SUN INSURANCE OFFICE vs CA and NERISSA LIM
i) while the Insured Person is engaging in (or practicing for or
| G.R. No. 92383 | July 17, 1992 |
DOCTRINE: (Casualty Insurance) 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 cooperation.
FACTS: Sun Insurance issued Personal Accident Policy No. 05687 to Felix
Lim, Jr. Two months later, Felix died. It happened on 6 October 1982 at
22:00 while at his mother’s birthday party. His secretary Pilar Nalagon,
the only eyewitness, said that Felix played with his handgun by pointing
it at her while she watched television. She pushed it aside because it might
be loaded. Felix said it was not loaded and pointed it to his own head. The
next moment, there was an explosion and the dead body of Felix was
slumped on the floor.
His wife Nerissa filed a claim for the Php200,000 face value of the policy,
but Sun Insurance rejected it. Although Sun Insurance agreed that Felix
did not commit suicide, it argued that there was no accident either, because
it was Felix who willfully exposed his own self to needless peril. Such
action of Felix would exempt the insurer from liability.
This prompted Nerissa to file a complaint before the RTC. The RTC ruled
in Nerissa’s favor and ordered Sun Insurance to pay the full value of the
policy. The CA affirmed the decision. Hence this petition before the SC.
ISSUE: Whether or not Sun Insurance would be absolved from liability
HELD: NO. The incident that resulted in the death of Felix was an
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 own accident. Indeed, most accidents are caused
by negligence. There are only four exceptions expressly made in the
contract to relieve the insurer from liability, and none of these exceptions
is applicable in the case at bar.
**Exceptions:The Company shall not be liable in respect of
1. bodily injury
a) sustained
1.
taking part in training peculiar to) any of the Excluded Activities.
2. ii) by any person before such person attains the Lower Age Limit
or after the expiry of the Period of Insurance during which such
person attains the Upper Age Limit.
b) consequent upon
1. i) the Insured Person committing or attempting to commit suicide
or wilfully exposing himself to needless peril except in an attempt
to save human life.
2. ii) war, invasion, act of foreign enemy, hostilities (whether war be
declared or not) civil war, rebellion, revolution, insurrection, or
military or usurped power.
2. bodily injury or Death Disablement or Medical Expenses
consequent upon or contributed to by the Insured Person
1. a) having taken a drug unless the Insured proves that the drug was
taken in accordance with proper medical prescription and
directions and not for treatment of drug addiction.
2. b) suffering from pre-existing physical or mental defect or infirmity
which had not been declared to and accepted in writing by the
Company.
3. Death Disablement or Medical Expenses consequent upon or
contributed to by the Insured Person being pregnant or suffering
from sickness or disease not resulting from bodily injury or
suffering from bodily injury due to a gradually operating cause.
4. Risks of Murder and Assault.
Accident insurance policies were never intended to reward the insured for
his tendency to show off or for his miscalculations. They were intended to
provide for contingencies.
Sun Insurance used this analogy: “Hence, when I miscalculate and jump
from the Quezon Bridge into the Pasig River in the belief that I can overcome
the current, I have willfully exposed myself to peril and must accept the
consequences of my act. If I drown I cannot go to the insurance company to
ask them to compensate me for my failure to swim as well as I thought I
could.” In this example, when the insured braved the dangerous currents
below, he deliberately exposed himself to a known peril.
In contrast, Felix did not know that the gun he put to his head was
loaded. Although he was negligent in handling the gun, the exposure to
the peril was not deliberate on his part.
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Biagtan vs. The Insular Life Assurance Company, Ltd.
FACTS:
Juan S. Biagtan was insured with defendant InsularLife Assurance
Company 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 “the death of the Insured resulted
directly from bodily injury effected solely through external and violent
means sustained in an accident … and independently of all other causes.”
The clause, however,expressly provided that it would not apply where
death resulted from an injury”intentionally inflicted by another party.”
On the night of May 20, 1964, or during the first hours of the following day
a band of robbers entered the house of the insured Juan S. Biagtan. On the
night of May 20, 1964 or the first hours of May 21, 1964, while the said life
policy and supplementary contract were in full force and effect, the house
of insured Juan S. Biagtan was robbed by a band of robbers who were
charged in and convicted by the Court of First Instance of Pangasinan for
robbery with homicide; that in committing the robbery, the robbers, on
reaching the staircase landing on the second floor, rushed towards the door
of the second floor room, where they suddenly met a person near the door
of oneof the rooms who turned out to be the insured Juan S. Biagtan who
received thrusts from their sharp-pointed instruments, causing wounds on
the body of said Juan S. Biagtan resulting in his death.
Plaintiffs, as beneficiaries of the insured, filed a claim under the policy.
The insurance company paid the basic amount of P5,000.00 but refused to
pay the additional sum of P5,000.00 under the accidental death benefit
clause, on the ground that the insured’s death resulted from injuries
intentionally inflicted by third parties and therefore was not covered.
Plaintiffs filed suit to recover, and after due hearing the court a quo
rendered judgment in their favor. Hence the present appeal by the insurer.
ISSUE:
Whether under the facts are stipulated and found by the trial court the
wounds received by the insured at the hands of the robbers were inflicted
intentionally.
RULING:
Yes. It should be noted that the exception in the accidental benefit clause
invoked by the appellant does not speak of the purpose — whether
homicidal or not — of a third party in causing the injuries, but only of the
fact that such injuries have been “intentionally” inflicted — this obviously
to distinguish them from injuries which, although received at the hands of
a third party, are purely accidental. This construction is the basic idea
expressed in the coverage of the clause itself, namely, that “the death of
the insured resulted directly from bodily injury effected solely through
external and violent means sustained in an accident … and independently
of all other causes.”
But where a 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.
MISSING: MALAYAN INSURANCE vs CA
Far Eastern Surety & Insurance Company, Inc. v. Socorro Dancel
vda de Misa, Araceli Maria Pinto and La Mallorca
No. L-24377, 26 October 1968
FACTS:
(1) On Sept 3 1957, Socorro Dancel vda de Misa and Araceli Pinto
hired a taxi operated by La Mallorca in Quezon City and while on their
way to the Archbishop’s Palace in Shaw Blvd, they collided with a gravel
and sand truck. As a result, Misa and Pinto were injured and filed a suit
for damages against La Mallorca. La Mallorca denied liability but
instituted a third party complaint against Far Eastern (FESIC) to recoup
damages based on its Common Carrier’s Accident Insurance, however, they
also denied liability.
(2) The CFI found favor in Misa and Pinto against La Mallorca with
actual, moral, and exemplary damages and attorney's fees, payable by La
Mallorca; and sentenced the insurance company to pay to La Mallorca
P10,000.00 on its third party liability insurance. The CA affirmed the
decision of the CFI, hence this appeal.
ISSUE: Whether or not FESIC was liable as an insurer.
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HELD: NO, CA Decision is modified. By eliminating the award against the
appellant, Far Eastern Insurance Co., Inc., in favor of the taxicab operator,
La Mallorca, including the sharing of the costs of litigation, which shall be
exclusively borne by the latter entity. (La Mallorca lang ang liable)
RATIO:
The liability of the Far Eastern Surety is defined as follows: —
"l. The Company will subject to the Limits of Liability indemnify the
Insured in the event of accident caused by or arising out of the use of the
Motor Vehicle or in connection with the loading or unloading of the Motor
Vehicle against all sums including claimant's costs and expense which the
Insured shall become legally liable to pay in respect of:
(a) death of or bodily injury to any person
(b) damage to property
"The above-quoted stipulation exempts the Far Eastern Surety from
paying damages other than actual bodily injuries sustained by third
parties."
(1) We agree with the appellant that the decision of the Court of
Appeals on this point is not legally tenable, for the reason that the policy
of insurance limited the recovery of the insured to "all sums including
claimant's" (passengers in this case) "cost and expenses which the Insured
shall become legally liable" in the "event of accident caused by or arising
out of the use of the Motor Vehicle;" and the appealed decision itself shows
that the indemnity awarded to the passengers of the La Mallorca taxicab
was not because of the accident but was exclusively predicated on the
representation made by the taxicab company to its passengers that the
latter were insured against accidents.
a. The SC finds that La Mallorca had indeed insured its passengers
and since such stipulation was not at all illegal, it must bind La Mallorca,
enough to render it liable for the injuries to the passengers thereof, even
though it had not been at fault. (may sticker kasi sa taxi na insured ang
passengers)
(2) While La Mallorca was found to be in estoppel, it does not apply to
the insurer, FESIC. It did not appear that the insurance company
authorized or consented to, or even knew of, the representation made by
La Mallorca to its passengers, it follows that the source of the award of
damages against the taxicab was beyond the contemplation of the parties
to the contract of the Accident Insurance and that the insurer may not be
held liable for such damages. Thus, decision of CA is modified.
PHIL-NIPPON KYOIE, CORP. vs. ROSALIA GUDALESAO
GR NO. 181375 / July 13, 2016
Doctrine: Personal Accident Insurance; While the Personal Accident
Policies are casualty insurance, they do not answer for petitioner’s
liabilities arising from the sinking of the vessel. It is an indemnity
insurance procured by petitioner for the benefit of the seafarers.
FACTS: Petitioner, a domestic shipping corporation, purchased a "Ro-Ro"
passenger/cargo vessel "MV Mahlia" in Japan in February 2003. For the
vessel's one month conduction voyage from Japan to the Philippines,
petitioner, as local principal, and Top Ever Marine Management Maritime
Co., Ltd. (TMCL), as foreign principal, hired Edwin C. Gudelosao, Virgilio
A. Tancontian, and six other crewmembers. They were hired through the
local manning agency of TMCL, Top Ever Marine Management Philippine
Corporation (TEMMPC). TEMMPC, through their president and general
manager, Capt. Oscar Orbeta (Capt. Orbeta), and the eight crewmembers
signed separate contracts of employment. Petitioner secured a Marine
Insurance Policy (Maritime Policy No. 00001) from SOUTH SEA SURETY
& INSURANCE CO., INC. (SSSICI) over the vessel for P10,800,000.00
against loss, damage, and third party liability or expense, arising from the
occurrence of the perils of the sea for the voyage of the vessel from
Onomichi, Japan to Batangas, Philippines. This Marine Insurance Policy
included Personal Accident Policies for the eight crewmembers for
P3,240,000.00 each in case of accidental death or injury.
On February 24, 2003, while still within Japanese waters, the vessel sank
due to extreme bad weather condition. Only Chief Engineer Nilo Macasling
survived the incident while the rest of the crewmembers, including
Gudelosao and Tancontian, perished.8
Respondents, as heirs and beneficiaries of Gudelosao and Tancontian, filed
separate complaints for death benefits and other damages against
petitioner, TEMMPC, Capt. Orbeta, TMCL, and SSSICI, with the
Arbitration Branch of the National Labor Relations Commission (NLRC).
Labor Arbiter: Ruled that petitioner, TEMMPC, TMCL. Capt. Orbeta,
TMCL. Also, that the liability of petitioner is extinguished upon payment
of the insurer SSSICI.
NLRC: Absolved petitioner, TEMMPC, TMCL and Capt. Orbeta based on
limited liability rule. Only the insurer is liable.
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CA: The CA found that the NLRC erred when it ruled that the obligation
of petitioner, TEMMPC and TMCL for the payment of death benefits under
the POEA-SEC was ipso facto transferred to SSSICI upon the death of the
seafarers.
ISSUE: WON the CA erred in ruling that the liability of petitioner is
extinguished only upon SSSICI's payment of insurance proceeds.
HELD: SSSICI 's liability as insurer under the Personal Accident Policies
is direct.
We, however, find that the CA erred in ruling that "upon payment of [the
insurance] proceeds to said widows by respondent SOUTH SEA SURETY
& INSURANCE CO., INC., respondent PHIL-NIPPON CORPORATION's
liability to all the complainants is deemed extinguished."66
This ruling makes petitioner's liability conditional upon SSSICI's payment
of the insurance proceeds. In doing so, the CA determined that the Personal
Accident Policies are casualty insurance, specifically one of liability
insurance. The CA determined that petitioner, as insured, procured from
SSSICI the Personal Accident Policies in order to protect itself from the
consequences of the total loss of the vessel caused by the perils of the sea.
The CA found that the liabilities insured against are all monetary claims,
excluding the benefits under the POEA-SEC, of respondents in connection
with the sinking of the vessel.
We rule that while the Personal Accident Policies are casualty insurance,
they do not answer for petitioner's liabilities arising from the sinking of the
vessel. It is an indemnity insurance procured by petitioner for the benefit
of the seafarers. As a result, petitioner is not directly liable to pay under
the policies because it is merely the policyholder of the Personal Accident
Policies.
Section 176 (formerly Sec. 174) of The Insurance Code67 defines casualty
insurance as follows:
SEC. 174. Casualty insurance is insurance covering loss or liability arising
from accident or mishap, excluding certain types of loss which by law or
custom are considered as falling exclusively within the scope of other types
of insurance such as fire or marine. It includes, but is not limited to,
employer's liability insurance, motor vehicle liability insurance, plate glass
insurance, burglary and theft insurance, personal accident and health
insurance as written by non-life insurance companies, and other
substantially similar kinds of
insurance. (Emphasis supplied.)
Based on Section 176, casualty insurance may cover liability or loss arising
from accident or mishap.1âwphi1 In a liability insurance, the insurer
assumes the obligation to pay third party in whose favor the liability of the
insured arises.68 On the other hand, personal accident insurance refers to
insurance against death or injury by accident or accidental means.69 In an
accidental death policy, the accident causing the death is the thing insured
against.70
Notably, the parties did not submit the Personal Accident Policies with the
NLRC or the CA. However, based on the pleadings submitted by the
parties, SSSICI admitted that the crewmembers of MV Mahlia are insured
for the amount of P3,240,000.00, payable upon the accidental death of the
crewmembers.71 It further admitted that the insured risk is the loss of life
or bodily injury brought about by the violent external event or accidental
means.72 Based on the foregoing, the insurer itself admits that what is
being insured against is not the liability of the shipowner for death or
injuries to passengers but the death of the seafarers arising from accident.
The liability of SSSICI to the beneficiaries is direct under the insurance
contract.73 Under the contract, petitioner is the policyholder, with SSSICI
as the insurer, the crewmembers as the cestui que vie or the person whose
life is being insured with another as beneficiary of the proceeds,74 and the
latter's heirs as beneficiaries of the policies. Upon petitioner's payment of
the premiums intended as additional compensation to the crewmembers,
SSSICI as insurer undertook to indemnify the crewmembers' beneficiaries
from an unknown or contingent event.75 Thus, when the CA conditioned
the extinguishment of petitioner's liability on SSSICI's payment of the
Personal Accident Policies' proceeds, it made a finding that petitioner is
subsidiarily liable for the face value of the policies. To reiterate, however,
there is no basis for such finding; there is no obligation on the part of
petitioner to pay the insurance proceeds because petitioner is, in fact, the
obligee or policyholder in the Personal Accident Policies. Since petitioner
is not the party liable for the value of the insurance proceeds, it follows
that the limited liability rule does not apply as well.
One final note. Petitioner's claim that the limited liability rule and its
corresponding exception (i.e., where the vessel is insured) apply here is
irrelevant because petitioner was not found liable under tort or quasi-
delict. Moreover, the insurance proceeds contemplated under the exception
in the case of a lost vessel are the insurance over the vessel and pending
freightage for the particular voyage.76 It is not the insurance in favor of
the seafarers, the proceeds of which are intended for their beneficiaries.
Thus, if ever petitioner is liable for the value of the insurance proceeds
under tort or quasi-delict, it would be from the Marine Insurance Policy
over the vessel and not from the Personal Accident Policies over the
seafarers.
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MERCANTILE INSURANCE VS YSMAEL
Facts:
Felipe Ysmael, Jr. & Co., Inc. and Magdalena Estate, lnc. represented by
Felipe Ysmael, Jr. as president and in his personal capacity filed an
application for an overdraft line of 1M and credit line of 1M From PNB. As
a security Ysmael executed with Mercantile Insurance Co., Inc. a surety
bond which guarantees that Ysmael shall perform its undertakings with
PNB. Ysmael and Mercantile also executed a indemnity agreement.
Defendants Felipe Ysmael, Jr. & Co., Inc. and Felipe Ysmael, Jr. bound
themselves solidary liable to indemnify Mercantile, from and against any
and all payments, damages, costs, losses, penalties, charges and expenses
which said company as surety (MERICO Bond No. 0007) shall incur or
become liable to pay.
Paragraph 3 of the indemnity agreement expressly provides:
3) ACCRUAL OF ACTION: Notwithstanding the provisions of the next
preceding paragraph, where the obligation involves a liquidated amount
for the payment of which the company has become legally liable under the
terms of the obligation and its suretyship undertaking or by the demand of
the obligee or otherwise and the latter has merely allowed the COMPANY
a term or extension for payment of the latter's demand the full amount
necessary to discharge the COMPANY's aforesaid liability irrespective of
whether or not payment has actually been made by the COMPANY, the
COMPANY for the protection of its interest may forthwith proceed against
the undersigned or either of them by court action or otherwise to enforce
payment even prior to making payment to the obligee which may hereafter
be done by the COMPANY.
Ysmael failed to pay the overdraft and credit line with PNB. Philippine
National Bank demanded from Mercantile the settlement of its obligation
under the surety bonds.
Mercantile wrote a letter of demand to Ysmael regarding the letter of
demand from Philippine National Bank and the settlement of said account.
Ysmael still failed to settle their obligation.
On February 10, 1971, Mercantile brought the present action.
Lower court dismissed case for lack of cause of action, Ysmael argued that
Mercantile as surety has paid nothing in the surety bonds and thus they
have not suffered any actual damage and that paragraph 3 of contract is
void.
Ysmael argued that to allow surety to receive indemnity or compensation
for something it has not paid in its capacity as surety would constitute
unjust enrichment at the expense of another.
Issue:
1. Whether or not surety Mercantile can be allowed indemnification
from Ysmael, upon the latter's default even before Mercantile has paid to
the creditor PNB?
2. Whether or not the contract is void?
Held:
1. YES. MERCANTILE has cause of action and can be allowed
indemnification. Overdraft line of Php1M and the credit line of Php1M
applied for by Ysmael were granted by the Philippine National Bank on
the strength of the two surety bonds.
As security and in consideration of the execution of the surety bonds,
Ysmael executed with Mercantile identical indemnity agreements which
provide that payment of indemnity or compensation may be claimed
whether or not Mercantile has actually paid the same as provided in
paragraph 3 of contract.
The Indemnity Agreement is principally entered into as security of
plaintiff-appellee in case of default of defendants and the liability of the
parties under the surety bonds is SOLIDARY, so that the obligee PNB may
proceed against either of them for the satisfaction of the obligation.
2. NO. The contract is valid.
Defendants by virtue of the Indemnity Agreement, given the plaintiffs the
prerogative of filing an action even prior to its payment to PNB. There is
no dispute as to meaning of the terms of the Indemnity Agreement. Having
voluntarily entered into such contract, the appellants cannot now be heard
to complain. Their indemnity agreement have the force and effect of law.
The principal debtors, defendants herein, are the same persons who
executed the Indemnity Agreement. Thus, the position occupied by them is
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that of a principal debtor and indemnitor at the same time, and their
liability being solidary with the Mercantile, the Philippine National Bank
may proceed against either for fulfillment of the obligation as covered by
the surety bonds.