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icoft
hePhi
li
ppi
nes

SUPREMECOURT

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la

ENBANC

G.
R.No.
L-24833 
   
  Sept
ember23,
1968

FI
ELDMEN'
SINSURANCECO.
,I
NC.
,
 pet
iti
oner
, 

vs
.

MERCEDESVARGASVDA.
DESONGCO,
ETAL.
andCOURTOFAPPEALS,
 
res
pondent
s.

J
oseS.
Suar
ezf
orpet
iti
oner
.

El
igi
oG.
Lagmanf
orr
espondent
s.

FERNANDO,
 
J.:

Anins ur
anc efir
m,petiti
onerFi el
dmen' sIns uranc eCo.,Inc.,wasnotal l
owedt oes capeliabili
ty
underac ommonc ar
rierinsurancepol i
cyont hepret extthatwhatwasi nsured,notonc ebut
twi
ce,wasapr i
vatevehi c
leandnotac ommonc arri
er,t hepoli
cybei ngi s
s uedupont he
i
nsistenceofi tsagentwhodi scountedf ear soft hei ns ur
edt hathispr i
vatelyownedvehi c l
e
mightnotf allwit
hinit
st erms,theinsuredmor eoverbei ng" amanofs canteduc at i
on,
"finishing
onlyt hefirs
tgr ade.Soi twashel di nadec isionoft hel owercourtt hereafteraf f
irmedby
res
pondentCour tofAppeal s.Pet i
tioneri ns eeking t he revi
ew oft he above dec isi
on of
res
pondentCour tofAppeal scannotbes os anguineast oent er
tai
nt hebel iefthatadi fferent
outcomec ouldbeexpec ted.Tobemor eexpl ic i
t,wes ustaint heCour
tofAppeal s.

Thef
act
sasf
oundbyr
espondentCour
tofAppeal
s,bi
ndi
nguponus
,fol
low:"
Thi
sisapec
uli
ar
case.Feder icoSongc oofFl or idablanca,Pampanga,amanofs canteduc at ionbei ngonl yaf i
rst
grader. .
.,ownedapr ivatej eepneywi thPl ateNo.41- 289f ortheyear1960.OnSept ember15,
1960,ass uch pr ivate vehi cle owner ,he wasi nduced byFi eldmen' sI nsurance Company
PampangaagentBenj ami nSambatt oappl yf oraCommonCar r
ier'
sLi abi l
ityInsuranc ePol ic
y
coveringhi smot orvehic le...Uponpayi nganannualpr emi um ofP16. 50,def endantFi eldmen' s
I
ns uranceCompany,I nc.issuedonSept ember19,1960,CommonCar r
ier sAc c
identIns urance
PolicyNo. 45-HO-4254. ..thedur ati
onofwhi c
hwi l
lbef orone( 1)year,ef fec t
iveSeptember15,
1960t oSept ember15, 1961. OnSept ember22, 1961, t
hedef endantc ompany, uponpaymentof
thec orrespondi ngpr emi um,r enewedt hepol i
cybyext endingt hec over agef r
om Oc t ober15,
1961t oOc t
ober15, 1962. Thi stimeFeder i
c oSongc o'sprivatej
eepneyc arr i
edPl ateNo. J- 68136
-Pampanga- 1961.. ..OnOc tober29,1961,dur ingt heef fect
ivityoft her enewedpol i
c y,the
i
ns uredvehi clewhi lebei ngdr ivenbyRodol foSongc o,adul yli
cens eddriverands onofFeder i
co
(thevehi cl
eowner )c oll
idedwi thac arint hemuni cipali
tyofCal umpi t
,pr ovi nceofBul ac an, asa
resultofwhi chmi shapFeder icoSongc o( father)andRodol foSongc o( s
on)di ed,Car l
osSongc o
(anothers on),thel atter'
swi fe, Angelit
aSongc o, andaf ami l
yfri
endbyt henameofJ oseManuel
sustainedphys icalinjuriesofvar yingdegr ee." 
1

I
twasf ur thers hownac cordingtot hedec isionofr espondentCour tofAppeal s:"AmorSongc o,
42-year -olds on ofdec eased Feder i
co Songc o,testifyi
ng aswi t
ness,dec l
ared t hatwhen
i
ns uranc eagentBenj aminSambatwasi nduc inghi sfathert oinsur ehisvehicle,hebut t
edi n
saying:'Thatc annotbe,Mr .Sambat ,bec aus eourvehi cleisan" owner "pri
vat evehi c
leandnot
forpas senger s,
' towhi chagentSambatr eplied:'whetherourvehi c l
ewasan" owner "typeorfor
pass engersi tcoul dbei nsuredbecaus et heircompanyi snotownedbyt heGover nmentandt he
Gover nmenthasnot hi
ngt odowi tht heircompany .Sotheyc oulddowhatt heypl easewhenever
theybel ieveavehi cleisinsurabl
e'..
. Inspiteoft hefactt hatthepr esentcasewasf i
ledandtried
i
nt heCFIofPampanga,t hedefendantc ompanydi dnotevenc aretorebutAmorSongc o' s
testimony by c all
ing on t he witnes s
- st
and agentBenj ami n Sambat ,itsPampanga Fi eld
Repr esentative." 2

Thepl aint
if
fsi nthel owerc ourt
,li
kewi
serespondentshere,wer
et hesurvivi
ngwidow and
chi
ldrenoft hedec easedFederic
oSongcoaswellastheinj
uredpas
s engerJoseManuel.Onthe
abovef act
st heypr evai
led,ashadbeenmenti
oned,int helowercourtandi nther
espondent
CourtofAppeal s.
1awphîl.nèt

Thebas i
sfort hefavorablejudgmentisthedoc t
rineannouncedin QuaCheeGanv.LawUni on
andRoc kInsuranceCo.,Ltd.
, 
3 wit
hJusti
ceJ. B.L.ReyesspeakingfortheCour
t.Iti
snowbeyond
quest
iont hatwher einequitableconductiss hownbyani nsurancefir
m,itis"estoppedf
rom
enfor
cingforfeit
uresinitsfavor,
inordert
of orestallf
raudorimposit
ionontheinsur
ed." 
4
Asmuc h, i
fnotmuc hmor esot hant he QuaCheeGan  decisi
on,thisisacasewher ethedoc tri
ne
ofes toppelundeni ablycall
sforappl i
cati
on.Af terpetiti
onerFieldmen'sInsuranceCo.,I
nc .had
ledt hei nsuredFeder ic
oSongc otobel i
evet hathec ouldqual i
fyundert hec ommonc arri
er
li
abili
t yinsurancepol i
cy,andt oent erintoc ontractofi nsur
anc epayingthepr emiumsdue,i t
couldnot ,thereaf
ter,inanyl i
ti
gationar is
ingoutofs uchrepresentati
on,beper mit
tedtochange
i
t sstandt othedet ri
mentoft hehei rsoft hei nsured.Ases toppelispr i
mar i
lybasedont he
doc t
rineofgoodf aithandt heavoi danceofhar mt hatwi l
lbefalltheinnocentpartyduet oi t
s
i
nj ur
iousr eli
ance,thefail
uretoappl yitint hi
sc asewoul dresulti
nagr osstravest
yofjust
ice.

Thatisallthatneedsbes ai
dinsofarasthefi
rstallegeder rorofrespondentCour tofAppealsis
concerned,peti
tionerbeingadamanti nitsf
ar-fr
om- reas
onabl epleathates t
oppelcouldnotbe
invokedbyt heheirsoft heinsuredasabart otheal legedbr eachofwar rantyandc ondit
ionin
thepolicy.l
twoul dnowr elyonthef ac
tthattheins uredownedapr ivatevehicl
e,notac ommon
carri
er,somethingwhi c
hi tknewal lal
ongwhennotonc ebutt wicei t
sagent,nodoubtwi thout
anyobj ect
ioninitspart,exert
edt heutmostpressur eont heinsured,amanofs canteducati
on,
toenterintosuchac ontract.

Norist her eanymer i

ttothes econdallegeder rorofr espondentCour tthatnol egall iabil
itywas
incurredundert hepol ic
ybypet iti
oner .Whyl iabil
it
yundert het er
msoft hepol i
cy 5 was
inescapabl ewass etf ort
hi nt hedec i
sionofr es pondentCour tofAppeal s.Thus :"Sinc esomeof
thec ondit i
onsc ont ainedi nt hepol i
cyi ssuedbyt hedef endant-appel l
antwer eimpos siblet o
compl ywi t
hundert heexis t
ingc onditi
onsatt het i
meand' incons i
stentwi tht heknownf acts,
'
theins urer' i
sest oppedf rom as sert
ingbr eac hofs uchc onditi
ons.'From t hisjurisprudenc e,we
findnoval i
dr easont odevi ateandc ons equent lyhol dthatthedec isionappeal edf roms houl dbe
affi
rmed. Thei nj
ur edparties,towi t
,Car losSongc o,Angel i
toSongc oandJ oseManuel , f
orwhos e
hospitalandmedi calexpens est hedefendantc ompanywasbei ngmadel iable,wer epas s
enger s
ofthej eepneyatt het imeoft heoccurrenc e, andRodol foSongc o,forwhos ebur ialexpens est he
defendantc ompanywasal s obeingmadel iablewast hedriveroft hevehi cleinques t
ion. Exc ept
forthef ac t,thatt heywer enotf arepayi ngpas sengers,theirstatusasbenef iciariesundert he
polic
yi srec ognizedt herei
n. "
 6

Evenifitbeassumedt hattherewasanambi guity

,anexc er
ptfrom the 
QuaCheeGan  dec
ision
wouldr evealanew theweaknes sofpet i
ti
oner '
sc ontent
ion.Thus:"Moreover,taki
ng int o
accountthewellknownr ul
ethatambigui
ti
esorobs curit
iesmustbes tr
ict
lyi
nterpret
edagains t
thepartythatcausedthem,t he'
memoofwar ranty'invokedbyappel l
antbarsthelatt
erfrom
questi
oningtheexist
enceoft heappl
ianc
esc alledfori ntheinsuredpremises
,s i
nceitsi
nitial
express
ion,'t
heunder not
edappliancesfortheextinc
tionoff i
re beingkeptonthepr emises
i
nsuredher eby,..
.iti
sher ebywarrant
ed...
,
'admi t
sofi nt
erpretati
onasanadmi ssi
onoft he
exi
stenceofs uchappl
ianceswhic
happel l
antcannotnowc ontr
adic t
,shoul
dtheparolevidence
rul
eapply."
 7

Tot hes ameef fec tisthef oll

owingc it
ationfromt hes amel eadingc ase:"Thisrigi
dappl icati
onof
ther uleonambi guiti
eshasbec omenec essaryi nviewofc urrentbus i
nes sprac t
ices.Thec ourts
cannoti gnor et hatnowadaysmonopol ies,cartelsandc onc entrati
onofc apital
,endowedwi th
over whel mingec onomi cpower ,managet oi mpos euponpar tiesdealingwi tht hem c unningly
prepar ed'agr eement s'thatt heweakerpar tymaynotc hangeonewhi t,hispar ti
cipati
oni nthe
'
agr eement 'bei ngr educ edt ot healternativet o' t
akei torl eavei t
'label l
eds inceRaymond
Saleilles'cont rac tsbyadher ence'(contratsd' adhesion),inc ont r
astt othos eent eredi ntoby
partiesbar gai ningonanequalf ooti
ng,s uchc ontract
s( ofwhi chpol ici
esofi nsuranc eand
internationalbi llsofl adi ngarepr i
meexampl es)obvious lyc allforgr eaters tri
ctnes sand
vigil
anc eont hepar tofc ourtsofjusti
cewi thavi ewt oprotec t
ingt heweakerpar tyfrom abus es
andi mpos i
tion,andpr eventt heirbecomi ngt rapsf ortheunwar y(New Ci vilCode.Ar ticl
e24;
Sent .ofSupr emeCour tofSpai n,13Dec .1934, 27Febr uary1942) .
" 
8

Thelaster
rorassi
gnedwhichwouldfi
ndf
aul
twiththedeci
si
onofrespondentCourtofAppeal
s
ins
ofarasi
taffi
rmedthelowercour
tawar
dforexemplar
ydamagesaswellasattor
ney'sf
eesis,
onitsf
ace,ofnopers
uasi
veforc
eatall
.

Thec oncl
us i
ont hatinesc
apablyemer gesfr
om t heabovei sthec orr ectnessoft hedecisi
onof
respondentCour tofAppeal ss oughtt ober evi
ewed.For ,t obor row onc eagai nf r
om the
languageoft heQuaCheeGanopi ni
on:"Thec ontractofinsuranceisoneofper fectgoodfai
th
(uberi
maf ides)notfortheinsuredalone,
butequal lysoforthei ns
ur er;infact,itismoresofor
thelatter
,sinceitsdominantbargai
ningposi
tionc arri
eswithitstri
cterr esponsibi
lit
y."
 9

Thisismer elytostressthatwhilethemor al
ityoft hebusi
nessworldisnotthemor al
it
yof
ins
titut
ionsofr ect
itudeli
ket hepulpi
tandt heac ademe,itcannotdes
cends olow astobe
anothernamef orguileordecept
ion.Moreover
,shouldithappenthus
,nocourtofj
ust
iceshoul
d
all
owi t
selftolendit
sapprovalandsupport.
1awphîl
.nèt

Wehavenoc hoi
cebutt orecogni
zethemonetaryrespons
ibil
it
yofpet i
ti
onerFiel
dmen's
I
nsur
anc
eCo.
,I
nc .
Itdi
dnotsucc
eedinit
sper
sis
tentef
for
ttoavoidcompl
yingwithi
tsobl
igat
ion
i
nthelowercour
tandt
heCourtofAppeals
.Muchl
essshoul
ditfi
ndanyr
ecept
ivi
tyf
rom usf
or
i
tsunwarr
ant
edandunj
ust
if
iedpleat
oes c
apefr
omitsl
iabi
li
ty.

WHEREFORE,thedecisi
onofrespondentCour
tofAppeal
sofJul
y20,1965,i
saf
fi
rmedi
nit
s
ent
iret
y.Cos
tsagai
nstpeti
ti
onerFi
eldmen'
sIns
uranc
eCo.,
Inc
.

Concepci
on,C.
J.
,Reyes
,J.
B.L.
,Di
zon,Makal
int
al,Zal
divar
,Sanc
hez
,Cas
troandAngel
es,J
J.,
conc
ur .

Foot
not
es

1Br
ieff
orDef
endant
-Appel
lant
,Appendi
xA,
pp.
27-
28.

2I
bid,
p.31.

398Phi
l.85(
1955)
.

4I
bid,
p.92.

5Thepol ic
ypr ovidedasf ollows :"
Thec ompanywi l
l,subj
ecttothel i
mit
sofl iabi
li
tyandunder
termsoft hispolicy,i
ndemni fytheinsuredintheeventofac c
identcausedbyorar isingoutof
theus eofmot orvehicleagai nstallsumswhi c
hthei nsur
edwillbecomeliabletopayi nrespect
of:deathorbodi lyinjurytoanyf are-payi
ngpassengerincl
udingthedriver,conductor,and/or
i
ns pectorwhoi sridi
ngint hemot orvehicl
einsur
edatt heti
meoft heaccidentorinjury(RA9) .
"
(Brieff
orDef endant-Appellant ,
p.36.)

6I
bid,
p.37.

798Phi
l.85,
92-
93(
1955)
.
8I
bid,
p.95.

9I
bid,
p.95.

TheLawphi
lPr
ojec
t-Ar
ell
anoLawFoundat
ion