1. Republic v Del Monte G.R. No.

156956 October 9, 2006

Facts:
Vilfran Liner lost in a case against Del Monte Motors. They were made to pay
11 million pesos for service contracts with Del Monte, and such was sourced
from the counterbond posted by Vilfran. CISCO issued the counterbond.
CISCO opposed but was rebuffed. The RTC released a motion for execution
commanding the sheriff to levy the amount on the property of CISCO. To
completely satisfy the amount, the Insurance Commissioner was also
commanded to withdraw the security deposit filed by CISCO with the
Commission according to Sec 203 of the Insurance Code.
Insurance Commissioner Malinis was ordered by the RTC to withdraw the
security bond of CISCO for the payment of the insurance indemnity won by
Del Monte Motor against Vilfran Liner, the insured.
Malinis didn’t obey the order, so the respondent moved to cite him in
contempt of Court. The RTC ruled against Malinis because he didn’t have
legal basis.

Issues:
1. Whether or not the security deposit held by the Insurance Commissioner
pursuant to Section 203 of the Insurance Code may be levied or garnished in
favor of only one insured.
2. Whether or not the Insurance Commissioner has power to withhold the
release of the security deposit.

Held:  No. Yes.  Petition granted.

Ratio:
1. Sec 203- No judgment creditor or other claimant shall have the right to
levy upon any of the securities of the insurer held on deposit pursuant to the
requirement of the Commissioner.
The court also claimed that the security deposit shall be (1) answerable for
all the obligations of the depositing insurer under its insurance contracts; (2)
at all times free from any liens or encumbrance; and (3) exempt from levy
by any claimant.
“To allow the garnishment of that deposit would impair the fund by
decreasing it to less than the percentage of paid-up capital that the law
requires to be maintained. Further, this move would create, in favor of
respondent, a preference of credit over the other policy holders and
beneficiaries.”
“Also, the securities are held as a contingency fund to answer for the claims
against the insurance company by all its policy holders and their
beneficiaries. This step is taken in the event that the company becomes
insolvent or otherwise unable to satisfy the claims against it. Thus, a single
claimant may not lay stake on the securities to the exclusion of all others.
The other parties may have their own claims against the insurance company
under other insurance contracts it has entered into.”
2. The Insurance Code has vested the Office of the Insurance Commission
with both regulatory and adjudicatory authority over insurance matters.
Under Sec  414 of the Insurance Code, "The Commissioner may issue such
rulings, instructions, circulars, orders and decisions as he may deem
necessary to secure the enforcement of the provisions of this Code.”
“The commissioner is authorized to (1) issue (or to refuse to issue)
certificates of authority to persons or entities desiring to engage in insurance
business in the Philippines;16 (2) revoke or suspend these certificates of
authority upon finding grounds for the revocation or suspension; (3) impose
upon insurance companies, their directors and/or officers and/or agents
appropriate penalties -- fines, suspension or removal from office -- for failing
to comply with the Code or with any of the commissioner's orders,
instructions, regulations or rulings, or for otherwise conducting business in
an unsafe or unsound manner.”
Included here is the duty to hold security deposits under Secs 191 and 202
of the Code for the benefit of policy holders. Sec 192, on the other hand,
states:
“the securities deposited as aforesaid shall be returned upon the company's
making application therefor and proving to the satisfaction of the
Commissioner that it has no further liability under any of its policies in the
Philippines.”
He has been given great discretion to regulate the business to protect the
public. Also “An implied trust is created by the law for the benefit of all
claimants under subsisting insurance contracts issued by the insurance
company.” He believed that the security deposit was exempt from execution
to protect the policy holders.

2. PHILIPPINE HEALTH CARE PROVIDERS, INC. V. COMMISSIONER

OF INTERNAL REVENUE, G.R. NO. 167330 (RESOLUTION),
[SEPTEMBER 18, 2009], 616 PHIL 387-423
FACTS: Petitioner is a domestic corporation whose primary purpose is “[t]o
establish, maintain, conduct and operate a prepaid group practice health
care delivery system or a health maintenance organization to take care of
the sick and disabled persons enrolled in the health care plan and to provide
for the administrative, legal, and financial responsibilities of the
organization”. Individuals enrolled in its health care programs pay an annual
membership fee and are entitled to various preventive, diagnostic and
curative medical services provided by its duly licensed physicians, specialists
and other professional technical staff participating in the group practice
health delivery system at a hospital or clinic owned, operated or accredited
by it.
On January 27, 2000, respondent Commissioner of Internal Revenue [CIR]
sent petitioner a formal demand letter and the corresponding assessment
notices demanding the payment of deficiency taxes, including surcharges
and interest, for the taxable years 1996 and 1997 in the total amount of
P224,702,641.18. . . .
The deficiency [documentary stamp tax (DST)] assessment was imposed on
petitioner’s health care agreement with the members of its health care
program pursuant to Section 185 of the 1997 Tax Code . . .
Petitioner protested the assessment in a letter dated February 23, 2000. As
respondent did not act on the protest, petitioner filed a petition for review in
the Court of Tax Appeals (CTA) seeking the cancellation of the deficiency
VAT and DST assessments.
ISSUE: WON THE PETITIONER IS ENGAGED IN INSURANCE BUSINESS.
HELD: NO. The mere presence of risk would be insufficient to override the
primary purpose of the business to provide medical services as needed, with
payment made directly to the provider of these services. In short, even if
petitioner assumes the risk of paying the cost of these services even if
significantly more than what the member has prepaid, it nevertheless cannot
be considered as being engaged in the insurance business.
By the same token, any indemnification resulting from the payment for
services rendered in case of emergency by non-participating health
providers would still be incidental to petitioner’s purpose of providing and
arranging for health care services and does not transform it into an insurer.
To fulfill its obligations to its members under the agreements, petitioner is
required to set up a system and the facilities for the delivery of such medical
services. This indubitably shows that indemnification is not its sole object.
In fact, a substantial portion of petitioner’s services covers preventive and
diagnostic medical services intended to keep members from developing
medical conditions or diseases. As an HMO, it is its obligation to maintain the
good health of its members. Accordingly, its health care programs are
designed to prevent or to minimize the possibility of any assumption of risk
on its part. Thus, its undertaking under its agreements is not to indemnify
its members against any loss or damage arising from a medical condition
but, on the contrary, to provide the health and medical services needed to
prevent such loss or damage.
Overall, petitioner appears to provide insurance-type benefits to its
members (with respect to its curative medical services), but these are
incidental to the principal activity of providing them medical care. The
“insurance-like” aspect of petitioner’s business is miniscule compared to its
non-insurance activities. Therefore, since it substantially provides health
care services rather than insurance services, it cannot be considered as
being in the insurance business.
It is important to emphasize that, in adopting the “principal purpose test”
used in the above-quoted U.S. cases, we are not saying that petitioner’s
operations are identical in every respect to those of the HMOs or health
providers which were parties to those cases. What we are stating is that, for
the purpose of determining what “doing an insurance business” means, we
have to scrutinize the operations of the business as a whole and not its mere
components. This is of course only prudent and appropriate, taking into
account the burdensome and strict laws, rules and regulations applicable to
insurers and other entities engaged in the insurance business. Moreover, we
are also not unmindful that there are other American authorities who have
found particular HMOs to be actually engaged in insurance activities.
2009], 616 PHIL 387-423
FACTS: Petitioner is a domestic corporation whose primary purpose is “[t]o
establish, maintain, conduct and operate a prepaid group practice health
care delivery system or a health maintenance organization to take care of
the sick and disabled persons enrolled in the health care plan and to provide
for the administrative, legal, and financial responsibilities of the
organization”. Individuals enrolled in its health care programs pay an annual
membership fee and are entitled to various preventive, diagnostic and
curative medical services provided by its duly licensed physicians, specialists
and other professional technical staff participating in the group practice
health delivery system at a hospital or clinic owned, operated or accredited
by it.
On January 27, 2000, respondent Commissioner of Internal Revenue [CIR]
sent petitioner a formal demand letter and the corresponding assessment
notices demanding the payment of deficiency taxes, including surcharges
and interest, for the taxable years 1996 and 1997 in the total amount of
P224,702,641.18. . . .
The deficiency [documentary stamp tax (DST)] assessment was imposed on
petitioner’s health care agreement with the members of its health care
program pursuant to Section 185 of the 1997 Tax Code . . .
Petitioner protested the assessment in a letter dated February 23, 2000. As
respondent did not act on the protest, petitioner filed a petition for review in
the Court of Tax Appeals (CTA) seeking the cancellation of the deficiency
VAT and DST assessments.
ISSUE: WON THE PETITIONER IS ENGAGED IN INSURANCE BUSINESS.
HELD: NO. The mere presence of risk would be insufficient to override the
primary purpose of the business to provide medical services as needed, with
payment made directly to the provider of these services. In short, even if
petitioner assumes the risk of paying the cost of these services even if
significantly more than what the member has prepaid, it nevertheless cannot
be considered as being engaged in the insurance business.
By the same token, any indemnification resulting from the payment for
services rendered in case of emergency by non-participating health
providers would still be incidental to petitioner’s purpose of providing and
arranging for health care services and does not transform it into an insurer.
To fulfill its obligations to its members under the agreements, petitioner is
required to set up a system and the facilities for the delivery of such medical
services. This indubitably shows that indemnification is not its sole object.
In fact, a substantial portion of petitioner’s services covers preventive and
diagnostic medical services intended to keep members from developing
medical conditions or diseases. As an HMO, it is its obligation to maintain the
good health of its members. Accordingly, its health care programs are
designed to prevent or to minimize the possibility of any assumption of risk
on its part. Thus, its undertaking under its agreements is not to indemnify
its members against any loss or damage arising from a medical condition
but, on the contrary, to provide the health and medical services needed to
prevent such loss or damage.
Overall, petitioner appears to provide insurance-type benefits to its
members (with respect to its curative medical services), but these are
incidental to the principal activity of providing them medical care. The
“insurance-like” aspect of petitioner’s business is miniscule compared to its
non-insurance activities. Therefore, since it substantially provides health
care services rather than insurance services, it cannot be considered as
being in the insurance business.
It is important to emphasize that, in adopting the “principal purpose test”
used in the above-quoted U.S. cases, we are not saying that petitioner’s
operations are identical in every respect to those of the HMOs or health
providers which were parties to those cases. What we are stating is that, for
the purpose of determining what “doing an insurance business” means, we
have to scrutinize the operations of the business as a whole and not its mere
components. This is of course only prudent and appropriate, taking into
account the burdensome and strict laws, rules and regulations applicable to
insurers and other entities engaged in the insurance business. Moreover, we
are also not unmindful that there are other American authorities who have
found particular HMOs to be actually engaged in insurance activities.
Lastly, it is significant that petitioner, as an HMO, is not part of the insurance
industry. This is evident from the fact that it is not supervised by the
Insurance Commission but by the Department of Health. In fact, in a letter
dated September 3, 2000, the Insurance Commissioner confirmed that
petitioner is not engaged in the insurance business. This determination of
the commissioner must be accorded great weight. It is well-settled that the
interpretation of an administrative agency which is tasked to implement a
statute is accorded great respect and ordinarily controls the interpretation of
laws by the courts.

3. White Gold Marine Services Inc. Vs Pioneer Insurance and Surety

Corporation, G.R. No. 154514
Facts: 
White Gold Marine Services, Inc. (White Gold) procured a protection and
indemnity coverage for its vessels from The Steamship Mutual Underwriting
Association (Bermuda) Limited (Steamship Mutual) through Pioneer
Insurance and Surety Corporation (Pioneer). Subsequently, White Gold was
issued a Certificate of Entry and Acceptance. Pioneer also issued receipts
evidencing payments for the coverage. When White Gold failed to fully pay
its accounts, Steamship Mutual refused to renew the coverage. Steamship
Mutual thereafter filed a case against White Gold for collection of sum of
money to recover the latter’s unpaid balance. White Gold on the other hand,
filed a complaint before the Insurance Commission claiming that Steamship
Mutual violated Sections 186[4] and 187[5] of the Insurance Code, while
Pioneer violated Sections 299 300 and 301 in relation to Sections 302 and
303, thereof. The Insurance Commission dismissed the complaint. It said
that there was no need for Steamship Mutual to secure a license because it
was not engaged in the insurance business. It explained that Steamship
Mutual was a Protection and Indemnity Club (P & I Club). Likewise, Pioneer
need not obtain another license as insurance agent and/or a broker for
Steamship Mutual because Steamship Mutual was not engaged in the
insurance business. Moreover, Pioneer was already licensed, hence, a
separate license solely as agent/broker of Steamship Mutual was already
superfluous.
Issues: 
1.Whether or not the contract entered into by the parties is an insurance
contract.
2. Whether or not Pioneer is required to obtain a separate license as an
insurance agent.

Held: 
1.Yes. The test to determine if a contract is an insurance contract or not,
depends on the nature of the promise, the act required to be performed, and
the exact nature of the agreement in the light of the occurrence,
contingency, or circumstances under which the performance becomes
requisite. It is not by what it is called.
Basically, an insurance contract is a contract of indemnity. In it, one
undertakes for a consideration to indemnify another against loss, damage or
liability arising from an unknown or contingent event.
In particular, a marine insurance undertakes to indemnify the assured
against marine losses, such as the losses incident to a marine adventure.
Section 99 of the Insurance Code enumerates the coverage of marine
insurance.
Relatedly, a mutual insurance company is a cooperative enterprise where
the members are both the insurer and insured. In it, the members all
contribute, by a system of premiums or assessments, to the creation of a
fund from which all losses and liabilities are paid, and where the profits are
divided among themselves, in proportion to their interest. Additionally,
mutual insurance associations, or clubs, provide three types of coverage,
namely, protection and indemnity, war risks, and defense costs.
A P & I Club is a form of insurance against third party liability, where the
third party is anyone other than the P & I Club and the members. By
definition then, Steamship Mutual as a P & I Club is a mutual insurance
association engaged in the marine insurance business.
Since a contract of insurance involves public interest, regulation by the State
is necessary. Thus, no insurer or insurance company is allowed to engage in
the insurance business without a license or a certificate of authority from the
Insurance Commission.
2. Yes. Pioneer is the resident agent of Steamship Mutual as evidenced by
the certificate of registration issued by the Insurance Commission. It has
been licensed to do or transact insurance business by virtue of the certificate
of authority issued by the same agency. However, a Certification from the
Commission states that Pioneer does not have a separate license to be an
agent/broker of Steamship Mutual.
Although Pioneer is already licensed as an insurance company, it needs a
separate license to act as insurance agent for Steamship Mutual. Section 299
of the Insurance Code clearly states:
No person shall act as an insurance agent or as an insurance broker in the
solicitation or procurement of applications for insurance, or receive for
services in obtaining insurance, any commission or other compensation from
any insurance company doing business in the Philippines or any agent
thereof, without first procuring a license so to act from the Commissioner,
which must be renewed annually on the first day of January, or within six
months thereafter.

4.Verendia v. CA, 217 SCRA 417

Facts:
Fidelity and Surety Insurance Company (Fidelity) issued Fire Insurance
Policy No. F-18876 effective between June 23, 1980 and June 23, 1981
covering Rafael (Rex) Verendia's residential in the amount of P385,000.00.
Designated as beneficiary was the Monte de Piedad & Savings Bank.
Verendia also insured the same building with two other companies, namely,
The Country Bankers Insurance for P56,000.00 and The Development
Insurance for P400,000.00. While the three fire insurance policies were in
force, the insured property was completely destroyed by fire. Fidelity
appraised the damage amounting to 385,000 when it was accordingly
informed of the loss. Despite demands, Fidelity refused payment under its
policy, thus prompting Verendia to file a complaint for the recovery of
385,000. Fidelity, averred that the policy was avoided by reason of over-
insurance, that Verendia maliciously represented that the building at the
time of the fire was leased under a contract executed on June 25, 1980 to a
certain Roberto Garcia, when actually it was a Marcelo Garcia who was the
lessee.

Issue: 
Whether or not Verendia can claim on the insurance despite the
misrepresentation as to the lessee and the over insurance.
Held:
No. The contract of lease upon which Verendia relies to support his claim for
insurance benefits, was entered into between him and one Robert Garcia, a
couple of days after the effectivity of the insurance policy. When the rented
residential building was razed to the ground, it appears that Robert Garcia
was still within the premises. However, according to the investigation by the
police, the building appeared to have "no occupants" and that Mr. Roberto
Garcia was "renting on the other side of said compound" These pieces of
evidence belie Verendia's uncorroborated testimony that Marcelo Garcia
whom he considered as the real lessee, was occupying the building when it
was burned.
Ironically, during the trial, Verendia admitted that it was not Robert Garcia
who signed the lease contract but it was Marcelo Garcia cousin of Robert,
who had also been paying the rentals all the while. Verendia, however, failed
to explain why Marcelo had to sign his cousin's name when he in fact he was
paying for the rent and why he (Verendia) himself, the lessor, allowed such
a ruse. Fidelity's conclusions on these proven facts appear, therefore, to
have sufficient bases: Verendia concocted the lease contract to deflect
responsibility for the fire towards an alleged "lessee", inflated the value of
the property by the alleged monthly rental of P6,500) when in fact, the
Provincial Assessor of Rizal had assessed the property's fair market value to
be only P40,300.00, insured the same property with two other insurance
companies for a total coverage of around P900,000, and created a dead-end
for the adjuster by the disappearance of Robert Garcia.
Basically, a contract of indemnity, an insurance contract is the law between
the parties. Its terms and conditions constitute the measure of the insurer's
liability and compliance therewith is a condition precedent to the insured's
right to recovery from the. As it is also a contract of adhesion, an insurance
contract should be liberally construed in favor of the insured and strictly
against the insurer company which usually prepares it.
Considering, however, the foregoing discussion pointing to the fact that
Verendia used a false lease contract to support his claim under Fire
Insurance Policy, the terms of the policy should be strictly construed against
the insured. Verendia failed to live by the terms of the policy, specifically
Section 13 thereof which is expressed in terms that are clear and
unambiguous, that all benefits under the policy shall be forfeited "if the
claim be in any respect fraudulent, or if any false declaration be made or
used in support thereof, or if any fraudulent means or devises are used by
the Insured or anyone acting in his behalf to obtain any benefit under the
policy". Verendia, having presented a false declaration to support his claim
for benefits in the form of a fraudulent lease contract, he forfeited all
benefits therein by virtue of Section 13 of the policy in the absence of proof
that Fidelity waived such provision
There is also no reason to conclude that by submitting the subrogation
receipt as evidence in court, Fidelity bound itself to a "mutual agreement" to
settle Verendia's claims in consideration of the amount of P142,685.77.
While the said receipt appears to have been a filled-up form of Fidelity, no
representative of Fidelity had signed it. It is even incomplete as the blank
spaces for a witness and his address are not filled up. More significantly, the
same receipt states that Verendia had received the aforesaid amount.
However, that Verendia had not received the amount stated therein, is
proven by the fact that Verendia himself filed the complaint for the full
amount of P385,000.00 stated in the policy. It might be that there had been
efforts to settle Verendia's claims, but surely, the subrogation receipt by
itself does not prove that a settlement had been arrived at and enforced.
Thus, to interpret Fidelity's presentation of the subrogation receipt in
evidence as indicative of its accession to its "terms" is not only wanting in
rational basis but would be substituting the will of the Court for that of the
parties

5. Rizal Surety & Insurance Co. vs. CA, 336 SCRA 12

 
NATURE
Petition for Review on Certiorari under Rule 45 of the Rules of Court
 
FACTS
Rizal Surety & Insurance Company (Rizal Insurance) issued Fire Insurance
Policy No. 45727 in favor of Transworld Knitting Mills, Inc. (Transworld).
 
Pertinent portions of subject policy on the buildings insured, and location
thereof, read: "‘On stocks of finished and/or unfinished products, raw
materials and supplies of every kind and description, the properties of the
Insureds and/or held by them in trust, on commission or on joint account
with others and/or for which they (sic) responsible in case of loss whilst
contained and/or stored during the currency of this Policy in the premises
occupied by them forming part of the buildings situate (sic) within own
Compound at MAGDALO STREET, BARRIO UGONG, PASIG, METRO MANILA,
PHILIPPINES, BLOCK NO.601.’
x xx............ ...xxx....... ........xxx
 
‘Said building of four-span lofty one storey in height with mezzanine portions
is constructed of reinforced concrete and hollow blocks and/or concrete
under galvanized iron roof and occupied as hosiery mills, garment and
lingerie factory, transistor-stereo assembly plant, offices, warehouse and
caretaker's quarters.
 
'Bounds in front partly by one-storey concrete building under galvanized iron
roof occupied as canteen and guardhouse, partly by building of two and
partly one storey constructed of concrete below, timber above
undergalvanized iron roof occupied as garage and quarters and partly by
open space and/or tracking/ packing, beyond which is the aforementioned
Magdalo Street; on its right and left by driveway, thence open spaces, and
at the rear by open spaces.'"
 
The same pieces of property insured with the petitioner were also insured
with New India Assurance Company, Ltd., (New India).
 
Fire broke out in the compound of Transworld, razing the middle portion of
its four-span building and partly gutting the left and right sections thereof. A
two-storey building (behind said fourspan building) where fun and
amusement machines and spare parts were stored, was also destroyed by
the fire.
 
Transworld filed its insurance claims with Rizal Surety & Insurance Company
and New India Assurance Company but to no avail.
 
Private respondent brought against the said insurance companies an action
for collection of sum of money and damages.
 
Petitioner Rizal Insurance countered that its fire insurance policy sued upon
covered only the contents of the four-span building, which was partly
burned, and not the damage caused by the fire on the two-storey annex
building.
 
The trial court dismissed the case as against The New India Assurance Co.,
Ltd. but ordered defendant Rizal Surety And Insurance Company to pay
Transwrold (sic) Knitting Mills, Inc.
 
Both the petitioner, Rizal Insurance Company, and private respondent,
Transworld Knitting Mills, Inc., went to the Court of Appeals, which required
New India Assurance Company to pay plaintiff appellant the amount of
P1,818,604.19 while the Rizal Surety has to pay the plaintiff-appellant
P470,328.67.
 
New India appealed to the Court theorizing inter alia that the private
respondent could not be compensated for the loss of the fun and
amusement machines and spare parts stored at the two-storey building
because it (Transworld) had no insurable interest in said goods or items.
 
The Court denied the appeal with finality.
 
Petitioner Rizal Insurance and private respondent Transworld, interposed a
Motion for Reconsideration before the Court of Appeals, which reconsidered
its decision of July 15, 1993, as regards the imposition of interest.
 
Undaunted, petitioner Rizal Surety & Insurance Company found its way to
the Court.
 
ISSUE:
 
WON the fire insurance policy litigated upon protected only the contents of
the main building (four-span), and did not include those stored in the two-
storey annex building
 
HELD:
 NO.
 
Resolution of the issue posited hinges on the proper interpretation of the
stipulation in subject fire insurance policy regarding its coverage, which
reads:
 
"xxx contained and/or stored during the currency of this Policy in the
premises occupied by them forming part of the buildings situate (sic) within
own Compound xxx"
 
It can be gleaned unerringly that the fire insurance policy in question did not
limit its coverage to what
were stored in the four-span building. As opined by the trial court of origin,
two requirements must
concur in order that the said fun and amusement machines and spare parts
would be deemed
protected by the fire insurance policy under scrutiny, to wit:
 
"First, said properties must be contained and/or stored in the areas occupied
by Transworld and second, said areas must form part of the building
described in the policy xxx"
 
Said building of four-span lofty one storey in height with mezzanine portions
is constructed of reinforced concrete and hollow blocks and/or concrete
under galvanized iron roof and occupied as hosiery mills, garment and
lingerie factory, transistor-stereo assembly plant, offices, ware house and
caretaker's quarter.
 
The Court is mindful of the well-entrenched doctrine that factual findings by
the Court of Appeals are conclusive on the parties and not reviewable by this
Court, and the same carry even more weight when the Court of Appeals has
affirmed the findings of fact arrived at by the lower court.
 
In the case under consideration, both the trial court and the Court of
Appeals found that the so called "annex " was not an annex building but an
integral and inseparable part of the four-span building described in the policy
and consequently, the machines and spare parts stored therein were
covered by the fire insurance in dispute.
 
Verily, the two-storey building involved, a permanent structure which
adjoins and intercommunicates with the "first right span of the lofty storey
building", formed part thereof, and meets the requisites for compensability
under the fire insurance policy sued upon.
 
So also, considering that the two-storey building aforementioned was
already existing when subject fire insurance policy contract was entered into,
petitioner should have specifically excluded the said two-storey building from
the coverage of the fire insurance if minded to exclude the same but if did
not, and instead, went on to provide that such fire insurance policy covers
the products, raw materials and supplies stored within the premises of
respondent Transworld which was an integral part of the four-span building
occupied by Transworld, knowing fully well the existence of such building
adjoining and intercommunicating with the right section of the four-span
building.
 
Indeed, the stipulation as to the coverage of the fire insurance policy under
controversy has created a doubt regarding the portions of the building
insured thereby. Article 1377 of the New Civil Code provides:
 
"Art.1377. The interpretation of obscure words or stipulations in a
contract shall not favor the party who caused the obscurity"
 
Conformably, it stands to reason that the doubt should be resolved against
the petitioner, Rizal
Surety Insurance Company, whose lawyer or managers drafted the fire
insurance policy contract under scrutiny. Citing the aforecited provision of
law in point, the Court in Landicho vs. Government Service Insurance
System, ruled:
 
"This is particularly true as regards insurance policies, in respect of which it
is settled that the 'terms in an insurance policy, which are ambiguous,
equivocal, or uncertain x x x are to be construed strictly and most strongly
against the insurer, and liberally in favor of the insured so as to effect the
dominant purpose of indemnity or payment to the insured, especially where
forfeiture is involved' and the reason for this is that the 'insured usually has
no voice in the selection or arrangement of the words employed and that the
language of the contract is selected with great care and deliberation by
experts and legal advisers employed by, and acting exclusively in the
interest of, the insurance company.' "
 
Equally relevant is the following disquisition of the Court in Fieldmen's
Insurance Company, Inc. vs. Vda. De Songco, to wit:
 
"'This rigid application of the rule on ambiguities has become necessary in
view of current business practices. The courts cannot ignore that nowadays
monopolies, cartels and concentration of capital, endowed with
overwhelming economic power, manage to impose upon parties dealing with
them cunningly prepared 'agreements' that the weaker party may not
change one whit, his participation in the 'agreement' being reduced to the
alternative to 'take it or leave it' labeled since Raymond Saleilles 'contracts
by adherence' (contrats [sic] d'adhesion), in contrast to these entered into
by parties bargaining on an equal footing, such contracts (of which policies
of insurance and international bills of lading are prime example) obviously
call for greater strictness and vigilance on the part of courts of justice with a
view to protecting the weaker party from abuses and imposition, and
prevent their becoming traps for the unwary.'"
 
The issue of whether or not Transworld has an insurable interest in the fun
and amusement machines and spare parts, which entitles it to be
indemnified for the loss thereof, had been settled in G.R. No. L-111118,
entitled New India Assurance Company, Ltd., vs. Court of Appeals, where
the appeal of New India from the decision of the Court of Appeals under
review, was denied with finality by this Court on February 2, 1994.
 
The rule on conclusiveness of judgment, which obtains under the premises,
precludes the relitigation of a particular fact or issue in another action
between the same parties based on a different claim or cause of action. "xxx
the judgment in the prior action operates as estoppel only as to those
matters in issue or points controverted, upon the determination of which the
finding or judgment was rendered. In fine, the previous judgment is
conclusive in the second case, only as those matters actually and directly
controverted and determined and not as to matters merely involved
therein."
 
Disposition  Decision, and the Resolution of the CA WERE AFFIRMED in toto.
No pronouncement as to costs.
6.Philamcare Health Systems, Inc. vs. CA & Julita Trinos, G.R. No.
125678, March 18, 2002 

Facts:

Ernani Trinos, deceased husband of private respondent Julita Trinos, was

approved for a health care coverage with petitioner from March 1988 to
March1989. The same was extended twice until June 1990. During the
period of his coverage, Ernani was hospitalized several times, however,
petitioner denied the claim of private respondent because the Health Care
Agreement was allegedly void due to the alleged concealment of Ernani that
he was not hypertensive, diabetic, and asthmatic, contrary to his answer in
the application form.

Petitioner argues that the agreement merely granted living benefits, such as
check-ups and hospitalisation, hence it is not an insurance contract.
Petitioner further argues that it is not an insurance company, which is
governed by the Insurance Commission, but a Health Maintenance
Organization under the authority of the Department of Health.

Issues:

1. Whether or not the Health Care Agreement between the deceased and
the petitioner falls under the ambit of an insurance contract.

2. Whether the alleged concealment of the deceased will invalidate the

Agreement.

Ruling:

1. Yes. In the case at bar, the insurable interest of respondents husband

in obtaining the health care agreement was his own health. Section 10
of the Insurance Code is clear that every person has an insurable
interest in the life and health of himself.  The health care agreement
was in the nature of non-life insurance, which is primarily a contract of
indemnity. Once the member incurs hospital, medical or any other
expense arising from sickness, injury or other stipulated contingent,
the health care provider must pay for the same to the extent agreed
upon under the contract

2. No. The answer assailed by petitioner was in response to the question

relating to the medical history of the applicant. This largely depends on
opinion rather than fact, especially coming from respondents husband
who was not a medical doctor. Where matters of opinion or judgment
are called for, answers made in good faith and without intent to
deceive will not avoid a policy even though they are untrue. (A)lthough
false, a representation of the expectation, intention, belief, opinion, or
judgment of the insured will not avoid the policy if there is no actual
fraud in inducing the acceptance of the risk, or its acceptance at a
lower rate of premium, and this is likewise the rule although the
statement is material to the risk, if the statement is obviously of the
foregoing character, since in such case the insurer is not justified in
relying upon such statement, but is obligated to make further
inquiry. There is a clear distinction between such a case and one in
which the insured is fraudulently and intentionally states to be true, as
a matter of expectation or belief, that which he then knows, to be
 actually untrue, or the impossibility of which is shown by the facts
within his knowledge, since in such case the intent to deceive the
insurer is obvious and amounts to actual fraud. Under Section 27 of
the Insurance Code, a concealment entitles the injured party to
rescind a contract of insurance. The right to rescind should be
exercised previous to the commencement of an action on the contract.

7. Fortune Insurance & Surety Co., Inc. vs. CA, 244 SCRA 308

It has been aptly observed that in burglary, robbery, and theft insurance,
"the opportunity to defraud the insurer - the moral hazard - is so great that
insurers have found it necessary to fill up their policies with countless
restrictions, many designed to reduce this hazard. Seldom does the insurer
assume the risk of all losses due to the hazards insured against." 

FACTS:

 Fortune issued a policy to Producers wherein it stipulated under the General

Exceptions Clause that “[t]he company shall not be liable under this policy in
respect of x x x (b) any loss caused by any dishonest, fraudulent or criminal
act of the insured or any officer, employee, partner, director, trustee or
authorized representative of the Insured whether acting alone or in
conjunction with others. x x x" An armored car of the bank was robbed of
P725,000 while transferring it to another branch. After an investigation
conducted by the Pasay police authorities, the driver Magalong and guard
Atiga (et. al.) were charged with violation of the Anti- Highway Robbery Law.
Petitioner claims that it was not liable because the incident fell under the
General Exception Clause. Private respondent says otherwise.

ISSUE:

Whether or not the petitioner is liable under the Money, Security, and Payroll
Robbery policy it issued to the private respondent. 

RULING:

NO. A contract of insurance is a contract of adhesion, thus any ambiguity

therein should be resolved against the insurer, or it should be construed
liberally in favor of the insured and strictly against the insurer. An insurance
contract is a contract of indemnity upon the terms and conditions specified
therein. 

It is settled that the terms of the policy constitute the measure of the
insurer's liability. In the absence of statutory prohibition to the contrary,
insurance companies have the same rights as individuals to limit their
liability and to impose whatever conditions they deem best upon their
obligations not inconsistent with public policy. 

It has been aptly observed that in burglary, robbery, and theft insurance,
"the opportunity to defraud the insurer - the moral hazard - is so great that
insurers have found it necessary to fill up their policies with countless
restrictions, many designed to reduce this hazard. Seldom does the insurer
assume the risk of all losses due to the hazards insured against." Persons
frequently excluded under such provisions are those in the insured's service
and employment. The purpose of the exception is to guard against liability
should the theft be committed by one having unrestricted access to the
property. In such cases, the terms specifying the excluded classes are to be
given their meaning as understood in common speech. The terms "service"
and "employment" are generally associated with the idea of selection,
control, and compensation. 

Magalong and Atiga were, in respect of the transfer of Producer's money

from its Pasay City branch to its head office in Makati, its"authorized
representatives" who served as such with its teller Maribeth Alampay.
Howsoever viewed, Producers entrusted the three with the specific duty to
safely transfer the money to its head office, with Alampay to be responsible
for its custody in transit; Magalong to drive the armored vehicle which would
carry the money; and Atiga to provide the needed security for the money,
the vehicle, and his two other companions. In short, for these particular
tasks, the three acted as agents of Producers. A "representative" is defined
as one who represents or stands in the place of another; one who represents
others or another in a special capacity, as an agent and is interchangeable
with "agent."

8.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: W/N Gulf can claim for its properties aside from the 2 swimming
pools

HELD: YES. Affirmed.

It is basic that all the provisions of the insurance policy should be examined
and interpreted in consonance with each other.
All its parts are reflective of the true intent of the parties.

Insurance Code
Section 2(1)
contract of insurance as an agreement whereby one undertakes for a
consideration to indemnify another against loss, damage or liability arising
from an unknown or contingent event

An insurance premium is the consideration paid an insurer for undertaking to

indemnify the insured against a specified peril.
In the subject policy, no premium payments were made with regard to
earthquake shock coverage, except on the two swimming pools.  

Case No. 9

MANILA MAHOGANY MANUFACTURING CORPORATION, vs. COURT OF

APPEALS AND ZENITH INSURANCE CORPORATION
G.R. No. L-52756 October 12, 1987

Facts:
From 6 March 1970 to 6 March 1971, petitioner insured its Mercedes Benz 4-
door sedan with respondent insurance company. On 4 May 1970 the insured
vehicle was bumped and damaged by a truck owned by San Miguel
Corporation. For the damage caused, respondent insurance company paid
petitioner five thousand pesos (P5,000.00) in amicable settlement.
Petitioner's general manager executed a Release of Claim, subrogating
respondent company to all its right to action against San Miguel Corporation.
On 11 December 1972, respondent company wrote Insurance Adjusters, Inc.
to demand reimbursement from San Miguel Corporation of the amount it had
paid petitioner. Insurance Adjusters, Inc. refused reimbursement, alleging
that San Miguel Corporation had already paid petitioner P4,500.00 for the
damages to petitioner's motor vehicle, as evidenced by a cash voucher and a
Release of Claim executed by the General Manager of petitioner discharging
San Miguel Corporation. Respondent insurance company thus demanded
from petitioner reimbursement of the sum of P4,500.00 paid by San Miguel
Corporation. Petitioner refused. Petitioner contends it is not bound to pay
P4,500.00, and much more, P5,000.00 to respondent company as the
subrogation in the Release of Claim it executed in favor of respondent was
conditioned on recovery of the total amount of damages petitioner had
sustained. a. Since total damages were valued by petitioner at P9,486.43
and only P5,000.00 was received by petitioner from respondent, petitioner
argues that it was entitled to go after San Miguel Corporation to claim the
additional P4,500.00 eventually paid to it by the latter.

Issue:
Whether private respondent may recover the P5000 it paid to petitioner?

Held:
Yes. Since petitioner by its own acts released San Miguel Corporation,
thereby defeating private respondents, the right of subrogation, the right of
action of petitioner against the insurer was also nullified. Otherwise stated,
private respondent may recover the sum of P5,000.00 it had earlier paid to
petitioner. 
∙ Petitioners right to file a deficiency claim against San Miguel Corporation is
with legal basis, without prejudice to the insurer's right of subrogation. But
when Manila Mahogany executed another release claim discharging San
Miguel Corporation from "all actions, claims, demands and rights of action
that now exist or hereafter arising out of or as a consequence of the
accident" after the insurer had paid the proceeds of the policy, the
compromise agreement of P5,000.00 being based on the insurance policy,
the insurer is entitled to recover from the insured the amount of insurance
money paid. 
∙ If a property is insured and the owner receives the indemnity from the
insurer, it is provided in Article 2207 of the New Civil Code that the insurer is
deemed subrogated to the rights of the insured against the wrongdoer and if
the amount paid by the insurer does not fully cover the loss, then the
aggrieved party is the one entitled to recover the deficiency. o Under this
legal provision, the real party in interest with regard to the portion of the
indemnity paid is the insurer and not the insured. 
∙ Since the insurer can be subrogated to only such rights as the insured may
have, should the insured, after receiving payment from the insurer, release
the wrongdoer who caused the loss, the insurer loses his rights against the
latter. But in such a case, the insurer will be entitled to recover from the
insured whatever it has paid to the latter, unless the release was made with
the consent of the insurer. o Petitioner is entitled to keep the sum of
P4,500.00 paid by San Miguel Corporation under its clear right to file a
deficiency claim for damages incurred, against the wrongdoer, should the
insurance company not fully pay for the injury caused (Article 2207, New
Civil Code). However, when petitioner released San Miguel Corporation from
any liability, petitioner's right to retain the sum of P5,000.00 no longer
existed, thereby entitling private respondent to recover the same.

Case No. 10

FEDERAL EXPRESS CORPORATION  vs. AMERICAN HOME ASSURANCE

COMPANY and PHILAM INSURANCE COMPANY, INC. G.R. No. 150094
August 18, 2004

FACTS: 
Shipper SMITHKLINE USA delivered to carrier Burlington Air Express
(BURLINGTON), an agent of [Petitioner] Federal Express Corporation, a
shipment of 109 cartons of veterinary biologicals for delivery to consignee
SMITHKLINE and French Overseas Company in Makati City. The shipment
was covered by Burlington Airway Bill No. 11263825 with the words,
‘REFRIGERATE WHEN NOT IN TRANSIT’ and ‘PERISHABLE’ stamp marked on
its face.  That same day, Burlington insured the cargoes with American
Home Assurance Company (AHAC).  The following day, Burlington turned
over the custody of said cargoes to FEDEX which transported the same to
Manila.
The shipments arrived in Manila and was immediately stored at [Cargohaus
Inc.’s] warehouse.  Prior to the arrival of the cargoes, FEDEX informed GETC
Cargo International Corporation, the customs broker hired by the consignee
to facilitate the release of its cargoes from the Bureau of Customs, of the
impending arrival of its client’s cargoes.
12 days after the cargoes arrived in Manila, DIONEDA, a non-licensed
custom’s broker who was assigned by GETC, found out, while he was about
to cause the release of the said cargoes, that the same [were] stored only in
a room with 2 air conditioners running, to cool the place instead of a
refrigerator.  DIONEDA, upon instructions from GETC, did not proceed with
the withdrawal of the vaccines and instead, samples of the same were taken
and brought to the Bureau of Animal Industry of the Department of
Agriculture in the Philippines by SMITHKLINE for examination wherein it was
discovered that the ‘ELISA reading of vaccinates sera are below the positive
reference serum.’
As a consequence of the foregoing result of the veterinary biologics test,
SMITHKLINE abandoned the shipment and, declaring ‘total loss’ for the
unusable shipment, filed a claim with AHAC through its representative in the
Philippines, the Philam Insurance Co., Inc. (PHILAM) which recompensed
SMITHKLINE for the whole insured amount. Thereafter, PHILAM filed an
action for damages against the FEDEX imputing negligence on either or both
of them in the handling of the cargo.
Trial ensued and ultimately concluded with the FEDEX being held solidarily
liable for the loss. Aggrieved, petitioner appealed to the CA. The appellate
court ruled in favor of PHILAM and held that the shipping Receipts were a
prima facie proof that the goods had indeed been delivered to the carrier in
good condition.

ISSUE: Is FEDEX liable for damage to or loss of the insured goods

 
HELD: 
Petition granted. Assailed decision reversed insofar as it pertains to FEDEX
Prescription of Claim
From the initial proceedings in the trial court up to the present, petitioner
has tirelessly pointed out that respondents’ claim and right of action are
already barred.  Indeed, this fact has never been denied by respondents and
is plainly evident from the records.
Airway Bill No. 11263825, issued by Burlington as agent of petitioner,
states:
“6.     No action shall be maintained in the case of damage to or partial loss
of the shipment unless a written notice, sufficiently describing the goods
concerned, the approximate date of the damage or loss, and the details of
the claim, is presented by shipper or consignee to an office of Burlington
within (14) days from the date the goods are placed at the disposal of the
person entitled to delivery, or in the  case of total loss (including non-
delivery) unless presented within (120) days from the date of issue of the
[Airway Bill].  xxx
Relevantly, petitioner’s airway bill states:
“12./12.1 The person entitled to delivery must make a complaint to the
carrier in writing in the case:
12.1.1 of visible damage to the goods, immediately after discovery of the
damage and at the latest within fourteen (14) days from receipt of the
goods;   xxx
Article 26 of the Warsaw Convention, on the other hand, provides:
Xxx (2)     In case of damage, the person entitled to delivery must complain
to the carrier forthwith after the discovery of the damage, and, at the latest,
within 3 days from the date of receipt in the case of baggage and 7 days
from the date of receipt in the case of goods.  xx
(3)     Every complaint must be made in writing upon the document of
transportation or by separate notice in writing dispatched within the times
aforesaid.
(4)     Failing complaint within the times aforesaid, no action shall lie against
the carrier, save in the case of fraud on his part.” xxx
Condition Precedent
In this jurisdiction, the filing of a claim with the carrier within the time
limitation therefor actually constitutes a condition precedent to the accrual of
a right of action against a carrier for loss of or damage to the goods. The
shipper or consignee must allege and prove the fulfillment of the condition. 
If it fails to do so, no right of action against the carrier can accrue in favor of
the former.  The aforementioned requirement is a reasonable condition
precedent; it does not constitute a limitation of action.
The requirement of giving notice of loss of or injury to the goods is not an
empty formalism.  The fundamental reasons for such a stipulation are (1) to
inform the carrier that the cargo has been damaged, and that it is being
charged with liability therefor; and (2) to give it an opportunity to examine
the nature and extent of the injury. “This protects the carrier by affording it
an opportunity to make an investigation of a claim while the matter is fresh
and easily investigated so as to safeguard itself from false and fraudulent
claims.
NOTES: as to proper payee:
The Certificate specifies that loss of or damage to the insured cargo is
“payable to order x x x upon surrender of this Certificate.” Such wording
conveys the right of collecting on any such damage or loss, as fully as if the
property were covered by a special policy in the name of the holder itself.  At
the back of the Certificate appears the signature of the representative of
Burlington.  This document has thus been duly indorsed in blank and is
deemed a bearer instrument.
Since the Certificate was in the possession of Smithkline, the latter had the
right of collecting or of being indemnified for loss of or damage to the
insured shipment, as fully as if the property were covered by a special policy
in the name of the holder.  Hence, being the holder of the Certificate and
having an insurable interest in the goods, Smithkline was the proper payee
of the insurance proceeds.
Subrogation
Upon receipt of the insurance proceeds, the consignee (Smithkline) executed
a subrogation Receipt in favor of respondents.  The latter were thus
authorized “to file claims and begin suit against any such carrier, vessel,
person, corporation or government.” Undeniably, the consignee had a legal
right to receive the goods in the same condition it was delivered for
transport to petitioner.  If that right was violated, the consignee would have
a cause of action against the person responsible therefor.

11. Eternal Gardens Memorial Park Corp vs Phil Am Life

Insurance, Inc.

Facts:
On December 10, 1980, respondent Philippine American Life Insurance
Company (Philamlife) entered into an agreement denominated as Creditor
Group Life Policy No. P-1920[2] with petitioner Eternal Gardens Memorial
Park Corporation (Eternal).
Under the policy, the clients of Eternal who purchased burial lots from it on
installment basis would be insured by Philamlife.
The policy was to be effective for a period of one... year, renewable on a
yearly basis.
Eternal was required under the policy to submit to Philamlife a list of all new
lot purchasers, together with a copy of the application of each purchaser,
and the amounts of the respective unpaid balances of all insured lot
purchasers. In relation to the instant petition,... Eternal complied by
submitting a letter dated December 29, 1982,[4] containing a list of
insurable balances of its lot buyers for October 1982. One of those included
in the list as "new business" was a certain John Chuang. His balance of
payments was PhP
100,000. On August 2, 1984, Chuang died.
Eternal sent a letter dated August 20, 1984[5] to Philamlife, which served as
an insurance claim for Chuang's death.
In reply, Philamlife wrote Eternal a letter on November 12, 1984,[6]
requiring Eternal to submit the following documents relative to its insurance
claim for Chuang's death
Eternal transmitted the required documents through a letter dated
November 14, 1984,[7] which was received by Philamlife on November 15,
1984.
After more than a year, Philamlife had not furnished Eternal with any reply
to the latter's insurance claim. This prompted Eternal to demand from
Philamlife the payment of the claim for PhP 100,000 on April 25, 1986.
In response to Eternal's demand, Philamlife denied Eternal's insurance claim
in a letter dated May 20, 1986
The deceased was 59 years old when he entered into Contract #9558 and
9529 with Eternal Gardens Memorial Park in October 1982 for the total
maximum insurable amount of P100,000.00 each. No application for Group
Insurance was submitted in our office prior to his death... on August 2,
1984.
In accordance with our Creditor's Group Life Policy No. P-1920, under
Evidence of Insurability provision, "a declaration of good health shall be
required for all Lot Purchasers as party of the application." We cite further
the provision on Effective Date of Coverage under the... policy which states
that "there shall be no insurance if the application is not approved by the
Company." Since no application had been submitted by the Insured/Assured,
prior to his death, for our approval but was submitted instead on November
15, 1984, after his death, Mr.
John Uy Chuang was not covered under the Policy.
With regard to our acceptance of premiums, these do not connote our
approval per se of the insurance coverage but are held by us in trust for the
payor until the prerequisites for insurance coverage shall have been met.
Eternal filed a case before the Makati City Regional Trial Court (RTC) for a
sum of money against Philamlife
The trial court decided in favor of Eternal
The RTC found that Eternal submitted Chuang's application for insurance
which he accomplished before his death, as testified to by Eternal's witness
and evidenced by the letter dated December 29, 1982
It further ruled that due to Philamlife's inaction from the submission of the
requirements of the group insurance on December 29, 1982 to Chuang's
death on August 2, 1984, as well as Philamlife's acceptance of the premiums
during the same period,... Philamlife was deemed to have approved
Chuang's application. The RTC said that since the contract is a group life
insurance, once proof of death is submitted, payment must follow.
Philamlife appealed to the CA, which ruled, thus:
WHEREFORE, the decision of the Regional Trial Court of Makati in Civil Case
No. 57810 is REVERSED and SET ASIDE, and the complaint is DISMISSED.
No costs.
The CA based its Decision on the factual finding that Chuang's application
was not enclosed in Eternal's letter dated December 29, 1982. It further
ruled that the non-accomplishment of the submitted application form
violated Section 26 of the Insurance Code. Thus, the CA... concluded, there
being no application form, Chuang was not covered by Philamlife's
insurance.
Eternal claims that the evidence that it presented before the trial court
supports its contention that it submitted a copy of the insurance application
of Chuang before his death. In Eternal's letter dated December 29, 1982, a
list of insurable interests of buyers for October
1982 was attached, including Chuang in the list of new businesses. Eternal
added it was noted at the bottom of said letter that the corresponding "Phil-
Am Life Insurance Application Forms & Cert." were enclosed in the letter that
was apparently received by Philamlife on
January 15, 1983. Finally, Eternal alleged that it provided a copy of the
insurance application which was signed by Chuang himself and executed
before his death.
Philamlife claims that the evidence presented by Eternal is insufficient,
arguing that Eternal must present evidence showing that Philamlife received
a copy of Chuang's insurance application.
The evidence on record supports Eternal's position.
Issues:
[ G.R. No. 166245, April 09, 2008 ]
ETERNAL GARDENS MEMORIAL PARK CORPORATION, PETITIONER, VS. THE
PHILIPPINE AMERICAN LIFE INSURANCE COMPANY, RESPONDENT.
May the inaction of the insurer on the... insurance application be considered
as approval of the application?
Ruling:
the letter dated December 29, 1982, which Philamlife stamped as received,
states that the insurance forms for the attached list of burial lot buyers were
attached to the letter. Such stamp of receipt has the effect of acknowledging
receipt of the... letter together with the attachments. Such receipt is an
admission by Philamlife against its own interest.[13] The burden of evidence
has shifted to Philamlife, which must prove that the letter did not contain
Chuang's insurance application. However,... Philamlife failed to do so; thus,
Philamlife is deemed to have received Chuang's insurance application.
it was Philamlife's bounden duty to make sure that before a transmittal letter
is stamped as received, the contents of the letter are correct and accounted
for.
Philamlife and Eternal entered into an agreement denominated as Creditor
Group Life Policy No. P-1920 dated December 10, 1980. In the policy, it is
provided that:
EFFECTIVE DATE OF BENEFIT.
The insurance of any eligible Lot Purchaser shall be effective on the date he
contracts a loan with the Assured. However, there shall be no insurance if
the application of the Lot Purchaser is not approved by the Company.
An examination of the above provision would show ambiguity between its
two sentences. The first sentence appears to state that the insurance
coverage of the clients of Eternal already became effective upon contracting
a loan with Eternal while the second sentence appears to... require Philamlife
to approve the insurance contract before the same can become effective