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HEIRS OF LORETO MARAMAG V. MARAMAG, 2009

Petitioners:

1. Petitioners were the legitimate wife and children of Loreto, while respondents were Loretos
illegitimate family;
2. Eva de Guzman Maramag was a concubine of Loreto and a suspect in the killing of the latter,
thus, she is disqualified to receive any proceeds from his insurance policies from Insular Life
Assurance Company, Ltd. (Insular) and Great Pacific Life Assurance Corporation (Grepalife);
3. the illegitimate children of Loreto: Odessa, Karl Brian, and Trisha Angelie were entitled only to
one-half of the legitime of the legitimate children, thus, the proceeds released to Odessa and
those to be released to Karl Brian and Trisha Angelie were inofficious and should be reduced;
and
4. Petitioners could not be deprived of their legitimes, which should be satisfied first.
5. Part of the insurance proceeds had already been released in favor of Odessa, while the rest of
the proceeds are to be released in favor of Karl Brian and Trisha Angelie, both minors, upon the
appointment of their legal guardian.

Insular: when it ascertained that Eva was not the legal wife of Loreto, it disqualified her as a beneficiary
and divided the proceeds among Odessa, Karl Brian, and Trisha Angelie, as the remaining designated
beneficiaries; and that it released Odessas share as she was of age, but withheld the release of the shares
of minors Karl Brian and Trisha Angelie pending submission of letters of guardianship.

Insular claimed that it was bound to honor the insurance policies designating the children of Loreto with
Eva as beneficiaries pursuant to Section 53 of the Insurance Code.

Grepalife: Eva was not a designated beneficiary.

The claims filed by Odessa, Karl Brian, and Trisha Angelie were denied because Loreto was ineligible for
insurance due to a misrepresentation in his application form that he was born on December 10, 1936
and, thus, not more than 65 years old when he signed it in September 2001.

Insular and Grepalife: insurance proceeds belong exclusively to the designated beneficiaries in the
policies, not to the estate or to the heirs of the insured.

Ruling: First, although petitioners are the legitimate heirs of Loreto, they were not named as beneficiaries
in the insurance policies issued by Insular and Grepalife. Art. 2011 provides that insurance contracts
should be governed by special laws.

SECTION 53. The insurance proceeds shall be applied exclusively to the proper interest of the person in
whose name or for whose benefit it is made unless otherwise specified in the policy.

Second, only persons entitled to claim the insurance proceeds are either the insured, if still alive; or the
beneficiary, if the insured is already deceased, upon the maturation of the policy. The exception to this
rule is a situation where the insurance contract was intended to benefit third persons who are not parties
to the same in the form of favorable stipulations or indemnity. In such a case, third parties may directly
sue and claim from the insurer.

Instances when proceeds redound to the insureds estate:

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1. Insured did not designate any beneficiary; or

2. Designated beneficiary is disqualified by law.

Petition is denied.

GAISANO CAGAYAN V. INSURANCE COMPANY OF NORTH A MERICA, 2006

Intercapitol Marketing Corporation (IMC) is the maker of Wrangler Blue Jeans.

Levi Strauss (Phils.) Inc. (LSPI) is the local distributor of products bearing trademarks owned by Levi Strauss
& Co.

IMC and LSPI separately obtained from respondent fire insurance policies with book debt endorsements.

The insurance policies provide for coverage on book debts in connection with ready-made clothing
materials which have been sold or delivered to various customers and dealers of the Insured
anywhere in the Philippines.

Book debts as the unpaid account still appearing in the Book of Account of the Insured 45 days after
the time of the loss covered under this Policy.

Petitioner is a customer and dealer of the products of IMC and LSPI.

On February 25, 1991, the Gaisano Superstore Complex in Cagayan de Oro City, owned by petitioner,
was consumed by fire. Included in the items lost or destroyed in the fire were stocks of ready-made
clothing materials sold and delivered by IMC and LSPI.

Respondent argued that it was subrogated to the rights of IMC and LSPI.

Petitioner: It is NOT liable:

1. the property covered by the insurance policies were destroyed due to fortuities event or
force majeure;
CA erred in construing a fire insurance policy on book debts as one covering the
unpaid accounts of IMC and LSPI since such insurance applies to loss of the ready-
made clothing materials sold and delivered to petitioner.
2. respondent's right of subrogation has no basis inasmuch as there was no breach of contract
committed by it since the loss was due to fire which it could not prevent or foresee;

Ruling: First, nowhere is it provided in the questioned insurance policies that the subject of the
insurance is the goods sold and delivered to the customers and dealers of the insured. When the
terms of the agreement are clear and explicit that they do not justify an attempt to read into it any
alleged intention of the parties, the terms are to be understood literally just as they appear on the
face of the contract. Thus, what were insured against were the accounts of IMC and LSPI with
petitioner which remained unpaid 45 days after the loss through fire, and not the loss or destruction
of the goods delivered.
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Second, when the seller retains ownership only to insure that the buyer will pay its debt, the risk of
loss is borne by the buyer. Accordingly, petitioner bears the risk of loss of the goods delivered.

IMC and LSPI did not lose complete interest over the goods. They have an insurable interest until full
payment of the value of the delivered goods. Unlike the civil law concept of res perit domino, where
ownership is the basis for consideration of who bears the risk of loss, in property insurance, one's
interest is not determined by concept of title, but whether insured has substantial economic interest
in the property. Section 13 of our Insurance Code defines insurable interest as "every interest in
property, whether real or personal, or any relation thereto, or liability in respect thereof, of such
nature that a contemplated peril might directly damnify the insured." Parenthetically, under Section
14 of the same Code, an insurable interest in property may consist in: (a) an existing interest; (b)
aninchoate interest founded on existing interest; or (c) an expectancy, coupled with an existing
interest in that out of which the expectancy arises.

Therefore, an insurable interest in property does not necessarily imply a property interest in, or a lien
upon, or possession of, the subject matter of the insurance, and neither the title nor a beneficial
interest is requisite to the existence of such an interest, it is sufficient that the insured is so situated
with reference to the property that he would be liable to loss should it be injured or destroyed by the
peril against which it is insured. Anyone has an insurable interest in property who derives a benefit
from its existence or would suffer loss from its destruction. Indeed, a vendor or seller retains an
insurable interest in the property sold so long as he has any interest therein, in other words, so long
as he would suffer by its destruction, as where he has a vendor's lien. In this case, the insurable
interest of IMC and LSPI pertain to the unpaid accounts appearing in their Books of Account 45 days
after the time of the loss covered by the policies.

Third, an obligor should be held exempt from liability when the loss occurs thru a fortuitous event
only holds true when the obligation consists in the delivery of a determinate thing and there is no
stipulation holding him liable even in case of fortuitous event.

Fourth, Art. 2207. If the plaintiff's property has been insured, and he has received indemnity from
the insurance company for the injury 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 violated the contract.

HILARIO GERCIO V. SUNLIFE , 1925

On January 29, 1910, the Sun Life Assurance Co. of Canada issued insurance policy (20 year
endowment policy) on the life of Hilario Gercio.

The insurance company agreed to insure the life of Hilario Gercio for the sum of P2,000, to be paid
him on February 1, 1930, or if the insured should die before said date, then to his wife, Mrs. Andrea
Zialcita (lawful wife), should she survive him; otherwise to the executors, administrators, or assigns
of the insured. The policy also contained a schedule of reserves, amounts in cash, paid-up policies,
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and renewed insurance, guaranteed. The policy did not include any provision reserving to the
insured the right to change the beneficiary.

Andrea was convicted of adultery. Thereafter, a divorce was issued.

The Sun Life Assurance Co. of Canada, the insurer, and Andrea Zialcita, the beneficiary, are the
defendants. The complaint is in the nature of mandamus.

Hilario compelled the defendant Sun Life Assurance Co. of Canada to change the beneficiary in the
policy issued by the defendant company on the life of the plaintiff Hilario Gercio, with one Adela
Garcia as beneficiary.

Ruling:

As to the matter of wifes insurable interests:

The wife has an insurable interest in the life of her husband. The beneficiary has an absolute vested
interest in the policy from the date of its issuance and delivery. So when a policy of life insurance is
taken out by the husband in which the wife is named as beneficiary, she has a subsisting interest in
the policy. And this applies to a policy to which there are attached the incidents of a loan value, cash
surrender value, an automatic extension by premiums paid, and to an endowment policy, as well as
to an ordinary life insurance policy. If the husband wishes to retain to himself the control and
ownership of the policy he may so provide in the policy. But if the policy contains no provision
authorizing a change of beneficiary without the beneficiary's consent, the insured cannot make such
change.

Accordingly, it is held that a life insurance policy of a husband made payable to the wife as beneficiary,
is the separate property of the beneficiary and beyond the control of the husband.
As to the effect of divorce:

In the absence of a statute to the contrary, that if a policy is taken out upon a husband's life the wife
is named as beneficiary therein, a subsequent divorce does NOT destroy her rights under the policy.

FILIPINO MERCHANTS CO. V. CA, 1989

Filipino Merchants Insurance Co. insured a shipment of fishmeal aboard the vessel SS Bougainville
and unloaded at the Port of Manila.

Shipment was damaged.

Choa Tiek Seng sought to recover from FMI for damages.

FMI: an "all risks" marine policy has a technical meaning in insurance in that before a claim can be
compensable it is essential that there must be "some fortuity, " "casualty" or "accidental cause" to
which the alleged loss is attributable and the failure of herein private respondent, upon whom lay
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the burden, to adduce evidence showing that the alleged loss to the cargo in question was due to a
fortuitous event precludes his right to recover from the insurance policy.

Ruling: An "all risks policy" should be read literally as meaning all risks whatsoever and covering all
losses by an accidental cause of any kind. The terms "accident" and "accidental", as used in insurance
contracts, have not acquired any technical meaning. They are construed by the courts in their
ordinary and common acceptance. Thus, the terms have been taken to mean that which happens by
chance or fortuitously, without intention and design, and which is unexpected, unusual and
unforeseen. An accident is an event that takes place without one's foresight or expectation; an event
that proceeds from an unknown cause, or is an unusual effect of a known cause and, therefore, not
expected.

The term "all risks" cannot be given a strained technical meaning, the language of the clause under
the Institute Cargo Clauses being unequivocal and clear, to the effect that it extends to all
damages/losses suffered by the insured cargo except (a) loss or damage or expense proximately
caused by delay, and (b) loss or damage or expense proximately caused by the inherent vice or nature
of the subject matter insured.

Generally, the burden of proof is upon the insured to show that a loss arose from a covered peril, but
under an "all risks" policy the burden is not on the insured to prove the precise cause of loss or
damage for which it seeks compensation. The insured under an "all risks insurance policy" has the
initial burden of proving that the cargo was in good condition when the policy attached and that
the cargo was damaged when unloaded from the vessel; thereafter, the burden then shifts to the
insurer to show the exception to the coverage.

RIZAL COMMERCIAL BANKING CORP. V. CA, 1998

GOYU applied for credit facilities (loan) and accommodations with RCBC at its Binondo Branch.

RCBC approved the application of P117 M.

As security for its credit facilities with RCBC, GOYU executed two real estate mortgages and two
chattel mortgages in favor of RCBC, which were registered with the Registry of Deeds at Valenzuela,
Metro Manila.

GOYU obtained in its name a total of ten insurance policies (over the mortgaged properties) from
Malayan Insurance Co. endorsed in favor of RCBC.

On April 27, 1992, one of GOYUs factory buildings in Valenzuela was gutted by fire. Consequently,
GOYU submitted its claim for indemnity on account of the loss insured against.

MICO denied the claim on the ground that the insurance policies were either attached pursuant to
writs of attachments/garnishments issued by various courts or that the insurance proceeds were
also claimed by other creditors of GOYU alleging better rights to the proceeds than the insured.

Same thing happened to RCBC.

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Because the endorsements do not bear the signature of any officer of GOYU, the trial court, as well
as the Court of Appeals, concluded that the endorsements are defective.

RTC directed MICO and RCBC to pay plaintiff.

Ruling: A mortgagor and a mortgagee have separate and distinct insurable interests in the same
mortgaged property, such that each one of them may insure the same property for his own sole
benefit. There is no question that GOYU could insure the mortgaged property for its own exclusive
benefit. In the present case, although it appears that GOYU obtained the subject insurance policies
naming itself as the sole payee, the intentions of the parties as shown by their contemporaneous
acts, must be given due consideration in order to better serve the interest of justice and equity.

1. 9 endorsement documents were prepared by Alchester in favor of RCBC. The Court is in a

quandary how Alchester could arrive at the idea of endorsing any specific insurance policy in
favor of any particular beneficiary or payee other than the insured had not such named payee
or beneficiary been specifically disclosed by the insured itself.
2. GOYU voluntarily and purposely took the insurance policies from MICO, a sister company of
RCBC, and not just from any other insurance company. Alchester would not have found out
that the subject pieces of property were mortgaged to RCBC had not such information been
voluntarily disclosed by GOYU itself.
3. Had it not been for GOYU, Alchester would not have known of GOYUs intention of obtaining
insurance coverage in compliance with its undertaking in the mortgage contracts with RCBC,
and verily, Alchester would not have endorsed the policies to RCBC had it not been so directed
by GOYU.

On equitable principles, particularly on the ground of estoppel, the Court is constrained to rule in
favor of mortgagor RCBC.