o'$( 'n#er t(e
&tat'te &tate)ent& are re.re&entation& (i!( )'&t
+e fra'#'"ent to avoi# t(e .o"i!y- So 'n#er !ertain
!o#e& t(e i).ortant in;'irie& are (et(er t(e
!on!ea")ent a& i""f'" an# re"ate# to a )atter
)ateria" to t(e ri&2-
%%% %%% %%%
PIf t(e a&&'re# (a& e%!"'&ive 2no"e#$e of
)ateria" fa!t&, (e &(o'"# f'""y an# fair"y #i&!"o&e
t(e &a)e, (et(er (e +e"ieve& t(e) )ateria" or
not- B't notit(&tan#in$ t(i& $enera" r'"e it i""
not infre;'ent"y (a..en, e&.e!ia""y in "ife ri&2&,
t(at t(e a&&'re# )ay (ave a 2no"e#$e a!t'a" or
.re&')e# of )ateria" fa!t&, an# yet entertain an
(one&t +e"ief t(at t(ey are not )ateria"- - - - T(e
#eter)ination of t(e .oint (et(er t(ere (a& or
(a& not +een a )ateria" !on!ea")ent )'&t re&t
"ar$e"y in a"" !a&e& '.on t(e for) of t(e ;'e&tion&
.ro.o'n#e# an# t(e e%a!t ter)& of t(e !ontra!t-
T('&, (ere in a##ition to &.e!ifi!a""y na)e#
#i&ea&e& t(e in&'re# a& a&2e# (et(er (e (a#
(a# any &i!2ne&& it(in ten year&, to (i!( (e
an&ere# NNo,N an# it a& .roven t(at it(in t(at
.erio# (e (a# (a# a &"i$(t atta!2 of .(aryn$iti&, it
a& (e"# a ;'e&tion .ro.er"y for t(e J'ry (et(er
&'!( an inf"a))ation of t(e t(roat a& a N&i!2ne&&N
it(in t(e intent of t(e in;'iry, an# t(e !o'rt
re)ar2e# on t(e a..ea" #e!i&ion t(at if it !o'"# +e
(e"# a& a )atter of "a t(at t(e .o"i!y a& t(ere+y
avoi#e#, t(en it a& a )ere #evi!e on t(e .art of
in&'ran!e !o).anie& to o+tain )oney it(o't
ren#erin$ t(e)&e"ve& "ia+"e 'n#er t(e .o"i!y- - - -
P - - - T(e ;'e&tion &(o'"# +e "eft to t(e J'ry
(et(er t(e a&&'re# tr'"y re.re&ente# t(e &tate of
(i& (ea"t( &o a& not to )i&"ea# or #e!eive t(e
in&'rer; an# if (e #i# not #ea" in $oo# fait( it(
t(e in&'rer in t(at )atter, t(en t(e in;'iry &(o'"#
+e )a#e, Ei# (e 2no t(e &tate of (i& (ea"t( &o a&
to +e a+"e to f'rni&( a .ro.er an&er to &'!(
;'e&tion& a& are .ro.o'n#e#X A Ma&&a!('&ett&
!a&e, if !on&tr'e# a& it i& fre;'ent"y !ite#, o'"#
+e o..o&e# to t(e a+ove !on!"'&ion; +'t, on t(e
!ontrary, it &'&tain& it, for t(e rea&on t(at
&y).to)& of !on&').tion (a# &o far #eve"o.e#
t(e)&e"ve& it(in a fe )ont(& .rior to effe!tin$
t(e in&'ran!e a& to in#'!e a rea&ona+"e +e"ief t(at
t(e a.."i!ant (a# t(at fata" #i&ea&e, an# e &(o'"#
f'rt(er !on&tr'e t(i& !a&e a& e&ta+"i&(in$ t(e r'"e
t(at &'!( a )atter !annot re&t a"one '.on t(e
a&&'re#N& +e"ief irre&.e!tive of (at i& a
rea&ona+"e +e"ief, +'t t(at it o'$(t to +e J'#$e# +y
t(e !riterion (et(er t(e +e"ief i& one fair"y
arrante# +y t(e !ir!')&tan!e&- A !a&e in In#iana,
(oever, (o"#& t(at if t(e a&&'re# (a& &o)e
affe!tion or ai")ent of one or )ore of t(e or$an&
INSURANCE Page 65
in;'ire# a+o't &o e"" #efine# an# )ar2e# a& to
)ateria""y #eran$e for a ti)e t(e f'n!tion& of &'!(
or$an, a& in t(e !a&e of Bri$(tN& #i&ea&e, t(e .o"i!y
i"" +e avoi#e# +y a non#i&!"o&'re, irre&.e!tive of
t(e fa!t (et(er t(e a&&'re# 2ne of &'!( ai")ent
or not- - - -P
, /a&t"y, a..e""ant !onten#& t(at even if t(e
in&'ran!e !o).any (a# a ri$(t to re&!in# t(e
!ontra!t, &'!( ri$(t !annot no +e enfor!e# in vie
of t(e .rovi&ion& of &e!tion DC of t(e In&'ran!e A!t
.rovi#in$ P0(enever a ri$(t to re&!in# a !ontra!t of
in&'ran!e i& $iven to t(e in&'rer +y any .rovi&ion of
t(i& !(a.ter, &'!( ri$(t )'&t +e e%er!i&e# .revio'&
to t(e !o))en!e)ent of an a!tion on t(e !ontra!t-P
T(i& &e!tion a& #erive# fro) &e!tion 2963 of t(e
Ca"ifornia Civi" Co#e, +'t in !ontra&t t(ereto, )a2e&
'&e of t(e i).erative P)'&tP in&tea# of t(e
.er)i&&ive P)ay-P Nevert(e"e&&, t(ere are to
an&er& to t(e .ro+"e) a& .ro.o'n#e#- T(e fir&t i&
t(at t(e Ca"ifornia "a a& !on&tr'e# +y t(e !o#e
e%a)iner&, at (o&e re!o))en#ation it a&
a#o.te#, !on!e#e# t(at PA fai"'re to e%er!i&e t(e
ri$(t @of re&!i&&ionA, !annot, of !o'r&e, .reJ'#i!e any
#efen&e to t(e a!tion (i!( t(e !on!ea")ent )ay
f'rni&(-P @Co#e& of Ca"ifornia Annotate#; Tan C(ay
1en$ v&- 0e&t Coa&t /ife In&'ran!e Co).any
[452C], .- 60, ante-A T(e &e!on# an&er i& t(at t(e
in&'ran!e !o).any )ore t(an one )ont( .revio'&
to t(e !o))en!e)ent of t(e .re&ent a!tion rote
t(e ."aintiff an# infor)e# (i) t(at t(e in&'ran!e
!ontra!t a& voi# +e!a'&e it (a# +een .ro!'re#
t(ro'$( fra'#'"ent re.re&entation&, an# offere# to
ref'n# to t(e ."aintiff t(e .re)i') (i!( t(e "atter
(a# .ai# '.on t(e ret'rn of t(e .o"i!y for
!an!e""ation- A& (e"# in Ca"ifornia a& to a fire
in&'ran!e .o"i!y, (ere any of t(e )ateria"
re.re&entation& are fa"&e, t(e in&'rerN& ten#er of t(e
.re)i') an# noti!e t(at t(e .o"i!y i& !an!e"e#,
+efore t(e !o))en!e)ent of &'it t(ereon, o.erate
to re&!in# t(e !ontra!t of in&'ran!e- @<an2in v&-
A)a:on In&'ran!e Co- [4654], 65 Ca"-, 203-A
Disposition G'#$)ent affir)e#, it( t(e !o&t& of
t(i& in&tan!e a$ain&t t(e a..e""ant-
GREAT PACIFIC LIFE $. CA (NGO HING)
65 SC<A 9D3
E> CAST<O, G; A.ri" 30, 45C5
NATURE
Petition for !ertiorari
FACTS
, On Mar!( 4D, 459C, .rivate re&.on#ent N$o 1in$
fi"e# an a.."i!ation it( t(e Great Pa!ifi! /ife
A&&'ran!e Co- @Pa!ifi! /ifeA for a 20 year en#o)ent
.o"i!y of P902 on t(e "ife of (i& 4 year o"# #a'$(ter,
1e"en- N$o 1in$ &'.."ie# t(e e&&etntia" #ata (i!(
.etitioner Mon#ra$on, +ran!( )ana$er of t(e Pa!ifi!
/ife in Ce+', rote on t(e !orre&.on#in$ for) in (i&
on (an#ritin$, "ater ty.in$ t(e #ata on an
a.."i!ation for) &i$ne# +y N$o 1in$- T(e "atter .ai#
t(e P40CC-C9 ann'a" .re)i') +'t retaine# P4,34C
a& !o))i&&ion a& (e a& a"&o a #'"y a't(ori:e#
a$ent of Pa!ifi! /ife- T(e +in#in$ #e.o&it re!ei.t a&
t(en i&&'e# to N$o 1in$; Mon#ra$on (an#rote (i&
&tron$ re!o))en#ation for t(e a..rova" of t(e
a.."i!ation on t(e +a!2 of t(e for)-
, On A.ri" 30, Mon#ra$on re!eive# a "etter fro)
Pa!ifi! /ife (i!( &tate# t(at t(e 20 year en#o)ent
."an a& not avai"a+"e for )inor& +e"o C, +'t t(at
Pa!ifi! /ife !o'"# !on&i#er t(e &a)e 'n#er t(e
G'veni"e Tri."e A!tion P"an, a#vi&in$ t(at if t(e offer
a& a!!e.ta+"e, t(e G'veni"e Non,Me#i!a" Ee!"aration
+e &ent to t(e !o).any-
,Mon#ra$on a""e$e#"y fai"e# to infor) N$o 1in$ of
t(e non,a!!e.tan!e of t(e in&'ran!e ."an, in&tea#
ritin$ Pa!ifi! /ife a$ain, re!o))en#in$ t(e a..rova"
of t(e en#o)ent ."an to !(i"#ren &in!e !'&to)er&
(a# +een a&2in$ for &'!( !overa$e &in!e 459D-
,On May 26, 459C, 1e"en #ie# of inf"'en:a- N$o 1in$
&o'$(t t(e .ay)ent of t(e .ro!ee#& of t(e
in&'ran!e, +'t (avin$ fai"e# to #o &o, fi"e# an a!tion
for re!overy it( t(e C*I of Ce+'- T(e Co'rt or#ere#
Pa!ifi! /ife to .ay P902 it( 6Q intere&t, (en!e t(i&
.etition-
ISSUE
0ON t(e +in#in$ #e.o&it re!ei.t !on&tit'te# a
te).orary !ontra!t of t(e "ife in&'ran!e in ;'e&tion
HELD
NO
, T(e +in#in$ #e.o&it re!ei.t i& )ere"y a .rovi&iona"
!ontra!t an# on"y '.on !o)."ian!e it( t(e ff
!on#ition&H @4A t(at t(e !o).any +e &ati&fie# t(at
t(e a.."i!ant a& in&'ra+"e on &tan#ar# rate& @2A
t(at if t(e !o).any #oe& not a!!e.t t(e a.."i!ation
an# offer& a #ifferent .o"i!y, t(e in&'ran!e !ontra!t
&(a"" not +e +in#in$ 'nti" t(e a.."i!ant a!!e.t& t(e
ne .o"i!y @3A t(at if t(e a.."i!ant i& not fo'n# to +e
in&'ra+"e on &tan#ar# rate& an# t(e a.."i!ation i&
#i&a..rove#, t(e in&'ran!e &(a"" not +e in for!e at
any ti)e an# t(e .re)i') +e ret'rne# to t(e
a.."i!ant-
,T(i& i)."ie& t(e re!ei.t i& )ere"y an
a!2no"e#$e)ent, on +e(a"f of t(e !o).any, t(at
t(e Ce+' +ran!( of Pa!ifi! /ife (a# re!eive# t(e
.re)i') an# (a# a!!e.te# t(e a.."i!ation &'+Je!t to
.ro!e&&in$ +y t(e in&'ran!e !o).any, (i!( i""
a..rove or reJe!t it #e.en#in$ on (et(er t(e
a.."i!ant i& in&'ra+"e on &tan#ar# rate&- A& &'!(, t(e
re!ei.t a& never in for!eUit #oe& not in&'re
o'tri$(t- No "ia+i"ity atta!(e& 'nti" t(e .rin!i.a"
a..rove& t(e ri&2 an# a re!ei.t i& $iven +y t(e
a$ent; +e!a'&e .rivate re&.on#ent fai"e# to a!!e.t
Pa!ifi! /ife=& offer for t(e G'veni"e Tri."e A!tion ."an,
t(ere a& no )eetin$ of t(e )in#& an# t('& no
!ontra!t- A"&o, +ein$ an a't(ori:e# a$ent of Pa!ifi!
/ife, N$o 1in$ )'&t (ave 2non t(e !o).any #i#
not offer t(e in&'ran!e a.."ie# for an# )ere"y too2 a
!(an!e on Mon#ra$on=& re!o))en#ation-
Disposition t(e #e!i&ion a..ea"e# fro) i& &et a&i#e,
a+&o"vin$ Pa!ifi! /ife fro) t(eir !ivi" "ia+i"itie&
EDILLON $. MANILA BAN<ERS LIFE
44C SC<A 46C
MASQU>?; Se.te)+er 30, 4562
NATURE
A..ea" fro) a #e!i&ion of t(e C*I
FACTS
, So)eti)e in A.ri" 4565, Car)en O, /a.': a.."ie#
it( re&.on#ent in&'ran!e !or.oration for in&'ran!e
!overa$e a$ain&t a!!i#ent an# inJ'rie&- In t(e
a.."i!ation for) (i!( a& #ate# A.ri" 49, 4565, &(e
$ave t(e #ate of (er +irt( a& G'"y 44, 450D- On t(e
&a)e #ate, &(e .ai# t(e &') of P20-00 re.re&entin$
t(e .re)i') for (i!( &(e a& i&&'e# t(e
!orre&.on#in$ re!ei.t &i$ne# +y an a't(ori:e# a$ent
of t(e re&.on#ent in&'ran!e !or.oration- U.on t(e
fi"in$ of &ai# a.."i!ation an# t(e .ay)ent of t(e
.re)i') on t(e .o"i!y a.."ie# for, t(e re&.on#ent
in&'ran!e !or.oration i&&'e# to Car)en O- /a.': it&
Certifi!ate of In&'ran!e- T(e .o"i!y a& to +e
effe!tive for a .erio# of 50 #ay&-
, On May 34, 4565 or #'rin$ t(e effe!tivity of t(e
In&'ran!e, Car)en O- /a.': #ie# in a ve(i!'"ar
a!!i#ent-
, On G'ne C, 4565, .etitioner <e$ina /- >#i""on, a
&i&ter of t(e in&'re# an# (o a& t(e na)e#
+enefi!iary in t(e .o"i!y, fi"e# (er !"ai) for t(e
.ro!ee#& of t(e in&'ran!e, &'+)ittin$ a"" t(e
ne!e&&ary .a.er& an# ot(er re;'i&ite& it( t(e
.rivate re&.on#ent- 1er !"ai) (avin$ +een #enie#,
INSURANCE Page 66
<e$ina /- >#i""on in&tit'te# t(i& a!tion in t(e Co'rt of
*ir&t In&tan!e of <i:a"-
, In re&i&tin$ t(e !"ai) of t(e .etitioner, t(e
re&.on#ent in&'ran!e !or.oration re"ie& on a
.rovi&ion !ontaine# in t(e Certifi!ate of In&'ran!e,
e%!"'#in$ it& "ia+i"ity to .ay !"ai)& 'n#er t(e .o"i!y in
+e(a"f of P.er&on& (o are 'n#er t(e a$e of &i%teen
@46A year& of a$e or over t(e a$e of &i%ty @60A
year& ---P It i& .ointe# o't t(at t(e in&'re# +ein$
over &i%ty @60A year& of a$e (en &(e a.."ie# for t(e
in&'ran!e !overa$e, t(e .o"i!y a& n'"" an# voi#, an#
no ri&2 on t(e .art of t(e re&.on#ent in&'ran!e
!or.oration (a# ari&en t(erefro)-
, <TC #i&)i&&e# t(e !o)."aint-
ISSUE
0ON t(e a!!e.tan!e +y t(e .rivate re&.on#ent
in&'ran!e !or.oration of t(e .re)i') an# t(e
i&&'an!e of t(e !orre&.on#in$ !ertifi!ate of in&'ran!e
&(o'"# +e #ee)e# a aiver of t(e e%!"'&ionary
!on#ition of overa$e &tate# in t(e &ai# !ertifi!ate of
in&'ran!e
HELD
F>S
, T(e a$e of t(e in&'re# Car)en 0- /a.': a& not
!on!ea"e# to t(e in&'ran!e !o).any- 1er a.."i!ation
for in&'ran!e !overa$e (i!( a& on a .rinte# for)
f'rni&(e# +y .rivate re&.on#ent an# (i!( !ontaine#
very fe ite)& of infor)ation !"ear"y in#i!ate# (er
a$e of t(e ti)e of fi"in$ t(e &a)e to +e a")o&t 69
year& of a$e- Ee&.ite &'!( infor)ation (i!( !o'"#
(ar#"y +e over"oo2e# in t(e a.."i!ation for),
!on&i#erin$ it& .ro)inen!e t(ereon an# it&
)ateria"ity to t(e !overa$e a.."ie# for, t(e
re&.on#ent in&'ran!e !or.oration re!eive# (er
.ay)ent of .re)i') an# i&&'e# t(e !orre&.on#in$
!ertifi!ate of in&'ran!e it(o't ;'e&tion- T(e
a!!i#ent (i!( re&'"te# in t(e #eat( of t(e in&'re#, a
ri&2 !overe# +y t(e .o"i!y, o!!'rre# on May 34, 4565
or *O<TF,*IM> @D9A EAFS after t(e in&'ran!e
!overa$e a& a.."ie# for- T(ere a& &'ffi!ient ti)e
for t(e .rivate re&.on#ent to .ro!e&& t(e a.."i!ation
an# to noti!e t(at t(e a.."i!ant a& over 60 year& of
a$e an# t(ere+y !an!e" t(e .o"i!y on t(at $ro'n# if it
a& )in#e# to #o &o- If t(e .rivate re&.on#ent fai"e#
to a!t, it i& eit(er +e!a'&e it a& i""in$ to aive
&'!( #i&;'a"ifi!ation; or, t(ro'$( t(e ne$"i$en!e or
in!o).eten!e of it& e)."oyee& for (i!( it (a& on"y
it&e"f to +"a)e, it &i)."y over"oo2e# &'!( fa!t- Un#er
t(e !ir!')&tan!e&, t(e in&'ran!e !or.oration i&
a"rea#y #ee)e# in e&to..e"- It& ina!tion to revo2e
t(e .o"i!y #e&.ite a #e.art're fro) t(e e%!"'&ionary
!on#ition !ontaine# in t(e &ai# .o"i!y !on&tit'te# a
aiver of &'!( !on#ition-
Disposition G'#$)ent a..ea"e# fro) i& <>M><S>E
an# S>T ASIE> an# re&.on#ent in&'ran!e
!or.oration i& or#ere# to .ay to t(e .etitioner t(e
.ro!ee#& of In&'ran!e
HARDING $. COMMERCIAL UNION (*,2"a 2.BD)
TAN $. CA ( PHILIPPINE AMERICAN LIFE
INSURANCE COMPANY)
4CD SC<A D03
GUTI><<>?; G'ne 25, 4565
NATURE
<evie on certiorari of t(e #e!i&ion of t(e Co'rt of
A..ea"& affir)in$ t(e #e!i&ion of t(e In&'ran!e
Co))i&&ioner
FACTS
, On Se.te)+er 23,45C3, Tan /ee Sion$, fat(er of
(erein .etitioner&, a.."ie# for "ife in&'ran!e in t(e
a)o'nt of P 60,000-00 it( re&.on#ent !o).any-
Sai# a.."i!ation a& a..rove# an# a& i&&'e#
effe!tive Nove)+er 6, 45C3
, On A.ri" 26,45C9, Tan /ee Sion$ #ie# of (e.ato)a
@>%(i+it BA- Petitioner& t(en fi"e# it( re&.on#ent
!o).any t(eir !"ai) for t(e .ro!ee#& of t(e "ife
in&'ran!e .o"i!y
,re&.on#ent !o).any #enie# .etitioner&N !"ai) an#
re&!in#e# t(e .o"i!y +y rea&on of t(e a""e$e#
)i&re.re&entation an# !on!ea")ent of )ateria" fa!t&
)a#e +y t(e #e!ea&e# Tan /ee Sion$ in (i&
a.."i!ation for in&'ran!e- T(e .re)i')& .ai# on t(e
.o"i!y ere t(ere'.on ref'n#e#
, Petitioner& fi"e# on Nove)+er 2C, 45C9, a
!o)."aint a$ain&t t(e for)er it( t(e Offi!e of t(e
In&'ran!e Co))i&&ioner- Co))i&&ioner #enie#
.etition- CA affir)e# Co))i&&ioner& #e!i&ion
ISSUE
0ON a!!or#in$ to Se!- D6 of t(e In&'ran!e Co#e,
in&'ran!e !o).any i& +arre# fro) re&!in#in$
!ontra!t
HELD
, Se!tion D6- 0(enever a ri$(t to re&!in# a !ontra!t
of in&'ran!e i& $iven to t(e in&'rer +y any .rovi&ion
of t(i& !(a.ter, &'!( ri$(t )'&t +e e%er!i&e#
.revio'& to t(e !o))en!e)ent of an a!tion on t(e
!ontra!t-
After a .o"i!y of "ife in&'ran!e )a#e .aya+"e on t(e
#eat( of t(e in&'re# &(a"" (ave +een in for!e #'rin$
t(e "ifeti)e of t(e in&'re# for a .erio# of to year&
fro) t(e #ate of it& i&&'e or of it& "a&t rein&tate)ent,
t(e in&'rer !annot .rove t(at t(e .o"i!y i& voi# ab
initio or i& re&!in#a+"e +y rea&on of t(e fra'#'"ent
!on!ea")ent or )i&re.re&entation of t(e in&'re# or
(i& a$ent-
, A!!or#in$ to t(e .etitioner&, t(e In&'ran!e /a a&
a)en#e# an# t(e &e!on# .ara$ra.( of Se!tion D6
a##e# to .revent t(e in&'ran!e !o).any fro)
e%er!i&in$ a ri$(t to re&!in# after t(e #eat( of t(e
in&'re#
, T(e &o,!a""e# Pin!onte&ta+i"ity !"a'&eP .re!"'#e& t(e
in&'rer fro) rai&in$ t(e #efen&e& of fa"&e
re.re&entation& or !on!ea")ent of )ateria" fa!t&
in&ofar a& (ea"t( an# .revio'& #i&ea&e& are
!on!erne# if t(e in&'ran!e (a& +een in for!e for at
"ea&t to year& #'rin$ t(e in&'re#N& "ifeti)e- T(e
.(ra&e P#'rin$ t(e "ifeti)eP fo'n# in Se!tion D6
&i)."y )ean& t(at t(e .o"i!y i& no "on$er !on&i#ere#
in for!e after t(e in&'re# (a& #ie#- T(e 2ey .(ra&e in
t(e &e!on# .ara$ra.( of Se!tion D6 i& Pfor a .erio#
of to year&-P
, T(e .o"i!y a& i&&'e# on Nove)+er 6,45C3 an# t(e
in&'re# #ie# on A.ri" 26,45C9- T(e .o"i!y a& t('& in
for!e for a .erio# of on"y one year an# five )ont(&-
Con&i#erin$ t(at t(e in&'re# #ie# +efore t(e to,
year .erio# (a# "a.&e#, re&.on#ent !o).any i& not,
t(erefore, +arre# fro) .rovin$ t(at t(e .o"i!y i& voi#
ab initio +y rea&on of t(e in&'re#N& fra'#'"ent
!on!ea")ent or )i&re.re&entation-
, T(e .etitioner& !onten# t(at t(ere !o'"# (ave +een
no !on!ea")ent or )i&re.re&entation +y t(eir "ate
fat(er +e!a'&e Tan /ee Sion$ #i# not (ave to +'y
in&'ran!e- 1e a& on"y .re&&'re# +y in&i&tent
&a"e&)en to #o &o
,T(e "e$i&"ative an&er to t(e ar$')ent& .o&e# +y
t(e .etitioner& i& t(e Pin!onte&ta+i"ity !"a'&eP a##e#
+y t(e &e!on# .ara$ra.( of Se!tion D6- T(e in&'rer
(a& to year& fro) t(e #ate of i&&'an!e of t(e
in&'ran!e !ontra!t or of it& "a&t rein&tate)ent it(in
(i!( to !onte&t t(e .o"i!y, (et(er or not, t(e
in&'re# &ti"" "ive& it(in &'!( .erio#- After to year&,
t(e #efen&e& of !on!ea")ent or )i&re.re&entation,
no )atter (o .atent or e"" fo'n#e#, no "on$er "ie
TAN CHAY HENG $. WEST COAST LIFE
INSURANCE
94 P1I/ 60
GO1NS; Nove)+er 24, 452C
INSURANCE Page 67
FACTS
, P"aintiff a""e$e& t(at #efen#ant a!!e.te# an#
a..rove# a "ife in&'ran!e .o"i!y of for t(e &') of
P40,000 in (i!( t(e ."aintiff a& t(e &o"e
+enefi!iary; t(at t(e .o"i!y a& i&&'e# '.on t(e
.ay)ent +y t(e &ai# Tan Cean$ of t(e fir&t yearN&
.re)i') a)o'ntin$ to P536; t(at in an# +y it&
ter)&, t(e #efen#ant a$ree# to .ay t(e ."aintiff a&
+enefi!iary t(e a)o'nt of t(e .o"i!y '.on t(e re!ei.t
of t(e .roof& of t(e #eat( of t(e in&'re# (i"e t(e
.o"i!y a& in for!e; t(at it(o't any .re)i') +ein$
#'e or 'n.ai#, Tan Cean$ #ie# on May 40, 4529;
t(at in G'ne, 4529, ."aintiff &'+)itte# t(e .roof& of
t(e #eat( of Tan Cean$ it( a !"ai) for t(e .ay)ent
of t(e .o"i!y (i!( t(e #efen#ant ref'&e# to .ay, for
(i!( (e .ray& for a !orre&.on#in$ J'#$)ent, it(
"e$a" intere&t fro) t(e #ate of t(e .o"i!y, an# !o&t&-
, Eefen#ant a""e$e& t(at t(e in&'ran!e .o"i!y on t(e
"ife of Tan Cean$, '.on (i!( ."aintiffN& a!tion i&
+a&e#, a& o+taine# +y t(e ."aintiff in !onfa+'"ation
it( one Go C('"ian, of Ba!o"o#, Ne$ro& O!!i#enta";
*ran!i&!o San!(e: of t(e &a)e ."a!e; an# Er- M- S-
/o!&in, of /a Car"ota, Ne$ro& O!!i#enta", t(r' fra'#
an# #e!eit .er.etrate# a$ain&t t(i& #efen#ant in t(e
fo""oin$ )anner, to itH
4- Go, San!(e: an# /o!&in, !a'&e# Tan Caen$ to
&i$n an a.."i!ation for in&'ran!e it( t(e
#efen#ant in t(e &') of P40,000, in (i!( it a&
&ai# t(at Tan Cean$ a& &in$"e an# a& a
)er!(ant, an# t(at t(e ."aintiff Tan C(ai 1en$,
t(e +enefi!iary, a& (i& ne.(e, (erea& in
tr't( an# in fa!t an# a& t(e ."aintiff an# (i& &ai#
!o!on&.irator& e"" 2ne, t(e &ai# Tan Cean$
a& not &in$"e +'t a& )arrie# an# (a# &evera"
!(i"#ren; an# a& not a )er!(ant +'t a )ere
e)."oyee of Tan Q'ina fro) (o) (e re!eive#
on"y a )ea$er &a"ary, an# t(at ."aintiff a& not
a ne.(e of t(e &ai# Tan Cean$-
2- Tan Cean$ a& &erio'&"y i"", &'fferin$ fro)
.'")onary t'+er!'"o&i& of a+o't t(ree year&N
#'ration, (i!( i""ne&& a& in!'ra+"e an# a&
e"" 2non to t(e ."aintiff an# (i& &ai#
!o!on&.irator&-
3- /o!&in, in (i& !a.a!ity a& )e#i!a" e%a)iner for
t(e #efen#ant, .re.are# an# fa"&ifie# t(e
ne!e&&ary )e#i!a" !ertifi!ate, in (i!( it a&
)a#e to a..ear, a)on$ ot(er t(in$&, t(at Tan
Cean$ (a# never '&e# )or.(ine, !o!aine or any
ot(er #r'$; t(at (e a& t(en in $oo# (ea"t( an#
(a# never !on&'"te# any .(y&i!ian; t(at (e (a#
never &.it +"oo#; an# t(at t(ere a& no &i$n of
eit(er .re&ent or .a&t #i&ea&e of (i& "'n$&;
(erea& in tr't( an# in fa!t, ."aintiff an#
!o!on&.irator& e"" 2ne, Tan Cean$ a&
a##i!te# to )or.(ine, !o!aine, an# o.i') an#
(a# +een !onvi!te# an# i).ri&one# t(erefor,
an# for a+o't t(ree year .rior t(ereto (a# +een
&'fferin$ fro) .'")onary t'+er!'"o&i&-
D- P"aintiff !a'&e# a !onfi#entia" re.ort to t(e
#efen#ant in&'ran!e !o).any to +e &i$ne# +y
one M- Sy Fo!2 Iian, (o a& an e)."oyee of
Go C('"ian, in (i!( it a& fa"&e"y re.re&ente#
t(at Tan Cean$ a& ort( a+o't PD0,000, (a#
an ann'a" in!o)e of fro) ei$(t to ten t(o'&an#
.e&o& net, (a# t(e a..earan!e of $oo# (ea"t(,
an# never (a# t'+er!'"o&i&-
9- After &ai# a.."i!ation for in&'ran!e, )e#i!a"
!ertifi!ate an# !onfi#entia" re.ort (a# +een
.re.are# an# fa"&ifie#, ."aintiff an#
!o!on&.irator& !a'&e# t(e &a)e to +e forar#e#
to t(e #efen#ant at it& offi!e in Mani"a, t(e
)e#i!a" !ertifi!ate t(r' t(e &ai# Er- M- S- /o!&in
a& )e#i!a" e%a)iner, an# &ai# a.."i!ation for
in&'ran!e an# !onfi#entia" re.ort t(r' t(e &ai#
*ran!i&!o San!(e: in (i& !a.a!ity a& one of t(e
a$ent& of t(e #efen#ant in&'ran!e !o).any in
t(e Provin!e of O!!i#enta" Ne$ro&; t(at t(e
#efen#ant, +e"ievin$ t(at t(e re.re&entation&
)a#e in &ai# #o!')ent ere tr'e, an# re"yin$
t(ereon, .rovi&iona""y a!!e.te# t(e &ai#
a.."i!ation for in&'ran!e on t(e "ife of Tan Cean$
in t(e &') of P40,000 an# i&&'e# a te).orary
.o"i!y .en#in$ t(e fina" a..rova" or #i&a..rova"
of &ai# a.."i!ation +y #efen#antN& (o)e,offi!e in
San *ran!i&!o, Ca"ifornia, (ere in !a&e of
a..rova" a .er)anent .o"i!y a& to +e i&&'e#;
t(at &'!( .er)anent .o"i!y a& never #e"ivere#
to t(e ."aintiff +e!a'&e #efen#ant #i&!overe# t(e
fra'# +efore it& #e"ivery-
6- T(at t(e fir&t a$ree# ann'a" .re)i') on t(e
in&'ran!e in ;'e&tion of P536-90 not (avin$
+een .ai# it(in 60 #ay& after )e#i!a"
e%a)ination of t(e a.."i!ant a& re;'ire# +y t(e
re$'"ation& of t(e #efen#ant in&'ran!e !o).any,
."aintiff an# !o!on&.irator& !a'&e# Tan Cean$ to
&i$n a (ea"t( !ertifi!ate for rein&tate)ent; t(at
t(e &ai# te).orary .o"i!y a& #e"ivere# +y
#efen#ant to t(e in&'re# on A.ri" 40, 4529, in
t(e +e"ief t(at &ai# &tate)ent& an#
re.re&entation& ere tr'e an# in re"ian!e
t(ereon-
C- 2 Z )ont(& after t(e &'..o&e# )e#i!a"
e%a)ination a+ove referre# to, an# e%a!t"y 4
)ont( after t(e #ate of t(e (ea"t( !ertifi!ate for
rein&tate)ent a+ove &et fort(, Tan Cean$ #ie#
in Ma""a#o"i#, O!!i#enta" Ne$ro&, of .'")onary
t'+er!'"o&i&, t(e &a)e i""ne&& fro) (i!(
&'fferin$ at t(e ti)e it i& &'..o&e# (e a&
e%a)ine# +y Er- M- S- /o!&in, +'t t(at t(e
."aintiff !o!on&.irator&, .'r&'ant to t(eir
!on&.ira!y, !a'&e# t(e &ai# Er- M- S- /o!&in to
&tate fa"&e"y in t(e !ertifi!ate of #eat( t(at t(e
&ai# Tan Cean$ (a# #ie# of !ere+ra"
(e)orr(a$e-
, Eefen#ant a"&o a""e$e& t(at ."aintiff a&, "i2e M- Sy
Fo!2 Iian, an e)."oyee of Go C('"ian; t(at t(e
"atter a& t(e rin$"ea#er of a $an$ of )a"efa!tor&,
(o, #'rin$, an# for &o)e year& .revio'& to t(e
#ate& a+ove )entione#, ere en$a$e# in t(e i""i!it
enter.ri&e of .ro!'rin$ fra'#'"ent "ife in&'ran!e&
fro) t(e .re&ent #efen#ant, &i)i"ar to t(e one in
;'e&tion, an# (i!( enter.ri&e a& !a.ita"i:e# +y
(i) +y f'rni&(in$ t(e f'n#& it( (i!( to .ay t(e
.re)i') on &ai# fra'#'"ent in&'ran!e; t(at t(e &ai#
Go C('"ian a& t(e one (o f'rni&(e# t(e )oney
it( (i!( to .ay t(e fir&t an# on"y ann'a" .re)i')
on t(e in&'ran!e (ere in ;'e&tion, a)o'ntin$ to
P536-90; t(at t(e &ai# Go C('"ian, on A'$'&t 26,
4526, a& !onvi!te# +y t(e Co'rt of *ir&t In&tan!e of
t(e City of Mani"a, in !ri)ina" !a&e No- 34D29 of t(at
!o'rt, of t(e !ri)e of fa"&ifi!ation of .rivate
#o!')ent& in !onne!tion it( an fra'#'"ent
in&'ran!e, &i)i"ar to t(e .re&ent, !o))itte# a$ain&t
t(i& #efen#ant in t(e )ont( of Se.te)+er, 452D;
t(at in t(e &a)e !a&e t(e &ai# *ran!i&!o San!(e:
a& one of t(e !oa!!'&e# of t(e &ai# Go C('"ian +'t
a& #i&!(ar$e# fro) t(e !o)."aint, +e!a'&e (e
offere# (i)&e"f an# a& 'ti"i:e# a& a &tateN& itne&&;
t(at t(ere i& anot(er !ivi" a!tion no .en#in$ a$ain&t
Go C('"ian an# San!(e: in t(e Co'rt of *ir&t
In&tan!e of Mani"a @!ivi" !a&e No- 26660A, in (i!(
t(e .re&ent #efen#ant i& t(e ."aintiff, for t(e
re!overy of t(e a)o'nt& of to in&'ran!e .o"i!ie&
a$$re$atin$ P45,000, fra'#'"ent"y o+taine# +y t(e
&ai# Go C('"ian an# San!(e:-
, To t(i&, ."aintiff fi"e# a #e)'rrer (i!( a&
$rante#-
ISSUE
0ON #efen&e i& +arre# +y Art- DC
HELD
NO
Ratio T(e or# Pre&!in#P (a& a e"" #efine# "e$a"
)eanin$, an# a& a.."ie# to !ontra!t&, it .re&'..o&e&
t(e e%i&ten!e of a !ontra!t to re&!in#-
INSURANCE Page 68
Reasoning
, P"aintiff vi$oro'&"y !onten#& t(at &e!tion DC of t(e
In&'ran!e A!t &(o'"# +e a.."ie#, an# t(at (en &o
a.."ie#, #efen#ant i& +arre# an# e&to..e# to ."ea#
an# &et fort( t(e )atter& a""e$e# in it& &.e!ia"
#efen&e- T(at &e!tion i& a& fo""o&H
0(enever a ri$(t to re&!in# a !ontra!t of in&'ran!e
i& $iven to t(e in&'rer +y any .rovi&ion of t(i&
!(a.ter, &'!( ri$(t )'&t +e e%er!i&e# .revio'& to
t(e !o))en!e)ent of an a!tion on t(e !ontra!t-
, It i"" +e note# t(at #efen#ant #oe& not &ee2 to
(ave t(e a""e$e# in&'ran!e !ontra!t re&!in#e#- It
#enie& t(at it ever )a#e any !ontra!t of in&'ran!e
on t(e "ife of Tan Cean$ or t(at any &'!( a !ontra!t
ever e%i&te#, an# t(at i& t(e ;'e&tion (i!( it &ee2&
to (ave "iti$ate# +y it& &.e!ia" #efen&e- In t(e very
nat're of t(in$&, if t(e #efen#ant never )a#e or
entere# into t(e !ontra!t in ;'e&tion, t(ere i& no
!ontra!t to re&!in#, an#, (en!e, &e!tion DC '.on
(i!( t(e "oer +a&e# it& #e!i&ion in &'&tainin$ t(e
#e)'rrer #oe& not a.."y- A& &tate#, an a!tion to
re&!in# a !ontra!t i& fo'n#e# '.on an# .re&'..o&e&
t(e e%i&ten!e of t(e !ontra!t (i!( i& &o'$(t to +e
re&!in#e#- If a"" of t(e )ateria" )atter& &et fort( an#
a""e$e# in t(e #efen#antN& &.e!ia" ."ea are tr'e, t(ere
a& no va"i# !ontra!t of in&'ran!e, for t(e &i)."e
rea&on t(at t(e )in#& of t(e .artie& never )et an#
never a$ree# '.on t(e ter)& an# !on#ition& of t(e
!ontra!t- 0e are !"ear"y of t(e o.inion t(at, if &'!(
)atter& are 2non to e%i&t +y a .re.on#eran!e of
t(e evi#en!e, t(ey o'"# !on&tit'te a va"i# #efen&e
to ."aintiffN& !a'&e of a!tion- U.on t(e ;'e&tion a& to
(et(er or not t(ey or are not tr'e, e #o not at t(i&
ti)e (ave or e%.re&& any o.inion, +'t e are !"ear
t(at &e!tion DC #oe& not a.."y to t(e a""e$ation&
)a#e in t(e an&er, an# t(at t(e tria" !o'rt erre# in
&'&tainin$ t(e #e)'rrer-
Disposition T(e J'#$)ent of t(e "oer !o'rt i&
rever&e# an# t(e !a&e i& re)an#e# for &'!( ot(er
an# f'rt(er .ro!ee#in$& a& are not in!on&i&tent it(
t(i& o.inion, it( !o&t& a$ain&t t(e ."aintiff-
PIONEER INSURANCE AND SURETY
CORPORATION $. YAP
64 SC<A D26
*><NANE>?; Ee!e)+er 45, 45CD

NATURE
A..ea" +y !ertiorari fro) CA #e!i&ion affir)in$ a C*I
#e!i&ion (i!( #e!"are# ."aintiff Fa. entit"e# to
re!over fro) #efen#ant Pioneer In&'ran!e an#
S'rety Cor., t(e f'"" a)o'nt of t(e #a)a$e in;'ire#
in Po"i!y No- D245

FACTS
, Fa. one# a &tore in a 2 &torey +'i"#in$, (ere
&(e &o"# &(o..in$ +a$& an# footear- 1er &on,in,"a
a& in !(ar$e of t(e &tore
, A.ri" 45, 4562, Fa. too2 o't *ire In&'ran!e Po"i!y
No- D246 fro) Pioneer it( a fa!e va"'e of P29,000
!overin$ (er &to!2&, offi!e f'rnit're, fi%t're&, et!-
, a)on$ t(e !on#ition& &et fort(H
T(e In&'re# &(a"" $ive noti!e to t(e
Co).any of any in&'ran!e or in&'ran!e& a"rea#y
effe!te#, or (i!( )ay &'+&e;'ent"y +e
effe!te#, !overin$ any of t(e .ro.erty (ere+y
in&'re#, an# unless suc! notice be "iven and
t!e #articulars of suc! insurance or insurances
be stated in$ or endorsed on t!is Policy by or on
be!alf of t!e Co#any before t!e occurrence of
any loss or daa"e$ all benefits under t!is
Policy s!all be forfeited- @e).(a&i& &'.."ie#A
It i& 'n#er&too# t(at, e%!e.t a& )ay +e
&tate# on t(e fa!e of t(i& .o"i!y t(ere i& no ot(er
in&'ran!e on t(e .ro.erty (ere+y !overe# an#
no ot(er in&'ran!e i& a""oe# e%!e.t +y t(e
!on&ent of t(e Co).any en#or&e# (ereon- Any
fa"&e #e!"aration or +rea!( or t(i& !on#ition i""
ren#er t(i& .o"i!y n'"" an# voi#-
, At t(e ti)e of in&'ran!e of Po"i!y D245@A.ri" 45,
4562A, an in&'ran!e .o"i!y for P20,000 i&&'e# +y t(e
Great A)eri!an In&'ran!e Co).any !overin$ t(e
&a)e .ro.ertie& a& note# on &ai# .o"i!y a& !o,
in&'ran!e-
, A'$'&t 25, 4562 H .artie& e%e!'te# an
en#or&e)ent on Po"i!y D245 &tatin$H
It i& (ere+y #e!"are# an# a$ree# t(at t(e !o,
in&'ran!e e%i&tin$ at .re&ent 'n#er t(i& .o"i!y i& a&
fo""o&H P20,000-00 Nort(e&t In&-, and not as
ori"inally stated- @e).(a&i& &'.."ie#A
>%!e.t a& varie# +y t(i& en#or&e)ent, a"" ot(er
ter)& an# !on#ition& re)ain 'n!(an$e#-
, Se.te)+er 26, 4562H Fa. too2 o't anot(er fire
in&'ran!e .o"i!y for P20,000 !overin$ t(e &a)e
.ro.ertie&, fro) *e#era" In&'ran!e Co).any- T(i&
.o"i!y a& .ro!'re# ,it!out notice to and t!e ,ritten
consent of Pioneer, an# a& t(erefore not note# a& a
!o,in&'ran!e in Po"i!y D245-
, Ee!e)+er 45, 4562H *ire +'rne# Fa.=& &tore
ISSUE
0ON .etitioner &(o'"# +e a+&o"ve# fro) "ia+i"ity on
*ire in&'ran!e Po"i!y No- D245 on a!!o'nt of any
vio"ation +y re&.on#ent Fa. of t(e !o,in&'ran!e
!"a'&e t(erein

HELD
F>S
, T(e .etitioner &(o'"# +e a+&o"ve#-
Reasoning
- T(ere a& a vio"ation +y Fa. of t(e !o,in&'ran!e
!"a'&e !ontaine# in Po"i!y No- D245 (i!( re&'"te# in
t(e avoi#an!e of t(e .etitioner=& "ia+i"ity-
, By t(e ."ain ter)& of t(e .o"i!y, ot(er in&'ran!e
it(o't t(e !on&ent of .etitioner o'"# i#so facto
avoi# t(e !ontra!t- It re;'ire# no affir)ative a!t of
e"e!tion on t(e .art of t(e !o).any to )a2e
o.erative t(e !"a'&e avoi#in$ t(e !ontra!t, (erever
t(e &.e!ifie# !on#ition& &(o'"# o!!'r- It& o+"i$ation&
!ea&e#, 'n"e&&, +ein$ infor)e# of t(e fa!t, it
!on&ente# to t(e a##itiona" in&'ran!e-
, T(e o+vio'& .'r.o&e of t(e afore&ai# re;'ire)ent
in t(e .o"i!y i& to .revent over,in&'ran!e an# t('&
avert t(e .er.etration of fra'#- T(e .'+"i!, a& e"" a&
t(e in&'rer, i& intere&te# in .reventin$ t(e &it'ation
in (i!( a fire o'"# +e .rofita+"e to t(e in&'re#-
A!!or#in$ to G'&ti!e StoryH PT(e in&'re# (a& no ri$(t
to !o)."ain, for (e a&&ent& to !o)."y it( a"" t(e
&ti.'"ation on (i& &i#e, in or#er to entit"e (i)&e"f to
t(e +enefit of t(e !ontra!t, (i!(, '.on rea&on or
.rin!i."e, (e (a& no ri$(t to a&2 t(e !o'rt to #i&.en&e
it( t(e .erfor)an!e of (i& on .art of t(e
a$ree)ent, an# yet to +in# t(e ot(er .arty to
o+"i$ation&, (i!(, +'t for t(o&e &ti.'"ation o'"#
not (ave +een entere# into-P
Disposition t(e a..ea"e# J'#$)ent of t(e Co'rt of
A..ea"& i& rever&e# an# &et a&i#e, an# t(e .etitioner
a+&o"ve# fro) a"" "ia+i"ity 'n#er t(e .o"i!y-
NEW LIFE ENTERPRISES $. CA
20C SC<A 605
<>GA/AEO; Mar!( 34, 4552
FACTS
, G'"ian Sy an# Go&e Sy Ban$ are .artner& en$a$e# in
t(e +'&ine&& of &e""in$ !on&tr'!tion )ateria"& 'n#er
t(e +'&ine&& na)e 7Ne /ife >nter.ri&e&-8 G'"ian Sy
in&'re# a$ain&t fire t(e &to!2& in tra#e of Ne /ife
>nter.ri&e& it( 0e&tern G'aranty Cor.oration,
<e"ian!e S'rety an# In&'ran!e Co- In!-, an#
>;'ita+"e In&'ran!e Cor.oration in t(e a$$re$ate
a)o'nt of P4,990,000-00- 0(en t(e +'i"#in$ (ere
Ne /ife >nter.ri&e& a& "o!ate#, a"on$ it( t(e
&to!2& in tra#e t(erein, ere $'tte# +y fire,
.etitioner& fi"e# an in&'ran!e !"ai) a$ain&t t(e t(ree
INSURANCE Page 69
!o).anie&- T(e in&'ran!e !o).anie& a"" #enie#
G'"ian Sy=& !"ai) on t(e $ro'n# of 7+rea!( of .o"i!y
!on#ition,8 @i-e-, t(e 7ot(er in&'ran!e8 !"a'&e (i!(
re;'ire# Ne /ife >nter.ri&e& to infor) ea!( of t(e
in&'ran!e !o).anie& in !a&e t(e for)er in&'re& it(
anot(er !o).any t(e &a)e .ro.erty a"rea#y in&'re#
+y ea!( of t(e in&'ran!e !o).anie&A-
, Be!a'&e of t(e #enia" of t(eir !"ai)& for .ay)ent
+y t(e 3 in&'ran!e !o).anie&, .etitioner& fi"e#
&e.arate !ivi" a!tion& a$ain&t t(e for)er +efore t(e
<e$iona" Tria" Co'rt of /'!ena City, (i!( !a&e& ere
!on&o"i#ate# for tria"- T(e tria" !o'rt r'"e# in favor of
.etitioner- 1oever, t(e Co'rt of A..ea"& rever&e#
t(e tria" !o'rt=& #e!i&ion, fo'n# .etitioner to (ave
vio"ate# C"a'&e& 3 an# 2C of t(e &e.arate in&'ran!e
.o"i!ie& i&&'e# +y t(e 3 !o).anie&, an# e%onerate#
t(e in&'ran!e !o).anie& fro) "ia+i"ity-
ISSUE
0ON .etitioner& vio"ate# t(e 7Ot(er In&'ran!e
C"a'&e8 of t(e in&'ran!e .o"i!ie&
HELD
F>S
, Petitioner& a#)it t(at t(e re&.e!tive in&'ran!e
.o"i!ie& i&&'e# +y .rivate re&.on#ent& #i# not &tate
or en#or&e t(ereon t(e ot(er in&'ran!e !overa$e
o+taine# or &'+&e;'ent"y effe!te# on t(e &a)e
&to!2& in tra#e for t(e "o&& of (i!( !o).en&ation i&
!"ai)e# +y .etitioner&- It i& f'rt(er a#)itte# +y
.etitioner& t(at >;'ita+"eN& .o"i!y &tate# Pni"P in t(e
&.a!e t(ereon re;'irin$ in#i!ation of any !o,
in&'ran!e a"t(o'$( t(ere ere 3 .o"i!ie& &'+&i&tin$
on t(e &a)e &to!2& in tra#e at t(e ti)e of t(e "o&&,
na)e"y, t(at of 0e&tern in t(e a)o'nt of
P390,000-00 an# to 2 .o"i!ie& of <e"ian!e in t(e
tota" a)o'nt of P4,000,000-00-
, T(e !overa$e +y ot(er in&'ran!e or !o,in&'ran!e
effe!te# or &'+&e;'ent"y arran$e# +y .etitioner&
ere neit(er &tate# nor en#or&e# in t(e .o"i!ie& of
t(e 3 .rivate re&.on#ent&, arrantin$ forfeit're of a""
+enefit& t(ere'n#er if e are to fo""o t(e e%.re&&
&ti.'"ation in Po"i!y Con#ition No- 3-
, T(e ter)& of t(e !ontra!t are !"ear an#
'na)+i$'o'&- T(e in&'re# i& &.e!ifi!a""y re;'ire# to
#i&!"o&e to t(e in&'rer any ot(er in&'ran!e an# it&
.arti!'"ar& (i!( (e )ay (ave effe!te# on t(e &a)e
&'+Je!t )atter- T(e 2no"e#$e of &'!( in&'ran!e +y
t(e in&'rerN& a$ent&, even a&&')in$ t(e a!;'i&ition
t(ereof +y t(e for)er, i& not t(e Pnoti!eP t(at o'"#
&to. t(e in&'rer& fro) #enyin$ t(e !"ai)- Be&i#e&,
t(e &o,!a""e# t(eory of i).'te# 2no"e#$e, t(at i&,
2no"e#$e of t(e a$ent i& 2no"e#$e of t(e .rin!i.a",
a&i#e fro) +ein$ of #'+io'& a.."i!a+i"ity (ere (a&
"i2ei&e +een ro'n#"y ref'te# +y re&.on#ent !o'rt
(o&e fa!t'a" fin#in$& e fin# a!!e.ta+"e- T(e )ere
fa!t t(at Fa. Ia) C('an a& an a$ent for +ot(
<e"ian!e an# >;'ita+"e #oe& not J'&tify t(e a""e$ation
t(at t(e to are &i&ter !o).anie&- Avai")ent of t(e
&ervi!e& of t(e &a)e a$ent& an# a#J'&ter& +y
#ifferent !o).anie& i& a !o))on .ra!ti!e in t(e
in&'ran!e +'&ine&& an# &'!( fa!t& #o not arrant t(e
&.e!'"ative !on!"'&ion of t(e tria" !o'rt-
, Con&i#erin$ t(e ter)& of t(e .o"i!y (i!( re;'ire#
t(e in&'re# to #e!"are ot(er in&'ran!e&, t(e
&tate)ent in ;'e&tion )'&t +e #ee)e# to +e a
&tate)ent @arrantyA +in#in$ on +ot( in&'rer an#
in&'re#, t(at t(ere ere no ot(er in&'ran!e on t(e
.ro.erty- T(e annotation t(en, )'&t +e #ee)e# to
+e a arranty t(at t(e .ro.erty a& not in&'re# +y
any ot(er .o"i!y- Mio"ation t(ereof entit"e# t(e
in&'rer to re&!in#-
, T(e o+vio'& .'r.o&e of t(e afore&ai# re;'ire)ent
in t(e .o"i!y i& to .revent over,in&'ran!e an# t('&
avert t(e .er.etration of fra'#- T(e .'+"i!, a& e"" a&
t(e in&'rer, i& intere&te# in .reventin$ t(e &it'ation
in (i!( a fire o'"# +e .rofita+"e to t(e in&'re#- T(e
in&'re# (a& no ri$(t to !o)."ain, for (e a&&ent& to
!o)."y it( a"" t(e &ti.'"ation& on (i& &i#e, in or#er
to entit"e (i)&e"f to t(e +enefit of t(e !ontra!t,
(i!(, '.on rea&on or .rin!i."e, (e (a& no ri$(t to
a&2 t(e !o'rt to #i&.en&e it( t(e .erfor)an!e of (i&
on .art of t(e a$ree)ent, an# yet to +in# t(e ot(er
.arty to o+"i$ation&, (i!(, +'t for t(o&e &ti.'"ation&,
o'"# not nave +een entere# into-
, It i& not #i&.'te# t(at t(e in&'re# fai"e# to revea"
+efore t(e "o&& t(ree ot(er in&'ran!e&- By rea&on of
&ai# 'nrevea"e# in&'ran!e&, t(e in&'re# (a# +een
$'i"ty of a fa"&e #e!"aration; a !"ear
)i&re.re&entation an# a vita" one +e!a'&e (ere t(e
in&'re# (a# +een a&2e# to revea" +'t #i# not, t(at
a& #e!e.tion- Ot(eri&e &tate#, (a# t(e in&'rer
2non t(at t(ere ere )any !o,in&'ran!e&, it !o'"#
(ave (e&itate# or ."ain"y #e&i&te# fro) enterin$ into
&'!( !ontra!t- 1en!e, t(e in&'re# a& $'i"ty of !"ear
fra'#-
, A& t(e in&'ran!e .o"i!y a$ain&t fire e%.re&&"y
re;'ire# t(at noti!e &(o'"# +e $iven +y t(e in&'re#
of ot(er in&'ran!e '.on t(e &a)e .ro.erty, t(e tota"
a+&en!e of &'!( noti!e n'""ifie& t(e .o"i!y-
, A##itiona""y, in&ofar a& t(e "ia+i"ity of re&.on#ent
<e"ian!e i& !on!erne#, it i& not #enie# t(at t(e
!o)."aint for re!overy a& fi"e# in !o'rt +y
.etitioner& on"y on Gan'ary 34, 456D, or after )ore
t(an one @4A year (a# e"a.&e# fro) .etitioner&N
re!ei.t of t(e in&'rer&N "etter of #enia" on Nove)+er
25, 4562-
, T(e !on#ition !ontaine# in an in&'ran!e .o"i!y t(at
!"ai)& )'&t +e .re&ente# it(in one year after
reJe!tion i& not )ere"y a .ro!e#'ra" re;'ire)ent +'t
an i).ortant )atter e&&entia" to a .ro).t &ett"e)ent
of !"ai)& a$ain&t in&'ran!e !o).anie& a& it #e)an#&
t(at in&'ran!e &'it& +e +ro'$(t +y t(e in&'re# (i"e
t(e evi#en!e a& to t(e ori$in an# !a'&e of
#e&tr'!tion (ave not yet #i&a..eare#-
=UA CHEE GAN $. LAW UNION (*,2"a 2.C7)
YOUNG $. MIDLAND TELTILE INSURANCE CO.
30 P1I/ 64C
GO1NSON; Mar!( 34, 4549
FACTS
, I-S- Fo'n$ (a# a !an#y an# fr'it &tore on t(e
>&!o"ta, Mani"a, an# o!!'.ie# a +'i"#in$ at 324 Ca""e
C"averia, a& a re&i#en!e an# +o#e$a- T(e Mi#"an#
Te%ti"e In&'ran!e Co- in !on&i#eration of t(e
.ay)ent of a .re)i') of P60, entere# into a
!ontra!t of in&'ran!e it( Fo'n$ +y t(e ter)& of
(i!( t(e !o).any, '.on !ertain !on#ition&,
.ro)i&e# to .ay Fo'n$ t(e &') of P3,000 in !a&e
&ai# re&i#en!e an# +o#e$a an# !ontent& &(o'"# +e
#e&troye# +y fire-
, One of t(e !on#ition& of t(e !ontra!t i&H P0arranty
B L It i& (ere+y #e!"are# an# a$ree# t(at #'rin$ t(e
.en#en!y of t(i& .o"i!y no (a:ar#o'& $oo#& +e
&tore# or 2e.t for &a"e, an# no (a:ar#o'& tra#e or
.ro!e&& +e !arrie# on, in t(e +'i"#in$ to (i!( t(i&
in&'ran!e a.."ie&, or in any +'i"#in$ !onne!te#
t(ereit(-P
, Fo'n$ ."a!e# in t(e re&i#en!e an# +o#e$a t(ree
+o%e& fi""e# it( fireor2&- Sai# re&i#en!e an#
+o#e$a an# t(e !ontent& t(ereof ere .artia""y
#e&troye# +y fire-
, T(e fireor2& (a# +een $iven to Fo'n$ +y t(e
for)er oner of t(e /'neta Can#y Store- 1e
inten#e# to '&e t(e) in t(e !e"e+ration of t(e
C(ine&e Ne Fear- 1oever, t(e a't(oritie& of t(e
!ity of Mani"a (a# .ro(i+ite# t(e '&e of fireor2& on
&ai# o!!a&ion, &o Fo'n$ t(en ."a!e# t(e) in t(e
INSURANCE Page 70
+o#e$a (ere t(ey re)aine# fro) t(e Dt( or 9t( of
*e+r'ary, 4543 'nti" after t(e fire of Mar!( 46, 4543-
, Bot( .artie& a$ree t(at t(e fireor2& !o)e it(in
t(e .(ra&e P(a:ar#o'& $oo#&,P )entione# in
P0arranty BP of t(e .o"i!y; t(at t(e fireor2& ere
fo'n# in a .art of t(e +'i"#in$ not #e&troye# +y t(e
fire an# t(at t(ey in no ay !ontri+'te# to t(e fire,
or to t(e "o&& t(at re&'"te#-
, T(e "oer !o'rt ren#ere# a J'#$)ent in favor of
Fo'n$ for t(e &') of P2,C06-C6, an# !o&t&-
ISSUE
4- 0ON t(e ."a!in$ of t(e fireor2& in t(e +'i"#in$
in&'re#, t(ey +ein$ P(a:ar#o'& $oo#&,P a& a
vio"ation of t(e ter)& of t(e !ontra!t of in&'ran!e
an# e&.e!ia""y of P0arranty B-P
HELD
4- F>S-
Rea*#+'+% It i& a#)itte# +y +ot( .artie& t(at t(e
fireor2& are (a:ar#o'& $oo#&- T(e #efen#ant
a""e$e# t(at t(ey ere P&tore#-P T(e ."aintiff
!onten#& t(at 'n#er a"" t(e fa!t& an# !ir!')&tan!e&
of t(e !a&e, t(ey ere not 7&tore#8 in &ai# +'i"#in$,
an# t(at t(e ."a!in$ of t(e) in t(e +'i"#in$ a& not
a vio"ation of t(e ter)& of t(e !ontra!t-
, 0(et(er a .arti!'"ar arti!"e i& P&tore#P or not )'&t,
in &o)e #e$ree, #e.en# '.on t(e intention of t(e
.artie&- Near"y a"" of t(e !a&e& !ite# +y t(e "oer
!o'rt are !a&e& (ere t(e arti!"e a& +ein$ .'t to
&o)e rea&ona+"e an# a!t'a" '&e, (i!( )i$(t ea&i"y
(ave +een .er)itte# +y t(e ter)& of t(e .o"i!y, an#
it(in t(e intention of t(e .artie&, an# e%!e.te# fro)
t(e o.eration of t(e arranty, "i2e t(e .re&ent-
, @4A 0(ere )er!(ant& (ave (a# or 2e.t t(e
P(a:ar#o'&P arti!"e& in &)a"" ;'antitie&, an# for
a!t'a" #ai"y '&e, for &a"e, &'!( a& $a&o"ine,
$'n.o#er, et!-; @2A 0(ere &'!( arti!"e& (ave +een
+ro'$(t on t(e .re)i&e& for a!t'a" '&e t(ereon, an#
in &)a"" ;'antitie&, &'!( a& oi", .aint&, et!; an# @3A
0(ere &'!( arti!"e& or $oo#& ere '&e# for "i$(tin$
.'r.o&e&, an# in &)a"" ;'antitie&-
, In t(e .re&ent !a&e no !"ai) i& )a#e t(at t(e
P(a:ar#o'& $oo#&P ere ."a!e# in t(e +o#e$a for
.re&ent or #ai"y '&e- It i& a#)itte# t(at t(ey ere
."a!e# in t(e +o#e$a Pfor f't're '&e,P or for f't're
!on&').tion, or for &afe 2ee.in$- It &ee)& !"ear to
'& t(at t(e P(a:ar#o'& $oo#&P in ;'e&tion ere
P&tore#P in t(e +o#e$a, a& t(at or# i& $enera""y
#efine#- T(at +ein$ tr'e, &'..o&e t(e #efen#ant (a#
)a#e an e%a)ination of t(e .re)i&e&, even in t(e
a+&en!e of a fire, an# (a# fo'n# t(e P(a:ar#o'&
$oo#&P t(ere, o'"# it not (ave +een J'&tifie# in
#e!"arin$ t(e .o"i!y n'"" an# of no effe!t +y rea&on of
a vio"ation of it& ter)&X If it )i$(t, t(en )ay it not
re.'#iate it& "ia+i"ity, even after t(e fireX If t(e
ParrantyP i& a ter) of t(e !ontra!t, i"" not it&
vio"ation !a'&e a +rea!( an# J'&tify non!o)."ian!e
or re.'#iationX
, Contra!t& of in&'ran!e are !ontra!t& of in#e)nity,
'.on t(e ter)& an# !on#ition& &.e!ifie# t(erein-
Partie& (ave a ri$(t to i).o&e &'!( rea&ona+"e
!on#ition& at t(e ti)e of t(e )a2in$ of t(e !ontra!t
a& t(ey #ee) i&e an# ne!e&&ary- T(e rate of
.re)i') i& )ea&'re# +y t(e !(ara!ter of t(e ri&2
a&&')e#- T(e in&'rer, for a !o).arative"y &)a""
!on&i#eration, 'n#erta2e& to $'arantee t(e in&'re#
a$ain&t "o&& or #a)a$e, '.on t(e ter)& an#
!on#ition& a$ree# '.on, an# '.on no ot(er- 0(en
t(e in&'rer i& !a""e# '.on to .ay, in !a&e of "o&&, (e
)ay J'&t"y in&i&t '.on a f'"fi"")ent of t(e ter)& of
t(e !ontra!t- If t(e in&'re#, !annot +rin$ (i)&e"f
it(in t(e ter)& an# !on#ition& of t(e !ontra!t, (e i&
not entit"e# to re!over for any "o&& &'ffere#- T(e
ter)& of t(e !ontra!t !on&tit'te t(e )ea&'re of t(e
in&'rerN& "ia+i"ity- If t(e !ontra!t (a& +een
ter)inate#, +y a vio"ation of it& ter)& on t(e .art of
t(e in&'re#, t(ere !an +e no re!overy- Co)."ian!e
it( t(e ter)& of t(e !ontra!t i& a !on#ition
.re!e#ent to t(e ri$(t of re!overy-
, Fo'n$ ar$'e& t(at &in!e t(e P&torin$P of t(e
fireor2& on t(e .re)i&e& #i# not !ontri+'te in any
ay to t(e #a)a$e o!!a&ione# +y t(e fire, (e &(o'"#
+e .er)itte# to re!over- T(at ar$')ent, (oever, i&
+e&i#e t(e ;'e&tion, if t(e P&torin$P a& a vio"ation
of t(e ter)& of t(e !ontra!t- T(e vio"ation of t(e
ter)& of t(e !ontra!t, +y virt'e of t(e .rovi&ion& of
t(e .o"i!y it&e"f, ter)inate#, at t(e e"e!tion of eit(er
.arty, t(e !ontra!t'a" re"ation&-
, Fo'n$ .ai# a .re)i') +a&e# '.on t(e ri&2 at t(e
ti)e t(e .o"i!y a& i&&'e#- Certain"y, t(e ."a!in$ of
t(e fire!ra!2er& in t(e +'i"#in$ in&'re# in!rea&e# t(e
ri&2- Fo'n$ (a# not .ai# a .re)i') +a&e# '.on t(e
in!rea&e# ri&2, neit(er (a# t(e #efen#ant i&&'e# a
.o"i!y '.on t(e t(eory of a #ifferent ri&2- 1e a&
enJoyin$, if (i& !ontention )ay +e a""oe#, t(e
+enefit& of an in&'ran!e .o"i!y '.on one ri&2,
(erea&, a& a )atter of fa!t, it a& i&&'e# '.on an
entire"y #ifferent ri&2- T(e #efen#ant (a# neit(er
+een .ai# nor (a# i&&'e# a .o"i!y to !over t(e
in!rea&e# ri&2- An in!rea&e of ri&2 (i!( i&
&'+&tantia" an# (i!( i& !ontin'e# for a !on&i#era+"e
.erio# of ti)e, i& a #ire!t an# !ertain inJ'ry to t(e
in&'rer, an# !(an$e& t(e +a&i& '.on (i!( t(e
!ontra!t of in&'ran!e re&t&-
Disposition Ee!i&ion of t(e "oer !o'rt i&
<>M><S>E-
TAN $. CA (*,2"a 2.16)
AREOLA $. CA (*,2"a 2.ED)
TAN CHAY $. WEST COAST (*,2"a 2.16)
FILIPINAS LIFE ASSURANCE $. NAVA
4C SC<A 240
BAUTISTA ANG>/O; May 20, 4566
NATURE
Petition for revie of a #e!i&ion of t(e Co'rt of
A..ea"&
FACTS
, Before t(e ar, Nava entere# into a !ontra!t of
in&'ran!e it( In&'"ar /ife A&&'ran!e Co-, /t#- @fa!e
va"'e of P92A, an# 4C &e.arate !ontra!t& of "ife
in&'ran!e it( *i"i.ina& /ife A&&'ran!e Co- @tota" fa!e
va"'e of P502A- >a!( an# everyone of t(e 46 .o"i!ie&
i&&'e# +y #efen#ant& to ."aintiff !ontain& a "oan
!"a'&e of t(e fo""oin$ tenorH
Policy loans. After t!ree full years@
#reius !ave been #aid u#on t!is Policy$ if no
#reiu #ayent is in default$ t!e Co#any$
sub6ect to its t!en e8istin" rules$ ,ill advance on
#ro#er assi"nent and delivery of t!is Policy and
on t!e sole security t!ereof a su e.ual to$ or at
t!e o#tion of t!e o,ner less t!an$ t!e cas! value
s#ecified in t!e Sc!edule of Policy Values$ less any
e8istin" indebtedness on or secured by t!is Policy
and any un#aid balance of t!e #reiu for t!e
current #olicy-yearE #rovided interest at si8 #er
centu #er annu on t!e ,!ole aount of t!e
loan is #aid in advance to t!e end of t!e current
#olicy-year. At t!e end of t!e current #olicy-year
interest at t!e sae rate for one year in advance
,ill be due and #ayable$ and annually t!ereafter$
and if not so #aid ,ill be added to t!e #rinci#al
and bear t!e sae rate of interest. Failure to
re#ay any suc! loan or interest s!all not avoid t!is
Policy unless t!e total indebtedness s!all e.ual or
e8ceed t!e full aount of t!e loan value available
!ereunder.
Any indebtedness on t!is Policy s!all first be
deducted fro any oney #ayable or in any
settleent under t!is Policy.
INSURANCE Page 71
, Nava (a# &o far .ai# to In&'"ar a tota" of P2,9CD;
an# to *i"i.ina& /ife, a tota" of P32,0C2-60-
, A.ri" 26, 45D6H Nava a.."ie# to t(e !o).anie& for a
P92 "oan in "ine it( t(e "oan !"a'&e, +'t t(ey
ref'&e# to $rant it +e!a'&e !ertain re$'"ation& i&&'e#
+y t(e In&'ran!e Co))i&&ioner re;'ire# t(e
in&'ran!e !o).anie& to it((o"# t(e .ay)ent& on
.re)i')& )a#e #'rin$ t(e Ga.ane&e o!!'.ation
+e!a'&e t(e &a)e &(a"" +e &'+Je!t to f't're
a#J'&t)ent& P a& &oon a& #e+tor,!re#itor re"ation&(i.
i& e&ta+"i&(e#P an# +e!a'&e of &'!( .ro!e&& of
Pit((o"#in$P ."aintiff a& not entit"e# to +orro any
a)o'nt 'nti" &'!( a#J'&t)ent (a& +een )a#e-
, Se.t 30, 45D6H Nava !a""e# t(e attention of t(e
in&'ran!e !o).anie& to t(e SC #e!i&ion @Ha, Pia v.
C!ina Ban+in" Cor#orationA e&ta+"i&(in$ an#
re!o$ni:in$ t(e re"ation&(i. of #e+tor an# !re#itor
it( re&.e!t to .ay)ent& in fiat !'rren!y )a#e
#'rin$ t(e Ga.ane&e o!!'.ation on .re,ar
o+"i$ation&-
, Co).anie& &ti"" ref'&e# &ayin$ t(at t(e SC #e!i&ion
a& not a.."i!a+"e to tran&a!tion& 'n#erta2en #'rin$
Ga.ane&e o!!'.ation (en t(ey re"ate to "ife
in&'ran!e .o"i!ie&-
, *e+ D, 45D5H Nava a& a$ain ref'&e# even if t(e
tota" a)o'nt of t(e !a&( &'rren#er va"'e& of t(e 46
.o"i!ie& rea!(e# t(e &') of P5,D66-25-
, *e+ 40, 45D5H Nava +ro'$(t !a&e to t(e C*I Mani"a
.rayin$ for t(e re&!i&&ion of t(e a+ove)entione# 46
.o"i!ie& an# for t(e ref'n# to (i) of a"" t(e .re)i')&
&o far .ai# +y (i) to #efen#ant& in t(e a)o'nt of
P34,633-60, ."'& 6Q intere&t t(ereon a& #a)a$e&
, Nov 26, 4594H !o).anie& .a&&e# a re&o"'tion
(i!( a& a..rove# +y t(e In&'ran!e Co))i&&ioner,
$ivin$ f'"" !re#it to a"" .re)i') .ay)ent& )a#e +y
t(eir .o"i!y(o"#er& in fiat !'rren!y #'rin$ t(e
Ga.ane&e o!!'.ation on a!!o'nt of .re,ar .o"i!ie&
for (i!( rea&on t(ey fi"e# an a)en#e# an&er
offerin$ to .ay ."aintiff t(e a)o'nt of P5,D66-25
(i!( re.re&ent& t(e a$$re$ate !a&( &'rren#er
va"'e& of a"" t(e .o"i!ie& in ;'e&tion a& of *e+r'ary
40, 45D5, +'t a..arent"y t(i& offer a& ref'&e#-
, C*IH @4A re&!in#e# t(e in&'ran!e !ontra!t&; @2A
or#ere# #efen#ant *i"i.ina& /ife A&&'ran!e Co- to .ay
."aintiff t(e a)o'nt of P32,0C2-60; an# @3A or#ere#
#efen#ant In&'"ar /ife A&&'ran!e Co-, /t#- to .ay
."aintiff t(e a)o'nt of P2,9CD-00
, CA affir)e#-
ISSUES
4- 0ON CA erre# in r'"in$ t(at a& a !on&e;'en!e of
t(e #e!i&ion in t(e 1a Pia !a&e .etitioner& vio"ate#
t(e "oan !"a'&e !ontaine# in t(e in&'ran!e .o"i!ie&
t(ere+y entit"in$ re&.on#ent to t(eir re&!i&&ion
2- 0ON CA erre# in r'"in$ t(at +y virt'e of Arti!"e
4259 of t(e o"# Civi" Co#e .etitioner& &(o'"# ref'n#
to #efen#ant a"" t(e .re)i')& .ai# on (i& in&'ran!e
.o"i!ie& a& a !on&e;'en!e of t(eir re&!i&&ion
3- 0ON CA erre# in not r'"in$ t(at, even if
re&.on#ent i& entit"e# to t(e re&!i&&ion of &ai#
in&'ran!e .o"i!ie&, (e !an on"y re!over t(eir !a&(
&'rren#er va"'e at t(e ti)e t(e !o)."aint a& fi"e#
HELD
4- NO-
, >ven a&&')in$ t(e va"i#ity of t(e In&'ran!e
Co))i&&ioner=& re$'"ation&, t(e fa!t (oever i& t(at
&'!( re;'ire)ent (a& a"rea#y "o&t it& "e$a" effe!t an#
va"'e (en o'r S'.re)e Co'rt ren#ere# it& #e!i&ion
in t(e 1a Pia !a&e (erein it a& #e!"are#, a)on$
ot(er&, t(at a"" .ay)ent& )a#e in fiat !'rren!y
#'rin$ t(e Ga.ane&e o!!'.ation in re"ation it( any
!ontra!t'a" o+"i$ation e%e!'te# +efore t(e ar ere
va"i# to a"" intent& an# .'r.o&e&, an# yet .etitioner&
a..arent"y #i# not $ive any i).ortan!e to &'!(
#e!i&ion for in t(eir o.inion it #oe& not (ave any
a.."i!ation to tran&a!tion& (i!( (ave any re"ation to
.ay)ent of .re)i')& on "ife in&'ran!e .o"i!ie&-
, It !annot +e #enie# t(at a "ife in&'ran!e .o"i!y
invo"ve& a !ontra!t'a" o+"i$ation (erein t(e in&'re#
+e!o)e& #'ty +o'n# to .ay t(e .re)i')& a$ree#
'.on, "e&t (e r'n& t(e ri&2 of (avin$ (i& in&'ran!e
.o"i!y "a.&e if (e fai"& to .ay &'!( .re)i')&-
, T(e fa!t t(at if t(e in&'re# (a# .ai# in f'"" t(e
.re)i')& !orre&.on#in$ to t(e fir&t 3 year& of t(e
"ife of (i& .o"i!y (e !annot +e !on&i#ere# #e"in;'ent
t(at o'"# !a'&e t(e "a.&e of (i& .o"i!y if t(e &a)e
!ontain& an a'to)ati! .re)i') .ay)ent !"a'&e
!annot #ive&t &'!( .o"i!y of it& !ontra!t'a" nat're,
for t(e re&'"t of &'!( fai"'re o'"# on"y +e for (i) to
.ay "ater t(e .re)i') ."'& t(e !orre&.on#in$
intere&t #e.en#in$ '.on t(e !on#ition of t(e .o"i!y-
B't !ertain"y it #oe& not !ea&e to +e a !ontra!t'a"
"ia+i"ity in&ofar a& t(e .ay)ent of t(at .re)i') i&
!on!erne# for (et(er (e "i2e& it or not t(at
.re)i') (a& to +e .ai# "e&t (e a""o& t(e "a.&e of
(i& .o"i!y- Con&e;'ent"y, t(e .ay)ent of .re)i')&
on t(e "ife in&'ran!e .o"i!ie& )a#e +y Nava +efore
an# #'rin$ t(e ar '. to t(e ti)e (e a.."ie# for t(e
"oan in ;'e&tion it( .etitioner& &(o'"# +e
!on&i#ere# "i2ei&e a& va"i# .ay)ent& '.on t(e
t(eory t(at &'!( in&'ran!e .o"i!ie& are in t(e nat're
of a !ontra!t'a" o+"i$ation it(in t(e )eanin$ of t(e
!ivi" "a- In effe!t, t(erefore, t(o&e .ay)ent& ere
)a#e +y a #e+tor to a !re#itor it(in t(e )eanin$ of
t(e re;'ire)ent of t(e re$'"ation& of t(e In&'ran!e
Co))i&&ioner an# a& &'!( t(ey !an offer no e%!'&e
to .etitioner& for ref'&in$ to $rant t(e "oan a&
!onte)."ate# in t(e "oan !"a'&e e)+o#ie# in t(e
.o"i!ie& in ;'e&tion-
, It i& !"ear fro) t(e fore$oin$ t(at t(e .etitioner&
vio"ate# t(e "oan !"a'&e e)+o#ie# in ea!( of t(e 46
"ife in&'ran!e .o"i!ie& i&&'e# to re&.on#ent to re&!in#
a"" &ai# .o"i!ie& 'n#er Se!tion 65 of t(e In&'ran!e
A!t, (i!( .rovi#e&H PT(e vio"ation of a )ateria"
arranty, or ot(er )ateria" .rovi&ion of a .o"i!y, on
t(e .art of eit(er .arty t(ereto, entit"e& t(e ot(er to
re&!in#-P
, PT(e $enera" r'"e i& t(at a +rea!( of t(e a$ree)ent
to )a2e t(e "oan #oe& not entit"e t(e in&'re# to
re&!in# t(e !ontra!t,P i& not !ontro""in$ in t(i&
J'ri&#i!tion- *ir&t"y, it a& not &(on t(at t(e
in&'ran!e "a& in t(e &tate& (ere &ai# r'"in$
.revai"& !ontain a .rovi&ion i#enti!a" to Se!tion 65 of
o'r In&'ran!e /a e ;'ote# a+ove, an# &e!on#"y,
t(e r'"e !ite# +y Man!e i& not a r'"e 'nifor)"y
fo""oe# +y a"" &tate& in t(e US, for on t(i& )atter
t(ere i& a )ar2e# #iver$en!e of o.inion-
2- NO
, Con&i#erin$ t(at o'r In&'ran!e /a #oe& not
!ontain an e%.re&& .rovi&ion a& to (at t(e !o'rt
&(o'"# #o in !a&e& of re&!i&&ion of an in&'ran!e
.o"i!y 'n#er Se!tion 65, t(e .rovi&ion t(at &(o'"#
a.."y i& t(at e)+o#ie# in Arti!"e 4229 of t(e o"# Civi"
Co#e, a& .o&t'"ate# in Arti!"e 46 of t(e &a)e Co#e,
(i!( .rovi#e& t(at on )atter& (i!( are not
$overne# +y &.e!ia" "a& t(e .rovi&ion& of &ai# Co#e
&(a"" &'.."e)ent it& #efi!ien!y- An# &ai# Arti!"e 4259
.rovi#e&H
A9/. :2JK. 9escission a+es necessary t!e return
of t!e t!in"s ,!ic! ,ere t!e sub6ect-atter of t!e
contract$ ,it! t!eir fruits$ and of t!e #rice #aid$
,it! interest t!ereon. ...888
, Sai# t(e .etitioner&H P<e!overy of t(e f'"" a)o'nt
of t(e .re)i') after t(e in&'rer (a& &'&taine# for
&o)eti)e t(e ri&2 of t(e in&'ran!e an# t(e in&'re#
(a& enJoye# t(e +enefit of .rote!tion i& o+vio'&"y
'nJ'&t an# i& &o re!o$ni:e# +y t(e +etter
a't(oritie&-P T(e r'"in$ a+ove ;'ote# )ere"y
re.re&ent& t(e )inority r'"e in t(e US, t(e )aJority
r'"e +ein$ t(at t(e in&'re# !an re!over a"" .re)i')&
.ai#, in &o)e !a&e& it( intere&t in !a&e of ron$f'"
!an!e""ation, re.'#iation, ter)ination or re&!i&&ion of
t(e !ontra!t of "ife in&'ran!e-
, Contention t(at +e!a'&e re&.on#ent !annot re&tore
to .etitioner& t(e Pva"'e of t(e +enefit of .rote!tionP
INSURANCE Page 72
(i!( (e )i$(t (ave re!eive# 'n#er t(e 46 "ife
in&'ran!e .o"i!ie& in ;'e&tion (e i& not entit"e# to
re&!in# t(e) 'n#er t(e .rovi&ion of Arti!"e 4259 of
t(e o"# Civi" Co#e, i& 'ntena+"e +e!a'&e &ai# arti!"e
on"y !onte)."ate& a tran&a!tion (et(er )ateria"
t(in$& are invo"ve#, an# #o not refer to intan$i+"e
one& (i!( !annot +e t(e &'+Je!t of re&toration, for
to inter.ret it ot(eri&e o'"# +e to #efeat t(e "a
it&e"f it( t(e re&'"t t(at re&!i&&ion !an never +e (a#
'n#er Se!tion 65 of o'r In&'ran!e /a-
, It !annot +e #enie# t(at .etitioner& (a# in t'rn
a"rea#y #erive# )ateria" +enefit& fro) t(e '&e of
.re)i')& .ai# to t(e) +y re&.on#ent +efore, #'rin$
an# after t(e "a&t ar fro) (i!( t(ey )'&t (ave
rea"i:e# ('$e .rofit&, an# in t(i& "i$(t a"one
.etitioner& !annot !"ai) .reJ'#i!e or 'nfairne&& if
t(ey are or#ere# to ref'n# t(e .re)i')& .ai# +y
re&.on#ent&-
3- NO-
, I&&'e i& !oro""ary to .re!e#in$ i&&'e- No nee# to
ref'te-
Disposition Ee!i&ion a..ea"e# fro) i& A**I<M>E-
Co&t& a$ain&t .etitioner&
CHAPTER VII. RIS<S AND COVERAGES
VDA. DE BATACLAN $. MEDINA
402 P1I/ 464
MONT>MAFO<; O!to+er 22, 459C
FACTS
, G'an Bata!"an ro#e B'& 30 of Me#ina Tran&.ort,
#riven +y Say"on, &(ort"y after )i#ni$(t- T(e +'&
a& r'nnin$ very fa&t- One of t(e front tire& +'r&t-
B'& fe"" into !ana" an# t'rne# t'rt"e- D .a&&en$er&
!o'"#n=t $et o't, in!"'#in$ Bata!"an- Ga&o"ine +e$an
to "ea2 fro) t(e overt'rne# +'&- 40 )en !a)e to
(e".- 4 !arrie# a tor!( an# (en (e a..roa!(e# t(e
+'&, fire &tarte#, 2i""in$ t(e tra..e# .a&&en$er&-
, TC o.ine# t(at .ro%i)ate !a'&e of Bata!"an=&
#eat( a& not t(e overt'rnin$ of +'& +'t t(e fire- At
t(e ti)e fire &tarte#, Bata!"an, t(o'$( inJ're#, a&
&ti"" a"ive an# #a)a$e& ere aar#e#, not for (i&
#eat(, +'t for .(y&i!a" inJ'rie& &'ffere#-
ISSUEOS
0ON t(e .ro%i)ate !a'&e i& t(e overt'rnin$ of t(e
+'& or t(e fire
HELD
, T(e .ro%i)ate !a'&e i& t(e overt'rnin$ of t(e +'&-
, Or#inari"y, (en a +'& overt'rn& an# .in& #on
.a&&en$er, )ere"y !a'&in$ (i) inJ'rie&- If t(ro'$(
&o)e event, 'ne%.e!te# an# e%traor#inary, t(e +'&
i& &et on fire, an# .a&&en$er i& +'rne# to #eat(, one
)i$(t !onten# t(at t(e .ro%i)ate !a'&e a& t(e fire
an# not t(e overt'rnin$ of t(e ve(i!"e-
, B't (ere, t(e .ro%i)ate !a'&e of Bata!"an=& #eat(
i& t(e overt'rnin$ of t(e +'&, t(i& for t(e rea&on t(at
(en t(e ve(i!"e t'rne# not on"y on it& &i#e +'t
!o)."ete"y on it& +a!2, "ea2in$ of $a&o"ine fro) t(e
tan2 a& not 'nnat'ra" or 'ne%.e!te#-
, T(e !o)in$ of t(e )en it( t(e tor!( a& in
re&.on&e to t(e !a"" for (e"., )a#e on"y not +y t(e
.a&&en$er& +'t even t(e #river an# !on#'!tor, an#
+e!a'&e it a& very #ar2, a+o't 2H30 a), re&!'er&
(a# to !arry a "i$(t it( t(e)- Co)in$ a& t(ey #i#
fro) r'ra" area (ere "antern& an# f"a&("i$(t& ere
not avai"a+"e, t(ey (a# to '&e a tor!(- 0(at a&
)ore nat'ra" t(an t(at &ai# re&!'er& &(o'"#
inno!ent"y a..roa!( t(e overt'rne# ve(i!"e to e%ten#
ai#-
, T(e !o)in$ of t(e )en it( t(e tor!( a& to +e
e%.e!te#, an# a& a nat'ra" &e;'en!e of t(e
overt'rnin$ of t(e +'&, t(e tra..in$ of &o)e of it&
.a&&en$er& an# t(e !a"" for o't&i#e (e".-
, T(e +'rnin$ of +'& !an a"&o in .art +e attri+'te# to
ne$"i$en!e of !arrier, t(ro'$( it& #river an#
!on#'!tor- T(ey, or at "ea&t t(e #river, &(o'"# (ave
2non t(at in t(e .o&ition in (i!( t(e overt'rne#
+'& a&, $a&o"ine !o'"# an# )'&t (ave "ea2e# fro)
t(e $a&o"ine tan2 an# &oa2e# t(e area in an# aro'n#
t(e +'&- Ga&o"ine !an +e &)e"t an# #ete!te# even
fro) a #i&tan!e, an# yet neit(er t(e #river nor t(e
!on#'!tor o'"# a..ear to (ave !a'tione# or ta2en
&te.& to arn re&!'er& not to +rin$ t(e "i$(te# tor!(
too near t(e +'&-
FINMAN GENERAL ASSURANCE CORPORATION
$. CA (SURPOSA)
243 SC<A D53
NOCON; Se.te)+er 2, 4552
NATURE
Certiorari
FACTS
, O!t- 22, 4566H Car"ie S'r.o&a a& in&'re# it(
*in)an Genera" A&&'ran!e Cor.oration 'n#er *in)an
Genera" Tea!(er& Prote!tion P"an Ma&ter Po"i!y No-
2009 an# In#ivi#'a" Po"i!y No- 0652D it( (i&
.arent&, &.o'&e& G'"ia an# Car"o& S'r.o&a, an#
+rot(er& C(ri&to.(er, C(ar"e&, C(e&ter an# C"ifton,
a"" &'rna)e#, S'r.o&a, a& +enefi!iarie&-
, 0(i"e &ai# in&'ran!e .o"i!y a& in f'"" for!e an#
effe!t, t(e in&'re#, Car"ie S'r.o&a, #ie# on O!to+er
46, 4566 a& a re&'"t of a &ta+ o'n# inf"i!te# +y one
of t(e 3 'ni#entifie# )en it(o't .rovo!ation an#
arnin$ on t(e .art of t(e for)er a& (e an# (i&
!o'&in, 0in&ton S'r.o&a, ere aitin$ for a ri#e on
t(eir ay (o)e after atten#in$ t(e !e"e+ration of t(e
PMa&2arra Ann'a" *e&tiva"-P
, T(ereafter, G'"ia S'r.o&a an# t(e ot(er
+enefi!iarie& of &ai# in&'ran!e .o"i!y fi"e# a ritten
noti!e of !"ai) it( t(e *INMAN Cor. (i!( #enie#
&ai# !"ai) !onten#in$ t(at )'r#er an# a&&a'"t are
not it(in t(e &!o.e of t(e !overa$e of t(e in&'ran!e
.o"i!y-
, *e+- 2D, 4565H S'r.o&a fi"e# a !o)."aint it( t(e
In&'ran!e Co))i&&ion (i!( &'+&e;'ent"y or#ere#
*INMAN to .ay S'r.o&a t(e .ro!ee#& of t(e .o"i!y
it( intere&t-
, CA affir)e# &ai# #e!i&ion-
ISSUE
0ON CA !o))itte# GAE in a.."yin$ t(e .rin!i."e of
Pe8#resso unius e8clusio alteriusP in a .er&ona"
a!!i#ent in&'ran!e .o"i!y @&in!e #eat( re&'"tin$ fro)
)'r#er an#Ror a&&a'"t are i)."ie#"y e%!"'#e# in &ai#
in&'ran!e .o"i!y !on&i#erin$ t(at t(e !a'&e of #eat(
of t(e in&'re# a& not a!!i#enta" +'t rat(er a
#e"i+erate an# intentiona" a!t of t(e a&&ai"ant in
2i""in$ t(e for)er a& in#i!ate# +y t(e "o!ation of t(e
"one &ta+ o'n# on t(e in&'re#A [T* t(ey !annot +e
)a#e to in#e)nify t(e S'r.o&a (eir&]
HELD
NO
, T(e re!or# i& +arren of any !ir!')&tan!e &(oin$
(o t(e &ta+ o'n# a& inf"i!te#- 0(i"e t(e a!t )ay
not e%e).t t(e 'n2non .er.etrator fro) !ri)ina"
"ia+i"ity, t(e fa!t re)ain& t(at t(e (a..enin$ a& a
.'re a!!i#ent on t(e .art of t(e vi!ti)- T(e in&'re#
#ie# fro) an event t(at too2 ."a!e it(o't (i&
fore&i$(t or e%.e!tation, an event t(at .ro!ee#e#
fro) an 'n'&'a" effe!t of a 2non !a'&e an#,
t(erefore, not e%.e!te#-
Reasoning
- De la Cruz vs. Ca#ital 'nsurance I Surety Co.$ 'nc
&:JQQ)T T(e ter)& Pa!!i#entP an# Pa!!i#enta"P a&
'&e# in in&'ran!e !ontra!t& !ave not ac.uired any
tec!nical eanin", an# are construed by t!e courts
in t!eir ordinary and coon acce#tation. /!us$ t!e
ters !ave been ta+en to ean t!at ,!ic! !a##en
INSURANCE Page 73
by c!ance or fortuitously$ ,it!out intention and
desi"n$ and ,!ic! is une8#ected$ unusual$ and
unforeseen. An accident is an event t!at ta+es #lace
,it!out one@s foresi"!t or e8#ectation an event t!at
#roceeds fro an un+no,n cause$ or is an unusual
effect of a +no,n cause and$ t!erefore$ not
e8#ected.
Ratio T(e $enera""y a!!e.te# r'"e i& t(at, #eat( or
inJ'ry #oe& not re&'"t fro) a!!i#ent or a!!i#enta"
)ean& it(in t(e ter)& of an a!!i#ent,.o"i!y if it i&
t(e nat'ra" re&'"t of t(e in&'re#N& vo"'ntary a!t,
'na!!o).anie# +y anyt(in$ 'nfore&een e%!e.t t(e
#eat( or inJ'ry- T(ere i& no a!!i#ent (en a
#e"i+erate a!t i& .erfor)e# 'n"e&& &o)e a##itiona",
'ne%.e!te#, in#e.en#ent, an# 'nfore&een (a..enin$
o!!'r& (i!( .ro#'!e& or +rin$& a+o't t(e re&'"t of
inJ'ry or #eat(- In ot(er or#&, (ere t(e #eat( or
inJ'ry i& not t(e nat'ra" or .ro+a+"e re&'"t of t(e
in&'re#N& vo"'ntary a!t, or if &o)et(in$ 'nfore&een
o!!'r& in t(e #oin$ of t(e a!t (i!( .ro#'!e& t(e
inJ'ry, t(e re&'"tin$ #eat( i& it(in t(e .rote!tion of
t(e .o"i!ie& in&'rin$ a$ain&t #eat( or inJ'ry fro)
a!!i#ent-
, T(e .er&ona" a!!i#ent in&'ran!e .o"i!y invo"ve#
(erein &.e!ifi!a""y en')erate# on"y 40 !ir!')&tan!e&
(erein no "ia+i"ity atta!(e& to *INMAN for any
inJ'ry, #i&a+i"ity or "o&& &'ffere# +y t(e in&'re# a& a
re&'"t of any of t(e &ti)'"ate# !a'&e&-
,T(e .rin!i."e of P e8#resso unius e8clusio alteriusP
t(e )ention of one t(in$ i)."ie& t(e e%!"'&ion of
anot(er t(in$ i& t(erefore a.."i!a+"e in t(e in&tant
!a&e &in!e )'r#er an# a&&a'"t, not (avin$ +een
e%.re&&"y in!"'#e# in t(e en')eration of t(e
!ir!')&tan!e& t(at o'"# ne$ate "ia+i"ity in &ai#
in&'ran!e .o"i!yH t!e failure of t!e F'1MA1 to include
deat! resultin" fro urder or assault aon" t!e
#ro!ibited ris+s leads inevitably to t!e conclusion
t!at it did not intend to liit or e8e#t itself fro
liability for suc! deat!.
, A6B00 NCC9 T(e inter.retation of o+&!'re or#&
or &ti.'"ation& in a !ontra!t &(a"" not favor t(e .arty
(o !a'&e# t(e o+&!'rity-
, NPC $*. CA H6J7D][ It i& e"" &ett"e# t(at
!ontra!t& of in&'ran!e are to +e !on&tr'e# "i+era""y in
favor of t(e in&'re# an# &tri!t"y a$ain&t t(e in&'rer-
T('& a)+i$'ity in t(e or#& of an in&'ran!e !ontra!t
&(o'"# +e inter.rete# in favor of it& +enefi!iary-
Disposition E>NI>E for "a!2 of )erit-
CALANOC $. CA
56 P1I/ C5
BAUTISTA; Ee!e)+er 46, 4599
FACTS
, Ba&i"io a& a at!()an of t(e Mani"a A'to S'.."y
"o!ate# at t(e !orner of Aveni#a <i:a" an# ?'r+aran-
1e &e!'re# a "ife in&'ran!e .o"i!y fro) t(e P(i"i..ine
A)eri!an /ife In&'ran!e Co).any in t(e a)o'nt of
P2,000 to (i!( a& atta!(e# a &'.."e)entary
!ontra!t !overin$ #eat( +y a!!i#ent- On Gan'ary 29,
4594, (e #ie# of a $'n&(ot o'n# on t(e o!!a&ion of
a ro++ery !o))itte# in t(e (o'&e of Atty- OJe#a at
t(e !orner of Oro;'ieta an# ?'r+aran &treet&-
Ca"ano!, t(e i#o, a& .ai# t(e &') of P2,000,
fa!e va"'e of t(e .o"i!y, +'t (en &(e #e)an#e# t(e
.ay)ent of t(e a##itiona" &') of P2,000
re.re&entin$ t(e va"'e of t(e &'.."e)enta" .o"i!y,
t(e !o).any ref'&e# a""e$in$, a& )ain #efen&e, t(at
t(e #e!ea&e# #ie# +e!a'&e (e a& )'r#ere# +y a
.er&on (o too2 .art in t(e !o))i&&ion of t(e
ro++ery an# (i"e )a2in$ an arre&t a& an offi!er of
t(e "a (i!( !ontin$en!ie& ere e%.re&&"y e%!"'#e#
in t(e !ontra!t an# (ave t(e effe!t of e%e).tin$ t(e
!o).any fro) "ia+i"ity-
, It i& !onten#e# in +e(a"f of t(e !o).any t(at
Ba&i"io a& 2i""e# (i!( P)a2in$ an arre&t a& an
offi!er of t(e "aP or a& a re&'"t of an Pa&&a'"t or
)'r#erP !o))itte# in t(e ."a!e an# t(erefore (i&
#eat( a& !a'&e# +y one of t(e ri&2& e%!"'#e# +y
t(e &'.."e)entary !ontra!t (i!( e%e).t& t(e
!o).any fro) "ia+i"ity- T(i& !ontention a& '.(e"#
+y t(e Co'rt of A..ea"&- 1en!e, t(i& .etition-
ISSUE
0ON t(e #eat( of t(e vi!ti) !o)e& it(in t(e
.'rvie of t(e e%!e.tion !"a'&e of t(e
&'.."e)entary .o"i!y an#, (en!e, e%e).t& t(e
!o).any fro) "ia+i"ity
HELD
NO
, Ba&i"io a& a at!()an of t(e Mani"a A'to S'.."y
(i!( a& a +"o!2 aay fro) t(e (o'&e of Atty-
OJe#a (ere &o)et(in$ &'&.i!io'& a& (a..enin$
(i!( !a'&e# t(e "atter to a&2 for (e".- 0(i"e at fir&t
(e #e!"ine# t(e invitation of Atty- OJe#a to $o it(
(i) to (i& re&i#en!e to in;'ire into (at a& $oin$
on +e!a'&e (e a& not a re$'"ar .o"i!e)an, (e "ater
a$ree# to !o)e a"on$ (en .ro).te# +y t(e traffi!
.o"i!e)an, an# '.on a..roa!(in$ t(e $ate of t(e
re&i#en!e (e a& &(ot an# #ie#- T(e !ir!')&tan!e
t(at (e a& a )ere at!()an an# (a# no #'ty to
(ee# t(e !a"" of Atty- OJe#a &(o'"# not +e ta2en a& a
!a.ri!io'& #e&ire on (i& .art to e%.o&e (i& "ife to
#an$er !on&i#erin$ t(e fa!t t(at t(e ."a!e (e a& in
#'ty,+o'n# to $'ar# a& on"y a +"o!2 aay- In
vo"'nteerin$ to e%ten# (e". 'n#er t(e &it'ation, (e
)i$(t (ave t(o'$(t, ri$(t"y or ron$"y, t(at to 2no
t(e tr't( a& in t(e intere&t of (i& e)."oyer it +ein$
a )atter t(at affe!t& t(e &e!'rity of t(e
nei$(+or(oo#- No #o'+t t(ere a& &o)e ri&2 !o)in$
to (i) in .'r&'in$ t(at erran#, +'t t(at ri&2 a"ay&
e%i&te# it +ein$ in(erent in t(e .o&ition (e a&
(o"#in$- 1e !annot t(erefore +e +"a)e# &o"e"y for
#oin$ (at (e +e"ieve# a& in 2ee.in$ it( (i& #'ty
a& a at!()an an# a& a !iti:en- An# (e !annot +e
!on&i#ere# a& )a2in$ an arre&t a& an offi!er of t(e
"a, a& !onten#e#, &i)."y +e!a'&e (e ent it( t(e
traffi! .o"i!e)an, for !ertain"y (e #i# not $o t(ere for
t(at .'r.o&e nor a& (e a&2e# to #o &o +y t(e
.o"i!e)an-
, M'!( "e&& !an it +e .reten#e# t(at Ba&i"io #ie# in
t(e !o'r&e of an a&&a'"t or )'r#er !on&i#erin$ t(e
very nat're of t(e&e !ri)e&- In t(e fir&t ."a!e, t(ere
i& no .roof t(at t(e #eat( of Ba&i"io i& t(e re&'"t of
eit(er !ri)e for t(e re!or# i& +arren of any
!ir!')&tan!e &(oin$ (o t(e fata" &(ot a& fire#-
Per(a.& t(i& )ay +e !"arifie# in t(e !ri)ina" !a&e
no .en#in$ in !o'rt a& re$ar#& t(e in!i#ent +'t
+efore t(at i& #one anyt(in$ t(at )i$(t +e &ai# on
t(e .oint o'"# +e a )ere !onJe!t're- Nor !an it +e
&ai# t(at t(e 2i""in$ a& intentiona" for t(ere i& t(e
.o&&i+i"ity t(at t(e )a"efa!tor (a# fire# t(e &(ot
)ere"y to &!are aay t(e .eo."e aro'n# for (i& on
.rote!tion an# not ne!e&&ari"y to 2i"" or (it t(e vi!ti)-
In any event, (i"e t(e a!t )ay not e%e).t t(e
tri$$er)an fro) "ia+i"ity for t(e #a)a$e #one, t(e
fa!t re)ain& t(at t(e (a..enin$ a& a .'re a!!i#ent
on t(e .art of t(e vi!ti)- T(e vi!ti) !o'"# (ave +een
eit(er t(e .o"i!e)an or Atty- OJe#a for it !annot +e
.reten#e# t(at t(e )a"efa!tor ai)e# at t(e #e!ea&e#
.re!i&e"y +e!a'&e (e ante# to ta2e (i& "ife-
Disposition Ee!i&ion &et a&i#e
BIAGTAN $. THE INSULAR LIFE ASSURANCE
COMPANY, LTD.
DD SC<A 96
MAIA/INTA/; Mar!( 25, 45C2
NATURE
A..ea" fro) #e!i&ion of C*I Pan$a&inan-
FACTS
, G'an Bia$tan a& in&'re# it( In&'"ar for P92 an#
a &'.."e)entary !ontra!t 7A!!i#enta" Eeat( Benefit8
!"a'&e for anot(er P92 '- Pt(e #eat( of t(e In&'re#
INSURANCE Page 74
re&'"te# #ire!t"y fro) +o#i"y inJ'ry effe!te# &o"e"y
t(ro'$( e%terna" an# vio"ent )ean& &'&taine# in an
a!!i#ent - - - an# in#e.en#ent"y of a"" ot(er !a'&e&-P
T(e !"a'&e, (oever, e%.re&&"y .rovi#e# t(at it
o'"# not a.."y (ere #eat( re&'"te# fro) an inJ'ry
Pintentiona""y inf"i!te# +y a t(ir# .arty-P
, One ni$(t, a +an# of ro++er& entere# t(eir (o'&e-
G'an ent o't of (i& roo) an# (e a& )et it( 5
2nife &ta+&- 1e #ie#- T(e ro++er& ere !onvi!te# of
ro++ery it( (o)i!i#e-
, T(e fa)i"y a& !"ai)in$ t(e a##itiona" P92 fro)
In&'"ar, 'n#er t(e A!!i#enta" Eeat( Benefit !"a'&e-
In&'"ar ref'&e# on t(e $ro'n# t(at t(e #eat( re&'"te#
fro) inJ'rie& intentiona""y inf"i!te# +y 3
r#
.artie& an#
a& t(erefore not !overe#- Bia$tan& fi"e# a$ain&t
In&'"ar- C*I r'"e# in favor of Bia$tan&-
ISSUE
0ON t(e inJ'rie& ere intentiona""y inf"i!te#
HELD
F>S
, 0(et(er t(e ro++er& (a# t(e intent to 2i"" or )ere"y
to &!are t(e vi!ti) or to ar# off any #efen&e (e
)i$(t offer, it !annot +e #enie# t(at t(e a!t it&e"f of
inf"i!tin$ t(e inJ'rie& a& intentiona"-
, T(e e%!e.tion in t(e a!!i#enta" +enefit !"a'&e
invo2e# +y t(e a..e""ant #oe& not &.ea2 of t(e
.'r.o&e U (et(er (o)i!i#a" or not U of a t(ir#
.arty in !a'&in$ t(e inJ'rie&, +'t on"y of t(e fa!t t(at
&'!( inJ'rie& (ave +een Pintentiona""yP inf"i!te# U
t(i& o+vio'&"y to #i&tin$'i&( t(e) fro) inJ'rie&
(i!(, a"t(o'$( re!eive# at t(e (an#& of a t(ir#
.arty, are .'re"y a!!i#enta"-
, >%a)."e& of 'nintentiona"H
BB A $'n (i!( #i&!(ar$e& (i"e +ein$ !"eane# an#
2i""& a +y&tan#er;
BB a ('nter (o &(oot& at (i& .rey an# (it& a
.er&on in&tea#;
BB an at("ete in a !o).etitive $a)e invo"vin$
.(y&i!a" effort (o !o""i#e& it( an o..onent an#
fata""y inJ're& (i) a& a re&'"t-
, In Calanoc vs. CAH 0(ere a &(ot a& fire# an# it
t'rne# o't afterar#& t(at t(e at!()an a& (it in
t(e a+#o)en, t(e o'n# !a'&in$ (i& #eat(, t(e
Co'rt (e"# t(at it !o'"# not +e &ai# t(at t(e 2i""in$
a& intentiona" for t(ere a& t(e .o&&i+i"ity t(at t(e
)a"efa!tor (a# fire# t(e &(ot to &!are t(e .eo."e
aro'n# for (i& on .rote!tion an# not ne!e&&ari"y to
2i"" or (it t(e vi!ti)- A &i)i"ar .o&&i+i"ity i& !"ear"y
r'"e# o't +y t(e fa!t& in t(i& !a&e- *or (i"e a &in$"e
&(ot fire# fro) a #i&tan!e, an# +y a .er&on (o a&
not even &een ai)in$ at t(e vi!ti), !o'"# in#ee#
(ave +een fire# it(o't intent to 2i"" or inJ're, nine
o'n#& inf"i!te# it( +"a#e# ea.on& at !"o&e ran$e
!annot !on!eiva+"y +e !on&i#ere# a& inno!ent in&ofar
a& &'!( intent i& !on!erne#-
, In Huct!craft@s A8@r vs. /ravelers@ 'ns. Co. @US
!a&eAH (ere t(e in&'re# a& ay"ai# an#
a&&a&&inate# for t(e .'r.o&e of ro++ery, t(e !o'rt
ren#ere# J'#$)ent for t(e in&'ran!e !o).any an#
(e"# t(at (i"e t(e a&&a&&ination of t(e in&'re# a&
a& to (i) an 'nfore&een event an# t(erefore
a!!i#enta", Pt(e !"a'&e of t(e .rovi&o t(at e%!"'#e&
t(e @in&'rerN&A "ia+i"ity, in !a&e #eat( or inJ'ry i&
intentiona""y inf"i!te# +y any ot(er .er&on, a.."ie& to
t(i& !a&e-P
Disposition C*I #e!i&ion rever&e#-
SEPARATE OPINION
TEEHAN<EE H.'**e+I
, Ca"ano! v- CA i& !ontro""in$ in t(i& !a&e +e!a'&e
t(e in&'ran!e !o).any a&n=t a+"e to .rove t(at t(e
2i""in$ a& intentiona"- @B'r#en of .roof i& it( t(e
in&'ran!e !o).anyA
, In&'ran!e, +ein$ !ontra!t& of a#(e&ion, )'&t +e
!on&tr'e# &tri!t"y a$ain&t in&'ran!e !o).any in
!a&e& of a)+i$'ity-
, T(e &'.."e)entary !ontra!t en')erate#
e%!e.tion&- T(e on"y e%!e.tion (i!( i& not
&'&!e.ti+"e of !"a&&ifi!ation i& t(at .rovi#e# in
.ara$ra.( 9@eA, t(e very e%!e.tion (erein invo"ve#,
(i!( o'"# a"&o e%!e.t inJ'rie& Pinf"i!te#
intentiona""y +y a t(ir# .arty, eit(er it( or it(o't
.rovo!ation on t(e .art of t(e in&'re#, an# (et(er
or not t(e atta!2 or t(e #efen&e +y t(e t(ir# .arty
a& !a'&e# +y a vio"ation of t(e "a +y t(e in&'re#-P
, T(i& a)+i$'o'& !"a'&e !onf"i!t& it( a"" t(e ot(er
fo'r e%!e.tion& in t(e &a)e .ara$ra.( 9 .arti!'"ar"y
t(at i))e#iate"y .re!e#in$ it in ite) @#A (i!(
e%!e.t& inJ'rie& re!eive# (ere t(e in&'re# (a&
vio"ate# t(e "a or .rovo2e# t(e inJ'ry, (i"e t(i&
!"a'&e, !on&tr'e# a& t(e in&'ran!e !o).any no
!"ai)&, o'"# &ee)in$"y e%!e.t a"&o a"" ot(er
inJ'rie&, intentiona""y inf"i!te# +y a t(ir# .arty,
re$ar#"e&& of any vio"ation of "a or .rovo!ation +y
t(e in&'re#, an# #efeat t(e very .'r.o&e of t(e
.o"i!y of $ivin$ t(e in&'re# #o'+"e in#e)nity in !a&e
of a!!i#enta" #eat( +y Pe%terna" an# vio"ent )ean&P
U in t(e very "an$'a$e of t(e .o"i!y-N
, It i& o+vio'& fro) t(e very !"a&&ifi!ation of t(e
e%!e.tion& an# a.."yin$ t(e r'"e of noscitus a sociis,
t(at t(e #o'+"e,in#e)nity .o"i!y !over& t(e in&'re#
a$ain&t a!!i#enta" #eat(, (et(er !a'&e# +y fa'"t,
ne$"i$en!e or intent of a t(ir# .arty (i!( i&
'nfore&een an# 'ne%.e!te# +y t(e in&'re#- A"" t(e
a&&o!iate# or#& an# !on!e.t& in t(e .o"i!y ."ain"y
e%!"'#e t(e a!!i#enta" #eat( fro) t(e !overa$e of
t(e .o"i!y on"y (ere t(e inJ'rie& are &e"f,inf"i!te# or
atten#e# +y &o)e .ro&!ri+e# a!t of t(e in&'re# or
are in!'rre# in &o)e e%.re&&"y e%!"'#e# !a"a)ity
&'!( a& riot, ar or ato)i! e%."o&ion-
, T(e 'ntena+i"ity of in&'rerN& !"ai) t(at t(e
in&'re#N& #eat( fe"" it(in t(e e%!e.tion i& f'rt(er
(ei$(tene# +y t(e &ti.'"ate# fa!t t(at to ot(er
in&'ran!e !o).anie& (i!( "i2ei&e !overe# t(e
in&'re# for )'!( "ar$er &')& 'n#er &i)i"ar
a!!i#enta" #eat( +enefit !"a'&e& .ro).t"y .ai# t(e
+enefit& t(ereof to ."aintiff& +enefi!iarie&-
SUN INSURANCE $. CA (LIM)
244 SC<A 99D
C<U?; G'"y 4C, 4552
FACTS
, T(e .etitioner i&&'e# Per&ona" A!!i#ent Po"i!y to
*e"i% /i), Gr- it( a fa!e va"'e of P200,000-00- To
)ont(& "ater, (e a& #ea# it( a +'""et o'n# in (i&
(ea#- A& +enefi!iary, (i& ife Neri&&a /i) &o'$(t
.ay)ent on t(e .o"i!y +'t (er !"ai) a& reJe!te#-
T(e .etitioner a$ree# t(at t(ere a& no &'i!i#e- It
ar$'e#, (oever, t(at t(ere a& no a!!i#ent eit(er-
Pi"ar Na"a$on, /i)N& &e!retary, a& t(e on"y
eyeitne&& to (i& #eat(- A!!or#in$ to Na"a$on, /i)
a& in a (a..y )oo# @+'t not #r'n2A an# a&
."ayin$ it( (i& (an#$'n, fro) (i!( (e (a#
.revio'&"y re)ove# t(e )a$a:ine- A& &(e at!(e#
t(e te"evi&ion, (e &too# in front of (er an# .ointe#
t(e $'n at (er- S(e .'&(e# it a&i#e an# &ai# it )i$(t
+e "oa#e#- 1e a&&'re# (er it a& not an# t(en
.ointe# it to (i& te)."e- T(e ne%t )o)ent t(ere a&
an e%."o&ion an# /i) &"').e# to t(e f"oor- 1e a&
#ea# +efore (e fe""-
, T(e ter) Pa!!i#entP (a& +een #efine# a& fo""o&H
T(e or#& Pa!!i#entP an# Pa!!i#enta"P (ave never
a!;'ire# any te!(ni!a" &i$nifi!ation in "a, an#
(en '&e# in an in&'ran!e !ontra!t are to +e
!on&tr'e# an# !on&i#ere# a!!or#in$ to t(e
or#inary 'n#er&tan#in$ an# !o))on '&a$e an#
&.ee!( of .eo."e $enera""y- In &'+&tan!e, t(e
!o'rt& are .ra!ti!a""y a$ree# t(at t(e or#&
Pa!!i#entP an# Pa!!i#enta"P )ean t(at (i!(
(a..en& +y !(an$e or fort'ito'&"y, it(o't
intention or #e&i$n, an# (i!( i& 'ne%.e!te#,
'n'&'a", an# 'nfore&een- T(e #efinition t(at (a&
INSURANCE Page 75
'&'a""y +een a#o.te# +y t(e !o'rt& i& t(at an
a!!i#ent i& an event t(at ta2e& ."a!e it(o't oneN&
fore&i$(t or e%.e!tation U an event t(at .ro!ee#&
fro) an 'n2non !a'&e, or i& an 'n'&'a" effe!t of
a 2non !a&e, an# t(erefore not e%.e!te#-
, An a!!i#ent i& an event (i!( (a..en& it(o't any
(')an a$en!y or, if (a..enin$ t(ro'$( (')an
a$en!y, an event (i!(, 'n#er t(e !ir!')&tan!e&, i&
'n'&'a" to an# not e%.e!te# +y t(e .er&on to (o)
it (a..en&- It (a& a"&o +een #efine# a& an inJ'ry
(i!( (a..en& +y rea&on of &o)e vio"en!e or
!a&'a"ty to t(e in&'re# it(o't (i& #e&i$n, !on&ent,
or vo"'ntary !o,o.eration-
ISSUE
0ON (at (a..ene# a& an a!!i#ent
HELD
F>S
, T(e .etitioner, (oever, !ite& one of t(e fo'r
e%!e.tion& .rovi#e# for in t(e in&'ran!e !ontra!t an#
!onten#& t(at t(e .rivate .etitionerN& !"ai) i& +arre#
+y &'!( .rovi&ion- It i& t(ere &tate#H
>%!e.tion& UT(e !o).any &(a"" not +e "ia+"e in
re&.e!t of-
4- Bo#i"y inJ'ry-
%%% %%% %%%
+- !on&e;'ent '.on-
iA T(e in&'re# .er&on& atte).tin$ to !o))it
&'i!i#e or i"f'""y e%.o&in$ (i)&e"f to nee#"e&& .eri"
e%!e.t in an atte).t to &ave (')an "ife-
, To re.eat, t(e .artie& a$ree t(at /i) #i# not
!o))it &'i!i#e- Nevert(e"e&&, t(e .etitioner
!onten#& t(at t(e in&'re# i""f'""y e%.o&e# (i)&e"f to
nee#"e&& .eri" an# t('& re)ove# (i)&e"f fro) t(e
!overa$e of t(e in&'ran!e .o"i!y- T(at .o&t're i&
ar$'a+"e- B't (at i& not i& t(at, a& t(e &e!retary
te&tifie#, /i) (a# re)ove# t(e )a$a:ine fro) t(e
$'n an# +e"ieve# it a& no "on$er #an$ero'&- 1e
e%.re&&e# a&&'re# (er t(at t(e $'n a& not "oa#e#-
It i& &'+)itte# t(at /i) #i# not i""f'""y e%.o&e
(i)&e"f to nee#"e&& .eri" (en (e .ointe# t(e $'n to
(i& te)."e +e!a'&e t(e fa!t i& t(at (e t(o'$(t it a&
not 'n&afe to #o &o- T(e a!t a& .re!i&e"y inten#e#
to a&&'re Na"a$on t(at t(e $'n a& in#ee# (ar)"e&&-
Disposition CA Affir)e#
DE LA CRUZ $. CAPITAL INSURANCE
4C SC<A 99D
BA<<><A; G'ne 30, 4566
NATURE
A..ea" fro) t(e #e!i&ion of t(e C*I of Pan$a&inan
FACTS
, >#'ar#o #e "a Cr':, e)."oye# in t(e Ito$on,S'yo!
Mine&, In!-, a& t(e (o"#er of an a!!i#ent in&'ran!e
.o"i!y 'n#erritten +y t(e Ca.ita" In&'ran!e S
S'rety Co-, In!-, for t(e .erio# +e$innin$ Nove)+er
43, 4596 to Nove)+er 42, 459C-
, On Gan'ary 4, 459C, t(e Ito$on,S'yo! Mine&, In!-
&.on&ore# a +o%in$ !onte&t (erein t(e in&'re#
>#'ar#o #e "a Cr': .arti!i.ate#-
, In t(e !o'r&e of (i& +o't, >#'ar#o &"i..e# an# a&
(it +y (i& o..onent on t(e "eft .art of t(e +a!2 of t(e
(ea#, !a'&in$ >#'ar#o to fa"", it( (i& (ea# (ittin$
t(e ro.e of t(e rin$-
, 1e a& +ro'$(t to t(e Ba$'io Genera" 1o&.ita", +'t
(e #ie# a& a re&'"t of (e)orr(a$e, intra!rania", "eft-
, Si)on #e "a Cr':, t(e fat(er an# na)e# +enefi!iary
of t(e in&'re#, fi"e# a !"ai) it( t(e in&'ran!e
!o).any for .ay)ent of t(e in#e)nity, +'t it a&
#enie#-
, 1e in&tit'te# t(e a!tion in t(e C*I of Pan$a&inan for
&.e!ifi! .erfor)an!e-
, Eefen#ant in&'rer &et '. t(e #efen&e t(at t(e
#eat( of t(e in&'re#, !a'&e# +y (i& .arti!i.ation in a
+o%in$ !onte&t, a& not a!!i#enta" an#, t(erefore,
not !overe# +y in&'ran!e
, T(e !o'rt ren#ere# t(e #e!i&ion in favor of t(e
."aintiff, (en!e, t(e .re&ent a..ea"-
ISSUE
0ON t(e #eat( of t(e in&'re# a& not a!!i#enta"
an#, t(erefore, not !overe# +y in&'ran!e
HELD
NO
, T(e ter)& Pa!!i#entP an# Pa!!i#enta"P, a& '&e# in
in&'ran!e !ontra!t&, (ave not a!;'ire# any te!(ni!a"
)eanin$, an# are !on&tr'e# +y t(e !o'rt& in t(eir
or#inary an# !o))on a!!e.tation- T('&, t(e ter)&
(ave +een ta2en to )ean t(at (i!( (a..en +y
!(an!e or fort'ito'&"y, it(o't intention an# #e&i$n,
an# (i!( i& 'ne%.e!te#, 'n'&'a", an# 'nfore&een-
An a!!i#ent i& an event t(at ta2e& ."a!e it(o't
oneN& fore&i$(t or e%.e!tation, an event t(at
.ro!ee#& fro) an 'n2non !a'&e, or i& an 'n'&'a"
effe!t of a 2non !a'&e an#, t(erefore, not
e%.e!te#-
, T(e $enera""y a!!e.te# r'"e i& t(at, #eat( or inJ'ry
#oe& not re&'"t fro) a!!i#ent or a!!i#enta" )ean&
it(in t(e ter)& of an a!!i#ent,.o"i!y if it i& t(e
nat'ra" re&'"t of t(e in&'re#N& vo"'ntary a!t,
'na!!o).anie# +y anyt(in$ 'nfore&een e%!e.t t(e
#eat( or inJ'ry- T(ere i& no a!!i#ent (en a
#e"i+erate a!t i& .erfor)e# 'n"e&& &o)e a##itiona",
'ne%.e!te#, in#e.en#ent, an# 'nfore&een (a..enin$
o!!'r& (i!( .ro#'!e& or +rin$& a+o't t(e re&'"t of
inJ'ry or #eat(- In ot(er or#&, (ere t(e #eat( or
inJ'ry i& not t(e nat'ra" or .ro+a+"e re&'"t of t(e
in&'re#N& vo"'ntary a!t, or if &o)et(in$ 'nfore&een
o!!'r& in t(e #oin$ of t(e a!t (i!( .ro#'!e& t(e
inJ'ry, t(e re&'"tin$ #eat( i& it(in t(e .rote!tion of
.o"i!ie& in&'rin$ a$ain&t #eat( or inJ'ry fro)
a!!i#ent-
, In t(e .re&ent !a&e, (i"e t(e .arti!i.ation of t(e
in&'re# in t(e +o%in$ !onte&t i& vo"'ntary, t(e inJ'ry
a& &'&taine# (en (e &"i#, $ivin$ o!!a&ion to t(e
inf"i!tion +y (i& o..onent of t(e +"o t(at t(re (i)
to t(e ro.e& of t(e rin$-
, T(e fa!t t(at +o%in$ i& atten#e# it( &o)e ri&2& of
e%terna" inJ'rie& #oe& not )a2e any inJ'rie& re!eive#
in t(e !o'r&e of t(e $a)e not a!!i#enta"- In +o%in$
a& in ot(er e;'a""y .(y&i!a""y ri$oro'& &.ort&, &'!( a&
+a&2et+a"" or +a&e+a"", #eat( i& not or#inari"y
anti!i.ate# to re&'"t- If, t(erefore, it ever #oe&, t(e
inJ'ry or #eat( !an on"y +e a!!i#enta" or .ro#'!e# +y
&o)e 'nfore&een (a..enin$ or event a& (at
o!!'rre# in t(i& !a&e-
, *'rt(er)ore, t(e .o"i!y invo"ve# (erein &.e!ifi!a""y
e%!"'#e# fro) it& !overa$eH
@eA Eeat( or #i&a+"e)ent !on&e;'ent '.on t(e
In&'re# en$a$in$ in foot+a"", ('ntin$, .i$&ti!2in$,
&tee."e!(a&in$, .o"o,."ayin$, ra!in$ of any 2in#,
)o'ntaineerin$, or )otor!y!"in$-
, Eeat( or #i&a+"e)ent re&'"tin$ fro) en$a$e)ent in
+o%in$ !onte&t& a& not #e!"are# o't&i#e of t(e
.rote!tion of t(e in&'ran!e !ontra!t- *ai"'re of t(e
#efen#ant in&'ran!e !o).any to in!"'#e #eat(
re&'"tin$ fro) a +o%in$ )at!( or ot(er &.ort& a)on$
t(e .ro(i+itive ri&2& "ea#& inevita+"y to t(e !on!"'&ion
t(at it #i# not inten# to "i)it or e%e).t it&e"f fro)
"ia+i"ity for &'!( #eat(-
Disposition T(e #e!i&ion a..ea"e# fro) i& affir)e#
FORTUNE INSURANCE $. CA (*,2"a 2.0)
PHIL HOME ASSURANCE CORP $. CA (EASTERN
SHIPPING)
29C SC<A D66
IAPUNAN; G'ne 20, 4556
NATURE
, >a&tern S(i..in$ /ine&, In!- "oa#e# on +oar# SS
>a&tern >%."orer in Io+e, Ga.an, t(e fo""oin$
&(i.)ent for !arria$e to Mani"a an# Ce+', frei$(t
INSURANCE Page 76
.re,.ai# an# in $oo# or#er an# !on#itionH @aA 2
+o%e& interna" !o)+'&tion en$ine .art&, !on&i$ne# to
0i""ia) /ine&, In!-; @+A 40 )etri! ton& @33D +a$&A
a))oni') !("ori#e, !on&i$ne# to Or!aN& Co).any;
@!A 200 +a$& G"'e 300, !on&i$ne# to Pan Orienta"
Mat!( Co).any; an# @#A $ar)ent&, !on&i$ne# to
Ein$ Me"ayo- A"" !on&i$nation& ere )a#e +y virt'e
of a Bi"" of /a#in$-
, 0(i"e t(e ve&&e" a& off O2inaa, a &)a"" f"a)e
a& #ete!te# on t(e a!ety"ene !y"in#er "o!ate# in t(e
a!!o))o#ation area near t(e en$ine roo)- A& t(e
!re a& tryin$ to e%tin$'i&( t(e fire, t(e !y"in#er
&'##en"y e%."o#e#, t('& !a'&in$ #eat( an# &evere
inJ'rie& to t(e !re an# in&tant"y &ettin$ fire to t(e
(o"e ve&&e"-
, SS >a&tern >%."orer a& t(en fo'n# to +e a
!on&tr'!tive tota" "o&& an# it& voya$e a& #e!"are#
a+an#one#-
, After t(e fire a& e%tin$'i&(e#, t(e !ar$oe& (i!(
ere &ave# ere "oa#e# to anot(er ve&&e" for
#e"ivery to t(eir ori$ina" .ort& of #e&tination- >S/I
!(ar$e# t(e !on&i$nee& &evera" a)o'nt&
!orre&.on#in$ to a##itiona" frei$(t an# &a"va$e
!(ar$e&-
, T(e !(ar$e& ere a"" .ai# +y P(i"i..ine 1o)e
A&&'ran!e Cor.oration @P1ACA under #rotest for and
in be!alf of t!e consi"nees- P1AC, a& &'+ro$ee of
t(e !on&i$nee&, t(en fi"e# a !o)."aint +efore t(e <TC
of Mani"a, a$ain&t >S/I to re!over t(e &') .ai#
'n#er .rote&t on t(e $ro'n# t(at t(e &a)e ere
a!t'a""y #a)a$e& #ire!t"y +ro'$(t a+o't +y t(e fa'"t,
ne$"i$en!e, i""e$a" a!t an#Ror +rea!( of !ontra!t of
>S/I-
, >S/I !onten#e# t(at it e%er!i&e# t(e #i"i$en!e
re;'ire# +y "a in t(e (an#"in$, !'&to#y an# !arria$e
of t(e &(i.)ent; t(at t(e fire a& !a'&e# +y an
'nfore&een event; t(at t(e a##itiona" frei$(t !(ar$e&
are #'e an# #e)an#a+"e .'r&'ant to t(e Bi"" of
/a#in$; an# t(at &a"va$e !(ar$e& are .ro.er"y
!o""e!ti+"e 'n#er A!t No- 2646, 2non a& t(e Sa"va$e
/a-
5 RTCH #i&)i&&e# P1ACN& !o)."aint an# r'"e# in
favor of >S/I-
, T(e +'rnin$ of t(e ve&&e" a& not t(e fa'"t or
ne$"i$en!e of #efen#ant +'t a nat'ra" #i&a&ter or
!a"a)ity- Sa"va$e o.eration& !on#'!te# +y *'2'#a
Sa"va$e Co).any a& .erfe!t"y a "e$a" o.eration
an# !(ar$e& )a#e on t(e $oo#& re!overe# ere
"e$iti)ate !(ar$e&- Se!tion 4
5
of A!t No- 2646, t(e
9
Section 1. 7hen in case of shipwrec#, the &essel or its cargo shall be beyond the control of the
crew, or shall ha&e been abandoned by them, and pic#ed up and con&eyed to a safe place by other
persons, the latter shall be entitled to a reward for the sal&age.
Sa"va$e /a i& a.."i!a+"e- 0it( re&.e!t to t(e
a##itiona" frei$(t !(ar$e# +y #efen#ant fro) t(e
!on&i$nee& of t(e $oo#&, t(e &a)e are a"&o va"i#"y
#e)an#a+"e-
, T(e +'rnin$ of P>AST><N >WP/O<><P (i"e off
O2inaa ren#ere# it .(y&i!a""y i).o&&i+"e for
#efen#ant to !o)."y it( it& o+"i$ation of #e"iverin$
t(e $oo#& to t(eir .ort of #e&tination .'r&'ant to t(e
!ontra!t of !arria$e- Un#er Arti!"e 4266 of t(e Civi"
Co#e, t(e .(y&i!a" i).o&&i+i"ity of t(e .re&tation
e%tin$'i&(e# #efen#antN& o+"i$ation-
5 N#e9 T(e $oo#& &'+Je!t of t(e .re&ent
!ontrover&y ere neit(er "o&t nor #a)a$e# in tran&it
+y t(e fire t(at ra:e# t(e !arrier- In fa!t, t(e&e ere
a"" #e"ivere# to t(e !on&i$nee&, even if t(e
tran&&(i.)ent too2 "on$er t(an ne!e&&ary- 0(at i&
at i&&'e t(erefore i& not (et(er or not t(e !arrier i&
"ia+"e for t(e "o&&, #a)a$e, or #eterioration of t(e
$oo#& tran&.orte# +y t(e) +'t (o, a)on$ t(e
!arrier, !on&i$nee or in&'rer of t(e $oo#&, i& "ia+"e
for t(e a##itiona" !(ar$e& or e%.en&e& in!'rre# +y
t(e oner of t(e &(i. in t(e &a"va$e o.eration& an#
in t(e tran&&(i.)ent of t(e $oo#& via a #ifferent
!arrier- In a+&o"vin$ re&.on#ent !arrier of any
"ia+i"ity, CA &'&taine# t(e tria" !o'rtN& fin#in$ t(at t(e
fire t(at $'tte# t(e &(i. a& a nat'ra" #i&a&ter or
!a"a)ity-
ISSUE
0ON t(e +'rnin$ of t(e SS >a&tern >%."orer
ren#erin$ it a !on&tr'!tive tota" "o&& a& a nat'ra"
#i&a&ter or !a"a)ity
HELD
NO
Ratio In o'r J'ri&.r'#en!e, fire )ay not +e
!on&i#ere# a nat'ra" #i&a&ter or !a"a)ity &in!e it
a")o&t a"ay& ari&e& fro) &o)e a!t of )an or +y
(')an )ean&- It !annot +e an a!t of Go# 'n"e&&
!a'&e# +y "i$(tnin$ or a nat'ra" #i&a&ter or !a&'a"ty
not attri+'ta+"e to (')an a$en!y-
Reasoning
- T(ere a& no &(oin$, an# none a& a""e$e# +y
t(e .artie&, t(at t(e fire a& !a'&e# +y a nat'ra"
#i&a&ter- On t(e !ontrary, t(ere i& &tron$ evi#en!e
in#i!atin$ t(at t(e a!ety"ene !y"in#er !a'$(t fire
+e!a'&e of t(e fa'"t an# ne$"i$en!e of re&.on#ent
>S/I, it& !a.tain an# it& !reH
@4A T(e a!ety"ene !y"in#er (i!( a& f'""y "oa#e#
&(o'"# not (ave +een &tore# near t(e en$ine roo)
'hose who, not being included in the abo&e paragraph, assist in sa&ing a &essel or its cargo from
shipwrec#, shall be entitled to li#e reward.
(ere t(e (eat $enerate# t(erefro) !o'"# !a'&e t(e
a!ety"ene !y"in#er to e%."o#e +y rea&on of
&.ontaneo'& !o)+'&tion- >S/I &(o'"# (ave ea&i"y
fore&een t(at t(e a!ety"ene !y"in#er, !ontainin$
(i$("y inf"a))a+"e )ateria", a& in a rea" #an$er of
e%."o#in$-
@2A >S/I &(o'"# (ave 2non t(at +y &torin$ t(e
a!ety"ene !y"in#er in t(e a!!o))o#ation area
&'..o&e# to +e re&erve# for .a&&en$er&, it
'nne!e&&ari"y e%.o&e# it& .a&&en$er& to $rave
#an$er an# inJ'ry-
@3A T(e fa!t t(at t(e a!ety"ene !y"in#er a& !(e!2e#,
te&te# an# e%a)ine# an# &'+&e;'ent"y !ertifie# a&
(avin$ !o)."ie# it( t(e &afety )ea&'re& an#
&tan#ar#& +y ;'a"ifie# e%.ert& +efore it a& "oa#e# in
t(e ve&&e" on"y &(o& to a $reat e%tent t(at
ne$"i$en!e a& .re&ent in t(e (an#"in$ of t(e
a!ety"ene !y"in#er after it a& "oa#e# an# (i"e it
a& on +oar# t(e &(i.-
, *ro) t(e fore$oin$ .re)i&e&, it in#'+ita+"y fo""o&
t(at t(e !ar$o !on&i$nee& !annot +e )a#e "ia+"e to
re&.on#ent !arrier for a##itiona" frei$(t an# &a"va$e
!(ar$e&-
Disposition G'#$)ent a..ea"e# fro) i& <>M><S>E
an# S>T ASIE>- <e&.on#ent >a&tern S(i..in$ /ine&,
In!- i& O<E><>E to ret'rn to .etitioner P(i"i..ine
1o)e A&&'ran!e Cor.oration t(e a)o'nt it .ai#
'n#er .rote&t in +e(a"f of t(e !on&i$nee& (erein-
PHILIPPINE AMERICAN LIFE INSURANCE
COMPANY $. THE AUDITOR GENERAL
22 SC<A 439
SANC1>?, GANUA<F 46, 4566
NATURE
P>TITION *O< <>MI>0 of a r'"in$ of t(e A'#itor
Genera"-
FACTS
, P(i"a)"ife, a #o)e&ti! "ife in&'ran!e !or.-, an#
A)eri!an Internationa" <ein&'ran!e Co).any
@Air!oA, a !or.oration or$ani:e# 'n#er t(e "a& of
t(e <e.'+"i! of Pana)a, entere# into a
<>INSU<ANC> T<>ATF (erein P(i"a)"ife a$ree& to
rein&'re it( Air!o on Gan'ary 4590- P(i"a)"ife
INSURANCE Page 77
a$ree# to .ay .re)i')& for a"" rein&'ran!e& on an
ann'a" .re)i') +a&i&-
, In G'"y 46, 4595, t(e Mar$in /a a& a..rove# an#
+e!a)e effe!tive, (i!( e%e).t& !ertain 7o+"i$ation&
fro) .ay)ent of )ar$in fee&, .arti!'"ar"y !ontra!t'a"
o+"i$ation& !a""in$ for .ay)ent of forei$n e%!(an$e
i&&'e#, a..rove# an# o't&tan#in$ a& of t(e #ate t(i&
A!t ta2e& ."a!e8-
, Centra" Ban2 of t(e P(i"i..ine& !o""e!te#
PED7,0C0.C7 a& forei$n e%!(an$e )ar$in on
P(i"a)"ife re)ittan!e& to Air!o .'r.orte#"y tota""in$
T640,556-63 an# )a#e &'+&e;'ent to G'"y 46, 4595-
P(i"a)"ife fi"e# a !"ai) for ref'n# on t(e $ro'n# t(at
t(e rein&'ran!e .re)i')& re)itte# ere .ai# in
.'r&'ant to t(e Gan'ary 4590 rein&'ran!e treaty,
an# t(erefore e%e).te#-
, Monetary Boar# e%e).te# P(i"a)"ife fro) .ay)ent
of )ar$in fee- 1oever, A'#itor of CB ref'&e# to
.a&& in a'#it P(i"a)"ife=& !"ai) for ref'n#- P(i"a)"ife
&o'$(t re!on&i#eration +'t a& #enie#, &ayin$
rein&'ran!e treaty NOT >W>MPT>E-
ISSUES
4- 0ON t(e .re)ia re)itte# ere in .'r&'an!e of
t(e rein&'ran!e treaty +eteen P(i"a)"ife an# Air!o
of Gan'ary 4595, a !ontra!t ante#atin$ t(e Mar$in
/a, an# t(erefore, P(i"a)"ife e%e).te# fro) .ayin$
)ar$in fee
2- 0ON Mar$in /a i).air& t(e o+"i$ation of !ontra!t
3- 0ON rein&'ran!e !ontra!t& a+roa# o'"# +e )a#e
i).ra!ti!a" +y t(e i).o&ition of t(e 29Q )ar$in fee
HELD
4- NO
, *or an e%e).tion to !o)e into ."ay, t(ere )'&t +e
a rein&'ran!e .o"i!y or, a& in t(e rein&'ran!e treaty
.rovi#e#, a Prein&'ran!e !e&&ionP (i!( )ay +e
a'to)ati! or fa!'"tative-
Ratio A "e'+*,"a+!e 2#l'!) i& t('& a !ontra!t of
in#e)nity one in&'rer )a2e& it( anot(er to .rote!t
t(e fir&t in&'rer fro) a ri&2 it (a& a"rea#y a&&')e#- -
- - In !ontra#i&tin!tion, a "e'+*,"a+!e "ea) i&
)ere"y an a$ree)ent +eteen to in&'ran!e
!o).anie& (ere+y one a$ree& to !e#e an# t(e
ot(er to a!!e.t rein&'ran!e +'&ine&& .'r&'ant to
.rovi&ion& &.e!ifie# in t(e treaty- T(e .ra!ti!e of
i&&'in$ .o"i!ie& +y in&'ran!e !o).anie& in!"'#e&,
a)on$ ot(er t(in$&, t(e i&&'an!e of rein&'ran!e
.o"i!ie& on &tan#ar# ri&2& an# a"&o on &'+&tan#ar#
ri&2& 'n#er &.e!ia" arran$e)ent&- T(e "').in$ of t(e
#ifferent a$ree)ent& 'n#er a !ontra!t (a& re&'"te# in
t(e ter) 2non to t(e in&'ran!e or"# a& Ntreatie&-N
S'!( a treaty i&, in fa!t, an a$ree)ent +eteen
in&'ran!e !o).anie& to !over t(e #ifferent &it'ation&
#e&!ri+e#- <ein&'ran!e treatie& an# rein&'ran!e
.o"i!ie& are not &ynony)o'&- T"ea'e* a"e
!#+"a!* -#" '+*,"a+!eG "e'+*,"a+!e 2#l'!'e* #"
!e**'#+* a"e !#+"a!* #- '+*,"a+!e.
Reasoning
- >ven if rein&'ran!e treaty .re!e#e# t(e Mar$in /a
+y over nine year&, not(in$ in t(e treaty o+"i$ate&
P(i"a)"ife to re)it to Air!o a fi%e#, !ertain, an#
o+"i$atory &') +y ay of rein&'ran!e .re)i')&- T(e
rein&'ran!e treaty .er &e !annot $ive ri&e to a
!ontra!t'a" o+"i$ation for t(e .ay)ent of forei$n
e%!(an$e- P(i"a)"ife=& o+"i$ation to re)it rein&'ran!e
.re)i')& +e!o)e& fi%e# an# #efinite ,2#+ he
e/e!,'#+ #- he "e'+*,"a+!e !e**'#+. It i& on"y
after a rein&'ran!e !e&&ion i& )a#e t(at .ay)ent of
rein&'ran!e .re)i') )ay +e e%a!te#, a& it i& on"y
after P(i"a)"ife &ee2& to re)it t(at rein&'ran!e
.re)i') t(at t(e o+"i$ation to .ay t(e )ar$in fee
ari&e&-
2- NO
Ratio# >%i&tin$ "a& for) .art of t(e !ontra!t Pa& t(e
)ea&'re of t(e o+"i$ation to .erfor) t(e) +y t(e
one .arty an# t(e ri$(t a!;'ire# +y t(e ot(er- 1f the
o"ligation does not inhere and su"sist in the
contract itself& propio vigore& "ut in the law
applica"le to the contract#
Reasoning
- # 0(en .etitioner entere# into t(e rein&'ran!e
treaty of Gan'ary 4, 4590 it( Air!o, it #i# &o it(
t(e 'n#er&tan#in$ t(at t(e )'ni!i.a" "a& of t(e
P(i"i..ine& at t(e ti)e &ai# treaty a& e%e!'te#,
+e!a)e an 'nritten !on#ition t(ereof- S'!(
)'ni!i.a" "a& !on&tit'te .art of t(e o+"i$ation of
!ontra!t-
,Ra'#+ale #- Ma"%'+ La&9 to re#'!e t(e e%!e&&ive
#e)an# on an# .revent f'rt(er #e!"ine of o'r
internationa" re&erve&; to .rovi#e t(e Centra" Ban2
it( an a##itiona" in&tr')ent for effe!tive"y !o.in$
it( t(e .ro+"e) an# a!(ievin$ #o)e&ti! an#
internationa" &ta+i"ity of o'r !'rren!y; to re#'!e t(e
e%!e&&ive #e)an#,for forei$n e%!(an$e-
, i)."e)entation of Mar$in /a in a!!or#an!e it(
.o"i!e .oer
3- NO
Reasoning
- *ir&t, t(ere i& +# !#+!"ee e$'.e+!e t(at &'!(
i).o&ition of t(e 29Q )ar$in fee i& 'nrea&ona+"e,
Se!on#, if rea""y !ontin'an!e of t(e e%i&tin$
rein&'ran!e treaty +e!o)e& 'n+eara+"e, t(at
!#+"a! '*el- 2"#$'.e* ha 2e''#+e" (a)
2#e*a'$el) &"'e -'+'* he"e# #+ +'+e) .a)*@
&"'e+ +#'!e. Petitioner i& not for!e# to !ontin'e
it& rein&'ran!e treaty in#efinite"y it( Air!o-
Disposition *or t(e rea&on& $iven, t(e .etition for
revie i& (ere+y #enie#, an# t(e r'"in$ of t(e A'#itor
Genera" of O!to+er 2D, 4564 #enyin$ ref'n# i&
(ere+y affir)e#-
Co&t& a$ain&t .etitioner- So or#ere#-
FIELDMEN@S INSURANCE CO INC $. ASIAN
SURETY ? INSURANCE CO INC
3D SC<A 36
MAIA/INTA/; G'"y 34, 45C0
FACTS
, On vario'& #ate& +eteen A.ri" 44, 4560 an# Gan-
5, 4564 t(e A&ian S'rety S In&'ran!e Co).any,
In!- an# t(e *ie"#)enN& In&'ran!e Co).any, In!-
entere# into C rein&'ran!e a$ree)ent& 'n#er (i!(
t(e for)er, a& t(e !e#in$ !o).any 'n#ertoo2 to
!e#e to t(e "atter, a& t(e rein&'rin$ !o).any, a
&.e!ifie# .ortion of t(e a)o'nt of in&'ran!e
'n#erritten +y ASIAN '.on .ay)ent to *I>/EM>NNS
of a .ro.ortionate &(are of t(e $ro&& rate of t(e
.re)i') a.."i!a+"e it( re&.e!t to ea!( !e&&ion
after #e#'!tin$ a !o))i&&ion- Sai# a$ree)ent& ere
to ta2e effe!t fro) !ertain &.e!ifi! #ate& an# ere to
+e in for!e 'nti" !an!e""e# +y eit(er .arty '.on
.revio'& noti!e of at "ea&t 3 )ont(& +y re$i&tere#
)ai" to t(e ot(er .arty, t(e !an!e""ation to ta2e
effe!t a& of Ee!- 34 of t(e year in (i!( t(e noti!e
a& $iven-
, On Se.- 45, 4564 *I>/EM>NNS, +y )ean& of
re$i&tere# )ai", &erve# noti!e to ASIAN of t(e
for)erN& #e&ire to +e re"ieve# fro) a"" .arti!i.ation in
it& vario'& a$ree)ent& it( t(e "atter effe!tive Ee!-
34, 4564- T(i& !o))'ni!ation, a"t(o'$( a#)itte#"y
re!eive# +y ASIAN on Se.- 29, 4564, #i# not e"i!it
any re."y fro) ASIAN-
, On Ee!- C, 4564 *I>/EM>NNS &ent anot(er "etter to
ASIAN e%.re&&in$ re$ret& at a""e$e# vio"ation&
!o))itte# +y t(e "atter it( re&.e!t to t(e vario'&
a$ree)ent& +eteen t(e) an# reiterate# it& .o&ition
t(at it o'"# !on&i#er it&e"f Pno "on$er at ri&2 for any
rein&'ran!e an#Ror !e&&ionP $iven +y ASIAN (i!(
)i$(t +e in for!e on Ee!- 34, 4564- Not (avin$
re!eive# any for)a" re."y fro) ASIAN, *I>/EM>NNS
&ent a ne a "etter on *e+- 4C, 4562 re)in#in$
ASIAN of t(e !an!e""ation of a"" t(e rein&'ran!e
INSURANCE Page 78
treatie& an# !e&&ion& a& of Ee!- 34, 4564 an#
re;'e&te# ASIAN to &'+)it it& fina" a!!o'ntin$ of a""
!e&&ion& )a#e to t(e for)er for t(e .re!e#in$
)ont(& (en t(e rein&'ran!e a$ree)ent& ere in
for!e-
, Mean(i"e one of t(e ri&2& rein&'re# it(
*I>/EM>NNS i&&'e# in favor of t(e GSIS +e!a)e a
"ia+i"ity (en t(e in&'re# .ro.erty a& +'rne# on
*e+r'ary 46, 4562- Sin!e t(e .o"i!y a& i&&'e# on
G'"y 4, 4564, it a& &'..o&e# to e%.ire on G'"y 4,
4562- 2 T(e ne%t #ay, *e+- 4C, ASIAN i))e#iate"y
notifie# *I>/EM>NNS of &ai# fire "o&&-
, *I>/EM>NNS, re"yin$ on t(e &'ffi!ien!y of it& noti!e
of ter)ination #ate# Se.te)+er 45, 4564 an#
o+vio'&"y +ent on avoi#in$ it& "ia+i"ity 'n#er t(e
rein&'ran!e a$ree)ent& it( ASIAN, fi"e# a .etition
for #e!"aratory re"ief it( t(e C*I of Mani"a to &ee2 a
#e!"aration t(at a"" t(e rein&'ran!e !ontra!t& entere#
into +eteen t(e) (a# ter)inate# a& of Ee!e)+er
34, 4564 an# to o+tain an or#er #ire!tin$ ASIAN to
ren#er fina" a!!o'ntin$ of t(e tran&a!tion& +eteen
t(e) it( re&.e!t to &ai# rein&'ran!e treatie& a& of
t(e !'t,off #ate-
, In it& an&er +e"o ASIAN #enie# (avin$ re!eive#
*I>/EM>NNS "etter #ate# Se. 45, 4564, an# ar$'e#
t(at even a&&')in$ it #i#, *I>/EM>NNS !o'"# not
(ave ter)inate# t(e rein&'ran!e treatie& a& of Ee!
34, 4564 +e!a'&e t(e "etter a& )ere"y an
e%.re&&ion of *I>/EM>NNS #e&ire to !an!e" t(e
treatie& an# not a for)a" noti!e of !an!e""ation a&
!onte)."ate# in t(eir rein&'ran!e a$ree)ent&- By
ay of &.e!ia" #efen&e A&ian !onten#e# t(at even if
t(e Se.- 45 "etter ere !on&i#ere# &'ffi!ient noti!e of
!an!e""ation U t(ere+y ren#erin$ t(e rein&'ran!e
a$ree)ent& ter)inate# a& of Ee!e)+er 34, 4564 U
t(e "ia+i"ity of *I>/EM>NNS it( re&.e!t to .o"i!ie& or
!e&&ion& i&&'e# 'n#er to of t(e &ai# a$ree)ent&
.rior to t(eir !an!e""ation !ontin'e# to (ave f'"" for!e
an# effe!t 'nti" t(e &tate# e%.iry #ate& of &'!(
.o"i!ie& or !e&&ion&-
, On Ee!- D, 4562, t(e tria" !o'rt #e!"are# 6 of t(e C
rein&'ran!e a$ree)ent& in ;'e&tion !an!e""e# a& of
Ee! 34, 4564- At t(e &a)e ti)e, it '.(e"# ASIANNS
.o&ition t(at a"" !e&&ion& of rein&'ran!e )a#e +y it to
*I>/EM>NNS .rior to t(e !an!e""ation of t(e
rein&'ran!e treatie& !ontin'e# in f'"" for!e an# effe!t
'nti" e%.iry #ate& an# or#ere# *I>/EM>NNS to )a2e
an a!!o'ntin$ of it& +'&ine&& tran&a!tion& it(
ASIAN it(in 30 #ay&-
, On a..ea" to t(e CA, t(e #e!i&ion of t(e tria" !o'rt
a& &'+&tantia""y affir)e#, it( t(e &"i$(t
)o#ifi!ation t(at t(e or#er for a!!o'ntin$ a&
e"i)inate#, it(o't .reJ'#i!e to t(e fi"in$ of a .ro.er
a!tion +eteen t(e .artie& for t(at .'r.o&e-
ISSUE
0ON t(e !an!e""ation a& of Ee!- 34, 4564 of t(e
rein&'ran!e treatie& (a# t(e effe!t of ter)inatin$
a"&o t(e "ia+i"ity of *I>/EM>NNS a& rein&'rer it(
re&.e!t to .o"i!ie& or !e&&ion& i&&'e# .rior to t(e
ter)ination of t(e .rin!i.a" rein&'ran!e !ontra!t& or
treatie&
HELD
NO to t(e 2 rein&'ran!e !ontra!t&
, Of t(e 6 rein&'ran!e !ontra!t&, 2 !ontain
.rovi&ion&, (i!( !"ear"y an# e%.re&&"y re!o$ni:e t(e
!ontin'in$ effe!tivity of .o"i!ie& !e#e# 'n#er t(e)
for rein&'ran!e notit(&tan#in$ t(e !an!e""ation of
t(e !ontra!t& t(e)&e"ve&- T(e &ai# treatie& .rovi#e
Pt(at in t(e event of ter)ination of t(i&
A$ree)ent - - -, t(e "ia+i"ity of t(e *ie"#)enN& 'n#er
!'rrent !e&&ion& &(a"" !ontin'e in f'"" for!e an# effe!t
'nti" t(eir nat'ra" e%.iry - - -;P an# t(e Dt( .ara$ra.(
of Arti!"e MI of t(e Per&ona" A!!i#ent <ein&'ran!e
Treaty &tate&H
PD- On t(e ter)ination of t(i& A$ree)ent fro)
any !a'&e (atever, t(e "ia+i"ity of t(e <>INSU<><
@*ie"#)enN&A 'n#er any !'rrent !e&&ion in!"'#in$
any a)o'nt& #'e to +e !e#e# 'n#er t(e ter)& of
t(i& A$ree)ent an# (i!( are not !an!e""e# in t(e
or#inary !o'r&e of +'&ine&& &(a"" !ontin'e in f'""
for!e 'nti" t(eir e%.iry 'n"e&& t(e COMPANF
@A&ianA &(a"", .rior to t(e t(irty,fir&t Ee!e)+er
ne%t fo""oin$ &'!( noti!e, e"e!t to it(#ra t(e
e%i&tin$ !e&&ion& - - -P
, T('&, in&ofar a& t(e to rein&'ran!e a$ree)ent&
are !on!erne#, t(ere i& !"ear"y no )erit in
*I>/EM>NNS !"ai) t(at t(eir !an!e""ation !arrie# it(
it i.&o fa!to t(e ter)ination of a"" rein&'ran!e
!e&&ion& t(ere'n#er- S'!( !e&&ion& !ontin'e# to +e
in for!e 'nti" t(eir re&.e!tive #ate& of e%.iration-
Sin!e it a& 'n#er one of &ai# a$ree)ent& t(at t(e
rein&'ran!e !e&&ion !orre&.on#in$ to t(e GSIS .o"i!y
(a# +een )a#e, *I>/EM>NNS !annot avoi# "ia+i"ity
(i!( aro&e +y rea&on of t(e +'rnin$ of t(e in&'re#
.ro.erty-
, 0it( re&.e!t to t(e ot(er D a$ree)ent&, it o'"#
&ee) t(at t(e .etition for #e!"aratory re"ief i& )oot,
an# t(at no '&ef'" .'r.o&e o'"# +e &erve# +y
#efinin$ t(e re&.e!tive ri$(t& an# o+"i$ation& of t(e
.artie& t(ere'n#er- T(e &ai# a$ree)ent& (ave +een
!an!e""e#, an# it #oe& not a..ear t(at any !"ai) +y
or "ia+i"ity in favor of t(e in&'re# (a& a!t'a""y ari&en
'n#er any of t(e rein&'ran!e !e&&ion& )a#e .rior to
&'!( !an!e""ation- *'t're !onf"i!t& of t(e &a)e nat're
a& t(o&e (i!( (ave )otivate# t(e .re&ent a!tion
!an of !o'r&e +e o+viate# +y '&in$ )ore .re!i&e an#
#efinite ter)ino"o$y in t(e rein&'ran!e a$ree)ent&
(i!( t(e .artie& )ay enter into (en!efort(-
E=UITABLE INSURANCE $. RURAL INSURANCE
D SC<A 3D3
BA<<><A; Gan'ary 34, 4562
FACTS
, P"aintiff >;'ita+"e In&'ran!e fi"e a !o)."aint it(
t(e C*I of Mani"a a$ain&t #efen#ant <'ra" In&'ran!e
a""e$in$, a& fir&t !a'&e of a!tion, t(at t(ey entere#
into a re!i.ro!a" fa!'"tative rein&'ran!e a$ree)ent,
(erein t(ey a$ree# to !e#e to ea!( ot(er- P'r&'ant
to &ai# a$ree)ent, ."aintiff rein&'re# for P22 it(
#efen#ant t(e &to!2 !overe# +y fire in&'ran!e Po"i!y
No- 9660 i&&'e# +y ."aintiff (i!( a& "ater +'rne#;
t(e &(are of t(e "o&& of #efen#ant a& .er in&'ran!e
a$ree)ent a& !o).'te# at P2,02D for (i!(
."aintiff &ent to #efen#ant a &tate)ent of a!!o'nt for
.ay)ent +y t(e "atter- Ee&.ite re.eate# #e)an#&
+y ."aintiff, #efen#ant ref'&e# to .ay-
, On t(e &e!on# !a'&e of a!tion, ."aintiff rein&'re#
for P22 it( #efen#ant &to!2 !overe# +y fire
in&'ran!e Po"i!y No- 6062 (i!( a"&o +'rne#- A$ain,
#efen#ant ref'&e# to .ay it& &(are of t(e "o&& of
P4,33D (en!e &ai# !o)."aint-
, Eefen#ant fi"e# a )otion to #i&)i&& on t(e $ro'n#
t(at it &tate& no !a'&e of a!tion, a& .'r&'ant to Art
MIII of t(e <ein&'ran!e A$ree)ent +eteen t(e
.artie&, +efore a !o'rt a!tion !an +e +ro'$(t, t(e
.artie& a$ree# to &'+)it a"" #i&.'te& to a +oar# of
ar+itrator&- T(e Co'rt #enie# t(e )otion an#
re;'ire# #efen#ant to an&er-
, Eefen#ant fi"e# it& an&er, a""e$in$ t(at t(e nat're
of t(e a$ree)ent i& 7&e"f,"i;'i#atin$ +eteen t(e
.artie&8, t(e rein&'rer +e!o)in$ t(e rein&'re# an#
vi!e ver&a; an# t(at &ai# a$ree)ent (a& not yet
+een a+ro$ate# &o t(e "ia+i"ity of eit(er to t(e ot(er
i& not yet 2non- Eefen#ant .raye# t(at t(e
!o)."aint +e #i&)i&&e# an# ."aintiff fi"e# a )otion
for J'#$)ent on t(e ."ea#in$& (i!( t(e !o'rt
#enie#-
, In&tea# of $oin$ into a for)a" (earin$, t(e .artie&
&'+)itte# t(eir !a&e for #e!i&ion &ti.'"atin$ t(e ff
fa!t&H #efen#ant a#)it& t(e a""e$ation& of t(e
!o)."aint an# t(at ."aintiff a#)it& t(at t(e i&&'e& of
t(e !o)."aint ere not &'+)itte# to a Boar# of
Ar+itrator& a& .rovi#e# in .ar MIII of t(e !o)."aint,
INSURANCE Page 79
+'t in&tea# referre# it to t(e In&'ran!e
Co))i&&ioner- T(e C*I ren#ere# J'#$)ent in favor
of ."aintiff- 1en!e t(i& a..ea"-
ISSUES
4- 0ON >;'ita+"e (a# no !a'&e of a!tion a& t(e
)atter a& not referre# to t(e #e!i&ion of ar+itrator&
2- 0ON in a fa!'"tative o+"i$ation t(e ri$(t to !(oo&e
an a"ternative re)e#y "ie& on"y it( t(e #e+tor @(ere
t(e #efen#antA 'n#er Art 4206
HELD
4- NO
, T(e re;'ire)ent of &'+)i&&ion for #e!i&ion to 2
ar+itrator& or an ').ire t(e )atter of "o&&e& +y fire
or t(e "ia+i"ity of t(e .artie& t(ereto 'n#er Art MIII of
t(e a$ree)ent ari&e& on"y if t(e &a)e i& #i&.'te# +y
one of t(e .artie&- In t(e in&tant !a&e, t(ere i& no
#i&.'te +eteen t(e .artie&; in t(e &ti.'"ation of
fa!t& #efen#ant a#)itte# t(at ."aintiff (a# .ai# it&
"ia+i"ity an# #efen#ant "i2ei&e a#)itte# t(at it
i$nore# ."aintiff=& #e)an#& for rei)+'r&e)ent for
#efen#ant=& fai"'re to .ay it& &(are a& rein&'rer- A&
(e"# in Ma"i$a# v Unite# A&&'ran!e Co-, if in t(e
!o'r&e of t(e &ett"e)ent of a "o&&, t(e a!tion of t(e
!o).any or it& a$ent& a)o'nt& to ref'&a" to .ay, t(e
!o).any i"" +e #ee)e# to (ave aive# t(e
!on#ition .re!e#ent it( referen!e to ar+itration an#
a &'it '.on t(e .o"i!y i"" "ie-
2- NO
, T(ere i& no !onne!tion +eteen Art 4206 NCC an#
t(e a$ree)ent of t(i& a!tion- T(e ter) 7fa!'"tative8
i& '&e# in rein&'ran!e !ontra!t&, an# it i& &o '&e# in
t(i& .arti!'"ar !a&e, )ere"y to #efine t(e ri$(t of t(e
rein&'rer to a!!e.t or not to a!!e.t .arti!i.ation in
t(e ri&2 in&'re#- B't on!e t(e &(are i& a!!e.te#, a& it
a& in t(e !a&e at +ar, t(e o+"i$ation i& a+&o"'te an#
t(e "ia+i"ity a&&')e# t(ere'n#er !an +e #i&!(ar$e#
+y on"y one ayUt(e .ay)ent of t(e &(are of t(e
"o&&e&-
Disposition 6ud"ent a##ealed fro t!e /C is
affired
ARTEL DEVELOPMENT CO INC $. WELLINGTON
INSURANCE CO INC
94 SC<A 392
T>>1ANI>>; G'ne 2C, 45C3
FACTS
, 0e""in$ton In&'ran!e Co- In!- in&'re# for
P2D,3D6,905-00 t(e +'i"#in$&, &to!2& an# )a!(inery
of ."aintiff Arte% Eeve"o.)ent Co- In!- a$ain&t "o&&
or #a)a$e +y fire or "i$(tin$ '.on .ay)ent of t(e
."aintiff of t(e !orre&.on#in$ .re)i')&; t(at &ai#
.ro.ertie& ere in&'re# for an a##itiona" &') of
P663,03D-00; t(at #efen#ant in&'re# ."aintiff a$ain&t
+'&ine&& interr'.tion @'&e an# o!!'.an!yA for
P9,200,000-00; 0e""in$ton entere# into a !ontra!t
of rein&'ran!e it( A"e%an#er an# A"e%an#er, In!- of
Ne For2- USA-
, T(e +'i"#in$&, &to!2& an# )a!(inerie& of ."aintiff&
&.innin$ #e.art)ent ere +'rne#-
, Noti!e of t(e "o&& an# #a)a$e a& $iven t(e
#efen#ant; t(at a& .er re.ort of t(e a#J'&ter&, t(e
tota" .ro.erty "o&& of t(e ."aintiff a& t(e &') of
P40,406,99D-D0 an# t(e tota" +'&ine&& interr'.tion
"o&& a& P3,000,000-00;
, T(at #efen#ant (a& .ai# to t(e ."aintiff t(e &') of
P6,D64,6C0-0C of t(e .ro.erty "o&& &'ffere# +y
."aintiff an# P4,66D,43D-06 on it& +'&ine&&
interr'.tion "o&&, "eavin$ a +a"an!e of P3,62D,663-D3
an# P4,CD6,D60-00, re&.e!tive"y-
, T(e !o'n&e" for Arte% fi"e# a Manife&tation &ayin$
t(at in vie of t(e Eee#& of Ei&!(ar$e an# Co""atera"
A$ree)ent, t(e on"y re)ainin$ "ia+i"ity &'+Je!t of
"iti$ation &(a"" +e t(e .ro.ortion of t(e "o&& rein&'re#
it( or t(ro'$( A"e%an#er an# A"e%an#er, In!- of
Ne For2, USA, na)e"y, P35C,643-00-
, T(e #o!')ent re!ite# f'rt(er t(at Arte%
a!2no"e#$e& re!ei.t of t(e &') of P3-6M .ai# +y
t(e in&'rer in f'"" an# fina" &ett"e)ent of a"" or any
!"ai)& of Arte% a$ain&t it& in&'rer- It #i&!(ar$e& it&
in&'rer fro) a"" a!tion&, .ro!ee#in$&, !"ai)&,
#e)an#&, !o&t& an# e%.en&e& in re&.e!t t(ereof-
, 0it( re$ar# t(e +a"an!e 'n.ai#, 0e""in$ton
!onten#& t(at Arte% &(o'"# (ave +een #ire!te#
a$ain&t t(e rein&'rer& to !over t(e "ia+i"ity an# not
a$ain&t 0e""in$ton-
ISSUE
0ON t(e in&'re# @Arte%A (a& a !a'&e of a!tion
a$ain&t t(e rein&'rer
HELD
NO
, Un"e&& t(ere i& a &.e!ifi! $rant in, or a&&i$n)ent of,
t(e rein&'ran!e !ontra!t in favor of t(e in&'re# or a
)anife&t intention of t(e !ontra!tin$ .artie& to t(e
rein&'ran!e !ontra!t to $rant &'!( +enefit or favor to
t(e in&'re#, t(e in&'re#, not +ein$ .rivy to t(e
rein&'ran!e !ontra!t, (a& no !a'&e of a!tion a$ain&t
t(e rein&'rer- It i& e%.re&&"y .rovi#e# in Se!tion 54
t(e In&'ran!e A!t 4 t(at P@TA(e ori$ina" in&'re# (a&
no intere&t in a !ontra!t of in&'ran!e-P
PERLA COMPANIA DE SEGUROS $. CA(LIM)
206 SC<A D6C
NOCON; May C, 4552
NATURE
Petition for !ertiorari +y Per"a Co).ania #e Se$'ro&
an# *OC Cre#it Cor.oration &ee2in$ to ann'" an# &et
a&i#e CA #e!i&ion reverin$ t(e <TC #e!i&ion for
re."evin an# #a)a$e&-
FACTS
5 Private re&.on#ent& &.o'&e& 1er)inio an# >ve"yn
/i) e%e!'te# a .ro)i&&ory note in favor of
S'.er!ar&, In!- in t(e &') of PCC,5D0-00, .aya+"e in
)ont("y in&ta"")ent& a!!or#in$ to t(e &!(e#'"e of
.ay)ent in#i!ate# in &ai# note, an# &e!'re# +y a
!(atte" )ort$a$e over a +ran# ne re# *or# /a&er,
(i!( i& re$i&tere# 'n#er t(e na)e of .rivate
re&.on#ent 1er)inio /i) an# in&'re# it( t(e
.etitioner Per"a Co).ania #e Se$'ro&, In!- @Per"a for
+revityA for !o).re(en&ive !overa$e-
, On t(e &a)e #ate, S'.er!ar&, In!-, it( noti!e to
.rivate re&.on#ent& &.o'&e&, a&&i$ne# to .etitioner
*CP Cre#it Cor.oration @*CP for +revityA it& ri$(t&,
tit"e an# intere&t on &ai# .ro)i&&ory note an# !(atte"
)ort$a$e a& &(on +y t(e Eee# of A&&i$n)ent-
, At aro'n# 2H30.) Nov5, 4562, &ai# ve(i!"e a&
!arna..e# (i"e .ar2e# at t(e +a!2 of Broa#ay
Centr')- >ve"yn /i), (o a& #rivin$ &ai# !ar
+efore it a& !arna..e#, i))e#iate"y !a""e# '. t(e
Anti,Carna..in$ Unit of t(e P(i"i..ine Con&ta+'"ary
to re.ort &ai# in!i#ent an# t(ereafter, ent to t(e
neare&t .o"i!e &'+&tation to )a2e a .o"i!e re.ort
re$ar#in$ &ai# in!i#ent-
, On Nov40, 4562, >ve"yn /i) re.orte# &ai# in!i#ent
to t(e /TO in !o)."ian!e it( t(e in&'ran!e
re;'ire)ent- S(e a"&o fi"e# a !o)."aint it( t(e
1ea#;'arter&- Con&ta+'"ary 1i$(ay Patro" Gro'.-
, On Nov44, 4562, .rivate re&.on#ent fi"e# a !"ai)
for "o&& it( t(e .etitioner Per"a +'t &ai# !"ai) a&
#enie# on Nov46, 4562 on t(e $ro'n# t(at >ve"yn
/i), (o a& '&in$ t(e ve(i!"e +efore it a&
!arna..e#, a& in .o&&e&&ion of an e%.ire# #riverN&
"i!en&e at t(e ti)e of t(e "o&& of &ai# ve(i!"e (i!( i&
in vio"ation of t(e a't(ori:e# #river !"a'&e of t(e
in&'ran!e .o"i!y, (i!( &tate&, to itH
PAUT1O<I?>E E<IM><H
Any of t(e fo""oin$H @aA T(e In&'re# @+A Any
.er&on #rivin$ on t(e In&'re#N& or#er, or it( (i&
.er)i&&ion- Provi#e# t(at t(e .er&on #rivin$ i&
.er)itte#, in a!!or#an!e it( t(e "i!en&in$ or
INSURANCE Page 80
ot(er "a& or re$'"ation&, to #rive t(e S!(e#'"e#
Me(i!"e, or (a& +een .er)itte# an# i& not
#i&;'a"ifie# +y or#er of a Co'rt of /a or +y
rea&on of any ena!t)ent or re$'"ation in t(at
+e(a"f-P
, On Nov4C, 4562, .rivate re&.on#ent& re;'e&te#
fro) .etitioner *CP for a &'&.en&ion of .ay)ent on
t(e )ont("y a)orti:ation a$ree# '.on #'e to t(e
"o&& of t(e ve(i!"e an#, &in!e t(e !arna..e# ve(i!"e
a& in&'re# it( .etitioner Per"a, &ai# in&'ran!e
!o).any &(o'"# +e )a#e to .ay t(e re)ainin$
+a"an!e of t(e .ro)i&&ory note an# t(e !(atte"
)ort$a$e !ontra!t-
, Per"a, (oever, #enie# .rivate re&.on#ent&N !"ai)-
Con&e;'ent"y, .etitioner *CP #e)an#e# t(at .rivate
re&.on#ent& .ay t(e (o"e +a"an!e of t(e .ro)i&&ory
note or to ret'rn t(e ve(i!"e +'t t(e "atter ref'&e#-
, On G'"y29, 4563, .etitioner *CP fi"e# a !o)."aint
a$ain&t .rivate re&.on#ent&, (o in t'rn fi"e# an
a)en#e# t(ir# .arty !o)."aint a$ain&t .etitioner
Per"a on Ee!6, 4563- After tria" on t(e )erit&, TC
or#ere# &.& /i) to .ay Joint"y an# &evera""y, ."aintiff
t(e &') of P99,099-53 ."'& intere&t t(ereon at t(e
rate of 2DQ .er ann') fro) G'"y 2, 4563 'nti" f'""y
.ai#; a& e"" a& t(e !o&t of &'it- It a"&o or#ere# t(e
#i&)i&&a" of t(e T(ir# .arty !o)."aint a$ain&t T(ir#,
Party Eefen#ant-
, U.on a..ea", CA rever&e# &ai# #e!i&ion
, After .etitioner&N &e.arate M*<& ere #enie# +y
CA, .etitioner& fi"e# t(e&e &e.arate .etition& for
revie on !ertiorari-
ISSUE
4- 0ON t(ere a& $rave a+'&e of #i&!retion on t(e
.art of t(e a..e""ate !o'rt in (o"#in$ t(at .rivate
re&.on#ent& #i# not vio"ate t(e in&'ran!e !ontra!t
+e!a'&e t(e a't(ori:e# #river !"a'&e i& not a.."i!a+"e
to t(e PT(eftP !"a'&e of &ai# Contra!t
2- 0ON t(e "o&& of t(e !o""atera" e%e).te# t(e
#e+tor fro) (i& a#)itte# o+"i$ation& 'n#er t(e
.ro)i&&ory note .arti!'"ar"y t(e .ay)ent of intere&t,
"iti$ation e%.en&e& an# attorneyN& fee&
HELD
4- NO
, T(e !o).re(en&ive in&'ran!e .o"i!y i&&'e# +y
.etitioner Per"a 'n#ertoo2 to in#e)nify t(e .rivate
re&.on#ent& a$ain&t "o&& or #a)a$e& to t(e !ar @aA
+y a!!i#enta" !o""i&ion or overt'rnin$, or !o""i&ion or
overt'rnin$ !on&e;'ent '.on )e!(ani!a" +rea2#on
or !on&e;'ent '.on ear an# tear; @+A +y fire,
e%terna" e%."o&ion, &e"f,i$nition or "i$(tnin$ or
+'r$"ary, (o'&e+rea2in$ or t(eft; an# @!A +y
)a"i!io'& a!t-
, 0(ere a !ar i& 'n"af'""y an# ron$f'""y ta2en
it(o't t(e onerN& !on&ent or 2no"e#$e, &'!(
ta2in$ !on&tit'te& t(eft, an#, t(erefore, it i& t(e
PT1>*TP !"a'&e, an# not t(e PAUT1O<I?>E E<IM><P
!"a'&e, t(at &(o'"# a.."y-T(e ri&2 a$ain&t a!!i#ent i&
#i&tin!t fro) t(e ri&2 a$ain&t t(eft- T(e Na't(ori:e#
#river !"a'&eN in a ty.i!a" in&'ran!e .o"i!y a& in
!onte)."ation or anti!i.ation of a!!i#ent in t(e "e$a"
&en&e in (i!( it &(o'"# +e 'n#er&too#, an# not in
!onte)."ation or anti!i.ation of an event &'!( a&
t(eft- T(e #i&tin!tion often &ei:e# '.on +y in&'ran!e
!o).anie& in re&i&tin$ !"ai)& fro) t(eir a&&'re#&
+eteen #eat( o!!'rrin$ a& a re&'"t of a!!i#ent an#
#eat( o!!'rrin$ a& a re&'"t of intent )ay a.."y to t(e
!a&e at +ar-
, If t(e in&'re# ve(i!"e (a# fi$'re# in an a!!i#ent at
t(e ti)e &(e #rove it it( an e%.ire# "i!en&e, t(en,
a..e""ee Per"a Co).ania !o'"# .ro.er"y re&i&t
a..e""ant&N !"ai) for in#e)nifi!ation for t(e "o&& or
#e&tr'!tion of t(e ve(i!"e re&'"tin$ fro) t(e a!!i#ent-
B't in t(e .re&ent !a&e, t(e "o&& of t(e in&'re#
ve(i!"e #i# not re&'"t fro) an a!!i#ent (ere intent
a& invo"ve#; t(e "o&& in t(e .re&ent !a&e a&
!a'&e# +y t(eft, t(e !o))i&&ion of (i!( a&
atten#e# +y intent-P
, T(ere i& no !a'&a" !onne!tion +eteen t(e
.o&&e&&ion of a va"i# #riverN& "i!en&e an# t(e "o&& of a
ve(i!"e- To r'"e ot(eri&e o'"# ren#er !ar in&'ran!e
.ra!ti!a""y a &(a) &in!e an in&'ran!e !o).any !an
ea&i"y e&!a.e "ia+i"ity +y !itin$ re&tri!tion& (i!( are
not a.."i!a+"e or $er)ane to t(e !"ai), t(ere+y
re#'!in$ in#e)nity to a &(a#o-
2- T(e !o'rt a$ree& it( *CP t(at /i) &.o'&e& are
not re"ieve# of t(eir o+"i$ation to .ay t(e for)er t(e
in&ta"")ent& #'e on t(e .ro)i&&ory note on a!!o'nt
of t(e "o&& of t(e a'to)o+i"e- T(e !(atte" )ort$a$e
!on&tit'te# over t(e a'to)o+i"e i& )ere"y an
a!!e&&ory !ontra!t to t(e .ro)i&&ory note- Bein$ t(e
.rin!i.a" !ontra!t, t(e .ro)i&&ory note i& 'naffe!te#
+y (atever +efa""& t(e &'+Je!t )atter of t(e
a!!e&&ory !ontra!t-
, T(e 'n.ai# +a"an!e on t(e .ro)i&&ory note &(o'"#
+e .ai#, an# not J'&t t(e in&ta"")ent& #'e an#
.aya+"e +efore t(e a'to)o+i"e a& !arna..e#, a&
errono'&"y (e"# +y t(e CA
, 1oever, t(i& #oe& not )ean t(at .rivate
re&.on#ent& are +o'n# to .ay t(e intere&t, "iti$ation
e%.en&e& an# attorneyN& fee& &ti.'"ate# in t(e
.ro)i&&ory note- Be!a'&e of t(e .e!'"iar re"ation&(i.
+eteen t(e t(ree !ontra!t& in t(i& !a&e, i- e-, t(e
.ro)i&&ory note, t(e !(atte" )ort$a$e !ontra!t an#
t(e in&'ran!e .o"i!y, t(e Co'rt i& !o).e""e# to
!on&tr'e a"" t(ree !ontra!t& a& inti)ate"y interre"ate#
to ea!( ot(er, #e&.ite t(e fa!t t(at at fir&t $"an!e
t(ere i& no re"ation&(i. (at&oever +eteen t(e
.artie& t(ereto-
, Un#er t(e .ro)i&&ory note, /i) &.o'&e& are
o+"i$e# to .ay S'.er!ar&, In!- t(e a)o'nt &tate#
t(erein in a!!or#an!e it( t(e &!(e#'"e .rovi#e# for-
To &e!'re &ai# .ro)i&&ory note, .rivate re&.on#ent&
!on&tit'te# a !(atte" )ort$a$e in favor of S'.er!ar&,
In!- over t(e a'to)o+i"e t(e for)er .'r!(a&e# fro)
t(e "atter- T(e !(atte" )ort$a$e, in t'rn, re;'ire#
.rivate re&.on#ent& to in&'re t(e a'to)o+i"e an# to
)a2e t(e .ro!ee#& t(ereof .aya+"e to S'.er!ar&,
In!- T(e .ro)i&&ory note an# !(atte" )ort$a$e ere
a&&i$ne# +y S'.er!ar&, In!- to .etitioner *CP, it(
t(e 2no"e#$e of .rivate re&.on#ent&- Private
re&.on#ent& ere a+"e to &e!'re an in&'ran!e .o"i!y
fro) .etitioner Per"a, an# t(e &a)e a& )a#e
&.e!ifi!a""y .aya+"e to .etitioner *CP-
, *ro) t(e a+ove)entione# .rovi&ion t(at '.on t(e
"o&& of t(e in&'re# ve(i!"e, t(e in&'ran!e !o).any
Per"a 'n#erta2e& to .ay #ire!t"y to t(e )ort$a$or or
to t(eir a&&i$nee, *CP, t(e o't&tan#in$ +a"an!e of
t(e )ort$a$e at t(e ti)e of &ai# "o&& 'n#er t(e
)ort$a$e !ontra!t- If t(e !"ai) on t(e in&'ran!e
.o"i!y (a# +een a..rove# +y .etitioner Per"a, it
o'"# (ave .ai# t(e .ro!ee#& t(ereof #ire!t"y to
.etitioner *CP, an# t(i& o'"# (ave (a# t(e effe!t of
e%tin$'i&(in$ .rivate re&.on#ent&N o+"i$ation to
.etitioner *CP- T(erefore, .rivate re&.on#ent& ere
J'&tifie# in a&2in$ .etitioner *CP to #e)an# t(e
'n.ai# in&ta"")ent& fro) .etitioner Per"a-
, Be!a'&e .etitioner Per"a (a# 'nrea&ona+"y #enie#
t(eir va"i# !"ai), .rivate re&.on#ent& &(o'"# not +e
)a#e to .ay t(e intere&t, "i;'i#ate# #a)a$e& an#
attorneyN& fee& a& &ti.'"ate# in t(e .ro)i&&ory note-
A& )entione# a+ove, t(e !ontra!t of in#e)nity a&
.ro!'re# to in&'re t(e ret'rn of t(e )oney "oane#
fro) .etitioner *CP, an# t(e 'nJ'&tifie# ref'&a" of
.etitioner Per"a to re!o$ni:e t(e va"i# !"ai) of t(e
.rivate re&.on#ent& &(o'"# not in any ay .reJ'#i!e
t(e "atter-
, Private re&.on#ent& !an not +e &ai# to (ave 'n#'"y
enri!(e# t(e)&e"ve& at t(e e%.en&e of *CP &in!e
t(ey i"" +e re;'ire# to .ay t(e "atter t(e 'n.ai#
+a"an!e of it& o+"i$ation 'n#er t(e .ro)i&&ory note-
, In vie of t(e fore$oin$ #i&!'&&ion, 0e (o"# t(at
t(e Co'rt of A..ea"& #i# not err in re;'irin$
.etitioner Per"a to in#e)nify .rivate re&.on#ent& for
t(e "o&& of t(eir in&'re# ve(i!"e- 1oever, t(e "atter
INSURANCE Page 81
&(o'"# +e or#ere# to .ay .etitioner *CP t(e a)o'nt
of P99,099-53, re.re&entin$ t(e 'n.ai# in&ta"")ent&
fro) Ee!e)+er 30, 4562 '. to G'"y 4, 4563, a&
&(on in t(e &tate)ent of a!!o'nt .re.are# +y
.etitioner *CP, 46 ."'& "e$a" intere&t fro) G'"y 2,
4563 'nti" f'""y .ai#-
, A& to t(e aar# of )ora" #a)a$e&, e%e)."ary
#a)a$e& an# attorneyN& fee&, .rivate re&.on#ent&
are "e$a""y entit"e# to t(e &a)e &in!e Per"a (a# a!te#
in +a# fait( +y 'nrea&ona+"y ref'&in$ to (onor t(e
in&'ran!e !"ai) of t(e .rivate re&.on#ent&- Be&i#e&,
aar#& for )ora" an# e%e)."ary #a)a$e&, a& e"" a&
attorneyN& fee& are "eft to t(e &o'n# #i&!retion of t(e
Co'rt- S'!( #i&!retion, if e"" e%er!i&e#, i"" not +e
#i&t'r+e# on a..ea"-
Disposition t(e a&&ai"e# #e!i&ion of t(e CA i&
(ere+y MOEI*I>E to re;'ire .rivate re&.on#ent& to
.ay .etitioner *CP t(e a)o'nt of P99,099-53, it(
"e$a" intere&t fro) G'"y 2, 4563 'nti" f'""y .ai#- T(e
#e!i&ion a..ea"e# fro) i& (ere+y affir)e# a& to a""
ot(er re&.e!t&- No .rono'n!e)ent a& to !o&t&-
SHAFER $. FUDGE
46C SC<A 366
PAEI//A; Nove)+er 4D, 4566

NATURE
Petition for revie on !ertiorari
FACTS
, S(er)an S(afer o+taine# a .rivate !ar .o"i!y over
(i& *or# /a&er fro) Ma2ati In&'ran!e Co).any, In!-,
for t(ir# .arty "ia+i"ity- E'rin$ t(e effe!tivity of t(e
.o"i!y, an infor)ation for re!2"e&& i).r'#en!e
re&'"tin$ in #a)a$e to .ro.erty an# &erio'& .(y&i!a"
inJ'rie& a& fi"e# a$ain&t &(afer- T(e infor)ation
&ai# t(at on or a+o't t(e 4Ct( #ay of May 4569, in
t(e City of O"on$a.o- S(afer (it an# +').e# a
Mo"2&a$en !ar one# an# #riven +y *e"ino ""ano y
/e$a&.i, t(ere+y !a'&in$ #a)a$e in t(e tota" a)o'nt
of P42,3D9-00 an# a& a re&'"t t(ereof one Goven!io
Po+"ete, Sr- (o a& on +oar# of t(e &ai#
Mo"2&a$en !ar &'&taine# .(y&i!a" inJ'rie& (i!(
inJ'rie& !a'&in$ #efor)ity on t(e fa!e- T(e oner of
t(e #a)a$e# Mo"2&a$en !ar fi"e# a &e.arate !ivi"
a!tion a$ain&t .etitioner for #a)a$e&, (i"e Goven!io
Po+"ete, Sr-, (o a& a .a&&en$er in t(e Mo"2&a$en
!ar, #i# not re&erve (i& ri$(t to fi"e a &e.arate !ivi"
a!tion for #a)a$e&- In&tea#, in t(e !o'r&e of t(e tria"
in t(e !ri)ina" !a&e, Po+"ete, Sr- te&tifie# on (i&
!"ai) for #a)a$e& for t(e &erio'& .(y&i!a" inJ'rie&
(i!( (e !"ai)e# to (ave &'&taine# a& a re&'"t of t(e
a!!i#ent-
, T(e !o'rt i&&'e# an or#er #i&)i&&in$ t(e t(ir# .arty
!o)."aint on t(e $ro'n# t(at it a& .re)at're,
+a&e# on t(e .re)i&e t(at 'n"e&& t(e a!!'&e#
@(erein .etitionerA i& fo'n# $'i"ty an# &enten!e# to
.ay t(e offen#e# .arty @Po+"ete Sr-A in#e)nity or
#a)a$e&, t(e t(ir# .arty !o)."aint i& it(o't !a'&e
of a!tion- T(e !o'rt f'rt(er &tate# t(at t(e +etter
.ro!e#'re i& for t(e a!!'&e# @.etitionerA to ait for
t(e o't!o)e of t(e !ri)ina" a&.e!t of t(e !a&e to
#eter)ine (et(er or not t(e a!!'&e#, a"&o t(e t(ir#
.arty ."aintiff, (a& a !a'&e of a!tion a$ain&t t(e t(ir#
.arty #efen#ant for t(e enfor!e)ent of it& t(ir# .arty
"ia+i"ity @TP/A 'n#er t(e in&'ran!e !ontra!t- 6
Petitioner )ove# for re!on&i#eration of &ai# or#er,
+'t t(e )otion a& #enie#; (en!e, t(i& .etition-
ISSUE
0ON t(e !o'rt a ;'o erre# in #i&)i&&in$ .etitionerN&
t(ir# .arty !o)."aint on t(e $ro'n# t(at .etitioner
(a# no !a'&e of a!tion yet a$ain&t t(e in&'ran!e
!o).any
HELD
F>S
, T(ere i& no nee# on t(e .art of t(e in&'re# to ait
for t(e #e!i&ion of t(e tria" !o'rt fin#in$ (i) $'i"ty of
re!2"e&& i).r'#en!e- T(e o!!'rren!e of t(e inJ'ry to
t(e t(ir# .arty i))e#iate"y $ave ri&e to t(e "ia+i"ity
of t(e in&'rer 'n#er it& .o"i!y- <e&.on#ent in&'ran!e
!o).anyN& !ontention t(at t(e t(ir# .arty !o)."aint
invo"ve& e%traneo'& )atter (i!( i"" on"y !"'tter,
!o)."i!ate an# #e"ay t(e !ri)ina" !a&e i& it(o't
)erit- T(e !ivi" a&.e!t of t(e offen&e !(ar$e#, i.e-,
&erio'& .(y&i!a" inJ'rie& a""e$e#"y &'ffere# +y
Goven!io Po+"ete, Sr-, a& i)."ie#"y in&tit'te# it(
t(e !ri)ina" !a&e- Petitioner )ay t('& rai&e a""
#efen&e& avai"a+"e to (i) in&ofar a& t(e !ri)ina" an#
!ivi" a&.e!t& of t(e !a&e are !on!erne#- T(e !"ai) of
.etitioner for .ay)ent of in#e)nity to t(e inJ're#
t(ir# .arty, 'n#er t(e in&'ran!e .o"i!y, for t(e
a""e$e# +o#i"y inJ'rie& !a'&e# to &ai# t(ir# .arty,
aro&e fro) t(e offen&e !(ar$e# in t(e !ri)ina" !a&e,
fro) (i!( t(e inJ're# @Goven!io Po+"ete, Sr-A (a&
&o'$(t to re!over !ivi" #a)a$e&- 1en!e, &'!( !"ai)
of .etitioner a$ain&t t(e in&'ran!e !o).any !annot
+e re$ar#e# a& not re"ate# to t(e !ri)ina" a!tion-
, A t(ir# .arty !o)."aint i& a #evi!e a""oe# +y t(e
r'"e& of .ro!e#'re +y (i!( t(e #efen#ant !an +rin$
into t(e ori$ina" &'it a .arty a$ain&t (o) (e i""
(ave a !"ai) for in#e)nity or re)'neration a& a
re&'"t of a "ia+i"ity e&ta+"i&(e# a$ain&t (i) in t(e
ori$ina" &'it-
6B
T(ir# .arty !o)."aint& are a""oe# to
)ini)i:e t(e n')+er of "a&'it& an# avoi# t(e
ne!e&&ity of +rin$in$ to @2A or )ore a!tion&
invo"vin$ t(e &a)e &'+Je!t )atter- T(ey are
.re#i!ate# on t(e nee# for e%.e#ien!y an# t(e
avoi#an!e of 'nne!e&&ary "a&'it&- If it a..ear&
.ro+a+"e t(at a &e!on# a!tion i"" re&'"t if t(e
."aintiff .revai"&, an# t(at t(i& re&'"t !an +e avoi#e#
+y a""oin$ t(e t(ir# .arty !o)."aint to re)ain, t(en
t(e )otion to #i&)i&& t(e t(ir# .arty !o)."aint
&(o'"# +e #enie#-
, Co).'"&ory Motor Me(i!"e /ia+i"ity In&'ran!e @t(ir#
.arty "ia+i"ity, or TP/A i& .ri)ari"y inten#e# to .rovi#e
!o).en&ation for t(e #eat( or +o#i"y inJ'rie&
&'ffere# +y inno!ent t(ir# .artie& or .a&&en$er& a& a
re&'"t of a ne$"i$ent o.eration an# '&e of )otor
ve(i!"e&- T(e vi!ti)& an#Ror t(eir #e.en#ent& are
a&&'re# of i))e#iate finan!ia" a&&i&tan!e, re$ar#"e&&
of t(e finan!ia" !a.a!ity of )otor ve(i!"e oner&-
, T(e "ia+i"ity of t(e in&'ran!e !o).any 'n#er t(e
Co).'"&ory Motor Me(i!"e /ia+i"ity In&'ran!e i& for
"o&& or #a)a$e- 0(ere an in&'ran!e .o"i!y in&'re&
#ire!t"y a$ain&t "ia+i"ity, t(e in&'rerN& "ia+i"ity a!!r'e&
i))e#iate"y '.on t(e o!!'rren!e of t(e inJ'ry or
event '.on (i!( t(e "ia+i"ity #e.en#&, an# #oe& not
#e.en# on t(e re!overy of J'#$)ent +y t(e inJ're#
.arty a$ain&t t(e in&'re#-
, T(e inJ're# for (o) t(e !ontra!t of in&'ran!e i&
inten#e# !an &'e #ire!t"y t(e in&'rer- T(e $enera"
.'r.o&e of &tat'te& ena+"in$ an inJ're# .er&on to
.ro!ee# #ire!t"y a$ain&t t(e in&'rer i& to .rote!t
inJ're# .er&on& a$ain&t t(e in&o"ven!y of t(e in&'re#
(o !a'&e& &'!( inJ'ry, an# to $ive &'!( inJ're#
.er&on a !ertain +enefi!ia" intere&t in t(e .ro!ee#& of
t(e .o"i!y, an# &tat'te& are to +e "i+era""y !on&tr'e#
&o t(at t(eir inten#e# .'r.o&e )ay +e a!!o)."i&(e#-
It (a& even +een (e"# t(at &'!( a .rovi&ion !reate& a
!ontra!t'a" re"ation (i!( in're& to t(e +enefit of
any an# every .er&on (o )ay +e ne$"i$ent"y
inJ're# +y t(e na)e# in&'re# a& if &'!( inJ're#
.er&on ere &.e!ifi!a""y na)e# in t(e .o"i!y-
, In t(e event t(at t(e inJ're# fai"& or ref'&e& to
in!"'#e t(e in&'rer a& .arty #efen#ant in (i& !"ai) for
in#e)nity a$ain&t t(e in&'re#, t(e "atter i& not
.revente# +y "a to avai" of t(e .ro!e#'ra" r'"e&
inten#e# to avoi# )'"ti."i!ity of &'it&- Not even a Pno
a!tionP !"a'&e 'n#er t(e .o"i!y,(i!( re;'ire& t(at a
fina" J'#$)ent +e fir&t o+taine# a$ain&t t(e in&'re#
an# t(at on"y t(ereafter !an t(e .er&on in&'re#
re!over on t(e .o"i!y !an .revai" over t(e <'"e& of
INSURANCE Page 82
Co'rt .rovi&ion& ai)e# at avoi#in$ )'"ti."i!ity of
&'it&-
Disposition in&tant .etition i& G<ANT>E- T(e
;'e&tione# or#er #ate# 2D A.ri" 456C i& S>T ASIE>
an# a ne one entere# a#)ittin$ .etitionerN& t(ir#
.arty !o)."aint a$ain&t t(e .rivate re&.on#ent
Ma2ati In&'ran!e Co).any, In!-
VDA DE MAGLANA $. CONSOLACION
242 SC<A 266
<OM><O; A'$'&t 6, 4552
NATURE
Petition for !ertiorari
FACTS
, /o.e Ma$"ana a& an e)."oyee of t(e B'rea' of
C'&to)& (o&e or2 &tation a& at /a&a, (ere in
Eavao City- One #ay, (en (e a& on (i& ay to (i&
or2, (e )et an a!!i#ent t(at re&'"te# in (i& #eat(-
1e #ie# on t(e &.ot-
, T(e PUG Jee. t(at +').e# t(e #e!ea&e# a& #riven
+y Pe.ito Into, o.erate# an# one# +y #efen#ant
Ee&traJo- *ro) t(e inve&ti$ation !on#'!te# +y t(e
traffi! inve&ti$ator, t(e PUG Jee. a& overta2in$
anot(er .a&&en$er Jee. t(at a& $oin$ toar#& t(e
!ity .o+"a!ion- 0(i"e overta2in$, t(e PUG Jee. of
#efen#ant Ee&traJo r'nnin$ a+rea&t it( t(e
overta2en Jee., +').e# t(e )otor!y!"e #riven +y
t(e #e!ea&e#- T(e .oint of i).a!t a& on t(e "ane of
t(e )otor!y!"e an# t(e #e!ea&e# a& t(ron fro)
t(e roa# an# )et (i& 'nti)e"y #eat(-
, 1eir& of /o.e Ma$"ana, Sr- fi"e# an a!tion for
#a)a$e& an# attorneyN& fee& a$ain&t o.erator
Patri!io Ee&traJo an# t(e Afi&!o In&'ran!e
Cor.oration @A*ISCOA- An infor)ation for (o)i!i#e
t(r' re!2"e&& i).r'#en!e a& a"&o fi"e# a$ain&t
Pe.ito Into-
, E'rin$ t(e .en#en!y of t(e !ivi" !a&e, Into a&
&enten!e# to &'ffer an in#eter)inate .ena"ty, it( a""
t(e a!!e&&ory .ena"tie& .rovi#e# +y "a, an# to
in#e)nify t(e (eir& of /o.e Ma$"ana, Sr- in t(e
a)o'nt of te"ve t(o'&an# .e&o& it( &'+&i#iary
i).ri&on)ent in !a&e of in&o"ven!y, ."'& five
t(o'&an# .e&o& in t(e !on!e.t of )ora" an#
e%e)."ary #a)a$e& it( !o&t&- No a..ea" a&
inter.o&e# +y a!!'&e# (o "ater a.."ie# for
.ro+ation-
, T(e "oer !o'rt ren#ere# a #e!i&ion fin#in$ t(at
Ee&traJo (a# not e%er!i&e# &'ffi!ient #i"i$en!e a& t(e
o.erator of t(e Jee.ney or#erin$ (i) to .ay ."aintiff&
t(e &') for "o&& of in!o)e; f'nera" an# +'ria"
e%.en&e& of t(e #e!ea&e#; )ora" #a)a$e&, an#
attorneyN& fee& an# !o&t& of &'it- T(e #efen#ant
in&'ran!e !o).any i& or#ere# to rei)+'r&e
#efen#ant Ee&traJo (atever a)o'nt& t(e "atter
&(a"" (ave .ai# on"y '. to t(e e%tent of it& in&'ran!e
!overa$e-
, Petitioner& fi"e# a )otion for t(e re!on&i#eration of
t(e &e!on# .ara$ra.( of t(e #e!i&ion !onten#in$ t(at
A*ISCO &(o'"# not )ere"y +e (e"# &e!on#ari"y "ia+"e
+e!a'&e t(e In&'ran!e Co#e .rovi#e& t(at t(e
in&'rerN& "ia+i"ity i& P#ire!t an# .ri)ary an#Ror Joint"y
an# &evera""y it( t(e o.erator of t(e ve(i!"e,
a"t(o'$( on"y '. to t(e e%tent of t(e in&'ran!e
!overa$e-P 1en!e, t(ey ar$'e# t(at t(e P20,000-00
!overa$e of t(e in&'ran!e .o"i!y i&&'e# +y A*ISCO,
&(o'"# (ave +een aar#e# in t(eir favor-
, A*ISCO ar$'e# t(at &in!e t(e In&'ran!e Co#e #oe&
not e%.re&&"y .rovi#e for a &o"i#ary o+"i$ation, t(e
.re&').tion i& t(at t(e o+"i$ation i& Joint-
, T(e "oer !o'rt #enie# t(e )otion for
re!on&i#eration r'"in$ t(at &in!e t(e in&'ran!e
!ontra!t Pi& in t(e nat're of &'rety&(i., t(en t(e
"ia+i"ity of t(e in&'rer i& &e!on#ary on"y '. to t(e
e%tent of t(e in&'ran!e !overa$e-P
, Petitioner& fi"e# a &e!on# )otion for
re!on&i#eration reiteratin$ t(at t(e "ia+i"ity of t(e
in&'rer i& #ire!t, .ri)ary an# &o"i#ary it( t(e
Jee.ney o.erator +e!a'&e t(e .etitioner& +e!a)e
#ire!t +enefi!iarie& 'n#er t(e .rovi&ion of t(e .o"i!y
(i!(, in effe!t, i& a &ti.'"ation #our autrui- T(i&
)otion a& "i2ei&e #enie# for "a!2 of )erit-
ISSUE
0ON A*ISCO !an +e (e"# #ire!t"y "ia+"e
HELD
F>S
, A& t(i& Co'rt r'"e# in S!afer vs. Sud"e$ 9/C of
-lon"a#o City$ Br. 4K, P[](ere an in&'ran!e .o"i!y
in&'re& #ire!t"y a$ain&t "ia+i"ity, t(e in&'rerN& "ia+i"ity
a!!r'e& i))e#iate"y '.on t(e o!!'rren!e of t(e
inJ'ry or even '.on (i!( t(e "ia+i"ity #e.en#&, an#
#oe& not #e.en# on t(e re!overy of J'#$)ent +y t(e
inJ're# .arty a$ain&t t(e in&'re#-P
, T(e 'n#er"yin$ rea&on +e(in# t(e t(ir# .arty
"ia+i"ity @TP/A of t(e Co).'"&ory Motor Me(i!"e
/ia+i"ity In&'ran!e i& Pto .rote!t inJ're# .er&on&
a$ain&t t(e in&o"ven!y of t(e in&'re# (o !a'&e&
&'!( inJ'ry, an# to $ive &'!( inJ're# .er&on a !ertain
+enefi!ia" intere&t in t(e .ro!ee#& of t(e .o"i!y - - -P
Sin!e .etitioner& (a# re!eive# fro) A*ISCO t(e &')
of P9,000-00 'n#er t(e no,fa'"t !"a'&e, A*ISCON&
"ia+i"ity i& no "i)ite# to P49,000-00-
, 1oever, e !annot a$ree t(at A*ISCO i& "i2ei&e
&o"i#ari"y "ia+"e it( Ee&traJo- In Malayan 'nsurance
Co.$ 'nc. v. Court of A##eals, t(i& Co'rt (a# t(e
o..ort'nity to re&o"ve t(e i&&'e a& to t(e nat're of
t(e "ia+i"ity of t(e in&'rer an# t(e in&'re# vis-a-vis
t(e t(ir# .arty inJ're# in an a!!i#ent- 0e
!ate$ori!a""y r'"e# t('&H 0(i"e it i& tr'e t(at (ere
t(e in&'ran!e !ontra!t .rovi#e& for in#e)nity a$ain&t
"ia+i"ity to t(ir# .er&on&, &'!( t(ir# .er&on& !an
#ire!t"y &'e t(e in&'rer, (oever, t!e direct liability
of t!e insurer under indenity contracts a"ainst
t!ird #arty liability does not ean t!at t!e insurer
can be !eld solidarily liable ,it! t!e insured and/or
t!e ot!er #arties found at fault- /!e liability of t!e
insurer is based on contractE t!at of t!e insured is
based on tort- In t(e !a&e at +ar, .etitioner a&
in&'rer of Sio C(oy, i& "ia+"e to re&.on#ent Ma""eJo&
@t(e inJ're# t(ir# .artyA, +'t it !annot, a& in!orre!t"y
(e"# +y t(e tria" !o'rt, +e )a#e P&o"i#ari"yP "ia+"e
it( t(e to .rin!i.a" tortfea&or&, na)e"y
re&.on#ent& Sio C(oy an# San /eon <i!e Mi"", In!-
For if #etitioner-insurer ,ere solidarily liable ,it!
said$ t,o &2) res#ondents by reason of t!e indenity
contract a"ainst t!ird #arty liability 'n#er (i!( an
in&'rer !an +e #ire!t"y &'e# +y a t(ir# .arty t!is ,ill
result in a violation of t!e #rinci#les underlyin"
solidary obli"ation and insurance contracts-
, 0(i"e in &o"i#ary o+"i$ation&, t(e !re#itor )ay
enfor!e t(e entire o+"i$ation a$ain&t one of t(e
&o"i#ary #e+tor&, in an in&'ran!e !ontra!t, t(e
in&'rer 'n#erta2e& for a !on&i#eration to in#e)nify
t(e in&'re# a$ain&t "o&&, #a)a$e or "ia+i"ity ari&in$
fro) an 'n2non or !ontin$ent event-
, Si)i"ar"y, .etitioner& (erein !annot va"i#"y !"ai)
t(at A*ISCO, (o&e "ia+i"ity 'n#er t(e in&'ran!e
.o"i!y i& a"&o P20,000-00, !an +e (e"# &o"i#ari"y "ia+"e
it( Ee&traJo for t(e tota" a)o'nt of P93,504-C0 in
a!!or#an!e it( t(e #e!i&ion of t(e "oer !o'rt-
Sin!e 'n#er +ot( t(e "a an# t(e in&'ran!e .o"i!y,
A*ISCON& "ia+i"ity i& on"y '. to P20,000-00, t(e
&e!on# .ara$ra.( of t(e #i&.o&itive .ortion of t(e
#e!i&ion in ;'e&tion )ay (ave 'nittin$"y &on
!onf'&ion a)on$ t(e .etitioner& an# t(eir !o'n&e"-
0(at &(o'"# (ave +een !"ear"y &tre&&e# a& to "eave
no roo) for #o'+t a& t(e "ia+i"ity of A*ISCO 'n#er
t(e e%."i!it ter)& of t(e in&'ran!e !ontra!t-
Disposition .re&ent .etition i& (ere+y G<ANT>E-
T(e aar# of P26,600-00 re.re&entin$ "o&& of in!o)e
i& INC<>AS>E to P452,000-00 an# t(e #eat(
in#e)nity of P42,000-00 to P90,000-00-
INSURANCE Page 83
FAR EASTERN SURETY $. MISA
29 SC<A 663
<>F>S; O!to+er 26, 4566
NATURE
A..ea" +y .etition for revie fro) a CA J'#$)ent
FACTS
, So!orro Ean!e" M#a-#e Mi&a an# Ara!e"i Pinto (ire#
a ta%i !a+ o.erate# +y /a Ma""or!a on Se.te)+er 3,
459C- T(e ta%i t(ey ere ri#in$ in !o""i#e# it( a
$rave" an# &an# tr'!2 re&'"tin$ to inJ'rie& to +ot(
Mi&a an# Pinto-
, T(e to .a&&en$er& in&tit'te# a &'it for #a)a$e&
a$ain&t /a Ma""or!a (o, (i"e #enyin$ re&.on&i+i"ity,
in&tit'te# a t(ir# .arty !o)."aint a$ain&t *ar >a&tern
S'rety to re!o'. fro) t(e "atter any aar# for
#a)a$e& t(at )i$(t +e re!overe# +y t(e .a&&en$er&-
, It o'"# a..ear fro) t(e !a&e t(at a &ti!2er a&
."a!e# in a"" t(e ta%i& of /a Ma""or!a &tatin$ t(at
.a&&en$er& of t(e ta%i& ere in&'re# a$ain&t
a!!i#ent&- T(i& a& #one to enti!e t(e .'+"i! into
.atroni:in$ /a Ma""or!a-
, T(e tria" !o'rt aar#e# to Mi&a an# Pinto a!t'a",
)ora" an# e%e)."ary #a)a$e&, an# attorney=& fee&
.aya+"e +y /a Ma""or!a an# &enten!e# *ar >a&tern to
.ay /a Ma""or!a P40,000- on it& t(ir# .arty "ia+i"ity
in&'ran!e-
, On a..ea", t(e CA, (i"e (o"#in$ t(at t(e !o""i&ion
a& #'e to t(e fa'"t of t(e #river of t(e $rave" an#
&an# tr'!2, fo'n# t(e ta%i !o).any "ia+"e for
#a)a$e& to t(e .a&&en$er& on t(e &tren$t( of it&
re.re&entation !ontaine# in t(e &ti!2er a+ove note#
t(at t(e .a&&en$er& ere in&'re# a$ain&t a!!i#ent&-
In &o r'"in$, t(e CA overr'"e# t(e #efen&e of t(e
in&'ran!e !o).any to t(e effe!t t(at it a&
re&.on&i+"e on"y if t(e in&'re#, /a Ma""or!a, a&
invo"ve# in a!!i#ent& !a'&e# +y, or ari&in$ o't of, t(e
'&e of t(e )otor ve(i!"e- A )otion for
re!on&i#eration a& fi"e# in an# #i&)i&&e# +y t(e CA-
ISSUE
0ON *ar >a&tern S'rety i& "ia+"e to t(e in&'re# on it&
in&'ran!e .o"i!y
HELD
NO
, T(e aar# for #a)a$e& )a#e to t(e .a&&en$er&
a& e%!"'&ive"y .re#i!ate# on t(e re.re&entation
)a#e +y /a Ma""or!a t(at it& .a&&en$er& ere
in&'re# a$ain&t a!!i#ent& an# not +e!a'&e it a& at
fa'"t in !a'&in$ t(e a!!i#ent-
Reasoning
, In t(i& !a&e, t(e fin#in$& of t(e CA an# t(e tria"
!o'rt t(at t(e !a'&ative fa!tor of t(e )i&(a. a& t(e
ne$"i$en!e of t(e $rave" an# tr'!2 #river o'"# (ave
+een &'ffi!ient to re"ieve t(e ta%i !o).any of any
"ia+i"ity ari&in$ fro) t(e a!!i#ent- 1oever, in vie
of t(e &ti!2er in a"" of it& ta%i!a+&, /a Ma""or!a (a&
in&'re# it& .a&&en$er& a$ain&t a!!i#ent&, (et(er it
a& at fa'"t or not- In ot(er or#&, /a Ma""or!a
a!!e.te# t(e re&.on&i+i"ity for #a)a$e& or inJ'rie& to
.a&&en$er& even if it (a# no fa'"t at a""-
, In t(e !a&e of t(e in&'ran!e !o).any, t(e SC r'"e#
t(at it neit(er a't(ori:e# nor !on&ente# to t(e
re.re&entation& )a#e +y t(e ta%i !o).any to it&
.a&&en$er&- A& &'!(, t(e "ia+i"ity of t(e &ai#
in&'ran!e !o).any +a&e# on it& in&'ran!e !ontra!t
i& "i)ite# to t(e re!overy +y t(e in&'re# of a"" &')&,
!o&t an# e%.en&e& (i!( t(e in&'re# &(a"" +e!o)e
"e$a""y "ia+"e- T(e in&'ran!e !o).any t(erefore
!annot +e (e"# "ia+"e for t(e aar#-
, T(e ta%i !o).any i& a#J'#$e# to +e t(e &o"e .arty
re&.on&i+"e for t(e aar#-
Disposition T(e #e!i&ion of t(e CA i& )o#ifie# +y
e"i)inatin$ t(e aar# a$ain&t *ar >a&tern-
PEZA $. ALI<PALA
460 SC<A 34
NA<MASA; A.ri" 49, 4566
NATURE
Motion .rayin$ t(at G'#$e A"i2.a"a +e #e!"are# $'i"ty
of !onte).t of !o'rt for (avin$ #e!i#e# t(e !a&e on
t(e )erit& #e&.ite t(e .en#en!y in t(i& Co'rt of t(e
!ertiorari a!tion in&tit'te# +y t(e ."aintiff&
FACTS
, ve(i!'"ar a!!i#ent it( 2 !(i"#ren r'nnin$ a!ro&&
t(e .at( of a C(evro"et PCarry,A""P, +e"on$in$ to a
.artner&(i. 2non a& Ei)an S Co).any #riven +y
it& #river, Perfe!to A)ar, a& it a& .a&&in$ a
nationa" (i$(ay at +arrio Ma2i"in$ Ca"a)+a,
/a$'na- T(ey ere 2i""e#- It a& in&'re# it( t(e
>).ire In&'ran!e Co-, In!- 'n#er a &o,!a""e#
N!o).re(en&ive !overa$eP .o"i!y, "o&& +y t(eft
e%!"'#e#- T(e .o"i!y a& in for!e at t(e ti)e of t(e
a!!i#ent-
, P"a!i#a Pe:a, t(e )ana$in$ .artner of Ei)an S Co-
fi"e# a !"ai) it( >).ire, for .ay)ent of
!o).en&ation to t(e fa)i"y of t(e 2 !(i"#ren (o
#ie# a& a re&'"t of t(e a!!i#ent- >).ire ref'&e# to
.ay on t(e $ro'n# t(at t(e #river (a# no a't(ority to
o.erate t(e ve(i!"e, a fa!t (i!( it e%.re&&"y
e%!e.te# fro) "ia+i"ity 'n#er t(e .o"i!y- 0(at Pe:a
#i# a& to ne$otiate #ire!t"y it( t(e #e!ea&e#
!(i"#ren fat(er for an o't,of,!o'rt &ett"e)ent- T(e
fat(er a$ree# to a!!e.t P6,200-00 in f'n &ett"e)ent
of t(e "ia+i"ity of t(e ve(i!"e& oner an# #river, an#
Pe:a .ai# (i) t(i& &')-
, Pe2a t(ereafter &'e# >).ire to re!over t(i& &') of
P6,200-00 a& a!t'a" #a)a$e&, a& e"" a& P20,000-00
a& )ora" #a)a$e&, P40,000-00 a& e%e)."ary
#a)a$e&, an# P40,000-00 a& attorneyN& fee&- S(e
a)en#e# (er !o)."aint &(ort"y t(ereafter to in!"'#e
Ei)an S Co- a& a"ternative .arty ."aintiff-
, )mpire3s "asic defense to t(e &'it a& an!(ore#
on t(e e%."i!it re;'ire)ent in t(e .o"i!y "i)itin$ t(e
o.eration of t(e in&'re# ve(i!"e to t(e Pa't(ori:e#
#riverP t(erein #efine#, na)e"y, @aA t(e in&'re#, or
@+A any .er&on #rivin$ on t(e in&'re# or#er or it(
(i& .er)i&&ion, .rovi#e# t(at,
--- t(at t(e .er&on #rivin$ i& .er)ite# in
a!!or#an!e it( t(e "i!en&in$ or ot(er "a& or
re$'"ation& to #rive t(e Motor ve(i!"e or (a& +een
&o .er)itte# an# i& not #i&;'a"ifie# +y or#er of t(e
Co'rt of /a of +y rea&on of any ena!t)ent or
re$'"ation in t(at +e(a"f fro) #rivin$ &'!( Motor
Me(i!"e-,
, #river Perfe!to A)ar, on"y (avin$ a te).orary
o.eratorN& .er)it @TM<A [already e8#iredH (i& #river=&
"i!en&e (avin$ ear"ier +een !onfi&!ate# +y an a$ent
of t(e /an# Tran&.ortation Co))i&&ion for an
a""e$e# vio"ation of /an# Tran&.ortation an# Traffi!
<'"e&, a& not .er)itte# +y "a an# a& in tr't(
#i&;'a"ifie# to o.erate any )otor ve(i!"e; Pe:a
atte).te# to ne'tra"i:e t(at fa!t +y@4A t(e i&&'an!e
of t(e TM< +y t(e /TC offi!er to A)ar; in .roof of t(e
.ro.o&ition t(at t(ere a& no rea&on for !onfi&!ation
of A)arN& "i!en&e @2A A)arN& "i!en&e (a# not e%.ire#,
+'t (a# +een renee#-
, G'#$e A"i2.a"a #i# not a#)it &'!( evi#en!e
ISSUES
4- 0ON G'#$e A"i2a.a"a !o))itte# $rave a+'&e of
#i&!retion in not a#)ittin$ evi#en!e
2- 0ON !onfi&!ation of "i!en&e an# e%.iration of TM<
of t(e #river o'"# &erve a& +ar for Pe:a in
re!overin$ fro) >).ire
INSURANCE Page 84
HELD
4- NO
, >ven .o&itin$ error in t(e G'#$eN& ana"y&i& of t(e
evi#en!e atte).te# to +e intro#'!e# an# (i&
reJe!tion t(ereof, it i& !"ear t(at it a& at )o&t an
error of J'#$)ent, not &'!( an error a& )ay +e
+ran#e# a $rave a+'&e of #i&!retion, i-e-, &'!(
!a.ri!io'& an# (i)&i!a" e%er!i&e of J'#$)ent a& i&
e;'iva"ent to "a!2 of J'ri&#i!tion, a$ain&t (i!( t(e
rit of !ertiorari i"" "ie- In any event, t(e
e&ta+"i&(e# .rin!i."e i& Pt(at r'"in$ of t(e tria" !o'rt
on .ro!e#'ra" ;'e&tion& an# on a#)i&&i+i"ity of
evi#en!e #'rin$ t(e !o'r&e of t(e tria" are
inter"o!'tory in nat're an# )ay not +e t(e &'+Je!t of
&e.arate a..ea" or revie on certiorari, +'t are to +e
a&&i$ne# a& error& an# reviee# in t(e a..ea"
.ro.er"y ta2en fro) t(e #e!i&ion ren#ere# +y t(e
tria" !o'rt on t(e )erit& of t(e !a&e-
, In t(e )eanti)e, G'#$e A"i2.a"a ren#ere#
J'#$)ent on t(e )erit&, &in!e t(e !a&e a& t(en
a"rea#y ri.e for a#J'#i!ation- T(e J'#$)ent or#ere#
#i&)i&&a" of t(e !a&e for fai"'re on t(e .art of t(e
."aintiff to .rove t(eir !a'&e of a!tion a$ain&t
>).ire- Noti!e of t(e J'#$)ent a& &erve# on t(e
.artie& in #'e !o'r&e-
2- F>S
, It o'"# &ee) fair"y o+vio'& t(at (et(er t(e /TC
a$ent a& !orre!t or not in (i& o.inion t(at #river
A)ar (a# vio"ate# &o)e traffi! re$'"ation arrantin$
!onfi&!ation of (i& "i!en&e an# i&&'an!e of a TM< in
"ie' t(ereof, t(i& o'"# not a"ter t(e 'n#i&.'te# fa!t
t(at A)arN& "i!en!e (a# in#ee# +een !onfi&!ate# an#
a TM< i&&'e# to (i), an# t(e TM< (a# a"rea#y
e%.ire# at t(e ti)e t(at t(e ve(i!"e +ein$ o.erate#
+y (i) 2i""e# to !(i"#ren +y a!!i#ent- Neit(er o'"#
.roof of t(e renea" of A)arN& "i!en&e !(an$e t(e
fa!t t(at it (a# rea""y +een ear"ier !onfi&!ate# +y t(e
/TC a$ent-
Disposition .etition i& EISMISS>E for "a!2 of )erit

PERLA COMPANIA DE SEGUROS $. ANCHETA
46D SC<A 4DD
CO<T>S; A'$'&t 6, 4566
NATURE
Petition for !ertiorari an# .ro(i+ition it( .re"i)
inJ'n!tion to revie or#er& of C*I Ca)arine& Norte
FACTS
, Per"a a& t(e in&'rer of a S'.er"ine& +'& (i!(
fi$'re# in a !o""i&ion it( a III S!o't @it=& a 2in# of
ve(i!"eA- InJ're# .a&&en$er& of t(e "atter @an#
re&.on#ent& in t(i& !a&eA fi"e# a !o)."aint for
#a)a$e& a$ain&t S'.er"ine&, t(e +'& #river, an#
Per"a @a& in&'rer of t(e +'&A- C*I G'#$e An!(eta
or#ere# t(at Per"a &(o'"# .ay t(e re&.on#ent&
i))e#iate"y t(e P9000 'n#er t(e 7no fa'"t !"a'&e8 a&
.rovi#e# in Se!- 3C6-
Se!- 3C6H Any !"ai) for #eat( or inJ'ry to any
.a&&en$er or 3
r#
.arty .'r&'ant to t(e .rovi&ion& of
t(i& !(a.ter &(a"" +e .ai# it(o't t(e ne!e&&ity of
.rovin$ fa'"t or ne$"i$en!e of any 2in#- Provi#e#,
T(at for .'r.o&e& of t(i& &e!tion
@iA T(e in#e)nity in re&.e!t of any one .er&on &(a""
not e%!ee# P9,000;
@iiA T(e fo""oin$ .roof& of "o&&, (en &'+)itte#
'n#er oat(, &(a"" +e &'ffi!ient evi#en!e to
&'+&tantiate t(e !"ai)H
@aA Po"i!e re.ort of a!!i#ent, an#
@+A Eeat( !ertifi!ate an# evi#en!e &'ffi!ient to
e&ta+"i&(, t(e .ro.er .ayee, or
@!A Me#i!a" re.ort an# evi#en!e of )e#i!a" or
(o&.ita" #i&+'r&e)ent in re&.e!t of (i!( ref'n# i&
!"ai)e#;
@iiiA C"ai) )ay +e )a#e a$ain&t one )otor ve(i!"e
on"y- 'n t!e case of an occu#ant of a ve!icle$ clai
s!all lie a"ainst t!e insurer of t!e ve!icle in ,!ic!
t!e occu#ant is ridin"$ ountin" or disountin"
fro. In any ot(er !a&e, !"ai) &(a"" "ie a$ain&t t(e
in&'rer of t(e #ire!t"y offen#in$ ve(i!"e- In a"" !a&e&,
t(e ri$(t of t(e .arty .ayin$ t(e !"ai) to re!over
a$ain&t t(e oner of t(e ve(i!"e re&.on&i+"e for t(e
a!!i#ent &(a"" +e )aintaine#-
Per"a #enie# it& "ia+i"ity 'n#er t(e a+ove .rovi&ion
an# &ai# t(at t(e in&'rer of t(e ve(i!"e t(at t(e
re&.on#ent& ere ri#in$ @Ma"ayan In&'ran!e in t(i&
!a&eA &(o'"# +e "ia+"e- It& 2 M*<& #enie#, Per"a fi"e#
t(i& a!tion
ISSUE
0ON Per"a i& t(e in&'rer "ia+"e to in#e)nify 'n#er
Se!- 3C6
HELD
NO
Ratio T(e "a i& very !"ear L t(e !"ai) &(a"" "ie
a$ain&t t(e in&'rer of t(e ve(i!"e in (i!( t(e
7o!!'.ant %%% i& ri#in$,8 an# no ot(er- T(e !"ai)ant
i& not free to !(oo&e fro) (i!( in&'rer (e i"" !"ai)
t(e 7no fa'"t in#e)nity,8 a& t(e "a, +y '&in$ t(e
or# 7&(a""8, )a2e& it )an#atory t(at t(e !"ai) +e
)a#e a$ain&t t(e in&'rer of t(e ve(i!"e in (i!( t(e
o!!'.ant i& ri#in$, )o'ntin$ or #i&)o'ntin$ fro)-
Reasoning
, t(e r'"e& on !"ai)& 'n#er t(e 7no fa'"t in#e)nity8
.rovi&ion, (ere .roof of fa'"t or ne$"i$en!e i& not
ne!e&&ary for .ay)ent of any !"ai) for #eat( or
inJ'ry to a .a&&en$er or to a 3
r#
.arty, are
e&ta+"i&(e#H
4- A !"ai) )ay +e )a#e a$ain&t one )otor ve(i!"e
on"y-
2- If t(e vi!ti) i& an o!!'.ant of a ve(i!"e, t(e !"ai)
&(a"" "ie a$ain&t t(e in&'rer of t(e ve(i!"e in (i!( (e
i& ri#in$, )o'ntin$ or #i&)o'ntin$ fro)-
3- In any ot(er !a&e @i-e- if t(e vi!ti) i& not an
o!!'.ant of a ve(i!"eA, t(e !"ai) &(a"" "ie a$ain&t t(e
in&'rer of t(e #ire!t"y offen#in$ ve(i!"e-
D- In a"" !a&e&, t(e ri$(t of t(e .arty .ayin$ t(e !"ai)
to re!over a$ain&t t(e oner of t(e ve(i!"e
re&.on&i+"e for t(e a!!i#ent &(a"" +e )aintaine#-
,T(at t(e ve(i!"e ri##en )i$(t not +e t(e one t(at
!a'&e# t(e a!!i#ent i& of no )o)ent &in!e t(e "a
it&e"f .rovi#e& t(at t(e .arty .ayin$ t(e !"ai) 'n#er
Se!- 3C6 )ay re!over a$ain&t t(e oner of t(e
ve(i!"e re&.on&i+"e for t(e a!!i#ent- T(i& i& .re!i&e"y
t(e e&&en!e of 7no fa'"t in#e)nity8 in&'ran!e (i!(
a& intro#'!e# to an# )a#e .art of o'r "a& in or#er
to .rovi#e vi!ti)& of ve(i!'"ar a!!i#ent& or t(eir
(eir& i))e#iate !o).en&ation, a"t(o'$( in a "i)ite#
a)o'nt, .en#in$ fina" #eter)ination of (o i&
re&.on&i+"e for t(e a!!i#ent an# "ia+"e for t(e vi!ti)&N
inJ'rie& or #eat(- In t'rn, t(e 7no fa'"t in#e)nity8
.rovi&ion i& .art an# .ar!e" of t(e Co#e .rovi&ion& on
!o).'"&ory )otor ve(i!"e "ia+i"ity in&'ran!e an#
&(o'"# +e rea# to$et(er it( t(e re;'ire)ent for
!o).'"&ory .a&&en$er an#Ror 3
r#
.arty "ia+i"ity
in&'ran!e @Se!- 3CCA (i!( a& )an#ate# in or#er
to en&'re rea#y !o).en&ation for vi!ti)& of
ve(i!'"ar a!!i#ent&-
,Irre&.e!tive of (et(er or not fa'"t or ne$"i$en!e
"ie& it( t(e #river of t(e S'.er"ine& +'&, a&
re&.on#ent& ere not o!!'.ant& of t(e +'&, t(ey
!annot !"ai) t(e 7no fa'"t in#e)nity8 .rovi#e# in
Se!- 3C6 fro) Per"a- T(e !"ai) &(o'"# +e )a#e
a$ain&t t(e in&'rer of t(e ve(i!"e t(ey ere ri#in$-
Disposition Petition G<ANT>E- Or#er& of C*I
or#erin$ Per"a to .ay re&.on#ent& i))e#iate"y
P9000 ANNU//>E an# S>T ASIE>
INSURANCE Page 85
WESTERN GUARANTY CORPORATION $. CA
(RODRIGUEZ ? DE DIOS TRANS)
469 SC<A 692
*>/ICIANO; G'"y 20, 4550
NATURE
Petition for revie t(e #e!i&ion of CA affir)in$ in
toto t(e #a)a$e& aar#e# to .rivate re&.on#ent +y
t(e tria" !o'rt-
FACTS
, <e&.on#ent Pri&!i""a >- <o#ri$'e: a& &tr'!2 +y a
Ee Eio& .a&&en$er +'& one# +y re&.on#ent Ee Eio&
Tran&.ortation Co-, In!- Pri&!i""a a& t(ron to t(e
$ro'n#, (ittin$ (er fore(ea#- S(e a& treate# at t(e
Prota!io >)er$en!y 1o&.ita" an# "ater on
(o&.ita"i:e# at t(e San G'an Ee Eio& 1o&.ita"- 1er
fa!e a& .er)anent"y #i&fi$'re#, !a'&in$ (er &erio'&
an%iety an# )ora" #i&tre&&- <e&.on#ent +'& !o).any
a& in&'re# it( .etitioner 0e&tern G'aranty
Cor.oration @P0e&ternPA 'n#er it& Ma&ter Po"i!y
(i!( .rovi#e#, a)on$ ot(er t(in$&, for .rote!tion
a$ain&t t(ir# .arty "ia+i"ity, t(e re"evant &e!tion
rea#in$ a& fo""o&H
Se!tion 4- /ia+i"ity to t(e P'+"i! X Co).any i"",
&'+Je!t to t(e /i)it& of /ia+i"ity, .ay a"" &')&
ne!e&&ary to #i&!(ar$e "ia+i"ity of t(e in&'re# in
re&.e!t of X
@aA #eat( of or +o#i"y inJ'ry to or #a)a$e to
.ro.erty of any .a&&en$er a& #efine# (erein-
@+A #eat( of or +o#i"y inJ'ry or #a)a$e to .ro.erty
of any T1I<E PA<TF a& #efine# (erein in any
a!!i#ent !a'&e# +y or ari&in$ o't of t(e '&e of t(e
S!(e#'"e Me(i!"e, .rovi#e# t(at t(e "ia+i"ity &(a""
(ave fir&t +een #eter)ine#- In no !a&e, (oever,
&(a"" t(e Co).anyN& tota" .ay)ent 'n#er +ot(
Se!tion I an# Se!tion 44 !o)+ine# e%!ee# t(e
/i)it& of /ia+i"ity &et fort( (erein- 0it( re&.e!t to
#eat( of or +o#i"y inJ'ry to any t(ir# .arty or
.a&&en$er, t(e !o).anyN& .ay)ent .er vi!ti) in
any one a!!i#ent &(a"" not e%!ee# t(e "i)it&
in#i!ate# in t(e S!(e#'"e of in#e)nitie& .rovi#e#
for in t(i& .o"i!y e%!"'#in$ t(e !o&t of a##itiona"
)e#i!ine&, an# &'!( ot(er +'ria" an# f'nera"
e%.en&e& t(at )i$(t (ave +een in!'rre#-
, <e&.on#ent Pri&!i""a <o#ri$'e: fi"e# a !o)."aint for
#a)a$e& +efore t(e <e$iona" Tria" Co'rt of Ma2ati
a$ain&t Ee Eio& Tran&.ortation Co- an# 0a"ter A-
Sa$a <e&.on#ent Ee Eio& Tran&.ortation Co-, in
t'rn, fi"e# a t(ir#,.arty !o)."aint a$ain&t it&
in&'ran!e !arrier, .etitioner 0e&tern- On 6 A'$'&t
4569, t(e tria" !o'rt ren#ere# a #e!i&ion in favor of
re&.on#ent Pri&!i""a >- <o#ri$'e:, aar#in$ )ora"
#a)a$e&, "o&&of earnin$ an# attorneyN& fee& a)on$
ot(er&-
, On a..ea", t(e Co'rt of A..ea"& affir)e# in toto
t(e #e!i&ion of t(e tria" !o'rt-
, Petitioner !onten#& t(at it !annot +e (e"# "ia+"e for
"o&& of earnin$&, )ora" #a)a$e& an# attorneyN& fee&
+e!a'&e t(e&e ite)& are not a)on$ t(o&e in!"'#e# in
t(e S!(e#'"e of In#e)nitie& &et fort( in t(e
in&'ran!e .o"i!y-
ISSUE
0ON .etitioner !an +e (e"# "ia+"e for "o&& of
earnin$&, )ora" #a)a$e& an# attorneyN& fee&
HELD
F>S
, T(e S!(e#'"e of In#e)nitie& #oe& not .'r.ort to
re&tri!t t(e 2in#& of #a)a$e& t(at )ay +e aar#e#
a$ain&t 0e&tern on!e "ia+i"ity (a& ari&en- It a&
)ere"y )eant to &et "i)it& to t(e a)o'nt& t(e
)ovant o'"# +e "ia+"e for in !a&e& of !"ai)& for
#eat(, +o#i"y inJ'rie& of, .rofe&&iona" &ervi!e& an#
(o&.ita" !(ar$e&, for &ervi!e& ren#ere# to traffi!
a!!i#ent vi!ti)&,N an# not ne!e&&ari"y e%!"'#e !"ai)&
a$ain&t t(e in&'ran!e .o"i!y for ot(er 2in#& of
#a)a$e&, &'!( a& t(o&e in ;'e&tion-
, It i"" +e &een t(at t(e a+ove ;'ote# S!(e#'"e of
In#e)nitie& e&ta+"i&(e& )onetary "i)it& (i!(
0e&tern )ay invo2e in !a&e of o!!'rren!e of t(e
.arti!'"ar 2in#& of .(y&i!a" inJ'ry t(ere "i&te#-
, It )'&t +e &tre&&e#, (oever, t(at t(e S!(e#'"e of
In#e)nitie& #oe& not .'r.ort to "i)it, or to
en')erate e%(a'&tive"y, t(e &.e!ie& of +o#i"y inJ'ry
o!!'rren!e of (i!( $enerate "ia+i"ity for .etitioner
0e&tern- A !ar a!!i#ent )ay, for in&tan!e, re&'"t in
inJ'ry to interna" or$an& of a .a&&en$er or t(ir#
.arty, it(o't any a!!o).anyin$ a).'tation or "o&&
of an e%terna" )e)+er @e-$-, a foot or an ar) or an
eyeA- B't &'!( interna" inJ'rie& are &'re"y !overe# +y
Se!tion I of t(e Ma&ter Po"i!y, &in!e t(ey !ertain"y
!on&tit'te +o#i"y inJ'rie&-
, T(e S!(e#'"e of In#e)nitie& #oe& not .'r.ort to
re&tri!t t(e 2in#& of #a)a$e& t(at )ay +e aar#e#
a$ain&t 0e&tern on!e "ia+i"ity (a& ari&en- Se!tion 4,
;'ote# a+ove, #oe& refer to !ertain P/i)it& of
/ia+i"ityP (i!( in t(e !a&e of t(e t(ir# .arty "ia+i"ity
&e!tion of t(e Ma&ter Po"i!y, i& a..arent"y
P90,000-00 .er .er&on .er a!!i#ent- 0it(in t(i&
over,a"" ;'antitative "i)it, a"" 2in#& of #a)a$e&
a""oa+"e +y "aP a!t'a" or !o).en&atory
#a)a$e&P; P)ora" #a)a$e&N; Pno)ina" #a)a$e&P;
Pte).erate or )o#erate #a)a$e&P; P"i;'i#ate#
#a)a$e&P; an# Pe%e)."ary #a)a$e&P X )ay +e
aar#e# +y a !o).etent !o'rt a$ain&t t(e in&'rer
on!e "ia+i"ity i& &(on to (ave ari&en, an# t(e
e&&entia" re;'i&ite& or !on#ition& for $rant of ea!(
&.e!ie& of #a)a$e& are .re&ent- It a..ear& to '&
&e"f,evi#ent t(at t(e S!(e#'"e of In#e)nitie& a& not
inten#e# to +e an en')eration, )'!( "e&& a !"o&e#
en')eration, of t(e &.e!ifi! 2in#& of #a)a$e& (i!(
)ay +e aar#e# 'n#er t(e Ma&ter Po"i!y 0e&tern
(a& i&&'e#-
, T(e rea#in$ 'r$e# +y 0e&tern of t(e S!(e#'"e of
In#e)nitie& !o)e& too !"o&e to or2in$ fra'# '.on
+ot( t(e in&'re# an# t(e t(ir# .arty +enefi!iary of
Se!tion 4, ;'ote# a+ove- *or 0e&ternN& rea#in$
o'"# #ra&ti!a""y an# it(o't arnin$ "i)it t(e
ot(eri&e 'n"i)ite# an# !o).re(en&ive &!o.e of
"ia+i"ity a&&')e# +y t(e in&'rer 0e&tern 'n#er
Se!tion 4H Pa"" &')& ne!e&&ary to #i&!(ar$e "ia+i"ity
of t(e in&'re# in re&.e!t of [+o#i"y inJ'ry to a t(ir#
.arty]P- T(i& re&'"t, (i!( i& not e&&entia""y #ifferent
fro) ta2in$ aay it( t(e "eft (an# (at (a# +een
$iven it( t(e ri$(t (an# e )'&t avoi# a& o+vio'&"y
re.'$nant to .'+"i! .o"i!y- If (at 0e&tern no
'r$e& i& (at 0e&tern inten#e# to a!(ieve +y it&
S!(e#'"e of In#e)nitie&, it a& in!')+ent '.on
0e&tern to '&e "an$'a$e far )ore &.e!ifi! an#
.re!i&e t(an t(at '&e# in fa!t +y 0e&tern, &o t(at t(e
in&'re#, an# .otentia" .'r!(a&er& of it& Ma&ter Po"i!y,
an# t(e Offi!e of t(e In&'ran!e Co))i&&ioner, )ay
+e .ro.er"y infor)e# an# a!t a!!or#in$"y-
, Moreover, an in&'ran!e !ontra!t i& a !ontra!t of
a#(e&ion- T(e r'"e i& e"" entren!(e# in o'r
J'ri&.r'#en!e t(at t(e ter)& of &'!( !ontra!t are to
+e !on&tr'e# &tri!t"y a$ain&t t(e .arty (i!(
.re.are# t(e !ontra!t, (i!( in t(i& !a&e (a..en& to
+e .etitioner 0e&tern-
Disposition Petition #enie#-
SUMMIT GUARANTY ? INSURANCE COMPANY $.
ARNALDO
496 SC<A 332
GANCAFCO; *e+r'ary 25, 4566
NATURE
P>TITION to revie t(e or#er of t(e In&'ran!e
Co))i&&ioner-
FACTS
, On Nov- 26, 45C6, a *or# Pi!2,'. tr'!2 one# +y
Mar!o& O"a&!o a& +').e# +y a !ar$o tr'!2 one#
+y *"ora"#e-
INSURANCE Page 86
*GU In&'ran!e Cor.oration @*G UA +y rea&on of
Motor Me(i!"e In&'ran!e Po"i!y No- IC,M*,0C469 .ai#
O"a&o t(e &') of P2,64C-90 a& it& &(are in t(e re.air
!o&t of t(e &ai# *or# Pi!2,'.- 1avin$ +een
&'+ro$ate# to t(e ri$(t& an# !a'&e& of a!tion of
O"a&o in t(e &ai# a)o'nt *GU for)a""y #e)an#e#
.ay)ent of &ai# a)o'nt fro) *"ora"#e an#
atte).te# to verify *"ora"#eN& in&'ran!e !arrier +'t
fai"e# to #o &o- In 45C6 *GU a& a+"e to a&!ertain
t(e i#entity of *"ora"#eN& in&'ran!e !arrier to +e t(e
S'))it G'aranty an# In&'ran!e Co).any, In!-
@S'))itA an# t('& re;'e&te# t(e in&'ran!e
!o))i&&ioner for a !onferen!e it( S'))it an#
#e)an#e# fro) S'))it t(ro'$( !o'n&e" on
*e+r'ary 26, 45C6 t(e .ay)ent of t(e #a)a$e&
&'&taine# +y t(e !ar of O"a&o +'t to no avai"-
, 1en!e on May 22, 45C6 *GU fi"e# a !a&e in t(e
In&'ran!e Co))i&&ionerN& Offi!e a$ain&t S'))it for
re!overy of &ai# a)o'nt-
, S'))it fi"e# a )otion to #i&)i&& on t(e $ro'n# of
.re&!ri.tion 'n#er Se!tion 36D of PE No- 642-
Averrin$ t(at t(e a!!i#ent (a..ene# on Nove)+er
26, 45C6 (i"e t(e !o)."aint a& fi"e# on May 22,
45C6 +eyon# t(e one,year .erio# fro) t(e ti)e of
t(e a!!i#ent .rovi#e# for +y t(e &ai# .rovi&ion-
ISSUE
0ON t(e a!tion )'&t +e #i&)i&&e# on t(e $ro'n# of
.re&!ri.tion 'n#er Se!tion 36D of PE No- 642
HELD
NO
, T(e !a&e #o not fa"" it(in t(e )eanin$ of #ro#er
cases@ a& !onte)."ate# in Se!tion 36D of t(e
In&'ran!e Co#e-
Reasoning
, Se!tion 36D of PE 642 @In&'ran!e Co#eA
Any .er&on (avin$ any !"ai) '.on t(e .o"i!y
i&&'e# .'r&'ant to t(i& !(a.ter &(a"", it(o't any
'nne!e&&ary #e"ay, .re&ent to t(e in&'ran!e
!o).any !on!erne# a ritten noti!e of !"ai)
&ettin$ fort( t(e a)o'nt of (i& "o&&, an#Ror t(e
nat're, e%tent an# #'ration of t(e inJ'rie&
&'&taine# a& !ertifie# +y a #'"y "i!en&e# .(y&i!ian-
Noti!e of !"ai) )'&t +e fi"e# it(in &i% )ont(&
fro) #ate of t(e a!!i#ent, ot(eri&e, t(e !"ai)
&(a"" +e #ee)e# aive#- A!tion or &'it for re!overy
of #a)a$e #'e to "o&& or inJ'ry )'&t +e +ro'$(t,
in #ro#er cases, it( t(e Co))i&&ioner or t(e
Co'rt& it(in one year fro) #ate of a!!i#ent,
ot(eri&e, t(e !"ai)antN& ri$(t of a!tion &(a""
.re&!ri+e-
, It i& very !"ear t(at t(e one,year .erio# i& on"y
re;'ire# 'n #ro#er cases- 1a# t(e "a)a2er&
inten#e# it to +e t(e ay Petitioner Co).any
a&&')e& it to +e, t(en t(e .(ra&e Nin .ro.er !a&e&N
o'"# not (ave +een in&erte#-
- in Aisporna# vs# Court of Appeals(
N/e$i&"ative intent )'&t +e a&!ertaine# fro) a
!on&i#eration of t(e &tat'te a& a (o"e- T(e
.arti!'"ar or#&, !"a'&e& an# .(ra&e& &(o'"# not
+e &t'#ie# a& #eta!(e# an# i&o"ate# e%.re&&ion&,
+'t t(e (o"e an# every .art of t(e &tat'te )'&t
+e !on&i#ere# in fi%in$ t(e )eanin$ of any of it&
.art& an# in or#er to .ro#'!e a (ar)onio'& (o"e-
A &tat'te )'&t +e &o !on&tr'e# a& to (ar)oni:e
an# $ive effe!t to a"" it& .rovi&ion& (enever
.o&&i+"e-N
, Petitioner !o).any i& tryin$ to '&e Se!tion 36D of
t(e In&'ran!e Co#e a& a !"oa2 to (i#e it&e"f fro) it&
"ia+i"itie&- T(e fa!t& of t(e&e !a&e& evi#ent"y ref"e!t
t(e #e"i+erate effort& of .etitioner !o).any to
.revent t(e fi"in$ of a for)a" a!tion a$ain&t it-
Bearin$ in )in# t(at if it &'!!ee#& in #oin$ &o 'nti"
one year "a.&e& fro) t(e #ate of t(e a!!i#ent it !o'"#
&et '. t(e #efen&e of .re&!ri.tion, .etitioner
!o).any )a#e .rivate re&.on#ent& +e"ieve t(at t(eir
!"ai)& o'"# +e &ett"e# in or#er t(at t(e "atter i""
not fin# it ne!e&&ary to i))e#iate"y +rin$ &'it- In
vio"ation of it& #'tie& to a#o.t an# i)."e)ent
rea&ona+"e &tan#ar#& for t(e .ro).t inve&ti$ation of
!"ai)& an# to effe!t'ate .ro).t, fair an# e;'ita+"e
&ett"e)ent of !"ai)&, an# it( )anife&t +a# fait(,
.etitioner !o).any #evi&e# )ean& an# ay& of
&ta""in$ t(e &ett"e)ent .ro!ee#in$&- In G-<- No- /,
9055C, no &te.& ere ta2en to .ro!e&& t(e !"ai) an#
no reJe!tion of &ai# !"ai) a& ever )a#e even if
.rivate re&.on#ent (a# a"rea#y !o)."ie# it( a"" t(e
re;'ire)ent&-
, In G-<- No- /,D6C96,.etitioner !o).any even
.rovi#e# "e$a" a&&i&tan!e to one of t(e .rivate
re&.on#ent& in t(e !ri)ina" !a&e fi"e# a$ain&t (i)
"ea#in$ Private re&.on#ent& to +e"ieve t(at it a&
rea#y to .ay- In t(e &a)e !a&e, .etitioner !o).any
a#)it& t(at it too2 no fina" a!tion or a#J'#i!ation of
t(e !"ai)- 0or&e &ti"", in G-<- No- /,D66C5,
a&&'ran!e& of .ay)ent ere !on&tant"y $iven an#
.etitioner !o).any even &ai# t(at a !(e!2 a& rea#y
for re"ea&e- T(i& Co'rt (a& )a#e t(e o+&ervation t(at
&o)e in&'ran!e !o).anie& (ave +een inventin$
e%!'&e& to avoi# t(eir J'&t o+"i$ation& an# it i& on"y
t(e State t(at !an $ive t(e .rote!tion (i!( t(e
in&'rin$ .'+"i! nee#& fro) .o&&i+"e a+'&e& of t(e
in&'rer&- In vie of t(e fore$oin$,
, It i& not #enie# t(at an e%traJ'#i!ia" #e)an# for
.ay)ent a& )a#e +y re&.on#ent *GU on .etitioner
+'t .etitioner fai"e# to re&.on# to t(e &a)e-
Nevert(e"e&& t(e !o)."aint a& fi"e# even +efore a
#enia" of t(e !"ai) a& )a#e +y .etitioner- *or a""
"e$a" .'r.o&e&, t(e one,year .re&!ri.tive .erio#
.rovi#e# for in Se!tion 36D of t(e In&'ran!e Co#e
(a& not +e$'n to r'n-T(e !a'&e of a!tion ari&e& on"y
an# &tart& to r'n '.on t(e #enia" of t(e !"ai) +y t(e
in&'ran!e !o).any-T(e !o'rt ta2e& note of t(e
#i"atory ta!ti!& e)."oye# +y .etitioner in t(i& a& in
t(e &evera" !a&e& afore!ite# to avoi# .ay)ent of it&
"ia+i"itie&-
VILLACORTA $. THE INSURANCE COMMISSION
400 SC<A D6C
T>>1ANI>>; O!to+er 30, 4560
FACTS
, G>0>/ MI//ACO<TA a& t(e oner of a Co"t
/an!er, Mo#e" 45C6, in&'re# it( re&.on#ent
!o).any for P39,000-00 , On Ea)a$e; P30,000-00
, T(eft; an# P30,000-00 , T(ir# Party /ia+i"ity,
effe!tive May 46, 45CC to May 46, 45C6-
, On May 5, 45C6, t(e ve(i!"e a& +ro'$(t to t(e
S'n#ay Ma!(ine 0or2&, In!-, for $enera" !(e!2,'.
an# re.air&- On May 44, 45C6, (i"e it a& in t(e
!'&to#y of t(e S'n#ay Ma!(ine 0or2&, t(e !ar a&
a""e$e#"y ta2en +y &i% @6A .er&on& an# #riven o't to
Monta"+an, <i:a"- 0(i"e trave""in$ a"on$ Ma+ini St-,
Sitio Pa"ya&an, Barrio B'r$o&, $oin$ Nort( at
Monta"+an, <i:a", t(e !ar fi$'re# in an a!!i#ent,
(ittin$ an# +').in$ a $rave" an# &an# tr'!2 .ar2e#
at t(e ri$(t &i#e of t(e roa# $oin$ &o't(- A& a
!on&e;'en!e, t(e $rave" an# &an# tr'!2 veere# to
t(e ri$(t &i#e of t(e .ave)ent $oin$ &o't( an# t(e
!ar veere# to t(e ri$(t &i#e of t(e .ave)ent $oin$
nort(- T(e #river, Benito Ma+a&a, an# one of t(e
.a&&en$er& #ie# an# t(e ot(er fo'r &'&taine#
.(y&i!a" inJ'rie&- T(e !ar, a& e"", &'ffere# e%ten&ive
#a)a$e- Co)."ainant, t(ereafter, fi"e# a !"ai) for
tota" "o&& it( t(e re&.on#ent !o).any +'t !"ai)
a& #enie#- 1en!e, !o)."ainant a& !o).e""e# to
in&tit'te t(e .re&ent a!tion-P
, T(e !o).re(en&ive )otor !ar in&'ran!e .o"i!y for
P39,000-00 i&&'e# +y re&.on#ent >).ire In&'ran!e
Co).any a#)itte#"y 'n#ertoo2 to in#e)nify t(e
.etitioner,in&'re# a$ain&t "o&& or #a)a$e to t(e !ar
@aA +y a!!i#enta" !o""i&ion or overt'rnin$, or !o""i&ion
or overt'rnin$ !on&e;'ent '.on )e!(ani!a"
INSURANCE Page 87
+rea2#on or !on&e;'ent '.on ear an# tear; @+A
+y fire, e%terna" e%."o&ion, &e"f,i$nition or "i$(tnin$
or +'r$"ary, (o'&e+rea2in$ or t(eft; an# @!A +y
)a"i!io'& a!t-
, <e&.on#ent in&'ran!e !o))i&&ion, (oever,
#i&)i&&e# .etitionerN& !o)."aint for re!overy of t(e
tota" "o&& of t(e ve(i!"e a$ain&t .rivate re&.on#ent,
&'&tainin$ re&.on#ent in&'rerN& !ontention t(at t(e
a!!i#ent #i# not fa"" it(in t(e .rovi&ion& of t(e
.o"i!y eit(er for t(e On Ea)a$e or T(eft !overa$e,
invo2in$ t(e .o"i!y .rovi&ion on PA't(ori:e# EriverP
!"a'&e, (i!( !"a'&e "i)it& t(e '&e of t(e in&'re#
ve(i!"e to to @2A .er&on& on"y, na)e"yH t(e in&'re#
(i)&e"f or any .er&on on (i& @in&'re#N&A .er)i&&ion-
A..arent"y, t(e In&'ran!e !o))i&&ion &ee& t(e
'na't(ori:e# ta2in$ of t(e ve(i!"e for a Joyri#e a& a
vio"ation of t(e NA't(ori:e# EriverN !"a'&e of t(e
.o"i!y-P
, <e&.on#ent !o))i&&ion "i2ei&e '.(e"# .rivate
re&.on#entN& a&&ertion t(at t(e !ar a& not &to"en
an# t(erefore not !overe# +y t(e T(eft !"a'&e, r'"in$
t(at P@TA(e e"e)ent of Nta2in$N in Arti!"e 306 of t(e
<evi&e# Pena" Co#e )ean& t(at t(e a!t of #e.rivin$
anot(er of t(e .o&&e&&ion an# #o)inion of a )ova+"e
t(in$ i& !o'."e# - - - it( t(e intention, at t(e ti)e of
t(e Nta2in$N, of it((o"#in$ it it( t(e !(ara!ter of
.er)anen!y
ISSUE
0ON t(e In&'ran!e !o))i&&ion=& fin#in$& are in
a!!or# it( "a
HELD
NO
, *ir&t, re&.on#ent !o))i&&ionN& r'"in$ t(at t(e
.er&on (o #rove t(e ve(i!"e in t(e .er&on of Benito
Ma+a&a, (o, a!!or#in$ to it& on fin#in$, a& one
of t(e re&i#ent& of t(e S'n#ay Ma!(ine 0or2&, In!-
to (o) t(e !ar (a# +een entr'&te# for $enera"
!(e!2,'. an# re.air& a& not an Pa't(ori:e# #riverP
of .etitioner,!o)."ainant i& too re&tri!tive an#
!ontrary to t(e e&ta+"i&(e# .rin!i."e t(at in&'ran!e
!ontra!t&, +ein$ !ontra!t& of a#(e&ion (ere t(e
on"y .arti!i.ation of t(e ot(er .arty i& t(e &i$nin$ of
(i& &i$nat're or (i& Pa#(e&ionP t(ereto, Po+vio'&"y
!a"" for $reater &tri!tne&& an# vi$i"an!e on t(e .art of
!o'rt& of J'&ti!e it( a vie of .rote!tin$ t(e ea2er
.arty fro) a+'&e an# i).o&ition, an# .revent t(eir
+e!o)in$ tra.& for t(e 'nary-P
, T(e )ain .'r.o&e of t(e Pa't(ori:e# #riverP !"a'&e,
a& )ay +e &een fro) it& te%t, &'.ra, i& t(at a .er&on
ot(er t(an t(e in&'re# oner, (o #rive& t(e !ar on
t(e in&'re#N& or#er, &'!( a& (i& re$'"ar #river, or
it( (i& .er)i&&ion, &'!( a& a frien# or )e)+er of
t(e fa)i"y or t(e e)."oyee& of a !ar &ervi!e or re.air
&(o. )'&t +e #'"y "i!en&e# #river& an# (ave no
#i&;'a"ifi!ation to #rive a )otor ve(i!"e- A !ar oner
(o entr'&t& (i& !ar to an e&ta+"i&(e# !ar &ervi!e
an# re.air &(o. ne!e&&ari"y entr'&t& (i& !ar 2ey to
t(e &(o. oner an# e)."oyee& (o are .re&')e# to
(ave t(e in&'re#N& .er)i&&ion to #rive t(e !ar for
"e$iti)ate .'r.o&e& of !(e!2in$ or roa#,te&tin$ t(e
!ar- T(e )ere (a..en&tan!e t(at t(e e)."oyee@&A of
t(e &(o. oner #ivert& t(e '&e of t(e !ar to (i& on
i""i!it or 'na't(ori:e# .'r.o&e in vio"ation of t(e tr'&t
re.o&e# in t(e &(o. +y t(e in&'re# !ar oner #oe&
not )ean t(at t(e Pa't(ori:e# #riverP !"a'&e (a&
+een vio"ate# &'!( a& to +ar re!overy, .rovi#e# t(at
&'!( e)."oyee i& #'"y ;'a"ifie# to #rive 'n#er a va"i#
#riverN& "i!en&e-
, Se!on#"y, an# in#e.en#ent"y of t(e fore$oin$
@&in!e (en a !ar i& 'n"af'""y ta2en, it i& t(e t(eft
!"a'&e, not t(e Pa't(ori:e# #riverP !"a'&e, t(at
a.."ie&A, (ere a !ar i& a#)itte#"y a& in t(i& !a&e
'n"af'""y an# ron$f'""y ta2en +y &o)e .eo."e, +e
t(ey e)."oyee& of t(e !ar &(o. or not to (o) it
(a# +een entr'&te#, an# ta2en on a "on$ tri. to
Monta"+an it(o't t(e onerN& !on&ent or
2no"e#$e, &'!( ta2in$ !on&tit'te& or .arta2e& of
t(e nat're of t(eft a& #efine# in Arti!"e 306 of t(e
<evi&e# Pena" Co#e-
, T(e Co'rt reJe!t& re&.on#ent !o))i&&ionN&
.re)i&e t(at t(ere )'&t +e an intent on t(e .art of
t(e ta2er of t(e !ar P.er)anent"y to #e.rive t(e
in&'re# of (i& !arP an# t(at &in!e t(e ta2in$ (ere a&
for a PJoy ri#eP an# P)ere"y te).orary in nat're,P a
Pte).orary ta2in$ i& (e"# not a ta2in$ in&'re#
a$ain&t-P
, T(e in&'rer )'&t t(erefore in#e)nify t(e .etitioner
oner for t(e tota" "o&& of t(e in&'re# !ar in t(e &')
of P39,000-00 'n#er t(e t(eft !"a'&e of t(e .o"i!y,
&'+Je!t to t(e fi"in$ of &'!( !"ai) for rei)+'r&e)ent
or .ay)ent a& it )ay (ave a& &'+ro$ee a$ain&t t(e
S'n#ay Ma!(ine 0or2&, In!-
CHAPTER VIII. MARINE INSURANCE
MAGSAYSAY INC $. AGAN
56 P1I/ 90D
<>F>S; Gan'ary 34, 4599
FACTS
, T(e S S PSan AntonioP, ve&&e" one# an# o.erate#
+y ."aintiff, "eft Mani"a on O!to+er 6, 45D5, +o'n# for
Ba&!o, Batane&, vi& A.arri, Ca$ayan, it( $enera"
!ar$o +e"on$in$ to #ifferent &(i..er&, a)on$ t(e)
t(e #efen#ant- T(e ve&&e" rea!(e# A.arri, +'t (i"e
&ti"" in t(e .ort, it ran a$ro'n# at t(e )o't( of t(e
Ca$ayan river, an#, atte).t& to ref"oat it 'n#er it&
on .oer (avin$ fai"e#, ."aintiff (a# it ref"oate# +y
t(e /':on Steve#orin$ Co- at an a$ree#
!o).en&ation- On!e af"oat t(e ve&&e" ret'rne# to
Mani"a to ref'e" an# t(en .ro!ee#e# to Ba&!o, t(e
.ort of #e&tination- T(ere t(e !ar$oe& ere #e"ivere#
to t(eir re&.e!tive oner& or !on&i$nee&, (o, it(
t(e e%!e.tion of #efen#ant, )a#e a #e.o&it or &i$ne#
a +on# to an&er for t(eir !ontri+'tion to t(e
avera$e-
, On t(e t(eory t(at t(e e%.en&e& in!'rre# in f"oatin$
t(e ve&&e" !on&tit'te $enera" avera$e to (i!( +ot(
&(i. an# !ar$o &(o'"# !ontri+'te, ."aintiff +ro'$(t
t(e .re&ent a!tion in t(e C*I of Mani"a to )a2e
#efen#ant .ay (i& !ontri+'tion, (i!(, a& #eter)ine#
+y t(e avera$e a#J'&ter, a)o'nt& to P6D4-D0-
, Eefen#ant #enie& "ia+i"ity to (i& a)o'nt, a""e$in$,
a)on$ ot(er t(in$&, t(at t(e &tran#in$ of t(e ve&&e"
a& #'e to t(e fa'"t, ne$"i$en!e an# "a!2 of &2i"" of
it& )a&ter, t(at t(e e%.en&e& in!'rre# in .'ttin$ it
af"oat #i# not !on&tit'te $enera" avera$e, an# t(at
t(e "i;'i#ation of t(e avera$e a& not )a#e in
a!!or#an!e it( "a-
, T(e "oer !o'rt fo'n# for ."aintiff
ISSUE
0ON t(e e%.en&e& in!'rre# in f"oatin$ a ve&&e" &o
&tran#e# &(o'"# +e !on&i#ere# $enera" avera$e an#
&(are# +y t(e !ar$o oner&
HELD
NO
Ratio T(e "a on avera$e& i& !ontaine# in t(e Co#e
of Co))er!e- Un#er t(at "a, avera$e& are !"a&&ifie#
into &i)."e or .arti!'"ar an# $enera" or $ro&&-
Genera""y &.ea2in$, &i)."e or .arti!'"ar avera$e&
in!"'#e a"" e%.en&e& an# #a)a$e& !a'&e# to t(e
ve&&e" or !ar$o (i!( (ave not in're# to t(e
!o))on +enefit @Art- 605A, an# are, t(erefore, to +e
+orne on"y +y t(e oner of t(e .ro.erty $ave ri&e to
&a)e @Art- 640A; (i"e $enera" or $ro&& avera$e&
in!"'#e Pa"" t(e #a)a$e& an# e%.en&e& (i!( are
INSURANCE Page 88
#e"i+erate"y !a'&e# in or#er to &ave t(e ve&&e", it&
!ar$o, or +ot( at t(e &a)e ti)e, fro) a rea" an#
2non ri&2P @Art- 644A- Bein$ for t(e !o))on
+enefit, $ro&& avera$e& are to +e +orne +y t(e
oner& of t(e arti!"e& &ave# @Art- 642A-
Reasoning
, t(e &tran#in$ of ."aintiffN& ve&&e" a& #'e to t(e
&'##en &(iftin$ of t(e &an#+ar& at t(e )o't( of t(e
river (i!( t(e .ort .i"ot #i# not anti!i.ate- T(e
&tan#in$ )ay, t(erefore, +e re$ar#e# a& a!!i#enta"-
, To"entino, in (i& !o))entarie& on t(e Co#e of
Co))er!e, $ive& t(e fo""oin$ "eM,'*'e* -#"
%e+e"al a$e"a%e9
First, t(ere )'&t +e a !o))on #an$er- T(i& )ean&,
t(at +ot( t(e &(i. an# t(e !ar$o, after (a& +een
"oa#e#, are &'+Je!t to t(e &a)e #an$er, (et(er
#'rin$ t(e voya$e, or in t(e .ort of "oa#in$ or
'n"oa#in$; t(at t(e #an$er ari&e& fro) t(e a!!i#ent&
of t(e &ea, #i&.o&ition& of t(e a't(ority, or fa'"t& of
)en, .rovi#e# t(at t(e !ir!')&tan!e& .ro#'!in$ t(e
.eri" &(o'"# +e a&!ertaine# an# i))inent or )ay
rationa""y +e &ai# to +e !ertain an# i))inent- T(i&
"a&t re;'ire)ent e%!"'#e )ea&'re& 'n#erta2en
a$ain&t a #i&tant .eri"-
Second, t(at for t(e !o))on &afety .art of t(e
ve&&e" or of t(e !ar$o or +ot( i& &a!rifi!e#
#e"i+erate"y-
/!ird, t(at fro) t(e e%.en&e& or #a)a$e& !a'&e#
fo""o& t(e &'!!e&&f'" &avin$ of t(e ve&&e" an# !ar$o-
Fourt!, t(at t(e e%.en&e& or #a)a$e& &(o'"# (ave
+een in!'rre# or inf"i!te# after ta2in$ .ro.er "e$a"
&te.& an# a't(ority-
, 0it( re&.e!t to t(e fir&t re;'i&ite, t(e evi#en!e
#oe& not #i&!"o&e t(at t(e e%.en&e& &o'$(t to +e
re!overe# fro) #efen#ant ere in!'rre# to &ave
ve&&e" an# !ar$o fro) a !o))on #an$er---it i& t(e
&afety of t(e .ro.erty, an# not of t(e voya$e, (i!(
!on&tit'te& t(e tr'e fo'n#ation of t(e $enera"
avera$e-
, A& to t(e &e!on# re;'i&ite, e nee# on"y re.eat
t(at t(e e%.en&e& in ;'e&tion ere not in!'rre# for
t(e !o))on &afety of ve&&e" an# !ar$o, &in!e t(ey,
or at "ea&t t(e !ar$o, ere not in i))inent .eri"-
, 0it( re&.e!t to t(e t(ir# re;'i&ite, t(e &a"va$e
o.eration, it i& tr'e, a& a &'!!e&&- B't a& t(e
&a!rifi!e a& for t(e +enefit of t(e ve&&e" to ena+"e it
to .ro!ee# to #e&tination an# not for t(e .'r.o&e of
&avin$ t(e !ar$o, t(e !ar$o oner& are not in "a
+o'n# to !ontri+'te to t(e e%.en&e&-
, T(e fina" re;'i&ite (a& not +een .rove#, for it #oe&
not a..ear t(at t(e e%.en&e& (ere in ;'e&tion ere
in!'rre# after fo""oin$ t(e .ro!e#'re "ai# #on in
arti!"e 643-
Disposition 0(erefore, t(e #e!i&ion a..ea"e# fro)
i& rever&e#-
FAR=UE $. SMITH, BELL ? CO.
96 P1I/ C96
OST<ANE; Nove)+er44, 4532
NATURE
A..ea" fro) J'#$)ent of t(e "oer !o'rt
FACTS
, P"aintiff=& )otor+oat, 7Pan#an8 a& in&'re# on a
)arine in&'ran!e .o"i!y it( Nationa" Union *ire
In&'ran!e Co).any @NU*ICA for PD9I- A!!or#in$ to
t(e .rovi&ion& of a 7ri#er8 atta!(e# to t(e .o"i!y, t(e
in&'ran!e a& a$ain&t t(e 7a+&o"'te tota" "o&& of t(e
ve&&e" on"y-8 On O!t- 34, 4526, t(e &(i. ran into very
(eavy &ea an# it +e!a)e ne!e&&ary to Jetti&on a
.ortion of t(e !ar$o- A& a re&'"t of t(e Jetti&on, t(e
NU*IC a& a&&e&&e# P2,640-66 a& it& !ontri+'tion to
t(e $enera" avera$e-
, T(e in&'ran!e !o).any, in&i&tin$ t(at it& o+"i$ation
#i# not e%ten# +eyon# t(e in&'ran!e of t(e 7a+&o"'te
tota" "o&& of t(e ve&&e" on"y, an# to .ay .ro.ortionate
&a"va$e of t(e #e!"are# va"'e,8 ref'&e# to !ontri+'te
to t(e &ett"e)ent of t(e $en- ave- T(e .re&ent a!tion
a& t(ere'.on in&tit'te#, an# after tria" t(e !o'rt
+e"o ren#ere# J'#$)ent in favor of t(e ."aintiff an#
or#ere# t(e #efen#ant to .ay t(e ."aintiff P2,640-66
a& it& .art of t(e in#e)nity for t(e $en- ave- +ro'$(t
a+o't +y t(e Jetti&on of !ar$o- T(e in&'ran!e
!o).any t(en a..ea"e# to t(e SC-
, T(e in&'ran!e !ontra!t i& .rinte# in t(e >n$"i&(
!o))on for) of )arine .o"i!ie&- One of t(e !"a'&e&
of t(e #o!')ent ori$ina""y rea# a& fo""o&H
/ouc!in" t!e Adventures and Perils ,!ic! t!e
said 1?F'C is content to bear$ and to ta+e u#on
t!e in t!is Voya"eE t!ey are of t!e Seas$ Men-of-
Rar$ Fire$ Pirates$ /!ieves$ Settison$ 0etters of
Mart and Counterart$ Sur#risals$ and /a+in"s at
Sea. Arrests$ 9estraints and Detainents$ of all
Lin"s$ Princes and Peo#le of ,!at 1ation$
Condition or =uality soeverE Barratry of t!e Master
and Marines$ and of all ot!er Perils$ 0osses and
Misfortunes$ t!at !ave or s!all coe to t!e Hurt$
Detrient$ or Daa"e of t!e said Vessel or any
#art t!ereofE and in case of any 0oss or
Misfortunes$ it s!all be la,ful for t!e Assured$ !is
or t!eir Factors$ Servants$ or assi"ns$ to sue$
labour and travel for$ in and about t!e Defence.
Safe"uard$ and recovery of t!e said Vessel or any
#art t!ereof$ ,it!out Pre6udice to t!is 'nsuranceE
to t!e C!ar"es ,!ereof t!e said Co#any$ ,ill
contribute$ accordin" to t!e rate and .uantity of
t!e su !erein assured...*
, Atta!(e# to t(e .o"i!y over an# a+ove t(e &ai#
!"a'&e i& a 7ri#er8 !ontainin$ ty.eritten .rovi&ion&,
a)on$ (i!( a..ear& in !a.ita"i:e# ty.e t(e
fo""oin$ !"a'&eH
A>A'1S/ /HA ABS-0?/A /-/A0 0-SS -F /HA
VASSA0 -10($ A1D /- PA( P9-P-9/'-1A/A
SA0VA>A CHA9>AS -F /HA DAC0A9AD VA0?A.*
ISSUES
4- 0ON t(e "oer !o'rt erre# in #i&re$ar#in$ t(e
ty.eritten !"a'&e en#or&e# '.on t(e .o"i!y,
e%.re&&"y "i)itin$ in&'rerN& "ia+i"ity t(ere'n#er of t(e
tota" "o&& of t(e oo#en ve&&e" Pan#an an# to
.ro.ortionate &a"va$e !(ar$e&
2- 0ON "oer !o'rt erre# in !on!"'#in$ t(at
#efen#ant an# a..e""ant, NU*IC i& "ia+"e to
!ontri+'te to t(e $enera" avera$e re&'"tin$ fro) t(e
Jetti&on of a .art of &ai# ve&&e"N& !ar$o
HELD
4- NO
Ratio In !a&e re.'$nan!e e%i&t& +eteen ritten
an# .rinte# .ortion& of a .o"i!y, t(e ritten .ortion
.revai"&-
Reasoning
- Se!tion 254 of t(e Co#e of Civi" Pro!e#'re .rovi#e&
t(at 7(en an in&tr')ent !on&i&t& .art"y of ritten
or#& an# .art"y of a .rinte# for) an# t(e to are
in!on&i&tent, t(e for)er !ontro"& t(e "atter-8
2- NO
Ratio T(e "ia+i"ity for !ontri+'tion in $enera" avera$e
i& not +a&e# on t(e e%.re&& ter)& of t(e .o"i!y, +'t
re&t& '.on t(e t(eory t(at fro) t(e re"ation of t(e
.artie& an# for t(eir +enefit, a ;'a&i !ontra!t i&
i)."ie# +y "a-
Reasoning
, In t(e a+&en!e of .o&itive "e$i&"ation to t(e
!ontrary, t(e "ia+i"ity of t(e #efen#ant in&'ran!e
!o).any on it& .o"i!y o'"#, .er(a.&, +e "i)ite# to
7a+&o"'te "o&& of t(e ve&&e" on"y, an# to .ay
.ro.ortionate &a"va$e of t(e #e!"are# va"'e-8 B't t(e
.o"i!y a& e%e!'te# in t(i& J'ri&#i!tion an#
7arrante# to tra#e it(in t(e ater& of t(e
P(i"i..ine Ar!(i.e"a$o on"y-8 1ere, Art- 695 of t(e
Co#e of Co))er!e i& &ti"" in for!eH
INSURANCE Page 89
A9/. MKJ. /!e under,riters of t!e vessel$ of t!e
frei"!t$ and of t!e car"o s!all be obli"ed to #ay for
t!e indenity of t!e "ross avera"e in so far as is
re.uired of eac! one of t!ese ob6ects
res#ectively.*
, T(e arti!"e i& )an#atory in it& ter)&, an# t(e
in&'rer& @(et(er for t(e ve&&e" or for t(e frei$(t or
for t(e !ar$oA are +o'n# to !ontri+'te to t(e
in#e)nity of t(e $enera" avera$e- T(e .rovi&ion
&i)."y ."a!e& t(e in&'rer on t(e &a)e footin$ a&
ot(er .er&on& (o (ave an intere&t in t(e ve&&e", or
t(e !ar$o t(erein, at t(e ti)e of t(e o!!'rren!e of
t(e $enera" avera$e an# (o are !o).e""e# to
!ontri+'te @Art- 642, Co#e of Co))er!eA-
, In t(e .re&ent !a&e it i& not #i&.'te# t(at t(e &(i.
a& in $rave .eri" an# t(at t(e Jetti&on of .art of t(e
!ar$o a& ne!e&&ary- If t(e !ar$o a& in .eri" to t(e
e%tent of !a"" for $enera" avera$e, t(e &(i. )'&t a"&o
(ave +een in $reat #an$er, .o&&i+"y &'ffi!ient to
!a'&e it& a+&o"'te "o&&- T(e Jetti&on a& t(erefore a&
)'!( to t(e +enefit of t(e 'n#erriter a& to t(e
oner of t(e !ar$o- T(e "atter a& !o).e""e# to
!ontri+'te to t(e in#e)nity; (y &(o'"# not t(e
in&'rer +e re;'ire# to #o "i2ei&eX If no Jetti&on (a#
ta2en ."a!e an# if t(e &(i. +y rea&on t(ereof (a#
fo'n#ere#, t(e 'n#erriterN& "o&& o'"# (ave +een
)any ti)e& a& "ar$e a& t(e !ontri+'tion no
#e)an#e#-
Disposition A..ea"e# J'#$)ent i& affir)e#
GO TIACO $. UNION INSURANCE
D0 P1I/ D0
ST<>>T; Se.te)+er 4, 4545
FACTS
, Union In&'ran!e So!iety of Canton, /t#-, i&&'e# a
)arine in&'ran!e .o"i!y '.on a !ar$o of ri!e
+e"on$in$ to t(e Go Tiao!o Brot(er&, (i!( a&
tran&.orte# in t(e ear"y #ay& of May, 4549, on t(e
&tea)&(i. 1on#a$'a fro) t(e .ort of Sai$on to
Ce+'-
, On #i&!(ar$in$ t(e ri!e fro) one of t(e
!o).art)ent& in t(e after (o"#, '.on arriva" at
Ce+', it a& #i&!overe# t(at 4DC3 &a!2& (a# +een
#a)a$e# +y &ea ater- T(e "o&& a& P3,6C9-29-
, T(e tria" !o'rt fo'n# t(at t(e inf"o of t(e &ea
ater #'rin$ t(e voya$e a& #'e to a #efe!t in one
of t(e #rain .i.e& of t(e &(i. an# !on!"'#e# t(at t(e
"o&& a& not !overe# +y t(e .o"i!y of in&'ran!e- T(e
tria" !o'rt )a#e t(e ff fin#in$&H
T(e #rain .i.e (i!( &erve# a& a #i&!(ar$e
fro) t(e ater !"o&et .a&&e# #on t(ro'$(
t(e !o).art)ent (ere t(e ri!e in ;'e&tion
a& &toe# an# t(en!e o't to &ea t(ro'$( t(e
a"" of t(e !o).art)ent, (i!( a& a .art of
t(e a"" of t(e &(i.- T(e Joint or e"+o (ere
t(e .i.e !(an$e# it& #ire!tion a& of !a&t
iron; an# in !o'r&e of ti)e it (a# +e!o)e
!orro#e# an# a+ra#e# 'nti" a "on$it'#ina"
o.enin$ (a# a..eare# in t(e .i.e a+o't one
in!( in "en$t(- T(i& (o"e (a# +een in e%i&ten!e
+efore t(e voya$e a& +e$'n, an# an atte).t
(a# +een )a#e to re.air it +y fi""in$ it(
!e)ent an# +o"tin$ over it a &tri. of iron- T(e
effe!t of "oa#in$ t(e +oat a& to &'+)er$e
t(e vent, or orifi!e, of t(e .i.e 'nti" it a&
a+o't 46 in!(e& or 2 feet +e"o t(e "eve" of
t(e &ea- A& a !on&e;'en!e t(e &ea ater ro&e
in t(e .i.e- Navi$ation 'n#er t(e&e !on#ition&
re&'"te# in t(e a&(in$ o't of t(e !e)ent,
fi""in$ fro) t(e a!tion of t(e &ea ater, t('&
.er)ittin$ t(e !ontin'e# f"o of t(e &a"t ater
into t(e !o).art)ent of ri!e-
, T(e !o'rt fo'n# in effe!t t(at t(e o.enin$ a+ove
#e&!ri+e# (a# re&'"te# in !o'r&e of ti)e fro)
or#inary ear an# tear an# not fro) t(e &trainin$ of
t(e &(i. in ro'$( eat(er on t(at voya$e- T(e !o'rt
a"&o fo'n# t(at t(e re.air& t(at (a# +een )a#e on
t(e .i.e ere &"oven"y an# #efe!tive an# t(at, +y
rea&on of t(e !on#ition of t(i& .i.e, t(e &(i. a& not
.ro.er"y e;'i..e# to re!eive t(e ri!e at t(e ti)e t(e
voya$e a& +e$'n- *or t(i& rea&on t(e !o'rt (e"#
t(at t(e &(i. a& 'n&eaort(y-
, T(e .o"i!y .'r.ort& to in&'re t(e !ar$o fro) t(e
fo""oin$ a)on$ ot(er ri&2&H PPeri"& - - - of t(e &ea&,
)en, of ar, fire, ene)ie&, .irate&, rover&,
t(ieve&, -Jetti&on&, - - - +arratry of t(e )a&ter an#
)ariner&, an# of a"" ot(er .eri"&, "o&&e&, an#
)i&fort'ne& t(at (ave or &(a"" !o)e to t(e ('rt,
#etri)ent, or #a)a$e of t(e &ai# $oo#& an#
)er!(an#i&e or any .art t(ereof-P
ISSUE
0ON Union In&'ran!e i& "ia+"e for t(e "o&& of t(e Go
Tia!o Brot(er&
HELD
NO
, t(e or#& Pa"" ot(er .eri"&, "o&&e&, an# )i&fort'ne&P
are to +e inter.rete# a& !overin$ ri&2& (i!( are of
"i2e 2in# @eJ'&#e) $eneri&A it( t(e .arti!'"ar ri&2&
(i!( are en')erate# in t(e .re!e#in$ .art of t(e
&a)e !"a'&e of t(e !ontra!t- NNA!!or#in$ to t(e
or#inary r'"e& of !on&tr'!tion, t(e&e or#& )'&t +e
inter.rete# it( referen!e to t(e or#& (i!(
i))e#iate"y .re!e#e t(e)- T(ey ere no #o'+t
in&erte# in or#er to .revent #i&.'te& fo'n#e# on ni!e
#i&tin!tion&- W % % *or e%a)."e, if t(e e%.re&&ion
N.eri"& of t(e &ea&N i& $iven it& i#e&t &en&e t(e
$enera" or#& (ave "itt"e or no effe!t a& a.."ie# to
t(at !a&e- If on t(e ot(er (an# t(at e%.re&&ion i& to
re!eive a "i)ite# !on&tr'!tion, a& a..arent"y it #i# in
C'""en v&- B't"er @9 M- S S-, D64A, an# "o&& +y .eri"&
of t(e &ea& i& to +e !onfine# to "o&& e% )arine
te).e&tati& #i&!ri)ine, t(e $enera" or#& +e!o)e
)o&t i).ortant- W % %P @T(a)e& an# Mer&ey Marine
In&'ran!e Co- v&- 1a)i"ton, *ra&er S Co-A
, a "o&& (i!(, in t(e or#inary !o'r&e of event&,
re&'"t& fro) t(e nat'ra" an# inevita+"e a!tion of t(e
&ea, fro) t(e or#inary ear an# tear of t(e &(i., or
fro) t(e ne$"i$ent fai"'re of t(e &(i.N& oner to
.rovi#e t(e ve&&e" it( .ro.er e;'i.)ent to !onvey
t(e !ar$o 'n#er or#inary !on#ition&, i& not a peril of
the sea- S'!( a "o&& i& rat(er #'e to (at (a& +een
a.t"y !a""e# t(e Pperil of the ship-P T(e in&'rer
'n#erta2e& to in&'re a$ain&t .eri"& of t(e &ea an#
&i)i"ar .eri"&, not a$ain&t .eri"& of t(e &(i.- T(ere
)'&t, in or#er to )a2e t(e in&'rer "ia+"e, +e P&o)e
!a&'a"ty, &o)et(in$ (i!( !o'"# not +e fore&een a&
one of t(e ne!e&&ary in!i#ent& of t(e a#vent're- T(e
.'r.o&e of t(e .o"i!y i& to &e!'re an in#e)nity
a$ain&t a!!i#ent& (i!( )ay (a..en, not a$ain&t
event& (i!( )'&t (a..en-P @0i"&on, Son& S Co- v&-
Oner& of Car$o .er t(e Want(oA
, In t(e .re&ent !a&e t(e entran!e of t(e &ea ater
into t(e &(i.N& (o"# t(ro'$( t(e #efe!tive .i.e
a"rea#y #e&!ri+e# a& not #'e to any a!!i#ent (i!(
(a..ene# #'rin$ t(e voya$e, +'t to t(e fai"'re of t(e
&(i.N& oner .ro.er"y to re.air a #efe!t of t(e
e%i&ten!e of (i!( (e a& a..ri&e#- T(e "o&& a&
t(erefore )ore ana"o$o'& to t(at (i!( #ire!t"y
re&'"t& fro) &i)."e 'n&eaort(ine&& t(an to t(at
(i!( re&'"t& fro) .eri"& of t(e &ea-
, t(ere i& no roo) to #o'+t t(e "ia+i"ity of t(e
&(i.oner for &'!( a "o&& a& o!!'rre# in t(i& !a&e- By
.arity of rea&onin$ t(e in&'rer i& not "ia+"e; for,
$enera""y &.ea2in$, t(e &(i.oner e%!e.t& t(e .eri"&
of t(e &ea fro) (i& en$a$e)ent 'n#er t(e +i"" of
"a#in$, (i"e t(i& i& t(e very .eri" a$ain&t (i!( t(e
in&'rer inten#& to $ive .rote!tion- A& a.."ie# to t(e
.re&ent !a&e it re&'"t& t(at t(e oner& of t(e
#a)a$e# ri!e )'&t "oo2 to t(e &(i.oner for re#re&&
an# not to t(e in&'rer-
T(e &a)e !on!"'&ion )'&t +e rea!(e# if t(e ;'e&tion
+e #i&!'&&e# it( referen!e to t(e &eaort(ine&& of
INSURANCE Page 90
t(e &(i.- It i& 'niver&a""y a!!e.te# t(at in every
!ontra!t of in&'ran!e '.on anyt(in$ (i!( i& t(e
&'+Je!t of )arine in&'ran!e, a arranty i& i)."ie#
t(at t(e &(i. &(a"" +e &eaort(y at t(e ti)e of t(e
in!e.tion of t(e voya$e- T(i& r'"e i& a!!e.te# in o'r
on In&'ran!e /a @A!t No- 2D2C, &e!- 406A- It i&
a"&o e"" &ett"e# t(at a &(i. (i!( i& &eaort(y for
t(e .'r.o&e of in&'ran!e '.on t(e &(i. )ay yet +e
'n&eaort(y for t(e .'r.o&e of in&'ran!e '.on t(e
!ar$o @A!t No- 2D2C, &e!- 406A-
Disposition Ee!i&ion of tria" !o'rt i& affir)e#
CATHAY INSURANCE CO. $. CA (REMINGTON
INDUSTRIAL SALES CORP.)
494 SC<A C40
PA<AS; G'ne 30 456C

FACTS
, <e)in$ton In#'&tria" Sa"e& Cor. in&'re# it&
&(i.)ent of &ea)"e&& &tee" .i.e&- It in!'rre# "o&&e&
an# #a)a$e& @I $at(er t(e &tee" .i.e& r'&te# #'rin$
t(e voya$e fro) Ga.an to t(e P(i"&- on +oar# ve&&e"
SS P>a&tern Mariner8A an# fi"e# !o)."aint a$ain&t
Cat(ay In&'ran!e Co &ee2in$ !o""e!tion of t(e &') of
P666,335-49
, TC #e!i#e# for <e)in$ton- Cat(ay fi"e# M<, (i!(
a& #enie#- CA affir)e#-
, CA &ai# @a)on$ ot(er t(in$&AH 4- Covera$e of
.rivate re&.on#entN& "o&& 'n#er t(e in&'ran!e .o"i!y
i&&'e# +y .etitioner i& 'n)i&ta2a+"e;
2- A""e$e# !ontra!t'a" "i)itation& !ontaine# in
in&'ran!e .o"i!ie& are re$ar#e# it( e%tre)e !a'tion
+y !o'rt& an# are to +e &tri!t"y !on&tr'e# a$ain&t t(e
in&'rer; o+&!'re .(ra&e& an# e%!e.tion& &(o'"# not
+e a""oe# to #efeat t(e very .'r.o&e for (i!( t(e
.o"i!y a& .ro!'re#;
3- <'&t i& not an in(erent vi!e of t(e &ea)"e&& &tee"
.i.e& it(o't interferen!e of e%terna" fa!tor&
, Caha) !onten# @a)on$ ot(er t(in$&AH 4- .rivate
re&.on#ent (a& a#)itte# t(at t(e ;'e&tione#
&(i.)ent i& not !overe# +y a P&;'are .rovi&ion of t(e
!ontra!t,P +'t .rivate re&.on#ent !"ai)& i)."ie#
!overa$e fro) t(e .(ra&e P.eri"& of t(e &eaP
)entione# in t(e o.enin$ &enten!e of t(e .o"i!y; 2-
T(e in&i&ten!e of .rivate re&.on#ent t(at r'&tin$ i& a
.eri" of t(e &ea i& erroneo'&; 3- <'&tin$ i& not a
ri&2 in&'re# a$ain&t, &in!e a ri&2 to +e in&'re#
a$ain&t &(o'"# +e a !a&'a"ty or &o)e !a&'a"ty,
&o)et(in$ (i!( !o'"# not +e fore&een a& one of t(e
ne!e&&ary in!i#ent& of a#vent're; D- A fa!t !a.a+"e
of 'n;'e&tiona+"e #e)on&tration or of .'+"i!
2no"e#$e nee#& no evi#en!e- T(i& fa!t of
'n;'e&tiona+"e #e)on&tration or of .'+"i! 2no"e#$e
i& t(at (eavy r'&tin$ of &tee" or iron .i.e& !annot
o!!'r it(in a .erio# of a &even @CA #ay voya$e-
Be&i#e&, .etitioner (a# intro#'!e# t(e !"ear !ar$o
re!ei.t& or ta""y &(eet& in#i!atin$ t(at t(ere a& no
#a)a$e on t(e &tee" .i.e& #'rin$ t(e voya$e-

ISSUE
0ON r'&tin$ i& a 7.eri" of t(e &ea8
HELD
F>S
, T(ere i& no ;'e&tion t(at t(e r'&tin$ of &tee" .i.e&
in t(e !o'r&e of a voya$e i& a P.eri" of t(e &eaP in
vie of t(e to"" on t(e !ar$o of in#, ater, an# &a"t
!on#ition&- At any rate if t(e in&'rer !annot +e (e"#
a!!o'nta+"e t(erefor, 0e o'"# fai" to o+&erve a
!ar#ina" r'"e in t(e inter.retation of !ontra!t&,
na)e"y, t(at any a)+i$'ity t(erein &(o'"# +e
!on&tr'e# a$ain&t t(e )a2erRi&&'erR#rafter t(ereof,
na)e"y, t(e in&'rer- Be&i#e& t(e .re!i&e .'r.o&e of
in&'rin$ !ar$o #'rin$ a voya$e o'"# +e ren#ere#
fr'it"e&&-
Disposition 01><>*O<>, t(i& .etition i& (ere+y
E>NI>E, an# t(e a&&ai"e# #e!i&ion of t(e Co'rt of
A..ea"& i& (ere+y A**I<M>E-
RO=UE $. IAC (PIONEER INSURANCE AND
SURETY CORP.)
435 SC<A 956
GUTI><<>?; Nove)+er 44, 4569
NATURE
Petition for !ertiorari to revie t(e #e!i&ion of t(e
IAC
FACTS
, *e+r'ary 45, 45C2 L Co))on !arrier Mani"a Bay
/i$(tera$e Cor.- entere# into a !ontra!t it( <o;'e
Ti)+er >nter.ri&e& an# C(ion$- T(e !ontra!t &tate#
t(at Mani"a Bay o'"# !arry D22-46 !'- )eter& of
"o$& on it& ve&&e" Ma+"e 40 fro) Ma"a).aya So'n#,
Pa"aan to Mani"a Nort( 1ar+or- <o;'e in&'re# t(e
"o$& it( Pioneer In&'ran!e for P400,000-
, *e+r'ary 25, 45C2 L 644 "o$& ere "oa#e# in
Ma"a).aya +'t en ro'te to Mani"a, Ma+"e 40 &an2-
, Mar!( 6,45C2 L <o;'e an# C(ion$ rote a "etter to
Mani"a Bay, #e)an#in$ .ay)ent of P490,000-00 for
t(e "o&& of t(e &(i.)ent ."'& P400,000-00 a&
'nrea"i:e# .rofit& +'t t(e "atter i$nore# t(e #e)an#-
, A "etter a& a"&o &ent to Pioneer, !"ai)in$ t(e f'""
a)o'nt of P400,000-00 'n#er t(e in&'ran!e .o"i!y
+'t Pioneer ref'&e# to .ay on t(e $ro'n# t(at it&
"ia+i"ity #e.en#e# '.on t(e PTota" /o&& +y Tota" /o&&
of Me&&e" on"yP-
, After (earin$, t(e tria" !o'rt favore# <o;'e-
Pioneer an# Mani"a Bay ere or#ere# to .ay <o;'e
P400,000- Pioneer a..ea"e# t(e #e!i&ion-
, Gan'ary 30, 456D L Pioneer a& a+&o"ve# fro)
"ia+i"ity after fin#in$ t(at t(ere a& a +rea!( of
i)."ie# arranty of &eaort(ine&& on t(e .art of t(e
.etitioner& an# t(at t(e "o&& of t(e in&'re# !ar$o a&
!a'&e# +y t(e P.eri"& of t(e &(i.P an# not +y t(e
P.eri"& of t(e &eaP- It r'"e# t(at t(e "o&& i& not
!overe# +y t(e )arine in&'ran!e .o"i!y-
, It a& a""e$e# t(at Ma+"e 40 a& not &eaort(y
an# t(at it #eve"o.e# a "ea2
, T(e IAC fo'n# t(at one of t(e (at!(e& a& "eft
o.en, !a'&in$ ater to enter t(e +ar$e an# +e!a'&e
t(e +ar$e a& not .rovi#e# it( t(e ne!e&&ary !over
or tar.a'"in, t(e &."a&( of &ea ave& +ro'$(t )ore
ater in&i#e t(e +ar$e-
, Petitioner& !onten# t(at t(e i)."ie# arranty of
&eaort(ine&& .rovi#e# for in t(e In&'ran!e Co#e
refer& on"y to t(e re&.on&i+i"ity of t(e &(i.oner (o
)'&t &ee to it t(at (i& &(i. i& rea&ona+"y fit to )a2e
in &afety t(e !onte)."ate# voya$e-
, T(e .etitioner& &tate t(at a )ere &(i..er of !ar$o,
(avin$ no !ontro" over t(e &(i., (a& not(in$ to #o
it( it& &eaort(ine&&- T(ey ar$'e t(at a !ar$o
oner (a& no !ontro" over t(e &tr'!t're of t(e &(i.,
it& !a+"e&, an!(or&, f'e" an# .rovi&ion&, t(e )anner
of "oa#in$ (i& !ar$o an# t(e !ar$o of ot(er &(i..er&,
an# t(e (irin$ of a &'ffi!ient n')+er of !o).etent
offi!er& an# &ea)en-
ISSUE
0ON t(e "o&& &(o'"# (ave +een !overe# +y t(e
)arine in&'ran!e .o"i!y
HELD
NO
Ratio 't i& 'niver&a""y a!!e.te# t(at in every
!ontra!t of in&'ran!e '.on anyt(in$ (i!( i& t(e
&'+Je!t of )arine in&'ran!e, a arranty i& i)."ie#
t(at t(e &(i. &(a"" +e &eaort(y at t(e ti)e of t(e
in!e.tion of t(e voya$e- In )arine in&'ran!e, t(e
ri&2& in&'re# a$ain&t are !"a&&ifie# a& N.eri"& of t(e
&ea,= (i!( in!"'#e& &'!( "o&&e& t(at are of
e%traor#inary nat're, or ari&e fro) &o)e
over(e")in$ .oer, (i!( !annot +e $'ar#e#
a$ain&t +y t(e or#inary e%ertion of (')an &2i"" an#
.r'#en!e-
Reasoning
INSURANCE Page 91
, Ba&e# on Se!- 443 an# Se!- 55 of t(e In&'ran!e
Co#e, t(e ter) P!ar$oP !an +e t(e &'+Je!t of )arine
in&'ran!e an# t(at on!e it i& &o )a#e, t(e i)."ie#
arranty of &eaort(ine&& i))e#iate"y atta!(e& to
(oever i& in&'rin$ t(e !ar$o (et(er (e +e t(e
&(i.oner or not-
, T(e fa!t t(at t(e 'n,&eaort(ine&& of t(e &(i. a&
'n2non to t(e in&'re# i& i))ateria" in or#inary
)arine in&'ran!e an# )ay not +e '&e# +y (i) a& a
#efen&e in or#er to re!over on t(e )arine in&'ran!e
.o"i!y-
, Sin!e t(e "a .rovi#e& for an i)."ie# arranty of
&eaort(ine&& in every !ontra!t of or#inary )arine
in&'ran!e, it +e!o)e& t(e o+"i$ation of a !ar$o
oner to "oo2 for a re"ia+"e !o))on !arrier (i!(
2ee.& it& ve&&e"& in &eaort(y !on#ition- T(e &(i..er
of !ar$o )y (ave no !ontro" over t(e ve&&e" +'t (e
(a& f'"" !ontro" in t(e !(oi!e of t(e !o))on !arrier
t(at i"" tran&.ort (i& $oo#&-
, In )arine !a&e&, t(e ri&2& in&'re# a$ain&t are
N.eri"& of t(e &ea-= T(e ter) e%ten#& on"y to "o&&e&
!a'&e# +y &ea #a)a$e, or +y t(e vio"en!e of t(e
e"e)ent&, an# #oe& not e)+ra!e a"" "o&&e& (a..enin$
at &ea-
, It i& ;'ite 'n)i&ta2a+"e t(at t(e "o&& of t(e !ar$o
a& #'e to t(e .eri"& of t(e &(i. rat(er t(an t(e
.eri"& of t(e &ea-
, /o&& (i!(, in t(e or#inary !o'r&e of event&,
re&'"t& fro) t(e nat'ra" an# inevita+"e a!tion of t(e
&ea, fro) t(e or#inary ear an# tear of t(e &(i., or
fro) t(e ne$"i$ent fai"'re of t(e &(i.N& oner to
.rovi#e t(e ve&&e" it( .ro.er e;'i.)ent to !onvey
t(e !ar$o 'n#er or#inary !on#ition&, i& not a V.eri" of
t(e &ea= +'t i& !a""e# V.eri" of t(e &(i.-=
Disposition Ee!i&ion a..ea"e# fro) i& affir)e#-
LA RAZON $. UNION INSURANCE SOCIETY OF
CANTON, LTD.
D0 P1I/ D0
ST<>>T; Se.te)+er 4, 4545
FACTS
, T(i& i& an a!tion on a .o"i!y of )arine in&'ran!e
i&&'e# +y t(e Union In&'ran!e So!iety of Canton,
/t#-, '.on a !ar$o of ri!e +e"on$in$ to t(e ."aintiff&,
Go Tiao!o Brot(er&, (i!( a& tran&.orte# on t(e
&tea)&(i. 1on#a$'a fro) t(e .ort of Sai$on to
Ce+'-
, On #i&!(ar$in$ t(e ri!e fro) one of t(e
!o).art)ent& in t(e after (o"#, '.on arriva" at
Ce+', it a& #i&!overe# t(at 4,DC3 &a!2& (a# +een
#a)a$e# +y &ea ater-
, T(e "o&& &o re&'"tin$ to t(e oner& of ri!e, after
.ro.er #e#'!tion (a# +een )a#e for t(e .ortion
&ave#, a& P3,6C9-29-
, T(e tria" !o'rt fo'n# t(at t(e inf"o of t(e &ea
ater #'rin$ t(e voya$e a& #'e to a #efe!t in one
of t(e #rain .i.e& of t(e &(i. an# !on!"'#e# t(at t(e
"o&& a& not !overe# +y t(e .o"i!y of in&'ran!e-
G'#$)ent a& a!!or#in$"y entere# in favor of t(e
#efen#ant an# t(e ."aintiff& a..ea"e#-
, T(e !o'rt fo'n# in effe!t t(at t(e o.enin$ a+ove
#e&!ri+e# (a# re&'"te# in !o'r&e of ti)e fro)
or#inary ear an# tear an# not fro) t(e &trainin$ of
t(e &(i. in ro'$( eat(er on t(at voya$e- T(e !o'rt
a"&o fo'n# t(at t(e re.air& t(at (a# +een )a#e on
t(e .i.e ere &"oven"y an# #efe!tive an# t(at, +y
rea&on of t(e !on#ition of t(i& .i.e, t(e &(i. a& not
.ro.er"y e;'i..e# to re!eive t(e ri!e at t(e ti)e t(e
voya$e a& +e$'n- *or t(i& rea&on t(e !o'rt (e"#
t(at t(e &(i. a& 'n&eaort(y-
ISSUE
0ON t(e in&'rer i& "ia+"e
HELD
, T(e ;'e&tion (et(er t(e in&'rer i& "ia+"e on t(i&
.o"i!y for t(e "o&& !a'&e# in t(e )anner a+ove &tate#
.re&ent& to .(a&e& (i!( are in a )anner invo"ve#
it( ea!( ot(er- One (a& referen!e to t(e )eanin$
of t(e e%.re&&ion P.eri"& of t(e &ea& an# a"" ot(er
.eri"&, "o&&e&, an# )i&fort'ne&,P a& '&e# in t(e
.o"i!y; t(e ot(er (a& referen!e to t(e i)."ie#
arranty, on t(e .art of t(e in&'re#, a& to t(e
&eaort(ine&& of t(e &(i.-
, T(e )eanin$ of t(e e%.re&&ion P.eri"& K K K of t(e
&ea& K K K an# a"" ot(er .eri"&, "o&&e&, an#
)i&fort'ne&,P '&e# in #e&!ri+in$ t(e ri&2& !overe# +y
.o"i!ie& of )arine in&'ran!e, (a& +een t(e &'+Je!t of
fre;'ent #i&!'&&ion; an# !ertain .ro.o&ition& re"ative
t(ereto are no &o $enera""y a!!e.te# a& to +e
!on&i#ere# #efinite"y &ett"e#-
, T(e or#& Pa"" ot(er .eri"&, "o&&e&, an#
)i&fort'ne&P are to +e inter.rete# a& !overin$ ri&2&
(i!( are of "i2e 2in# @eJ'&#e) $eneri&A it( t(e
.arti!'"ar ri&2& (i!( are en')erate# in t(e
.re!e#in$ .art of t(e &a)e !"a'&e of t(e !ontra!t-
, A "o&& (i!(, in t(e or#inary !o'r&e of event&,
re&'"t& fro) t(e nat'ra" an# inevita+"e a!tion of t(e
&ea, fro) t(e or#inary ear an# tear of t(e &(i., or
fro) t(e ne$"i$ent fai"'re of t(e &(i.N& oner to
.rovi#e t(e ve&&e" it( .ro.er e;'i.)ent to !onvey
t(e !ar$o 'n#er or#inary !on#ition&, i& not a .eri" of
t(e &ea- S'!( a "o&& i& rat(er #'e to (at (a& +een
a.t"y !a""e# t(e P.eri" of t(e &(i.-P T(e in&'rer
'n#erta2e& to in&'re a$ain&t .eri"& of t(e &ea an#
&i)i"ar .eri"&, not a$ain&t .eri"& of t(e &(i.-
, A& a& &ai# +y /or# 1er&!(e"" in 0i"&on, Son& S Co-
v&- Oner& of Car$o .er t(e Want(o, t(ere )'&t, in
or#er to )a2e t(e in&'rer "ia+"e, +e P&o)e !a&'a"ty,
&o)et(in$ (i!( !o'"# not +e fore&een a& one of t(e
ne!e&&ary in!i#ent& of t(e a#vent're- T(e .'r.o&e of
t(e .o"i!y i& to &e!'re an in#e)nity a$ain&t a!!i#ent&
(i!( )ay (a..en, not a$ain&t event& (i!( )'&t
(a..en-P
, In t(e .re&ent !a&e t(e entran!e of t(e &ea ater
into t(e &(i.N& (o"# t(ro'$( t(e #efe!tive .i.e
a"rea#y #e&!ri+e# a& not #'e to any a!!i#ent (i!(
(a..ene# #'rin$ t(e voya$e, +'t to t(e fai"'re of t(e
&(i.N& oner .ro.er"y to re.air a #efe!t of t(e
e%i&ten!e of (i!(, (e a& a..ri&e#- T(e "o&& a&
t(erefore )ore ana"o$o'& to t(at (i!( #ire!t"y
re&'"t& fro) &i)."e 'n&eaort(ine&& t(an to t(at
(i!( re&'"t& fro) .eri"& of t(e &ea-
, It i& 'niver&a""y a!!e.te# t(at in every !ontra!t of
in&'ran!e '.on anyt(in$ (i!( i& t(e &'+Je!t of
)arine in&'ran!e, a arranty i& i)."ie# t(at t(e &(i.
&(a"" +e &eaort(y at t(e ti)e of t(e in!e.tion of t(e
voya$e- T(i& r'"e i& a!!e.te# in o'r on In&'ran!e
/a @A!t No- 2D2C, &ee- 406A-
, It i& a"&o e"" &ett"e# t(at a &(i. (i!( i&
&eaort(y for t(e .'r.o&e of in&'ran!e '.on t(e &(i.
)ay yet +e 'n&eaort(y for t(e .'r.o&e of
in&'ran!e '.on t(e !ar$o @A!t No- 2D2C, &ee- 406A-
Disposition GJ'#$)ent affir)e#-
MALAYAN INSURANCE $. CA (*,2"a 2.68)
FILIPINO MERCHANTS INS. CO. $. CA (*,2"a
2.6J)
COASTWISE LIGHTERAGE CORP $. CA
(PHILIPPINE GENERAL INSURANCE COMPANY)
2D9 SC<A C56
*<ANCISCO; G'"y 42, 4559
NATURE
Petition for revie of CA Ee!i&ion affir)in$ #e!i&ion
of <TC Mani"a (o"#in$ t(at Coa&ti&e i& "ia+"e to .ay
P(i"Gen In&'ran!e t(e a)o'nt of PC00t(o' ."'& "e$a"
intere&t t(ereon, anot(er &') of P400t(o' a&
attorneyN& fee& an# t(e !o&t of t(e &'it-
FACTS
, Pa$,a&a Sa"e&, In!- entere# into a !ontra!t to
tran&.ort )o"a&&e& fro) t(e .rovin!e of Ne$ro& to
INSURANCE Page 92
Mani"a it( Coa&ti&e, '&in$ t(e "atterN& #')+
+ar$e&- T(e +ar$e& ere toe# in tan#e) +y t(e
t'$+oat MT Mari!a, a"&o one# +y Coa&ti&e- U.on
rea!(in$ Mani"a Bay, (i"e a..roa!(in$ Pier 46, one
of t(e +ar$e& &tr'!2 an 'n2non &'n2en o+Je!t- T(e
forar# +'oyan!y !o).art)ent a& #a)a$e#, an#
ater $'&(e# in t(ro'$( a (o"e Pto in!(e& i#e an#
tenty,to in!(e& "on$-P
, A& a !on&e;'en!e, t(e )o"a&&e& at t(e !ar$o tan2&
ere !onta)inate# an# ren#ere# 'nfit for t(e '&e it
a& inten#e#- T(i& .ro).te# !on&i$nee Pa$,a&a
Sa"e& to reJe!t t(e &(i.)ent of )o"a&&e& a& a tota"
"o&&- T(ereafter, Pa$,a&a Sa"e& fi"e# a for)a" !"ai)
it( t(e in&'rer of it& "o&t !ar$o @P(i"GenA an#
a$ain&t t(e !arrier @Coa&ti&eA- Coa&ti&e #enie# t(e
!"ai) an# it a& P(i"Gen (i!( .ai# Pa$,a&a Sa"e&
t(e a)o'nt of PC002 re.re&entin$ t(e va"'e of t(e
#a)a$e# !ar$o of )o"a&&e&-
, P(i"Gen t(en fi"e# an a!tion a$ain&t Coa&ti&e
+efore t(e <TC Mani"a, &ee2in$ to re!over t(e PC002
(i!( it .ai# to Pa$,a&a Sa"e& for t(e "atterN& "o&t
!ar$o- P(i"Gen no !"ai)& to +e &'+ro$ate# to a"" t(e
!ontra!t'a" ri$(t& an# !"ai)& (i!( t(e !on&i$nee
)ay (ave a$ain&t t(e !arrier, (i!( i& .re&')e# to
(ave vio"ate# t(e !ontra!t of !arria$e-
, <TC aar#e# t(e a)o'nt .raye# for +y P(i"Gen- CA
affir)e#- 1en!e, t(i& .etition-
ISSUES
4- 0ON Coa&ti&e /i$(tera$e a& tran&for)e# into a
.rivate !arrier, +y virt'e of t(e !ontra!t of
affrei$(t)ent (i!( it entere# into it( t(e
!on&i$nee, Pa$,a&a Sa"e&, In!- @Coro""ari"y, if it ere
in fa!t tran&for)e# into a .rivate !arrier, #i# it
e%er!i&e t(e or#inary #i"i$en!e to (i!( a .rivate
!arrier i& in t'rn +o'n#XA
2- 0ON t(e in&'rer a& &'+ro$ate# into t(e ri$(t& of
t(e !on&i$nee a$ain&t t(e !arrier, '.on .ay)ent +y
t(e in&'rer of t(e va"'e of t(e !on&i$neeN& $oo#& "o&t
(i"e on +oar# one of t(e !arrierN& ve&&e"&
HELD
4- NO
, T(e #i&tin!tion +eteen t(e to 2in#& of !(arter
.artie& @i.e- +are+oat or #e)i&e an# !ontra!t of
affrei$(t)entA i& )ore !"ear"y &et o't in t(e !a&e of
Puroines$ 'nc. vs. Court of A##eals,

(erein SC
r'"e#H
7Un#er t(e #e)i&e or +are+oat !(arter of t(e
ve&&e", t(e !(arterer i"" $enera""y +e re$ar#e#
a& t(e oner for t(e voya$e or &ervi!e
&ti.'"ate#- T(e !(arterer )an& t(e ve&&e" it(
(i& on .eo."e an# +e!o)e& t(e oner #ro !ac
vice, &'+Je!t to "ia+i"ity to ot(er& for #a)a$e&
!a'&e# +y ne$"i$en!e- To !reate a #e)i&e, t(e
oner of a ve&&e" )'&t !o)."ete"y an#
e%!"'&ive"y re"in;'i&( .o&&e&&ion, !o))an# an#
navi$ation t(ereof to t(e !(arterer, anyt!in"
s!ort of suc! a co#lete transfer is a contract of
affrei"!tent &tie or voya"e c!arter #arty) or
not a c!arter #arty at all-
On t(e ot(er (an# a !ontra!t of affrei$(t)ent i&
one in (i!( t(e oner of t(e ve&&e" "ea&e& .art
or a"" of it& &.a!e to (a'" $oo#& for ot(er&- It i& a
!ontra!t for &.e!ia" &ervi!e to +e ren#ere# +y
t(e oner of t(e ve&&e" an# 'n#er &'!( !ontra!t
t(e $enera" oner retain& t(e .o&&e&&ion,
!o))an# an# navi$ation of t(e &(i., t(e
!(arterer or frei$(ter )ere"y (avin$ '&e of t(e
&.a!e in t(e ve&&e" in ret'rn for (i& .ay)ent of
t(e !(arter (ire---
An oner (o retain& .o&&e&&ion of t(e &(i.
t(o'$( t(e (o"# i& t(e .ro.erty of t(e !(arterer,
re)ain& "ia+"e a& !arrier an# )'&t an&er for
any +rea!( of #'ty a& to t(e !are, "oa#in$ an#
'n"oa#in$ of t(e !ar$o-8
, A"t(o'$( a !(arter .arty )ay tran&for) a !o))on
!arrier into a .rivate one, t(e &a)e (oever i& not
tr'e in a !ontra!t of affrei$(t)ent on a!!o'nt of t(e
afore)entione# #i&tin!tion& +eteen t(e to-
, SC a$ree& it( Coa&ti&eN& a#)i&&ion t(at t(e
!ontra!t it entere# into it( t(e !on&i$nee a& one
of affrei$(t)ent-

Pa$,a&a Sa"e&, In!- on"y "ea&e#
t(ree of .etitionerN& ve&&e"&, in or#er to !arry !ar$o
fro) one .oint to anot(er, +'t t(e .o&&e&&ion,
!o))an# an# navi$ation of t(e ve&&e"& re)aine#
it( Coa&ti&e- A& &'!(, Coa&ti&e, +y t(e !ontra!t
of affrei$(t)ent, a& not !onverte# into a .rivate
!arrier, +'t re)aine# a !o))on !arrier an# a& &ti""
"ia+"e a& &'!(-
, T(erefore, t(e )ere .roof of #e"ivery of $oo#& in
$oo# or#er to a !arrier an# t(e &'+&e;'ent arriva" of
t(e &a)e $oo#& at t(e ."a!e of #e&tination in +a#
or#er )a2e& for a #ria facie !a&e a$ain&t t(e
!arrier- T(e .re&').tion of ne$"i$en!e t(at atta!(e&
to !o))on !arrier&, on!e t(e $oo#& it tran&.ort& are
"o&t, #e&troye# or #eteriorate#, a.."ie& to Coa&ti&e-
T(i& .re&').tion, (i!( i& over!o)e on"y +y .roof of
t(e e%er!i&e of e%traor#inary #i"i$en!e, re)aine#
'nre+'tte# in t(i& !a&e-
, T(e #a)a$e to t(e +ar$e (i!( !arrie# t(e !ar$o of
)o"a&&e& a& !a'&e# +y it& (ittin$ an 'n2non
&'n2en o+Je!t a& it a& (ea#in$ for Pier 46- T(e
o+Je!t t'rne# o't to +e a &'+)er$e# #ere"i!t ve&&e"-
T(e evi#en!e on re!or# a..eare# t(at far fro)
(avin$ ren#ere# &ervi!e it( t(e $reate&t &2i"" an#
't)o&t fore&i$(t, an# +ein$ free fro) fa'"t, t(e
!arrier a& !'".a+"y re)i&& in t(e o+&ervan!e of it&
#'tie&-
, Ge&'& <- Con&tantino, t(e .atron of t(e ve&&e"
PCoa&ti&e 5P a#)itte# t(at (e a& not "i!en&e#- T(e
Co#e of Co))er!e, (i!( &'+&i#iari"y $overn&
!o))on !arrier& @(i!( are .ri)ari"y $overne# +y
t(e .rovi&ion& of t(e Civi" Co#eA .rovi#e&H 7Art- 605-
Ca.tain&, )a&ter&, or .atron& of ve&&e"& )'&t +e
*i"i.ino&, (ave "e$a" !a.a!ity to !ontra!t in
a!!or#an!e it( t(i& !o#e, an# .rove t(e &2i""
!a.a!ity an# ;'a"ifi!ation& ne!e&&ary to !o))an#
an# #ire!t t(e ve&&e", a& e&ta+"i&(e# +y )arine an#
navi$ation "a&, or#inan!e& or re$'"ation&, an# )'&t
not +e #i&;'a"ifie# a!!or#in$ to t(e &a)e for t(e
#i&!(ar$e of t(e #'tie& of t(e .o&ition-8
, C"ear"y, Coa&ti&e /i$(tera$eN& e)+ar2in$ on a
voya$e it( an 'n"i!en&e# .atron vio"ate& t(i& r'"e-
It !annot &afe"y !"ai) to (ave e%er!i&e#
e%traor#inary #i"i$en!e, +y ."a!in$ a .er&on (o&e
navi$ationa" &2i""& are ;'e&tiona+"e, at t(e (e") of
t(e ve&&e" (i!( event'a""y )et t(e fatef'" a!!i#ent-
It )ay a"&o "o$i!a""y, fo""o t(at a .er&on it(o't
"i!en&e to navi$ate, "a!2& not J'&t t(e &2i"" to #o &o,
+'t a"&o t(e 't)o&t fa)i"iarity it( t(e '&'a" an#
&afe ro'te& ta2en +y &ea&one# an# "e$a""y a't(ori:e#
one&- 1a# t(e .atron +een "i!en&e#, (e !o'"# +e
.re&')e# to (ave +ot( t(e &2i"" an# t(e 2no"e#$e
t(at o'"# (ave .revente# t(e ve&&e"N& (ittin$ t(e
&'n2en #ere"i!t &(i. t(at "ay on t(eir ay to Pier 46-
, A& a !o))on !arrier, Coa&ti&e i& "ia+"e for +rea!(
of t(e !ontra!t of !arria$e, (avin$ fai"e# to over!o)e
t(e .re&').tion of ne$"i$en!e it( t(e "o&& an#
#e&tr'!tion of $oo#& it tran&.orte#, +y .roof of it&
e%er!i&e of e%traor#inary #i"i$en!e-
2- F>S
, Coa&ti&e i& "ia+"e for +rea!( of t(e !ontra!t of
!arria$e it entere# into it( Pa$,a&a Sa"e&, In!-
1oever, for t(e #a)a$e &'&taine# +y t(e "o&& of
t(e !ar$o (i!( .etitioner,!arrier a& tran&.ortin$,
it a& not t(e !arrier (i!( .ai# t(e va"'e t(ereof to
Pa$,a&a Sa"e&, In!- +'t t(e "atterN& in&'rer, (erein
.rivate re&.on#ent P(i"Gen-
, Arti!"e 220C of t(e Civi" Co#eH If t(e ."aintiff&
.ro.erty (a& +een in&'re#, an# (e (a& re!eive#
in#e)nity fro) t(e in&'ran!e !o).any for t(e inJ'ry
or "o&& ari&in$ o't of t(e ron$ or +rea!( of !ontra!t
!o)."aine# of, t(e in&'ran!e !o).any &(a"" +e
&'+ro$ate# to t(e ri$(t& of t(e in&'re# a$ain&t t(e
ron$#oer or t(e .er&on (o vio"ate# t(e !ontra!t-8
INSURANCE Page 93
, T(i& "e$a" .rovi&ion i& fo'n#e# on t(e e"",&ett"e#
.rin!i."e of &'+ro$ation- If t(e in&'re# .ro.erty i&
#e&troye# or #a)a$e# t(ro'$( t(e fa'"t or
ne$"i$en!e of a .arty ot(er t(an t(e a&&'re#, t(en
t(e in&'rer, '.on .ay)ent to t(e a&&'re# i"" +e
&'+ro$ate# to t(e ri$(t& of t(e a&&'re# to re!over
fro) t(e ron$#oer to t(e e%tent t(at t(e in&'rer
(a& +een o+"i$ate# to .ay- Payent by t!e insurer to
t!e assured o#erated as an e.uitable assi"nent to
t!e forer of all reedies ,!ic! t!e latter ay !ave
a"ainst t!e t!ird #arty ,!ose ne"li"ence or ,ron"ful
act caused t!e loss- T(e ri$(t of &'+ro$ation i& not
#e.en#ent '.on, nor #oe& it $ro o't of, any .rivity
of !ontra!t or '.on ritten a&&i$n)ent of !"ai)- It
a!!r'e& &i)."y '.on .ay)ent of t(e in&'ran!e !"ai)
+y t(e in&'rer-
, Un#o'+te#"y, '.on .ay)ent +y re&.on#ent in&'rer
P(i"Gen of t(e a)o'nt of PC00,000-00 to Pa$,a&a
Sa"e&, In!-, t(e !on&i$nee of t(e !ar$o of )o"a&&e&
tota""y #a)a$e# (i"e +ein$ tran&.orte# +y
.etitioner Coa&ti&e /i$(tera$e, t(e for)er a&
&'+ro$ate# into a"" t(e ri$(t& (i!( Pa$,a&a Sa"e&,
In!- )ay (ave (a# a$ain&t t(e !arrier, (erein
.etitioner Coa&ti&e /i$(tera$e-
Disposition Petition #enie#- CA affri)e#-
THE PHILIPPINE AMERICAN GENERAL
INSURANCE COMPANY INC $. CA (FELMAN
SHIPPING LINES)
2C3 SC<A 226
B>//OSI//O; G'ne 44, 455C
FACTS
, Co!a,Co"a Bott"er& P(i"i..ine&, In!-, "oa#e# on
+oar# MV Asilda$* a ve&&e" one# an# o.erate# +y
*e")an C,900 !a&e& of 4,"iter Co!a,Co"a &oft#rin2
+ott"e& to +e tran&.orte# fro) ?a)+oan$a City to
Ce+' for !on&i$nee Co!a,Co"a Bott"er& P(i"i..ine&,
In!-, Ce+'-

T(e &(i.)ent a& in&'re# it( .etitioner
P(i"i..ine A)eri!an Genera" 'n#er Marine O.en
Po"i!y-
, T(e ve&&e" &an2 in t(e ater& of ?a)+oan$a #e"
Norte +rin$in$ #on (er entire !ar$o it( (er
in!"'#in$ t(e &'+Je!t C,900 !a&e& of 4,"iter Co!a,Co"a
&oft#rin2 +ott"e&-
, T(e !on&i$nee fi"e# a !"ai) it( re&.on#ent
*>/MAN for re!overy of #a)a$e& it &'&taine# a& a
re&'"t of t(e "o&& of it& &oft#rin2 +ott"e& t(at &an2
it( MV Asilda.* <e&.on#ent #enie# t(e !"ai)
t('& .ro).tin$ t(e !on&i$nee to fi"e an in&'ran!e
!"ai) it( P1I/AMG>N (i!( .ai# it& !"ai) of
PC99,290-00-
, C"ai)in$ it& ri$(t of &'+ro$ation P1I/AMG>N
&o'$(t re!o'r&e a$ain&t re&.on#ent *>/MAN (i!(
#i&!"ai)e# any "ia+i"ity for t(e "o&&- Con&e;'ent"y,
P1I/AMG>N &'e# t(e &(i.oner for &') of )oney
an# #a)a$e&-
, P1I/AMG>N a""e$e# t(at t(e &in2in$ an# tota" "o&&
of MV Asilda* an# it& !ar$o ere #'e to t(e ve&&e"=&
'n&eaort(ine&& a& &(e a& .'t to &ea in an
'n&ta+"e !on#ition- It f'rt(er a""e$e# t(at t(e
ve&&e" a& i).ro.er"y )anne# an# t(at it&
offi!er& ere $ro&&"y ne$"i$ent in fai"in$ to ta2e
a..ro.riate )ea&'re& to .ro!ee# to a near+y .ort or
+ea!( after t(e ve&&e" &tarte# to "i&t-
, *>/MAN fi"e# a )otion to #i&)i&& +a&e# on t(e
affir)ative #efen&e t(at no ri$(t of &'+ro$ation in
favor of P1I/AMG>N a& tran&)itte# +y t(e &(i..er,
an# t(at, in any event, *>/MAN (a# a+an#one# a""
it& ri$(t&, intere&t& an# oner&(i. over MV Asilda*
to$et(er it( (er frei$(t an# a..'rtenan!e& for t(e
.'r.o&e of "i)itin$ an# e%tin$'i&(in$ it& "ia+i"ity
'n#er Art- 96C of t(e Co#e of Co))er!e-
, Tria" !o'rt #i&)i&&e# t(e !o)."aint of P1I/AMG>N-
On a..ea" t(e Co'rt of A..ea"& &et a&i#e t(e
#i&)i&&a" an# re)an#e# t(e !a&e to t(e "oer !o'rt
for tria" on t(e )erit&- *>/MAN fi"e# a .etition for
certiorari it( t(i& Co'rt +'t it a& &'+&e;'ent"y
#enie# on 43 *e+r'ary 4565-
, Tria" !o'rt ren#ere# J'#$)ent in favor of *>/MAN-
It r'"e# t(at MV Asilda* a& &eaort(y (en it "eft
t(e .ort of ?a)+oan$a a& !onfir)e# +y !ertifi!ate&
i&&'e# +y t(e P(i"i..ine Coa&t G'ar# an# t(e
&(i.oner=& &'rveyor atte&tin$ to it& &eaort(ine&&-
T('& t(e "o&& of t(e ve&&e" an# it& entire &(i.)ent
!o'"# on"y +e attri+'te# to eit(er a fort'ito'& event,
in (i!( !a&e, no "ia+i"ity &(o'"# atta!( 'n"e&& t(ere
a& a &ti.'"ation to t(e !ontrary, or to t(e
ne$"i$en!e of t(e !a.tain an# (i& !re, in (i!(
!a&e, Art- 96C of t(e Co#e of Co))er!e &(o'"#
a.."y-
, CA r'"e# t(at MV Asilda* a& 'n&eaort(y for
+ein$ to., (eavy a& 2,900 !a&e& of Co!a,Co"a
&oft#rin2 +ott"e& ere i).ro.er"y &toe# on #e!2-
Nonet(e"e&&, t(e a..e""ate !o'rt #enie# t(e !"ai) of
P1I/AMG>N on t(e $ro'n# t(at t(e a&&'re#=& i)."ie#
arranty of &eaort(ine&& a& not !o)."ie# it(-
Perf'n!tori"y, P1I/AMG>N a& not .ro.er"y
&'+ro$ate# to t(e ri$(t& an# intere&t& of t(e &(i..er-
*'rt(er)ore, re&.on#ent !o'rt (e"# t(at t(e fi"in$ of
noti!e of a+an#on)ent (a# a+&o"ve# t(e
&(i.onerRa$ent fro) "ia+i"ity 'n#er t(e "i)ite#
"ia+i"ity r'"e-
ISSUES
4- 0ON MV Asilda* a& &eaort(y (en it "eft t(e
.ort of ?a)+oan$a
2- 0ON t(e "i)ite# "ia+i"ity 'n#er Art- 96C of t(e
Co#e of Co))er!e &(o'"# a.."y
3- 0ON P1I/AMG>N a& .ro.er"y &'+ro$ate# to t(e
ri$(t& an# "e$a" a!tion& (i!( t(e &(i..er (a#
a$ain&t *>/MAN, t(e &(i.oner
HELD
4- F>S
- MV Asilda* a& 'n&eaort(y (en it "eft t(e .ort
of ?a)+oan$a- 0e &'+&!ri+e to t(e fin#in$& of t(e
>"ite A#J'&ter&, In!-, an# t(e Co'rt of A..ea"& t(at
t(e .ro%i)ate !a'&e of t(e &in2in$ of MV Asilda*
a& it& +ein$ to.,(eavy- Contrary to t(e &(i.
!a.tain=& a""e$ation&, evi#en!e &(o& t(at
a..ro%i)ate"y 2,900 !a&e& of &oft#rin2 +ott"e& ere
&toe# on #e!2- Severa" #ay& after MV Asilda*
&an2, an e&ti)ate# 2,900 e).ty Co!a,Co"a ."a&ti!
!a&e& ere re!overe# near t(e vi!inity of t(e &in2in$-
Con&i#erin$ t(at t(e &(i.=& (at!(e& ere .ro.er"y
&e!'re#, t(e e).ty Co!a,Co"a !a&e& re!overe# !o'"#
(ave !o)e on"y fro) t(e ve&&e"=& #e!2 !ar$o- It i&
&ett"e# t(at !arryin$ a #e!2 !ar$o rai&e& t(e
.re&').tion of 'n&eaort(ine&& 'n"e&& it !an +e
&(on t(at t(e #e!2 !ar$o i"" not interfere it( t(e
.ro.er )ana$e)ent of t(e &(i.- 1oever, in t(i&
!a&e it a& e&ta+"i&(e# t(at MV Asilda* a& not
#e&i$ne# to !arry &'+&tantia" a)o'nt of !ar$o on
#e!2- T(e inor#inate "oa#in$ of !ar$o #e!2 re&'"te#
in t(e #e!rea&e of t(e ve&&e"=& )eta!entri! (ei$(t
t('& )a2in$ it 'n&ta+"e- T(e &tron$ in#& an#
ave& en!o'ntere# +y t(e ve&&e" are +'t t(e
or#inary vi!i&&it'#e& of a &ea voya$e an# a& &'!(
)ere"y !ontri+'te# to it& a"rea#y 'n&ta+"e an#
'n&eaort(y !on#ition-
2- NO
, T(e &(i. a$ent i& "ia+"e for t(e ne$"i$ent a!t& of t(e
!a.tain in t(e !are of $oo#& "oa#e# on t(e ve&&e"-
T(i& "ia+i"ity (oever !an +e "i)ite# t(ro'$(
a+an#on)ent of t(e ve&&e", it& e;'i.)ent an#
frei$(ta$e a& .rovi#e# in Art- 96C- Nonet(e"e&&,
t(ere are e%!e.tiona" !ir!')&tan!e& (erein t(e
&(i. a$ent !o'"# &ti"" +e (e"# an&era+"e #e&.ite t(e
a+an#on)ent, a& (ere t(e "o&& or inJ'ry a& #'e to
t(e fa'"t of t(e &(i.oner an# t(e !a.tain- T(e
internationa" r'"e i& to t(e effe!t t(at t(e ri$(t of
a+an#on)ent of ve&&e"&, a& a "e$a" "i)itation of a
&(i.oner=& "ia+i"ity, #oe& not a.."y to !a&e& (ere
t(e inJ'ry or avera$e a& o!!a&ione# +y t(e
&(i.oner=& on fa'"t-
INSURANCE Page 94
3- F>S
, T(e #o!trine of &'+ro$ation (a& it& root& in e;'ity-
It i& #e&i$ne# to .ro)ote an# to a!!o)."i&( J'&ti!e
an# i& t(e )o#e (i!( e;'ity a#o.t& to !o).e" t(e
'"ti)ate .ay)ent of a #e+t +y one (o in J'&ti!e,
e;'ity an# $oo# !on&!ien!e o'$(t to .ay- T(erefore,
t(e .ay)ent )a#e +y P1I/AMG>N to Co!a,Co"a
Bott"er& P(i"i..ine&, In!-, $ave t(e for)er t(e ri$(t
to +rin$ an a!tion a& &'+ro$ee a$ain&t *>/MAN-
1avin$ fai"e# to re+'t t(e .re&').tion of fa'"t, t(e
"ia+i"ity of *>/MAN for t(e "o&& of t(e C,900 !a&e& of
4,"iter Co!a,Co"a &oft#rin2 +ott"e& i& inevita+"e-
, Se!- 443 of t(e In&'ran!e Co#e .rovi#e& t(at 7@iAn
every )arine in&'ran!e '.on a &(i. or frei$(t, or
frei$(ta$e, or '.on anyt(in$ (i!( i& t(e &'+Je!t of
)arine in&'ran!e, a arranty i& i)."ie# t(at t(e &(i.
i& &eaort(y-8 Un#er Se!- 44D, a &(i. i& 7&eaort(y
(en rea&ona+"y fit to .erfor) t(e &ervi!e, an# to
en!o'nter t(e or#inary .eri"& of t(e voya$e,
!onte)."ate# +y t(e .artie& to t(e .o"i!y-8 T('& it
+e!o)e& t(e o+"i$ation of t(e !ar$o oner to "oo2 for
a re"ia+"e !o))on !arrier (i!( 2ee.& it& ve&&e"& in
&eaort(y !on#ition- 1e )ay (ave no !ontro" over
t(e ve&&e" +'t (e (a& f'"" !ontro" in t(e &e"e!tion of
t(e !o))on !arrier t(at i"" tran&.ort (i& $oo#&- 1e
a"&o (a& f'"" #i&!retion in t(e !(oi!e of a&&'rer t(at
i"" 'n#errite a .arti!'"ar vent're-
, In .o"i!ie& (ere t(e "a i"" $enera""y i)."y a
arranty of &eaort(ine&&, it !an on"y +e e%!"'#e#
+y ter)& in ritin$ in t(e .o"i!y in t(e !"eare&t
"an$'a$e- An# (ere t(e .o"i!y &ti.'"ate& t(at t(e
&eaort(ine&& of t(e ve&&e" a& +eteen t(e a&&'re#
an# t(e a&&'rer i& a#)itte#, t(e ;'e&tion of
&eaort(ine&& !annot +e rai&e# +y t(e a&&'rer
it(o't &(oin$ !on!ea")ent or )i&re.re&entation
+y t(e a&&'re#-
, P1I/AMG>N=& a!tion a$ain&t *>/MAN i& &;'are"y
&an!tione# +y Art- 220C of t(e Civi" Co#e (i!(
.rovi#e&H
Art- 220C- If t(e ."aintiff=& .ro.erty (a& +een
in&'re#, an# (e (a& re!eive# in#e)nity fro)
t(e in&'ran!e !o).any for t(e inJ'ry or "o&&
ari&in$ o't of t(e ron$ or +rea!( of !ontra!t
!o)."aine# of, t(e in&'ran!e !o).any &(a""
+e &'+ro$ate# to t(e ri$(t& of t(e in&'re#
a$ain&t t(e ron$#oer or t(e .er&on (o (a&
vio"ate# t(e !ontra!t- If t(e a)o'nt .ai# +y
t(e in&'ran!e !o).any #oe& not f'""y !over
t(e inJ'ry or "o&&, t(e a$$rieve# .arty &(a""
+e entit"e# to re!over t(e #efi!ien!y fro) t(e
.er&on !a'&in$ t(e "o&& or inJ'ry-
Disposition Petition i& G<ANT>E- <e&.on#ent
*>/MAN S1IPPING /IN>S i& or#ere# to .ay .etitioner
P1I/IPPIN> AM><ICAN G>N><A/ INSU<ANC> CO-,
INC-, Seven 1'n#re# *ifty,five T(o'&an# To
1'n#re# an# *ifty Pe&o& @PC99,290-00A ."'& "e$a"
intere&t t(ereon !o'nte# fro) 25 Nove)+er 4563,
t(e #ate of J'#i!ia" #e)an#, .'r&'ant to Art&- 2242
an# 2243 of t(e Civi" Co#e-
PHILIPPINE MFTG. CO. $. UNION INSURANCE
SOCIETY OF CANTON
D2 P1I/ 3C6
GO1NS; Nove)+er 22, 4524
FACTS
5 T(e ."aintiff=& &tee" tan2 "i$(ter a& in&'re# +y
#efen#ant !o).any for a+&o"'te tota" "o&&- A& a
re&'"t of a ty.(oon, t(e "i$(ter &'n2 in Mani"a Bay-
T(e ."aintiff #e)an#e# .ay)ent fro) t(e #efen#ant
in&'ran!e !o).any +'t t(e "atter ref'&e#- T(e
!o).any a&2e# t(e ."aintiff to &a"va$e t(e &(i.,
(i!( it a& a+"e to #o &o-
, 0it( t(e ."aintiff a+"e to rai&e t(e "i$(ter,
re!on&tr'!t it an# ."a!e# it in !o))i&&ion, t(e
#efen#ant in&'ran!e !o).any !"ai)& t(at it a& on"y
"ia+"e for a tota" a+&o"'te "o&& an# t(at t(ere a& no
tota" #e&tr'!tion of t(e "i$(ter-
, T(e tria" !o'rt #e!i#e# in favor of t(e #efen#ant,
&ayin$ t(at t(e .o"i!y on"y !overe# an a!t'a" tota"
"o&&, not a !on&tr'!tive tota" "o&&-
ISSUES
4- 0ON t(ere a& an a+&o"'te tota" "o&& t(at !an +e
!overe# +y t(e .o"i!y
2- 0ON t(e Marine /a of Great Britain a.."ie&
HELD
4- F>S
, At t(e ti)e t(at t(e "i$(ter a& at t(e +otto) of
t(e +ay, it a& of no va"'e to t(e oner, t('& t(ere
a& an a!t'a" tota" "o&&-
, T(e &(i. a& &'n2 in G'"y 4, 4546- After &evera"
f'ti"e atte).t&, it a& fina""y rai&e# on Se.t- 20,
4546- It i& faitr to a&&')e t(at in it& t(en !on#ition
)'!( f'rt(er ti)e o'"# +e re;'ire# to )a2e t(e
ne!e&&ary re.air& an# in&ta"" t(e ne )a!(inery
+efore it !o'"# a$ain +e ."a!e# in !o))i&&ion-
E'rin$ t(at ti)e t(e oner o'"# +e #e.rive# of t(e
'&e of it& ve&&e" or t(e intere&t on it& inve&t)ent-
0(en t(o&e ;'e&tion& are !on&i#ere# t(e te&ti)ony
i& !on!"'&ive t(at t(e !o&t of &a"va$e, re.air an#
re!on&tr'!tion a& )ore t(an t(e ori$ina" !o&t of t(e
&(i. at t(e ti)e t(e .o"i!y a& i&&'e#- A& fo'n# +y
t(e tria" !o'rt, 7t i& #iffi!'"t to &ee (o t(ere !o'"#
(ave +een a )ore !o)."ete "o&& of t(e ve&&e" t(an
t(at (i!( a!t'a""y o!!'rre#8- U.on t(e fa!t& &(on
(ere, any ot(er !on&tr'!tion o'"# n'""ify t(e &tat'te
an# a& a.."ie# to t(e !on#ition& e%i&tin$ in t(e
Mani"a Bay, t(i& 2in# of .o"i!y o'"# +e ort("e&&,
an# t(ere o'"# not +e any !on&i#eration for t(e
.re)i')-
2- NO
, T(e #efen#ant ar$'e& t(at t(e .o"i!y !ontain& t(e
.rovi&ion t(at it 7&(a"" +e of a& for!e an# effe!t a&
t(e &'re&t ritin$ or .o"i!y of in&'ran!e )a#e in
/on#on8- 1oever, for &'!( "a to a.."y to o'r
!o'rt& t(e e%i&ten!e of &'!( "a )'&t +e .roven- It
!annot a.."y (en &'!( .roof i& "a!2in$-
Nevert(e"e&&, in t(e >n$"i&( .ra!ti!e, a &(i. i& a tota"
"o&& (en &(e (a& &'&taine# &'!( e%ten&ive #a)a$e&
t(at it o'"# not +e rea&ona+"y .ra!ti!a" to re.air
(er-
Disposition Ee!i&ion rever&e#
CHOA TIE< SENG $. CA (FILIPINO MERCHANTS
INSURANCE)
463 SC<A 223
GANCAFO; Mar!( 49, 4550
NATURE
A..ea" fro) a #e!i&ion of t(e Co'rt of A..ea"&
FACTS
, Petitioner i).orte# &o)e "a!to&e !ry&ta"& fro)
1o""an#-
, T(e i).ortation invo"ve# fifteen @49A )etri! ton&
.a!2e# in 600 6,."y .a.er +a$& it( .o"yt(e"ene
inner +a$&, ea!( +a$ at 29 2i"o& net- T(e $oo#& ere
"oa#e# at t(e .ort at <otter#a) in &ea van& on +oar#
t(e ve&&e" PMS Bena"#erN a& t(e )ot(er ve&&e", an#
t(ereafter a+oar# t(e fee#er ve&&e" P0e&&er Bro2er
M,29P of re&.on#ent Ben /ine& Container, /t#- @Ben
/ine& for &(ortA- T(e $oo#& ere in&'re# +y t(e
re&.on#ent *i"i.ino Mer!(ant&N In&'ran!e Co-, In!-
@in&'ran!e !o).any for &(ortA for t(e &') of
P56,662-39, t(e e;'iva"ent of UST6,C69-00 ."'& 90Q
INSURANCE Page 95
)ar2,'. or US T43,4DC-90, a$ain&t a"" ri&2& 'n#er
t(e ter)& of t(e in&'ran!e !ar$o .o"i!y- U.on arriva"
at t(e .ort of Mani"a, t(e !ar$o a& #i&!(ar$e# into
t(e !'&to#y of t(e arra&tre o.erator re&.on#ent >-
<a:on, In!- @+ro2er for &(ortA, .rior to t(e #e"ivery to
.etitioner t(ro'$( (i& +ro2er- Of t(e 600 +a$&
#e"ivere# to .etitioner, D03 ere in +a# or#er- T(e
&'rvey& &(oe# t(at t(e +a# or#er +a$& &'ffere#
&.i""a$e an# "o&& "ater va"'e# at P33,44C-63-
Petitioner fi"e# a !"ai) for &ai# "o&& #ate# *e+r'ary
46, 45CC a$ain&t re&.on#ent in&'ran!e !o).any in
t(e a)o'nt of P33,44C-63 a& t(e in&'re# va"'e of
t(e "o&&-
, <e&.on#ent in&'ran!e !o).any reJe!te# t(e !"ai)
a""e$in$ t(at a&&')in$ t(at &.i""a$e too2 ."a!e (i"e
t(e $oo#& ere in tran&it, .etitioner an# (i& a$ent
fai"e# to avert or )ini)i:e t(e "o&& +y fai"in$ to
re!over &.i""a$e fro) t(e &ea van, t('& vio"atin$ t(e
ter)& of t(e in&'ran!e .o"i!y &'e# '.on; an# t(at
a&&')in$ t(at t(e &.i""a$e #i# not o!!'r (i"e t(e
!ar$o a& in tran&it, t(e &ai# D00 +a$& ere "oa#e#
in +a# or#er, an# t(at in any !a&e, t(e van #i# not
!arry any evi#en!e of &.i""a$e-
, Petitioner fi"e# a !o)."aint in t(e <TC a$ain&t t(e
in&'ran!e !o).any &ee2in$ .ay)ent of t(e &') of
P33,44C-63 a& #a)a$e& ."'& attorneyN& fee& an#
e%.en&e& of "iti$ation- In&'ran!e !o).any #enie# a""
t(e )ateria" a""e$ation& of t(e !o)."aint an# rai&e#
&evera" &.e!ia" #efen&e& a& e"" a& a !o).'"&ory
!o'nter!"ai)- In&'ran!e !o).any fi"e# a t(ir#,.arty
!o)."aint a$ain&t re&.on#ent& Ben /ine& an# +ro2er-
, <TC #i&)i&&e# t(e !o)."aint, t(e !o'nter!"ai) an#
t(e t(ir#,.arty !o)."aint it( !o&t& a$ain&t t(e
.etitioner- A..ea"e# in CA +'t #enie#- M*< a&
#enie# a& e""-
ISSUE
0ON in&'ran!e !o).any &(o'"# +e (e"# "ia+"e even if
t(e te!(ni!a" )eanin$ in )arine in&'ran!e of an
7in&'ran!e a$ain&t a"" ri&2P i& a.."ie#
HELD
F>S
, In G"oren In!- v&- *i"i.ina& Cia- #e Se$'ro&, 42 it
a& (e"# t(at an a"" ri&2 in&'ran!e .o"i!y in&'re&
a$ain&t a"" !a'&e& of !on!eiva+"e "o&& or #a)a$e,
e%!e.t a& ot(eri&e e%!"'#e# in t(e .o"i!y or #'e to
fra'# or intentiona" )i&!on#'!t on t(e .art of t(e
in&'re#- It !over& a"" "o&&e& #'rin$ t(e voya$e
(et(er ari&in$ fro) a )arine .eri" or not, in!"'#in$
.i"fera$e "o&&e& #'rin$ t(e ar-
, In t(e .re&ent !a&e, t(e Pa"" ri&2&P !"a'&e of t(e
.o"i!y &'e# '.on rea#& a& fo""o&H
P9- T(i& in&'ran!e i& a$ain&t a"" ri&2& of "o&& or
#a)a$e to t(e &'+Je!t )atter in&'re# +'t &(a"" in
no !a&e +e #ee)e# to e%ten# to !over "o&&,
#a)a$e, or e%.en&e .ro%i)ate"y !a'&e# +y #e"ay
or in(erent vi!e or nat're of t(e &'+Je!t )atter
in&'re#- C"ai)& re!overa+"e (ere'n#er &(a"" +e
.aya+"e irre&.e!tive of .er!enta$e-P
, T(e ter)& of t(e .o"i!y are &o !"ear an# re;'ire no
inter.retation- T(e in&'ran!e .o"i!y !over& a"" "o&& or
#a)a$e to t(e !ar$o e%!e.t t(o&e !a'&e# +y #e"ay
or in(erent vi!e or nat're of t(e !ar$o in&'re#- It i&
t(e #'ty of t(e re&.on#ent in&'ran!e !o).any to
e&ta+"i&( t(at &ai# "o&& or #a)a$e fa""& it(in t(e
e%!e.tion& .rovi#e# for +y "a, ot(eri&e it i& "ia+"e
t(erefor-
, An Pa"" ri&2&P .rovi&ion of a )arine .o"i!y !reate& a
&.e!ia" ty.e of in&'ran!e (i!( e%ten#& !overa$e to
ri&2& not '&'a""y !onte)."ate# an# avoi#& .'ttin$
'.on t(e in&'re# t(e +'r#en of e&ta+"i&(in$ t(at t(e
"o&& a& #'e to .eri" fa""in$ it(in t(e .o"i!yN&
!overa$e- T(e in&'rer !an avoi# !overa$e '.on
#e)on&tratin$ t(at a &.e!ifi! .rovi&ion e%.re&&"y
e%!"'#e& t(e "o&& fro) !overa$e-
, In t(i& !a&e, t(e #a)a$e !a'&e# to t(e !ar$o (a&
not +een attri+'te# to any of t(e e%!e.tion& .rovi#e#
for nor i& t(ere any .reten&ion to t(i& effe!t- T('&,
t(e "ia+i"ity of re&.on#ent in&'ran!e !o).any i&
!"ear-
Disposition t(e #e!i&ion a..ea"e# fro) i& (ere+y
<>M><S>E ANE S>T ASIE> an# anot(er J'#$)ent i&
(ere+y ren#ere# or#erin$ t(e re&.on#ent *i"i.ina&
Mer!(ant& In&'ran!e Co).any, In!- to .ay t(e &')
of P33,44C-63 a& #a)a$e& to .etitioner it( "e$a"
intere&t fro) t(e fi"in$ of t(e !o)."aint, ."'&
attorneyN& fee& an# e%.en&e& of "iti$ation in t(e
a)o'nt of P40,000-00 a& e"" a& t(e !o&t& of t(e
&'it-
FILIPINO MERCHANTS INS. CO. $. CA (*,2"a
2.6J)
ABOITIZ SHIPPING $. PHILAMGEN INSURANCE
4C5 SC<A 39C
GANCAFCO; O!to+er 9, 4565
NATURE
Petition for revie on !ertiorari
FACTS
, Marin#';'e Minin$ In#'&tria" Cor.oration
@Marin#';'eA &(i..e# on +oar# SS Art('r Maer&2
fro) Bo&ton, U-S-A- a &(i.)ent of 4 &2i# !arton
.art& for va"ve&- T(e &(i.)ent a& or#ere# fro)
Ga)e&+'ry, Sin$a.ore PT>, /TE-, (i!( i&&'e# t(e
!ar$oN& .a!2in$ "i&t an# Invoi!e n')+er &(oin$ t(e
!ontent& of t(e !arton- T(e P(i"i..ine Con&'"ate in
Sin$a.ore i&&'e# invoi!e for t(e &(i.)ent &(oin$
t(e !ontent& an# it& tota" .ri!e of T35,D45-60 an#
t(e frei$(t an# ot(er !(ar$e& of T2,C54-C3- 0(en
t(e !ar$o arrive# in Mani"a, it a& re!eive# an#
#e.o&ite# in t(e offi!e of A+oiti: S(i..in$
Cor.oration @A+oiti:A for tran&(i.)ent to Nono!
I&"an#-
, In G'"y 4560, Marin#';'e, a& !on&i$nee of t(e
!ar$o, )a#e a re.ort t(at &ai# !ar$o a& .i"fere# on
G'"y 3, 4560 #'e to (eavy rain at t(e A+oiti:
ter)ina" an# t(at of t(e tota" va"'e of t(e !ar$o of
TD2,205-33, on"y TC,D42-00 ort( re)ain& of t(e
!ar$o it( t(e re!o))en#ation t(at t(e !"ai) +e
)a#e a$ain&t A+oiti:-
, T(e &ervi!e& of t(e Mani"a A#J'&ter& an# S'rveyor&
Co- @Mani"a A#J'&ter&A ere en$a$e# +y t(e P(i",
A)eri!an Genera" In&'ran!e Co-, In!- @P(i" A)A
(i!( !a)e o't it( t(e re.ort t(at t(e !ar$o in
;'e&tion, (en in&.e!te#, &(oe# t(at it a&
.i"fere#- A !onfir)atory re.ort a& &'+)itte# +y t(e
Mani"a A#J'&ter&-
, On A'$'&t 44, 4560 Marin#';'e t(en fi"e# a !"ai)
a$ain&t A+oiti: in t(e a)o'nt of P2D6,D30-60
re.re&entin$ t(e va"'e of t(e .i"fere# !ar$o- On t(e
&a)e #ay Marin#';'e fi"e# a !"ai) for t(e &a)e
a)o'nt a$ain&t t(e P(i",A) on t(e "atterN& .o"i!y-
P(i",A) .ai# Marin#';'e t(e &') of P2D6,D30-60 a&
in&'rer of t(e !ar$o-
, P(i",A) t(en fi"e# a !o)."aint in <TC Mani"a
a$ain&t A+oiti: for re!overy of &a)e a)o'nt a""e$in$
t(at it (a& +een &'+ro$ate# to t(e ri$(t& of
Marin#';'e- Co)."aint #i&)i&&e# an# M*< #enie#-
CA rever&e#- M*< t(ereof a& #enie#- 1en!e, t(i&
.etition-
ISSUE
0ON .etitioner A+oiti: a& .ro.er"y (e"# "ia+"e to t(e
.rivate re&.on#ent P(i",A) +y t(e a..e""ate !o'rt
HELD
F>S
, T(e ;'e&tione# &(i.)ent i& !overe# +y a
!ontin'in$ o.en in&'ran!e !overa$e @(i!( too2
effe!t after Se.t- 4, 45C9, a& !ontaine# in Marine
O.en Po"i!y No- 40046DA fro) t(e ti)e it a& "oa#e#
INSURANCE Page 96
a+oar# t(e SS Art('r Maer&2 in Bo&ton, U-S-A- to t(e
ti)e it a& #e"ivere# to t(e .o&&e&&ion of .etitioner
at it& offi!e& at Pier D in Mani"a 'nti" it a& .i"fere#
(en t(e $reat )aJority of t(e !ar$o a& "o&t on G'"y
3, 4560- 1en!e, .etitioner A+oiti: a& .ro.er"y (e"#
"ia+"e to P(i",A)-
Reasoning
-a. <e!or#& of t(e !a&e &(o t(at P(i",A) e%e!'te#
a !ontin'o'& an# o.en in&'ran!e !overa$e !overin$
$oo#& of Marin#';'e i).orte# into an# e%.orte#
fro) t(e P(i"i..ine& (i!( too2 effe!t after Se.t- 4,
45C9, a& !ontaine# in Marine O.en Po"i!y No-
40046D-

A &i)i"ar in&'ran!e !overa$e a& a"&o
e%e!'te# +y .etitioner in favor of Marin#';'e for a""
it& $oo#& &(i..e# or )ove# it(in t(e territoria"
"i)it& of t(e P(i"i..ine& a"&o effe!tive after Se.t- 4,
45C9 an# !ontaine# in Marine O.en Po"i!y No-
400469-
-". TC in #i&)i&&in$ t(e !o)."aint a..arent"y re"ie#
on Marine <i&2 Note No- 04C9D9 i&&'e# +y .rivate
re&.on#ent P(i",A) on"y on G'"y 26, 4560 after t(e
&(i.)ent in ;'e&tion a& a"rea#y .i"fere#- O+vio'&"y
TC )i&too2 &ai# Marine <i&2 Note a& an in&'ran!e
.o"i!y (en it i& NOT- It i& on"y an a!2no"e#$)ent
or #e!"aration of t(e .rivate re&.on#ent !onfir)in$
t(e &.e!ifi! &(i.)ent !overe# +y it& Marine O.en
Po"i!y, t(e eva"'ation of t(e !ar$o an# t(e
!(ar$ea+"e .re)i')-
-c. T(e !ontention of t(e A+oiti: t(at it !o'"# not +e
"ia+"e for t(e .i"fera$e of t(e !ar$o a& it a& &to"en
even +efore it a& "oa#e# on it& ve&&e" i& 'ntena+"e-
A+oiti: re!eive# !ar$o (en it arrive# in Mani"a at it&
offi!e&, an# it a& (i"e in it& .o&&e&&ion an# +efore
"oa#in$ it in it& ve&&e" t(at t(e !ar$o a& .i"fere#- It&
"ia+i"ity i& !"ear-
Disposition Petition EISMISS>E-
ORIENTAL ASSURANCE $. CA (PANAMA SAW
MILL)
200 SC<A D95
M>/>NCIO,1><<><A; A'$'&t 5, 4554
NATURE
Petition for revie on !ertiorari
FACTS
5 So)eti)e in Gan'ary 4566, .rivate re&.on#ent
Pana)a Sa)i"" Co-, In!- @Pana)aA +o'$(t, in
Pa"aan, 4,206 .ie!e& of a.iton$ "o$&, it( a tota"
vo"')e of 2,000 !'+i! )eter&- It (ire# Tran&.a!ifi!
Toa$e, In!-, to tran&.ort t(e "o$& +y &ea to Mani"a
an# in&'re# it a$ain&t "o&& for P4,M it( .etitioner
Orienta" A&&'ran!e Cor.oration @Orienta" A&&'ran!eA-
, 0(i"e t(e "o$& ere +ein$ tran&.orte#, ro'$( &ea&
an# &tron$ in#& !a'&e# #a)a$e to one of t(e to
+ar$e& re&'"tin$ in t(e "o&& of D5C .ie!e& of "o$& o't
of t(e 956 .ie!e& "oa#e# t(ereon-
, Pana)a #e)an#e# .ay)ent for t(e "o&& +'t
Orienta" A&&'ran!e ref'&e on t(e $ro'n# t(at it&
!ontra!te# "ia+i"ity a& for PTOTA/ /OSS ON/F-P
, Una+"e to !onvin!e Orienta" A&&'ran!e to .ay it&
!"ai), Pana)a fi"e# a Co)."aint for Ea)a$e& a$ain&t
Orienta" A&&'ran!e +efore t(e <e$iona" Tria" Co'rt-
, <TC or#ere# Orienta" A&&'ran!e to .ay Pana)a
it( t(e vie t(at t(e in&'ran!e !ontra!t &(o'"# +e
"i+era""y !on&tr'e# in or#er to avoi# a #enia" of
&'+&tantia" J'&ti!e; an# t(at t(e "o$& "oa#e# in t(e
to +ar$e& &(o'"# +e treate# &e.arate"y &'!( t(at
t(e "o&& &'&taine# +y t(e &(i.)ent in one of t(e)
)ay +e !on&i#ere# a& P!on&tr'!tive tota" "o&&P an#
!orre&.on#in$"y !o).en&a+"e- CA affir)e# in toto-
ISSUE
0ON Orienta" A&&'ran!e !an +e (e"# "ia+"e 'n#er it&
)arine in&'ran!e .o"i!y +a&e# on t(e t(eory of a
#ivi&i+"e !ontra!t of in&'ran!e an#, !on&e;'ent"y, a
!on&tr'!tive tota" "o&&
HELD
NO
, T(e ter)& of t(e !ontra!t !on&tit'te t(e )ea&'re of
t(e in&'rer "ia+i"ity an# !o)."ian!e t(ereit( i& a
!on#ition .re!e#ent to t(e in&'re#N& ri$(t to re!overy
fro) t(e in&'rer- 0(et(er a !ontra!t i& entire or
&evera+"e i& a ;'e&tion of intention to +e #eter)ine#
+y t(e "an$'a$e e)."oye# +y t(e .artie&- T(e .o"i!y
in ;'e&tion &(o& t(at t(e &'+Je!t )atter in&'re#
a& t(e entire &(i.)ent of 2,000 !'+i! )eter& of
a.iton$ "o$&- T(e fa!t t(at t(e "o$& ere "oa#e# on
to #ifferent +ar$e& #i# not )a2e t(e !ontra!t
&evera" an# #ivi&i+"e a& to t(e ite)& in&'re#- T(e
"o$& on t(e to +ar$e& ere not &e.arate"y va"'e# or
&e.arate"y in&'re#- On"y one .re)i') a& .ai# for
t(e entire &(i.)ent, )a2in$ for on"y one !a'&e or
!on&i#eration- T(e in&'ran!e !ontra!t )'&t,
t(erefore, +e !on&i#ere# in#ivi&i+"e-
, More i).ortant"y, t(e in&'rerN& "ia+i"ity a& for
Ptota" "o&& on"y-P A tota" "o&& )ay +e eit(er a!t'a" or
!on&tr'!tive @Se!- 425, In&'ran!e Co#eA- An a!t'a"
tota" "o&& i& !a'&e# +yH
@aA A tota" #e&tr'!tion of t(e t(in$ in&'re#;
@+A T(e irretrieva+"e "o&& of t(e t(in$ +y &in2in$, or
+y +ein$ +ro2en '.;
@!A Any #a)a$e to t(e t(in$ (i!( ren#er& it
va"'e"e&& to t(e oner for t(e .'r.o&e for (i!(
(e (e"# it; or
@#A Any ot(er event (i!( effe!tive"y #e.rive& t(e
oner of t(e .o&&e&&ion, at t(e .ort of #e&tination,
of t(e t(in$ in&'re#- @Se!tion 430, In&'ran!e
Co#eA-
, A !on&tr'!tive tota" "o&& i& one (i!( $ive& to a
.er&on in&'re# a ri$(t to a+an#on, 'n#er Se!tion
435 of t(e In&'ran!e Co#e- T(i& .rovi&ion rea#&H
S>CTION 435- A .er&on in&'re# +y a !ontra!t of
)arine in&'ran!e )ay a+an#on t(e t(in$ in&'re#,
or any .arti!'"ar .ortion t(ereof se#arately valued
by t!e #olicy$ or ot!er,ise se#arately insured, an#
re!over for a tota" "o&& t(ereof, (en t(e !a'&e of
t(e "o&& i& a .eri" inJ're# a$ain&t,
@aA If )ore t(an t(ree,fo'rt(& t(ereof in va"'e i&
a!t'a""y "o&t, or o'"# (ave to +e e%.en#e# to
re!over it fro) t(e .eri";
@+A If it i& inJ're# to &'!( an e%tent a& to re#'!e
it& va"'e )ore t(an t(ree,fo'rt(&;
%%% %%% %%%
, T(e re;'ire)ent& for t(e a.."i!ation of Se!tion 435
of t(e In&'ran!e Co#e, ;'ote# a+ove, (ave not +een
)et- T(e "o$& invo"ve#, a"t(o'$( ."a!e# in to
+ar$e&, ere not &e.arate"y va"'e# +y t(e .o"i!y, nor
&e.arate"y in&'re#- <e&'"tant"y, t(e "o$& "o&t in t(e
#a)a$e# +ar$e in re"ation to t(e tota" n')+er of
"o$& "oa#e# on t(e &a)e +ar$e !annot +e )a#e t(e
+a&i& for #eter)inin$ !on&tr'!tive tota" "o&&- T(e "o$&
(avin$ +een in&'re# a& one in&e.ara+"e 'nit, t(e
!orre!t +a&i& for #eter)inin$ t(e e%i&ten!e of
!on&tr'!tive tota" "o&& i& t(e tota"ity of t(e &(i.)ent
of "o$&- Of t(e entirety of 4,206, .ie!e& of "o$&, on"y
D5C .ie!e& t(ereof ere "o&t or D4-D9Q of t(e entire
&(i.)ent- Sin!e t(e !o&t of t(o&e D5C .ie!e& #oe&
not e%!ee# C9Q of t(e va"'e of a"" 4,206 .ie!e& of
"o$&, t(e &(i.)ent !annot +e &ai# to (ave &'&taine#
a !on&tr'!tive tota" "o&& 'n#er Se!tion 435@aA of t(e
In&'ran!e Co#e-
Disposition J'#$)ent 'n#er revie i& S>T ASIE>
PAN MALAYAN INSURANCE $. CA ( THE FOOD
AND AGRICULTURAL ORGANIZATION OF THE
UNITED NATIONS)
204 SC<A 362
<>GA/AEO; Se.te)+er 9, 4554
FACTS
, T(e *oo# an# A$ri!'"t'ra" Or$ani:ation of t(e
Unite# Nation& @(ereinafter referre# to a& *AOA,
nten#e# an# )a#e arran$e)ent& to &en# to
INSURANCE Page 97
Ia).'!(ea 4,900 )etri! .etition& of I<,36 !ertifie#
ri!e &ee#& to +e #i&tri+'te# to t(e .eo."e for &ee#"in$
.'r.o&e&
, /U?T>M>CO a& to &(i. t(e !ar$o a)o'ntin$ to
UST63,329-52 in re&.e!t of one "ot of 4,900 )etri!
.etition& in!( i& t(e &'+Je!t of t(e .re&ent a!tion-
T(e !ar$o a& "oa#e# on +oar# /U?T>M>CO Bar$e
No- /C,3000 an# !on&i&te# of 3D,422 +a$& of I<,36
!ertifie# ri!e &ee#& .'r!(a&e# +y *AO fro) t(e
B'rea' of P"ant In#'&try for PD,602,2C0-00
, *AO &e!'re# in&'ran!e !overa$e in t(e a)o'nt of
P9,290,000-00 fro) .etitioner, Pan Ma"ayan
In&'ran!e Cor.oration
, On G'ne 46, 4560, *AO $ave in&tr'!tion& to
/U?T>M>CO to "eave for Ma'n$ Ta', Mietna) to
#e"iver t(e !ar$o (i!(, +y it& nat're, !o'"# not
it(&tan# #e"ay +e!a'&e of t(e in(erent ri&2& of
ter)ination an#Ror &.oi"a$e- On t(e &a)e #ate, t(e
in&'ran!e .re)i')& on t(e &(i.)ent a& .ai# +y
*AO .etitioner
, On G'ne 26, 4560, *AO a& a#vi&e# of t(e &in2in$
of t(e +ar$e in t(e C(ina Sea, (en!e it infor)e#
.etitioner t(ereof an#, "ater, for)a""y fi"e# it& !"ai)
'n#er t(e )arine in&'ran!e .o"i!y- On G'"y 25, 4560,
*AO a& infor)e# +y /UST>M>CO of t(e re!overy of
t(e "o&t &(i.)ent, for (i!( rea&on *AO for)a""y
fi"e# it& !"ai) it( /U?T>M>CO for !o).en&ation of
#a)a$e to it& !ar$o
, /U?T>M>CO fai"e# an# ref'&e# to .ay- Pan Ma"ayan
"i2ei&e fai"e# to .ay for t(e "o&&e& an# #a)a$e&
&'&taine# +y *AO +y rea&on of it& ina+i"ity to re!over
t(e va"'e of t(e &(i.)ent fro) /U?T>M>CO
, Pan Ma"ayan !"ai)& t(at .art of t(e !ar$o a&
re!overe# an# t('& t(e !"ai) +y *AO a&
'narrante#- T(i& i& evi#en!e# +y to &'rvey& '.on
t(e !ar$o (erein it a& fo'n# t(at on"y aro'n# C6Q
a& "o&t-
, *AO fi"e# a !ivi" !a&e a$ain&t +ot( /U?T>M>CO an#
Pan Ma"ayan- Tria" !o'rt fo'n# in favor of *AO an#
or#ere# +ot( to .ay Joint"y an# &evera""y t(e f'""
a)o'nt of t(e !"ai)- T(i& a& affir)e# +y CA
ISSUE
4- 0ON re&.on#ent !o'rt !o))itte# a rever&i+"e
error in (o"#in$ t(at t(e tria" !o'rt i& !orre!t in
(o"#in$ t(at t(ere i& a tota" "o&& of t(e &(i.)ent
HELD
4- NO
, T(e "a !"a&&ifie& "o&& into eit(er tota" or .artia"-
Tota" "o&& )ay +e a!t'a" or a+&o"'te, or it )ay
ot(eri&e +e !on&tr'!tive or te!(ni!a"- Petitioner
&'+)it& t(at re&.on#ent !o'rt erre# in r'"in$ t(at
t(ere a& tota" "o&& of t(e &(i.)ent #e&.ite t(e fa!t
t(at on"y 2C,522 +a$& of ri!e &ee#& o't of 3D,422
+a$& ere ren#ere# va"'e"e&& to *AO an# t(e
&(i.)ent &'&taine# on"y a "o&& of C6Q- , *AO,
(oever, !"ai)& t(at, for a"" intent& an# .'r.o&e&, it
(a& .ra!ti!a""y "o&t it& total or entire s!i#ent in t(i&
!a&e, in!"'&ive of e%.en&e&, .re)i') fee&, an# &o
fort(, #e&.ite t(e a""e$e# re!overy +y #efen#ant
/U?T>M>CO- A& fo'n# +y t(e !o'rt +e"o an#
re.ro#'!e# it( a..rova" +y re&.on#ent !o'rt, *AO
P(a& never +een !o).en&ate# for t(i& total "o&& or
#a)a$e, a fa!t (i!( i& not #enie# nor !ontroverte#
, If t(ere ere &o)e !ar$oe& &ave#, +y /U?T>M>CO,
.rivate re&.on#ent a+an#one# it an# t(e &a)e a&
&o"# or '&e# for t(e +enefit of /U?T>M>CO or Pan
Ma"ayan Cor.oration- Un#er Se!tion& 425 an# 430 of
t(e Ne In&'ran!e Co#e, a tota" "o&& )ay eit(er +e
a!t'a" or !on&tr'!tive- 'n case of total loss in Marine
'nsurance$ t!e assured is entitled to recover fro
t!e under,riter t!e ,!ole aount of !is subscri#tion
, S>C- 430- An a!t'a" tota" "o&& i& !a'&e# +yH @!A Any
#a)a$e to t(e t(in$ (i!( ren#er& it va"'e"e&& to t(e
oner for t(e .'r.o&e for (i!( (e (e"# it; or
@#A Any ot(er event (i!( effe!tive"y #e.rive& t(e
oner of t(e .o&&e&&ion, at t(e .ort of #e&tination of
t(e t(in$ in&'re#-
,a& &ai# an# .roven, t(e &ee#& ere of fra$i"e
nat're- An# t(e ettin$ of &ai# &ee#& affe!te# t(e
&tate of &ee#&- T('& ren#erin$ t(e) '&e"e&& for *AO-
A"t(o'$( t(ere ere +a$& (i!( ere re!overe#,
t(e&e ere 7&taine#8 an# not in t(e &a)e !on#ition it
a& +ro'$(t in- in a##ition to t(i&, *AO #i# not
re!eive any !o).en&ation for &ai# re!overe# +a$& a&
t(e &a)e ere #i&tri+'te# +y /U?M>T>CO it(o't
a't(ori:ation of *AO
, t(e !o)."ete .(y&i!a" #e&tr'!tion of t(e &'+Je!t
)atter i& not e&&entia" to !on&tit'te an a!t'a" tota"
"o&&- S'!( a "o&& )ay e%i&t (ere t(e for) an#
&.e!ie of t(e t(in$ i& #e&troye#, a"t(o'$( t(e
)ateria"& of (i!( it !on&i&te# &ti"" e%i&t @Great
0e&tern In&- Co- v&- *o$arty, N-F-, 45 0a"" 6D0, 22
/- >#- 246A, a& (ere t(e !ar$o +y t(e .ro!e&& of
#e!o).o&ition or ot(er !(e)i!a" a$en!y no "on$er
re)ain& t(e &a)e 2in# of t(in$ a& +efore @0i""ia)&
v&- Co"e, 46 Me- 20CA-
, It i& t('& !"ear t(at *AO &'ffere# a!t'a" tota" "o&&
'n#er Se!tion 430 of t(e In&'ran!e Co#e, &.e!ifi!a""y
'n#er .ara$ra.(& @!A an# @#A t(ereof, re!o).en&e
for (i!( it (a& +een #enie# '. to t(e .re&ent
,Se!tion 439 of t(e In&'ran!e Co#e e%."i!it"y
.rovi#e& t(at P@'A.on an a!t'a" tota" "o&&, a .er&on
in&'re# i& entit"e# to .ay)ent it(o't noti!e of
a+an#on)ent-P T(i& i& a &tat'tory a#o.tion of a "on$
&tan#in$ #o!trine in )ariti)e in&'ran!e "a t(at in
!a&e of a!t'a" tota" "o&&, t(e ri$(t of t(e in&'re# to
!"ai) t(e (o"e in&'ran!e i& a+&o"'te, it(o't nee#
of a noti!e of a+an#on)ent
PHILIPPINE AMERICAN LIFE INSURANCE
COMPANY $ # CA (ELIZA PULIDO)
3DD SC<A 260
GON?AGA,<>F>S; Nove)+er 49, 2000
NATURE
T(i& .etition for revie on !ertiorari &ee2& to rever&e
t(e Ee!i&ion of t(e S.e!ia" Se!on# Eivi&ion of t(e
Co'rt of A..ea"&
FACTS
, On Gan'ary 5, 4565, .etitioner re!eive# fro) one
*"oren!e P'"i#o an a.."i!ation for "ife in&'ran!e,
#ate# Ee!e)+er 46, 4566, in t(e a)o'nt of
P400,000-00 (i!( #e&i$nate# (er &i&ter, (erein
.rivate re&.on#ent, a& it& .rin!i.a" +enefi!iary-
Be!a'&e t(e in&'ran!e a.."ie# for a& non,)e#i!a",
.etitioner #i# not re;'ire a )e#i!a" e%a)ination an#
i&&'e# a .o"i!y on t(e &o"e +a&i& of t(e a.."i!ation on
*e+r'ary 44, 4565- On A.ri" 4552, .etitioner
re!eive# .rivate re&.on#ent=& !"ai), (i!( #e!"are#
t(at t(e in&'re#, *"oren!e P'"i#o, #ie# of a!'te
.ne')onia on Se.te)+er 40, 4554-
, Petitioner it((e"# .ay)ent on t(e $ro'n# t(at t(e
.o"i!y !"ai)e# 'n#er a& voi# fro) t(e &tart for
(avin$ +een .ro!'re# in fra'#- It i& .etitioner=&
!ontention t(at even +efore t(ey re!eive# .rivate
re&.on#ent=& !"ai) for #eat( +enefit&, t(eir
inve&ti$ation !on!ernin$ t(e &'+Je!t .o"i!y yie"#e#
t(e infor)ation t(at t(e in&'re#, *"oren!e P'"i#o,
#ie# in 4566, +efore t(e a.."i!ation for in&'ran!e on
(er "ife a& )a#e- 0(i"e t(i& a& !o))'ni!ate# to
.rivate re&.on#ent in a "etter #ate# A.ri" 25, 4552,
.rivate re&.on#ent (a# a"rea#y fi"e# (er !"ai) ear"ier
t(at )ont(- In anot(er "etter #ate# G'"y 2C, 4552,
(oever, .etitioner !onfir)e# to .rivate re&.on#ent
re!ei.t of t(e !"ai) .a.er& an# a&&'re# (er t(at (er
!a&e a& 7+ein$ $iven .referentia" attention an#
.ro).t a!tion8-
, *o""oin$ t(e fi"in$ +y .rivate re&.on#ent of (er
!"ai), .etitioner !a'&e# anot(er inve&ti$ation
re&.e!tin$ t(e &'+Je!t .o"i!y- P'r&'ant to t(e
fin#in$& of t(i& &e!on# inve&ti$ation, .etitioner &too#
+y it& initia" #e!i&ion to treat t(e .o"i!y a& voi# an#
not to (onor t(e !"ai)- On Nove)+er 5, 4552,
INSURANCE Page 98
.rivate re&.on#ent en"i&te# t(e &ervi!e& of !o'n&e" in
reiteratin$ (er !"ai) for #eat( +enefit&- Petitioner
&ti"" ref'&e# to )a2e .ay)ent an# t('&, t(i& a!tion-
, PetitionerH t(e re&'"t& of it& inve&ti$ation& (avin$
in#i!ate# t(at t(e in&'re# a& a"rea#y #ea# at t(e
ti)e t(e .o"i!y a& a.."ie# for- It a"&o
!o'nter!"ai)e# for attorney=& fee&- T(e fir&t re.ort,
.re.are# +y one Er- Bene#i!to Brione&, a& #ate#
A.ri" 4, 4552, an# (a# atta!(e# to it a ;'e&tionnaire,
re&.on#e# to +y one <a)on Pi$anto, (o
re.re&ente# to +e t(e +rot(er,in,"a of t(e in&'re#
an# t(e +aran$ay !(air)an of Car#i:, Ba$'"in, /a
Union- To t(e ;'e&tion 70(ere #oe& [*"oren!e
P'"i#o] re&i#e noX8, Pi$anto (a# re."ie# t(at
*"oren!e P'"i#o '&e# to "ive in Car#i:, +'t a& #ea#
&in!e 4566- Pi$anto=& &tate)ent a& &i$ne# +y (i),
an# itne&&e# +y (i& ife, Nenita Pi$anto- T(i&
re.ort a& .etitioner=& +a&i& for treatin$ t(e #i&.'te#
.o"i!y a& voi# &in!e A.ri" 4552, even +efore re!ei.t of
.rivate re&.on#ent=& !"ai)-
ISSUE
0ON t(ere a& fra'# @(et(er t(e in&'re#, *"oren!e
P'"i#o, a& in fa!t #ea# +efore t(e a.."i!ation for
in&'ran!e on (er "ife a& )a#eA
HELD
NO
, T(i& t(e "oer !o'rt& (a# effe!te# r'"e# on, '.on a
.re.on#eran!e of t(e evi#en!e #'"y re!eive# fro)
+ot( .artie&- 0e &ee no rever&i+"e error in t(e
fin#in$ of +ot( re&.on#ent !o'rt an# t(e tria" !o'rt in
favor of t(e !orre!tne&& of t(e entrie& in Certifi!ate
of Eeat(, #'"y re$i&tere# it( t(e /o!a" Civi"
<e$i&trar of Ba$'"in, /a Union, (i!( #e!"are# t(at
*"oren!e P'"i#o #ie# of a!'te .ne')onia on
Se.te)+er 40, 4554- Er- Irineo G'tierre:, t(e
M'ni!i.a" 1ea"t( Offi!er of Ba$'"in, /a Union (o&e
&i$nat're a..eare# in t(e #eat( !ertifi!ate, te&tifie#
in a##ition t(at (e )ini&tere# to t(e ai"in$ *"oren!e
P'"i#o for to #ay& i))e#iate"y .rior to (er #eat(-
T(i& fa!t i& "i2ei&e note# in t(e #eat( !ertifi!ate-
, Eeat( !ertifi!ate&, an# note& +y a )'ni!i.a" (ea"t(
offi!er .re.are# in t(e re$'"ar .erfor)an!e of (i&
#'tie&, are #ria facie evi#en!e of fa!t& t(erein
&tate#- A #'"y,re$i&tere# #eat( !ertifi!ate i&
!on&i#ere# a .'+"i! #o!')ent an# t(e entrie& fo'n#
t(erein are .re&')e# !orre!t, 'n"e&& t(e .arty (o
!onte&t& it& a!!'ra!y !an .ro#'!e .o&itive evi#en!e
e&ta+"i&(in$ ot(eri&e- Petitioner=& !ontention t(at
t(e #eat( !ertifi!ate i& &'&.e!t +e!a'&e Er- G'tierre:
a& not .re&ent (en *"oren!e P'"i#o #ie#, an#
2ne of *"oren!e=& #eat( on"y t(ro'$( <a)on
Pi$anto, #oe& not )erit a !on!"'&ion of fra'#- No
)otive a& i).'te# to Er- G'tierre: for &ee2in$ to
.er.et'ate a fa"&ity in .'+"i! re!or#&- Petitioner a&
"i2ei&e 'na+"e to )a2e o't any !"ear )otive a& to
(y <a)on Pi$anto o'"# .'r.o&e"y "ie- Mere
a""e$ation& of fra'# !o'"# not &'+&tit'te for t(e f'""
an# !onvin!in$ evi#en!e t(at i& re;'ire# to .rove it-
A fai"'re to #o &o o'"# "eave inta!t t(e .re&').tion
of $oo# fait( an# re$'"arity in t(e .erfor)an!e of
.'+"i! #'tie&, (i!( a& t(e +a&i& of +ot( re&.on#ent
!o'rt an# t(e tria" !o'rt in fin#in$ t(e #ate of
*"oren!e P'"i#o=& #eat( to +e a& ."aintiff,.rivate
re&.on#ent )aintaine#-
, 0e !annot "i2ei&e $ive !re#en!e to .etitioner=&
&'+)i&&ion t(at t(e in!on&i&ten!ie& in t(e
te&ti)onie& of t(e itne&&e& for ."aintiff,.rivate
re&.on#ent are in t(e)&e"ve& evi#en!e of fra'#-
S'!( a""e$e# in!on&i&ten!ie& are )atter& of !re#i+i"ity
(i!( (a# +een a+"y .a&&e# '.on +y t(e "oer !o'rt-
, T(e a+&en!e of fra'#, a& a fa!t'a" fin#in$ of t(e
"oer !o'rt a#o.te# +y t(e Co'rt of A..ea"&, entire"y
!on&i&tent it( t(e evi#en!e on re!or#, i"" not +e
rever&e# an#, (en!e, i& fina" an# !on!"'&ive '.on t(i&
Co'rt-
Disposition T(e in&tant .etition i& E>NI>E
CHAPTER IL. CLAIMS SETTLEMENT ?
SUBROGATION
LONDRES $. NATIONAL LIFE INSURANCE
5D P1I/ 62C
BAUTISTA ANG>/O; Mar!( 25, 459D
NATURE
A..ea" fro) a #e!i&ion of t(e Co'rt of *ir&t In&tan!e
of Mani"a or#erin$ #efen#ant to .ay to ."aintiff t(e
&') of P3,000, P(i"i..ine !'rren!y, ."'& "e$a"
intere&t t(ereon fro) t(e ti)e of t(e fi"in$ of t(e
!o)."aint 'nti" it& f'"" .ay)ent-
FACTS
, On A.ri" 4D, 45D3, t(e Nationa" /ife In&'ran!e
Co).any of t(e P(i"i..ine& i&&'e# a .o"i!y on t(e "ife
of Go&e C- /on#re& (ere+y it 'n#ertoo2 to .ay it&
+enefi!iary '.on (i& #eat( t(e &') of P3,000- A"" t(e
.re)i')& #'e 'n#er t(e .o"i!y ere a!t'a""y .ai# on
t(eir #ate& of )at'rity an# t(e .o"i!y a& in for!e
(en t(e in&'re# #ie# on *e+r'ary C, 45D9-
Sa"va!ion M- /on#re&, a& +enefi!iary, #e)an#e# fro)
t(e !o).any t(e .ay)ent of t(e .ro!ee#& of t(e
.o"i!y, an# (er #e)an# (avin$ +een ref'&e#, &(e
in&tit'te# t(e .re&ent a!tion a$ain&t t(e !o).any in
t(e Co'rt of *ir&t In&tan!e of Mani"a-
, Eefen#ant in it& an&er #enie#, for "a!2 of
&'ffi!ient .roof, t(e a""e$ation t(at t(e in&'re# #ie#
on *e+r'ary C, 45D9, an# &et '. t(e fo""oin$ &.e!ia"
#efen&e&H @aA t(at ."aintiffN& !"ai) i& !overe# +y t(e
Moratori') /a; @bA t(at t(e .o"i!y (avin$ +een
i&&'e# #'rin$ t(e Ga.ane&e o!!'.ation, it i&
.re&')e# t(at it& fa!e va"'e &(o'"# +e .ai# in
Ga.ane&e !'rren!y, t(ere +ein$ no .rovi&ion in t(e
.o"i!y fro) (i!( !an +e inferre# t(at t(e .artie&
!onte)."ate# .ay)ent in any ot(er !'rren!y; @cA
t(at t(e )oney .ai# +y t(e in&'re# a& .re)i')&,
to$et(er it( t(e )oney re!eive# fro) ot(er .o"i!y,
(o"#er&, a& a"" #e.o&ite# +y t(e #efen#ant in t(e
P(i"i..ine Nationa" Ban2 an# &ai# #e.o&it a&
#e!"are# it(o't va"'e +y >%e!'tive Or#er No- D5 of
t(e Pre&i#ent of t(e P(i"i..ine&; an# @dA t(at t(e
.o"i!y (avin$ +een i&&'e# 'n#er a+nor)a"
!ir!')&tan!e&, it &(o'"# +e !on&i#ere# in t(e "i$(t of
e;'ity (i!( #oe& not .er)it anyone to enri!(
(i)&e"f at t(e e%.en&e of anot(er- Eefen#ant,
(oever, a& a .roof of $oo# fait(, offere# to .ay t(e
va"'e of t(e .o"i!y in a!!or#an!e it( t(e Ba""antyne
&!a"e of va"'e&, or t(e &') of P2,D00, P(i"i..ine
!'rren!y-
, It a..ear& t(at t(e #e!ea&e# too2 '. t(e .o"i!y
'n#er !on&i#eration on A.ri" 49, 45D3 for t(e &') of
P3,000- A"" t(e .re)i')& #'e 'n#er t(e .o"i!y ere
a!t'a""y .ai# on t(eir #ate& of )at'rity an# t(e
.o"i!y a& in for!e (en t(e in&'re# #ie# on
*e+r'ary C, 45D9- On &ai# #ate, t(e +att"e of t(e
"i+eration of t(e City of Mani"a a& &ti"" ra$in$- 0(i"e
t(e nort(ern .art )ay (ave +een "i+erate#, not &o
t(e &o't(ern .art, a& &(on fro) t(e very affi#avit&
&'+)itte# +y a..e""ee (erein it a& &tate# t(at on
t(e afore&ai# #ate, t(e in&'re#, Go&e /on#re&, an#
(i& to &on& ere ta2en +y t(e Ga.ane&e &o"#ier&
fro) t(eir (o'&e at Sin$a"on$ Street an# ere
)a&&a!re# +y t(eir !a.tor&- It )ay t(erefore +e &ai#
t(at t(e .o"i!y +e!a)e #'e (en t(e City of Mani"a
a& &ti"" 'n#er t(e yo2e of t(e ene)y an# +e!a)e
.aya+"e on"y after "i+eration (i!( too2 ."a!e on
Mar!( 40, 45D9 (en Pre&i#ent O&)ena i&&'e#
Pro!"a)ation No- 6 fo""oin$ t(e re&toration of t(e
!ivi" $overn)ent +y Genera" Eo'$"a& Ma! Art('r-
An# e &ay t(at t(e .o"i!y +e!a)e .aya+"e on"y
after "i+eration even if it )at're# &o)eti)e +efore,
+e!a'&e +efore t(at event'a"ity t(e in&'ran!e
!o).any, a..e""ant (erein, a& not yet in a .o&ition
to .ay t(e va"'e of t(e .o"i!y for t(e &i)."e rea&on
t(at it (a# not yet reo.ene#-
INSURANCE Page 99
ISSUE
0ON t(e a)o'nt of P3,000 (i!( a..e""ant +o'n#
it&e"f to .ay to t(e in&'re# 'n#er t(e .o"i!y '.on (i&
#eat( &(o'"# +e .ai# in a!!or#an!e it( t(e .re&ent
!'rren!y or &(o'"# +e a#J'&te# 'n#er t(e Ba""antyne
&!a"e of va"'e&
HELD
F>S, .re&ent !'rren!y-
Reasoning
, In t(e !a&e of 9utter vs. Asteban, 53 P(i"-, 66, t(e
Moratori') /a a& #e!"are# inva"i# an#
'n!on&tit'tiona"-
, E'rin$ t(o&e #ay& of "i+eration, (i"e t(e .eo."e
ere reJoi!in$ +e!a'&e of t(e (a..y event, t(e
+an2&, t(e in&'ran!e !o).anie&, an# for t(at )atter
ot(er !o))er!ia" an# +'&ine&& fir)&, ere &ti""
fee"in$ t(e a#ver&e effe!t& of t(e &'##en fa"" of
va"'e& an# ere 'n!ertain an# a..re(en&ive a& to
t(e )anner t(e rea#J'&t)ent o'"# +e )a#e +y t(e
ne Govern)ent- It i& for t(i& rea&on t(at t(e
+enefi!iary, after rea"i:in$ t(e tr't( a+o't t(e #eat(
of (er ('&+an#, an# after $at(erin$ evi#en!e to
&'+&tantiate (i& #eat(, (a# #iffi!'"ty in effe!tin$ t(e
!o""e!tion of (er !"ai) fro) t(e in&'ran!e !o).any
+e!a'&e at t(at ti)e it (a# not yet reo.ene# for
+'&ine&& .'r.o&e&- A"t(o'$( t(e re!or# #oe& not
#i&!"o&e t(e e%a!t #ate on (i!( t(e in&'ran!e
!o).any reo.ene# for t(i& .'r.o&e, t(i& Co'rt !an
ta2e J'#i!ia" noti!e t(at it on"y #i# &o after "i+eration-
A ha '(e he le%al e+.e" &a* al"ea.) he
2"e*e+ !,""e+!).
, A& fina" ."ea, a..e""ant invo2e& e;'ity in it& favor in
vie of t(e n'""ifi!ation of t(e #e.o&it& )a#e +y it
it( t(e P(i"i..ine Nationa" Ban2 of a"" fiat )oney
re!eive# fro) it& .o"i!y(o"#er&, (i!( )oney a&
#e!"are# it(o't va"'e +y >%e!'tive Or#er No- D5 of
t(e Pre&i#ent of t(e P(i"i..ine&- A..e""ant !"ai)&
t(at, !on&i#erin$ t(e 'ne%.e!te# !ir!')&tan!e& t(at
#eve"o.e#, t(e in#e)nity to +e .ai# +y it &(o'"# +e
&'ffere# +y it 'n#er Arti!"e 30C of t(e Co#e of
Co))er!e (i!( .rovi#e&H P0(en t(e #e.o&it& are
of !a&(, it( a &.e!ifi!ation of t(e !oin& !on&tit'tin$
t(e), - - - t(e in!rea&e or re#'!tion (i!( t(eir va"'e
)ay &'ffer &(a"" +e for t(e a!!o'nt of t(e #e.o&itor-P
A22ella+, 3) e+e"'+% '+# a+ '+*,"a+!e
!#+"a!, !a++# !la'(, '- ' *,--e"* l#**, ha
he 3e+e-'!'a") !a++# e+"'!h he"*el- a '*
e/2e+*e. T(i& i& a ri&2 atten#ant to any a$erin$
!ontra!t- One (o $a)+"e& an# "o&e& !annot +e
(ear# to !o)."ain of (i& "o&&- To a..e""ant, e !an
on"y re.eat t(e fo""oin$ a#)onitionH
PT(e .artie& (erein $a)+"e# an# &.e!'"ate# on t(e
#ate of t(e ter)ination of t(e ar an# t(e
"i+eration of t(e P(i"i..ine& +y t(e A)eri!an&- T(i&
!an +e $"eane# fro) t(e &ti.'"ation a+o't
re#e).tion, .arti!'"ar"y t(at .ortion to t(e effe!t
t(at re#e).tion !o'"# +e effe!te# not +efore t(e
e%.iration of one year fro) G'ne 2D, 45DD- T(i&
2in# of a$ree)ent i& .er)itte# +y "a- 0e fin#
not(in$ i))ora" or 'n"af'" in it-P @Go)e: vs.
Ta+iaA
Disposition 0(erefore, t(e #e!i&ion a..ea"e# fro)
i& affir)e#, it( !o&t& a$ain&t a..e""ant-
VDA. DE FERNANDEZ $. NATIONAL LIFE
INSURANCE CO OF THE PHILS
409 P1I/ 95
>NE>NCIA; Gan'ary 2C, 4595
NATURE
A..ea" fro) C*I #e!i&ion a.."yin$ t(e Ba""antyne
&!a"e of va"'e& '.on t(e .ro!ee#& of "ife in&'ran!e
ta2en an# )at'rin$ #'rin$ t(e Ga.ane&e o!!'.ation
+'t !"ai)e# after "i+eration

FACTS
, Nationa" /ife In&'ran!e Co).any @N/ICA in&'re# G-
*ernan#e:=& "ife for P40,000 '.on (i& .ay)ent of
PDDD fro) G'"y 49, 45DD to G'"y 4D, 45D9
, T(e in&'re# #ie# on Nove)+er 2, 45DD, (i"e t(e
.o"i!y a& in for!e
, After )ore t(an C year&, in 4592, Atty #e "a Torre,
re.re&entin$ t(e +enfi!iarie& of t(e .o"i!y, infor)e#
t(e !o).any t(at *ernan#e: (a# #ie# in 45DD, an#
!"ai)e# t(e .ro!ee#& of t(e .o"i!y- T(e !o).any
&ai# t(at t(e &tat'& of t(e .o"i!ie& i&&'e# #'rin$ t(e
Ga.ane&e o!!'.ation a& &ti"" .en#in$ !on&i#eration
+efore t(e !o'rt&- N/IC &ai# t(at +e!a'&e t(e .o"i!y
)at're# '.on t(e in&'re#=& #eat( in Nove)+er,
45DD, t(ey &(o'"# !o).'te t(e va"'e of t(eir !"ai)
'n#er t(e Ba""antyne &!a"e of va"'e& @(i!( o'"#
a)o'nt on"y to P900A
, +enefi!iarie& !o))en!e# &'it, an# t(e "oer !o'rt
&'&taine# t(e &tan# of t(e !o).any, #i&)i&&e# t(e
!o)."aint-
, +enefi!iarie& )aintain t(at t(e o+"i$ation of t(e
!o).any to .ay a!!r'e# not '.on t(e #eat( of
*ernan#e:, +'t on"y '.on t(e re!ei.t an# a..rova"
+y t(e !o).any, on .roof of #eat( of t(e in&'re#,
(i!( a& in 459D- T(e .o"i!y rea#&H
1ational 0ife In&'ran!e Co).any of t(e P(i"i..ine
(ere+y a$ree& to .ay at it& 1o)e Offi!e, Mani"a,
Ten T(o'&an# Pe&o& to G'an E- *ernan#e:
@(ereinafter !a""e# t(e in&'re#A on t(e :Kt! day of
Suly$ :JQP, if t(e In&'re# i& "ivin$ an# t(i& Po"i!y i&
in for!e, or u#on recei#t and a##roved at its -ffice
of due #roofs of t!e title of t!e claiant and of t!e
#rior deat! of t!e 'nsured (i"e t(i& Po"i!y i& in
for!e to Tere&a E'at M#a- Ee *ernan#e:, Maria T-
an# Man'e"a *ernan#e:, )ot(er an# &i&ter&
re&.e!tive"y of t(e In&'re# @1ereinafter !a""e# t(e
Benefi!iaryA &'+Je!t to t(e ri$(t of t(e In&'re# to
!(an$e t(e +enefi!iary a& &tate# on t(e &e!on#
.a$e of t(i& Po"i!y-
, T(e a+ove &ti.'"ation i& a..arent"y +a&e# on Se!-
54,A of t(e In&'ran!e /a (i!( .rovi#e& a& fo""o&H
T(e .ro!ee#& of a "ife in&'ran!e .o"i!y &(a"" +e .ai#
i))e#iate"y '.on )at'rity of t(e .o"i!y, 'n"e&& &'!(
.ro!ee#& are )a#e .aya+"e in in&ta"")ent& or a a& an
ann'ity, in (i!( !a&e t(e in&ta"")ent& or ann'itie&
&(a"" +e .ai# a& t(ey +e!o)e #'eH Provided$
!o,ever, T(at in !a&e of a .o"i!y aturin" by t!e
deat! of t!e insured, t(e .ro!ee#& t(ereof &(a"" +e
.ai# it(in &i%ty #ay& after .re&entation of t(e !"ai)
an# fi"in$ of t(e .roof of t(e #eat( of t(e in&'re#-
<ef'&e# to .ay t(e !"ai) it(in t(e ti)e .re&!ri+e#
(erein i"" entit"e t(e +enefi!iary to !o""e!t intere&t
on t(e .ro!ee#& of t(e .o"i!y for t(e #'ration of t(e
#e"ay at t(e rate of &i% .er !ent') .er ann'),
'n"e&& &'!( fai"'re or ref'&a" to .ay i& +a&e# on t(e
$ro'n# t(at t(e !"ai) i& fra'#'"ent - - - -
, Ba&e# on t(e fore$oin$ .rovi&ion of "a an# t(e
afore;'ote# &ti.'"ation a& e"" a& on t(e a""e$ation
t(at t(e fi"in$ of .roof of #eat( +y t(e +enefi!iarie& i&
a !on#ition .re!e#ent of t(e #e)an#a+i"ity of t(e
o+"i$ation of t(e in&'rer to .ay t(e .ro!ee#&,
a..e""ant& !"ai) t(at t(ey &(o'"# +e .ai# P40,000 in
P(i"i..ine !'rren!y an# not 'n#er t(e Ba""antyne
&!a"e of va"'e&-
ISSUE
0ON t(e .o"i!y )at're# '.on t(e #eat( of t(e
in&'re#
HELD
F>S
Ratio In "ife in&'ran!e, t(e .o"i!y )at're& eit(er
'.on t(e e%.iration of t(e ter) &et fort( t(erein, or
'.on (i& #eat( o!!'rin$ at any ti)e .rior to t(e
INSURANCE Page 100
e%.iration of &'!( &ti.'"ate# ter), in (i!( !a&e, t(e
.ro!ee#& are .aya+"e to (i& +enefi!iarie& it(in &i%ty
#ay& after t(eir fi"in$ of .roof of #eat(-
Reasoning
- T(e &i%ty #ay .erio# fi%e# +y "a it(in (i!( to
.ay t(e .ro!ee#& after .re&entation of .roof of #eat(
I& )ere"y .ro!e#'ra" in nat're, evi#ent"y to
#eter)ine t(e e%a!t a)o'nt to +e .ai# an# t(e
intere&t t(ereon to (i!( t(e +enefi!iarie& )ay +e
entit"e# to !o""e!t in !a&e of 'narrante# ref'&a" of
t(e !o).any to .ay, an# a"&o to ena+"e t(e in&'rer
to verify or !(e!2 on t(e fa!t of #eat( (i!( it )ay
even va"i#"y aive- It i& t(e (a..enin$ of t(e
&'&.en&ive !on#ition of #eat( t(at ren#er& a "ife
.o"i!y )at're#, an# not (t efi"in$ of .roof of #eat(
(i!(, a& a+ove &tate#, i& )ere"y .ro!e#'ra"- T(e
in&'re# (avin$ #ie# #'rin$ t(e Ga.ane&e o!!'.ation,
t(e .ro!ee#& of (i& .o"i!y &(o'"# +e a#J'&te#
a!!or#in$"y, for 7T(e r'"e i& a"rea#y &ett"e# t(at
(ere a #e+tor !o'"# (ave .ai# (i& o+"i$ation at any
ti)e #'rin$ t(e Ga.ane&e o!!'.ation, .ay)ent after
"i+eration )'&t +e a#J'&te# in a!!or#an!e it( t(e
Ba""antyne &!(e#'"e @Ee A&i& v&- A$#a)a$, a)on$
ot(er !a&e&A- &Colla"oration is defined as t!e acts
of ,or+in" to"et!er in a 6oint #ro6ect.
Disposition G'#$)ent affir)e#
TIO <HE CHIO $. CA (EASTERN ASSURANCE ?
SURETY)
202 SC<A 445
*><NAN; Se.te)+er 30, 4554
FACTS
, Petitioner Tio I(e C(io i).orte# 4,000 +a$& of
fi&()ea" va"'e# at T36,000-30 fro) A$ro I).e%,
S-A- Ea""a&, Te%a&, U-S-A- T(e $oo#& ere in&'re#
it( re&.on#ent >ASCO an# &(i..e# on +oar# t(e
MRM Pe&2ov, a ve&&e" one# +y *ar >a&tern S(i..in$
Co).any- 0(en t(e $oo#& rea!(e# Mani"a, t(ey
ere fo'n# to (ave +een #a)a$e# +y &ea ater
(i!( ren#ere# t(e fi&()ea" '&e"e&&- Petitioner fi"e#
a !"ai) it( >ASCO an# *ar >a&tern S(i..in$- Bot(
ref'&e# to .ay- 0(ere'.on, .etitioner &'e# t(e)
+efore t(e t(en Co'rt of *ir&t In&tan!e of Ce+' for
#a)a$e&- >ASCO, a& t(e in&'rer, fi"e# a !o'nter!"ai)
a$ain&t t(e .etitioner for t(e re!overy of t(e 'n.ai#
in&'ran!e .re)i')&-
, T(e tria" !o'rt ren#ere# J'#$)ent in favor of
.etitioner- T(e J'#$)ent +e!a)e fina" a& to >ASCO
+'t t(e &(i..in$ !o).any a..ea"e# to t(e Co'rt of
A..ea"& an# a& a+&o"ve# fro) "ia+i"ity +y t(e &ai#
!o'rt-
, T(e tria" !o'rt, '.on )otion +y .etitioner, i&&'e# a
rit of e%e!'tion a$ain&t >ASCO- T(e &(eriff
enfor!in$ t(e rit re.orte#"y fi%e# t(e "e$a" rate of
intere&t at 42Q- <e&.on#ent >ASCO )ove# to ;'a&(
t(e rit a""e$in$ t(at t(e "e$a" intere&t to +e
!o).'te# &(o'"# +e 6Q .er !ent .er ann') in
a!!or#an!e it( Arti!"e 2205 of t(e Civi" Co#e- T(e
tria" !o'rt #enie# >ASCON& )otion- On a..ea", t(e
Co'rt of A..ea"& rever&e# t(e tria" !o'rt=& #enia" of
>ASCO=& )otion an# r'"e# t(at t(e a.."i!a+"e
intere&t i& 6Q .er ann')- 1en!e, t(i& .etition-
ISSUE
0ON t(e a.."i!a+"e rate of intere&t i& 42Q .er
ann')
HELD
NO
, Se!tion& 2D3 an# 2DD of t(e In&'ran!e Co#e a.."y
on"y (en t(ere i& an 'nJ'&tifie# ref'&a" or
it((o"#in$ of .ay)ent on t(e in&'re#=& !"ai)- In
t(i& !a&e, >ASCON& ref'&a" to &ett"e t(e !"ai) to Tio
I(e C(io a& +a&e# on &o)e $ro'n# (i!(, (i"e
not &'ffi!ient to free it fro) "ia+i"ity 'n#er it& .o"i!y,
nevert(e"e&& i& &'ffi!ient to ne$ate any a&&ertion t(at
in ref'&in$ to .ay, it a!te# 'nJ'&tifia+"y- Si)."y .'t,
t(e &ai# .rovi&ion& of t(e In&'ran!e Co#e are not
.ertinent to t(e in&tant !a&e- T(ey a.."y on"y (en
t(e !o'rt fin#& an 'nrea&ona+"e #e"ay or ref'&a" in
t(e .ay)ent of t(e !"ai)&-
, Cir!'"ar No- D46 of t(e Centra" Ban2, (i!( rai&e#
t(e "e$a" rate of intere&t fro) 6Q to 42Q .er ann')
refer& on"y to "oan& or for+earan!e& of )oney, $oo#&
or !re#it& an# !o'rt J'#$)ent& t(ereon +'t not to
!o'rt J'#$)ent& for #a)a$e& ari&in$ fro) inJ'ry to
.er&on& an# "o&& of .ro.erty (i!( #oe& not invo"ve
a "oan- C"ear"y, t(e a.."i!a+"e "a i& Arti!"e 2205 of
t(e Civi" Co#e-
, An# in t(e "i$(t of t(e fa!t t(at t(e !onten#in$
.artie& #i# not a""e$e t(e rate of intere&t &ti.'"ate# in
t(e in&'ran!e !ontra!t, t(e "e$a" intere&t a&
.ro.er"y .e$$e# +y t(e A..e""ate Co'rt at 6Q .er
!ent-
CATHAY INSURANCE $. CA(LUGAY)
4CD SC<A 44
G<INO,AQUINO; G'ne 9, 4565
FACTS
, Petitioner& are 6 in&'ran!e !o).anie& t(at i&&'e#
fire in&'ran!e .o"i!ie& for t(e tota" &') of
PD,000,000 to t(e Ce+' *i"i.ina Pre&& one# +y
>)i"ia C(an /'$ay- T(e fire .o"i!ie& #e&!ri+e# t(e
in&'re# .ro.erty a& P&to!2& of Printin$ )ateria"&,
.a.er& an# $enera" )er!(an#i&e '&'a" to t(e
A&&'re#N& tra#eP &tore# in a one,&torey +'i"#in$ of
&tron$ )ateria"& (o'&in$ t(e Ce+' *i"i.ina Pre&&
"o!ate# at UNNO Pre&- Q'irino !or- Eon M- Sotto
St&-, Ma+o"o, Ce+' City- T(e !o,in&'rer& ere
in#i!ate# in ea!( of t(e .o"i!ie&- A"", e%!e.t one
.o"i!y @Para)o'ntN&A, ere renea"& of ear"ier
.o"i!ie& i&&'e# for t(e &a)e .ro.erty-
, On Ee!e)+er 46, 4564, t(e Ce+' *i"i.ina Pre&& a&
ra:e# +y e"e!tri!a" fire to$et(er it( a"" t(e &to!2&
an# )er!(an#i&e &tore# in t(e .re)i&e&- On Gan'ary
49, 4562, /'$ay &'+)itte# &orn State)ent& of /o&&
an# *or)a" C"ai)& to t(e in&'rer&, t(ro'$( t(eir
a#J'&ter&- S(e !"ai)e# a tota" "o&& of PD,959,000-
, After near"y 40 )ont(& of aitin$, &(e &'e# to
!o""e!t on Ee!e)+er 49, 4562- T(e in&'ran!e
!o).anie& #enie# "ia+i"ity, a""e$in$ vio"ation of
!ertain !on#ition& of t(e .o"i!y, )i&#e!"aration, an#
even ar&on (i!( a& not &erio'&"y .re&&e# for,
!o)e t(e .re,tria", t(e .etitioner& offere# to .ay
90Q of (er !"ai), +'t &(e in&i&te# on f'"" re!overy-
, Tria" !o'rt ren#ere# J'#$)ent in (er favor or#erin$
t(e in&'rer& to .ay (er a tota" of PD,000,000 a&
in#e)nity, PD6,000 re.re&entin$ e%.en&e& of t(e
."aintiff, a &e.arate a)o'nt of 20Q of t(e
PD,000,000 re.re&entin$ fee& of !o'n&e", intere&t& at
t(e rate of ti!e t(e !ei"in$ +ein$ .re&!ri+e# +y t(e
Monetary Boar# &tartin$ fro) t(e ti)e (en t(e
!a&e a& fi"e#, an# fina""y, it( !o&t&- CA affir)e#-
ISSUES
4- 0ON t(e in&'re#N& !a'&e of a!tion (a# a"rea#y
a!!r'e# +efore &(e fi"e# (er !o)."aint
2- 0ON &'ffi!ient .roof& of "o&& (a# +een .re&ente#
+y t(e in&'re#
3- 0ON t(e .rivate re&.on#ent& !"ai) for "o&& a&
inf"ate#
D- 0ON "oer !o'rt erre# in aar#in$ #a)a$e& to
t(e .rivate re&.on#ent in t(e for) of intere&t
e;'iva"ent to #o'+"e t(e intere&t !ei"in$ &et +y t(e
Monetary Boar#
9- 0ON attorneyN& fee& aar#e# ere e%or+itant
HELD
4- F>S
, A& t(e fire (i!( #e&troye# t(e Ce+' *i"i.ina Pre&&
o!!'rre# on Ee!e)+er 45, 4564 an# t(e .roof& of
"o&& ere &'+)itte# fro) Gan'ary 49, 4562 t(ro'$(
G'ne 24, 4562 in !o)."ian!e it( t(e a#J'&ter&N
n')ero'& re;'e&t& for vario'& #o!')ent&, .ay)ent
INSURANCE Page 101
&(o'"# (ave +een )a#e it(in 50 #ay& t(ereafter
@Se! 2D3A, or on or +efore Se.te)+er 24, 4562-
1en!e, (en t(e a&&'re# fi"e# (er !o)."aint on
Ee!e)+er 49, 4562, (er !a'&e of a!tion (a# a"rea#y
a!!r'e#-
2- F>S
, T(ere i& no )erit in t(e .etitioner&N !ontention t(at
t(e .roof& of "o&& ere in&'ffi!ient +e!a'&e /'$ay
fai"e# to !o)."y it( t(e a#J'&terN& re;'e&t for t(e
&'+)i&&ion of (er +an2 &tate)ent&- Con#ition No- 43
of t(e .o"i!y #oe& not re;'ire t(e in&'re# to .ro#'!e
(er +an2 &tate)ent&- T(erefore, t(e in&'re# a& not
o+"i$ate# to .ro#'!e t(e) an# t(e in&'rer& (a# no
ri$(t to a&2 for t(e)- Con#ition No- 43 a& .re.are#
+y t(e in&'rer& t(e)&e"ve&, (en!e, it &(o'"# +e
ta2en )o&t &tron$"y a$ain&t t(e)-
3- NO
, Bot( t(e tria" !o'rt an# t(e CA note# t(at t(e
.roof& ere a)."e an# )ore t(an eno'$( for
#efen#ant in&'rer& to #o a J'&t a&&e&&)ent
&'..ortin$ t(e 4564 fire !"ai) for an a)o'nt
e%!ee#in$ fo'r )i""ion .e&o&-
D- NO
, T(e aar# of #o'+"e intere&t on t(e !"ai) i& "af'"
an# J'&tifie# 'n#er Se!tion& 2D3 an# 2DD of t(e
In&'ran!e Co#e (i!( .rovi#eH
Se!- 2D3 <ef'&a" or fai"'re to .ay t(e "o&& or
#a)a$e it(in t(e ti)e .re&!ri+e# (erein i""
entit"e t(e a&&'re# to !o""e!t intere&t on t(e
.ro!ee#& of t(e .o"i!y for t(e #'ration of t(e #e"ay
at t(e rate of ti!e t(e !ei"in$ .re&!ri+e# +y t(e
Monetary Boar#-
Se!- 2DD In !a&e of any "iti$ation for t(e
enfor!e)ent of any .o"i!y or !ontra!t of in&'ran!e,
it &(a"" +e t(e #'ty of t(e Co))i&&ioner or t(e
Co'rt, a& t(e !a&e )ay +e, to )a2e a fin#in$ a& to
(et(er t(e .ay)ent of t(e !"ai) of t(e in&'re#
(a& +een 'nrea&ona+"y #enie# or it((e"#; an# in
t(e affir)ative !a&e, t(e in&'ran!e !o).any &(a""
+e a#J'#$e# to .ay #a)a$e& (i!( &(a"" !on&i&t of
attorneyN& fee& an# ot(er e%.en&e& in!'rre# +y t(e
in&'re# .er&on +y rea&on of &'!( 'nrea&ona+"e
#enia" or it((o"#in$ of .ay)ent ."'& intere&t of
ti!e t(e !ei"in$ .re&!ri+e# +y t(e Monetary Boar#
of t(e a)o'nt of !"ai) #'e t(e in&'re#-
, T(e .etitioner&N !ontention t(at t(e !(ar$in$ of
#o'+"e intere&t a& i).ro.er +e!a'&e no
'nrea&ona+"e #e"ay in t(e .ro!e&&in$ of t(e fire !"ai)
a& .roven i& ref'te# +y t(e tria" !o'rtN& e%."i!it
fin#in$ t(at Pt(ere a& a #e"ay t(at a& not
rea&ona+"e in .ro!e&&in$ t(e !"ai) an# #oin$
.ay)ent&P- Un#er Se!tion 2DD, a .ri)a fa!ie
evi#en!e of 'nrea&ona+"e #e"ay in .ay)ent of t(e
!"ai) i& !reate# +y t(e fai"'re of t(e in&'rer to .ay
t(e !"ai) it(in t(e ti)e fi%e# in +ot( Se!- 2D2 an#
2D3 of t(e IC-
, In vie of t(e not in&'+&tantia" va"'e of t(e .rivate
re&.on#entN& !"ai)& an# t(e !on&i#era+"e ti)e an#
effort e%.en#e# +y t(e) an# t(eir !o'n&e" in
.ro&e!'tin$ t(e&e !"ai)& for t(e .a&t 6 year&,
attorneyN& fee& ere .ro.er"y aar#e# to t(e .rivate
re&.on#ent&-
9- F>S
, An aar# e;'iva"ent to 40Q of t(e .ro!ee#& of t(e
.o"i!ie& o'"# +e )ore rea&ona+"e t(an t(e 20Q
aar#e# +y t(e tria" !o'rt an# t(e CA-
Disposition Ee!i&ion of t(e CA A**I<M>E it(
MOEI*ICATION-
NODA $. CRUZ
494 SC<A 22C
*><NAN; G'ne 22, 456C
NATURE
Petition to revie #e!i&ion of t(e In&'ran!e
Co))i&&ioner
FACTS
, In 45CC, No#a o+taine# fro) ?enit( In&'ran!e
Cor.oration 2 fire in&'ran!e .o"i!ie&H [4] No- *,
03C2D it( a fa!e va"'e of P302 !overin$ t(e $oo#&
an# &to!2& in tra#e in (i& +'&ine&& e&ta+"i&()ent at
t(e )ar2et &ite in Man$a$oy, Bi&"i$, S'ri$ao #e" S'r
an# [2] No- *,03C3D it( a fa!e va"'e in t(e
a$$re$ate a)o'nt of P4002 an# !on&i&tin$ of Ite) 4
for PD02 on (o'&e(o"# f'rnit're, fi%t're&, fittin$& an#
ot(er .er&ona" effe!t&, an# Ite) 2 for P602 on &to!2&
in tra#e '&'a" to .etitionerN& retai" +'&ine&& &it'ate#
in a to,&torey +'i"#in$ at 035 Barre#a St-,
Man$a$oy, Bi&"i$, S'ri$ao #e" S'r-
, 0(i"e +ot( .o"i!ie& ere in for!e, fire #e&troye#
.etitionerN& in&'re# .ro.ertie& at t(e )ar2et &ite on
Se.te)+er 9, 45CC an# at Barre#a St- on Nove)+er
5, 45CC-
, 0(en .etitioner fai"e# to o+tain in#e)nity on (i&
!"ai)& fro) ?enit(, (e fi"e# a !o)."aint it( t(e
In&'ran!e Co))i&&ion .rayin$ t(at ?enit( +e
or#ere# to .ay (i) P4302J re.re&entin$ t(e va"'e of
t(e 2 .o"i!ie& in&'re# +y re&.on#ent it( intere&t at
42Q .er ann'), ."'& #a)a$e&, attorneyN& fee& an#
ot(er e%.en&e& of "iti$ation- ---
, ?enit( inter.o&e# t(at .etitioner (a# no !a'&e of
a!tion; t(at Po"i!y No- *,03C2D a& not in f'"" for!e
an# effe!t at t(e ti)e of t(e fire +e!a'&e t(e
.re)i') on t(e .o"i!y a& not .ai#; t(at ?enit(N&
"ia+i"ity 'n#er Po"i!y No- *,03C3D, if any, a& "i)ite#
to P49,DC2-90 in vie of t(e !o,in&'ran!e; an# t(at
.etitioner fai"e# to &'+&tantiate (i& !"ai) a& to t(e
va"'e of t(e $oo#& re.'te#"y #e&troye# +y fire-
, 0(i"e t(e !a&e a& .en#in$, ?enit( &ett"e#
.etitioner=& fire "o&& !"ai) 'n#er Ite) 4 of Po"i!y No-
03C3D in t(e a)o'nt of P49,DC2-90-
, In&'ran!e Co))i&&ioner a""oe# .etitioner to
re!over 'n#er &ai# .o"i!y an# or#ere# ?enit( to .ay
(i) t(e a)o'nt of P202 it( "e$a" intere&t fro) t(e
#ate t(e !o)."aint a& fi"e#, in!"'#in$ P42 a&
attorneyN& fee& +'t e%!"'#in$ t(e a!t'a", )ora" an#
e%e)."ary #a)a$e& .raye# for-

A& for .etitionerN&
!"ai) 'n#er Po"i!y No- *,03C3D, &(e (e"# t(at in vie
of t(e .ay)ent of P49,DC2-90 to .etitioner, ?enit(
(a# f'""y #i&!(ar$e# it& "ia+i"ity 'n#er &ai# .o"i!y
(i!( !overe# f'rnit're, fi%t're&, fittin$& an# ot(er
.er&ona" +e"on$in$& of .etitioner-
, In a""oin$ re!overy 'n#er Po"i!y No- *,03C3D,
Co))i&&ioner ."a!e# )'!( ei$(t on t(e fina" re.ort
.re.are# +y Ee"a Mer!e# A#J'&t)ent Cor.oration, an
in#e.en#ent fire, )arine an# !a&'a"ty a#J'&ter
!ontra!te# +y ?enit( to inve&ti$ate t(e !"ai)& of it&
vario'& .o"i!y(o"#er&- Sai# re.ort !on!"'#e# t(at
Pt(e &o'n# va"'e of P26,666-6C re.re&ente# t(e
(o"e "o&& an# #a)a$eP in!'rre# +y .etitioner, +'t
it( t(e a.."i!ation of t(e t(ree,fo'rt(& "o&& !"a'&e,
?enit(N& "ia+i"ity a& re#'!e# to P202-

ISSUES
4- 0ON In&'ran!e Co))i&&ioner erre# in #enyin$
.etitionerN& #e)an# for P602 'n#er Ite) 2 of Po"i!y
No- *,03C3D
2- 0ON In&'ran!e Co))i&&ioner erre# in not
aar#in$ in favor of .etitioner e%e)."ary #a)a$e&
for ?enit(N& 'nJ'&tifie# an# anton ref'&a" to .ay
.etitionerN& !"ai) 'n#er t(e &ai# to in&'ran!e
!ontra!t&
HELD
4- F>S
, To .rove t(e e%i&ten!e of t(e &to!2& in tra#e
!overe# +y Po"i!y No- *,03C3D, .etitioner offere# (i&
te&ti)ony an# t(at of (i& ife a& e"" a&
#o!')entary e%(i+it&- T(e fore$oin$ evi#en!e for
.etitioner .re.on#erant"y &(oe# t(e .re&en!e of
&o)e P9502 ort( of $oo#& in (i& retai" &tore #'rin$
t(e fire of Nove)+er 5, 45CC-
, 0(i"e t(e in&'rer, an# t(e In&'ran!e Co))i&&ioner
for t(at )atter, (ave t(e ri$(t to reJe!t .roof& of "o&&
INSURANCE Page 102
if t(ey are 'n&ati&fa!tory, t(ey )ay not &et '. for
t(e)&e"ve& an ar+itrary &tan#ar# of &ati&fa!tion-
S'+&tantia" !o)."ian!e it( t(e re;'ire)ent& i""
a"ay& +e #ee)e# &'ffi!ient-
, ?enit( intro#'!e# in evi#en!e t(e fina" re.ort on
Po"i!y No- *,03C3D &'+)itte# +y it& on a#J'&ter,
Ee"a Mer!e# A#J'&t)ent Cor.oration- <e&.on#ent
Co))i&&ioner (oever i$nore# &'!( re.ort,
rea&onin$ t(at it( re$ar# to Ite) 2 of Po"i!y No- *,
03C3D t(e !"ai) for "o&& of t(e &to!2& in tra#e a&
not &'!!e&&f'""y .roven in vie of .etitionerN& fai"'re
to .re&ent evi#en!e; t(at t(e a#J'&terN& re.ort
#e&erve# &!ant !on&i#eration &in!e t(e a""e$ation&
t(erein ere not &'+&tantiate#, an# t(at &ai# re.ort
#i# not even )a2e a re!o))en#ation for .ay)ent-
, A &!r'tiny of t(e a+ove)entione# a#J'&terN& re.ort
revea"& t(at to$et(er it( t(e for)a" #e)an# for f'""
in#e)nity, .etitioner &'+)itte# (i& in!o)e ta% ret'rn
for 45C6, .'r!(a&e invoi!e&, !ertifi!ation fro) (i&
&'.."ier& a& to (i& .'r!(a&e&, an# ot(er &'..ortin$
.a.er&- T(e re.ort even too2 into a!!o'nt t(e
a..rai&a"& of t(e ot(er a#J'&ter& an# !on!"'#e# t(at
t(e tota" "o&& &'&taine# +y .etitioner in (i& (o'&e(o"#
effe!t& and &to!2& in tra#e rea!(e# P3C5,302-42- B't
after a..ortionin$ &ai# a)o'nt a)on$ .etitionerN&
&i% #ifferent in&'rer& [t(e !o,in&'ran!e +ein$ 2non
to ?enit(], t(e "ia+i"ity of ?enit( a& ."a!e# at
P60,952-40- It t(erefore re!o))en#e# t(at ?enit(
.ay t(e .etitioner t(e a)o'nt of P60, 952-40-
, Sai# #o!')ent a& offere# a& evi#en!e +y ?enit(
it&e"f an# !o'"# very e"" +e !on&i#ere# a& an
a#)i&&ion of it& "ia+i"ity '. to t(e a)o'nt
re!o))en#e#- Bein$ in t(e nat're of an a#)i&&ion
a$ain&t intere&t, it i& t(e +e&t evi#en!e (i!( affor#&
t(e $reate&t !ertainty of t(e fa!t& in #i&.'te-
<e&.on#ent Co))i&&ioner &(o'"# not (ave
.erf'n!tori"y #i&)i&&e# t(at .arti!'"ar evi#en!e a& a
ort("e&& .ie!e of .a.er-
2- NO
, T(ere i& no &(oin$ t(at ?enit(, in !onte&tin$
.ay)ent, (a# a!te# in a anton, o..re&&ive or
)a"evo"ent )anner to arrant t(e i).o&ition of
!orre!tive #a)a$e&-
Disposition ?enit( In&'ran!e Cor.oration or#ere# to
.ay .etitioner Nor)an <- No#a t(e &') of
P60,952-40 it( "e$a" intere&t fro) t(e fi"in$ of t(e
!o)."aint 'nti" f'"" .ay)ent, +'t #e#'!tin$
t(erefro) t(e a)o'nt of P49,DC2-90 (i!( it (a#
ear"ier .ai# to .etitioner-
DELSAN TRANSPORT, INC. $. CA (AMERICAN
HOME ASSURANCE)
365 SC<A 2D
E> />ON, G<; Nove)+er 49, 2004
NATURE
A .etition for revie on certiorari of t(e #e!i&ion of
CA-
FACTS
, Ca"te% entere# into a !ontra!t of affrei$(t)ent it(
t(e .etitioner, Ee"&an Tran&.ort /ine&, In!-
@.etitionerA, for a .erio# of one year (ere+y t(e
&ai# !o))on !arrier a$ree# to tran&.ort Ca"te%=&
in#'&tria" f'e" oi" fro) t(e Batan$a&,Bataan <efinery
to #ifferent .art& of t(e !o'ntry- Ee"&an too2 on
+oar# it& ve&&e", MT May&'n, 2,2CC-34D 2i"o"iter& of
in#'&tria" f'e" oi" of Ca"te% to +e #e"ivere# to t(e
Ca"te% Oi" Ter)ina" in ?a)+oan$a City- T(e
&(i.)ent a& in&'re# +y A)eri!an 1o)e A&&'ran!e
Cor.oration @re&.on#entA-
, A'$'&t 4D, 4566H MT May&'n &et &ai" fro)
Batan$a& for ?a)+oan$a City- T(e ve&&e" &an2 in
t(e ear"y )ornin$ of A'$'&t 46, 4566 near Panay
G'"f in t(e Mi&aya& ta2in$ it( it t(e entire !ar$o of
f'e" oi"-
, <e&.on#ent .ai# Ca"te% P9,056,639-9C
re.re&entin$ t(e in&'re# va"'e of t(e "o&t !ar$o-
>%er!i&in$ it& ri$(t of &'+ro$ation 'n#er Arti!"e 220C
of t(e Ne Civi" Co#e, t(e .rivate re&.on#ent
#e)an#e# of t(e .etitioner t(e &a)e a)o'nt it .ai#
to Ca"te%- Ee"&an ref'&e# to .ay, for!in$ A)eri!an
(o)e to fi"e a !a&e for !o""e!tion in t(e <TC-
, <TC fo'n# t(at t(e ve&&e", MT May&'n, a&
&eaort(y to 'n#erta2e t(e voya$e, an# t(at t(e
in!i#ent a& !a'&e# +y an 'ne%.e!te# in!"e)ent
eat(er !on#ition or force a6eure$ t('& e%e).tin$
t(e !o))on !arrier fro) "ia+i"ity for t(e "o&& of it&
!ar$o-
, CA rever&e# <TC #e!i&ion on t(e +a&i& of evi#en!e
fro) PAG,ASA t(at t(ere ere no 20 ft- ave& in t(e
area- CA r'"e# t(at t(e .etitioner i& "ia+"e on it&
o+"i$ation a& !o))on !arrier to re&.on#ent
in&'ran!e !o).any a& &'+ro$ee of Ca"te%-
Petitioners Claim
B In every )arine in&'ran!e '.on a &(i. or frei$(t,
or frei$(ta$e, or '.on any t(in$ (i!( i& t(e &'+Je!t
of )arine in&'ran!e t(ere i& an i)."ie# arranty +y
t(e &(i..er t(at t(e &(i. i& &eaort(y-
40
0(en
.rivate re&.on#ent .ai# Ca"te% t(e va"'e of it& "o&t
!ar$o, t(e a!t of t(e .rivate re&.on#ent i& e;'iva"ent
10
>ec. 113 6nsurance Code
to a ta!it re!o$nition t(at t(e i"",fate# ve&&e" a&
&eaort(y-
Respondents Comment
B A)eri!an 1o)e A&&'ran!e i& entit"e# to .ay)ent
+y it& ri$(t of &'+ro$ation-
ISSUES
4- 0ON .ay)ent )a#e +y A)eri!an 1o)e to Ca"te%
for t(e in&'re# va"'e of t(e "o&t !ar$o a)o'nte# to
an a#)i&&ion t(at t(e ve&&e" a& &eaort(y, t('&
.re!"'#in$ any a!tion for re!overy a$ain&t t(e
.etitioner
2- 0ON MT May&'n a& &eaort(y at t(e ti)e of t(e
voya$e @o't"ine to.i!A
3- 0ON non,.re&entation of t(e )arine in&'ran!e
.o"i!y +ar& t(e !o)."aint for re!overy of &') of
)oney for "a!2 of !a'&e of a!tion
HELD
4- NO
Ratio T(e fa!t of .ay)ent $rant& A)eri!an 1o)e
t(e &'+ro$atory ri$(t (i!( ena+"e& it to e%er!i&e
"e$a" re)e#ie& t(at o'"# ot(eri&e +e avai"a+"e to
Ca"te% a& oner of t(e "o&t !ar$o a$ain&t t(e
.etitioner !o))on !arrier-
Reasoning
Art- 220C- @Civi" Co#eA
If t(e ."aintiff=& .ro.erty (a& +een in&'re#, an# (e
(a& re!eive# in#e)nity fro) t(e in&'ran!e
!o).any for t(e inJ'ry or "o&& ari&in$ o't of t(e
ron$ or +rea!( of !ontra!t !o)."aine# of, t(e
in&'ran!e !o).any &(a"" +e &'+ro$ate# to t(e
ri$(t& of t(e in&'re# a$ain&t t(e ron$#oer or t(e
.er&on (o (a& vio"ate# t(e !ontra!t- If t(e
a)o'nt .ai# +y t(e in&'ran!e !o).any #oe& not
f'""y !over t(e inJ'ry or "o&&, t(e a$$rieve# .arty
&(a"" +e entit"e# to re!over t(e #efi!ien!y fro) t(e
.er&on !a'&in$ t(e "o&& or inJ'ry-
, T(e ri$(t of &'+ro$ation i& #e&i$ne# to .ro)ote
an# to a!!o)."i&( J'&ti!e an# i& t(e )o#e (i!(
e;'ity a#o.t& to !o).e" t(e '"ti)ate .ay)ent of a
#e+t +y one (o in J'&ti!e an# $oo# !on&!ien!e
o'$(t to .ay- It i& not #e.en#ent '.on, nor #oe& it
$ro o't of, any .rivity of !ontra!t or '.on ritten
a&&i$n)ent of !"ai)- It a!!r'e& &i)."y '.on
.ay)ent +y t(e in&'ran!e !o).any of t(e in&'ran!e
!"ai)-
2- NO
Ratio Seaort(ine&& re"ate& to a ve&&e"=& a!t'a"
!on#ition- Neit(er t(e $rantin$ of !"a&&ifi!ation or
INSURANCE Page 103
t(e i&&'an!e of !ertifi!ate& e&ta+"i&(e&
&eaort(ine&&-
Reasoning
, Co))on !arrier& are +o'n# to o+&erve
e%traor#inary #i"i$en!e in t(e vi$i"an!e over t(e
$oo#& an# for t(e &afety of .a&&en$er& tran&.orte#
+y t(e), a!!or#in$ to a"" t(e !ir!')&tan!e& of ea!(
!a&e- T(ere i& no "ia+i"ity if t(e "o&&, #e&tr'!tion or
#eterioration i& +y force a6eure-
, T(e ta"e of &tron$ in#& an# +i$ ave& +y t(e &ai#
offi!er& of t(e .etitioner (oever, a& effe!tive"y
re+'tte# an# +e"ie# +y t(e eat(er re.ort fro) PAG,
ASA- MT May&'n &an2 it( it& entire !ar$o for t(e
rea&on t(at it a& not &eaort(y- T(ere a& no
&;'a"" or +a# eat(er or e%tre)e"y .oor &ea
!on#ition in t(e vi!inity (en t(e &ai# ve&&e" &an2-
, Petitioner )ay not e&!a.e "ia+i"ity +y .re&entin$ in
evi#en!e !ertifi!ate& t(at ten# to &(o t(at at t(e
ti)e of #ry,#o!2in$ an# in&.e!tion +y t(e P(i"i..ine
Coa&t G'ar# MT May&'n, a& fit for voya$e- T(e&e
.ie!e& of evi#en!e #o not ne!e&&ari"y ta2e into
a!!o'nt t(e a!t'a" !on#ition of t(e ve&&e" at t(e ti)e
of t(e !o))en!e)ent of t(e voya$e- At t(e ti)e of
#ry,#o!2in$ an# in&.e!tion, t(e &(i. )ay (ave
a..eare# fit- T(e !ertifi!ate& i&&'e#, (oever, #o
not ne$ate t(e .re&').tion of 'n&eaort(ine&&
tri$$ere# +y an 'ne%."aine# &in2in$-
, A't(oritie& are !"ear t(at #i"i$en!e in &e!'rin$
!ertifi!ate& of &eaort(ine&& #oe& not &ati&fy t(e
ve&&e" oner=& o+"i$ation- A"&o &e!'rin$ t(e a..rova"
of t(e &(i..er of t(e !ar$o, or (i& &'rveyor, of t(e
!on#ition of t(e ve&&e" or (er &toa$e #oe& not
e&ta+"i&( #'e #i"i$en!e if t(e ve&&e" a& in fa!t
'n&eaort(y, for t(e !ar$o oner (a& no o+"i$ation
in re"ation to &eaort(ine&&-
3- NO
Ratio T(e .re&entation in evi#en!e of t(e )arine
in&'ran!e .o"i!y i& not in#i&.en&a+"e in t(i& !a&e
+efore t(e in&'rer )ay re!over fro) t(e !o))on
!arrier t(e in&'re# va"'e of t(e "o&t !ar$o in t(e
e%er!i&e of it& &'+ro$atory ri$(t- T(e &'+ro$ation
re!ei.t, +y it&e"f, i& &'ffi!ient to e&ta+"i&( not on"y
t(e re"ation&(i. of re&.on#ent a& in&'rer an# Ca"te%,
a& t(e a&&'re# &(i..er of t(e "o&t !ar$o of in#'&tria"
f'e" oi", +'t a"&o t(e a)o'nt .ai# to &ett"e t(e
in&'ran!e !"ai)- T(e ri$(t of &'+ro$ation a!!r'e&
&i)."y '.on .ay)ent +y t(e in&'ran!e !o).any of
t(e in&'ran!e !"ai)-
Disposition Petition i& #enie#, an# t(e #e!i&ion of
t(e CA i& affir)e#-
FINMAN GENERAL ASSURANCE CORP $.
INOCENCIO
4C5 SC<A D60
*>/ICIANO; Nove)+er 49, 4565
FACTS
, Pan Pa!ifi! i& a re!r'it)ent an# e)."oy)ent
a$en!y- It .o&te# &'rety +on# i&&'e# +y *in)an
Genera" A&&'ran!e an# a& $rante# "i!en&e to
o.erate +y PO>A-
, Ino!en!io, Pa"ero, Car#one&, 1ernan#e: fi"e# it(
PO>A !o)."aint& a$ain&t Pan Pa!ifi! for vio"ation of
/a+or Co#e an# for ref'n# of ."a!e)ent fee&- PO>A
A#)ini&trator )ot' .ro.io i)."ea#e# *in)an a&
&'rety for Pan Pa!ifi!-
, Pan Pa!ifi! )ove# o't an# no noti!e of tran&fer a&
f'rni&(e# to PO>A a& re;'ire#- PO>A !on&i#ere# t(at
!on&tr'!tive &ervi!e of !o)."aint& (a# +een effe!te#-
, *in)an #enie# "ia+i"ity an# &ai# t(at
, PO>A (a# no J'ri&#i!tion over &'rety +on#&;
J'ri&#i!tion i& ve&te# in In&'ran!e Co))i&&ion
, *in)an (a# not vio"ate# /a+or Co#e
, Co)."ainant& (ave no !a'&e of a!tion a$ain&t
*in)an
, A)o'nt& !"ai)e# ere .ai# a& #e.o&it& an# not a&
."a!e)ent fee&-
, PO>A A#)ini&trator i&&'e# Or#er t(at re&.on#ent&
&(o'"# .ay- *in)an a..ea"e# to Se!retary of /a+or-
Se!retary '.(e"# t(e PO>A or#er-
ISSUE
0ON *in)an !an +e (e"# "ia+"e for !o)."ainant&=
!"ai)& a$ain&t Pan Pa!ifi!
HELD
F>S
, Un#er In&'ran!e Co#e, "ia+i"ity of &'rety in a
&'rety +on# i& Joint an# &evera" it( t(e .rin!i.a"
o+"i$or-
, Con#ition& of a +on# &.e!ifie# an# re;'ire# in t(e
.rovi&ion& of a &tat'te .rovi#in$ for &'+)i&&ion of
t(e +on#, are in!or.orate# into a"" +on#& ten#ere#
'n#er t(at &tat'te even t(o'$( not &et o't in
.rinter=& in2-
, PO>A (e"# an# Se!retary of /a+or affir)e# t(at
Pan Pa!ifi! (a# vio"ate# /a+or Co#e, an# at "ea&t one
of t(e !on#ition& for t(e $rant an# !ontin'e# '&e of
t(e re!r'it)ent "i!en&e- PO>A an# Se!retary of
/a+or !an re;'ire Pan Pa!ifi! to ref'n# t(e ."a!e)ent
fee& an# to i).o&e t(e fine-
, If Pan Pa!ifi! i& "ia+"e, an# if *in)an i& &o"i#ari"y
"ia+"e it( Pan Pa!ifi!, t(en *in)an i& "ia+"e +ot( to
.rivate re&.on#ent& an# to PO>A-
, Ca&( an# &'rety +on#& are re;'ire# fro)
re!r'it)ent !o).anie& a& )ean& of en&'rin$ .ro).t
an# effe!tive re!o'r&e a$ain&t &'!( !o).anie& (en
(e"# "ia+"e- P'+"i! .o"i!y i"" +e effe!tive"y ne$ate# if
PO>A an# t(e Eo/> ere (e"# .oer"e&& to !o).e" a
&'rety !o).any to )a2e $oo# on it& &o"i#ary
'n#erta2in$-
EAGLE STAR INSURANCE CO LTD $. CHIA YU
56 P1I/ 656
<>F>S; Mar!( 34, 4599
NATURE
Certiorari
FACTS
, At2in, Iro"" S Co-, "oa#e# on t(e S- S- <oe.(
Si"ver"i$(t one# an# o.erate# +y /ei$( 1oe$( S
Co-, ARS, of San *ran!i&!o Ca"ifornia, 4D +a"e& of
a&&orte# 'n#erear va"'e# at P6,069-23 !on&i$ne#
to C(ia F' in t(e City of Mani"a-
, T(e &(i.)ent a& in&'re# a$ain&t a"" ri&2& +y >a$"e
Star In&- Co- of San *ran!i&!o, Ca"ifornia, 'n#er a
.o"i!y i&&'e# to t(e &(i..er an# +y t(e "atter
a&&i$ne# to t(e !on&i$nee-
, T(e ve&&e" arrive# in Mani"a +'t of t(e 4D +a"e&
@a-2-a- frei$(t& \.A !on&i$ne# to C(ia F' on"y 40
ere #e"ivere# to (i) a& t(e re)ainin$ 3 !o'"# not
+e fo'n#-3 of t(o&e #e"ivere# ere a"&o fo'n#
#a)a$e# to t(e e%tent of 90 .er !ent-
,C(ia F' !"ai)e# in#e)nity for t(e )i&&in$ an#
#a)a$e# +a"e&- B't t(e !"ai) a& #e!"ine#, fir&t, +y
t(e !arrier an# afterar# +y t(e in&'rer, (ere'.on
C(ia F' +ro'$(t t(e .re&ent a!tion a$ain&t +ot(,
in!"'#in$ t(eir re&.e!tive a$ent& in t(e P(i"i..ine&-
, An a!tion a& fi"e# at t(e C*I after )ore t(an 2
year& after #e"ivery of t(e #a)a$e# +a"e& an# t(e
#ate (en t(e )i&&in$ +a"e& &(o'"# (ave +een
#e"ivere#, t(e a!tion a& re&i&te# +y t(e At2in& an#
>a$"e Star .rin!i.a""y on t(e $ro'n# of .re&!ri.tion-
,TC favore# C(ia F' an# CA affir)e#-
KKK CA<<I><=& #efen&e of .re&!ri.tion i& )a#e to
re&t on t(e fo""oin$ &ti.'"ation of t(e +i"" of "a#in$H
In any event t(e !arrier an# t(e &(i. &(a"" +e
#i&!(ar$e# fro) a"" "ia+i"ity in re&.e!t of "o&& or
#a)a$e 'n"e&& &'it i& +ro'$(t it(in one year
after t(e #e"ivery of t(e $oo#& or t(e #ate (en
t(e $oo#& &(o'"# (ave +een #e"ivere#- &/!is
sti#ulation is but a re#etition of a #rovision in t!e
INSURANCE Page 104
CA QK ,!ic! says t!at bills of ladin" coverin"
s!i#ents fro t!e ?S to t!e P!ils s!ould be
brou"!t ,/in one year after t!e delivery of t!e
"oods or t!e date ,!en t!e "oods s!ould !ave
been delivered to !old t!e carrier liable.)
KKK INSU<><=& !"ai) of .re&!ri.tion i& fo'n#e# '.on
t(e ter)& of t(e .o"i!y an# not '.on t(e +i"" of
"a#in$- &But in our 6urisdiction$ as #er A::PP$
#rescri#tion is :3 years after action accrues.)
No &'it a!tion on t(i& Po"i!y, for t(e re!overy of
any !"ai), &(a"" +e &'&taina+"e in any Co'rt of "a
or e;'ity 'n"e&& t(e in&'re# &(a"" (ave f'""y
!o)."ie# it( a"" t(e ter)& an# !on#ition& of t(i&
Po"i!y nor 'n"e&& !o))en!e# it( te"ve @42A
)ont(& ne%t after t(e (a..enin$ of t(e "o&& - - -
ISSUE
0ON ATIIN= & a!tion (a& .re&!ri+e#
HELD
NO
, Bein$ !ontrary to t(e "a of t(e for'), t(e
&ti.'"ation in t(e .o"i!y !annot +e $iven effe!t a& it
o'"# re#'!e t(e .erio# a""oe# t(e in&'re# for
+rin$in$ (i& a!tion to "e&& t(an one year @+e!a'&e
t(e .re&!ri.tion .erio# +e$in& fro) t(e 7(a..enin$
of t(e "o&&8 an# t(at +efore any &'it !o'"# +e
&'&taine# t(e in&'re# &(a"" (ave to !o)."y it( t(e
ter)& an# !on#ition& of t(e .o"i!y fir&t T* "e&&enin$
t(e .erio# to "e&& t(an a year- A
, In&'"ar Govern)ent vs- *ran2@43 P(i"- 236A[
P)atter& re&.e!tin$ a re)e#y, &'!( a& t(e +rin$in$
of &'it, a#)i&&i+i"ity of evi#en!e, an# &tat'te of
"i)itation&, #e.en# '.on t(e "a of t(e ."a!e (ere
t(e &'it i& +ro'$(tP T* any .o"i!y !"a'&e re.'$nant to
t(i& a)en#)ent to t(e In&'ran!e A!t !annot +e
$iven effe!t in an a!tion in o'r !o'rt&-
S>C- 64,A- @In&'ran!e Co#eA [ Any !on#ition,
&ti.'"ation or a$ree)ent in any .o"i!y of
in&'ran!e, "i)itin$ t(e ti)e for !o))en!in$ an
a!tion t(ere'n#er to a .erio# of "e&& t(an one year
fro) t(e ti)e (en t(e !a'&e of a!tion a!!r'e&, i&
voi#-
, T(e .re&!ri.tion !"a'&e !o'"# +e (ar)oni:e# it(
&e!tion 64,A of t(e In&'ran!e A!t +y ta2in$ it to
)ean t(at t(e ti)e $iven t(e in&'re# for +rin$in$ (i&
&'it i& te"ve )ont(& after t(e !a'&e of a!tion
a!!r'e&-
, If &o, (en #i# t(e !a'&e of a!tion a!!r'eX C(ia
F'=& a!tion #i# not a!!r'e 'nti" (i& !"ai) a& fina""y
reJe!te# +y t(e in&'ran!e !o).any- T(i& i& +e!a'&e,
+efore &'!( fina" reJe!tion, t(ere a& no rea"
ne!e&&ity for +rin$in$ &'it-
, A& t(e .o"i!y .rovi#e& t(at t(e in&'re# &(o'"# fi"e
(i& !"ai), fir&t, it( t(e !arrier an# t(en it( t(e
in&'rer, (e (a# a ri$(t to ait for (i& !"ai) to +e
fina""y #e!i#e# +efore $oin$ to !o'rt-
, *'rt(er)ore, t(ere i& not(in$ in t(e re!or# to &(o
t(at t(e !"ai) a& reJe!te# in t(e year 45DC, eit(er
+y t(e in&'ran!e !o).any in /on#on or it& &ett"in$
a$ent& in t(e P(i"i..ine&-
, *or t(e .'r.o&e of t(i& a!tion, C(ia F'N& !"ai) a&
!on&i#ere# to (ave +een fina""y reJe!te# +y t(e
in&'rer on A.ri" 22, 45D6- 1avin$ +een fi"e# it(in
te"ve )ont(& for) t(at #ate, t(e a!tion !annot +e
#ee)e# to (ave .re&!ri+e# even on t(e &'..o&ition
t(at t(e .erio# $iven t(e in&'re# for +rin$in$ &'it
'n#er t(e .re&!ri.tive !"a'&e of t(e .o"i!y i& te"ve
)ont(& after t(e a!!r'a" of t(e !a'&e of a!tion-
, Contractual liitations contained in insurance
#olicies are re"arded ,it! e8tree 6ealousy by
courts and ,ill be strictly construed a"ainst t!e
insurer and s!ould not be #eritted to #revent a
recovery ,!en t!eir 6ust and !onest a##lication
,ould not #roduce t!at result. @D6 C- G- S- 2C3-A
Disposition G'#$)ent a..ea"e# fro) i& REVERSED
it( re&.e!t to t(e !arrier an# it& a$ent& +'t
AFFIRMED it( re&.e!t to t(e in&'ran!e !o).any
an# it& a$ent&-
ACCFA $. ALPHA INSURANCE
2D SC<A 494
<>F>S; G'"y 25, 4566
FACTS
, In or#er to $'arantee t(e A&in$an *ar)er&N
Coo.erative Mar2etin$ A&&o!iation, In!- @*ACOMAA
a$ain&t "o&& on a!!o'nt of P.er&ona" #i&(one&ty,
a)o'ntin$ to "ar!eny or e&tafa of it& Se!retary,
Trea&'rer, /a#ine&, t(e a..e""ee, A".(a In&'ran!e S
S'rety Co).any (a# i&&'e#, on 4D *e+r'ary 4596,
it& +on#, No- P,*IE,49,96, for t(e &') of P9,000
it( &ai# /a#ine& a& .rin!i.a" an# t(e a..e""ee a&
&o"i#ary &'rety- On t(e &a)e #ate, t(e A&in$an
*ACOMA a&&i$ne# it& ri$(t& to t(e a..e""ant,
A$ri!'"t'ra" Cre#it Coo.erative an# *inan!in$
A#)ini&tration @ACC*A for &(ortA, it( a..rova" of
t(e .rin!i.a" an# t(e &'rety-
, E'rin$ t(e effe!tivity of t(e +on#, /a#ine&
!onverte# an# )i&a..ro.riate#, to (i& .er&ona"
+enefit, &o)e P44,943-22 of t(e *ACOMA f'n#&, of
(i!( P6,30C-33 +e"on$e# to t(e ACC*A- U.on
#i&!overy of t(e "o&&, ACC*A i))e#iate"y notifie# in
ritin$ t(e &'rvey !o).any on 40 O!to+er 4596, an#
.re&ente# t(e .roof of "o&& it(in t(e .erio# fi%e# in
t(e +on#; +'t #e&.ite re.eate# #e)an#& t(e &'rety
!o).any ref'&e# an# fai"e# to .ay- 0(ere'.on,
ACC*A fi"e# &'it a$ain&t a..e""ee on 30 May 4560-
, Eefen#ant A".(a In&'ran!e S S'rety Co-, In!-,
@no a..e""eeA )ove# to #i&)i&& t(e !o)."aint for
fai"'re to &tate a !a'&e of a!tion, $ivin$ a& rea&on
t(at @4A t(e &a)e a& fi"e# )ore t(an one year after
."aintiff )a#e !"ai) for "o&&, !ontrary to t(e ei$(t(
!on#ition of t(e +on#, .rovi#in$ a& fo""o&H
>IG1T /IMITATION O* ACTIONH No a!tion, &'it or
.ro!ee#in$ &(a"" +e (a# or )aintaine# '.on t(i&
Bon# 'n"e&& t(e &a)e +e !o))en!e# it(in one
year fro) t(e ti)e of )a2in$ !"ai) for t(e "o&& '.on
(i!( &'!( a!tion, &'it or .ro!ee#in$, i& +a&e#, in
a!!or#an!e it( t(e fo'rt( &e!tion (ereof-
@2A t(e !o)."aint fai"e# to &(o t(at ."aintiff (a#
fi"e# !ivi" or !ri)ina" a!tion a$ain&t /a#ine&, a&
re;'ire# +y !on#ition& D an# 44 of t(e +on#; an# @3A
t(at /a#ine& a& a ne!e&&ary an# in#i&.en&a+"e
.arty +'t (a# not +een Joine# a& &'!(-
, At fir&t, t(e Co'rt of *ir&t In&tan!e #enie#
#i&)i&&a"; +'t, '.on re!on&i#eration, t(e !o'rt
rever&e# it& ori$ina" &tan#, an# #i&)i&&e# t(e
!o)."aint on t(e $ro'n# t(at t(e a!tion a& fi"e#
+eyon# t(e !ontra!t'a" "i)itation .erio#- 1en!e, t(i&
a..ea"-
ISSUE
0ON t(e .rovi&ion of a fi#e"ity +on# t(at no a!tion
&(a"" +e (a# or )aintaine# t(ereon 'n"e&&
!o))en!e# it(in one year fro) t(e )a2in$ of a
!"ai) for t(e "o&& '.on (i!( t(e a!tion i& +a&e#, i&
va"i#, in vie of Se!tion 64,A of t(e In&'ran!e A!t
inva"i#atin$ &ti.'"ation& "i)itin$ t(e ti)e for
!o))en!in$ an a!tion t(ereon to "e&& t(an one year
fro) t(e ti)e t(e !a'&e of a!tion a!!r'e&
HELD
NO
, A fi#e"ity +on# i&, in effe!t, in t(e nat're of a
!ontra!t of in&'ran!e a$ain&t "o&& fro) )i&!on#'!t,
an# i& $overne# +y t(e &a)e .rin!i."e& of
inter.retation- Con&e;'ent"y, t(e !on#ition of t(e
+on# in ;'e&tion, "i)itin$ t(e .erio# for +rin$in$
a!tion t(ereon, i& &'+Je!t to t(e .rovi&ion& of Se!tion
INSURANCE Page 105
64,A of t(e In&'ran!e A!t @No- 2D2CA, a& a)en#e#
+y A!t D404 of t(e .re,Co))onea"t( P(i"i..ine
/e$i&"at're, .re&!ri+in$ t(atH
S>C- 64,AH A !on#ition, &ti.'"ation or a$ree)ent in
any .o"i!y of in&'ran!e, "i)itin$ t(e ti)e for
!o))en!in$ an a!tion t(ere'n#er to a .erio# of
"e&& t(an one year fro) t(e ti)e (en t(e !a'&e
of a!tion a!!r'e& i& voi#-
, Sin!e a P!a'&e of a!tionP re;'ire&, a& e&&entia"
e"e)ent&, not on"y a "e$a" ri$(t of t(e ."aintiff an# a
!orre"ative o+"i$ation of t(e #efen#ant +'t a"&o Pan
a!t or o)i&&ion of t(e #efen#ant in vio"ation of &ai#
"e$a" ri$(t,P t(e !a'&e of a!tion #oe& not a!!r'e 'nti"
t(e .arty o+"i$ate# ref'&e&, e%.re&&"y or i)."ie#"y, to
!o)."y it( it& #'ty @in t(i& !a&e, to .ay t(e a)o'nt
of t(e +on#A- T(e year for in&tit'tin$ a!tion in !o'rt
)'&t +e re!2one#, t(erefore, fro) t(e ti)e of
a..e""eeN& ref'&a" to !o)."y it( it& +on#; it !an not
+e !o'nte# fro) t(e !re#itorN& fi"in$ of t(e !"ai) of
"o&&, for t(at #oe& not i).ort t(at t(e &'rety
!o).any i"" ref'&e to .ay- In &o far, t(erefore, a&
!on#ition ei$(t of t(e +on# re;'ire& a!tion to +e fi"e#
it(in one year fro) t(e fi"in$ of t(e !"ai) for "o&&,
&'!( &ti.'"ation !ontra#i!t& t(e .'+"i! .o"i!y
e%.re&&e# in Se!tion 64,A of t(e P(i"i..ine In&'ran!e
A!t-
, Con#ition ei$(t of t(e +on#, t(erefore, i& n'"" an#
voi#, an# t(e a..e""ant i& not +o'n# to !o)."y it(
it& .rovi&ion&- T(e #i&!o'ra$in$ of 'nne!e&&ary
"iti$ation )'&t +e #ee)e# a r'"e of .'+"i! .o"i!y,
!on&i#erin$ t(e 'nre"ieve# !on$e&tion in t(e !o'rt&-
A& a !on&e;'en!e of t(e fore$oin$, a!tion )ay +e
+ro'$(t it(in t(e &tat'tory .erio# of "i)itation for
ritten !ontra!t& @Ne Civi" Co#e, Arti!"e 44DDA-
ANG $. FULTON FIRE INSURANCE CO.
2 SC<A 5D9
/AB<AEO<; G'"y 34, 4564
NATURE
A..ea" fro) J'#$)ent of t(e C*I or#erin$ t(e
#efen#ant *'"ton *ire In&'ran!e Co- to .ay t(e
."aintiff& t(e &') of P40,000-00, it( intere&t, an#
an a##itiona" &') of P2,000-00 a& attorneyN& fee&,
an# !o&t&-
FACTS
, T(e &to!2& of $enera" )er!(an#i&e in t(e &tore of
t(e An$ &.o'&e& are in&'re# it( *'"ton- 0(i"e t(e
in&'ran!e a& in for!e, fire #e&troye# t(e $oo#&- T(e
An$& fi"e# t(eir fir&t !"ai) i))e#iate"y after t(e fire-
, T(eir !"ai) a& #enie# on A.ri" 6, 4596- T(ey
re!eive# noti!e on A.ri" 45, 4596-
, T(e An$& +ro'$(t an a!tion a$ain&t t(e a$ent on
May 44, 4596- T(e !o'rt #enie# t(e &'it an# t(e )fr
on Se.t- 3 an# 42, 459C-
, T(e An$& fi"e# a$ain&t *'"ton on May 26, 4596-
, T(ere a& a !"a'&e in t(e .o"i!yH
43-If t(e !"ai) +e in any re&.e!t fra'#'"ent, or if
any fa"&e #e!"aration i& )a#e or '&e# in &'..ort
t(ereof, or if any fra'#'"ent )ean& or #evi!e& are
'&e# +y t(e In&'re# or any one a!tin$ on (i&
+e(a"f to o+tain any +enefit 'n#er t(i& Po"i!y, or, if
t(e "o&& or #a)a$e +e o!!a&ione# +y t(e i"f'" a!t
or it( t(e !onnivan!e of t(e In&'re#, or, if t!e
clai be ade and re6ected and an action or suit
be not coenced ,it!in t,elve ont!s after
suc! re6ection or @in !a&e of ar+itration ta2in$
."a!e in .'r&'an!e of t(e 46t( !on#ition of t(i&
Po"i!yA it(in te"ve )ont(& after t(e ar+itrator or
ar+itrator& or ').ire &(a"" (ave )a#e t(eir aar#
all benefit under t!is Policy s!all be forfeited-P
ISSUE
0ON t(e &'it a$ain&t t(e a$ent to""e# t(e
.re&!ri.tion .erio#, &'!( t(at t(e fi"in$ a$ain&t *'"ton
a& on"y 5 )ont(& after t(e !"ai) a& reJe!te#
HELD
NO
, T(e +rin$in$ of t(e a!tion a$ain&t t(e Para)o'nt
S'rety S In&'ran!e Co).any, t(e a$ent of t(e
#efen#ant !o).any, !annot (ave any "e$a" effe!t
e%!e.t t(at of notifyin$ t(e a$ent of t(e !"ai)-
Beyon# &'!( notifi!ation, t(e fi"in$ of t(e a!tion !an
&erve no ot(er .'r.o&e- T(ere i& no "a $ivin$ any
effe!t to &'!( a!tion '.on t(e .rin!i.a"- Be&i#e&,
t(ere i& no !on#ition in t(e .o"i!y t(at t(e a!tion
)'&t +e fi"e# a$ain&t t(e a$ent, an# t(e Co'rt !an
not +y inter.retation e%ten# t(e !"ear &!o.e of t(e
a$ree)ent +eyon# (at i& a$ree# '.on +y t(e
.artie&-
, T(eir !ontra!t i& t(e "a +eteen t(e .artie&, an#
t(eir a$ree)ent t(at an a!tion on a !"ai) #enie# +y
t(e in&'rer )'&t +e +ro'$(t it(in one year fro) t(e
#enia", $overn&, not t(e r'"e& on t(e .re&!ri.tion of
a!tion&-
Disposition T(e J'#$)ent a..ea"e# fro) i& (ere+y
&et a&i#e an# t(e !a&e #i&)i&&e#, it( !o&t& a$ain&t
."aintiff&,a..e""ee&-
TRAVELLERS INSURANCE ? SURETY CORP. $.
CA (MENDOZA)
2C2 SC<A 936
1><MOSISIMA, G<; May 22, 455C
NATURE
T(e .etition (erein &ee2& t(e revie an# rever&a" of
t(e #e!i&ion of re&.on#ent Co'rt of A..ea"& affir)in$
in toto t(e J'#$)ent of t(e <e$iona" Tria" Co'rt in an
a!tion for #a)a$e& fi"e# +y .rivate re&.on#ent
Mi!ente Men#o:a, Gr- a& (eir of (i& )ot(er (o a&
2i""e# in a ve(i!'"ar a!!i#ent-
FACTS
,an o"# "a#y a& (it +y a ta%i!a+- T(e ta%i!a+ a&
"ater i#entifie# an# a !a&e a& fi"e# a$ain&t t(e
#river an# oner- /ater, an a)en#)ent a& fi"e# to
in!"'#e t(e in&'ran!e !o).any- <TC an# CA or#ere#
t(at t(e oner, #river a& e"" a& t(e in&'ran!e
!o).any +e (e"# &o"i#ari"y "ia+"e-
ISSUE
0ON <TC an# CA erre#
HELD
F>S
, 0(ere t(e !ontra!t .rovi#e& for in#e)nity a$ain&t
"ia+i"ity to t(ir# .er&on&, t(en t(ir# .er&on& to (o)
t(e in&'re# i& "ia+"e !an &'e t(e in&'rer- 0(ere t(e
!ontra!t i& for in#e)nity a$ain&t a!t'a" "o&& or
.ay)ent, t(en t(ir# .er&on& !annot .ro!ee# a$ain&t
t(e in&'rer, t(e !ontra!t +ein$ &o"e"y to rei)+'r&e
t(e in&'re# for "ia+i"ity a!t'a""y #i&!(ar$e# +y (i)
t(r' .ay)ent to t(ir# .er&on&, &ai# t(ir# .er&on&N
re!o'r&e +ein$ t('& "i)ite# to t(e in&'re# a"one- B't
in t(e !a&e at +ar, he"e &a* +# !#+"a! *h#&+.
Wha he+ &a* he 3a*'* #- he RTC a+. he CA
# *a) ha he '+*,"a+!e !#+"a! &a* a h'".5
2a") l'a3'l') '+*,"a+!e 2#l'!)N Con&e;'ent"y,
t(e tria" !o'rt a& !onf'&e# a& it #i# not #i&tin$'i&(
+eteen t(e .rivate re&.on#entN& !a'&e of a!tion
a$ain&t t(e oner an# t(e #river of t(e /a#y /ove
ta%i!a+ an# (i& !a'&e of a!tion a$ain&t .etitioner-
T(e for)er i& +a&e# on tort& an# ;'a&i,#e"i!t& (i"e
t(e "atter i& +a&e# on !ontra!t-
, >ven a&&')in$ ar$'en#o t(at t(ere a& &'!( a
!ontra!t, .rivate re&.on#entN& !a'&e of a!tion !an
not .revai" +e!a'&e (e -a'le. # -'le he &"'e+
!la'( (a+.ae. 3) he I+*,"a+!e C#.e (3e-#"e
' &a* a(e+.e.5a!'#+ (,* 3e 3"#,%h &'h'+
*'/ (#+h* -"#( .ae #- he a!!'.e+ (h'* '*
&ha4* a22l'!a3le he"e) ; after a)en#)ent,
Pa!tion or &'it for re!overy of #a)a$e #'e to "o&& or
inJ'ry )'&t +e +ro'$(t in .ro.er !a&e&, it( t(e
Co))i&&ioner or t(e Co'rt& it(in one year fro)
INSURANCE Page 106
#enia" of t(e !"ai), ot(eri&e t(e !"ai)antN& ri$(t of
a!tion &(a"" .re&!ri+eP A. 1e i& #ee)e#, 'n#er t(i&
"e$a" .rovi&ion, to (ave aive# (i& ri$(t& a& a$ain&t
.etitioner,in&'rer-
Disposition .etition $rante#
SUN INSURANCE $. CA (*,2"a 2.10)
COASTWISE $. CA (*,2"a 2.08)
CEBU SHIPYARD $. WILLIAM LINES (*,2"a 2.B)
MANILA MAHOGANY MANUFACTURING CORP $.
CA (ZENITH INSURANCE CORP)
49D SC<A 692
PAEI//A; O!to+er 42, 456C
NATURE
Petition to revie CA #e!i&ion or#erin$ Mani"a
Ma(o$any Man'fa!t'rin$ Cor.oration to .ay ?enit(
In&'ran!e Cor.oration P9,000 it( 6Q ann'a"
intere&t, attorneyN& fee&, an# !o&t& of &'it
FACTS
, *ro) 6 Mar!( 45C0 to 6 Mar!( 45C4, M/A
MA1OGANF in&'re# it& Mer!e#e& Ben: D,#oor &e#an
it( ?>NIT1-
, On D May 45C0, t(e in&'re# ve(i!"e a& +').e#
an# #a)a$e# +y a tr'!2 one# +y San Mi$'e"
Cor.oration- *or t(e #a)a$e !a'&e#, ?>NIT1 .ai#
M/A MA1OGANF P9,000 in a)i!a+"e &ett"e)ent- M/A
MA1OGANFN& $enera" )ana$er e%e!'te# a <e"ea&e of
C"ai), &'+ro$atin$ re&.on#ent !o).any to a"" it&
ri$(t to a!tion a$ain&t San Mi$'e" Cor.oration-
, On 44 Ee! 45C2, ?>NIT1 rote In&'ran!e
A#J'&ter&, In!- to #e)an# rei)+'r&e)ent fro) San
Mi$'e"- In&'ran!e A#J'&ter&, In!- ref'&e#
rei)+'r&e)ent, a""e$in$ t(at San Mi$'e" (a# a"rea#y
.ai# .etitioner PD,900, a& evi#en!e# +y a !a&(
vo'!(er an# a <e"ea&e of C"ai) e%e!'te# +y t(e
Genera" Mana$er of .etitioner-
, ?>NIT1 t('& #e)an#e# fro) .etitioner
rei)+'r&e)ent of t(e &') of PD,900 .ai# +y San
Mi$'e"-
, City Co'rt or#ere# .etitioner to .ay re&.on#ent
PD,900-
, C*I affir)e# t(e City Co'rtN& #e!i&ion in toto-
, CA affirne# C*I, it( t(e )o#ifi!ation t(at
.etitioner a& to .ay t(e tota" a)o'nt of P9,000 it
(a# ear"ier re!eive# fro) ?>NIT1-
Petitioners Claims
B It i& not +o'n# to .ay PD,900, an# )'!( )ore,
P9,000 to ?>NIT1 a& t(e &'+ro$ation in t(e <e"ea&e
of C"ai) it e%e!'te# in favor of re&.on#ent a&
!on#itione# on re!overy of t(e tota" a)o'nt of
#a)a$e& .etitioner (a# &'&taine#- Sin!e tota"
#a)a$e& ere va"'e# +y .etitioner at P5,D66-D3 an#
on"y P9,000 a& re!eive# +y .etitioner, M/A
MA1OGANF ar$'e& t(at it a& entit"e# to $o after
San Mi$'e" to !"ai) t(e a##itiona" PD,900-
B It !ite& Art- 220C
44
an# Art- 430D
42
of t(e Civi"
Co#e, an# !"ai)& a .referre# ri$(t to retain t(e
a)o'nt !o)in$ fro) San Mi$'e", #e&.ite t(e
&'+ro$ation in favor of ?>NIT1-
Respondents Arguments
B T(ere a& no ;'a"ifi!ation to it& ri$(t of
&'+ro$ation 'n#er t(e <e"ea&e of C"ai) e%e!'te# +y
.etitioner, t(e !ontent& (avin$ e%.re&&e# a"" intent&
an# .'r.o&e& of t(e .artie&-
ISSUE
0ON t(e in&'rer )ay re!over t(e &') of P9,000
HELD
F>S
Ratio Sin!e t(e in&'rer !an +e &'+ro$ate# to on"y
&'!( ri$(t& a& t(e in&'re# )ay (ave, &(o'"# t(e
in&'re#, after re!eivin$ .ay)ent fro) t(e in&'rer,
re"ea&e t(e ron$#oer (o !a'&e# t(e "o&&, t(e
in&'rer "o&e& (i& ri$(t& a$ain&t t(e "atter- B't in &'!(
a !a&e, t(e in&'rer i"" +e entit"e# to re!over fro)
t(e in&'re# (atever it (a& .ai# to t(e "atter, 'n"e&&
t(e re"ea&e a& )a#e it( t(e !on&ent of t(e
in&'rer-
Reasoning
- A"t(o'$( .etitioner=& ri$(t to fi"e a #efi!ien!y !"ai)
a$ain&t San Mi$'e" i& it( "e$a" +a&i&, it(o't
.reJ'#i!e to t(e in&'rerN& ri$(t of &'+ro$ation,
nevert(e"e&&, (en Mani"a Ma(o$any e%e!'te#
anot(er re"ea&e !"ai) #i&!(ar$in$ San Mi$'e" fro)
Pa"" a!tion&, !"ai)&, #e)an#& an# ri$(t& of a!tion
t(at no e%i&t or (ereafter ari&in$ o't of or a& a
!on&e;'en!e of t(e a!!i#entP after t(e in&'rer (a#
.ai# t(e .ro!ee#& of t(e .o"i!y , t(e !o).ro)i&e
a$ree)ent of P9,000 +ein$ +a&e# on t(e in&'ran!e
11
Article 220: @6f the plaintiff/s property has been insured, and he has recei&ed indemnity from
the insurance company for the in?ury or loss arising out of the wrong or breach of contract
complained of the insurance company shall be subrogated to the rights of the insured against the
wrongdoer or the person who has &iolated the contract. 6f the amount paid by the insurance
company does not fully co&er the in?ury or loss the aggrie&ed party shall be entitled to reco&er the
deficiency from the person causing the loss or in?ury.A
12
Article 1!0": @A creditor, to whom partial payment has been made, may e+ercise his right for
the remainder, and he shall be preferred to the person who has been subrogated in his place in
&irtue of the partial payment of the same credit.A
.o"i!y , t(e in&'rer i& entit"e# to re!over fro) t(e
in&'re# t(e a)o'nt of in&'ran!e )oney .ai#- Sin!e
.etitioner +y it& on a!t& re"ea&e# San Mi$'e",
t(ere+y #efeatin$ .rivate re&.on#ent=& ri$(t of
&'+ro$ation, t(e ri$(t of a!tion of .etitioner a$ain&t
t(e in&'rer a& a"&o n'""ifie#-
, A& (e"# in P(i"- Air /ine& v- 1ea"# /')+er Co-,
'n#er Art- 220C, t!e real #arty in interest ,it!
re"ard to t!e #ortion of t!e indenity #aid is t!e
insurer and not t!e insured.
SUBROGATION9 T(e ri$(t of &'+ro$ation !an on"y
e%i&t after t(e in&'rer (a& .ai# t(e in&'re#,
ot(eri&e t(e in&'re# i"" +e #e.rive# of (i& ri$(t to
f'"" in#e)nity- If t(e in&'ran!e .ro!ee#& are not
&'ffi!ient to !over t(e #a)a$e& &'ffere# +y t(e
in&'re#, t(en (e )ay &'e t(e .arty re&.on&i+"e for
t(e #a)a$e for t(e re)ain#er- To t(e e%tent of t(e
a)o'nt (e (a& a"rea#y re!eive# fro) t(e in&'rer
enJoy& t(e ri$(t of &'+ro$ation-
Disposition Petition E>NI>E- G'#$)ent a..ea"e#
fro) i& A**I<M>E it( !o&t& a$ain&t .etitioner-
PIONEER INSURANCE $. CA ( BORDER
MACHINERY ? HEAVY E=UIPMENT INC)
4C9 SC<A 666
GUTI><<>?, G<-; G'"y 26, 4565
NATURE
Petition& for revie on !ertiorari of a #e!i&ion of t(e
CA
FACTS
, In 4569, Ga!o+ S- /i) a& en$a$e# in t(e air"ine
+'&ine&& a& oner,o.erator of So't(ern Air /ine&
@SA/A, a &in$"e .ro.rietor&(i.-
,On May 4C, 4569, at To2yo, Ga.an, Ga.an Eo)e&ti!
Air"ine& @GEAA an# /i) entere# into an# e%e!'te# a
&a"e& !ontra!t for t(e &a"e an# .'r!(a&e of to @2A
EC,3A Ty.e air!raft& an# one @4A &et of ne!e&&ary
&.are .art& for t(e tota" a$ree# .ri!e of US
T405,000-00 to +e .ai# in in&ta"")ent&-
, On May 22, 4569, Pioneer In&'ran!e an# S'rety
Cor.oration, a& &'rety, e%e!'te# an# i&&'e# it&
S'rety Bon# No- 6635 in favor of GEA, in +e(a"f of it&
.rin!i.a", /i), for t(e +a"an!e .ri!e of t(e air!raft&
an# &.are .art&-
,Bor#er Ma!(inery an# 1eavy >;'i.)ent Co).any,
In!- @Bor)a(e!oA, *ran!i&!o an# Mo#e&to Cervante&
@Cervante&e&A an# Con&tan!io Ma$"ana !ontri+'te#
&o)e f'n#& '&e# in t(e .'r!(a&e of t(e a+ove
air!raft& an# &.are .art&- T(ey e%e!'te# to @2A
&e.arate in#e)nity a$ree)ent& in favor of Pioneer,
INSURANCE Page 107
one &i$ne# +y Ma$"ana an# t(e ot(er Joint"y &i$ne#
+y /i) for SA/, Bor)a(e!o an# t(e Cervante&e&-
, On G'ne 40, 4569, /i) #oin$ +'&ine&& 'n#er t(e
na)e an# &ty"e of SA/ e%e!'te# in favor of Pioneer
a& #ee# of !(atte" )ort$a$e a& &e!'rity for t(e
"atterN& &'rety&(i. in favor of t(e for)er- It a&
&ti.'"ate# t(erein t(at /i) tran&fer an# !onvey to
t(e &'rety t(e to air!raft&-
, /i) #efa'"te# on (i& &'+&e;'ent in&ta"")ent
.ay)ent& .ro).tin$ GEA to re;'e&t .ay)ent& fro)
t(e &'rety-
, Pioneer .ai# a tota" &') of P256,626-42-
, Pioneer t(en fi"e# a .etition for t(e e%traJ'#i!ia"
fore!"o&'re of t(e &ai# !(atte" )ort$a$e +efore t(e
S(eriff of Eavao City-
, T(e Cervante&e& an# Ma$"ana, (oever, fi"e# a
t(ir# .arty !"ai) a""e$in$ t(at t(ey are !o,oner& of
t(e air!raft&,
, On G'"y 45, 4566, Pioneer fi"e# an a!tion for J'#i!ia"
fore!"o&'re it( an a.."i!ation for a rit of
.re"i)inary atta!()ent a$ain&t /i) an# re&.on#ent&,
t(e Cervante&e&, Bor)a(e!o an# Ma$"ana-
KKMa$"ana, Bor)a(e!o an# t(e Cervante&e& fi"e#
!ro&&,!"ai)& a$ain&t /i) a""e$in$ t(at t(ey ere not
.rivie& to t(e !ontra!t& &i$ne# +y /i) an#, +y ay of
!o'nter!"ai), &o'$(t for #a)a$e& for +ein$ e%.o&e#
to "iti$ation an# for re!overy of t(e &')& of )oney
t(ey a#van!e# to /i) for t(e .'r!(a&e of t(e
air!raft& in ;'e&tion- @t!is constitutes t!e second
#etition but ,ill no lon"er be discussed because it is
not relevant to t!e to#icA
, After tria" on t(e )erit&, a #e!i&ion a& ren#ere#
h#l.'+% L'( l'a3le # 2a) P'#+ee" 3, .'*('**e.
P'#+ee"@* !#(2la'+ a%a'+* all #he"
.e-e+.a+*-
, CA )o#ifie# t(e tria" !o'rtN& #e!i&ion in t(at he
2la'+'--4* !#(2la'+ a%a'+* all he .e-e+.a+*
('+!l,.'+% L'() &a* .'*('**e..
ISSUE
0ON t(e .etition of Pioneer In&'ran!e an# S'rety
Cor.oration a$ain&t a"" #efen#ant& a& ri$(t"y
#i&)i&&e#
HELD
F>S
, Bot( t(e TC an# CA )a#e t(e fin#in$ t(at Pioneer
rein&'re# it& ri&2 of "ia+i"ity 'n#er t(e &'rety +on# it
(a# e%e!'te# in favor of GEA, !o""e!te# t(e .ro!ee#&
of &'!( rein&'ran!e in t(e &') of P259,000, an# .ai#
it( t(e &ai# a)o'nt t(e +'"2 of it& a""e$e# "ia+i"ity
to GEA 'n#er t(e &ai# &'rety +on#- T(e tota" a)o'nt
.ai# +y Pioneer to GEA i& P255,666-25- Sin!e Pioneer
(a& !o""e!te# P259,000-00 fro) t(e rein&'rer&, t(e
'nin&'re# .ortion of (at it .ai# to GEA i& t(e
#ifferen!e +eteen t(e to a)o'nt&, or P3,666-26-
T(i& i& t(e a)o'nt for (i!( Pioneer )ay &'e
#efen#ant&, a&&')in$ t(at t(e in#e)nity a$ree)ent
i& &ti"" va"i# an# effe!tive- B't &in!e t(e a)o'nt
rea"i:e# fro) t(e &a"e of t(e )ort$a$e# !(atte"& are
P39,000-00 for one of t(e air."ane& an# P2,090-00
for a &.are en$ine, or a tota" of P3C,090-00, Pioneer
i& &ti"" over.ai# +y P33,363-C2- T(erefore, Pioneer
(a& no )ore !"ai) a$ain&t #efen#ant&-
, T(e .ay)ent to t(e .etitioner )a#e +y t(e
rein&'rer& a& not #i&.'te#- Con&i#erin$ t(i&
a#)itte# .ay)ent, t(e on"y ;'e&tion a& t(e effe!t
of .ay)ent )a#e +y t(e rein&'rer& to t(e .etitioner
, In $enera" a rein&'rer, on .ay)ent of a "o&&
a!;'ire& t(e &a)e ri$(t& +y &'+ro$ation a& are
a!;'ire# in &i)i"ar !a&e& (ere t(e ori$ina" in&'rer
.ay& a "o&& @Univer&a" In&- Co- v- O"# Ti)e Mo"a&&e&
Co-A-
, T(e r'"e& of .ra!ti!e in a!tion& on ori$ina"
in&'ran!e .o"i!ie& are in $enera" a.."i!a+"e to a!tion&
or !ontra!t& of rein&'ran!e @Ee"aare, In&- Co- v-
Penn&y"vania *ire In&- Co-A-
, 1en!e t(e a.."i!a+"e "a i& Arti!"e 220C of t(e ne
Civi" Co#e, to itH Art- 220C- If t(e ."aintiff=&
.ro.erty (a& +een in&'re#, an# (e (a& re!eive#
in#e)nity fro) t(e in&'ran!e !o).any for t(e inJ'ry
or "o&& ari&in$ o't of t(e ron$ or +rea!( of !ontra!t
!o)."aine# of, t(e in&'ran!e !o).any &(a"" +e
&'+ro$ate# to t(e ri$(t& of t(e in&'re# a$ain&t t(e
ron$#oer or t(e .er&on (o (a& vio"ate# t(e
!ontra!t- If t(e a)o'nt .ai# +y t(e in&'ran!e
!o).any #oe& not f'""y !over t(e inJ'ry or "o&&, t(e
a$$rieve# .arty &(a"" +e entit"e# to re!over t(e
#efi!ien!y fro) t(e .er&on !a'&in$ t(e "o&& or inJ'ry
, If a .ro.erty i& in&'re# an# t(e oner re!eive& t(e
in#e)nity fro) t(e in&'rer, it i& .rovi#e# in &ai#
arti!"e t(at t(e in&'rer i& #ee)e# &'+ro$ate# to t(e
ri$(t& of t(e in&'re# a$ain&t t(e ron$#oer an# if
t(e a)o'nt .ai# +y t(e in&'rer #oe& not f'""y !over
t(e "o&&, t(en t(e a$$rieve# .arty i& t(e one entit"e#
to re!over t(e #efi!ien!y- Avidently$ under t!is le"al
#rovision$ t!e real #arty in interest ,it! re"ard to
t!e #ortion of t!e indenity #aid is t!e insurer and
not t!e insured &. Air 0ines$ 'nc. v. Heald 0uber
Co -, an# Manila Ma!o"any Manufacturin"
Cor#oration v. Court of A##eals)
- It i& !"ear fro) t(e re!or#& t(at Pioneer &'e# in it&
on na)e an# not a& an attorney,in,fa!t of t(e
rein&'rer- A!!or#in$"y, t(e a..e""ate !o'rt #i# not
!o))it a rever&i+"e error in #i&)i&&in$ t(e
.etitionerN& !o)."aint a& a$ain&t t(e re&.on#ent& for
t(e rea&on t(at t(e .etitioner a& not t(e rea" .arty
in intere&t in t(e !o)."aint an#, t(erefore, (a& no
!a'&e of a!tion a$ain&t t(e re&.on#ent&-
Disposition Petition& #i&)i&&e#- Q'e&tione# #e!i&ion
of CA affir)e#-
PAN MALAYAN INSURANCE CORPORATION $.
CA (FABIE, HER UN<NOWN DRIVER)
46D SC<A 9D
CO<T>S, A.ri" 3, 4550
NATURE
P>TITION to revie t(e #e!i&ion of t(e Co'rt of
A..ea"&
FACTS
, Pan Ma"ayan In&'ran!e Co).any @Pan)a"ayA
in&'re# t(e Mit&'+i&(i Co"t /an!er !ar re$i&tere# in
t(e na)e of Can"'+an$ A'to)otive <e&o'r!e&
Cor.oration @Can"'+an$A 'n#er it& )otor ve(i!"e
in&'ran!e .o"i!y- A)on$ t(e .rovi&ion& of t(e .o"i!y
a& a 7on,#a)a$e8 !"a'&e (ere+y Pan)a"ay
a$ree& to in#e)nify Can"'+an$ in !a&e& of #a)a$e
!a'&e# +y 7accidental collision or overturnin"$ or
collision or overturnin" conse.uent u#on ec!anical
brea+do,n or conse.uent u#on ,ear and tear*-
, On 4569, t(e in&'re# !ar a& &i#e&e.t an#
#a)a$e# +y a !ar one# +y >r"in#a *a+ie, #riven +y
an 'n2non #river (o f"e# t(e &!ene- Pan)a"ay, in
a!!or#an!e it( t(e .o"i!y, #efraye# t(e !o&t of
re.air of t(e in&'re# !ar an# a& &'+ro$ate# to t(e
ri$(t& of Can"'+an$ a$ain&t t(e #river an# oner of
t(e .i!2,'.- Pan)a"ay t(en fi"e# a !o)."aint for
#a)a$e& it( <TC Ma2ati a$ain&t >r"in#a *a+ie an#
(er #river on t(e $ro'n#& of &'+ro$ation, it( t(e
"atter fai"in$ an# ref'&in$ to .ay t(eir !"ai)- *a+ie
fi"e# a Motion for Bi"" of Parti!'"ar&-
, <TCH #i&)i&&e# !o)."aint for "a!2 of !a'&e of
a!tion @.ay)ent +y PANMA/AF of CAN/UBANGN&
!"ai) 'n#er t(e Pon #a)a$eP !"a'&e of t(e
in&'ran!e .o"i!y a& an a#)i&&ion +y t(e in&'rer
t(at t(e #a)a$e a& !a'&e# +y t(e a&&'re# an#Ror
it& re.re&entative&A L Pan)a"ay a..ea"e#
, CAH #i&)i&&e# a..ea", affir)e# <TC @a.."yin$ t(e
eJ'&#e) $eneri& r'"e (e"# t(at Se!tion III,4 of t(e
.o"i!y, (i!( a& t(e +a&i& for &ett"e)ent of
CAN/UBANGN& !"ai), #i# not !over #a)a$e ari&in$
fro) !o""i&ion or overt'rnin$ #'e to t(e ne$"i$en!e of
t(ir# .artie& a& one of t(e in&'ra+"e ri&2A
INSURANCE Page 108
ISSUE
0ON t(e in&'rer PANMA/AF )ay in&tit'te an a!tion
to re!over t(e a)o'nt it (a# .ai# it& a&&'re# in
&ett"e)ent of an in&'ran!e !"ai) a$ain&t .rivate
re&.on#ent& a& t(e .artie& a""e$e#"y re&.on&i+"e for
t(e #a)a$e !a'&e# to t(e in&'re# ve(i!"e, in
a!!or#an!e it( A220C, NCC
HELD
F>S
Ratio Arti!"e 220C of t(e Civi" Co#e i& fo'n#e# on
t(e e"",&ett"e# .rin!i."e of &'+ro$ation- If t(e
in&'re# .ro.erty i& #e&troye# or #a)a$e# t(ro'$(
t(e fa'"t or ne$"i$en!e of a .arty ot(er t(an t(e
a&&'re#, t(en t(e in&'rer, '.on .ay)ent to t(e
a&&'re#, i"" +e &'+ro$ate# to t(e ri$(t& of t(e
a&&'re# to re!over fro) t(e ron$#oer to t(e e%tent
t(at t(e in&'rer (a& +een o+"i$ate# to .ay- Pay)ent
+y t(e in&'rer to t(e a&&'re# o.erate& a& an
e;'ita+"e a&&i$n)ent to t(e for)er of a"" re)e#ie&
(i!( t(e "atter )ay (ave a$ain&t t(e t(ir# .arty
(o&e ne$"i$en!e or ron$f'" a!t !a'&e# t(e "o&&-
T(e ri$(t of &'+ro$ation i& not #e.en#ent '.on, nor
#oe& it $ro o't of, any .rivity of !ontra!t or '.on
ritten a&&i$n)ent of !"ai)- It a!!r'e& &i)."y '.on
.ay)ent of t(e in&'ran!e !"ai) +y t(e in&'rer
)*ceptions
@4A if t(e a&&'re# +y (i& on a!t re"ea&e& t(e
ron$#oer or t(ir# .arty "ia+"e for t(e "o&& or
#a)a$e, fro) "ia+i"ity, t(e in&'rerN& ri$(t of
&'+ro$ation i& #efeate#;
@2A (ere t(e in&'rer .ay& t(e a&&'re# t(e va"'e of
t(e "o&t $oo#& it(o't notifyin$ t(e !arrier (o (a&
in $oo# fait( &ett"e# t(e a&&'re#N& !"ai) for "o&&, t(e
&ett"e)ent i& +in#in$ on +ot( t(e a&&'re# an# t(e
in&'rer, an# t(e "atter !annot +rin$ an a!tion a$ain&t
t(e !arrier on (i& ri$(t of &'+ro$ation;
@3A (ere t(e in&'rer .ay& t(e a&&'re# for a "o&&
(i!( i& not a ri&2 !overe# +y t(e .o"i!y, t(ere+y
effe!tin$ Pvo"'ntary .ay)entP, t(e for)er (a& no
ri$(t of &'+ro$ation a$ain&t t(e t(ir# .arty "ia+"e for
t(e "o&&
Reasoning
- Bot( TC an# CA are in!orre!t-
ON TC9 7On #a)a$e8 @not fo'n# in t(e in&'ran!e
.o"i!yA &i)."y )eant t(at Pan)a"ay (a# a&&')e# to
rei)+'r&e t(e !o&t for re.airin$ t(e #a)a$e to t(e
in&'re# ve(i!"e- It=& #ifferent fro) 7T(ir# Party
/ia+i"ity8 !overa$e @"ia+i"itie& ari&in$ fro) t(e #eat(
of or +o#i"y inJ'rie& &'ffere# +y 3
r#
.artie&A an# fro)
7Pro.erty Ea)a$e8 !overa$e @"ia+i"itie& fro) #a)a$e
!a'&e# +y in&'re# ve(i!"e to .ro.ertie& of 3
r#
.artie&A
ON CA9 t!e ters of a contract are to be construed
accordin" to t!e sense and eanin" of t!e ters
,!ic! t!e #arties t!ereto !ave used. 'n t!e case of
#ro#erty insurance #olicies$ t!e evident intention of
t!e contractin" #arties$ i.e.$ t!e insurer and t!e
assured$ deterine t!e i#ort of t!e various ters
and #rovisions ebodied in t!e #olicy. 't is only
,!en t!e ters of t!e #olicy are abi"uous$
e.uivocal or uncertain$ suc! t!at t!e #arties
t!eselves disa"ree about t!e eanin" of #articular
#rovisions$ t!at t!e courts ,ill intervene. 'n suc! an
event$ t!e #olicy ,ill be construed by t!e courts
liberally in favor of t!e assured and strictly a"ainst
t!e insurer
, Bot( Pan)a"ay an# Can"'+an$ (a# t(e &a)e
inter.retation re$ar#in$ t(e !overa$e of in&'re# ri&2
re$ar#in$ 7a!!i#enta" !o""i&ion or overt'rnin$O8 to
in!"'#e #a)a$e& !a'&e# +y 3
r#
.arty to Can"'+an$ &o
it a& i).ro.er for CA to a&!ri+e )eanin$ !ontrary
to t(e !"ear intention an# 'n#er&tan#in$ of t(e
.artie&-
, Co'rt on &evera" o!!a&ion& #efine# 7a!!i#ent8 or
7a!!i#enta"8 a& ta2in$ ."a!e 7it(o't one=& fore&i$(t
or e%.e!tation, an event t(at .ro!ee#& fro) an
'n2non !a'&e, or i& an 'n'&'a" effe!t of a 2non
!a'&e an#, t(erefore, not e%.e!te#8 [Ee"a Cr': v-
Ca.ita" In&'ran!e S S'rety Co-] T(e !on!e.t
Pa!!i#entP i& not ne!e&&ari"y &ynony)o'& it( t(e
!on!e.t of Pno fa'"tP- It )ay +e 'ti"i:e# &i)."y to
#i&tin$'i&( intentiona" or )a"i!io'& a!t& fro)
ne$"i$ent or !are"e&& a!t& of )an-
, #a)a$eR"o&& to in&'re# ve(i!"e #'e to ne$"i$en!e of
3
r#
.artie& not "i&te# a& e%!e.tion& to !overa$e in t(e
in&'ran!e .o"i!y
, Inter.retation $iven +y Pan)a"ay i& )ore in
2ee.in$ it( rationa"e +e(in# r'"e& on inter.retation
of in&'ran!e !ontra!t& in favor of a&&'re# or
+enefi!iaryH in#e)nity or .ay)ent
, >M>N if vo"'ntari"y in#e)nifie# Can"'+an$, a&
inter.rete# +y TCH t(e in&'rer (o )ay (ave no
ri$(t& of &'+ro$ation #'e to Pvo"'ntaryP .ay)ent
)ay never- t(e"e&& re!over fro) t(e t(ir# .arty
re&.on&i+"e for t(e #a)a$e to t(e in&'re# .ro.erty
'n#er Arti!"e 4236 of t(e Civi" Co#e- [Sveri$e&
An$farty$& A&&'ran& *orenin$ v- Q'a C(ee Gan]
Disposition t(e .re&ent .etition i& G<ANT>E-
PetitionerN& !o)."aint for #a)a$e& a$ain&t .rivate
re&.on#ent& i& (ere+y <>INSTAT>E- /et t(e !a&e +e
re)an#e# to t(e "oer !o'rt for tria" on t(e )erit&-
FIREMAN@S FUND INSURANCE COMPANY $.
FAMILA ? COMPANY, INC.
C0 SC<A 323
AQUINO; A.ri" 45C6
FACTS
, Ga)i"a S Co-, In!- or t(e Meteran& P(i"i..ine
S!o't& Se!'rity A$en!y !ontra!te# to &'.."y &e!'rity
$'ar#& to *ire&tone- Ga)i"a a&&')e# re&.on&i+i"ity
for t(e a!t& of it& &e!'rity $'ar#&- T(e *ir&t Q'e:on
City In&'ran!e Co-, In!- e%e!'te# a +on# in t(e &')
of P20,000 to $'arantee Ga)i"aN& o+"i$ation& 'n#er
t(at !ontra!t-
, On May 46, 4563 .ro.ertie& of *ire&tone va"'e# at
P44,529 ere "o&t a""e$e#"y #'e to t(e a!t& of it&
e)."oyee& (o !onnive# it( Ga)i"aN& &e!'rity
$'ar#- *ire)anN& *'n#, a& in&'rer, .ai# to *ire&tone
t(e a)o'nt of t(e "o&&- *ire)anN& *'n# a&
&'+ro$ate# to *ire&toneN& ri$(t to $et rei)+'r&e)ent
fro) Ga)i"a- Ga)i"a an# it& &'rety, *ir&t Q'e:on City
fai"e# to .ay t(e a)o'nt of t(e "o&& in &.ite of
re.eate# #e)an#&-
, U.on #efen#antN& )otion&, t(e "oer !o'rt
#i&)i&&e# t(e !o)."aint a& to Ga)i"a on t(e $ro'n#
t(at t(ere a& no a""e$ation t(at it (a# !on&ente# to
t(e &'+ro$ation an#, t(erefore, *ire)anN& *'n# (a#
no !a'&e of a!tion a$ain&t it- It a"&o #i&)i&&e# t(e
!o)."aint a& to *ir&t Q'e:on City on t(e $ro'n# of
re& J'#i!ata- It a..ear& t(at t(e &a)e a!tion a&
.revio'&"y fi"e# in a !ivi" !a&e (i!( a& #i&)i&&e#
+e!a'&e of t(e fai"'re of t(e &a)e ."aintiff& an# t(eir
!o'n&e" to a..ear at t(e .re,tria"-
, U.on an M<, t(e "oer !o'rt &et a&i#e it& or#er of
#i&)i&&a" an# &'&taine# ."aintiffN& !ontention t(at
t(ere a& no re& J'#i!ata a& to *ir&t Q'e:on City
+e!a'&e t(e !ivi" !a&e a& #i&)i&&e# it(o't
.reJ'#i!e- 1oever, #'e to ina#verten!e, t(e "oer
!o'rt #i# not &tate in it& or#er (y it &et a&i#e it&
.rior or#er #i&)i&&in$ t(e !o)."aint it( re&.e!t to
Ga)i"a- Ga)i""a (a# ori$ina""y )ove# for t(e #i&)i&&a"
of t(e !o)."aint on t(e $ro'n# of "a!2 of !a'&e of
a!tion- It& +a&i& for it& !ontention ereH @4A t(at t(e
!o)."aint #i# not a""e$e t(at *ire&tone, .'r&'ant to
t(e !ontra!t'a" &ti.'"ation ;'ote# in t(e !o)."aint,
(a# inve&ti$ate# t(e "o&& an# t(at Ga)i"a a&
re.re&ente# in t(e inve&ti$ation an# @2A t(at Ga)i"a
#i# not !on&ent to t(e &'+ro$ation of *ire)anN& *'n#
to *ire&toneN& ri$(t to $et rei)+'r&e)ent fro) Ga)i"a
an# it& &'rety- T(e "oer !o'rt in it& or#er of
#i&)i&&a" (a# &'&taine# t(e &e!on# $ro'n#-
, Ga)i"a in it& M< invo2e# t(e fir&t $ro'n# (i!(
(a# never +een .a&&e# '.on +y t(e "oer !o'rt- B't
INSURANCE Page 109
t(e "oer !o'rt in it& or#er $rantin$ Ga)i"aN& )otion
for re!on&i#eration, !o)."ete"y i$nore# t(at fir&t
$ro'n#- It reverte# to t(e &e!on# $ro'n# (i!( a&
re"ie# '.on in it& or#er .revio'& or#er- T(e "oer
!o'rt reiterate# it& or#er, &tatin$ t(at *ire)anN& *'n#
(a# no !a'&e of a!tion a$ain&t Ga)i"a +e!a'&e Ga)i"a
#i# not !on&ent to t(e &'+ro$ation- T(e !o'rt #i# not
)ention *ire&tone, t(e !o,."aintiff of *ire)anN& *'n#-
, *ire&tone an# *ire)anN& *'n# fi"e# an M< on t(e
$ro'n# t(at *ire)anN& *'n# a& &'in$ on t(e +a&i&
of "e$a" &'+ro$ation (erea& t(e "oer !o'rt
erroneo'&"y .re#i!ate# it& #i&)i&&a" or#er on t(e
t(eory t(at t(ere a& no !onventiona" &'+ro$ation
+e!a'&e t(e #e+torN& !on&ent a& "a!2in$-
, T(e ."aintiff& !ite# arti!"e 220C of t(e Civi" Co#e
(i!( .rovi#e& t(at Pif t(e ."aintiffN& .ro.erty (a&
+een in&'re#, an# (e (a& re!eive# in#e)nity fro)
t(e in&'ran!e !o).any for t(e inJ'ry or "o&& ari&in$
o't of t(e ron$ or +rea!( of !ontra!t !o)."aine# of,
t(e in&'ran!e !o).any &(a"" +e &'+ro$ate# to t(e
ri$(t& of t(e in&'re# a$ain&t t(e ron$#oer or t(e
.er&on (o (a& vio"ate# t(e !ontra!tP-
, T(e "oer !o'rt #enie# ."aintiffN& )otion- T(ey
fi"e# a &e!on# M<, !a""in$ t(e "oer !o'rtN& attention
to t(e fa!t t(at t(e i&&'e of &'+ro$ation a& of no
)o)ent +e!a'&e *ire&tone, t(e &'+ro$or, i& a .arty,
."aintiff an# !o'"# &'e #ire!t"y Ga)i"a in it& on ri$(t-
0it(o't re&o"vin$ t(at !ontention, t(e "oer !o'rt
#enie# ."aintiff&N &e!on# M<-
ISSUE
0ON t(e !o)."aint of *ire&tone an# *ire)anN& *'n#
&tate& a !a'&e of a!tion a$ain&t Ga)i"a
HELD
F>S
, *ire)anN& *'n#N& a!tion a$ain&t Ga)i"a i& &;'are"y
&an!tione# +y arti!"e 220C- A& t(e in&'rer, *ire)anN&
*'n# i& entit"e# to $o after t(e .er&on or entity t(at
vio"ate# it& !ontra!t'a" !o))it)ent to an&er for
t(e "o&& in&'re# a$ain&t-
, T(e tria" !o'rt erre# in a.."yin$ to t(i& !a&e t(e
r'"e& on novation- T(e ."aintiff& in a""e$in$ in t(eir
!o)."aint t(at *ire)anN& *'n# P+e!a)e a .arty in
intere&t in t(i& !a&e +y virt'e of a &'+ro$ation ri$(t
$iven in it& favor +yP *ire&tone, ere not re"yin$ on
t(e novation +y !(an$e of !re#itor& a& !onte)."ate#
in arti!"e& 4254 an# 4300 to 4303 of t(e Civi" Co#e
+'t rat(er on arti!"e 220C-
, Arti!"e 220C i& a re&tate)ent of a &ett"e# .rin!i."e
of A)eri!an J'ri&.r'#en!e- S'+ro$ation (a& +een
referre# to a& t(e #o!trine of &'+&tit'tion- It i& an
ar) of e;'ity t(at )ay $'i#e or even for!e one to
.ay a #e+t for (i!( an o+"i$ation a& in!'rre# +'t
(i!( a& in (o"e or in .art .ai# +y anot(er-
, S'+ro$ation i& fo'n#e# on .rin!i."e& of J'&ti!e an#
e;'ity, an# it& o.eration i& $overne# +y .rin!i."e& of
e;'ity- It re&t& on t(e .rin!i."e t(at &'+&tantia"
J'&ti!e &(o'"# +e attaine# re$ar#"e&& of for), t(at i&,
it& +a&i& i& t(e #oin$ of !o)."ete, e&&entia", an#
.erfe!t J'&ti!e +eteen a"" t(e .artie& it(o't re$ar#
to for)-
, S'+ro$ation i& a nor)a" in!i#ent of in#e)nity
in&'ran!e- U.on .ay)ent of t(e "o&&, t(e in&'rer i&
entit"e# to +e &'+ro$ate# .ro tanto to any ri$(t of
a!tion (i!( t(e in&'re# )ay (ave a$ain&t t(e t(ir#
.er&on (o&e ne$"i$en!e or ron$f'" a!t !a'&e# t(e
"o&&- T(e ri$(t of &'+ro$ation i& of t(e (i$(e&t
e;'ity- T(e "o&& in t(e fir&t in&tan!e i& t(at of t(e
in&'re# +'t after rei)+'r&e)ent or !o).en&ation, it
+e!o)e& t(e "o&& of t(e in&'rer-
, A"t(o'$( )any .o"i!ie& in!"'#in$ .o"i!ie& in t(e
&tan#ar# for), no .rovi#e for &'+ro$ation, an#
t('& #eter)ine t(e ri$(t& of t(e in&'rer in t(i&
re&.e!t, t(e e;'ita+"e ri$(t of &'+ro$ation a& t(e
"e$a" effe!t of .ay)ent in're& to t(e in&'rer it(o't
any for)a" a&&i$n)ent or any e%.re&& &ti.'"ation to
t(at effe!t in t(e .o"i!y- State# ot(eri&e, (en t(e
in&'ran!e !o).any .ay& for t(e "o&&, &'!( .ay)ent
o.erate& a& an e;'ita+"e a&&i$n)ent to t(e in&'rer of
t(e .ro.erty an# a"" re)e#ie& (i!( t(e in&'re# )ay
(ave for t(e re!overy t(ereof- T(at ri$(t i& not
#e.en#ent '.on, nor #oe& it $ro o't of, any .rivity
of !ontra!t, or '.on ritten a&&i$n)ent of !"ai), an#
.ay)ent to t(e in&'re# )a2e& t(e in&'rer an
a&&i$nee in e;'ity-
, On t(e ot(er (an#, *ire&tone i& rea""y a no)ina"
.arty in t(i& !a&e- It (a# a"rea#y +een in#e)nifie#
for t(e "o&& (i!( it (a# &'&taine#- O+vio'&"y, it
Joine# a& a .arty,."aintiff in or#er to (e". *ire)anN&
*'n# to re!over t(e a)o'nt of t(e "o&& fro) Ga)i"a
an# *ir&t Q'e:on City- *ire&tone (a# ta!it"y a&&i$ne#
to *ire)anN& *'n# it& !a'&e of a!tion a$ain&t Ga)i"a
for +rea!( of !ontra!t- S'ffi!ient '"ti)ate fa!t& are
a""e$e# in t(e !o)."aint to &'&tain t(at !a'&e of
a!tion-
TABACALERA $. NORTH FRONT SHIPPING
2C2 SC<A 92C
B>//OSI//O; May 46, 455C
FACTS
, 20,23D &a!2& of !orn $rain& va"'e# at P3-9M ere
&(i..e# on +oar# Nort( *ront CCC, #efen#ant=&
ve&&e"- T(e !ar$o a& !on&i$ne# to <e.'+"i! *"o'r
Mi""& Cor.- 'n#er Bi"" of /a#in$ No- 004 an# in&'re#
it( Ta+a!a"era, Pr'#entia" G'arantee S A&&'ran!e,
an# Ne ?ea"an# In&'ran!e-
, <e.'+"i! *"o'r a& a#vi&e# of t(e ve&&e"=& arriva" in
Mani"a, +'t #i# not i))e#iate"y !o))en!e t(e
'n"oa#in$ o.eration&- Un"oa#in$ a& &o)eti)e&
&to..e# #'e to varyin$ eat(er an# &o)eti)e& for
no a..arent rea&on- Un"oa#in$ a& on"y !o)."ete#
20 #ay& after t(e arriva" of t(e +ar$e; +y t(en, t(e
!ar$o a& &(ort 26-333 )etri! ton& an# t(e re&t a&
a"rea#y )o"#y an# #eterioratin$-
, Ana"y&e& &(oe# t(at t(e #eterioration a& !a'&e#
+y )oi&t're !ontent fro) &a"t ater, (i!( !o'"# +e
arre&te# +y #ryin$- 1oever, <e.'+"i! *"o'r reJe!te#
t(e entire !ar$o an# #e)an#e# t(at #efen#ant Nort(
*ront S(i..in$ .ay t(e #a)a$e& &'ffere# +y it- T(e
#e)an#& ere 'n(ee#e# an# t(e in&'ran!e
!o).anie& ere o+"i$e# to .ay <e.'+"i! *"o'r
P2,465,D33
, By virt'e of t(e in&'ran!e !o).anie&= .ay)ent,
t(ey ere &'+ro$ate# to t(e ri$(t& of <e.'+"i! *"o'r-
Petitioner& fi"e# a !o)."aint a$ain&t Nort( *ront
S(i..in$, !"ai)in$ t(e "o&& a& e%!"'&ive"y
attri+'ta+"e to t(e "atter=& fa'"t an# ne$"i$en!e-
1avin$ &'rveye# t(e ve&&e", it a& fo'n# t(at t(e
+ar$e (a# !ra!2& in it& +o#e$a- T(e (at!(e& on t(e
!rate& of $rain ere not &ea"e# an# t(e tar.a'"in&
'&e# in !overin$ t(e) ere not ne, !ontrary to
Nort( *ront S(i..in$=& !"ai)&- Nort( *ront S(i..in$
reiterate# t(at t(e +ar$e a& in&.e!te# .rior to
"oa#in$ an# fo'n# &eaort(y an# ere i&&'e# a
.er)it to &ai" +y t(e Coa&t G'ar#- T(ey f'rt(er
averre# t(at t(e $rain& ere far) et an# not
.ro.er"y #rie# +efore "oa#in$-
, T(e !o'rt #i&)i&&e# t(e !o)."aint, r'"in$ t(at t(e
!ontra!t entere# into a& a !(arter,.arty
a$ree)ent; a& &'!(, on"y or#inary #i"i$en!e in t(e
!are of t(e $oo#& a& re;'ire# of Nort( *ront
S(i..in$-
ISSUE
0ON #efen#ant i& re;'ire# to o+&erve e%traor#inary
#i"i$en!e in it& vi$i"an!e over t(e $oo#& it tran&.ort&
HELD
F>S
, A& a !or.oration en$a$e# in t(e +'&ine&& of
tran&.ortin$ !ar$o offerin$ it& &ervi!e&
in#i&!ri)inate"y to t(e .'+"i!, it i& it(o't a #o'+t a
!o))on !arrier- A& &'!(, it (a& t(e +'r#en of
.rovin$ t(at it o+&erve# e%traor#inary #i"i$en!e to
INSURANCE Page 110
avoi# re&.on&i+i"ity for t(e "o&t !ar$o- T(e !"ean +i""
of "a#in$ it i&&'e# #i&.rove t(e )a&ter of t(e ve&&e"=&
!"ai) t(at t(e $rain& ere far) et (en "oa#e#- If
t(ey ere et, t(e )a&ter of t(e ve&&e" &(o'"# (ave
2non t(at t(e $rain& o'"# event'a""y #eteriorate
(en &ea"e# in (ot !o).art)ent& in (at!(e& of a
&(i. an# &(o'"# (ave 'n#erta2en .re!a'tionary
)ea&'re& to avoi# t(i&- T(e arriva" of t(e $oo#& at
t(e ."a!e of #e&tination in +a# or#er )a2e& a .ri)a
fa!ie !a&e a$ain&t t(e !o))on !arrier, (i!( )'&t
.rove it& non,"ia+i"ity-
, 0(i"e .etitioner& .re&ente# evi#en!e of t(e ve&&e"=&
+a# &(a.e an# a "a+oratory ana"y&i& revea"in$ t(at
t(e $rain& ere !onta)inate# it( &a"t ater,
#efen#ant& fai"e# to re+'t &ai# ar$')ent& or even
en#eavor to e&ta+"i&( t(at t(e "o&&, #e&tr'!tion or
#eterioration a& #'e to a fort'ito'& event; an
a!tRo)i&&ion of t(e oner of t(e $oo#&; t(e
!(ara!ter of t(e $oo#& or #efe!t& in t(eir .a!2in$; or
an or#er or a!t of a !o).etent .'+"i! a't(ority-
, 1oever, <e.'+"i! *"o'r i& a"&o fo'n# to +e $'i"ty
of !ontri+'tory ne$"i$en!e for not i))e#iate"y
&tarin$ t(e 'n"oa#in$ o.eration& an# for .rovi#in$ no
e%."anation for t(e #e"ay- A& &'!(, it &(o'"# &(are at
"ea&t D0Q of t(e "o&&-
Disposition /!e decision of t!e CA is 9AVA9SAD
and SA/ AS'DA
PHILIPPINE AMERICAN LIFE INSURANCE
COMPANY $. CA (ELIZA PULIDO)
3DD SC<A 360
GON?AGA,<>F>S; Nove)+er 49, 2000
NATURE
T(i& .etition for revie on !ertiorari &ee2& to rever&e
t(e Ee!i&ion of t(e S.e!ia" Se!on# Eivi&ion of t(e
Co'rt of A..ea"&
FACTS
, On Gan'ary 5, 4565, .etitioner re!eive# fro) one
*"oren!e P'"i#o an a.."i!ation for "ife in&'ran!e,
#ate# Ee!e)+er 46, 4566, in t(e a)o'nt of
P400,000-00 (i!( #e&i$nate# (er &i&ter, (erein
.rivate re&.on#ent, a& it& .rin!i.a" +enefi!iary-
Be!a'&e t(e in&'ran!e a.."ie# for a& non,)e#i!a",
.etitioner #i# not re;'ire a )e#i!a" e%a)ination an#
i&&'e# a .o"i!y on t(e &o"e +a&i& of t(e a.."i!ation on
*e+r'ary 44, 4565- On A.ri" 4552, .etitioner
re!eive# .rivate re&.on#ent=& !"ai), (i!( #e!"are#
t(at t(e in&'re#, *"oren!e P'"i#o, #ie# of a!'te
.ne')onia on Se.te)+er 40, 4554-
, Petitioner it((e"# .ay)ent on t(e $ro'n# t(at t(e
.o"i!y !"ai)e# 'n#er a& voi# fro) t(e &tart for
(avin$ +een .ro!'re# in fra'#- It i& .etitioner=&
!ontention t(at even +efore t(ey re!eive# .rivate
re&.on#ent=& !"ai) for #eat( +enefit&, t(eir
inve&ti$ation !on!ernin$ t(e &'+Je!t .o"i!y yie"#e#
t(e infor)ation t(at t(e in&'re#, *"oren!e P'"i#o,
#ie# in 4566, +efore t(e a.."i!ation for in&'ran!e on
(er "ife a& )a#e- 0(i"e t(i& a& !o))'ni!ate# to
.rivate re&.on#ent in a "etter, .rivate re&.on#ent
(a# a"rea#y fi"e# (er !"ai) ear"ier t(at )ont(- In
anot(er "etter, (oever, .etitioner !onfir)e# to
.rivate re&.on#ent re!ei.t of t(e !"ai) .a.er& an#
a&&'re# (er t(at (er !a&e a& 7+ein$ $iven
.referentia" attention an# .ro).t a!tion8-
, Petitioner !a'&e# anot(er inve&ti$ation re&.e!tin$
t(e &'+Je!t .o"i!y- P'r&'ant to t(e fin#in$& of t(i&
&e!on# inve&ti$ation, .etitioner &too# +y it& initia"
#e!i&ion to treat t(e .o"i!y a& voi# an# not to (onor
t(e !"ai)- On Nove)+er 5, 4552, .rivate
re&.on#ent en"i&te# t(e &ervi!e& of !o'n&e" in
reiteratin$ (er !"ai) for #eat( +enefit&Petitioner &ti""
ref'&e# to )a2e .ay)ent an# t('&, t(i& a!tion-
ISSUE
0ON "oer !o'rt erre# in (o"#in$ t(at t(ere a& no
fra'#
HELD
, T(e re!or#& +ear o't t(at &in!e t(e on&et of t(i&
!a&e, t(e )ain i&&'e (a& a"ay& +een (et(er t(ere
a& fra'# in t(e o+tain)ent of t(e #i&.'te# .o"i!y,
or .'t #ifferent"y, (et(er t(e in&'re#, *"oren!e
P'"i#o, a& in fa!t #ea# +efore t(e a.."i!ation for
in&'ran!e on (er "ife a& )a#e- T(i& t(e "oer
!o'rt& (a# effe!te# r'"e# on, '.on a .re.on#eran!e
of t(e evi#en!e #'"y re!eive# fro) +ot( .artie&- 0e
&ee no rever&i+"e error in t(e fin#in$ of +ot(
re&.on#ent !o'rt an# t(e tria" !o'rt in favor of t(e
!orre!tne&& of t(e entrie& in Certifi!ate of Eeat(,
#'"y re$i&tere# it( t(e /o!a" Civi" <e$i&trar of
Ba$'"in, /a Union, (i!( #e!"are# t(at *"oren!e
P'"i#o #ie# of a!'te .ne')onia on Se.te)+er 40,
4554- Er- Irineo G'tierre:, t(e M'ni!i.a" 1ea"t(
Offi!er of Ba$'"in, /a Union (o&e &i$nat're
a..eare# in t(e #eat( !ertifi!ate, te&tifie# in a##ition
t(at (e )ini&tere# to t(e ai"in$ *"oren!e P'"i#o for
to #ay& i))e#iate"y .rior to (er #eat(- T(i& fa!t i&
"i2ei&e note# in t(e #eat( !ertifi!ate-
, Eeat( !ertifi!ate&, an# note& +y a )'ni!i.a" (ea"t(
offi!er .re.are# in t(e re$'"ar .erfor)an!e of (i&
#'tie&, are #ria facie evi#en!e of fa!t& t(erein
&tate#- A #'"y,re$i&tere# #eat( !ertifi!ate i&
!on&i#ere# a .'+"i! #o!')ent an# t(e entrie& fo'n#
t(erein are .re&')e# !orre!t, 'n"e&& t(e .arty (o
!onte&t& it& a!!'ra!y !an .ro#'!e .o&itive evi#en!e
e&ta+"i&(in$ ot(eri&e- Petitioner=& !ontention t(at
t(e #eat( !ertifi!ate i& &'&.e!t +e!a'&e Er- G'tierre:
a& not .re&ent (en *"oren!e P'"i#o #ie#, an#
2ne of *"oren!e=& #eat( on"y t(ro'$( <a)on
Pi$anto, #oe& not )erit a !on!"'&ion of fra'#- No
)otive a& i).'te# to Er- G'tierre: for &ee2in$ to
.er.et'ate a fa"&ity in .'+"i! re!or#&- Petitioner a&
"i2ei&e 'na+"e to )a2e o't any !"ear )otive a& to
(y <a)on Pi$anto o'"# .'r.o&e"y "ie- Mere
a""e$ation& of fra'# !o'"# not &'+&tit'te for t(e f'""
an# !onvin!in$ evi#en!e t(at i& re;'ire# to .rove it-
A fai"'re to #o &o o'"# "eave inta!t t(e .re&').tion
of $oo# fait( an# re$'"arity in t(e .erfor)an!e of
.'+"i! #'tie&, (i!( a& t(e +a&i& of +ot( re&.on#ent
!o'rt an# t(e tria" !o'rt in fin#in$ t(e #ate of
*"oren!e P'"i#o=& #eat( to +e a& ."aintiff,.rivate
re&.on#ent )aintaine#-
, 0e !annot "i2ei&e $ive !re#en!e to .etitioner=&
&'+)i&&ion t(at t(e in!on&i&ten!ie& in t(e
te&ti)onie& of t(e itne&&e& for ."aintiff,.rivate
re&.on#ent are in t(e)&e"ve& evi#en!e of fra'#-
S'!( a""e$e# in!on&i&ten!ie& are )atter& of !re#i+i"ity
(i!( (a# +een a+"y .a&&e# '.on +y t(e "oer !o'rt-
Disposition t(e in&tant .etition i& E>NI>E
ST.PAUL FIRE ? MARINE INSURANCE CO $.
MACONDRAY ? CO INC
C0 SC<A 422
ANTONIO; Mar!( 29, 45C6
FACTS
, 0int(ro. Pro#'!t&, In!- &(i..e# a+oar# t(e SS
PTai Pin$P, one# an# o.erate# +y 0i"(e")
0i"(e")&en, 246 !arton& an# #r')& of #r'$& an#
)e#i!ine, it( t(e frei$(t .re.ai#, (i!( ere
!on&i$ne# to 0int(ro.,Stearn&, In!- Bar+er
Stea)&(i. /ine&, In!-, a$ent of 0i"(e") 0i"(e")&en
i&&'e# Bi"" of /a#in$ No- 3D, in t(e na)e of 0int(ro.
Pro#'!t&, In!- a& &(i..er, it( arriva" noti!e in,
Mani"a to !on&i$nee 0int(ro.,Stearn&, In!- T(e
&(i.)ent a& in&'re# +y t(e &(i..er a$ain&t "o&&
an#Ror #a)a$e it( t(e St- Pa'" *ire S Marine
In&'ran!e Co).any-
, T(e SS PTai Pin$P arrive# at t(e Port of Mani"a an#
#i&!(ar$e# it& afore&ai# &(i.)ent into t(e !'&to#y of
Mani"a Port Servi!e, t(e arra&tre !ontra!tor for t(e
Port of Mani"a- T(e &ai# &(i.)ent a& #i&!(ar$e#
!o)."ete an# in $oo# or#er it( t(e e%!e.tion of one
@4A #r') an# &evera" !arton& (i!( ere in +a#
INSURANCE Page 111
or#er !on#ition- Be!a'&e !on&i$nee fai"e# to re!eive
t(e (o"e &(i.)ent an# a& &evera" !arton& of
)e#i!ine ere re!eive# in +a# or#er !on#ition, t(e
!on&i$nee fi"e# t(e !orre&.on#in$ !"ai) in t(e
a)o'nt of P4,405-6C re.re&entin$ t(e C-I-*- va"'e of
t(e #a)a$e# #r') an# !arton& of )e#i!ine it( t(e
!arrier an# t(e Mani"a Port Servi!e- 1oever, +ot(
ref'&e# to .ay &'!( !"ai)- Con&e;'ent"y, t(e
!on&i$nee fi"e# it& !"ai) it( t(e in&'rer, St- Pa'"
*ire S Marine In&'ran!e Co-, t(e in&'ran!e !o).any,
on t(e +a&i& of &'!( !"ai), .ai# to t(e !on&i$nee t(e
in&'re# va"'e of t(e "o&t an# #a)a$!# $oo#&,
in!"'#in$ ot(er e%.en&e& in !onne!tion t(ereit(, in
t(e tota" a)o'nt of T4,43D-D6 U-S- !'rren!y-
, A& &'+ro$ee of t(e ri$(t& ofN t(e &(i..er an#Ror
!on&i$nee, t(e in&'rer, St- Pa'" *ire S Marine
In&'ran!e Co-, in&tit'te# an a!tion a$ain&t t(e
#efen#ant& for t(e re!overy of &ai# a)o'nt of
T4,43D-D6, ."'& !o&t&-
, T(e #efen#ant& re&i&te# t(e a!tion- 1oever, for
t(e .'r.o&e on"y of avoi#in$ "iti$ation it(o't
a#)ittin$ "ia+i"ity to t(e !on&i$nee, t(e #efen#ant&
offere# to &ett"e t(e "atter=& !"ai) in f'"" +y .ayin$
t(e C-I-*- va"'e of t(e #a)a$e# !ar$o, +'t t(i& offer
a& #e!"ine# +y t(e ."aintiff-
, T(e /C ren#ere# J'#$)ent or#erin$ t(e
#efen#ant& to .ay t(e ."aintiff t(e &') of P300-00-
T(e ."aintiff fi"e# a M*< !onten#in$ t(at it &(o'"#
re!over t(e a)o'nt of T4,43D-D6 or it& e;'iva"ent in
.e&o& at t(e rate of P3-50, in&tea# of P2-00, +'t t(i&
a& #enie#- 1en!e, t(i& a..ea"-
ISSUES
4- 0ON in !a&e of "o&& or #a)a$e, t(e "ia+i"ity of t(e
!arrier to t(e !on&i$nee i& "i)ite# to t(e C-I-*- va"'e
of t(e $oo#& (i!( ere "o&t or #a)a$e#
2- 0ON t(e in&'rer (o (a& .ai# t(e !"ai) in #o""ar&
to t(e !on&i$nee &(o'"# +e rei)+'r&e# in it& .e&o
e;'iva"ent on t(e #ate of #i&!(ar$e of t(e !ar$o or
on t(e #ate of t(e #e!i&ion
HELD
4- F>S
Ratio T(e .'r.o&e of t(e +i"" of "a#in$ i& to .rovi#e
for t(e ri$(t& an# "ia+i"itie& of t(e .artie& in referen!e
to t(e !ontra!t to !arry- T(e &ti.'"ation in t(e +i"" of
"a#in$ "i)itin$ t(e !o))on !arrierN& "ia+i"ity to t(e
va"'e of t(e $oo#& a..earin$ in t(e +i"", 'n"e&& t(e
&(i..er or oner #e!"are& a $reater va"'e, i& va"i#
an# +in#in$- T(i& "i)itation of t(e !arrierN& "ia+i"ity i&
&an!tione# +y t(e free#o) of t(e !ontra!tin$ .artie&
to e&ta+"i&( &'!( &ti.'"ation&, !"a'&e&, ter)&, or
!on#ition& a& t(ey )ay #ee) !onvenient, .rovi#e#
t(ey are not !ontrary to "a, )ora"&, $oo# !'&to)&
an# .'+"i! .o"i!y- A &ti.'"ation fi%in$ or "i)itin$ t(e
&') t(at )ay +e re!overe# fro) t(e !arrier on t(e
"o&& or #eterioration of t(e $oo#& i& va"i#, .rovi#e# it
i& @aA rea&ona+"e an# J'&t 'n#er t(e !ir!')&tan!e&,
an# @+A (a& +een fair"y an# free"y a$ree# '.on- In
t(e !a&e at +ar, t(e "ia+i"itie& of t(e #efen#ant&,
a..e""ee& it( re&.e!t to t(e "o&t or #a)a$e#
&(i.)ent& are e%.re&&"y "i)ite# to t(e C-I-*- va"'e of
t(e $oo#& a& .er !ontra!t of &ea !arria$e e)+o#ie#
in t(e +i"" of "a#in$-
, T(e ."aintiff,a..e""ant, a& in&'rer, after .ayin$ t(e
!"ai) of t(e in&'re# for #a)a$e& 'n#er t(e
in&'ran!e, i& &'+ro$ate# )ere"y to t(e ri$(t& of t(e
a&&'re#- A& &'+ro$ee, it !an re!over on"y t(e
a)o'nt t(at i& re!overa+"e +y t(e "atter- Sin!e t(e
ri$(t of t(e a&&'re#, in !a&e of "o&& or #a)a$e to t(e
$oo#&, i& "i)ite# or re&tri!te# +y t(e .rovi&ion& in t(e
+i"" of "a#in$, a &'it +y t(e in&'rer a& &'+ro$ee
ne!e&&ari"y i& &'+Je!t to "i2e "i)itation& an#
re&tri!tion&-
2- On t(e #ate of t(e #i&!(ar$e of t(e !ar$o- T(e
.e&o e;'iva"ent a& +a&e# +y t(e !on&i$nee on t(e
e%!(an$e rate of P2-049 to T4-00 (i!( a& t(e rate
e%i&tin$ at t(at ti)e-
PHILAM $. AUDITOR (*,2"a 2.1J)
FIELDMEN4S $. ASIAN SURETY (*,2"a 2.D8)
E=UITABLE $. RURAL INSURANCE (*,2"a 2.D8)
CO=UIA $. FIELDMEN@S INSURANCE CO. INC.
26 SC<A 4C6
CONC>PCION; Nove)+er 25, 4566
NATURE
A..ea" fro) t(e #e!i&ion of t(e C*I !ertifie# +y CA
FACTS
, Ee!e)+er 4, 4564, a..e""ant *ie"#)enN& In&'ran!e
Co).any, In!- i&&'e#, in favor of t(e Mani"a Fe""o
Ta%i!a+ Co-, In!- a !o))on !arrier a!!i#ent
in&'ran!e .o"i!y, !overin$ t(e .erio# fro) Ee!e)+er
4, 4564 to Ee!e)+er ,4562- It a& &ti.'"ate# in &ai#
.o"i!y t(atH
PT(e Co).any i"", &'+Je!t to t(e /i)it& of /ia+i"ity
an# 'n#er t(e Ter)& of t(i& Po"i!y, in#e)nify t(e
In&'re# in t(e event of a!!i#ent !a'&e# +y or ari&in$
o't of t(e '&e of Motor Me(i!"e a$ain&t a"" &')&
(i!( t(e In&'re# i"" +e!o)e "e$a""y "ia+"e to .ay in
re&.e!t ofH Eeat( or +o#i"y inJ'ry to any fare,.ayin$
.a&&en$er in!"'#in$ t(e Eriver, Con#'!tor an#Ror
In&.e!tor (o i& ri#in$ in t(e Motor Me(i!"e in&'re#
at t(e ti)e of a!!i#ent or inJ'ry-P
, 0(i"e t(e .o"i!y a& in for!e, or on *e+r'ary 40,
4562, a ta%i!a+ of t(e In&'re#, #riven +y Car"ito
Co;'ia, )et a ve(i!'"ar a!!i#ent to (i!( (e #ie#-
T(e In&'re# fi"e# t(erefor a !"ai) for P9,000-00 to
(i!( t(e Co).any re."ie# it( an offer to .ay
P2,000-00, +y ay of !o).ro)i&e- T(e In&'re#
reJe!te# it an# )a#e a !o'nter,offer for PD,000-00,
+'t t(e Co).any #i# not a!!e.t it-
, On Se.te)+er 46, 4562, t(e In&'re# an# Car"itoN&
.arent& fi"e# a !o)."aint a$ain&t t(e Co).any to
!o""e!t t(e .ro!ee#& of t(e .o"i!y- In it& an&er, t(e
Co).any a#)itte# t(e e%i&ten!e t(ereof, +'t
."ea#e# "a!2 of !a'&e of a!tion on t(e .art of t(e
."aintiff&-
, TC ren#ere# a #e!i&ion &enten!in$ t(e Co).any to
.ay to t(e ."aintiff& t(e &') of PD,000-00 an# t(e
!o&t&- 1en!e, t(i& a..ea" +y t(e Co).any, (i!(
!onten#& t(at ."aintiff& (ave no !a'&e of a!tion
+e!a'&eH 4A t(e Co;'ia& (ave no !ontra!t'a" re"ation
it( t(e Co).any; an# 2A t(e In&'re# (a& not
!o)."ie# it( t(e .rovi&ion& of t(e .o"i!y !on!ernin$
ar+itration-
ISSUES
4- 0ON t(ere a& !ontra!t'a" re"ation& +eteen t(e
Co;'ia& an# t(e Co).any
2- 0ON t(e in&'re# (a& not !o)."ie# it( t(e
.rovi&ion& of t(e .o"i!y !on!ernin$ ar+itration
HELD
4- A"t(o'$(, in $enera", on"y .artie& to a !ontra!t
)ay +rin$ an a!tion +a&e# t(ereon, t(i& r'"e i&
&'+Je!t to e%!e.tion&, one of (i!( i& fo'n# in t(e
Art 4344 CC, rea#in$H
PIf a !ontra!t &(o'"# !ontain &o)e &ti.'"ation in
favor of a t(ir# .er&on, (e )ay #e)an# it&
f'"fi"")ent .rovi#e# (e !o))'ni!ate# (i& a!!e.tan!e
of t(e o+"i$or +efore it& revo!ation- A )ere in!i#enta"
+enefit or intere&t of a .er&on i& not &'ffi!ient- T(e
!ontra!tin$ .artie& )'&t (ave !"ear"y an#
#e"i+erate"y !onferre# a favor '.on a t(ir# .er&on-P
, Eoe& t(e .o"i!y in ;'e&tion +e"on$ to &'!( !"a&& of
!ontra!t& .o'r a'tr'iX
In t(i& !onne!tion, &ai# .o"i!y .rovi#e&, inter a"iaH
PSe!tion I U /ia+i"ity to Pa&&en$er&- 4- T(e
Co).any i"", &'+Je!t to t(e /i)it& of /ia+i"ity an#
'n#er t(e Ter)& of t(i& Po"i!y, in#e)nify t(e In&'re#
in t(e event of a!!i#ent !a'&e# +y or ari&in$ o't of
INSURANCE Page 112
t(e '&e of Motor Me(i!"e a$ain&t a"" &')& (i!( t(e
In&'re# i"" +e!o)e "e$a""y "ia+"e to .ay in re&.e!t
ofH Eeat( or +o#i"y inJ'ry to any fare,.ayin$
.a&&en$er in!"'#in$ t(e Eriver- - - (o i& ri#in$ in
t(e Motor Me(i!"e in&'re# at t(e ti)e of a!!i#ent or
inJ'ry-
PSe!tion II- U /ia+i"ity to t(e P'+"i!
P3- In ter)& of an# &'+Je!t to t(e "i)itation& of
an# for t(e .'r.o&e& of t(i& Se!tion, t(e Co).any
i"" in#e)nify any a't(ori:e# Eriver (o i& #rivin$
t(e Motor Me(i!"e - - - P
PCon#ition&
PC- In t(e event of #eat( of any .er&on entit"e#
to in#e)nify 'n#er t(i& Po"i!y, t(e Co).any i"", in
re&.e!t of t(e "ia+i"ity in!'rre# +y &'!( .er&on,
in#e)nify (i& .er&ona" re.re&entative& in ter)& of
an# &'+Je!t to t(e "i)itation& of t(i& Po"i!y, .rovi#e#,
t(at &'!( re.re&entative& &(a"", a& t(o'$( t(ey ere
t(e In&'re#, o+&erve, f'"fi"" an# +e &'+Je!t to t(e
Ter)& of t(i& Po"i!y in&ofar a& t(ey !an a.."y-
P6- T(e Co).any )ay, at it& o.tion, )a2e
in#e)nity .aya+"e #ire!t"y to t(e !"ai)ant& or (eir&
of !"ai)ant&, it( or it(o't &e!'rin$ t(e !on&ent of
or .rior notifi!ation to t(e In&'re#, it +ein$ t(e tr'e
intention of t(i& Po"i!y to .rote!t, to t(e e%tent
(erein &.e!ifie# an# &'+Je!t a"ay& to t(e Ter)& of
t(i& Po"i!y, t(e "ia+i"itie& of t(e In&'re# toar#& t(e
.a&&en$er& of t(e Motor Me(i!"e an# t(e P'+"i!-P
, T('&, t(e .o"i!y 'n#er !on&i#eration i& ty.i!a" of
!ontra!t& .o'r a'tr'i, t(i& !(ara!ter +ein$ )a#e
)ore )anife&t +y t(e fa!t t(at t(e #e!ea&e# #river
.ai# fifty .er!ent @90QA of t(e !orre&.on#in$
.re)i')&, (i!( ere #e#'!te# fro) (i& ee2"y
!o))i&&ion&- Un#er t(e&e !on#ition&, it i& !"ear t(at
t(e Co;'ia& U (o, a#)itte#"y, are t(e &o"e (eir& of
t(e #e!ea&e# U (ave a #ire!t !a'&e of a!tion a$ain&t
t(e Co).any, an#, &in!e t(ey !o'"# (ave )aintaine#
t(i& a!tion +y t(e)&e"ve&, it(o't t(e a&&i&tan!e of
t(e In&'re#, it $oe& it(o't &ayin$ t(at t(ey !o'"#
an# #i# .ro.er"y Join t(e "atter in fi"in$ t(e !o)."aint
(erein-
2- Ba&e# '.on Se!tion 4C of t(e .o"i!yH
PIf any #ifferen!e or #i&.'te &(a"" ari&e it(
re&.e!t to t(e a)o'nt of t(e Co).anyN& "ia+i"ity
'n#er t(i& Po"i!y, t(e &a)e &(a"" +e referre# to t(e
#e!i&ion of a &in$"e ar+itrator to +e a$ree# '.on +y
+ot( .artie& or fai"in$ &'!( a$ree)ent of a &in$"e
ar+itrator, to t(e #e!i&ion of to ar+itrator&, one to
+e a..ointe# in ritin$ +y ea!( of t(e .artie&
it(in one !a"en#ar )ont( after (avin$ +een
re;'ire# in ritin$ &o to #o +y eit(er of t(e .artie&
an# in !a&e of #i&a$ree)ent +eteen t(e
ar+itrator&, to t(e #e!i&ion of an ').ire (o &(a""
(ave +een a..ointe# in ritin$ +y t(e ar+itrator&
+efore enterin$ on t(e referen!e an# t(e !o&t& of
an# in!i#enta" to t(e referen!e &(a"" +e #ea"t it(
in t(e Aar#- An# it i& (ere+y e%.re&&"y &ti.'"ate#
an# #e!"are# t(at it &(a"" +e a !on#ition .re!e#ent
to any ri$(t of a!tion or &'it '.on t(i& Po"i!y t(at
t(e aar# +y &'!( ar+itrator, ar+itrator& or ').ire
of t(e a)o'nt of t(e Co).anyN& "ia+i"ity (ere'n#er
if #i&.'te# &(a"" +e fir&t o+taine#-P
, T(e re!or# &(o& t(at none of t(e .artie& to t(e
!ontra!t invo2e# t(i& &e!tion, or )a#e any referen!e
to ar+itration, #'rin$ t(e ne$otiation& .re!e#in$ t(e
in&tit'tion of t(e .re&ent !a&e- In fa!t, !o'n&e" for
+ot( .artie& &ti.'"ate#, in t(e tria" !o'rt, t(at none of
t(e) (a#, at any ti)e #'rin$ &ai# ne$otiation&, even
&'$$e&te# t(e &ett"e)ent of t(e i&&'e +eteen t(e)
+y ar+itration, a& .rovi#e# in &ai# &e!tion- T(eir
afore)entione# a!t& or o)i&&ion& (a# t(e effe!t of a
aiver of t(eir re&.e!tive ri$(t to #e)an# an
ar+itration-
Disposition T(e #e!i&ion a..ea"e# fro) &(o'"# +e
a& it i& (ere+y affir)e# in toto, it( !o&t& a$ain&t t(e
(erein #efen#ant,a..e""ant, *ie"#)enN& In&'ran!e
Co-, In!-
COUNTRY BAN<ERS INSURANCE CORP $.
LIANGA BAY
E> />ON; Gan'ary 29, 2002
NATURE
Petition for revie on !ertiorari
FACTS
, /ian$a Bay i& a #'"y re$i&tere# !oo.erative
J'#i!ia""y #e!"are# in&o"vent an# i& (ere re.re&ente#
+y, Corne"io Ga)ero- Co'ntry Ban2er& In&'ran!e
an# /ian$a Bay entere# into a !ontra!t of fire
in&'ran!e- Co'ntry Ban2er& in&'re# t(e
re&.on#ent=& &to!2&,in,tra#e a$ain&t fire "o&&,
#a)a$e or "ia+i"ity #'rin$ t(e .erio# &tartin$ fro)
G'ne 20, 4565 at DH00 .-)- to G'ne 20, 4550 at DH00
.-)-, for t(e &') of P200,000-00-
, On G'"y 4, 4565, at or a+o't 42HD0 a-)-, t(e
re&.on#ent=& +'i"#in$ at Baran$ay Eiata$on, /ian$a,
S'ri$ao #e" S'r a& $'tte# +y fire, re&'"tin$ in t(e
tota" "o&& of t(e re&.on#ent=& &to!2&,in,tra#e, .ie!e&
of f'rnit're& an# fi%t're&, e;'i.)ent& an# re!or#&-
, E'e to t(e "o&&, t(e re&.on#ent fi"e# an in&'ran!e
!"ai) it( t(e .etitioner 'n#er it& *ire In&'ran!e
Po"i!y, &'+)ittin$H @aA t(e S.ot <e.ort of Pf!- Art'ro
M- G'ar+a", INP Inve&ti$ator, #ate# G'"y 4, 4565; @+A
t(e Sorn State)ent of Go&e /o)o!&o; an# @!A t(e
Sorn State)ent of >rne&to Ur+i:ton#o-
, T(e .etitioner, (oever, #enie# t(e in&'ran!e !"ai)
on t(e $ro'n# t(at, +a&e# on t(e &'+)itte#
#o!')ent&, t(e +'i"#in$ a& &et on fire +y 2 NPA
re+e"& (o ante# to o+tain !anne# $oo#&, ri!e an#
)e#i!ine& a& .rovi&ion& for t(eir !o)ra#e& in t(e
fore&t, an# t(at &'!( "o&& a& an e%!e.te# ri&2 'n#er
.ara$ra.( No- 6 of t(e .o"i!y !on#ition& of *ire
In&'ran!e Po"i!y No- *,435C, (i!( .rovi#e&H
/!is insurance does not cover any loss or daa"e
occasioned by or t!rou"! or in conse.uence$
directly or indirectly$ of any of t!e follo,in"
occurrences$ naely7
&d) Mutiny$ riot$ ilitary or #o#ular u#risin"$
insurrection$ rebellion$ revolution$ ilitary or
usur#ed #o,er.
Any loss or daa"e !a##enin" durin" t!e
e8istence of abnoral conditions &,!et!er
#!ysical or ot!er,ise) ,!ic! are occasioned by or
t!rou"! or in conse.uence$ directly or indirectly$
of any of said occurrences s!all be deeed to be
loss or daa"e ,!ic! is not covered by t!is
insurance$ e8ce#t to t!e e8tent t!at t!e 'nsured
s!all #rove t!at suc! loss or daa"e !a##ened
inde#endently of t!e e8istence of suc! abnoral
conditions.
, *in#in$ t(e #enia" of it& !"ai) 'na!!e.ta+"e, /ian$a
Bay t(en in&tit'te# in t(e tria" !o'rt t(e !o)."aint for
re!overy of P"o&&, #a)a$e or "ia+i"ityP a$ain&t
Co'ntry Ban2er&-
, <TC r'"e# in favor of t(e !oo.erative- CA affir)e#-
ISSUE
0ON t(e !a'&e of t(e "o&& a& an e%!e.te# ri&2
'n#er t(e ter)& of t(e fire in&'ran!e .o"i!y
HELD
, 0(ere a ri&2 i& e%!e.te# +y t(e ter)& of a .o"i!y
(i!( in&'re& a$ain&t ot(er .eri"& or (a:ar#&, "o&&
fro) &'!( a ri&2 !on&tit'te& a #efen&e (i!( t(e
in&'rer )ay 'r$e, &in!e it (a& not a&&')e# t(at ri&2,
an# fro) t(i& it fo""o& t(at an in&'rer &ee2in$ to
#efeat a !"ai) +e!a'&e of an e%!e.tion or "i)itation
in t(e .o"i!y (a& t(e +'r#en of .rovin$ t(at t(e "o&&
!o)e& it(in t(e .'rvie of t(e e%!e.tion or
"i)itation &et '.- If a .roof i& )a#e of a "o&&
a..arent"y it(in a !ontra!t of in&'ran!e, t(e +'r#en
i& '.on t(e in&'rer to .rove t(at t(e "o&& aro&e fro)
a !a'&e of "o&& (i!( i& e%!e.te# or for (i!( it i&
not "ia+"e, or fro) a !a'&e (i!( "i)it& it& "ia+i"ity-
State# e"&e i&e, &in!e Co'ntry +an2 (ere i&
INSURANCE Page 113
#efen#in$ on t(e $ro'n# of non,!overa$e an# re"yin$
'.on an e%e).tion or e%!e.tion !"a'&e in t(e fire
in&'ran!e .o"i!y it (a& t(e +'r#en of .rovin$ t(e
fa!t& '.on (i!( &'!( e%!e.te# ri&2 i& +a&e#, +y a
.re.on#eran!e of evi#en!e- B't .etitioner fai"e# to
#o &o-
, T(e .etitioner re"ie& on t(e Sorn State)ent& of
Go&e /o)o!&o an# >rne&to Ur+i:ton#o a& e"" a& on
t(e S.ot <e.ort of Pf!- Art'ro M- G'ar+a"- A itne&&
!an te&tify on"y to t(o&e fa!t& (i!( (e 2no& of (i&
.er&ona" 2no"e#$e, (i!( )ean& t(o&e fa!t& (i!(
are #erive# fro) (i& .er!e.tion-

Con&e;'ent"y, a
itne&& )ay not te&tify a& to (at (e )ere"y "earne#
fro) ot(er& eit(er +e!a'&e (e a& to"# or rea# or
(ear# t(e &a)e- S'!( te&ti)ony i& !on&i#ere#
(ear&ay an# )ay not +e re!eive# a& .roof of t(e
tr't( of (at (e (a& "earne#-
Disposition t(e a..ea"e# Ee!i&ion i& MODIFIED-
T(e rate of intere&t on t(e a#J'#$e# .rin!i.a"
a)o'nt of To 1'n#re# T(o'&an# Pe&o&
@P200,000-00A &(a"" +e &i% .er!ent @6QA .er ann')
!o).'te# fro) t(e #ate of fi"in$ of t(e Co)."aint in
t(e tria" !o'rt- T(e aar#& in t(e a)o'nt& of *ifty
T(o'&an# Pe&o& @P90,000-00A a& a!t'a" #a)a$e&,
*ifty T(o'&an# Pe&o& @P90,000-00A a& e%e)."ary
#a)a$e&, *ive T(o'&an# Pe&o& @P9,000-00A a&
"iti$ation e%.en&e&, an# Ten T(o'&an# Pe&o&
@P40,000-00A a& attorneyX& fee& are (ere+y
DELETED-
DBP POOL OF ACCREDITED INSURANCE $.
RADIO MINDANAO NETWOR<
D60 SC<A 34D
MA<TIN>?; Gan'ary 2C, 2006
NATURE
Petition for !ertiorari
FACTS
, In t(e evenin$ of G'"y 2C, 4566, t(e ra#io &tation of
<a#io Min#anao Netor2 "o!ate# at t(e SSS B'i"#in$
in Ba!o"o# City a& +'rne# #on !a'&in$ #a)a$e in
t(e a)o'nt of over one )i""ion .e&o&- <e&.on#ent
&o'$(t to re!over 'n#er to in&'ran!e .o"i!ie& +'t
t(e !"ai)& ere #enie# on t(e +a&i& t(at t(e !a&e of
t(e "o&& a& an e%!e.te# ri&2 'n#er !on#ition no- 6
@!A an# @#A, to itH
6- T(i& in&'ran!e #oe& not !over any "o&& or #a)a$e
o!!a&ione# +y or t(ro'$( or in !on&e;'en!e, #ire!t"y
or in#ire!t"y, of any of t(e fo""oin$ !on&e;'en!e&,
na)e"yH
@!A 0ar, inva&ion, a!t of forei$n ene)ie&, (o&ti"itie&,
or ar"i2e o.eration& @(et(er ar +e #e!"are# or
notA, !ivi! ar-
@#A M'tiny, riot, )i"itary or .o.'"ar '.ri&in$,
in&'rre!tion, re+e""ion, revo"'tion, )i"itary or '&'r.e#
.oer-
, T(e in&'rer& )aintaine# t(at +a&e# on itne&&e&
an# evi#en!e $at(ere# at t(e &ite, t(e fire a&
!a'&e# +y t(e )e)+er& of t(e Co))'ni&t Party of
t(e P(i"i..ine&RNe Peo."e=& Ar)y- 1en!e t(e ref'&a"
to (onor t(eir o+"i$ation&-
, T(e tria" !o'rt an# t(e CA fo'n# in favor of t(e
re&.on#ent- In it& fin#in$&, +ot( !o'rt& )entione#
t(e fa!t t(at t(ere a& no !re#i+"e evi#en!e
.re&ente# t(at t(e CCPRNPA #i# in fa!t !a'&e t(e fire
t(at $'tte# t(e ra#io &tation in Ba!o"o#-
ISSUE
0ON t(e in&'ran!e !o).anie& are "ia+"e to .ay <a#io
Min#anao Netor2 'n#er t(e in&'ran!e .o"i!ie&
HELD
F>S
, T(e Co'rt i"" not #i&t'r+ t(e fa!t'a" fin#in$& of t(e
a..e""ant an# tria" !o'rt& a+&ent !o).e""in$ rea&on-
Un#er t(i& )o#e of revie, t(e J'ri&#i!tion of t(e
!o'rt i& "i)ite# to reviein$ on"y error& of "a-
, Parti!'"ar"y in !a&e& of in&'ran!e #i&.'te& it(
re$ar# to e%!e.te# ri&2&, it i& t(e in&'ran!e
!o).anie& (i!( (ave t(e +'r#en to .rove t(at t(e
"o&& !o)e& it(in t(e .'rvie of t(e e%!e.tion or
"i)itation &et '.- It i& &'ffi!ient for t(e in&'re# to
.rove t(e fa!t of #a)a$e or "o&&- On!e t(e in&'re#
)a2e& o't a .ri)a fa!ie !a&e in it& favor, t(e #'ty or
+'r#en of evi#en!e &(ift& to t(e in&'rer to !ontrovert
&ai# .ri)a fa!ie !a&e-
Disposition Petition #i&)i&&e#- Ee!i&ion of t(e CA i&
affir)e#-
LEA MER INDUSTRIES $. MALAYAN INSURANCE
DC4 SC<A 656
PANGANIBAN; Se.te)+er 30, 2009
NATURE
Petition for <evie
FACTS
, I"ian Si"i!a Minin$ entere# into a !ontra!t of
!arria$e it( /ea Mer In#'&trie& for t(e &(i.)ent of
500 )etri! ton& of &i"i!a &an# va"'e# at P969,000-
Con&i$ne# to M'"!an In#'&tria" an# Minin$
Cor.oration, t(e !ar$o a& to +e tran&.orte# fro)
Pa"aan to Mani"a- T(e &i"i!a &an# a& ."a!e# on
+oar# Sudy V'', a +ar$e "ea&e# +y /ea Mer, t(e
ve&&e" &an2, re&'"tin$ in t(e "o&& of t(e !ar$o-
ISSUE
0ON /ea Mer i& "ia+"e for t(e "o&& of t(e !ar$o
HELD
F>S
, Co))on !arrier& are +o'n# to o+&erve
e8traordinary #i"i$en!e in t(eir vi$i"an!e over t(e
$oo#& an# t(e &afety of t(e .a&&en$er& t(ey
tran&.ort, a& re;'ire# +y t(e nat're of t(eir +'&ine&&
an# for rea&on& of .'+"i! .o"i!y- >%traor#inary
#i"i$en!e re;'ire& ren#erin$ &ervi!e it( t(e $reate&t
&2i"" an# fore&i$(t to avoi# #a)a$e an# #e&tr'!tion
to t(e $oo#& entr'&te# for !arria$e an# #e"ivery-
, Co))on !arrier& are .re&')e# to (ave +een at
fa'"t or to (ave a!te# ne$"i$ent"y for "o&& or #a)a$e
to t(e $oo#& t(at t(ey (ave tran&.orte#- T(i&
.re&').tion !an +e re+'tte# on"y +y .roof t(at t(ey
o+&erve# e%traor#inary #i"i$en!e, or t(at t(e "o&& or
#a)a$e a& o!!a&ione# +y any of t(e fo""oin$
!a'&e&H
7@4A *"oo#, &tor), eart(;'a2e, "i$(tnin$, or ot(er
nat'ra" #i&a&ter or !a"a)ity;
7@2A A!t of t(e .'+"i! ene)y in ar, (et(er
internationa" or !ivi";
7@3A A!t or o)i&&ion of t(e &(i..er or oner of t(e
$oo#&;
7@DA T(e !(ara!ter of t(e $oo#& or #efe!t& in t(e
.a!2in$ or in t(e !ontainer&;
7@9A Or#er or a!t of !o).etent .'+"i! a't(ority-8
, To e%!'&e t(e !o))on !arrier f'""y of any "ia+i"ity,
t(e fort'ito'& event )'&t (ave +een t(e .ro%i)ate
an# on"y !a'&e of t(e "o&&- It &(o'"# (ave e%er!i&e#
#'e #i"i$en!e to .revent or )ini)i:e t(e "o&& +efore,
#'rin$ an# after t(e o!!'rren!e of t(e event-
- Petitioner +ore t(e +'r#en of .rovin$ t(at it (a#
e%er!i&e# e%traor#inary #i"i$en!e to avoi# t(e "o&&,
or t(at t(e "o&& (a# +een o!!a&ione# +y a fort'ito'&
event ,, an e%e).tin$ !ir!')&tan!e-
, T(e evi#en!e .re&ente# +y .etitioner in &'..ort of
it& #efen&e of fort'ito'& event a& &ore"y
in&'ffi!ient- It a& not eno'$( for t(e !o))on
!arrier to &(o t(at t(ere a& an 'nfore&een or
'ne%.e!te# o!!'rren!e-
Disposition Petition i& E>NI>E an# t(e a&&ai"e#
Ee!i&ion an# <e&o"'tion are A**I<M>E- Co&t&
a$ain&t .etitioner-
INSURANCE Page 114
LOADSTAR SHIPPING CO INC $. PIONEER ASIA
INSURANCE CORP
G< No- 49CD64
QUISUMBING; Gan'ary 2D, 2006
NATURE
<evie on !ertiorari @4A t(e De!'*'#+ #ate# O!to+er
49, 2002 an# @2A t(e Re*#l,'#+ #ate# *e+r'ary 2C,
2003 of CA
FACTS
, G'ne 6, 456D , Petitioner /oa#&tar S(i..in$ Co-,
In!- @/OAESTA<A, re$i&tere# oner an# o.erator of
t(e ve&&e" M/V Reasel, entere# into a voya$e,
!(arter it( Nort(ern Min#anao Tran&.ort Co).any,
In!- for t(e !arria$e of 69,000 +a$& of !e)ent fro)
I"i$an City to Mani"a- T(e &(i..er a& I"i$an Ce)ent
Cor.oration, (i"e t(e !on&i$nee in Mani"a a&
Mar2et Eeve"o.er&, In!- @MA<I>TA
, G'ne 2D, 456D , 6C,900 +a$& of !e)ent ere
"oa#e# on +oar# M/V Reasel an# &toe# in t(e !ar$o
(o"#& for #e"ivery to t(e !on&i$nee- T(e &(i.)ent
a& !overe# +y .etitioner=& Bi"" of /a#in$ #ate# G'ne
23, 456D-
, Prior to t(e voya$e, t(e !on&i$nee in&'re# t(e
&(i.)ent of !e)ent it( re&.on#ent Pioneer A&ia
In&'ran!e Cor.oration @PION>><A for P4,D00,000, for
(i!( it i&&'e# Marine O.en Po"i!y No- MOP,006
#ate# Se.te)+er 4C, 4560, !overin$ a"" &(i.)ent&
)a#e on or after Se.te)+er 30, 4560
, G'ne 29, 456D , Ca.tain Montera of M/V Reasel
or#ere# t(e ve&&e" to +e for!e# a$ro'n# (i!(
ren#ere# t(e entire &(i.)ent of !e)ent a& $oo# a&
$one #'e to e%.o&'re to &ea ater- /OASTA< t('&
fai"e# to #e"iver t(e $oo#& to MA<I>T in Mani"a-
, MA<I>T #e)an#e# fro) /OAESTA< f'""
rei)+'r&e)ent of t(e !o&t of t(e "o&t &(i.)ent-
/OAESTA< ref'&e# to rei)+'r&e t(e MA<I>T #e&.ite
re.eate# #e)an#&-
, Mar!( 44, 4569 L PION>>< .ai# t(e MA<I>T
P4,D00,000 ."'& an a##itiona" a)o'nt of P900,000,
t(e va"'e of t(e "o&t &(i.)ent of !e)ent- In ret'rn,
t(e MA<I>T e%e!'te# a /o&& an# S'+ro$ation
<e!ei.t in favor of PION>>< !on!ernin$ t(e "atter=&
&'+ro$ation ri$(t& a$ain&t /OAESTA<-
, O!to+er 49, 4566 L PION>>< fi"e# a !o)."aint
a$ain&t /OAESTA< it( t(e <TC Mani"a a""e$in$
t(atH @4A t(e M/V Reasel a& not &eaort(y at t(e
!o))en!e)ent of t(e voya$e; @2A t(e eat(er an#
&ea !on#ition& t(en .revai"in$ ere '&'a" an#
e%.e!te# for t(at ti)e of t(e year an# a& &'!(, a&
an or#inary .eri" of t(e voya$e for (i!( t(e M/V
Reasel &(o'"# (ave +een nor)a""y a+"e to !o.e it(;
an# @3A /OAESTA< a& ne$"i$ent in t(e &e"e!tion
an# &'.ervi&ion of it& a$ent& an# e)."oyee& t(en
)annin$ t(e M/V Reasel-
, /OAESTA< a""e$e# t(at no fa'"t nor ne$"i$en!e
!o'"# +e attri+'te# to it +e!a'&e it e%er!i&e# #'e
#i"i$en!e to )a2e t(e &(i. &eaort(y, a& e"" a&
.ro.er"y )anne# an# e;'i..e# an# fai"'re to #e"iver
a& #'e to force a6eure-
, *e+r'ary 49, 4553 , <TC #e!i#e# in favor of
PION>>< an# t(at /OAESTA< , a& a !o))on !arrier,
+ear& t(e +'r#en of .rovin$ t(at it e%er!i&e#
e%traor#inary #i"i$en!e in it& vi$i"an!e over t(e $oo#&
it tran&.orte#- T(e tria" !o'rt e%."aine# t(at in !a&e
of "o&& or #e&tr'!tion of t(e $oo#&, a &tat'tory
.re&').tion ari&e& t(at t(e !o))on !arrier a&
ne$"i$ent 'n"e&& it !o'"# .rove t(at it (a# o+&erve#
e%traor#inary #i"i$en!e- /OAESTA<=S #efen&e of
force a6eure a& fo'n# +ereft of fa!t'a" +a&i& a& a
PAG,ASA re.ort t(at at t(e ti)e of t(e in!i#ent,
tro.i!a" &tor) 7Asian"8 (a# )ove# aay fro) t(e
P(i"i..ine& a& .re&ente#-
, O!to+er 49, 2002 L CA affir)e# <TC Ee!i&ion it(
)o#ifi!ation
ISSUES
4- 0ON /OAESTA< i& a !o))on !arrier 'n#er
Arti!"e 4C32 CC
2- A&&')in$ it i& a !o))on !arrier, 0ON .ro%i)ate
!a'&e of t(e "o&& of !ar$o a& not a fort'ito'& event
+'t a& a""e$e#"y #'e to t(e fai"'re of .etitioner to
e%er!i&e e%traor#inary #i"i$en!e
HELD
4- F>S
, A4C32 CC #efine& a 7!o))on !arrier8 a&
fo""o&H
Co))on !arrier& are .er&on&, !or.oration&, fir)&
or a&&o!iation& en$a$e# in t(e +'&ine&& of !arryin$
or tran&.ortin$ .a&&en$er& or $oo#& or +ot(, +y
"an#, ater, or air, for !o).en&ation, offerin$ t(eir
&ervi!e& to t(e .'+"i!-
, /OAESTA< i& a !or.oration en$a$e# in t(e +'&ine&&
of tran&.ortin$ !ar$o +y ater an# for !o).en&ation,
offerin$ it& &ervi!e& in#i&!ri)inate"y to t(e .'+"i!-
T('&, it(o't #o'+t, it i& a !o))on !arrier- >ven if
it entere# into a voya$e,!(arter a$ree)ent it(
Nort(ern Min#anao Tran&.ort Co).any, In!, it #i#
not in any ay !onvert t(e !o))on !arrier into a
.rivate !arrier-
O Planters Products& 1nc# v# CA , .'+"i! !arrier
&(a"" re)ain a& &'!(, notit(&tan#in$ t(e !(arter of
t(e (o"e or .ortion of a ve&&e" +y one or )ore
.er&on&, .rovi#e# t(e !(arter i& "i)ite# to t(e &(i.
on"y, a& in t(e !a&e of a ti)e,!(arter or voya$e,
!(arter- It i& on"y (en t(e !(arter in!"'#e& +ot(
t(e ve&&e" an# it& !re, a& in a +are+oat or #e)i&e
t(at a !o))on !arrier +e!o)e& .rivate, at "ea&t
in&ofar a& t(e .arti!'"ar voya$e !overin$ t(e !(arter,
.arty i& !on!erne#-
2- F>S
, A& a !o))on !arrier, /OAESTA< i& re;'ire# to
o+&erve e%traor#inary #i"i$en!e in t(e vi$i"an!e over
t(e $oo#& it tran&.ort&- 0(en t(e $oo#& ."a!e# in it&
!are are "o&t, /OAESTA< i& .re&')e# to (ave +een
at fa'"t or to (ave a!te# ne$"i$ent"y- /OAESTA< (a&
t(e +'r#en of .rovin$ t(at it o+&erve# e%traor#inary
#i"i$en!e in or#er to avoi# re&.on&i+i"ity for t(e "o&t
!ar$o-
, Compania 4aritima 5 CA , It re;'ire& !o))on
!arrier& to ren#er &ervi!e it( t(e $reate&t &2i"" an#
fore&i$(t an# 7to '&e a"" rea&ona+"e )ean& to
a&!ertain t(e nat're an# !(ara!teri&ti!& of $oo#&
ten#ere# for &(i.)ent, an# to e%er!i&e #'e !are in
t(e (an#"in$ an# &toa$e, in!"'#in$ &'!( )et(o#& a&
t(eir nat're re;'ire&-
, A4C3D CC en')erate& t(e in&tan!e& (en a !arrier
)i$(t +e e%e).t fro) "ia+i"ity for t(e "o&& of t(e
$oo#&-
@4A *"oo#, &tor), eart(;'a2e, "i$(tnin$,
or ot(er nat'ra" #i&a&ter or !a"a)ity;
@2A A!t of t(e .'+"i! ene)y in ar,
(et(er internationa" or !ivi";
@3A A!t or o)i&&ion of t(e &(i..er or
oner of t(e $oo#&;
@DA T(e !(ara!ter of t(e $oo#& or #efe!t&
in t(e .a!2in$ or in t(e !ontainer&; an#
@9A Or#er or a!t of !o).etent .'+"i!
a't(ority
, /OAESTA< !"ai)& t(at t(e "o&& of t(e $oo#& a&
#'e to a fort'ito'& event 'n#er .ara$ra.( 4- Fet, it&
!"ai) i& not &'+&tantiate#- It i& &'..orte# +y
evi#en!e t(at t(e "o&& of t(e entire &(i.)ent of
!e)ent a& #'e to t(e $ro&& ne$"i$en!e of
/OAESTA<
, <e!or#& &(o t(at in t(e evenin$ of G'ne 2D, 456D,
t(e &ea an# eat(er !on#ition& in t(e vi!inity of
Ne$ro& O!!i#enta" ere !a")- T(e re!or#& revea"
t(at /OAESTA< too2 a &(ort!'t ro'te, in&tea# of t(e
'&'a" ro'te, (i!( e%.o&e# t(e voya$e to
'ne%.e!te# (a:ar#- /OAESTA< (a& on"y it&e"f to
+"a)e for it& )i&J'#$)ent-
Disposition .etition i& E>NI>E

INSURANCE Page 115

i