Roque v.
Intermediate Appellate Court ordinary course of events, results from the natural and inevitable
G.R. No. L-66935 Nov. 11, 1985
Facts:
Isabela Roque (Roque of Isabela Roque Timber
Enterprises) hired the Manila Bay Lighterage Corp. (Manila Bay)
to load and carry its logs from Palawan to North Harbor, Manila.
The logs were insured with Pioneer Insurance and Surety Corp.
(Pioneer). The logs never reached Manila due to certain
circumstances (as alleged by Roque and found by the appellate
court), such as the fact that the barge was not seaworthy that it
developed a leak, that one of the hatches were left open causing
water to enter, and the absence of the necessary cover of
tarpaulin causing more water to enter the barge. When Roque
demanded payment from Pioneer, but the latter refused on the
ground that its liability depended upon the “Total Loss by Total
Loss of Vessel Only.” The trial court ruled in favor of Roque
in the civil complaint filed by the latter against Pioneer, but
the decision was reversed by the appellate court.
Issue:
WON in cases of marine insurance, there is a warranty
of seaworthiness by the cargo owner; WON the loss of the cargo
was due to perils of the sea, not perils of the ship.
Held:
Yes, there is. The liability of the insurance company is
governed by law. Section 113 of the Insurance Code provides
that “In every marine insurance upon a ship or freight, or
freightage, or upon anything which is the subject of marine
insurance, a warranty is implied that the ship is seaworthy.”
Hence, there can be no mistaking the fact that the term "cargo"
can be the subject of marine insurance and that once it is so
made, the implied warranty of seaworthiness immediately
attaches to whoever is insuring the cargo whether he be the
shipowner or not. Moreover, the fact that the unseaworthiness
of the ship was unknown to the insured is immaterial in ordinary
marine insurance and may not be used by him as a defense in
order to recover on the marine insurance policy.
As to the second issue, by applying Sec. 113 of the
Insurance Code, there is no doubt that the term 'perils of the
sea' extends only to losses caused by sea damage, or by the
violence of the elements, and does not embrace all losses
happening at sea; it is said to include only such losses as are
of extraordinary nature, or arise from some overwhelming
power, which cannot be guarded against by the ordinary
exertion of human skill and prudence. t is also the general rule
that everything which happens thru the inherent vice of the
thing, or by the act of the owners, master or shipper, shall not be
reputed a peril, if not otherwise borne in the policy. It must be
considered to be settled, furthermore, that a loss which, in the
action of the sea, from the ordinary wear and tear of the ship, or
from the negligent failure of the ship's owner to provide the
vessel with proper equipment to convey the cargo under
ordinary conditions, is not a peril of the sea. Such a loss is rather
due to what has been aptly called the "peril of the ship." The
insurer undertakes to insure against perils of the sea and similar
perils, not against perils of the ship. Neither barratry can be used
as a ground by Roque. Barratry as defined in American Insurance
Law is "any willful misconduct on the part of master or crew in
pursuance of some unlawful or fraudulent purpose without the
consent of the owners, and to the prejudice of the owner's
interest." Barratry necessarily requires a willful and intentional
act in its commission. No honest error of judgment or mere
negligence, unless criminally gross, can be barratry. In the case at
bar, there is no finding that the loss was occasioned by the willful
or fraudulent acts of the vessel's crew. There was only simple
negligence or lack of skill.
Go Tiaco v Union Insurance Society of Canton
Facts:
A policy of marine insurance issued by the Union Insurance
Society of Canton, Ltd., upon a cargo of rice belonging to the
plaintiffs, Go Tiaoco Brothers, which was transported in the early
days of May, 1915, on the steamship Hondagua from the port of
Saigon to Cebu. On discharging the rice from one of the
compartments in the after hold, upon arrival at Cebu, it was
discovered that one thousand four hundred seventy-three sacks
and been damages by sea water. The trial court found that the
inflow of the sea water during the voyage was due to a defect in
one of the drain pipes of the ship and concluded that the loss
was not covered by the policy of insurance. The policy of
insurance was signed upon a form long in use among companies
engaged in maritime insurance. It purports to insure the cargo
from the following among other risks: "Perils . . . of the seas, x x
x.”
Issue: whether the insurer is liable on this policy for the loss
caused by perils of the seas
Decision:
No. It must be considered to be settled, furthermore, that a loss
which, in the ordinary course of events, results from the natural
and inevitable action of the sea, from the ordinary wear and tear
of the ship, or from the negligent failure of the ship's owner to
provide the vessel with proper equipment to convey the cargo
under ordinary conditions, is not a peril of the sea. Such a loss is
rather due to what has been aptly called the "peril of the ship."
The insurer undertakes to insure against perils of the sea and
similar perils, not against perils of the ship. In the present case
the entrance of the sea water into the ship's hold through the
defective pipe already described was not due to any accident
which happened during the voyage, but to the failure of the
ship's owner properly to repair a defect of the existence of which
he was apprised. The loss was therefore more analogous to that
which directly results from simple unseaworthiness than to that
which results from perils of the sea. As applied to the present insurance company (FilMerchant) under policy no. M-2678 for
case it results that the owners of the damages rice must look to P267,653.59 and for goods described as 600 metric tons of
the shipowner for redress and not to the insurer. fishmeal in new gunny bags of 90 kilos each. What was actually
imported was 59.940m tons in 666 gunny bags. Upon arrival at
Manila, arrastre and defendant’s surveyor found 227 bags in
G.R. No. 76145 June 30, 1987 CATHAY INSURANCE CO.,
bad order condition. Because of this loss, buyer formally
petitioner, vs. HON. COURT OF APPEALS, and REMINGTON
claimed from FilMerchant but the said insurance company
INDUSTRIAL SALES CORPORATION, respondents. refused to pay. He brought suit. Trial court ruled for him and
against FilMerchant, CA affirmed trial court hence this
petition.
FACTS:
A complaint was filed by private respondent corporation against Issue:
petitioner (then defendant) company seeking collection of the Whether or not the insured had insurable interest over
sum of P868,339.15 representing private respondent's losses and the property insured
damages incurred in a shipment of seamless steel pipes under an
insurance contract in favor of the said private respondent as the Held:
insured, consignee or importer of aforesaid merchandise while in Anent the issue of insurable interest, we uphold the
transit from Japan to the Philippines on board vessel SS "Eastern ruling of the respondent court that private respondent, as
Mariner." The total value of the shipment was P2,894,463.83 at consignee of the goods in transit under an invoice containing the
the prevailing rate of P7.95 to a dollar in June and July 1984, when terms under "C & F Manila," has insurable interest in said goods.
the shipment was made. The trial court decided in favor of private Section 13 of the Insurance Code defines insurable interest in
respondent corporation by ordering petitioner to pay it the sum property as every interest in property, whether real or personal,
of P866,339.15 as its recoverable insured loss equivalent to 30% or any relation thereto, or liability in respect thereof, of such
of the value of the seamless steel pipes; ordering petitioner to pay nature that a contemplated peril might directly damnify the
private respondent interest on the aforecited amount at the rate insured. In principle, anyone has an insurable interest in property
of 34% or double the ceiling prescribed by the Monetary Board who derives a benefit from its existence or would suffer loss
per annum from February 3, 1982 or 90 days from private from its destruction whether he has or has not any title in, or lien
respondent's submission of proof of loss to petitioner until paid as upon or possession of the property.Insurable interest in property
provided in the settlement of claim provision of the policy; and may consist in (a) an existing interest; (b) an inchoate interest
ordering petitioner to pay private respondent certain amounts for founded on an existing interest; or (c) an expectancy, coupled
marine surveyor's fee, attorney's fees and costs of the suit. with an existing interest in that out of which the expectancy
arises.
ISSUE: WON the rusting of steel pipes in the course of a voyage is
a "peril of the sea" in view of the toll on the cargo of wind, water, Herein private respondent, as vendee/consignee of the goods in
and salt conditions. transit has such existing interest therein as may be the subject of
a valid contract of insurance. His interest over the goods is based
RULING: on the perfected contract of sale.The perfected contract of sale
between him and the shipper of the goods operates to vest in
There is no question that the rusting of steel pipes in the course him an equitable title even before delivery or before be
of a voyage is a "peril of the sea" in view of the toll on the cargo performed the conditions of the sale. The contract of shipment,
of wind, water, and salt conditions. At any rate if the insurer whether under F.O.B., C.I.F., or C. & F. as in this case, is
cannot be held accountable therefor, We would fail to observe a immaterial in the determination of whether the vendee has an
cardinal rule in the interpretation of contracts, namely, that any insurable interest or not in the goods in transit. The perfected
ambiguity therein should be construed against the contract of sale even without delivery vests in the vendee an
maker/issuer/drafter thereof, namely, the insurer. Besides the equitable title, an existing interest over the goods sufficient to be
precise purpose of insuring cargo during a voyage would be the subject of insurance.
rendered fruitless. Be it noted that any attack of the 15-day clause C & F contracts are shipment contracts. The term means that the
in the policy was foreclosed right in the pre-trial conference. price fixed includes in a lump sum the cost of the goods and
freight to the named destination. It simply means that the seller
must pay the costs and freight necessary to bring the goods to
the named destination but the risk of loss or damage to the
G.R. No. 85141 November 28, 1989 FILIPINO MERCHANTS goods is transferred from the seller to the buyer when the goods
INSURANCE CO., INC., petitioner, vs. COURT OF APPEALS and pass the ship's rail in the port of shipment.
CHOA TIEK SENG, respondents.
Facts:
Oriental Assurance Corporation vs. Court of Appeals
This case is about a consignee/buyer who bought
fishmeal products from Bangkok and had it delivered to the port G.R. No. 94052. August 9, 1991.
of Manila. He entered into an insurance contract with defendant FACTS:
Sometime in January 1986, Panama Sawmill Co., Inc. (Panama) More importantly, the insurer’s liability was for “total loss
bought in Palawan 1,208 pieces of apitong logs and hired only.” A total loss may be either actual or constructive (Sec.
Transpacific Towage, Inc., to transport the logs by sea to Manila 129, Insurance Code). An actual total loss is caused by:
and insured it against total loss for P1M with petitioner Oriental
1 A total destruction of the thing insured;
Assurance Corporation (Oriental Assurance). There is a claim by
Panama, however, that the insurance coverage should have been 2 The irretrievable loss of the thing by sinking, or
for P3M were it not for the fraudulent act of one Benito Sy Yee by being broken up;
Long to whom it had entrusted the amount of P6,000.00 for the
3 Any damage to the thing which renders it
payment of the premium for a P3M policy.
valueless to the owner for the purpose for which he held it; or
The logs were loaded on two (2) barges: 610 pieces of logs with a
4 Any other event which effectively deprives the
volume of 1,000 cubic meters on the first barge; and 598 pieces
owner of the possession, at the port of destination, of the thing
of logs, also with a volume of 1,000 cubic meters on the second
insured.” (Section 130, Insurance Code).
barge.
A constructive total loss is one which gives to a person insured a
On 28 January 1986, the two barges were towed by one tugboat,
right to abandon, under Section 139 of the Insurance Code. This
but during the voyage, rough seas and strong winds caused
provision reads:
damage to the second barge resulting in the loss of 497 pieces of
logs out of the 598 pieces loaded thereon. “SECTION 139. A person insured by a contract of marine
insurance may abandon the thing insured, or any particular
Panama demanded payment for the loss but Oriental Assurance portion thereof separately valued by the policy, or otherwise
refuse on the ground that its contracted liability was for “TOTAL separately insured, and recover for a total loss thereof, when
LOSS ONLY.” the cause of the loss is a peril insured against.
Panama filed a Complaint for Damages against Ever Insurance 1 If more than three-fourths thereof in value is
Agency (allegedly, also liable), Benito Sy Lee Yong and Oriental actually lost, or would have to be expended to recover it from
Assurance, before the Regional Trial Court of Kalookan. the peril;
The RTC rendered judgement ordering Oriental Assurance to pay 2 If it is injured to such an extent as to reduce its
insurance indemnity to Panama and Panama to pay Ever value more than three-fourths;
Insurance Agency for attorney’s fees and moral damages.
Complaint against Benito Sy Lee Yong was dismissed. In the absence of either actual or constructive total loss, there
can be no recovery by the insured Panama against the insurer,
On appeal by both parties, respondent Appellate Court2 affirmed Oriental Assurance.
the lower Court judgment in all respects except for the rate of
interest, which was reduce from twelve (12%) to six (6%) per
annum. FINMAN GENERAL ASSURANCE CORPORATION, petitioner, vs.
ISSUE: THE HONORABLE COURT OF APPEALS and JULIA SURPOSA,
respondents.
Whether or not Oriental Assurance can be held liable under its
marine insurance policy based on the theory of a divisible FACTS:
contract of insurance and, consequently, a constructive total Carlie Surposa was insured with petitioner Finman General
loss. Assurance Corporation under Finman General Teachers
HELD: Protection Plan Master Policy No. 2005 and Individual Policy No.
08924 with his parents, spouses Julia and Carlos Surposa, and
brothers Christopher, Charles, Chester and Clifton, all surnamed,
No. The terms of the contract constitute the measure of the Surposa, as beneficiaries.
insurer’s liability and compliance therewith is a condition While said insurance policy was in full force and effect,
precedent to the insured’s right to recovery from the insurer the insured, Carlie Surposa, died on October 18, 1988 as a result
(Perla Compania de Seguros, Inc. v. Court of Appeals, G.R. of a stab wound inflicted by one of the three (3) unidentified
No. 78860, May 28, 1990, 185 SCRA 741). Whether a
men without provocation and warning on the part of the former
contract is entire or severable is a question of intention to be
as he and his cousin, Winston Surposa, were waiting for a ride on
determined by the language employed by the parties. The policy
their way home along Rizal-Locsin Streets, Bacolod City after
in question shows that the subject matter insured was the entire
attending the celebration of the "Maskarra Annual Festival."
shipment of 2,000 cubic meters of apitong logs. The fact that the
logs were loaded on two different barges did not make the Thereafter, private respondent and the other beneficiaries of
contract several and divisible as to the items insured. The logs on said insurance policy filed a written notice of claim with the
the two barges were not separately valued or separately insured. petitioner insurance company which denied said claim
Only one premium was paid for the entire shipment, making for contending that murder and assault are not within the scope of
only one cause or consideration. The insurance contract must, the coverage of the insurance policy.
therefore, be considered indivisible.
The petitioner contended alleging grove abuse of discretion on
the part of the appellate court in applying the principle of
"expresso unius exclusio alterius" in a personal accident
insurance policy since death resulting from murder and/or
assault are impliedly excluded in said insurance policy
considering that the cause of death of the insured was not
accidental but rather a deliberate and intentional act of the
assailant in killing the former as indicated by the location of the
lone stab wound on the insured. Therefore, said death was
committed with deliberate intent which, by the very nature of a
personal accident insurance policy, cannot be indemnified.
ISSUE: Whether or not death petitioner is correct that results
from assault or murder deemed are not included in the terms
“accident” and “accidental”.
HELD:
The terms “accident” and “accidental” as used in
insurance contracts have not acquired any technical
meaning, and are construed by the courts in their ordinary and
common acceptation. Thus, the terms have been taken to mean
that which happen 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.
It is well settled that contracts of insurance are to be construed under the exception -- is arguable. But what is not is that Lim had
liberally in favor of the insured and strictly against the insurer. removed the magazine from the gun and believed it was no
Thus ambiguity in the words of an insurance contract should be
interpreted in favor of its beneficiary.
Sun Insurance Office Ltd. vs. Court of Appeals [GR 92383, 17
July 1992]
Facts: Sun Insurance Office Ltd. issued Personal Accident Policy
05687 to Felix Lim, Jr. with a face value of P200,000.00. Two
months later, he was dead with a bullet wound in his head. As
beneficiary, his wife Nerissa Lim sought payment on the policy
but her claim was rejected. Sun Insurance agreed that there was own accident. Indeed, most accidents are caused by negligence.
no suicide. It argued, however, that there was no accident either. There are only four exceptions expressly made in the contract to
Pilar Nalagon, Lim's secretary, was the only eyewitnessto his
death. It happened on 6 October 1982, at about 10 p.m., after
his mother's birthday party. According to Nalagon, Lim was in a
happy mood (but not drunk) and was playing with his handgun,
from which he had previously removed the magazine. As she
watched the television, he stood in front of her and pointed the
gun at her. She pushed it aside and said it might be loaded. He
assured her it was not and then pointed it to his temple. The
next moment there was an explosion and Lim slumped to the
floor. He was dead before he fell.
The widow sued Sun Insurance in the Regional Trial Court of
Zamboanga City and was sustained. Sun
Insurance was sentenced to pay her P200,000.00, representing
the face value of the policy, with interest at the legal rate;
P10,000.00 as moral damages; P5,000.00 as exemplary damages; "the death of the Insured resulted directly from bodily injury
P50,000.00 as actual and compensatory damages; and P5,000.00 effected solely through external and violent means sustained in
as attorney's fees, plus the cost of the suit. This decision was
affirmed on appeal, and the motion for reconsideration was
denied. Sun Insurance then came to the Supreme Court.
Issue: Whether the insured willfully exposed himself to needless
peril and thus removed himself from the coverage of the
insurance policy.
Held: NO. An accident is an event which happens without any
human agency or, if happening through human agency, an event
which, under the circumstances, is unusual to and not expected
by the person to whom it happens. It has also been defined as an
injury which happens by reason of some violence or casualty to
the insured without his design, consent, or voluntary co-
operation. Herein, the incident that resulted in Lim's death was
indeed an accident.
On the other hand, the parties agree that Lim did not commit
suicide. Nevertheless, Sun Insurance contends that the insured
willfully exposed himself to needless peril and thus removed
himself from the coverage of the insurance policy. It should be
noted at the outset that suicide and willful exposure to needless
peril are in pari materia because they both signify a disregard for
one's life. The only difference is in degree, as suicide imports a
positive act of ending such life whereas the second act indicates
a reckless risking of it that is almost suicidal in intent. The
posture -- that by the mere act of pointing the gun to his temple,
Lim had willfully exposed himself to needless peril and so came
longer dangerous. He expressed assured her that the gun was
not loaded. It is submitted that Lim did not willfully expose
himself to needless peril when he pointed the gun to his temple
because the fact is that he thought it was not unsafe to do so.
The act was precisely intended to assure Nalagon that the gun
was indeed harmless. Lim was unquestionably negligent and that
negligence cost him his own life. But it should not prevent his
widow from recovering from the insurance policy he obtained
precisely against accident. There is nothing in the policy that
relieves the insurer of the responsibility to pay the indemnity
agreed upon if the insured is shown to have contributed to his
relieve the insurer from liability, and none of these exceptions is
applicable in the present case. It bears noting that insurance
contracts are as a rule supposed to be interpreted liberally in
favor of the assured. There is no reason to deviate from this rule,
especially in view of the circumstances of the case.
BIAGTAN, vs. THE INSULAR LIFE ASSURANCE COMPANY, LTD.
G.R. No. L-25579 (1972)
Facts:
• Juan S. Biagtan was insured with defendant Insular
Life under Policy No. 398075 for the sum of P5,000.00 and,
under a supplementary contract denominated "Accidental
Death Benefit Clause, for an additional sum of P5,000.00. if
an accident ... and independently of all other causes." The innocent insofar as such intent is concerned. The manner of
clause, however, expressly provided that it would not apply execution of the crime permits no other conclusion.
where death resulted from an injury "intentionally inflicted by
• Court decisions in the American jurisdiction, where
another party."
similar provisions in accidental death benefit clauses in
• The life policy and supplementary contract were in insurance policies have been construed, may shed light on
full force and effect. the house of insured Juan S. Biagtan the issue before Us. Thus, it has been held that "intentional" as
was robbed by a band of robbers who were charged for used in an accident policy excepting intentional injuries inflicted
robbery with homicide. the robbers, on reaching the staircase by the insured or any other person, etc., implies the exercise of
landing on the second floor, rushed towards the door of the the reasoning faculties, consciousness and volition.1 Where a
second floor room, where they suddenly met a person near the provision of the policy excludes intentional injury, it is the
door of one of the rooms who turned out to be the insured Juan intention of the person inflicting the injury that is controlling.2 If
S. Biagtan who received thrusts from their sharp-pointed the injuries suffered by the insured clearly resulted from the
instruments, causing wounds on the body of said Juan S. Biagtan intentional act of a third person the insurer is relieved from
resulting in his death. liability as stipulated.3
• Beneficiaries of the insured, filed a claim under the • In the case of Hutchcraft's Ex'r v. Travelers' Ins.
policy and was paid the basic amount of P5,000.00 Co., , the insured was waylaid and assassinated for the
However Insular refused to pay the additional sum of P5,000.00 purpose of robbery. the Court held that while the
under the accidental death benefit clause, on the ground that assassination of the insured was as to him an unforeseen
the insured's death resulted from injuries intentionally inflicted event and therefore accidental, "the clause of the proviso that
by third parties and therefore was not covered. Beneficiaries excludes the (insurer's) liability, in case death or injury is
filed suit to recover, and after due hearing the court a quo intentionally inflicted by another person, applies to this case."
rendered judgment in their favor. Hence the present appeal by
• WHEREFORE, the decision appealed from is
the insurer.
reversed and the complaint dismissed, without pronouncement
Issue: as to costs.
whether under the facts are stipulated and wounds received by
the insured at the hands of the were inflicted intentionally.
Held:
• The court, in ruling negatively on the issue, stated
that since the parties presented no evidence and submitted
the case upon stipulation, there was no "proof that the act
of receiving thrust (sic) from the sharp-pointed instrument of
the robbers was intended to inflict injuries upon the person of
the insured or any other person or merely to scare away any
person so as to ward off any resistance or obstacle that might be
offered in the pursuit of their main objective which was
robbery."
• The exception in the accidental benefit clause invoked
by the appellant does not speak of the purpose, but only of the
fact that such injuries have been "intentionally" inflicted,
although received at the hands of a third party, are purely
accidental.
• Gang of robbers enter a house and coming face to face
with the owner, even if unexpectedly, stab him repeatedly, it is
contrary to all reason and logic to say that his injuries are not
intentionally inflicted, regardless of whether they prove fatal or
not. As it was, in the present case they did prove fatal, and the
robbers have been accused and convicted of the crime of
robbery with homicide.
• The case of Calanoc vs. Court of Appeals, 98 Phil.
79, is relied upon by the trial court in support of its decision.
A single shot fired from a distance, and by a person who was not
even seen aiming at the victim, could indeed have been fired
without intent to kill or injure, nine wounds inflicted with bladed
weapons at close range cannot conceivably be considered as