GUINGON v DEL MONTE

FACTS:
The insured owned a fleet of jeepneys. He insured the operation of his
jeepneys against “accidents with third part liability” with Capital Insurance
and Surety Co. One day, one of his jeepney drivers, bumped and killed
Guingon. An action for damages was then filed against the owner-insured,
the driver and the company. The company sought to dismiss the charges
against it on the ground of lack of cause of action against it.
ISSUE: Whether or not there is a cause of action against the
company.
RULING:
The right of a person injured to sue the insurer of the party at fault depends
on whether the contract of insurance was intended to benefit third persons.
The test applied here is: Where the contract provides for indemnity against
liability to third persons, then third persons to whom the insured is liable,
can sue the insurer. On the other hand, where the contract is for indemnity
against actual loss or payment, then third persons cannot proceed against
the insurer, the contract being solely to reimburse the insured for liability
actually discharged by him through payment to third persons, said third
persons' recourse being thus limited to the insured alone
The policy in the present case, is one whereby the insurer agreed to
indemnify the insured "against all sums . which the Insured shall become
legally liable to pay in respect of: a. death of or bodily injury to any
person . . ." Clearly, therefore, it is one for indemnity against liability from
the fact then that the insured is liable to the third person, such third person
is entitled to sue the insurer.
Since the policy in questioned contained, a stipulation pour autrui, then the
insurance company must deliver the proceeds to the claimants.
KEY CONCEPTS:
The right of a person injured to sue the insurer of the party at fault depends
on whether the contract of insurance was intended to benefit third persons.
The test applied here is: Where the contract provides for indemnity against
liability to third persons, then third persons to whom the insured is liable,
can sue the insurer.