Professional Documents
Culture Documents
L-15774
November 29, 1920
PILAR
C.
DE
LIM, plaintiff-appellant, vs. SUN
LIFE
ASSURANCE COMPANY OF CANADA, defendant-appellee.
MALCOLM, J.:
This is an appeal by plaintiff from an order of the Court of First
Instance of Zamboanga sustaining a demurrer to plaintiff's
complaint upon the ground that it fails to state a cause of
action.
As the demurrer had the effect of admitting the material facts
set forth in the complaint, the facts are those alleged by the
plaintiff. On July 6, 1917, Luis Lim y Garcia of Zamboanga
made application to the Sun Life Assurance Company of
Canada for a policy of insurance on his life in the sum of
P5,000. In his application Lim designated his wife, Pilar C. de
Lim, the plaintiff herein, as the beneficiary. The first premium
of P433 was paid by Lim, and upon such payment the
company issued what was called a "provisional policy." Luis
Lim y Garcia died on August 23, 1917, after the issuance of the
provisional policy but before approval of the application by the
home office of the insurance company. The instant action is
brought by the beneficiary, Pilar C. de Lim, to recover from the
Sun Life Assurance Company of Canada the sum of P5,000, the
amount named in the provisional policy.
The "provisional policy" upon which this action rests reads as
follows:
Received (subject to the following stipulations and
agreements) the sum of four hundred and thirtythree pesos, being the amount of the first year's
premium for a Life Assurance Policy on the life of Mr.
Luis D. Lim y Garcia of Zamboanga for P5,000, for
which an application dated the 6th day of July, 1917,
has been made to the Sun Life Assurance Company
of Canada.
The above-mentioned life is to be assured in
accordance with the terms and conditions contained
or inserted by the Company in the policy which may
be granted by it in this particular case for four
months only from the date of the application,
provided that the Company shall confirm this
agreement by issuing a policy on said application
when the same shall be submitted to the Head Office
in Montreal. Should the Company not issue such a
policy, then this agreement shall be null and void ab
initio, and the Company shall be held not to have
been on the risk at all, but in such case the amount
herein acknowledged shall be returned.
[SEAL.]
(Sgd.) T. B. MACAULAY, President.
(Sgd.) A. F. Peters, Agent.
Our duty in this case is to ascertain the correct meaning of the
document above quoted. A perusal of the same many times by
the writer and by other members of the court leaves a decided
impression of vagueness in the mind. Apparently it is to be a
provisional policy "for four months only from the date of this
application." We use the term "apparently" advisedly, because
immediately following the words fixing the four months period
comes the word "provided" which has the meaning of "if."
Otherwise stated, the policy for four months is expressly made
subjected to the affirmative condition that "the company shall
confirm this agreement by issuing a policy on said application
when the same shall be submitted to the head office in
Montreal." To reenforce the same there follows the negative
condition
Should the company not issue such a policy, then this
agreement shall be null and void ab initio, and the company
shall be held not to have been on the risk." Certainly, language
could hardly be used which would more clearly stipulate that
the agreement should not go into effect until the home office
of the company should confirm it by issuing a policy. As we
read and understand the so-called provisional policy it
amounts to nothing but an acknowledgment on behalf of the
company, that it has received from the person named therein
the sum of money agreed upon as the first year's premium
The chief clerk of the Manila office of the Sun Life Assurance
Company of Canada at the time of the trial testified that he
prepared the letter introduced in evidence as Exhibit 3, of date
November 26, 1917, and handed it to the local manager, Mr. E.
E. White, for signature. The witness admitted on crossexamination that after preparing the letter and giving it to he
manager, he new nothing of what became of it. The local
manager, Mr. White, testified to having received the cablegram
accepting the application of Mr. Herrer from the home office on
November 26, 1917. He said that on the same day he signed a
letter notifying Mr. Herrer of this acceptance. The witness
further said that letters, after being signed, were sent to the
chief clerk and placed on the mailing desk for transmission.
The witness could not tell if the letter had every actually been
placed in the mails. Mr. Tuason, who was the chief clerk, on
November 26, 1917, was not called as a witness. For the
defense, attorney Manuel Torres testified to having prepared
the will of Joaquin Ma. Herrer, that on this occasion, Mr. Herrer
mentioned his application for a life annuity, and that he said
that the only document relating to the transaction in his
possession was the provisional receipt. Rafael Enriquez, the
administrator of the estate, testified that he had gone through
the effects of the deceased and had found no letter of
notification from the insurance company to Mr. Herrer.
Our deduction from the evidence on this issue must be that
the letter of November 26, 1917, notifying Mr. Herrer that his
application had been accepted, was prepared and signed in
the local office of the insurance company, was placed in the
ordinary channels for transmission, but as far as we know, was
never actually mailed and thus was never received by the
applicant.
Not forgetting our conclusion of fact, it next becomes
necessary to determine the law which should be applied to the
facts. In order to reach our legal goal, the obvious signposts
along the way must be noticed.
Until quite recently, all of the provisions concerning life
insurance in the Philippines were found in the Code of
Commerce and the Civil Code. In the Code of the Commerce,
there formerly existed Title VIII of Book III and Section III of
Title III of Book III, which dealt with insurance contracts. In the
Civil Code there formerly existed and presumably still exist,
Chapters II and IV, entitled insurance contracts and life
annuities, respectively, of Title XII of Book IV. On the after July
1, 1915, there was, however, in force the Insurance Act. No.
2427. Chapter IV of this Act concerns life and health insurance.
The Act expressly repealed Title VIII of Book II and Section III of
Title III of Book III of the code of Commerce. The law of
insurance is consequently now found in the Insurance Act and
the Civil Code.
YNARES-SANTIAGO, J.:
A contract of insurance, like all other contracts, must be
assented to by both parties, either in person or through their
agents and so long as an application for insurance has not
been either accepted or rejected, it is merely a proposal or an
offer to make a contract.
SO ORDERED.[5]
The trial court, in ruling for petitioner, held that the premium
for the additional insurance of P50,000.00 had been fully paid
and even if the sum of P2,075.00 were to be considered
merely as partial payment, the same does not affect the
validity of the policy. The trial court further stated that the
deceased had fully complied with the requirements of the
insurance company. He paid, signed the application form and
passed the medical examination. He should not be made to
suffer the subsequent delay in the transmittal of his
application form to private respondents head office since these
were no longer within his control.
A final note. It has not escaped our notice that the Court of
Appeals declared Insurance Policy 056300 for P50,000.00 null
and void and rescinded. The Court of Appeals corrected this in
its Resolution of the motion for reconsideration filed by
petitioner, thus:
"Anent the appearance of the word rescinded in the
dispositive portion of the decision, to which defendantappellee attaches undue significance and makes capital
of, it is clear that the use of the words and rescinded is, as
it is hereby declared, a superfluity. It is apparent from the
context of the decision that the insurance policy in
question was found null and void, and did not have to be
rescinded."[13]
and
was not eligible for MRI coverage, being over the acceptance
age limit of 60 years at the time of application.
WHEREFORE, the decision rendered by the Court of Appeals
in CA-G.R. CV No. 35529 is AFFIRMED insofar as it declared
Insurance Policy No. 056300 for P50,000.00 issued by BF
Lifeman Insurance Corporation of no force and effect and
hence null and void. No costs.
QUIASON, J.:
This is a petition for review on certiorari under Rule 45 of the
Revised Rules of Court to reverse and set aside the decision of
the Court of Appeals in CA-G.R CV No. 26434 and its resolution
denying reconsideration thereof.
We affirm the
modification.
decision
of
the
Court
of
Appeals
with
In May 1987, Juan B. Dans, together with his wife Candida, his
son and daughter-in-law, applied for a loan of P500,000.00
with the Development Bank of the Philippines (DBP), Basilan
Branch. As the principal mortgagor, Dans, then 76 years of
age, was advised by DBP to obtain a mortgage redemption
insurance (MRI) with the DBP Mortgage Redemption Insurance
Pool (DBP MRI Pool).
On August 20, 1987, the MRI premium of Dans, less the DBP
service fee of 10 percent, was credited by DBP to the savings
account of the DBP MRI Pool. Accordingly, the DBP MRI Pool
was advised of the credit.
The DBP and the DBP MRI Pool separately filed their answers,
with the former asserting a cross-claim against the latter.
At the pre-trial, DBP and the DBP MRI Pool admitted all the
documents and exhibits submitted by respondent Estate. As a
result of these admissions, the trial court narrowed down the
issues and, without opposition from the parties, found the case
ripe for summary judgment. Consequently, the trial court
ordered the parties to submit their respective position papers
and documentary evidence, which may serve as basis for the
judgment.
In dealing with Dans, DBP was wearing two legal hats: the first
as a lender, and the second as an insurance agent.
II
Article 19 provides:
Article 20 provides:
Every person who, contrary to law, willfully or negligently
causes damage to another, shall indemnify the latter for
the same.
WHEREFORE, the decision of the Court of Appeals in CA G.R.CV No. 26434 is MODIFIED and petitioner DBP is ORDERED: (1)
to REIMBURSE respondent Estate of Juan B. Dans the amount
of P1,476.00 with legal interest from the date of the filing of
the complaint until fully paid; and (2) to PAY said Estate the
amount of Fifty Thousand Pesos (P50,000.00) as moral
damages and the amount of Ten Thousand Pesos (P10,000.00)
as attorney's fees. With costs against petitioner.
Article 21 provides:
Any person, who willfully causes loss or injury to another
in a manner that is contrary to morals, good customs or
public policy shall compensate the latter for the damage.
MEDIALDEA, J.:
Assailed in this petition is the decision of the Court of Appeals
in CA-G.R. C.V. No. 13498 entitled, "Lawrence L. Fernandez,
plaintiff-appellee v. Zenith Insurance Corp., defendantappellant" which affirmed in toto the decision of the Regional
Trial Court of Cebu, Branch XX in Civil Case No. CEB-1215 and
the denial of petitioner's Motion for Reconsideration.
THE INSULAR LIFE ASSURANCE COMPANY, LTD., plaintiffappellee, vs. CARPONIA T. EBRADO and PASCUALA VDA.
DE EBRADO, defendants-appellants.
MARTIN, J.:
This is a novel question in insurance law: Can a common-law
wife named as beneficiary in the life insurance policy of a
legally married man claim the proceeds thereof in case of
death of the latter?
Upon motion of the parties, they are given ten (10) days to
file their simultaneous memoranda from the receipt of this
order.
Carponia T. Ebrado filed with the insurer a claim for the
proceeds of the Policy as the designated beneficiary therein,
although she admits that she and the insured Buenaventura C.
Ebrado were merely living as husband and wife without the
benefit of marriage.
SO ORDERED.
PUNO, J.:
Before the Court is the petition for certiorari under Rule 45 of
the Revised Rules of Court by petitioner GULF RESORTS, INC.,
against respondent PHILIPPINE CHARTER INSURANCE
CORPORATION. Petitioner assails the appellate court
Rate-Various
Premium - P37,420.60 F/L
2,061.52 Typhoon
1,030.76 EC
393.00 ES
F.S.T. 776.89
5.) Costs.[11]
Prem. Tax 409.05
TOTAL 45,159.92;
Respondent filed its Answer with Special and Affirmative
Defenses with Compulsory Counterclaims.[12]
that the above break-down of premiums shows that plaintiff
paid only P393.00 as premium against earthquake shock (ES);
that in all the six insurance policies (Exhs. C, D, E, F, G and H),
the premium against the peril of earthquake shock is the
same, that is P393.00 (Exhs. C and 1-B; 2-B and 3-B-1 and 3-B2; F-02 and 4-A-1; G-2 and 5-C-1; 6-C-1; issued by AHAC (Exhs.
C, D, E, F, G and H) and in Policy No. 31944 issued by
defendant, the shock endorsement provide(sic):
On February 21, 1994, the lower court after trial ruled in favor
of the respondent, viz:
The above schedule clearly shows that plaintiff paid only a
premium of P393.00 against the peril of earthquake shock, the
same premium it paid against earthquake shock only on the
two swimming pools in all the policies issued by AHAC(AIU)
(Exhibits C, D, E, F and G). From this fact the Court must
consequently agree with the position of defendant that the
endorsement rider (Exhibit 7-C) means that only the two
swimming pools were insured against earthquake shock.
From the above observations the Court finds that only the two
(2) swimming pools had earthquake shock coverage and were
heavily damaged by the earthquake which struck on July 16,
1990. Defendant having admitted that the damage to the
swimming pools was appraised by defendants adjuster
at P386,000.00, defendant must, by virtue of the contract of
insurance, pay plaintiff said amount.
No pronouncement as to costs.[13]
allegedly amounting toP4,280,000.00. Since the defendantappellant has expressed its willingness to pay the damage
caused on the two (2) swimming pools, as the Court a quo and
this Court correctly found it to be liable only, it then cannot be
said that it was in default and therefore liable for interest.
Petitioner contends:
On the other hand, respondent filed a partial appeal, assailing
the lower courts failure to award it attorneys fees and
damages on its compulsory counterclaim.
xxx
We also find that the Court a quo was correct in not granting
the plaintiff-appellants prayer for the imposition of interest
24% on the insurance claim and 6% on loss of income
Earthquake Endorsement
CROSS EXAMINATION
November 25, 1991
pp. 12-13
OF
LEOPOLDO
MANTOHAC
TSN,
OF
LEOPOLDO
MANTOHAC
TSN,
pp. 23-26
Q. For the period from March 14, 1988 up to March 14, 1989,
did you personally arrange for the procurement of this policy?
A. Yes, sir.
Q. Did you also do this through your insurance agency?
A. If you are referring to Forte Insurance Agency, yes.
A. Yes, sir. The final action is still with us although they can
recommend what insurance to take.
Q. In the procurement of the insurance police (sic) from March
14, 1988 to March 14, 1989, did you give written instruction to
Forte Insurance Agency advising it that the earthquake shock
coverage must extend to all properties of Agoo Playa Resort in
La Union?
A. No, sir. We did not make any written instruction, although
we made an oral instruction to that effect of extending the
coverage on (sic) the other properties of the company.
Q. And that instruction, according to you, was very important
because in April 1987 there was an earthquake tremor in La
Union?
A. Yes, sir.
Q. And you wanted to protect all your properties against
similar tremors in the [future], is that correct?
pp. 9-12
Atty. Mejia:
We respectfully manifest that the same exhibits C to H
inclusive have been previously marked by counsel for
defendant as Exhibit[s] 1-6 inclusive. Did you have occasion to
review of (sic) these six (6) policies issued by your company [in
favor] of Agoo Playa Resort?
WITNESS:
Yes[,] I remember having gone over these policies at one point
of time, sir.
Q. Now, wach (sic) of these six (6) policies marked in evidence
as Exhibits C to H respectively carries an earthquake shock
endorsement[?] My question to you is, on the basis on (sic) the
wordings indicated in Exhibits C to H respectively what was the
extent of the coverage [against] the peril of earthquake shock
as provided for in each of the six (6) policies?
A. Yes, sir.
xxx
Q. Now, after this policy was delivered to you did you bother to
check the provisions with respect to your instructions that all
WITNESS:
A. Yes, sir.
COURT:
ATTY. MEJIA:
WITNESS:
WITNESS:
They are the same in the sence (sic), in the amount of the
coverage. If you are going to do some computation based on
the rates you will arrive at the same premiums, your Honor.
ATTY. MEJIA:
pp. 4-6
ATTY. ANDRES:
WITNESS:
WITNESS:
No, we dont, sir.
Q. That is why the phrase earthquake shock to the two (2)
swimming pools only was placed, is it not?
A. Yes, sir.
ATTY. ANDRES:
Will you not also agree with me that these exhibits, Exhibits G
and H which you have pointed to during your directexamination, the phrase Item no. 5 only meaning to (sic) the
two (2) swimming pools was deleted from the policies issued
by AIU, is it not?
xxx
ATTY. ANDRES:
As an insurance executive will you not attach any significance
to the deletion of the qualifying phrase for the policies?
WITNESS:
My answer to that would be, the deletion of that particular
phrase is inadvertent. Being a company underwriter, we do not
cover. . it was inadvertent because of the previous policies that
we have issued with no specific attachments, premium rates
and so on. It was inadvertent, sir.
The Court also rejects petitioners contention that respondents
contemporaneous and subsequent acts to the issuance of the
insurance policy falsely gave the petitioner assurance that the
coverage of the earthquake shock endorsement included all its
properties in the resort. Respondent only insured the
properties as intended by the petitioner. Petitioners own
witness testified to this agreement, viz:
CROSS EXAMINATION OF LEOPOLDO MANTOHAC
A. I told him that the insurance that they will have to get will
have the same provisions as this American Home Insurance
Policy No. 206-4568061-9.
Q. You are referring to Exhibit H of course?
Q. So, all the provisions here will be the same except that of
the premium rates?
pp. 22-26
Atty. Mejia:
xxx
Q. Will it be correct to state[,] Mr. Witness, that you made a
comparison of the provisions and scope of coverage of Exhibits
I and H sometime in the third week of March, 1990 or
thereabout?
xxx
The case law will show that this Court will only rule out blind
adherence to terms where facts and circumstances will show
that they are basically one-sided. [34] Thus, we have called on
lower courts to remain careful in scrutinizing the factual
circumstances behind each case to determine the efficacy of
the claims of contending parties. In Development Bank of
the Philippines v. National Merchandising Corporation,
et al.,[35] the parties, who were acute businessmen of
experience, were presumed to have assented to the assailed
documents with full knowledge.
A. Yes, sir. I told him that I will agree to that renewal of this
policy under Philippine Charter Insurance Corporation as long
as it will follow the same or exact provisions of the previous
insurance policy we had with American Home Assurance
Corporation.
Q. Did you take any step Mr. Witness to ensure that the
provisions which you wanted in the American Home Insurance
policy are to be incorporated in the PCIC policy?
A. Yes, sir.
pp. 20-21
Q. Did you indicate to Atty. Omlas (sic) what kind of policy you
would want for those facilities in Agoo Playa?