Case no. 64 G.R. No. L-50997 June 30, 1987 SUMMIT GUARANTY AND INSURANCE COMPANY, INC., petitioner, vs. HON. JOSE C.

DE GUZMAN, in his capacity as Presiding Judge of Branch III, CFI of Tarlac, GERONIMA PULMANO and ARIEL PULMANO, respondents. No. L-48679 June 30, 1987 SUMMIT GUARANTY AND INSURANCE COMPANY, INC., petitioner, vs. THE HONORABLE GREGORIA C. ARNALDO, in her capacity as Insurance Commissioner, and JOSE G. LEDESMA, JR., respondents. No. L-48758 June 30, 1987 SUMMIT GUARANTY AND INSURANCE COMPANY, INC., petitioner, vs. HONORABLE RAMON V. JABSON, in his capacity as Presiding Judge of Branch XXVI, Court of First Instance of Rizal, Pasig, Metro Manila and AMELIA GENERAO, respondents. Facts: Jose Ledesma was the owner of a tractor which was bumped by a minibus insured with petitioner for Third Party Liability. Ledesma immediately made a notice of claim. Petitioner company advised private respondent to have car repaired by G.A. Machineries, which was later estimated at an amount of Php21,000 and made assurance of payment. Upon repair, respondent made several demands on insurance company because of repair shops warning that failure to pay would result in the auctioning of the tractor to pay expenses. Petitioner Company continued giving assurance and promises to pay. Eventually, private respondent filed a formal complaint with the Insurance Commission, which petitioner company moved to dismiss on ground of prescription. Geronima Pulmano was the owner of a jeep insured with petitioner company in the amount of Php20,000. The jeep got into a vehicular accident which resulted in the death of one of the victims and private respondent immediately filed a notice of accident and claim. Petitioner company took no steps to process the claim so private respondents brought their claim to the Insurance Commission, but petitioner company still failed to settle. A complaint was eventually filed with the Court of First Instance of Tarlac which petitioner company moved to dismiss on the ground of prescription. Amelia Generao owned a passenger jeepney insured with petitioner under a Vehicle Comprehensive Policy. The jeepney struck the van of a certain Mr. Hahn and two days later Generao notified insurance company and demanded payment on both vehicles. Generao and petitioner insurance company even had a dialogue at the office of insurance company to settle the claim. Nonetheless, time passed without petitioner insurance company taking any final action. Mr. Hahn filed a complaint for damages against Generao who, in response, filed a third party complaint against petitioner insurance company which in turn filed a motion to dismiss on the ground of prescription. Petitioner insurance Company argues that under Section 384 of the Insurance Code, even if the notice of claim was timely filed with the insurance company within the six month period, if the

action or suit that follows is filed beyond the one year period it should necessarily be dismissed on the ground of prescription. prescription has not yet set in. Ruling: NO. Issue: Whether or not the causes of action of private respondents have already prescribed. with the Commissioner or the Courts within one year from denial of the claim. On the contrary. Section 384 has been amended as follows. petitioner Company devised means and ways of stalling the settlement proceedings. fair and equitable settlement of claims. The Supreme Court finds absolutely nothing in the law which mandates that the two periods must always concur. The one year period should be counted from the date of rejection by the insurer as this is the time the cause of action accrues. Since in these cases there has yet been no accrual of cause of action. otherwise the claimant right of action shall prescribe. and with manifest bad faith. it is very clear that the one year period is only required “in proper cases”. In violation of its duties to adopt and implement reasonable standards for the prompt investigation of claims and to effectuate prompt. “…Action or suit for recovery of damage due to loss or injury must be brought in proper cases.” . It is very obvious that petitioner Company is trying to use Section 384 of as a cloak to hide itself from its liabilities.