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DVOR, College of Law

INSURANCE LAW
Judge Manasseh S. Bastes
BACA (U.P.), LLB (USC)
(1st Semester, AY 2018-2019)

Class Rules:

1. Attendance is a must. A total of more than eight (8) class hours shall automatically drop a
student from the roll.

2. Read all assigned laws and jurisprudence. Recitation and quizzes shall constitute 50% of
the grade. The other 50% shall be taken from major examinations.

3. Make-up examinations shall not be allowed, except only in case of medical emergency of
the student. Failure to take the examination, quiz or recitation on the scheduled date or
session shall mean a zero score in that examination, quiz or recitation.

4. All electronic gadgets, books, notes, etc. must be placed below the seat, except writing
pens and blank papers during quizzes and examinations.

COURSE OUTLINE
I. GENERAL
A. Concept, purpose, history

B. Definition of insurance contract - Sec. 2(a), lnsurance Code (lC)1

C. Nature and characteristics of insurance contracts


De Leon, lnsurance Code Annotated, pages 17-44 (2015 Ed.)

D. Requisites for validity in general- Civil Code on validity of contracts

Articles 1318, 1319, 1353, Civil Code



Enriquez v. Sun Life Assurance, GR 15895, 29 Nov. 1920

Perez v. CA, GR 112329. 28 January 2000

De Lim v. Sun Life of Canada, GR 15774, Nov. 29, 1920

Musngi v. West Coast Life, GR 41794,30 Aug. 1935

E. Essential elements

Gulf Resorts v. Philippine Charter lns., GR 156167, 16 May 2005
Philamcare Health Systems v. CA, GR 125678, 18 March 2002

F. Applicability of CivilCode

1 RA 10607 adopted amendments to PD 612 (lnsurance Code) which are intended to strengthen
the insurance industry. Substantive insurance law remains the same. Due to the addition of some
new sections (starting with Sec. 78 allowing government employees to pay premiums through
salary deductions) section references are to the lnsurance Code as amended by RA 10607.
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Art. 2011,2012,739, Civil Code

lnsular Life v. Ebrado, GR 44059, 28 October 1977
Zenith lnsurance v. CA, GR 85296, 14 May 1990

G. Subrogation

Article 2027, Civil Code

Fireman's Fund et al v Jamila et al., GR27427, 7 April 1976



Pan Malayan lnsurance v CA, GR 81026, 3 April 1990
SverigesAnfartygs Assurance v Qua Chee Gan, L-22146, 5 Sept 1967
Rizal Surety v Manila Railroad, GR L-24043,25 April 1968

St. Paul Fire v Macondray, GR L-27796,25 March 1976

National Union Fire lnsurance v. Stolt Nielsen, GR 87958, 26 April 1990
Cebu Shipyard vWilliam Lines, GR 132607,5 May 1999

Manila Mahogany v CA, GR L-52756,12 October 1987

F .F . Cruz v CA, GR L-52732, 29 August 1988

H. Construction of insurance contracts



De la Cruz v. Capital lnsurance, GR L-21 574, 30 June 1966

Sun lnsurance Office Ltd v CA, GR 92383, 17 July 1992

Ty v Filipinas Cia de Seguros, GR L-21821-22 and L-21824-27, 31 May 1966
Calanoc v CA, GR 81 51 , 16 Dec,ember 1955

Biagtan v lnsular Life, GR L-25579,29 March 1972

Finman GeneralAssurance v CA, GR 100970, 2 September 1992

Qua Chee Gan v Law Union and Rock, GR L-4611,17 December 1955
Del Rosario v. Equitable lnsurance and Casualty, GR L-16215, 29 June 1963
Verendia v CA, GR 75605, 22 January 1993

Fortune lnsurance v CA, GR 115278,23 May 1995
Misamis Lumber v Capital lnsurance, GR L-21380, 20 May 1996

l. The Business of lnsurance



Section 2(2),lC

White Gold Marine v Pioneer lnsurance, GR 154514,28 July 2045
Philamlife v Ansaldo, GR 76452,26 July 1994

ll. Contract of insurance


A. What may be insured against


Sections 3-4, lC;


De Leon, pages 65-72

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B. Parties to insurance contracts
De Leon, pages 74-88


1. Who may be an insurer


Sec.6, lC


2. Who may be insured


Sec.7, lC


Filipinas Cia. De Seguros v Christern Huenefeld, GR L-2294,25 May1951


Constantino v Asia Life, GR L-1669, 31 August 1950

Fidela Sales Gonzaga v Crown Life, GR L4197,20 March 1957

3. Mortgagor/mortgagee
Sec. 8 and 9, lC; Sec. 13 and 53, lC

Palileo v Cosio, GR L-7667,28 November 1955

San Miguel Brewery v Law Union, GR L-14300, 19 January 1920
Gonzalez LaO v Yek Tong Lin Fire, GR 33131, 13 Dec. 1930
Geagonia v. CA, GR 114427,6 February 1995

Saura lmport & Export v Phil lnt'l Surety, GR L-15184,31 May 1963
Phil. National Bank v CA, GR L-57757,31August 1987

C. lnsurable interest
Sec. 18,25,!C;
De Leon, pp.89-135

1. lnsurable interest in life insurance


Sec. 10, lC; Sec. 184, lC


Lalican v. lnsular Life, GR 183526, 25 August 2009


El Oriente v Posadas, GR 34774, 21 September 1931

2. Beneficiaries

Sections 11 and12,lC

Art.2012 and 739, Civil Code


lnsular Life v Ebrado, GR L-44059, 28 October 1977


Vda. De Consuegra v GSIS, GR L-28093, 30 January 1971
Southern Luzon Employees v Golpeo, GR L-6114, 30 October 1954
Heirs of Maramag v Maramag, GR 181132,5 June 2009
Philamcare v CA, GR 125678, 18 March 2002

Nario V Phil Am Life, GR l-22796, 26 June 1967
Phil Am Life v Pineda, GR L-54216, 19 July 1989
Villanueva v Oro, GR L-2227, 31 August 1948

3. lnsurable interest in property insurance


Sections 13 to 18, lC; Section 25, lC

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Harvardian College v Gountry Bankers (CA), CA CV 03771, 6 Jan. 6, 1986, CARA 1

Gaisan'o v lnsurance Co. of North America, GR 147839, I June 2006
Commercial Union Assurance v. Lepanto, GR L-52027,27 April 1982
Harding v Commercial Union, GR L-12707,10 August 1918

Lampano v Jose, GR L-9401, 30 March 1915

Ong Lim Sing, Jr. v FEB Leasing, GR 168115, 8 June 2007

Traders lnsurance v Golangco, GR L-6442,21 September 1954
Lopez v del Rosario, GR L-19189,27 November 1922

San Miguel v Law Union Rock lnsurance, GR L-14300, 19 Jan.1920
Spouses Cha v Court of Appeals, GR 124520, 18 August 1997

4. When insurable interest must exist



Sections 19, 20, 21, 22, 23, 24, 25, lC

Tai Tong Chua Che v lnsurance Com, GR L-55397 ,29 February 1988
Bachrach v British American lnsurance, L-5715,2A December 1910

San Miguelv Law Union Rock Insurance, GR L-14300, 19 January 1920

D. Concealment

Sections 26-35, IC;
De Leon, pages 136-154

Argente v West Coast Life, GR L-24899, 9 March 1928

Great Pacific Life v CA, GR L-31845, 30 April 1979

Saturnino v Philippine American Life, GR L-16163, 28 February 1963
Canilang v CA and Great Pacific Life, GR 92492,17 June 1993

Sun Life v Bacani, GR 105135, 22 June 1995

Yu Pang Cheng v CA, GR L-12465, 29 May 1959

Ng Zee v Asian Crusader Life lnsurance, GR L-30685, 30 May 1983
Colado v lnsular Life, 51 O.G. (No. 12), 1955

E. Representation

Sections 37-48,|C;
De Leon, pages 155-175

Edillon v Manila Bankers Life, GR L-34200,30 September 1982
lnsular Life v Feliciano, GR L-47593, 29 December 1943

Tan Chay Heng v West Coast Life, GR L-27541,21 Nov. 1927
Tan v Court of Appeals, GR 48049,29 June 1989

F. The Policy

1. Sections 49-52; Sec.232, IC
De Leon, pages 177-224

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[Sec. 233, lC (mandatory provisions - individual life insurance policies)
Sec. 234, lC (mandatory provisions - group life insurance policy)
Sec. 236, 237, lC (mandatory provisions - industrial life insurance)l

Pacific Banking v CA, GR L-41014,28 November 1988


OrientalAssurance v Court of Appeals, GR 94052, 9 August 1991
Perez v CA, GR 112329,28 January 2000

Enriquez v Sun Life, GR L-15895, 29 November 1924

Tang v CA, GR L48563, 25 May 1979
Rizal Commercial Banking v CA, GR 128833,20 April 1998
Great Pacific Life CA, GR L-31845, 30 April 1979

De Lim v Sun Life of Canada, GR 15774,29 Nov 1920

2. Sections 53-58, IC

Bonifacio Brothers v Mora, GR L-20853,29 May 1967

Heirs of Maramag v Maramag, GR 181132,5 June 2009

Coquia v Fieldmen's lnsurance, GR L-23276,29 November 1968 


3. Sections 59-62, lC

Development lnsurance v. lAC, GR 71360, 16 July 1986 


4. Section 63, lC

ACCFA v Alpha lnsurance, GR L-24566, 29 July 1968
Ang v Fulton Fire lnsurance, GR L-15862, 31 July 1961
Sun lnsurance CA, GR 89741; 13 March 1991

Pacific Banking v CA, GR L-41014,28 November 1988
Lopez v Cia de Seguros, GR L-19613, 30 April 1966 


5. Sections 64-66, lC

Saura lmport & Export v Phil lnt'l Surety, GR L-15'184, 31 May 1963
Malayan lnsurance v Cruz-Arnaldo, GR L-67835, 12 October 1987 


G. Warranties

Sections 67-76, lC


Sta. Ana v Commercial Union lnsurance, GR L-32889, 20 Nov. 1930



Ang Giok Chip v Springfield Fire & Marine, GR L-33637, 31 December 1931
Young v Midland Textile, GR L-9370, 31 March 1915

American Home Assurance v Tantuco, GR 138941; 6 October 2001

Qua Chee Gan v Law Union & Rock lnsurance, GR L4611,17 Dec. 1955
Fieldman's lnsurance v Songco, GR 24833,23 September 1968

Pioneer lnsurance v Yap, GR L-36232,19 Dec. 1974

Prudential Guarantee v Trans Asia, GR 151890, 20 June 2006

General Insurance v Ng Hua, GR L-14373, 30 January 1960

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H. Premium

Sections 77-84,|C

Philippine Phoenix v Woodworks, GR L-22684,31 August 1967

Philippine Phoenix v Woodworks, GR L-25317,6 August 1979

Arce v Capital lnsurance, GR L-28501, 30 September 1985

MakatiTuscany v CA, GR 95546, 6 November 1992

Tibay v CA, GR 119655, 24 May 1996

UCPB General V Masagana Telamart, GR 137172,15 June 1999 and
UCPB General v Masagana Telamart, GR 137172,4 April 2001
American Home lns. v Chua, GR 130421, 28 June 1999
Great Pacific Life v CA, GR 57308, 28 April 1990

l. Loss and Notice of Loss

1. Sections 85-89, lC

Paris-Manila Perfume v Phoenix Assurance, GR L-25845,17 Dec 1926
Prats v PhoenixAssurance, GR L-28607,21 February 1929

East Furniture v Globe & Rutgers Fire, L-35848,57 Phil 576 (1929)
Country Bankers v Lianga Bay Multipurpose, GR 36914, 25 January 2002
Heirs of Coscolluela v Rico General, GR 84628,16 Nov. 1989
FGU lnsurance v CA, GR 137775,31 March 2005 2. Sections 90-94, lC

2. Sections 90-94, lC

Malayan lnsurance v Cruz Arnaldo, GR L-67835, 12 October 1987


Yu Ban Chan v Fieldmen's lnsurance, GR L-19851, 29 June 1965
Go Lu v Yorkshire lnsurance, G.R. No. L-18090, 25 July 25 1922
Pacific Banking v CA, GR L41014,28 November 1988
Pacific Timber v CA, GR L-38613,25 February 1982
Phil. Charter lns. v Chemoil Lighterage, GR 136888, 29 June 2005

J. Double lnsurance

Sections 95-96, lC


Geagonia v CA, GR 114427,6 February 1995



Pacific Bank v CA, L41014,28 November 1988

Sta. Ana v Commercial Union lnsurance, GR L-32889, 20 Nov. 1930

Pioneer lnsurance v Yap, L-36232, 19 December 1974

New Life lnsurance v CA, GR 94071, 31 March 1992

Emilio Gonzalez La O v Yek Tong Lin, GR L-33131, 13 Dec. 1930

General lnsurance v Ng Hua, GR L-14373, 30 January 1960

Union Manufacturing & Republic Bank v Philippine Guaranty, GR L-27932, 30 October
1972

K. Reinsurance


Sections 98-100, lC


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Fieldmen's lnsurance v Asian Surety, L-23447 ,31 July 1970

Pioneer lnsurance v CA, GR 84197,28 July 1989

Gibson v Revilla, GR L41432, 30 July 1979

Artex Development v Wellington lnsurance, GR L-29508, 27 June 1973

lll. Marine lnsurance


A. Scope

1. What marine insurance includes

Section 101,|C

De Leon, pages 326-338

2. Perils of the ship; perils of the sea; All Risks insurance

Roque v lAC, G.R. No. L-66935 November 11, 1985

La Razon Social Go Tiaoco v Union lnsurance, GR 13983, 1 Sep. 1919
ChoaTek Seng v CA & Filipino Merchants, GR84507, 15 March 1990
Filipino Merchants v CA & ChoaTekTeng, GR 85141, 28 Nov. 1989 


B. lnsurable interest in marine insurance



De Leon, pages 540

Sections 102-108, !C

Caltex Phil v Sulpicio Lines, GR 131166, 30 Sept. 1999
San Miguel v Heirs of Sabiniano lnguito, [G.R. No. 141716. July 4, 2002]

C. Concealment and representation in marine insurance

De Leon, pages 349-352


Sections 109-112, lC; Sec. 1 13-114, lC 


D. lmplied warranties

1. Seaworthiness

Sections 115-121, lC

Philippine American General lns. v CA, 116940, 11 June 1997
Caltex Phil v Sulpicio Lines, GR 131166, 30 September 1999
Delsan Transport v CA, [G.R. No. 127897. November 15, 20011
Madrigal v Hanson, GR L-6106-07, 18 April 1958

Roque v lAC, GR L-66935, 11 November 1985 


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2. Documents where nationality expressly warranted Section 122,|C 


3. Against deviation

De Leon, pages 365-368

Sections 123-128,|C

E. Loss in marine insurance



Sections 129-139, lC


De Leon, pages 368-378


PMC v Union lnsurance, GR L-16473,22 November 1921


Malayan v CA, GR 119599, 20 March 1997
Pan Malayan v CA, GR 95070, 5 September 1991

F. Abandonment

Sections 140-157, lC

Oriental Assurance v CA, GR 94052, I August 1991

G. Measure of indemnity in marine insurance

Sections 156-166, lC

Jarque v Smith Bell, GR L-32986, November 1930

lV. Fire lnsurance



Sections 169-175,1C


De Leon, pages 402


Bachrach v British American Assurance, GR L-5715, 20 Dec- 1 910


Ong Guan Can v Century lnsurance, GR L-21196, 6 February 1924
Galian v State Assurance, GR L-8405, 10 February 1915

V. Casualty lnsurance


Section 176, lC


De Leon, pages 417-433


Sections 386-402, lC (Comprehensive Motor Vehicle Liability Insurance


Pan Malayan lnsurance v CA, GR 81026, 3 April 1990



De la Cruz v. Capital Insurance, GR L-21 574, 30 June 1966


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Sun lnsurance Office Ltd v CA, GR 92383, 17 July 1992

Ty v Filipinas Cia de Seguros, GR L-21821-22 and L-21824-27, 31 May 1966
Calanoc v CA, GR 8151, 16 December'1955

Biagtan v lnsular Life, GR L-25579, 29 March 1972

Finman GeneralAssurance v CA, GR 100970, 2 September 1992

Fortune lnsurance v CA, GR 115278,23 May 1995

Misamis Lumber v Capital lnsurance, GR L-21380, 20 May 1966
Villacorta v lnsurance Commission, GR 54171, 28 October 1980
Perla Cia de Seguros v CA, GR 96452,7 May 1992

Association of Baptists v Fieldmen, GR L-28772,21 September 1983
Shaferv RTC Judge, GR 78848, 14 November 1988
Guingon v Del Monte, GR L-22042,17 August 1967

Malayan lnsurance v CA and Vallqios, et al., GR L-36413, 26 Sept. 1988
Vda de Maglana v Consolacion, GR 60506, 6 August 1992

Vl. Suretyship


Sections 177-180, lC


De Leon, pages 435-445


National Power Corporation v CA, GR L-43706 14 November 1986


Leyson v Rizal Surety, GR L-21250, 31 March 1966

Philippine Pryce Assurance v. CA, GR 107062,21 February 1994
AFP General lnsurance v. Molina, GR 151133, 30 June 20Og
Capital lnsurance v. Ronquillo Trading, GR L-36488, 25 July 1983

Vll. Life lnsurance Sections 181-186; lC


Section 233, lC (mandatory provisions - individual life insurance policies)

Vlll. Other provisions


A. Claims settlement


Sections 247-251,|C


Cathay lnsurance v CA, GR 85624, 5 June 1989


Zenith lnsurance v. CA, GR 85296, 14 May 1990 


B. Mutualization


Section 268, lC


Republic v Sun Life, G.R. No. 158085,14 October 2005 


C. lnsurance agents and brokers


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Sections 307, 308, 309 - lnsurance agent

Sections 310-311 - insurance brokers 


D. Adjusters - Section 332, lC

Actuary - Sec. 344,lC 


E. Bancassuran@ - Sec. 375-377,|C

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