Professional Documents
Culture Documents
THE POLICY
HEIRS OF MARAMAG VS MARAMAG
Lessons Applicable: To whom insurance
proceeds payable (Insurance)
FACTS:
Loreto Maramag designated as
beneficiary his concubine Eva
de Guzman Maramag
Vicenta Maramag and Odessa, Karl
Brian, and Trisha Angelie (heirs of
Loreto Maramag) and his
concubine Eva de Guzman Maramag,
also suspected in the killing of Loreto
and his illegitimate children are
claiming for his insurance.
Vicenta alleges that Eva is
disqualified from claiming
RTC: Granted - civil code does NOT
apply
CA: dismissed the case for lack
of jurisdiction for filing beyond
reglementary period
ISSUE: W/N Eva can claim even though
prohibited under the civil code against
donation
Sy
violated the "Other Insurance Clause"
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the insured had been asked to reveal
but did not, that was deception - guilty of c
lear fraud
total absence of such notice nullifies the
policy
assuming arguendo that petitioners felt the
legitimate need to be clarified as to the pol
icy condition violated, there was a
considerable lapse of time from their
receipt of the insurer's clarificatory letter
dated March 30, 1983, up to the time the
complaint was filed in court on
January 31, 1984. The one-year prescriptiv
e period was yet to
expire on November 29, 1983, or about eig
ht (8) months from the
receipt of the clarificatory letter, but petiti
oners let the
period lapse without bringing their action i
n court
ACCFA VS ALPHA
The year for instituting action in court must
be reckoned from the time of appellee's
refusal to comply with its bond
FACTS:
Alpha Insurance & Surety Company had
issued a fidelity bond in favor or the
Asingan Farmers' Cooperative Marketing
Association, Inc. (FACOMA) against los on
account of personal dishonesty of its
Secretary Treasurer Ricardo Ladines.
FACOMA then assigned its rights to
Agricultural Credit Cooperative and
Financing Administration with the approval
of the principal and the surety.
During the effectivity of the bond, the
principal Ricardo Ladines misappropriated
for personal benefit the funds of FACOMA,
and part of which belonged to ACCFA.
ACCFA then filed a claim for the loss to the
surety company Alpha, but it refused and
failed to pay. A suit then filed by the
ACCFA. Defendant Alpha Insurance &
Surety Co., Inc., moved to dismiss the
complaint for the reason that the same
was filed more than one year after plaintiff
made claim for loss, contrary to the eighth
condition of the bond.
The condition is as follow:
EIGHT LIMITATION OF ACTION
No action, suit or proceeding shall be had or
maintained upon this Bond unless the
same be commenced within one year from
the time of making claim for the loss upon
which such action, suit or proceeding, is
based, in accordance with the fourth
section hereof.
ISSUE:
Whether the ACCFA was already barred to file
a complaint because one year had been
already elapsed from the claim of loss?
HELD:
No, because the condition is null and void.
The condition of the bond in question,
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WARRANTIES
(Ang Giok Chip vs. Springfield, 56 Phil
275.) A rider is an attachment to the
policy that contains additional stipulations
between the parties. It is issued after the
policy is delivered and can modify the
policy's conditions by either
expanding/restricting its benefits or
excluding certain conditions from the
coverage. It isn't binding on the insured
unless its descriptive title/name is written
in the blank spaces provided for in the
policy itself. If properly attached to the
policy, it forms part of the contract with
the effect that it has been embodied in the
policy.
Gen. Insurance & Surety Corp v. NG Hua
Misrepresentation
106 PHIL 1117
Facts:
> In 1952, General issued a fire policy to Ng
Hua to cover the contents of the Central
Pomade Factory owned by him.
> There was a provision in the policy that
should there be any insurance already
effected or to be subsequently procured,
the insured shall give notice to the insurer.
> Ng Hua declared that there was non. The
very next day, the building and the goods
stored therein burned.
> Subsequently, the claim of Ng Hua for the
proceeds was denied by General since it
discovered that Ng Hua had obtained an
insurance from General Indemnity for the
same goods and for the same period of
time.
Issue:
Whether or not General Insurance can refuse
to pay the proceeds.
Held:
Yes.
Violation of the statement which is to be
considered a warranty entitles the insurer
to rescind the contract of insurance. Such
misrepresentation is fatal.
THE PREMIUM
American Home v Chua G.R. No. 130421.
June 28, 1999
Facts:
Chua obtained from American Home a fire
insurance covering the stock-in-trade of
his business. The insurance was due to
expire on March 25, 1990.
On April 5, 1990, Chua issued a check for
P2,983.50 to American Homes agent,
James Uy, as payment for the renewal of
the policy. The official receipt was issued
on April 10. In turn, the latter
a renewal certificate. A new insurance
policy was issued where petitioner
undertook to indemnify respondent for any
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accepted the check and issued the official
receipt for the payment. It is, as well,
bound by its agents acknowledgment of
receipt of payment.
Section 78 of the Insurance Code explicitly
provides:
An acknowledgment in a policy or contract of
insurance of the receipt of premium is
conclusive evidence of its payment, so far
as to make the policy binding,
notwithstanding any stipulation therein
that it shall not be binding until the
premium is actually paid.
2. Submission of the alleged fraudulent
documents pertained to
respondents income tax returns for 1987
to 1989. Respondent, however, presented
a BIR certification that he had paid the
proper taxes for the said years. Since this
is a question of fact, the finding is
conclusive.
Ordinarily, where the insurance policy
specifies as a condition the disclosure of
existing co-insurers, non-disclosure is a
violation that entitles the insurer to avoid
the policy. The purpose for the inclusion of
this clause is to prevent an increase in the
moral hazard. The relevant provision is
Section 75, which provides that:
A policy may declare that a violation of
specified provisions thereof shall avoid it,
otherwise the breach of an immaterial
provision does not avoid the policy.
Respondent acquired several co-insurers and
he failed to disclose this information to
petitioner. Nonetheless, petitioner is
estopped from invoking this argument due
to the loss
adjusters admission of previous knowledg
e of the co-insurers.
It cannot be said that petitioner was deceived
by respondent by the latters nondisclosure of the other insurance contracts
when petitioner actually had prior
knowledge thereof. The loss adjuster,
being an employee of petitioner, is
deemed a representative of the latter
whose awareness of the other insurance
contracts binds petitioner.
3. Petitioner is liable to pay the loss. But there
is merit in petitioners grievance against
the damages and attorneys fees awarded.
There was no basis for an award for loss of
profit. This cannot be shouldered by
petitioner whose obligation is limited to
the object of insurance.
There was no fraud to justify moral damages.
Exemplary damages cant be awarded
because the defendant never acted in a
reckless manner to claim insurance.
Attorneys fees cant be recovered as part
of damages because no premium should
be placed on the right to litigate.
CA: Affirmed
ISSUE:
1. W/N there was a valid payment of
premium considering that the check was
cashed after the occurrence of the fire
since the renewal certificate issued
containing the acknowledgement receipt
2. W/N Chua violated the policy by his
submission of fraudulent documents and
non-disclosure of the other
existing insurance contracts or other
insurance clause"
HELD: petition is partly GRANTED modified
by deleting the awards of P200,000 for loss
of profit, P200,000 as moral damages and
P100,000 as exemplary damages, and
reducing the award of attorneys fees from
P50,000 to P10,000
1. YES.
Section 77 of the Insurance Code
An insurer is entitled to
payment of the premium as soon as the
thing insured is exposed to the peril
insured against. Notwithstanding any
agreement to the contrary, no policy or
contract of insurance issued by an
2.
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Laws Applicable: Section 84 of the Insurance
Code
FACTS:
CA: reversed
ISSUE: W/N the cover note is valid despite the
absence of premium payment upon it
HELD: YES. CA set aside. CFI reinstated
Section 84
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ISSUE:
Whether payment by installment of the
premiums due on an insurance policy
invalidates the contract of insurance, in
view of Sec. 77 of P.D. 612, otherwise
known as the Insurance Code, as
amended, which provides:
Sec. 77. An insurer is entitled to the
payment of the premium as soon as the
thing is exposed to the peril insured
against. Notwithstanding any agreement
to the contrary, no policy or contract of
insurance issued by an insurance company
is valid and binding unless and until the
premium thereof has been paid, except in
the case of a life or an industrial life policy
whenever the grace period provision
applies.
RULING:
No, the contract remains valid even if the
premiums were paid on installments.
Certainly, basic principles of equity and
fairness would not allow the insurer to
continue collecting and accepting the
premiums, although paid on installments,
and later deny liability on the lame excuse
that the premiums were not prepared in
full.
At the very least, both parties should be
deemed in estoppel to question the
arrangement they have voluntarily
accepted.
Moreover, as correctly observed by the
appellate court, where the risk is entire
and the contract is indivisible, the insured
is not entitled to a refund of the premiums
paid if the insurer was exposed to the risk
insured for any period, however brief or
momentary. The obligation to pay
premiums when due is ordinarily as
indivisible obligation to pay the entire
premium.
Philippine Phoenix Surety & Insurance
Co. V. Woodworks Inc (1979)
Lessons Applicable: Estoppel and
credit extension (Insurance)
Laws Applicable: Section 77 of the
Insurance Code
FACTS:
July 21, 1960: Woodworks, Inc. was
issued a fire policy for its
building machinery and
equipment by Philippine Phoenix Surety &
Insurance Co. for P500K covering July 21,
1960 to July 21, 1961. Woodworks did not
pay the premium totalling to P10,593.36.
April 19, 1961: It was alleged
that Woodworks notified Philippine
Phoenix the cancellation of the Policy
so Philippine Phoenix credited P3,110.25
for the unexpired period of 94 days
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changed the legal regime in that unless
the premium is paid there is no insurance.
LOSS
Paris-Manila Perfume Co. V. Phoenix
Assurance Co.(1926)
FACTS:
HELD: YES.
If it be a fact that the
fire resulted from an explosion that
fact, if proven, would be a complete
defense, the burden of the proof of
that fact is upon the defendant, and
upon that point, there is a failure of
proof
lower court found as a fact that there
was no fraud in the insurance, and
that the value of the property
destroyed by the fire was more than
the amount of the insurance.
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CA affirmed
(1)
. . .
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under thrust receipts. Fire broke out on 4
January 1964.
Pacific sent letter of demand to Oriental.
Insurance Adjuster of Oriental notified Pacific
to submit proof of loss pursuant to Policy
Condition 11. Pacific did not accede but
asked Insurance Adjuster toverify records
form Bureau of Customs.
Pacific filed for sum of money against
Oriental. Oriental alleged that Pacific
prematurely filed a suit, for neither filing a
formal claim over loss pursuant to policy nor
submitting any proof of loss.
Trial court decided in favor of Pacific.
Decision based on technicality. The defense
of lack of proof of loss and defects were
raised for the 1st time. (On presentation of
evidences by Pacific, it was revealed there
was violation of Condition No.3, there were
undeclared co-insurances under same
property Wellington, Empire, Asian. The
only declared co-insurances were Malayan,
South Sea, and Victory)
CA reversed decision. Concealment of other
co-insurances is a misrepresentation and can
easily be fraud.
Issues:
(1) Whether or not unrevealed coninsurances is a violation of Policy Condition
No.3
(2) Whether or not there was premature
filing of action
Held:
(1) Yes. Policy Condition 3 provides that the
insured must give notice of any insurance
already in effect or subsequently be in effect
covering same property being insured.
Failure to do so, the policy shall be forfeited.
Failure to reveal before the loss of the 3
other insurances is a clear misrepresentation
or a false declaration. The material fact was
asked for but was not revealed.
Representations of facts are the foundations
of the contract. Pacific itself provided for the
evidences in trial court that proved existence
of misrepresentation.
(2) Yes. Policy Condition 11 is a sine qua non
requirement for maintaining action. It
requires that documents necessary to prove
and estimate the loss should be included
with notice of loss. Pacific failed
to submit formal claim of loss with
supporting documents but shifted the burden
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the insurer will furnish the facts on which the
cancellation is based.
MICO's claims it cancelled the policy in
question on October 15, 1981, for nonpayment of premium. To support this
assertion, it presented one of its employees,
who testified that "the original of the
endorsement and credit memo"
presumably meaning the alleged cancellation
"were sent the assured by mail through
our mailing section" However, there is no
proof that the notice, assuming it complied
with the other requisites mentioned above,
was actually mailed to and received by
Pinca.
We also look askance at the alleged
cancellation, of which the insured and MICO's
agent himself had no knowledge, and the
curious fact that although Pinca's payment
was remitted to MICO's by its agent on
January 15, 1982, MICO sought to return it to
Adora only on February 5, 1982, after it
presumably had learned of the occurrence of
the loss insured against on January 18, 1982.
These circumstances make the motives of
the petitioner highly suspect, to say the
least, and cast serious doubts upon its
candor and bona fides.
PHILIPPINE CHARTER INSURANCE
CORPORATION VS. CHEMOIL
LIGHTERAGE HITE GOLD CORPORATION
G.R. No. 136888. June 29, 2005
Facts: Philippine Charter Insurance
Corporation is a domestic corporation
engaged in the business of non-life
insurance. Respondent Chemoil Lighterage
Corporation is also a domestic corporation
engaged in the transport of goods. On 24
January 1991, Samkyung Chemical Company,
Ltd., based in South Korea, shipped 62.06
metric tons of the liquid chemical DIOCTYL
PHTHALATE (DOP) on board MT TACHIBANA
which was valued at US$90,201.57 and
another 436.70 metric tons of DOP valued at
US$634,724.89 to the Philippines. The
consignee was Plastic Group Phils., Inc. in
Manila. PGP insured the cargo with Philippine
Charter Insurance Corporation against all
risks. The insurance was under Marine
Policies No. MRN-30721[5] dated 06 February
1991. Marine Endorsement No.
2786[7] dated 11 May 1991 was attached
and formed part of MRN-30721, amending
the latters insured value to P24,667,422.03,
and reduced the premium accordingly. The
ocean tanker MT TACHIBANA unloaded the
cargo to the tanker barge, which shall
transport the same to Del Pan Bridge in Pasig
River and haul it by land to PGPs storage
tanks in Calamba, Laguna. Upon inspection
by PGP, the samples taken from the
shipment showed discoloration
demonstrating that it was damaged. PGP
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by PGP employee, to Ms. Abastillas, at the
time of the delivery of the cargo, and
therefore, within the required period. The
respondent, however, claims that the
supposed notice given by PGP over the
telephone was denied by Ms. Abastillas. The
Court of Appeals declared:that a telephone
call made to defendant-company could
constitute substantial compliance with the
requirement of notice. However, it must be
pointed out that compliance with the period
for filing notice is an essential part of the
requirement, i.e.. immediately if the damage
is apparent, or otherwise within twenty-four
hours from receipt of the goods, the clear
import being that prompt examination of the
goods must be made to ascertain damage if
this is not immediately apparent. We have
examined the evidence, and We are unable
to find any proof of compliance with the
required period, which is fatal to the accrual
of the right of action against the carrier.
Nothing in the trial courts decision stated
that the notice of claim was relayed or filed
with the respondent-carrier immediately or
within a period of twenty-four hours from the
time the goods were received. The Court of
Appeals made the same finding. Having
examined the entire records of the case, we
cannot find a shred of evidence that will
precisely and ultimately point to the
conclusion that the notice of claim was
timely relayed or filed.
The requirement that a notice of claim
should be filed within the period stated by
Article 366 of the Code of Commerce is not
an empty or worthless proviso.
The object sought to be attained by the
requirement of the submission of claims in
pursuance of this article is to compel the
consignee of goods entrusted to a carrier to
make prompt demand for settlement of
alleged damages suffered by the goods while
in transport, so that the carrier will be
enabled to verify all such claims at the time
of delivery or within twenty-four hours
thereafter, and if necessary fix responsibility
and secure evidence as to the nature and
extent of the alleged damages to the goods
while the matter is still fresh in the minds of
the parties.
The filing of a claim with the carrier within
the time limitation therefore actually
constitutes a condition precedent to the
accrual of a right of action against a carrier
for loss of, or damage to, the goods. The
shipper or consignee must allege and prove
the fulfillment of the condition. If it fails to do
so, no right of action against the carrier can
accrue in favor of the former. The
aforementioned requirement is a reasonable
condition precedent; it does not constitute a
limitation of action.
We do not believe so. As discussed at length
above, there is no evidence to confirm that
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attorneys fees. CA reversed the decision of
the Insurance Commission because it found
that the petitioner knew of the existence of
the two other policies issued by the PFIC.
Issues:
REINSURANCE
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it has already assumed. On the other hand, a
reinsurance treaty is merely an agreement
between two insurance companies whereby
one agrees to surrender and the other to
accept reinsurance business pursuant to
provisions specified in the treaty. Treaties are
contracts for insurance; reinsurance policies
or cessions are contracts of insurance.
Although the reinsurance treaty precedes the
Margin Law by over nine years nothing in
that treaty obligates PHILAM to remit
toAIRCO a fixed, certain, and obligatory sum
by way of reinsurance premiums. All that the
reinsurance treaty provides on this point is
that PHILAM "agrees to reinsure." The treaty
speaks of a probability; not a reality.
PHILAMs obligation to remit reinsurance
premiums becomes fixed and definite upon
the execution of the reinsurance cession.
Because, for every life insurance policy
surrendered to AIRCO, PHILAM agrees to pay
premium. It is only after a
reinsurancecession is made that payment of
reinsurance premium may be exacted, as it
is only after PHILAM seeks to remit that
reinsurance premium that the obligation to
pay the margin fee arises.
GIBSON VS REVILLA
FACTS: Lepanto Consolidated Mining
Company filed a complaint against Malayan
Insurance Company, Inc. The civil suit thus
instituted by Lepanto against Malayan was
founded on the fact that Malayan issued a
Marine Open Policy covering all shipments of
copper, gold, and silver concentrates in bulk
from Poro, San Fernando, La Union to
Tacoma, Washington or to other places in the
United States. Thereafter, Malayan obtained
reinsurance abroad through Sedgwick,
Collins & Co., Limited, a London insurance
brokerage. The Memorandum of Insurance
issued by Sedgwick to Malayan listed three
groups of underwriters or reinsurers Lloyds
62.808%, Companies (I.L.U.) 34.705%, Other
companies 2.487%. At the top of the list of
underwriting members of Lloyds is Syndicate
No. 448, assuming 2.48% of the risk
assumed by the reinsurer, which syndicate
number petitioner Ivor Robert Dayton Gibson
claims to be himself. Petitioner then filed a
motion to intervene as defendant, which
motion was denied by the lower court.
ISSUE: WON THE LOWER COURT
COMMITTED, REVERSIBLE ERROR IN
REFUSING THE INTERVENTION OF THE
PETITIONER IN THE SUIT BETWEEN LEPANTO
AND MALAYAN COMPANIES.
HELD:
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1963, WIC issued a cover note to PTEC for
the said logs. On April 2, 1963, WIC issued
two policies for the logs. However, the total
board feet covered this time is only
1,195,498. On April 4, 1963, while the logs
were in transit to Japan, bad weather
prevailed and this caused the loss of 32
pieces of logs. WIC then asked an adjuster to
investigate the loss. The adjuster submitted
that the logs lost were not covered by the
two policies issued on April 2, 1963 but said
logs were included in the cover note earlier
issued. WIC however denied the insurance
claim of PTEC as it averred that the cover
note became null and void when the two
policies were subsequently issued. The Court
of Appeals ruled that the cover note is void
for lack of valuable consideration as it
appeared that no premium payment therefor
was made by PTEC. ISSUE: Whether or not a
separate premium is needed for cover notes.
HELD: No. The Cover Note was not without
consideration for which the Court of Appeals
held the Cover Note as null and void, and
denied recovery therefrom. The fact that no
separate premium was paid on the Cover
Note before the loss insured against
occurred, does not militate against the
validity of PTECs contention, for no such
premium could have been paid, since by the
nature of the Cover Note, it did not contain,
as all Cover Notes do not contain particulars
of the shipment that would serve as basis for
the computation of the premiums. As a
logical consequence, no separate premiums
are intended or required to be paid on a
Cover Note. At any rate, it is not disputed
that PTEC paid in full all the premiums as
called for by the statement issued by WIC
after the issuance of the two regular marine
insurance policies, thereby leaving no
account unpaid by PTEC due on the
insurance coverage, which must be deemed
to include the Cover Note. If the Note is to be
treated as a separate policy instead of
integrating it to the regular policies
subsequently issued, the purpose and
function of the Cover Note would be set at
naught or rendered meaningless, for it is in a
real sense a contract, not a mere application
for insurance which is a mere offer.
Artex Development Co. Inc. v Wellington
Insurance Co. Inc.
GR No. L-29508 June 27, 1973
FACTS: Wellington Insurance Co. insured for
P24, 346, 509.00 the buildings, stocks and
machinery of Artex Development against loss
or damage by fire or lightning, upon payment
of the corresponding premiums. On 22
September 1963, the buildings, stocks and
machinery of plaintiffs spinning department