46. HEIRS OF LORETO C.

MARAMAG, represented by surviving spouse VICENTA

PANGILINAN MARAMAG vs. EVA VERNA DE GUZMAN MARAMAG, et al G.R. No. 181132              
June 5, 2009
FACTS: Petitioners in this case are the legitimate heirs of deceased Loreto. The petitioners were not
named as beneficiaries in the insurance policiesissued by Insular and Grepalife. Petitioners claim that
Eva, the concubine of Loreto and a suspect in hismurder, is disqualified from being designated of the
insurance policies. They further add that Eva’s children with Loreto, being illegitimatechildren, are
entitled to a lesser share of the proceeds of the policies. Thus, they prayed that the share of Eva and
portions of the share of Loreto’s illegitimate children should be awarded to them, being thelegitimate
heirs of Loreto entitled to their respective legitimes.
ISSUE:Whether or not the proceeds should be awarded to the petitioners
HELD:No. The insurance contracts are governed by specials laws. Petitioners are third parties to the
insurance contracts with Insular andGrepalife and thus, they are not entitled to the proceeds thereof.
The Insular and Grepalife have no legal obligation to turn over theinsurance proceeds to the petitioner. It
is only in cases where the insured has not designated any beneficiary,or when the designated beneficiary
is disqualified by law to receive theproceeds, that the insurance policy proceeds shall redound to the
benefitof the estate of the insured.
49. Ang Giok Chip v Springfield FIRE & MARINE INSURANCE COMPANY G.R. No. L-33637
December 31, 1931
Facts:Ang insured his warehouse for the total value of Php 60,000. One of these, amounting to
10,000,was with Springfield Insurance Company. His warehouse burned down, then he attempted
torecover 8,000 from Springfield for the indemnity. The insurance company interposed its defenseon a
rider in the policy in the form of Warranty F, fixing the amount of hazardous good that can be stored in a
building to be covered by the insurance. They claimed that Ang violated the 3 percent limit by placing
hazardous goods to as high as 39 percent of all the goods stored in the building. His suit to recover was
granted by the trial court. Hence, this appeal.
Issue: Whether a warranty referred to in the policy as forming part of the contract of insuranceand in the
form of a rider to the insurance policy, is null and void because not complying withthe Philippine
Insurance Act.
Held: No. The warranty is valid. Petition dismissed. The Insurance Act, Section 65, taken from
California law, states: "Every express warranty, made at or before the execution of a policy, must be
contained in the policy itself, or in another instrument signed by the insured and referred to in the policy,
as making a part of it."
Warranty F, indemnifying for a value of Php 20,000 and pasted on the left margin of the policy stated:
It is hereby declared and agreed that during the currency of this policy no hazardous goods be stored in
the Building to which this insurance applies or in any building communicating therewith, provided,
always, however, that the Insured be permitted to stored a small quantity of the hazardous goods specified
below, but not exceeding in all 3 per cent of the total value of the whole of the goods or merchandise
contained in said warehouse, viz; . . . .
Also, the court stated a book that said,  "any express warranty or condition is always a part of the policy,
but, like any other part of an express contract, may be written in the margin, or contained in proposals or
documents expressly referred to in the policy, and so made a part of it."
51. GULF RESORTS, INC, vs. PHILIPPINE CHARTER INSURANCE CORPORATION
[G.R. No. 156167. May 16, 2005]
FACTS: Gulf Resorts, Inc at Agoo, La Union was insured with American Home Assurance Company
which includes loss or damage to shock to any of the property insured by this Policy occasioned by or
through or in consequence of earthquake. July 16, 1990: an earthquake struck Central Luzon and
Northern Luzon so the properties and 2 swimming pools in its Agoo Playa Resort were damaged. August
23, 1990: Gulf's claim was denied on the ground that its insurance policy only afforded earthquake shock
coverage to the two swimming pools of the resort. Petitioner contends that pursuant to this rider, no
qualifications were placed on the scope of the earthquake shock coverage.  Thus, the policy extended
earthquake shock coverage to all of the insured properties. RTC: Favored American Home -endorsement
rider means that only the two swimming pools were insured against earthquake shock. CA: affirmed RTC
Issue: Whether or not the policy covers only the two swimming pools owned by Gulf Resorts and does
not extend to all properties damaged therein.
Held: YES. All the provisions and riders taken and interpreted together, indubitably show the intention of
the parties to extend earthquake shock coverage to the two swimming pools only. An insurance premium
is the consideration paid an insurer for undertaking to indemnify the insured against a specified peril. In
fire, casualty and marine insurance, the premium becomes a debt as soon as the risk attaches. In the
subject policy, no premium payments were made with regard to earthquake shock coverage except on the
two swimming pools. There is no mention of any premium payable for the other resort properties with
regard to earthquake shock. This is consistent with the history of petitioner’s insurance policies with
AHAC.
52. Ang Giok Chip v Springfield FIRE & MARINE INSURANCE COMPANY G.R. No. L-33637
December 31, 1931
Facts:Ang insured his warehouse for the total value of Php 60,000. One of these, amounting to
10,000,was with Springfield Insurance Company. His warehouse burned down, then he attempted
torecover 8,000 from Springfield for the indemnity. The insurance company interposed its defenseon a
rider in the policy in the form of Warranty F, fixing the amount of hazardous good that can be stored in a
building to be covered by the insurance. They claimed that Ang violated the 3 percent limit by placing
hazardous goods to as high as 39 percent of all the goods stored in the building. His suit to recover was
granted by the trial court. Hence, this appeal.
Issue: Whether a warranty referred to in the policy as forming part of the contract of insuranceand in the
form of a rider to the insurance policy, is null and void because not complying withthe Philippine
Insurance Act.
Held: NO. “It is well settled that a rider attached to a policy is a part of the contract, to the same extent
and with like effect as it actually embodied therein. In the second place, it is equally well settled that an
express warranty must appear upon the face of the policy, or be clearly incorporated therein and made a
part thereof by explicit reference, or by words clearly evidencing such intention.”
The court concluded that Warranty F is contained in the policy itself, because by the contract of insurance
agreed to by the parties it was made to be a part. It wasn’t aseparate instrument agreed to by the parties.
The receipt of the policy by the insured without objection binds him. It was his duty to read the policy and
know its terms. He also never chose to accept a different policy by considering the earlier one as a
mistake. Hence, the rider is valid.
53. FRANCISCO JARQUE vs. SMITH, BELL & CO., LTD., ET AL.,UNION FIRE INSURANCE
CO., G.R. No. L-32986             November 11, 1930
Facts: The plaintiff was the owner of the motorboat Pandan and held a marine insurance policy on the
boat, the policy being issued by the National Union Fire Insurance Company and according to the
provisions of a "rider" attached to the policy, the insurance was against the "absolute total loss of the
vessel only." On October 31, 1928, the ship ran into very heavy sea off the Islands of Ticlin, and it
became necessary to jettison a portion of the cargo. As a result of the jettison, the National Union Fire
Insurance Company was to pay. The insurance company refused to contribute to the settlement of the
general average. Trial court rendered judgment in favor of the plaintiff and ordered the defendant to pay.
ISSUE: won lower court erred in concluding that defendant and appellant, is liable to contribute to the
general average resulting from the jettison of a part of said vessel's cargo."
Held: In the absence of positive legislation to the contrary, the liability of the defendant insurance
company on its policy would, perhaps, be limited to "absolute loss of the vessel only, and to pay
proportionate salvage of the declared value." But the policy was executed in this jurisdiction and
"warranted to trade within the waters of the Philippine Archipelago only." Here the liability for
contribution in general average is not based on the express terms of the policy, but rest upon the theory
that from the relation of the parties and for their benefit, a quasi contract is implied by law.
54. ARMANDO GEAGONIA vs. COURT OF APPEALS and COUNTRY BANKERS
INSURANCE CORPORATION G.R. No. 114427 February 6, 1995
Facts: Geagonia, owner of a store, obtained from Country Bankers fire insurance policy for P100,000.00.
The 1 year policy and covered the stock trading of dry goods. The petitioners’ stocks were destroyed by
fire. He then filed a claim which was subsequently denied. The basis of the private respondent's denial
was the petitioner's alleged violation of Condition 3 of the policy. Geagonia then filed a complaint against
the private respondent in the Insurance Commission for the recovery of P100,000.00 under fire insurance
policy and damages. He claimed that he knew the existence of the other two policies. But, he said that he
had no knowledge of the provision in the private respondent's policy. The Insurance Commission found
that the petitioner did not violate Condition 3. The Insurance Commission then ordered the respondent
company to pay complainant the sum of P100,000.00 with interest and attorney’s fees. CA reversed the
decision of the Insurance Commission.
Issue: WON the petitioner had not disclosed the two insurance policies when he obtained the fire
insurance and thereby violated Condition 3 of the policy.
Held: Yes. The court agreed with the CA that the petitioner knew of the prior policies issued by the PFIC.
His letter of 18 January 1991 to the private respondent conclusively proves this knowledge. His testimony
to the contrary before the Insurance Commissioner and which the latter relied upon cannot prevail over a
written admission made ante litem motam. It was, indeed, incredible that he did not know about the prior
policies since these policies were not new or original.
55. PACIFIC TIMBER EXPORT CORPORATION vs. CA and WORKMEN'S INSURANCE
COMPANY, INC., G.R. No. L-38613 February 25, 1982
Facts: On March 13, 1963, Pacific secured temporary insurance from the Workemen’s Insurance Co. for
its exportation of logs to Japan.  Workmen issued on said date Cover Note 1010 insuring said cargo. The
regular marine policies were issued by the company in favor of Pacific on Apr 2, 1963.   After the
issuance of the cover note but BEFORE the issuance of the 2 policies, some of the logs intended to be
exported were lost due to a typhoon. Pacific filed its claim with the company, but the latter refused,
contending that said loss may not be considered as covered under the cover note because such became
null and void by virtue of the issuance of the marine policies.
Issue: Whether or not the cover not was without consideration, thus null and void.
Held: It was with consideration. SC upheld Pacific’s contention that said cover not was with
consideration.  The fact that no separate premium was paid on the cover note before the loss was insured
against occurred does not militate against the validity of Pacific’s contention, for no such premium could
have been paid, since by the nature of the cover note, it did not contain, as all cover notes do not contain,
particulars of the shipment that would serve as basis for the computation of the premiums.  As a logical
consequence, no separate premiums are required to be paid on a cover note. If the note is to be treated as a
separate policy instead of integrating it to the regular policies subsequently issued, its purpose would be
meaningless for it is in a real sense a contract, not a mere application.
56. DOMINION INSURANCE CORPORATION V. COURT OF APPEALS G.R. No. 129919.
February 6, 2002
Facts: Private Respondent, Rodolfo Guevarra filed a complaint for sum of money against the petitioner
DIC, seeking to recover the sum of P 156,473.90, which he claimed to have advanced in his capacity as
manager of the petitioner to satisfy the claims filed by their clients. DIC however stated that they are not
liable to pay respondent because he had not acted within his authority as an agent for Dominion. They
have instructed the respondent that the payment for the claims of the insured should be taken from the
revolving fund, not from respondents’ personal money.
ISSUE: Whether petitioner is liable to reimburse respondent.
Held: However, while the law on agency prohibits respondent Guevarra from obtaining reimbursement,
his right to recover may still be justified under the general law on obligations and contracts. In this case,
when the risk insured against occurred, petitioner's liability as insurer arose. This obligation was
extinguished when respondent Guevarra paid the claims and obtained Release of Claim Loss and
Subrogation Receipts from the insured who were paid. Thus, to the extent that the obligation of the
petitioner has been extinguished, respondent Guevarra may demand for reimbursement from his principal.
To rule otherwise would result in unjust enrichment of petitioner.
57. UNION MANUFACTURING CO., INC. VS. PHILIPPINE GUARANTY CO., INC.47 SCRA
271 (G.R. NO. L-27932) OCTOBER 30, 1972
FACTS: On January 12, 1962, the Union Manufacturing Co., Inc. obtained certain loans from the
Republic Bank in the total sum of ₱ 415,000.00. To secure thepayment thereof, UMC executed real and
chattel mortgage on certain properties. The Republic Bank procured from the defendant Philippine
Guaranty Co., Inc. an insurance coverage on loss against fire for ₱500,000.00 over the properties of the
UMC, as described in defendant’s cover note dated September 25, 1962, with the annotation that loss or
damage, if any, under said cover note is payable to Republic Bank as its interest may appear, subject
however to the printed conditions of said defendant’s Fire Insurance Policy Form.
ISSUE: Whether Republic Bank can recover.
HELD: In as much as the Union Manufacturing has violated the condition of the policy to the effect that
it did not reveal the existence of other insurance policies over the same properties, asrequired by the
warranty appearing on the face of the policy and that said petitioner represented that there were no other
insurance policies at the time of the issuance of said defendant's policy, and it appearing furthermore that
while the policy of the defendant was in full force and effect the petitioner secured other fire insurance
policies without the written consent of the defendant endorsed on the policy,the conclusion is inevitable
that both the Republic Bank and Union Manufacturing Co.,Inc. cannot recover from the same policy of
the defendant because the same is null and void.
58. Paz Lopez De Constantino vs Asia Life Insurance Company G.R. No. L-1669
August 31, 1950
Facts: Respondent Corporation was paid P 176.04 as annual premium by Arcadio Constantino in
exchange for policy no. 93212 on 1941 for P 3,000 which lasted for 20 years. Petitioner Paz Constantino
was made beneficiary. However after the first payment, no further premiums were made. Thereafter the
insured died on 1944. Later, due to the war (Japanese occupation) Respondent Corporation had to close
down its branch in the country. 
Plaintiff demanded payment but was refused due to Respondent Corporation’s refusal on the ground of
non-payment of the premiums. The lower court favored Respondent. 
Issue:Whether or not the periodic payments of the premiums, those after the first, is not an obligation of
the insured so that it is not a debt enforceable by the action of the insurer. 
Held: The annual premium is not a debt, nor is it an obligation which the insurer can maintain an action
against the insured; nor its settlement governed by the rules on payment of debts. 
A contract of insurance is sui generis. This means though the insured may hold the insurer to the contract
by the fulfillment of the condition, the latter has no power or right to compel the insured to maintain the
contract relation longer than the insured may desire. It is optional upon the insured. 

59. VICTORIA HIDALGO VDA. DE CARRERO, et al., vs. THE MANUFACTURERS LIFE

INSURANCE CO., G.R. No. L-3032           October 10, 1950
Facts: In February 1934, Juan Carrero was issued an insurance policy by Manufacturer’s Life Insurance
Co. (Manulife). Carrero incurred a $5,500.00 loan from Manulife in 1941. However, during the Japanese
occupation from 1942 to 1944, Carrero was not able to pay his premium to Manulife. In February 1945,
Carrero died. His widow Victoria Hidalgo filed an insurance claim but Manulife refused due to Carrero’s
nonpayment.
ISSUE: Whether or not Hidalgo’s insurance policy has been forfeited considering that nonpayment was
due to the war.
HELD: Yes. This case, therefore, is one in which time is material and of the essence of the contract. Non-
payment at the day involves absolute forfeiture if such be the terms of the contract, as is the case here.
Courts cannot with safety vary the stipulation of the parties by introducing equities for the relief of the
insured against their own negligence.
The United States rule (Statham case) declares that the contract is not merely suspended, but is abrogated
by reason of non-payment of premium, since the time of the payment is peculiarly of the essence of the
contract. It additionally holds that it would be unjust to allow the insurer to retain the reserve value of the
policy, which is the excess of the premiums paid over the actual risk carried during the years when the
policy had been in force.
60. Far East Bank and Trust Company, and Makati Insurance Company Petitioners vs. Jose
Marques and MaxiliteTechnologies, Inc. G.R. No. 171419 : January 10, 2011
Facts: respondents entered into a Trust Receipt transaction with the petitioner (FEBTC). FEBTC also
referred the incoming goods to Far East Bank Insurance Company (FEBIC) to insure said goods from
fire. Marques et al. were unable to pay the premium for the fire insurance. FEBIC notified FEBTC of the
unpaid premium, and asked that Marques account be debited the amount. FEBTC was unable to do so.
Subsequently, the warehouse where the goods in question were stored burned down. Marques et al.
sought to collect the insurance proceeds from Makati Insurance and FEBIC. Both refused compliance as
the insurance premium was unpaid. Marques et al. sued FEBTC, FEBIC, and Makati Insurance
companyfor actual, moral, and exemplary damages. The RTC found for Marques, and ruled that all
respondents were solidarily liable to Marques. On appeal, the CA affirmed the finding of the RTC.
ISSUE: Whether or not FEBTC and Makati Insurance Company can be held solidarily liable with
FEBIC.
HELD: The appellate court has found that FEBTC is the cause of the damage suffered by Marques. It
was the one who referred the goods to the insurance company. It was also the entity approached by
FEBIC for the debit of the unpaid insurance premium. The loan that it extended to Marques was to cover
all expenses related to the trust receipt, including the insurance cost. Hence, FEBTC is clearly the one
responsible to take care of the matters of the insurance premium. Since it failed in its duty due to
negligence, it is clearly liable for damages it caused to Marques, as Marques was unable to get insurance
proceeds for his loss.