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Blue Cross v Olivares G.R. No. 169737, February 12, 2008 J.

Corona Facts: Neomi Olivares applied for a health care program with Blue Cross for the amount of 12,000 pesos. 38 days after she applied, she suffered from a stroke. Ailments due to pre-existing conditions were excluded from the coverage. She was confined in Medical City and discharged with a bill of Php 34,000. Blue Cross refused to pay unless she had her physicians certification that she was suffering from a pre-existing condition. When Blue Cross still refused to pay, she filed suit in the MTC. The health care company rebutted by saying that the physician didnt disclose the condition due to the patients invocation of the doctor-client privilege. The MTC dismissed for a lack of cause of action because the physician didnt disclose the condition. In the RTC, the spouses were awarded the amount of the hospital bills plus 60,000 in damages. This was under the ratio that the burden to prove that Neomi had a pre-existing condition was underBlue Cross. The CA denied the motion for reconsideration of the health care company. Issues: 1. Whether petitioner was able to prove that respondent Neomi's stroke was caused by a pre-existing condition and therefore was excluded from the coverage of the health care agreement. 2. Whether it was liable for moral and exemplary damages and attorney's fees. Held: No. Yes. Petition dismissed. Ratio: 1. Philamcare Health Systems, Inc. v. CA- a health care agreement is in the nature of a non-life insurance. It is an established rule in insurance contracts that when their terms contain limitations on liability, they should be construed strictly against the insurer. These are contracts of adhesion the terms of which must be interpreted and enforced stringently against the insurer which prepared the contract. This doctrine is equally applicable to health care agreements. The agreement defined a pre-existing condition as: a disability which existed before the commencement date of membership whose natural history can be clinically determined, whether or not the Member was aware of such illness or condition. Such conditions also include disabilities existing prior to reinstatement date in the case of lapse of an Agreement. Under this provision, disabilities which existed before the commencement of the agreement are excluded from its coverage if they become manifest within one year from its effectivity. Petitioners still averred that the non-disclosure of the pre-existing condition made a presumption in its favor. Respondents still maintained that the petitioner had the duty to prove its accusation.

Petitioner never presented evidence to prove its presumption that the Doctors report would work against Neomi. They only perceived that the invocation of the privilege made the report adverse to Neomi and such was a disreputable presumption. They should have made an independent assessment of Neomis condition when it failed to obtain the report. They shouldnt have waited for the attending physicians report to come out. Section 3 (e), Rule 131 of the Rules of Court states: Under the rules of court, Rule 131, Sec. 3. Disputable presumptions. The following presumptions are satisfactory if uncontradicted, but may be contradicted and overcome by other evidence: (e) That evidence wilfully suppressed would be adverse if produced. The exception on presenting evidence applies when the suppression is an exercise of a privilege. Hence, Neomi had the privilege not to present the Doctors report under the doctor client privilege. 2. The court quoted the CA and RTC decision stating that the refusal of petitioner to pay respondent Neomi's bills smacks of bad faith, as its refusal [was] merely based on its own perception that a stroke is a pre-existing condition. Also, there was factual bases in the RTC and CA for the award of the damages.

COUNTRY BANKERS INSURANCE CORPORATION, vs. LIANGA BAY AND COMMUNITY MULTI-PURPOSE COOPERATIVEG.R. No. 136914 January 25, 2002DE LEON JR J: Facts: The petitioner is a domestic corporation principally engaged in the insurance business wherein it undertakes, for aconsideration, to indemnify another against loss, damage or liability from an unknown or contingent event including fire whilethe respondent is a duly registered cooperative judicially declared insolvent and represented by the elected assignee,Cornelio Jamero.Sometime in1989, the petitioner and the respondent entered into a contract of fire insurance, Fire Insurance Policy No. F-1397. Under Fire Insurance, the petitioner insured the respondents stocks-in-trade against fire loss, damage or liabilityduring the period starting from June 20, 1989 to June 20, 1990 for the sum of Two Hundred Thousand Pesos.On July 1, 1989, the respondents building located at Surigao del Sur was gutted by fire and reduced to ashes, resulting inthe total loss of the respondents stocks-in-trade, pieces of furnitures and fixtures, equipments and records. Due to the loss,the respondent filed an insurance claim with the petitioner under its Fire Insurance.The petitioner, however, denied the insurance claim on the ground that, based on the submitted documents, the buildingwas set on fire by two NPA rebels who wanted to obtain canned goods, rice and medicines as provisions for their comrades in the forest, and that such loss was an excepted risk under the policy conditions of Fire Insurance Policy which provides:This insurance does not cover any loss or damage occasioned by or through or in consequence, directly or indirectly, of any of the following occurrences, namely:(d) Mutiny, riot, military or popular uprising, insurrection, rebellion, revolution,

military or usurped power. Respondent then instituted in the trial court the complaint for recovery of "loss, damage or liability" against petitioner. The petitioner answered the complaint and reiterated the ground it earlier cited to deny the insurance claim. The trial court rendered its Decision in favor of the respondent declaring that the defendant-Country Bankers was liable to plaintiff-Insolvent Cooperative and to fully pay the insurance claim for the loss the insured-plaintiff sustained as a result of the fire under its Fire Insurance in its full face value of P 200,000.00 with interest of 12% per annum from date of filing of thecomplaint until the same is fully paid.Petitioner appealed to the Court of Appeals which affirmed the decision of the trial court in its entirety. Hence, this petition. Issue: Whether Country Bankers in liable Ruling: Yes Country bankers is liable The petitioner does not dispute that the respondents stocks-in-trade were insured against fire loss, damage or liability under Fire Insurance Policy and that the respondent lost its stocks-in-trade in a fire that occurred within the duration of said fire insurance. The petitioner, however, posits the view that the cause of the loss was an excepted risk under the terms of the fire insurance policy. Where a risk is excepted by the terms of a policy which insures against other perils or hazards, loss from such a risk constitutes a defense which the insurer may urge, since it has not assumed that risk, and from this it follows that an insurer seeking to defeat a claim because of an exception or limitation in the policy has the burden of proving that the loss comes within the purview of the exception or limitation set up. If a proof is made of a loss apparently within a contract of insurance,the burden is upon the insurer to prove that the loss arose from a cause of loss which is excepted or for which it is not liable,or from a cause which limits its liability. Stated else wise, since the petitioner in this case is defending on the ground of non-coverage and relying upon an exemption or exception clause in the fire insurance policy, it has the burden of proving thefacts upon which such excepted risk is based, by a preponderance of evidence. But petitioner failed to do so.The petitioner relies on the Sworn Statements of Jose Lomocso and Ernesto Urbiztondo and on the Spot Report of Pfc. Arturo V. Juarbal specifically that: investigation revealed by Jose Lomocso that those armed men wanted to get can goodsand rice for their consumption in the forest PD investigation further disclosed that the perpetrator are members of the NPA .Such testimony is considered hearsay and may not be received as proof of the truth of what he has learned. Such is thehearsay rule which applies not only to oral testimony or statements but also to written evidence as well. The petitioners evidence to prove its defense is sadly wanting and thus, gives rise to its liability to the respondent under Fire InsurancePolicy. A witness can testify only to those facts which he knows of his personal knowledge, which means those facts which are derived from his perception. Consequently, a witness may not testify as to what he merely learned from others either

GLORIA 153587







Promulgated: February 27, 2008 X ---------------------------------------------------------------------------------------- X

This is a petition for review on certiorari[1] seeking the nullification of the Decision rendered by the Court of Appeals (CA) on December 21, 2001, and its Resolution denying reconsideration, dated May 14, 2002, in CA-G.R. CV No. 67514, entitled Gloria Sondayon v. P.J. Lhuillier, Inc. and Ricardo Diago. The facts are[2]: Respondent P.J. Lhuillier, Inc. is a domestic corporation that owns and operates pawnshops under the business name La Cebuana Pawnshop.

Respondent Ricardo Diagoacts as manager in one of its pawnshops located at Maywood, President Avenue, B.F. Homes Subdivision, Paraaque, Metro Manila. Respondent company contracted the services of the Sultan Security Agency. The security agency assigned Guimad Mantung to guard the La Cebuana Pawnshop inMaywood. On June 6, 1996, petitioner Gloria Sondayon, a store manager of Shekinah Jewelry & Boutique, secured a loan from La Cebuana and pledged her Patek Philippe solid gold watch worth P250,000. The watch was given to her as part of her commission by the owner of the shop where she works. She had pawned the watch to La Cebuana a few times in the past and, each time, she was able to redeem it. On August 10, 1996, Guimad Mantung, employing force and violence, robbed La Cebuana, resulting in the deaths of respondent companys appraiser and vault custodian. An information for Robbery with Homicide was filed against Mantung before the Regional Trial Court (RTC) of Paraaque, docketed as Criminal Case No. 96-761. The information alleged that Mantung divested the pawnshop of P62,000 in cash and several pieces of jewelry amounting to P5,300,000. On December 10, 1996, respondent company received a letter from petitioners counsel demanding for the gold watch that she had pawned. Respondent company, however, failed to comply with the demand letter because the watch was among the articles of jewelry stolen by Mantung. Petitioner filed a complaint with the RTC of Paraaque[3] for recovery of possession of personal property with prayer for preliminary attachment against respondent company and its Maywood branch manager, Ricardo Diago. In their Answer, respondents averred that petitioner had no cause of action against them because the incident was beyond their control.

On August 18, 1997, the RTC,[4] stating that the loss of the thing pledged was due to a fortuitous event, rendered a Decision dismissing petitioners complaint as well as respondents counterclaim. The pertinent portions of the Decision read:
Culled from the testimonies of all the witnesses presented as well as the pieces of documentary evidence offered, this Court, after a thorough and careful evaluation and deliberation thereof is of the honest and firm belief that plaintiff failed to establish a sufficient cause of action against defendant as to warrant the recovery of the pledged Patek Philippe Solid Gold Watch which was allegedly concealed, removed or disposed of by the latter defendants as the facts and evidence proved otherwise as said watch was lost on account of a robbery with double homicide that happened on August 10, 1996 perpetrated by one Guimad Mantung, the security guard of defendant employed by Sultan Security Agency as found out by the Court (Exh. 7); thus, defendants were not negligent in the safekeeping of the watch of plaintiff. Not only that. The pledge bears the terms and conditions which the parties should adhere being the law between them pursuant to Art. 1159 of the New Civil Code. Paragraph 13 of Exhibits A and B specifically provides:
The pawnee shall not be liable for the loss or damage of the article pawned due to fortuitous events or force majeure such as fire, robbery, theft, hold-ups and other similar acts. When the loss is due to the fault and/or negligence of the pawnee, the amount of its liability, if any, shall be limited to the appraised value appearing on the face hereof.

Said provision is not violative of law, customs, public policy or tradition, hence, has the force of law between the plaintiff and defendants, and the incident that happened which led to the loss of the thing pledged cannot be considered as negligence but more of a fortuitous event which the defendants could not have foreseen or which though foreseen, was inevitable. This finds support in Art. 1174 of the Civil Code. The defendants, therefore, are not bound to return the thing pledged nor the Court to fix its value. There was no unjustifiable refusal on the part of the defendants to return the thing pledged because, as testified by plaintiff herself, she has pawned the watch at least five (5) times to defendant corporation.[5]

Appeal was taken to the CA. On December 21, 2001, the CA rendered a Decision affirming the ruling of the trial court.[6] Petitioners motion for reconsideration was denied in the Resolution dated May 14, 2002.[7] Petitioner contends that the CA erred: 1) in considering the loss of the thing pledged a fortuitous event although the robbery was caused by respondents own employees; in disregarding the legal principle that existing laws, rules and regulations in relation to the operation and regulation of pawnshops are part and parcel of the contract of pledge between petitioner and respondents; in affirming the ruling of the trial court that paragraph 13 of Exhibits A and B binds the parties and the courts as to the limitation on the value of the thing pledged; and in affirming the ruling of the trial court that paragraph 13 of Exhibits A and B is not violative of laws, customs, public policy or tradition when it is clearly a contract of adhesion.




Petitioner argues that respondents have not shown that the incident constitutes a fortuitous event; that the security guard was an employee of respondent corporation regardless of the existence of a contract of employment because the latter had supervision and control over the former; that respondents were negligent because they did not insure the articles of jewelry including petitioners watch against fire and burglary as required under the Pawnshop Regulation Act; that the provision in the pawnshop ticket limiting the value of the thing pledged is not binding on petitioner and the courts because the appraised value was very low and was not reached voluntarily by the parties but was merely imposed on the former; and that paragraph 13 of the pawnshop ticket limiting the

liability of respondents to the appraised value is a contract of adhesion, and thus, should be declared void. The Court will only resolve issues of law in this proceeding under Rule 45. Accordingly, the existence or non-existence of an employer-employee relationship between respondent company and the security guard is a factual issue on which the Court defers to the findings of the CA. So, also, on the issue of the voluntariness of the agreement on the valuation of the thing pledged, the Court is not wont to disturb the finding of the appellate court. However, on the issue of the legal effect of the failure of respondents to insure the article pledged against burglary, the Court finds a reversible error in the appealed decision. Said the CA:
Equally barren of merit is the Appellants claim that the Appellee should bear the loss of the watch because of the failure of the Appellee to insure the watch by an insurance company accredited by the Insurance Commission, as required by Section 17 of the Rules and Regulations Implementing Presidential Decree No. 114, quoted, infra:
Sec. 17. Insurance of office building and pawns. The place of business of a pawnshop and the pawns pledged to it must be insured against fire, and against burglary as well for the latter, by an insurance company accredited by the Insurance Commission. (idem supra)

Even if We assume, for the nonce, that, indeed, the Appellee failed to comply with the aforequoted Rule & Regulation, nevertheless, the Appellant was burdened to prove the causal connection between the violation, by the Appellee, of the aforequoted Rule/Regulation and the heist-homicide committed by the security guard:
First of all, it has not been shown how the alleged negligence of the Cimarron driver contributed to the collision between the vehicles. Indeed, petitioner has the burden of showing a causal connection between the injury received and the violation of the Land Transportation and Traffic Code. He must show that the violation of the statute was the proximate or legal cause of the injury or that it substantially contributed thereto. Negligence, consisting in whole or in part, of violation of law, like any other negligence, is without legal

consequence unless it is a contributing cause of the injury. Petitioner says that driving an overloaded vehicle with only one functioning headlight during nighttime certainly increases the risk of accident, that because the Cimarron had only one headlight, there was decreased visibility, and that the fact that the vehicle was overloaded and its front seat overcrowded decreased [its] maneuverability. However, mere allegations such as these are no sufficient to discharge its burden of proving clearly that such alleged negligence was the contributing cause of injury. (Sanitary Steam Laundry, Inc. versus Court of Appeals, et al., 300 SCRA 20, at pages 27-28, supra)

The Appellant failed to discharge her burden. Indeed, the Appellant failed to allege, in her Complaint, the causal connection of the loss of the watch and the violation by the Appellee, of theaforequoted Rule/Regulation. Additionally, the appellant never invoked the aforequoted Rule/Regulation as anchor for her claim for damages against the Appellee. It was only, in the present recourse, in her Brief, when the appellant invoked the aforequoted Rule/Regulation. The Appellant is, thus, estopped from so doing. As our Supreme Court declared:
The issue of minority was first raised only on petitioners Motion for Reconsideration of the Court of Appeals Decision; thus, it is as if it was never duly raised in that court at all. Hence, this Court cannot now, for the first time on appeal, entertain this issue, for to do so would plainly violate the basic rule of fair play, justice and due process. We take this opportunity to reiterate and emphasize the wellsettled rule that (a)n issue raised for the first time on appeal and not raised timely in the proceedings in the lower court is barred by estoppel. Questions raised on appeal must be within the issues framed by the parties and, consequently, issues not raised in the trial court cannot be raised for the first time on appeal. (Rolando Sanchez, et al. versus Court of Appeals, et al., 279 SCRA 647, at pages 678679, supra)

The records show that the matter of the insurance of the article pledged was taken up during the trial with no objection by respondents (Petition, p. 17, citing the testimony of Mr. Anthony Erenea, Area Manager of respondent company, on September 8, 1999):
Q: A: Q: A: Now, you said, Mr. Witness, you said that there were items lost? Yes, sir. As a result of the robbery? Yes, sir.

Q: A: Q: A:

Were those jewelry insured? At the time we were self-insured, sir. I mean an independent Insurance Company by the Insurance Commission? At that time, sir I have no knowledge of any insurance sir. accredited

Hence, petitioner correctly raised it in her brief in the CA. As to the causal connection between respondent companys violation of the legal obligation to insure the articles pledged and the heist-homicide committed by the security guard, the answer is simple: had respondent company insured the articles pledged against burglary, petitioner would have been compensated for the loss from the burglary. Respondent companys failure to insure the article is, therefore, a contributory cause to petitioners loss. Considering, however, that petitioner agreed to a valuation of P15,000 for the article pledged in case of a loss, the replacement value for failure to insure is likewise limited toP15,000. Nevertheless, this Court, taking into account all the circumstances of this case, deems it fair and just to award exemplary damages against respondent company for its failure to comply with the rule and regulation requiring it to insure the articles pledged against fire and burglary, in the amount of Twenty Five Thousand (P25,000) Pesos. This Decision is without prejudice to appropriate proceedings to recover any excess value of the article pledged from amounts that may be or have been awarded payable by third parties answerable for the loss arising from the robbery.

WHEREFORE, the petition is partly GRANTED and the Decision and Resolution of the Court of Appeals dated December 21, 2001 and May 14, 2002 in CA-G.R. CV No. 67514 are MODIFIED in that respondent company is ordered to pay petitioner the sum of Fifteen Thousand (P15,000) Pesos representing the agreed value of the watch pledgeTHIRD DIVISION
G.R. No. 161539 April 24, 2009

INTERNATIONAL CONTAINER TERMINAL SERVICES, INC., Petitioner, vs. FGU INSURANCE CORPORATION, HAPAG-LLOYD, HAPAG-LLOYD PHILS., INC., and DESMA CARGO HANDLERS, INC., Respondents. RESOLUTION AUSTRIA-MARTINEZ, J.: In a Decision dated June 27, 2008, the Court denied the petition filed in this case and affirmed the CA Decision dated October 22, 2003 and Resolution dated January 8, 2004, finding petitioner liable for the full amount of the shipment which was lost while in its charge. Petitioner filed a motion for reconsideration, which was denied by the Court with finality per Resolution dated August 27, 2008. Undaunted, petitioner filed the present second motion for partial reconsideration where it solely assails the award and reckoning date of the 12% interest imposed by the RTC on it adjudged liability. Petitioner contends that the complaint filed before the RTC is not one for loan or forbearance of money, but one for breach of contract or damages; hence, petitioner insists that the interest rate should be the legal rate of 6%, and not 12%. Petitioner also argues that the RTC reckoned the date when interest should accrue on the date when respondent FGU Insurance Corporation paid the amount insured, or on January 3, 1995. Petitioner contends that this is erroneous and the date should be reckoned from the time when respondent filed the complaint with the RTC, which is on April 10, 1995. A second look at petitioners arguments shows that indeed, the interest rate of 6% should have been imposed, and not 12%, as affirmed by the Court. Also, it should have been reckoned from April 10, 1995, when respondent filed by the complaint for sum of money, and not January 3, 1995, which was the date respondent paid the amount insured to the Republic Asahi Glass Corporation (RAGC). The claim in this case is one for reimbursement of the sum of money paid by FGU Insurance Corporation to RAGC. This is not one for forbearance of money, goods or credit. Forbearance in the context of the usury law is a contractual obligation of lender or creditor to refrain, during a given period of time, from requiring the borrower or debtor to repay a loan or debt then due and payable.1 Thus the interest rate should be as it is hereby fixed at 6%. Moreover, the interest rate of 6% shall be computed from the date of filing of the complaint, i.e., April 10, 1995. This is in accordance with the ruling that where the demand cannot be established with reasonable certainty, the interest shall begin to run only from the date the judgment of the court is made (at which time the quantification of damages may be deemed to have been reasonably ascertained). The actual base for the computation of legal interest shall, in any case, be on the amount finally adjudged.2

WHEREFORE, the second motion for partial reconsideration is GRANTED. The Decision dated June 27, 2008 isMODIFIED. The rate of interest on the principal amount of P1,875,068.88, as adjudged in the Regional Trial Court Decision dated July 1, 1999 in Civil Case No. 95-73532, and affirmed in the Courts Decision dated June 27, 2008, shall be six percent (6%) per annum computed from the date of filing of the complaint or April 10, 1995 until finality of this judgment. From the time this Decision becomes final and executory and the judgment amount remains unsatisfied, the same shall earn interest at the rate of 12% per annum until its satisfaction. SO ORDERED. MA. ALICIA AUSTRIA-MARTINEZ

d and Twenty Five Thousand (P25,000) Pesos as, and by way of, exemplary damages.