RAFAEL ENRIQUEZ v.

SUN LIFE ASSURANCE COMPANY OF

CANADA
GR NO. L-15895 NOVEMBER 29, 1920

FACTS:
Joaquin Ma. Herrer made an application to the Sun Life Assurance
Company of Canada on September 24, 1917, through its office in Manila
for a life annuity. After paying the sum of Php6,000.00 two days later, the
application was immediately forwarded to the head office of the company
in Montreal, Canada.
On November 26, 1917, the head office gave a notice of acceptance
through cable to Manila. Then on December 4, 1917, the policy was
issued at Montreal, but 14 days later, Atty. Aurelio Torres wrote to the
Manila office stating that Herrer desired to withdraw his application.
The following day, the local office replied to Atty. Torres, stating that
the policy was already issued, and called attention to the notification of
November 26, 1917. The letter was then received by Atty. Torres on
December 21, 1917 and Mr. Herrer died the day before.

ISSUE:
1. Whether or not the Civil Code shall apply in the present case?
2. Whether or not the contract is valid?
RULING:
1. Yes, the Civil Code shall apply in the present case.
The Supreme Court held that as a rule, an acceptance made
by letter shall bind the person making the offer only from the date it came
to his knowledge, may not be the best expression of modern commercial
usage. Still, it must be admitted that its enforcements avoid uncertainty
and tends to security. Not only this, but in order that the principle may not
be taken too lightly, let it be noticed that it is identical with the principles
announced by a considerable number of respectable courts in the United
States. The courts who take this view have expressly held that an
acceptance of an offer of insurance not actually or constructively
communicated to the proposer does not make a contract. Only the mailing
of acceptance, it has been said, completes the contract of insurance, as
the locus poenitentiae is ended when the acceptance has passed beyond
the control of the party.
2. No, the contract was not valid.
The Supreme Court held that the contract for a life annuity in
the case at bar was not perfected because it has not been proved
satisfactorily that the acceptance of the application ever came to the
knowledge of the applicant because Mr. Herrer died without knowing the
acceptance of his application.
THE INSULAR LIFE ASSURANCE COMPANY, LTD., plaintiff-
appellee, vs. CARPONIA T. EBRADO and PASCUALA VDA. DE
EBRADO, defendants-appellants.
-On matters not otherwise specifically provided for by the Insurance Law,
the contract of life insurance is governed by general rules of civil law.
-Life Insurance policy no different from civil donation as far as beneficiary
is concerned; Both are founded on liberality; Commonlaw spouses
designated as beneficiary barred from receiving life insurance proceeds
from a legally married person;
-Conviction for adultery or concubinage for those barred from receiving
donations or life insurance not required as only preponderance of
evidence is necessary.—
Facts:
Buenaventura Cristor Ebrado was issued by The Insular Life Assurance
Co., Ltd., Policy No. 009929 on a whole-life plan for P5,882.00 with a rider
for Accidental Death Benefits for the same amount. Buenaventura C.
Ebrado designated Carponia T. Ebrado as the revocable beneficiary in his
policy.
On October 21, 1969. Ebrado died as a result of an accident when he was
hit by a falling branch of a tree. Carponia T. Ebrado filed with the insurer
a claim for the proceeds of the policy as the designated beneficiary
therein, although she admits that she and the insured Buenaventura C.
Ebrado were merely living as husband and wife without the benefit of
marriage. Pascuala Vda. de Ebrado also filed her claim as the widow of
the deceased insured. She asserts that she is the one entitled to the
insurance proceeds, not the common-law wife, Carponia.
The trial court rendered judgment declaring, among others, Carponia T.
Ebrado disqualified from becoming beneficiary. From this judgment,
Carponia T. Ebrado appealed to the Court of Appeals, but the Appellate
Court certified the case to Us as involving only questions of law.
Issues:
WHAT LAW SHOULD BE APPLIED? SHOULD CARPONIA BE
DISQUALIFIED AS BENEFICIARY PURSUANT TO THE APPLICABLE
CIVIL CODE PROVISION? WHO SHOULD RECOVER THE PROCEEDS
OF THE POLICY?
Ruling:
The SC affirms the judgement of the Lower Court.
There is no specific provision in the Insurance Code concerning the right
of a common law wife to be designated as beneficiary in a life insurance
policy and therefore, the provisions of the Civil Code should apply.
The Civil Code provides, any person who is forbidden from receiving any
donation under Art. 739 cannot be named beneficiary of a life insurance
policy by the person who cannot make a donation to him. It declares void
these donations made between persons who were guilty of adultery or
concubinage at the time of the donation.
The underscored clause neatly conveys that no criminal conviction for the
disqualifying offense is a condition precedent. The law plainly states that
the guilt of the party may be proved “in the same action” for declaration of
nullity of donation
Hence, Carponia as the common-law wife cannot recover the proceeds of
the insurance policy. The proceeds of the policy shall go to the estate of
Buenaventura.
Paz Lopez de Constantino v. Asia Life Insurance Company
No. L-1669. August 31, 1950
FACTS:
(First Case)
Arcadio Constantino was insured by Asia Life Insurance Company
for a period of 20 years. The first premium covered the period from
September 27, 1941 to September 26, 1942. The beneficiary of Arcadio
was Paz Lopez de Constantino.
After the first payment, no further premiums were paid and Arcadio
died on September 22, 1944. Be it noted that being an American
corporation, its branch office in Manila closed due to Japanese occupation
from January 2, 1942 upto 1945.
(Second Case)
Tomas Ruiz and Agustina Peralta was insured by the same
insurance company wherein their annual premium was regularly paid from
August 1, 1938 up to and including September 30, 1941. Since the
payment of premiums was changed from annual to quarterly payment, the
spouses were able to pay it last on Nov. 1941 which covers the period
until January 31, 1942. No further payment of premiums ensued.
Due to the war, the insured and the insurer separated lines as it was
illegal for them to deal with each other. Because the insured had borrowed
on the policy an amount of P234.00 in January, 1941, the cash surrender
value of the policy was sufficient to maintain the policy in force only up to
September 7, 1942. Tomas Ruiz then died on Feb 16, 1945 wherein his
beneficiary was Agustina Peralta. When the latter demanded for payment,
Asia Life refused by reason of non-payment of premiums.
ISSUE:
WON the beneficiary in a life insurance policy may recover the
amount thereof although the insured died after repeatedly failing to pay
the stipulated premiums by reason of war
RULING:
No. Following the United States Rule, it is stated that the insurance
policy, by reason of non-payment of premiums, is not suspended but
rather abrogated since the time of the payments is peculiarly of the
essence of the contract. 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.
After careful perusal of the Insurance Act, the Court was persuaded
that the non-payment of premiums is such a vital defense of insurance
companies that since the very beginning, said Act No. 2427 expressly
preserved it, by providing that after the policy shall have been in force for
two years, it shall become incontestable (i. e. the insurer shall have no
defense) except for fraud, non-payment of premiums, and military or naval
service in time of war (sec. 184 [b], Insurance Act). And when Congress
recently amended this section (Rep. Act No. 171), the defense of fraud
was eliminated, while the defense of nonpayment of premiums was
preserved. Thus, the fundamental character of the undertaking to pay
premiums and the high importance of the def ense of non-payment
thereof, was specifically recognized.
The Court ruled that the first policy had no reserve value, and that
the equitable values of the second had been practically returned to the
insured in the form of loan and advance for premium.
Virginia Perez vs CA
Facts:
Primitivo B. Perez had been insured with the BF Lifeman Insurance
Corporation since 1980 for P20,000.00. Sometime in October 1987, an
agent of the insurance corporation, Rodolfo Lalog, visited Perez and
convinced him to apply for additional insurance coverage of P50,000.00,
to avail of the ongoing promotional discount of P400.00 if the premium
were paid annually.

On October 20, 1987. Primitivo Perez accomplished an application form

for the additional insurance coverage of P50,000.00. On the same day,
petitioner Virginia A. Perez, Primitivo's wife, paid P2,075.00 to Lalog. The
receipt issued by Lalog indicated the amount received was a
"deposit."1 Unfortunately, Lalog lost the application form accomplished by
Perez and so on October 28, 1987, he asked the latter to fill up another
application form. Perez was made to undergo the required medical
examination, which he passed.

Lalog forwarded the application for additional insurance of Perez, together

with all its supporting papers, to the office of BF Lifeman Insurance
Corporation at Gumaca, Quezon which office was supposed to forward
the papers to the Manila office

November 25, 1987, Perez died in an accident. He was riding in a banca

which capsized during a storm. At the time of his death, his application
papers for the additional insurance of P50,000.00 were still with the
Gumaca office. Lalog testified that when he went to follow up the papers,
he found them still in the Gumaca office and so he personally brought the
papers to the Manila office of BF Lifeman Insurance Corporation. It was
only on November 27, 1987 that said papers were received in Manila.

BF Lifeman Insurance Corporation approved the application and issued

the corresponding policy for the P50,000.00 on December 2, 1987.

Petitioner Virginia Perez went to Manila to claim the benefits under the
insurance policies of the deceased. She was paid P40,000.00 under the
first insurance policy for P20,000.00. but the insurance company refused
to pay the claim under the additional policy coverage of P50,000.00. The
insurance company maintained that the insurance for P50,000.00 had not
been perfected at the time of the death of Primitivo Perez. Consequently,
the insurance company refunded the amount of P2,075.00 which Virginia
Perez had paid.
Trial Court

Held that the premium for the additional insurance of P50,000.00 had
been fully paid and even if the sum of P2,075.00 were to be considered
merely as partial payment, the same does not affect the validity of the
policy. The trial court further stated that the deceased had fully complied
with the requirements of the insurance company. He paid, signed the
application form and passed the medical examination.

CA

however, reversed the decision of the trial court saying that the insurance
contract for P50,000.00 could not have been perfected since at the time
that the policy was issued, Primitivo was already dead.

Issue:

WN respondent insurer corporation is liable to pay the proceeds?

Held:

No, the insurer corporation is not liable

This is because when Primitivo filed an application for insurance, paid

P2,075.00 and submitted the results of his medical examination, his
application was subject to the acceptance of private respondent BF
Lifeman Insurance Corporation.

The assent of private respondent BF Lifeman Insurance Corporation

therefore was not given when it merely received the application form and
all the requisite supporting papers of the applicant. Its assent was given
when it issues a corresponding policy to the applicant. It is only when the
applicant pays the premium and receives and accepts the policy while he
is in good health that the contract of insurance is deemed to have been
perfected

The condition imposed by the corporation that the policy must have been
delivered to and accepted by the applicant while he is in good health can
hardly be considered as a potestative or facultative condition (ibig sabihin
ng potestative condition ay nakadepende sa insurer ang validity ng
insurance contract).
Rather, the condition is a suspensive one whereby the acquisition of
rights depends upon the happening of an event which constitutes the
condition. In this case, the suspensive condition was the policy must have
been delivered and accepted by the applicant while he is in good health.
There was non-fulfillment of the condition, however, inasmuch as the
applicant was already dead at the time the policy was issued. Hence, the
non-fulfillment of the condition resulted in the non-perfection of the
contract.
So long as an application for insurance has not been either accepted or
rejected, it is merely an offer or proposal to make a contract. The contract,
to be binding from the date of application, must have been a completed
contract, one that leaves nothing to be done, nothing to be completed,
nothing to be passed upon, or determined, before it shall take effect.
There can be no contract of insurance unless the minds of the parties
have met in agreement
Alpha Insurance vs Arsenia Castor
In interpreting the exclusions in an insurance contract, the terms used
specifying the excluded classes therein are to be given their meaning as
understood in common speech.
A contract of insurance is a contract of adhesion. So, when the terms of
the insurance contract contain limitations on liability, courts should
construe them in such a way as to preclude the insurer from non-
compliance with his obligation
Facts:
- In 2007, respondent entered into a contract of insurance for her
Toyota Revo with Alpha Insurance. It has been stipulated that the
insurance company will be paying 630,000 pesos in case of loss or
damage of the said vehicle.
- Later that same year, respondent instructed her driver Lanuza to
bring the vehicle to a nearby auto-shop for fixing however the said driver
never brought the toyota revo back to her. This led her to file an incident
report and to notify the insurance company of the matters as well as
demanded the payment of the insurance proceeds.
- The request was denied by the insurance company stating that
there is a provision in their contract which says that the company will not
be liable for any malicious damage caused by the insured, any member
of his family or by a person in the insured service.
- This led the petitioner to file a complaint for a sum of money with
the RTC of Quezon city. The said court then ruled in favor of the insured
and ordered the insurance company to pay the proceeds of the insurance.
- The case was then appealed to CA however CA only affirmed the
lower courts decision. A motion for reconsideration was filed but it was
denied, hence, this petition.
Issue:
Whether or not the loss of respondent’s vehicle is excluded under the
insurance policy
Ruling:
No, the loss of the respondent's vehicle is not excluded under the
insurance policy.
An insurance contract should be interpreted as to carry out the purpose
for which the parties entered into in the first place which is to insure
against risks of loss or damage to the goods.
If the restrictive provisions are open to two interpretations, the one which
is most favorable to the insured is adopted.
In here, the petitioner insurance company made use of the words loss and
damage and those words means different things in its ordinary meaning.
The word “loss” refers to the act or fact of losing, or failure to keep
possession, while the word “damage” means deterioration or injury to
property.
Therefore petitioner cannot exclude the loss of respondent's Revo for no
malicious damage was incurred as in its ordinary sense, loss of property
cannot be equated to malicious damage.
SIMON DE LA CRUZ vs. THE CAPITAL INSURANCE and SURETY CO.,
INC., G.R. No. L-21574 June 30, 1966
BARRERA, J.:
Facts:
Eduardo de la Cruz, employed as a mucker in the Itogon-Suyoc Mines,
Inc. in Baguio, was the holder of an accident insurance policy underwritten
by the Capital Insurance & Surety Co., Inc.
In connection with the celebration of the New Year, the company
sponsored a boxing contest for general entertainment wherein the insured
Eduardo de la Cruz, a non-professional boxer participated.
In the course of his bout with another person, likewise a non-professional,
of the same height, weight, and size, Eduardo slipped and was hit by his
opponent on the left part of the back of the head, causing Eduardo to fall,
with his head hitting the rope of the ring. He was brought to the Baguio
General Hospital the following day.
The cause of death was reported as hemorrhage, intracranial, left. Simon
de la Cruz, the father of the insured and who was named beneficiary under
the policy, thereupon filed a claim with the insurance company for
payment of the indemnity under the insurance policy.
As the claim was denied, De la Cruz instituted the action in the Court of
First Instance of Pangasinan for specific performance. Defendant insurer
set up the defense that the death of the insured, caused by his
participation in a boxing contest, was not accidental and, therefore, not
covered by insurance.
Issue:
W/N the cause of death was within the purview of an accident.
Ruling:
Yes
The generally accepted rule is that, death or injury does not result from
accident or accidental means within the terms of an accident-policy if it is
the natural result of the insured's voluntary act, unaccompanied by
anything unforeseen except the death or injury.
There is no accident when a deliberate act is performed unless some
additional, unexpected, independent, and unforeseen happening occurs
which produces or brings about the result of injury or death.
In other words, where the death or injury is not the natural or probable
result of the insured's voluntary act, or if something unforeseen occurs in
the doing of the act which produces the injury, the resulting death is within
the protection of policies insuring against death or injury from accident.
In the present case, while the participation of the insured in the boxing
contest is voluntary, the injury was sustained when he slid, giving
occasion to the infliction by his opponent of the blow that threw him to the
ropes of the ring. Without this unfortunate incident, that is, the
unintentional slipping of the deceased, perhaps he could not have
received that blow in the head and would not have died.
The fact that boxing is attended with some risks of external injuries does
not make any injuries received in the course of the game not accidental.
In boxing as in other equally physically rigorous sports, such as basketball
or baseball, death is not ordinarily anticipated to result. If, therefore, it ever
does, the injury or death can only be accidental or produced by some
unforeseen happening or event as what occurred in this case.
Diosdado C. Ty, plaintiff-appellant vs. First National Surety & Assurance
Co., Inc., defendant-appellee.
FACTS:
Diosdado Ty was employed as operator mechanic foreman in the
Broadway Cotton Factory in Grace Park, Caloocan, and Rizal at a monthly
salary of P185.00 and was insured in 18 local companies among which
was First National Surety and Assurance Co., Inc. Ty’s beneficiary was
his employer which paid the insurance premiums. On 24 December 1953,
a fire broke out which totally destroyed the Broadway Cotton Factory.
Fighting his way out of the factory, Ty was injured on the left hand by a
heavy object. He was brought to the hospital, and after receiving first aid
there, he went to the National Orthopedic Hospital for treatment of his
injuries from December 26, 1953 to February 8, 1954. His injuries have
caused temporary total disability of Ty’s left hand.
Hence, he filed the corresponding notice of accident and notice of claim
with First National Surety & Assurance Co., Inc., and other defendants to
recover indemnity under Part II of the policy which provides: “x x x The
loss of a hand shall mean the loss by amputation through the bones of the
wrist. x x x”
The defendants rejected Ty’s claim for indemnity for the reason there was
no severance of amputation of the left hand hence the disability suffered
by him was not covered by his policy. With this, Ty sued the defendants
in the Municipal Court which however dismissed the complaint. Hence,
this appeal.
ISSUE:
Whether or not the insurer was liable
RULING:
NEGATIVE.
The SC held that the insurance contract is the law between the parties.
As the terms of the policies are clear, express and specific, that only
amputation of the left hand should be considered as a loss thereof, an
interpretation that would include the mere fracture or other temporary
disability, not covered by the policies, would be unwarranted.
Here, Ty suffered injuries which caused the temporary total disability of
his left hand, due to the fractures of the index, middle and fourth fingers
thereof. The policy provides that the loss of hand shall mean the loss by
amputation through the bones of the wrist. Since there was no amputation,
there should be no liability on the part of the insurance.
Panaton v. Malayan Insurance
Facts:
Panaton filed an application for a personal accident policy which
Respondent Malayan issued covering “loss of legs” defined in the policy
as the amputation of legs. Respondent met an accident resulting in total
paralysis of both legs. Thus, demand was made against Malayan to pay
in accordance with the personal accident policy, but the latter refused
arguing that there was no “loss of legs” as stated in the policy considering
that the insured, although totally paralyzed, was never amputated.
Issue:
WON MALAYAN AS INSURER WAS LIABLE
Held:
Yes. The insurer was liable because “loss of legs” should be
interpreted to include the permanent and total paralysis of both legs. The
interpretation of the term “loss of legs” as limited to amputation of both
legs to the exclusion of permanent total paralysis of both legs would be
contrary to public good, sound morality, and public policy. It would force a
desperate man to cause an amputation to be performed since his legs are
of no use for life, to avail the benefits of the policy. The permanent, total
paralysis of both legs suffered by the insured was equivalent to loss of
both legs, since he will obviously be bedridden for the rest of his natural
life.
QUA Chee GAN vs.LAW UNION AND ROCK INSURANCE CO., LTD.,
represented by its agent, WARNER, BARNES AND CO., LTD.,

Facts:
Qua Chee Gan was a merchant from Albay who owned 4 warehouses or
bodegas which he insured with Law Union and Rock Co., LTD., since
1937 and the lose made payable to the Philippine National Bank (PNB)
as mortgage of the hemp and crops, to the extent of its interest.
The amount of the insurance is Php 370,000.00. On the morning of July
21, 1940,a fire broke out in bodegas 1,2 and 4 which lasted for almost a
week. Qua Chee Gan informed Law Union by telegram, submitted the
corresponding fire claims, totalling P398,562.81 (but reduced to the full
amount of the insurance, P370,000.
However, the Insurance Company rejected alleging that it was a
fraudulent claim that the fire had been deliberately caused by the insured
or by other persons in connivance with him. Qua Chee Gan, with his
brother, Qua Chee Pao, and some employees of his, were indicted and
tried in 1940 for the crime of arson but was subsequently acquitted.
Qua Chee Gan then instituted the civil case for the collection of money.
Philippine National Bank’s complaint in intervention was dismissed
because during the pendency of the suit, Que Chee Gan paid PNB.
Eventually, the CFI granted Qua Chee Gan’s petition and ruled that Law
Union and Rock Insurance Co.,Ltd should pay 356,394.48 for the 5 cases
of action stated for the civil case. Law Union then filed an appeal with the
following assignment of errors:
1. Memo of warranty requires 11 hydrants instead of 2 which were
actually placed in the bodegas.
2. Violation of hemp warranty against storage of gasoline since it
prohibits oils
3. Fire was due to fraud
4. Burned bodegas could not possibly have contained the quantities
of copra and hemp stated in the fire claims
Issue:
Whether or not Qua Chee Gan should be allowed to claim the insurance
proceeds
Held:
Yes. Qua Chee Gan should be allowed to claim the insurance
proceeds.
1. The insurance company was aware, even before the policies were
issued, that in the premises insured there were only two fire hydrants
installed by Qua Chee Gan and two others nearby, owned by the
municipality of TAbaco, contrary to the requirements of the warranty in
question. It is a well settled rule of law that an insurer which with
knowledge of facts entitling it to treat a policy as no longer in force,
receives and accepts a premium on the policy, estopped to take
advantage of the forfeiture.
2. As to the second assignment of error, it is well to note that
gasoline is not specifically mentioned among the prohibited articles
listed in the so-called "hemp warranty." The cause relied upon by the
insurer speaks “oils” (animal and/or vegetable and/or mineral and/or
their liquid products having a flash point below 300o Fahrenheit",
and is decidedly ambiguous and uncertain; for in ordinary parlance,
"Oils" mean "lubricants" and not gasoline or kerosene.
▪ by reason of the exclusive control of the insurance
company over the terms and phraseology of the contract,
the ambiguity must be held strictly against the insurer
and liberraly in favor of the insured, specially to avoid a
forfeiture
The Court found no reason why the prohibition of keeping
gasoline in the premises could not be expressed clearly and
unmistakably, in the language and terms that the general public can
readily understand, without resort to obscure esoteric expression
(now derisively termed "gobbledygook").
Another point that is in favor of the insured is that the gasoline
kept in Bodega No. 2 was only incidental to his business, being no
more than a customary 2 day's supply for the five or six motor
vehicles used for transporting of the stored merchandise.
3. As to the third issue, the Court found that the discrepancies were a
result of the insured's erroneous interpretation of the provisions of the
insurance policies and claim forms, caused by his imperfect knowledge of
English, and that the misstatements were innocently made and without
intent to defraud.
4. Lastly, the insured's overclaim of 20 per cent in the case at bar, duly
explained by him to the Court a quo, appears puny by comparison, and
can not be regarded as "more than misstatement, more than inadvertence
of mistake, more than a mere error in opinion, more than a slight
exaggeration" that would entitle the insurer to avoid the policy. It is well to
note that the overcharge of 20 per cent was claimed only on a part (70 per
cent) of the hemp stock; had the insured acted with fraudulent intent,
nothing prevented him from increasing the value of all of his copra, hemp
and buildings in the same proportion.
(The 20 per cent overclaim on 70 per cent of the hemp stock, was
explained by the insured as caused by his belief that he was entitled to
include in the claim his expected profit on the 70 per cent of the hemp,
because the same was already contracted for and sold to other parties
before the fire occurred)
 FORTUNE INSURANCE AND SURETY CO., INC., petitioner, vs.
COURT OF APPEALS and PRODUCERS BANK OF THE
PHILIPPINES, respondents.
Same; Same; Contract of insurance is a contract of adhesion, thus any
ambiguity therein should be resolved against the insurer.—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.
Limitations of liability should be regarded with extreme jealousy and
must be construed in such a way as to preclude the insurer from
non-compliance with its obligation. It goes without saying then that
if the terms of the contract are clear and unambiguous, there is no
room for construction and such terms cannot be enlarged or
diminished by judicial construction
Facts:
This case began with the filing of a complaint for recovery of the sum
of P725,000.00 under the policy issued by Fortune. The sum was
allegedly lost during a robbery of Producer’s armored vehicle while it was
in transit to transfer the money from its Pasay City Branch to its head office
in Makati. After joinder of issues, the key facts are as Follows:
- plaintiff was insured by the defendants and an insurance policy
was issued
- Armored car of the plaintiff containing the amount previously
mentioned, was robbed of the said cash. The robbery took place while the
armored car was traveling along Taft Avenue in Pasay City;
- After an investigation conducted by the Pasay police the driver
Magalong and guard Atiga were charged, together with Edelmer
Bantigue Y Eulalio, Reynaldo Aquino and John Doe, with violation of (Anti-
Highway Robbery Law)
- Demands were made by the plaintiff(producer Bank) upon the
defendant(Fortune Insurance) to pay the amount of the loss of
P725,000.00, but the latter refused to pay as the loss is excluded from
the coverage of the insurance policy which provides:
General Exceptions
Section (b), The company shall not be liable under this policy in respect
of
(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.
- The plaintiff opposes the contention of the defendant and
contends that Atiga and Magalong are not its “officer, employee,
trustee or authorized representative at the time of the robbery.
RTC ruled in favor of the producers, stating that Magalong and
Atiga were not employees or representatives of Producers. The RTC
provides that “The finding is accordingly compelled that neither
Magalong nor Atiga were plaintiff’s “employees” in avoidance of
defendant’s liability under the policy, particularly the general exceptions
therein embodied. Neither is the Court prepared to accept the proposition
that driver Magalong and guard Atiga were the “authorized
representatives” of plaintiff.”
CA agrees with the conclusion of the lower court.
Issue:
whether the petitioner is liable under the Money, Security, and
Payroll Robbery policy it issued to the private respondent or whether
recovery thereunder is precluded under the general exceptions clause
thereof.
Ruling:
Petition merits, They can no longer recover as they are precluded
under the general exceptions clause.
It is clear to us that Fortune’s intention is to exclude and exempt from
protection and coverage losses arising from dishonest, fraudulent, or
criminal acts of persons granted or having unrestricted access to
Producers’ money or payroll.
Even granting for the sake of argument that these contracts were not
“labor-only” contracts, and PRC Management Systems and Unicorn
Security Services were truly independent contractors, This Court is
satisfied that 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.
Producers entrusted the three with the specific duty to safely
transfer the money to its head office, 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.”
Ruling in the book:
The loss was excluded by the policy. While the contractors provided
“labor-only”, Magalong and Artiga were, in respect of the transfer of
producers money from its pasay branch to its head office of Makati, its
authorized representatives who served as such. Fortune insurance under
the general exception clause of the policy was not liable for the loss
caused by the authorized representative of the insured. While limitations
of liability should be regarded with extreme jealousy and must be
construed in such a way as to preclude the insurer from non-compliance
with the obligation, however if the terms and conditions of the contract are
clear and unambiguous, there is no room for construction and such terms
cannot be enlarged or diminished by judicial construction.
(ito nalang siguro gamitin nyo sa recit para sure HAHA)
FILIPINAS COMPAÑÍA DE SEGUROS vs. CHRISTERN, HUENEFELD
& Co., INC.
PARAS, C.J.:
FACTS:
The respondent corporation, after payment of a corresponding premium,
obtained from the petitioner a fire policy in the sum of P100,000.00,
covering merchandise contained in a building located at No. 711 Roman
Street, Binondo, Manila.
During the Japanese military occupation, the building and insured
merchandise were burned, which prompted the respondent to submit a
claim under the aforementioned policy. The salvaged goods were sold at
a public auction and the respondent suffered a total loss of P92,650.00,
which the petitioner refused to pay. It was the petitioner’s contention that
the policy in had ceased to be in force on the date the United States
declared war against Germany, the respondent corporation being
controlled by German subjects and the petitioner being a company under
American jurisdiction, as the policy was issued on Oct. 1, 1941. However,
the petitioner, in pursuance of the order of the Director of the Bureau of
Financing, Philippine Executive Commission, paid to the respondent the
total sum of their claim.
The petitioner filed the present action in the CFI of Manila to recover
the sum, which it dismissed. Upon appeal to the CA, the judgment of the
CFI was affirmed. Thus, the appeal to the Supreme Court.
ISSUE:
Can the petitioner be held liable under the insurance policy?
HELD:
No, it cannot. There is no question that majority of the stockholders of the
respondent corporation were German subjects. This being so, we have to
rule that said respondent became an enemy corporation upon the
outbreak of the war between the United States and Germany.
The Philippine Insurance Law (Act No. 2427, as amended), in
section 8, provides that "anyone except a public enemy may be insured."
It stands to reason that an insurance policy ceases to be allowable as
soon as an insured becomes a public enemy. The respondent having
become an enemy corporation on December 10, 1941, the insurance
policy issued in its favor on October 1, 1941, by the petitioner (a Philippine
corporation) had ceased to be valid and enforceable, and since the
insured goods were burned after December 10, 1941, and during the war,
the respondent was not entitled to any indemnity under said policy from
the petitioner.
Wherefore, the appealed decision is hereby reversed and the
respondent corporation is ordered to pay to the petitioner the sum of
P77,208.33, Philippine currency, less the amount of the premium, in
Philippine currency, that should be returned by the petitioner for the
unexpired term of the policy in question, beginning December 11, 1941.
Without costs. So ordered.