BAR 2004

Bar Question:
CNI insured SAM under a homeowner's policy against claims for accidental injuries by
neighbors. SAM's minor son, BOY, injured 3 children of POS, a neighbor, who sued SAM
for damages. SAM's lawyer was ATT, who was paid for his services by the insurer for
reporting periodically on the case to CNI. In one report, ATT disclosed to CNI that after
his investigations, he found the injuries to the 3 children not accidental but intentional.
SAM lost the case in court, and POS was awarded one million pesos in damages which
he sought to collect from the insurer. But CNI used ATTs report to deny the claim on the
ground that the injuries to POS's 3 children were intentional, hence excluded from the
policy's coverage. POS countered that CNI was estopped from using ATTs report
because it was unethical for ATT to provide prejudicial information against his client to
the insurer, CNI.
Who should prevail: the claimant, POS; or the insurer, CNI? Decide with reasons briefly.
(5%)

Suggested Answer: The insurer’s contention should prevail.

In accident insurance, the insured’s beneficiary has the burden of proof in demonstrating that the cause
of the death is due to the covered peril. Once that fact is established, the burden then shifts to the insurer
to show any excepted peril that may have been stipulated by the parties. (Vda. de Gabriel vs CA, G.R. No.
103883 November 14, 1996). The term Accident or accidental means that which happens by chance or
fortuitously, without intention or design , and which is unexpected, unusual and unforeseen.
The claimant was not able to provide proof that it was accidental it merely countered that the report was
unethical. In this case, the insurer denied liability because the injuries to the 3 children were intentional
and not accidental.

The CNN claim cannot prevail because as a rule it is the insurer who has the burden of
proof to show that the peril was excepted as it is the insurer that seeks avoidance from
the liability.

Moreover, in Finman General Assurance Corp. v. Court of Appeals, 213 SCRA 493
(1992), it was explained that there is no "accident" in the context of an accident policy, if
it is the natural result of the insured's voluntary act, unaccompanied by anything
unforeseen except the injury. There is no accident when a deliberate act is performed
unless some additional and unforeseen happening occurs that brings about the injury.
This element of deliberateness is not clearly shown from the facts of the case, especially
considering the fact that BOY is a minor, and the injured parties are also children.
Accordingly, it is possible that CNI may not prosper. ATT's report is not conclusive on
POS or the court.

BAR 2004

CNI insured SAM under a homeowner’s policy against claims for accidental injuries by
neighbors. SAM’s minor son, BOY, injured 3 children of POS, a neighbor, who sued SAM for
damages. SAM’s lawyer was at ATT, who was paid for his services by the insurer for reporting
periodically on the case to CNI. In one report, ATT disclosed to CNI that after his investigations,
he found the injuries to the 3 children not accidental but intentional. SAM lost the case in court,
and POS was awarded P1 M in damages which he sought to collect from the insurer. But CNI
used ATT’s report to deny the claim on the ground that the injuries to POS’ 3 children were
intentional, hence excluded from the policy’s coverage. POS countered that CNI was stopped
from using ATT’s report because it was unethical for ATT to provide prejudicial information
against his client to the insurer, CNI. Who should prevail: the claimant, POS; or the insurer,
CNI? Decide with reasons briefly.

Answer: CNI is not stopped from using ATT’s report because CNI, in the first place,
commissioned it and paid ATT for it. On the other hand, ATT has no conflict of interest because
SAM and CNI are on the same side—their interests being congruent with each other, namely, to
oppose POS’ claim. It cannot be said that ATT has used the information to the disadvantage or
prejudice of SAM. However, in Finman General Assurance Corp. v. Court of Appeals, 213
SCRA 493 (1992), it was explained that there is no “accident” in the context of an accident
policy, if it is the natural result of the insured’s voluntary act, unaccompanied by anything
unforeseen except the injury. There is no accident when a deliberate act is performed, unless
some additional and unforeseen happening occurs that brings about the injury. This element of
deliberateness is not clearly shown from the facts of the case, especially considering the fact that
BOY is a minor, and the injured parties are also children. Accordingly, it is possible that CNI
may not prosper. ATT’s report is not conclusive on POS or the court. (BAR 2004)