[RISKS AND COVERAGES – MOTOR VEHICLE INSURANCE] ● The Schedule doesn’t purport to restrict the kinds of damages that

sn’t purport to restrict the kinds of damages that may be

25 WESTERN GUARANTY CORP. V. CA, PRISCILLA E. RODRIGUEZ, and DE awarded against Western once liability has arisen. All kinds of damages
DIOS TRANSPORTATION CO., INC. allowable by law—actual or compensatory, moral, nominal, liquidated, etc.—
July 20, 1990 | Feliciano, J. | may be awarded against the insurer. Schedule of Indemnities was not
intended to be an enumeration, much less a closed enumeration, of the
Doctrine: Contractual limitations of liability found in insurance contracts should be specific kinds of damages which may be awarded under the Master Policy
regarded by courts with a jaundiced eye and extreme care and should be so Western has issued.
construed as to preclude the insurer from evading compliance with its just obligations. ● The reading urged by Western of the Schedule of Indemnities comes too
As a contract of adhesion, insurance contracts should be construed strictly against close to working fraud upon both the insured and the third party beneficiary.
the party which prepared the contract. This would limit the otherwise unlimited and comprehensive scope of liability
assumed by Western under Sec. 1: “all sums necessary to discharge liability
Facts: of the insured in respect of [bodily injury to a third party].” This reading will
● Rodriguez was struck by a De Dios Transportation Co. (DDTC) passenger be repugnant to public policy. Western should have then used more precise
bus while crossing a pedestrian lane along Airport Road. The bus driver language if this is what they had intended, so that the insured may be
disregarded the stop signal of the traffic policeman. properly informed.
○ Priscilla was thrown to the ground and was treated at the San Juan ● See doctrine!
De Dios hospital. Her face was permanently disfigured, causing her
anxiety and stress. Dispositive
● DDTC was insured with petitioner Western Guaranty Corp., wherein the ACCORDINGLY, the Court Resolved to DENY the Petition for Review for lack of
Master Policy provided for protection against third party liability. merit Costs against petitioner.
○ “Company will, subject to the Limits of Liability, pay all sums
necessary to discharge liability of the insured in respect of death or
bodily injury or damage to property of any third party caused by or
arising out of the use of the vehicle…With respect to death of or
bodily injury to any third party or passenger, the company's
payment per victim in any one accident shall not exceed the limits
indicated in the Schedule of Indemnities provided for in this policy.”
● Rodriguez filed a complaint for damages in the RTC against DDTC, which in
turn, filed a third-party complaint against its insurance carrier Western.
● Trial court ordered DDTC to pay actual and moral damages as well as
compensation for loss of earnings, and attorneys fees. Whatever may be left
unpaid by DDTC is to be paid by Western Guaranty by way of contribution,
indemnity or subrogation, to the extent of not more than P50,000.
● Western, in this Petition for Review, contends that it cannot be held liable for
loss of earnings, moral damages and attorney’s fees because these items
are not included in the Schedule of Indemnities set forth in the insurance
policy.
○ Western in effect contends that because the Schedule of
Indemnities limits the amount payable for certain kinds of expenses
— "hospital room", "surgical expenses", "operating room" and
"medical expenses" — that Schedule should be read as excluding
liability for any other type of expense or damage or loss even
though actually sustained or incurred by the third party victim.

Issue:
W/N Western is liable beyond the Schedule of Indemnities set forth in the policy.

Held:
YES. The Schedule of Indemnities does not purport to limit, or to enumerate
exhaustively, the species of bodily injury occurrence of which generate liability
for Western.