THE INSULAR LIFE ASSURANCE COMPANY, LTD., VS. CARPONIA T. EBRADO AND PASCUALA VDA.

DE EBRADO

Buenaventura Ebrado was issued by The Insular Life Assurance Co., Ltd., a whole-life plan for P5,882.00 with a rider for
Accidental Death Benefits for the same amount. He designated Carponia T. Ebrado as the revocable beneficiary in his
policy and referred to her as his wife.

Sometime in October 1969, Buenaventura C. Ebrado died as a result of an accident when he was hit by a falling branch
of a tree. As the insurance policy was in force, The Insular Life Assurance Co., Ltd. stands liable to pay the coverage in
the total amount of P11,745.73, representing the face value of the policy in the amount of P5,882.00 plus the additional
benefits for accidental death also in the amount of P5,882.00 and the refund of P18.00 paid for the premium paid, minus
the unpaid premiums and interest due.

Carponia Ebrado filed with the insurer a claim for the proceeds of the policy as the designated beneficiary, although she
admits that she and the insured were merely living as husband and wife without the benefit of marriage.

Pascuala Ebrado also filed her claim as the widow of the deceased insured and asserts that she is the one entitled to the
insurance proceeds, not the common-law wife.

In doubt as to whom the insurance proceeds shall be paid, the insurer, The Insular Life Assurance Co., Ltd. commenced
an action for Interpleader before the CFI. It was found that the deceased Buenaventura Ebrado was married to Pascuala
with whom she had six legitimate children. But during the lifetime of Buenaventura Ebrado, he was living with his
common-law wife, Carponia Ebrado, with whom she had 2 children although he was not legally separated from his legal
wife.

The trial court rendered judgment declaring Carponia T. Ebrado disqualified from becoming beneficiary of the insured
and directing the payment of the insurance proceeds to the estate of the deceased. They based their decision on Art.
739 of the Civil Code, wherein a criminal conviction for adultery or concubinage is not essential in order to establish the
disqualification.

Article 739 of the new Civil Code provides:

"The following donations shall be void:

"1. Those made between persons who were guilty of adultery or concubinage at the time of donation;

"2. Those made between persons found guilty of the same criminal offense, in consideration thereof;

"3. Those made to a public officer or his wife, descendants or ascendants by reason of his office.

What is essential is that such adultery or concubinage exists at the time Carponia T. Ebrado was made beneficiary in the
policy. Since it is agreed in their stipulation that the deceased insured and Carponia T. Ebrado were living together as
husband and wife without being legally married and that the marriage of the insured with the other defendant Pascuala
was valid and still existing at the time the insurance was purchased, then Carponia is disqualified from becoming the
beneficiary of the policy and as such she is not entitled to the proceeds of the insurance upon the death of the insured.

CA affirmed.
ISSUE: WON a common-law wife named as beneficiary in the life insurance policy of a legally married man may claim the
proceeds in case of death of the legally married man. (NO)

The bar in donations between legitimate spouses and those between illegitimate ones should be enforced in life
insurance policies since the same are based on similar consideration (liberality of the donor). A beneficiary in a life
insurance policy is no different from a donee as both are recipients of pure beneficence. That reason and morality
dictate that the impediments imposed upon married couple should likewise be imposed upon extra-marital relationship

No criminal conviction for the disqualifying offense is a condition precedent because it cannot even be gleaned from the
provision that a criminal prosecution is needed. On the contrary, the law plainly states that the guilt of the party may be
proved "in the same action" for declaration of nullity of donation and that it would be sufficient if evidence
preponderates upon the guilt of the consort for the offense indicated. The quantum of proof in criminal cases is not
demanded.

Carponia T. Ebrado is declared disqualified to be the beneficiary of the late Buenaventura C. Ebrado in his life insurance
policy. As a consequence, the proceeds of the policy are hereby held payable to the estate of the deceased insured.

GREAT PACIFIC LIFE ASSURANCE COMPANY VS. COURT OF APPEALS

Respondent Ngo Hing filed an application with Great Pacific Life Assurance Company for a twenty-year endowment
policy in the amount of P50,000.00 on the life of his one-year-old daughter Helen Go. Said respondent supplied the
essential data which petitioner Lapu-Lapu Mondragon, Branch Manager of the Pacific Life in Cebu City wrote on the
corresponding form in his own handwriting. Mondragon finally type-wrote the data on the application form which was
signed by Ngo Hing. The latter paid the annual premium, the sum of P1,077.75 going over to the Company, but he
retained the amount of P1,317.00 as his commission for being a duly authorized agent of Pacific Life.

Upon the payment of the insurance premium, the binding deposit receipt was issued to Ngo Hing. Likewise, Mondragon
handwrote at the bottom of the back page of the application form his strong recommendation for the approval of the
insurance application.

But later on, Mondragon received a letter from Pacific Life disapproving the insurance application because said life
insurance application for 20-year endowment plan is not available for minors below seven years old, but Pacific Life can
consider the same under the Juvenile Triple Action Plan, and advised that if the offer is acceptable, the Juvenile Non-
Medical Declaration be sent to the Company.

The non-acceptance of the insurance plan was allegedly not communicated by Mondragon to Ngo Hing. Instead, he
wrote back to Pacific Life strongly recommending the approval of the 20-year endowment life insurance on the ground
that Pacific Life is the only insurance company not selling the 20-year endowment insurance plan to children, pointing
out that since 1954 the customers, especially the Chinese, were asking for such coverage.

Sometime in May 1957, Helen Go died of influenza with complication of broncho-pneumonia. Thereupon, respondent
sought the payment of the proceeds of the insurance, but having failed in his effort, he filed the action for the recovery
of the same before the CFI, which rendered a decision against petitioners.

At the back of application form are condition precedents required before a deposit is considered a BINDING RECEIPT.
The provisions printed show that the binding deposit receipt is intended to be merely a provisional or temporary
insurance contract and only upon compliance of the following conditions:
(1) that the company shall be satisfied that the applicant was insurable on standard rates;

(2) that if the company does not accept the application and offers to issue a policy for a different plan, the insurance
contract shall not be binding until the applicant accepts the policy offered; otherwise, the deposit shall be refunded; and

(3) that if the applicant is not insurable according to the standard rates, and the company disapproves the application,
the insurance applied for shall not be in force at any time, and the premium paid shall be returned to the applicant.

ISSUE:

(1) whether the binding deposit receipt constituted a temporary contract of the life insurance in question; (NO) and

(2) whether Ngo Hing concealed the state of health and physical condition of Helen Go, which rendered the policy void.

RULING: The binding deposit receipt is merely an acknowledgment, on behalf of the company. The company’s branch
office had received from the applicant the insurance premium and had accepted the application subject for processing
by the insurance company; the latter will either approve or reject the same on the basis of whether or not the applicant
is "insurable on standard rates." Since petitioner Pacific Life disapproved the insurance application of Ngo Hing, the
binding deposit receipt in question had never become in force at any time.

Therefore, the binding deposit receipt is merely conditional and does not insure outright. Where an agreement is made
between the applicant and the agent, no liability shall attach until the principal approves the risk and a receipt is
given by the agent. The acceptance is merely conditional, and is subordinated to the act of the company in approving
or rejecting the application. Thus, in life insurance, a "binding slip" or "binding receipt" does not insure by itself.

The failure of petitioner Mondragon to communicate to him the rejection of the insurance application would not have
any effect.

In the first place, there was no contract perfected between the parties who had no meeting of their minds. Secondly,
having an insurable interest on the life of his one-year-old daughter, aside from being an insurance agent and an office
associate of Mondragon, Ngo Hing must have known and followed the progress on the processing of such application
and could not pretend ignorance of the Company's rejection of the 20-year endowment life insurance application.

The Court believes that respondent had deliberately concealed the state of health and physical condition of his daughter
Helen Go.

When respondent supplied the required essential data for the insurance application form, he was fully aware that his
one-year-old daughter is a mongoloid child. Such a congenital physical defect could never be disguised. Nonetheless,
respondent, in apparent bad faith, withheld the material fact to the risk to be assumed by the insurance company.

As an insurance agent of Pacific Life, he ought to know his duty and responsibility to supply such a material fact. If he
had divulged said significant fact in the insurance application form, Pacific Life would have verified the same and would
have had no choice but to disapprove the application outright.

The contract of insurance is one of perfect good faith (uberrima fides], not for the insured alone but equally for the
insurer. Concealment takes place when there is neglect to communicate that which a party knows and ought to
communicate. Whether intentional or unintentional, the concealment entitles the insurer to rescind the contract of
insurance.

Therefore, no insurance contract was perfected between the parties with the non-compliance of the conditions
provided in the binding receipt, and concealment, as legally defined, having been committed by respondent.

TAN VS. COURT OF APPEALS (1989)

Tan Lee Siong, father of petitioners, applied for life insurance in the amount of P80,000.00 with PHILIPPINE AMERICAN
LIFE INSURANCE COMPANY. Said application was approved and was issued effective November 1973, with petitioners as
the beneficiaries thereof.

Years later, Tan Lee Siong died of hepatoma. Petitioners then filed with respondent their claim for the proceeds of the
life insurance policy. However, PHILIPPINE AMERICAN LIFE denied petitioners' claim and rescinded the policy because of
the alleged misrepresentation and concealment of material facts made by the deceased Tan Lee Siong in his application
for insurance. The premiums paid on the policy were thereupon refunded.

Alleging that respondent's refusal to pay them the proceeds of the policy was unjustified and unreasonable, petitioners
a complaint against the former with the Office of the Insurance Commissioner.

Insurance Commissioner rendered judgment dismissing the complaint and was also dismissed by the CA for lack of
merit.

ISSUE:

o WON respondent insurer has the right to rescind the policy contract when insured is already dead. (YES)
o WON respondent insurer may be allowed to avoid the policy on grounds of concealment by the deceased
assured. (YES)

The petitioners contend that the respondent company no longer had the right to rescind the contract of insurance as
rescission must allegedly be done during the lifetime of the insured within two years and prior to the commencement of
action.

RULING:

The pertinent section in the Insurance Code provides:

Section 48. Whenever a right to rescind a contract of insurance is given to the insurer, such right must be exercised prior
to the commencement of an action on the contract.

"After a policy of life insurance made payable on the death of the insured shall have been in force during the lifetime of
the insured for a period of two years from the date of its issue or of its last reinstatement, the insurer cannot prove that
the policy is void ab initio or is rescindable by reason of the fraudulent concealment or misrepresentation of the insured
or his agent."

According to the petitioners, the second paragraph of Section 48 prevents the insurance company from exercising a right
to rescind after the death of the insured.
The so-called "INCONTESTABILITY CLAUSE" precludes the insurer from raising the defenses of false representations or
concealment of material facts insofar as health and previous diseases are concerned if the insurance has been in force
for at least two years during the insured's lifetime. The phrase "during the lifetime found in Section 48 simply means
that the policy is no longer considered in force after the insured has died. The key phrase in the second paragraph of
Section 48 is "for a period of two years."

As noted by the Court of Appeals:

The policy was issued on November 6, 1973, and the insured died on April 26, 1975. The policy was thus in force for a
period of only one year and five months. Considering that the insured died before the two-year period had lapsed,
respondent company is not, therefore, barred from proving that the policy is void ab initio by reason of the insured's
fraudulent concealment or misrepresentation. Moreover, respondent company rescinded the contract of insurance and
refunded the premiums paid on September 11, 1975, previous to the commencement of this action on November 27,
1975.

The petitioners contend that there could have been no concealment or misrepresentation by their late father because Tan
Lee Siong did not have to buy insurance. He was only pressured by salesmen to do so . That he could have obtained a
bigger insurance, not just P80,000.00 if his purpose were to misrepresent and to conceal his ailments in anticipation of
death during the two-year period. He did not.

According to the SC, the legislative answer to the arguments is the "incontestability clause" added by the second
paragraph of Section 48.

The insurer has two years from the date of issuance of the insurance contract or of its last reinstatement within which to
contest the policy, whether or not, the insured still lives within such period. After two years, the defenses of
concealment or misrepresentation, no matter how patent or well founded, no longer lie. Congress felt this was a
sufficient answer to the various tactics employed by insurance companies to avoid liability.

The petitioners argue that no evidence was presented to show that the medical terms were explained in a layman's
language to the insured. They state that the insurer should have presented its two medical field examiners as witnesses.
Moreover, the petitioners allege that the policy intends that the medical examination must be conducted before its
issuance otherwise the insurer "waives whatever imperfection by ratification."

When the deceased affixed his signature on the application form, he affirmed the correctness of all the entries and
answers appearing in it. That he, a businessman, would not have affixed his signature on the application form unless he
clearly understood its significance. For, the presumption is that a person intends the ordinary consequence of his
voluntary act and takes ordinary care of his concerns.

There is no strong showing that we should apply the "fine print" or "contract of adhesion" rule in this case. It is a matter
of common knowledge that large amounts of money are collected from ignorant persons by companies and associations
which adopt high sounding titles and print the amount of benefits they agree to pay in large black-faced type. All
provisions, conditions, or exceptions which in any way tend to work a forfeiture of the policy should be construed most
strongly against those for whose benefit they are inserted, and most favorably toward those against whom they are
meant to operate.
There is no showing that the questions in the application form for insurance regarding the insured's medical history are
in smaller print than the rest of the printed form or that they are designed in such a way as to conceal from the applicant
their importance.

Therefore, the decision of the Court of Appeals is AFFIRMED. Considering that the insured died before the two-year
period had lapsed, respondent company is not barred from proving that the policy is void ab initio by reason of the
insured's fraudulent concealment or misrepresentation.

SUN INSURANCE OFFICE, LTD. VS. COURT OF APPEALS

The petitioner issued Personal Accident Policy to Felix Lim, Jr. with a face value of P200,000.00. Two months later, he
was dead with a bullet wound in his head. As beneficiary, his wife Nerissa Lim sought payment on the policy, but her
claim was rejected. The petitioner agreed that there was no suicide. It argued, however, that there was no accident
either.

Pilar Nalagon, Lim's secretary, was the only eyewitness to his death. It happened after his mother's birthday party.
According to Nalagon, Lim was in a happy mood (but not drunk) and was playing with his handgun, from which he had
previously removed the magazine. As she watched television, he stood in front of her and pointed the gun at her. She
pushed it aside and said it might be loaded. He assured her it was not and then pointed it to his temple. The next
moment there was an explosion and Lim slumped to the floor. He was dead before he fell.

The widow sued SUN INSURANCE OFFICE in the Regional Trial Court. RTC ruled in favor of the widow and was sentenced
to pay her P200,000.00, representing the face value of the policy. This decision was affirmed on appeal.

The petitioner, says that "there is no accident when a deliberate act is performed unless some additional, unexpected
and unforeseen happening occurs which produces or brings about their injury or death."

The petitioner also cites one of the four exceptions provided for in the insurance contract and contends that the private
petitioner's claim is barred by such provision. It is there stated:

The company shall not be liable:

i) The insured person attempting to commit suicide or willfully exposing himself to needless peril except in an attempt to
save human life.

The parties agree that Lim did not commit suicide. Nevertheless, the petitioner contends that the insured willfully
exposed himself to needless peril and thus removed himself from the coverage of the insurance policy.

ISSUE:

o WON the Court of Appeals made an error in approving the payment of the claim and the award of damages.
(NO)
o WON Lim is entitled to recover damages. (NO)

RULING:
The words "accident" and "accidental" when used in an insurance contract are to be construed and considered
according to the ordinary understanding and common usage of people generally. "accident" and "accidental" pertain to
those that happen by chance or fortuitously, without intention or design, and which is unexpected, unusual, and
unforeseen.

The definition that has been adopted by the courts is that an accident is an event that takes place without one's
foresight or expectation - an event that proceeds from an unknown cause, or is an unusual effect of a known case, and
therefore not expected.

An accident is an event which happens without any human agency or, if happening through human agency, an event
which, under the circumstances, is unusual to and not expected by the person to whom it happens.

In light of these definitions, the Court is convinced that the incident that resulted in Lim's death was indeed an accident.
The firing of the gun, which was the additional unexpected and independent and unforeseen occurrence, led to the
insured person's death.

Furthermore, suicide and willful exposure to needless peril are in pari materia (on the same subject matter) because
they both signify a disregard for one's life. The only difference is in degree, as suicide imports a positive act of ending
such life whereas the second act indicates a reckless risking that is almost suicidal in intent.

The petitioner maintains that by the mere act of pointing the gun to his temple, Lim had willfully exposed himself to
needless peril and so came under the exception. The theory is that a gun is per se dangerous and should therefore be
handled cautiously in every case.

That posture is arguable. But what is not is that Lim had removed the magazine from the gun and believed it was no
longer dangerous. He expressly assured her that the gun was not loaded. Lim did not willfully expose himself to
needless peril when he pointed the gun to his temple because the fact is that he thought it was not unsafe to do so.
The act was precisely intended to assure Nalagon that the gun was indeed harmless.

SKIP: The petitioner's hypothetical swimmer knew when he dived off the Quezon Bridge, that the currents below were
dangerous. By contrast, Lim did not know that the gun he put to his head was loaded.

There is nothing in the policy that relieves the insurer of the responsibility to pay the indemnity agreed upon if the
insured is shown to have contributed to his own accident. There are only four exceptions expressly made in the contract
to relieve the insurer from liability, and none of these exceptions is applicable in the case at bar.

On the second assigned error, however, the Court ruled in favor of the petitioner.

It is evident that the petitioner was acting in good faith when it resisted the respondent's claim on the ground that the
death of the insured was covered by the exception. The award of moral and exemplary damages and of attorney's fees is
unjust and so must be disapproved.

WHEREFORE, the decision of the Court of Appeals is AFFIRMED insofar as it holds the petitioner liable for the sum of
P200,000.00 representing the face value of the insurance contract, but MODIFIED with the deletion of all awards for
damages.

HEIRS OF LORETO C. MARAMAG VS. MARAMAG

The case stems from a petition filed against respondents with the Regional Trial Court for revocation and/or reduction of
insurance proceeds for being void and/or inofficious.

The petition alleged that:

(1) petitioners were the legitimate wife and children of Loreto Maramag (Loreto), while respondents were Loreto's
illegitimate family;

(2) Eva Maramag (Eva) was a concubine of Loreto and a suspect in the killing of the latter, thus, she is disqualified to
receive any proceeds from his insurance policies from Insular Life Assurance Company, Ltd. (Insular) and Great Pacific
Life Assurance Corporation (Grepalife);

(3) the illegitimate children of Loreto Odessa, Karl Brian, and Trisha Angelie were entitled only to one-half of the legitime
of the legitimate children, thus, the proceeds released to Odessa and those to be released to Karl Brian and Trisha
Angelie were inofficious and should be reduced; and

(4) petitioners could not be deprived of their legitimes, which should be satisfied first.

Part of the insurance proceeds had already been released in favor of Odessa, while the rest of the proceeds are to be
released in favor of Karl Brian and Trisha Angelie, both minors.

In answer, Insular admitted that Loreto misrepresented Eva as his legitimate wife and Odessa, Karl Brian, and Trisha
Angelie as his legitimate children, and that they filed their claims for the insurance proceeds of the insurance policies;
that when it ascertained that Eva was not the legal wife of Loreto, it disqualified her as a beneficiary and divided the
proceeds among Odessa, Karl Brian, and Trisha Angelie, as the remaining designated beneficiaries; and that it released
Odessa's share as she was of age, but withheld the release of the shares of minors Karl Brian and Trisha Angelie pending
submission of letters of guardianship.

Insular alleged that the complaint failed to state a cause of action insofar as it sought to declare as void the designation
of Eva as beneficiary, because Loreto revoked her designation and it disqualified her; and insofar as it sought to declare
as inofficious the shares of Odessa, Karl Brian, and Trisha Angelie, considering that no settlement of Loreto's estate had
been filed nor had the respective shares of the heirs been determined. Insular further claimed that it was bound to
honor the insurance policies designating the children of Loreto with Eva as beneficiaries pursuant to Section 53 of the
Insurance Code.

Grepalife alleged that Eva was not designated as an insurance policy beneficiary; that the claims filed by Odessa, Karl
Brian, and Trisha Angelie were denied because Loreto was ineligible for insurance due to a misrepresentation in his
application form that he was born on December 10, 1936 and, thus, not more than 65 years old when he signed it; that
the case was premature, there being no claim filed by the legitimate family of Loreto; and that the law on succession
does not apply where the designation of insurance beneficiaries is clear.

In their comment, petitioners alleged that the designation of a beneficiary is an act of liberality or a donation and,
therefore, subject to the provisions of Articles 752 and 772 of the Civil Code.
In reply, both Insular and Grepalife countered that the insurance proceeds belong exclusively to the designated
beneficiaries in the policies, not to the estate or to the heirs of the insured. Grepalife also reiterated that it had
disqualified Eva as a beneficiary when it ascertained that Loreto was legally married to Vicenta Pangilinan Maramag.

RTC ruling: Art. 2011 of the Civil Code provides that the contract of insurance is governed by the special laws. Matters
not expressly provided for in such special laws shall be regulated by this Code.

The Insurance Code contains a provision regarding to whom the insurance proceeds shall be paid. It is very clear under
Sec. 53 that the insurance proceeds shall be applied exclusively to the proper interest of the person in whose name or
for whose benefit it is made, unless otherwise specified in the policy. Since the defendants are the ones named as the
primary beneficiary in the insurances taken by the deceased Loreto C. Maramag and there is no showing that plaintiffs
were also included as beneficiary, then the proceeds are properly given to the illegitimate children. This is because the
beneficiary has a vested right to the indemnity, unless the insured reserves the right to change the beneficiary.

Neither could the plaintiffs invoked the law on donations or the rules on testamentary succession in order to defeat the
right of defendants to collect the insurance indemnity.

The beneficiary in a contract of insurance is not the donee spoken in the law of donation. The rules on testamentary
succession cannot apply here, for the insurance indemnity does not partake of a donation

Petitioners appealed to the CA, but it dismissed the appeal for lack of jurisdiction, holding that the decision of the trial
court dismissing the complaint for failure to state a cause of action involved a pure question of law. The appellate court
also noted that petitioners did not file within the reglementary period a motion for reconsideration; thus, the said
Resolution had already attained finality.

Petitioners posit that, even assuming Insular disqualified Eva as a beneficiary, her share should not have been
distributed to her children with Loreto but, instead, awarded to them, being the legitimate heirs of the insured
deceased, in accordance with law on succession.

ISSUE: Whether the members of the legitimate family are entitled to the proceeds of the insurance for the concubine.
(NO)

Petitioners are not entitled to a favorable judgment in light of Article 2011 of the Civil Code which expressly provides
that insurance contracts shall be governed by special laws, i.e., the Insurance Code. Section 53 of the Insurance Code
states

SECTION 53. The insurance proceeds shall be applied exclusively to the proper interest of the person in whose name or for
whose benefit it is made unless otherwise specified in the policy.

It is obvious that the only persons entitled to claim the insurance proceeds are the insured, if still alive; or the
beneficiary, if the insured is already deceased, upon the maturation of the policy. The exception to this rule is a situation
where the insurance contract was intended to benefit third persons who are not parties to the same in the form of
favorable stipulations or indemnity. In such a case, third parties may directly sue and claim from the insurer.

Petitioners are third parties to the insurance contracts with Insular and Grepalife and, thus, are not entitled to the
proceeds thereof. The revocation of Eva as a beneficiary in one policy and her disqualification as such in another are of
no moment considering that the designation of the illegitimate children as beneficiaries in Loreto's insurance policies
remains valid. Because no legal proscription exists in naming as beneficiaries the children of illicit relationships by the
insured, the shares of Eva in the insurance proceeds must be awarded to the said illegitimate children, the designated
beneficiaries. It is only in cases where the insured has not designated any beneficiary, or when the designated
beneficiary is disqualified by law to receive the proceeds, that the insurance policy proceeds shall redound to the benefit
of the estate of the insured.

PHILAMCARE HEALTH SYSTEM VS. COURT OF APPEALS

Ernani Trinos, deceased husband of respondent Julita Trinos, applied for a health care coverage with petitioner
Philamcare Health Systems, Inc. In the standard application form, he answered no to the following question:

Have you or any of your family members ever consulted or been treated for high blood pressure, heart trouble,
diabetes, cancer, liver disease, asthma or peptic ulcer? (If Yes, give details)

The application was approved for a period of one year from March 1, 1988 to March 1, 1989. Accordingly, he was issued
Health Care Agreement. Under the agreement, respondent's husband was entitled to avail of hospitalization benefits,
whether ordinary or emergency, listed there. He was also entitled to avail of "out-patient benefits" such as annual
physical examinations, preventive health care and other out-patient services.

Upon the termination of the agreement, the same was extended for another year from March 1, 1989 to March 1, 1990,
then from March 1, 1990 to June 1, 1990. The amount of coverage was increased to a maximum sum of P75,000.00 per
disability.

During the period of his coverage, Ernani suffered a heart attack and was confined at the Manila Medical Center (MMC)
for one month. While her husband was in the hospital, respondent tried to claim the benefits under the health care
agreement. However, petitioner denied her claim saying that the Health Care Agreement was void. According to
petitioner, there was a concealment regarding Ernani's medical history. Doctors at the MMC allegedly discovered at the
time of Ernani's confinement that he was hypertensive, diabetic and asthmatic, contrary to his answer in the application
form. Thus, respondent paid the hospitalization expenses herself, amounting to about P76,000.00.

After her husband was discharged from the MMC, he was attended by a physical therapist at home. Later, he was
admitted at the Chinese General Hospital. Due to financial difficulties, however, respondent brought her husband home
again. In the morning of April 13, 1990, Ernani had fever and was feeling very weak. Respondent was constrained to
bring him back to the Chinese General Hospital where he died on the same day.

Respondent instituted with the Regional Trial Court an action for damages against petitioner and its president, Dr.
Benito Reverente,. She asked for reimbursement of her expenses plus moral damages and attorney's fees. After trial,
the lower court ruled against petitioners.

On appeal, the Court of Appeals affirmed the decision of the trial court but deleted all awards for damages.

Petitioner argues that a health care agreement is not an insurance contract; hence the "incontestability clause" under
the Insurance Code does not apply.

ISSUE:
Section 3 of the Insurance Code states that any contingent or unknown event, whether past or future, which may
damnify a person having an insurable interest against him, may be insured against. Every person has an insurable
interest in the life and health of himself. Section 10 provides:

Every person has an insurable interest in the life and health:

(1) of himself, of his spouse and of his children;

(2) of any person on whom he depends wholly or in part for education or support, or in whom he has a pecuniary
interest;
(3) of any person under a legal obligation to him for the payment of money, respecting property or service, of which
death or illness might delay or prevent the performance; and
(4) of any person upon whose life any estate or interest vested in him depends.

In the case at bar, the insurable interest of respondent's husband in obtaining the health care agreement was his own
health. 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.

Petitioner argues that respondent's husband concealed a material fact in his application.

In addition to the signed document, petitioner additionally required the applicant for authorization to inquire about the
applicant's medical history. But petitioner cannot rely on the stipulation regarding "Invalidation of agreement".

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 respondent's 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.

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. In this case, no
rescission was made. Besides, the cancellation of health care agreements as in insurance policies require the
concurrence of the following conditions:

 Prior notice of cancellation to insured;

 Notice must be based on the occurrence after effective date of the policy of one or more of the grounds
mentioned;
 Must be in writing, mailed or delivered to the insured at the address shown in the policy;
 Must state the grounds relied upon provided in Section 64 of the Insurance Code and upon request of insured,
to furnish facts on which cancellation is based.

None of the above pre-conditions was fulfilled in this case. When the terms of 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.

On the incontestability clause/ defense of concealment and misrepresentation

Under the title Claim procedures of expenses, the defendant Philamcare Health Systems Inc. had twelve months from
the date of issuance of the Agreement within which to contest the membership of the patient if he had previous ailment
of asthma, and six months from the issuance of the agreement if the patient was sick of diabetes or hypertension. The
periods having expired, the defense of concealment or misrepresentation no longer lie.

Petitioner alleges that respondent was not the legal wife of the deceased member considering that at the time of their
marriage, the deceased was previously married to another woman who was still alive.

The health care agreement is in the nature of a contract of indemnity. Hence, payment should be made to the party
who incurred the expenses. It is not refuted that respondent paid all the hospital and medical expenses. She is
therefore entitled to reimbursement. The records adequately prove the expenses incurred by respondent for the
deceased's hospitalization, medication and the professional fees of the attending physicians.

LALICAN VS. INSULAR LIFE ASSURANCE COMPANY LTD

Violeta is the widow of the deceased Eulogio C. Lalican (Eulogio).

During his lifetime, Eulogio applied for an insurance policy with Insular Life. Insular Life, through Josephine Malaluan
(Malaluan), its agent in Gapan City, issued in favor of Eulogio Policy which contained a 20-Year Endowment Variable
Income Package Flexi Plan worth P500,000.00, with two riders valued at P500,000.00 each. Thus, the value of the policy
amounted to P1,500,000.00. Violeta was named as the primary beneficiary.

Under the terms of Policy, Eulogio was to pay the premiums on a quarterly basis in the amount of P8,062.00 until the
end of the 20-year period of the policy. According to the Policy Contract, there was a grace period of 31 days for the
payment of each premium subsequent to the first. If any premium was not paid on or before the due date, the policy
would be in default, and if the premium remained unpaid until the end of the grace period, the policy would
automatically lapse and become void.

Eulogio failed to pay the premium due on 24 January 1998, even after the lapse of the grace period of 31 days.
Therefore, the policy lapsed and became void.

Eulogio submitted to the Cabanatuan District Office of Insular Life, through Malaluan, an Application for Reinstatement
together with the amount of P8,062.00 to pay for the premium due on 24 January 1998. Insular Life notified Eulogio that
his Application for Reinstatement could not be fully processed because, although he already deposited P8,062.00 as
payment, he left unpaid the overdue interest thereon amounting to P322.48. Thus, Insular Life instructed Eulogio to pay
the amount of interest and to file another application for reinstatement. Eulogio was likewise advised by Malaluan to
pay the premiums that subsequently became due on 24 April 1998 and 24 July 1998, plus interest.

Eulogio went to Malaluan's house and submitted a second Application for Reinstatement including the amount of
P17,500.00, representing payments for the overdue interest on the premium and the premiums which became due on
24 April 1998 and 24 July 1998. As Malaluan was away on a business errand, her husband received Eulogio's second
Application for Reinstatement and issued a receipt for the amount Eulogio deposited.

A while later, on the same day, 17 September 1998, Eulogio died of cardio-respiratory arrest secondary to electrocution.

Without knowing of Eulogio's death, Malaluan forwarded to the Insular Life Regional Office in the City of San Fernando.
However, Insular Life no longer acted upon Eulogio's second Application for Reinstatement, as the former was informed
that Eulogio had already passed away.
Violeta filed with Insular Life a claim for payment of the full proceeds of Policy.

In a letter, Insular Life informed Violeta that her claim could not be granted since, at the time of Eulogio's death, Policy
had already lapsed, and Eulogio failed to reinstate the same. According to the Application for Reinstatement, the policy
would only be considered reinstated upon approval of the application by Insular Life during the applicant's "lifetime and
good health," and whatever amount the applicant paid in connection thereto was considered to be a deposit only until
approval of said application. Insular Life issued Check for P25,417.00, representing the full refund of the payments made
by Eulogio.

Violeta filed with the RTC a Complaint for Death Claim Benefit. Violeta alleged that Insular Life engaged in unfair claim
settlement practice and deliberately failed to act with reasonable promptness on her insurance claim.

In its answer, Insular Life maintained that the policy on which Violeta sought to recover, was rendered void by the non-
payment of the 24 January 1998 premium and non-compliance with the requirements for the reinstatement of the
same.

After trial, the RTC rendered a Decision in favor of Insular Life. The RTC found that Policy had indeed lapsed and Eulogio
needed to have the same reinstated. It held that the policy was clearly not ambiguous or uncertain that would need
further construction.

Violeta also invoked Section 19 of the Insurance Code:

Section. 19. x x x Interest in the life or health of a person insured must exist when the insurance takes effect but need not
exist thereafter or when the loss occurs.

Violeta argues that Eulogio still had insurable interest in his own life when he reinstated Policy just before he passed
away on 17 September 1998. The RTC should have construed the provisions of the Policy Contract and Application for
Reinstatement in favor of the insured Eulogio and against the insurer Insular Life, and considered the special
circumstances of the case.

ISSUE: Whether or not Eulogio had an existing insurable interest in his own life until the day of his death in order to have
the insurance policy validly reinstated. (NO)

In general, an insurable interest is that interest which a person is deemed to have in the subject matter insured, where
he has a relation or connection with or concern in it, such that the person will derive pecuniary benefit or advantage
from the preservation of the subject matter insured and will suffer pecuniary loss or damage from its destruction,
termination, or injury by the happening of the event insured against.

The existence of an insurable interest gives a person the legal right to insure the subject matter of the policy of
insurance. Section 10 of the Insurance Code indeed provides that every person has an insurable interest in his own life.
Section 19 of the same code also states that an interest in the life or health of a person insured must exist when the
insurance takes effect, but need not exist thereafter or when the loss occurs.

In the case at bar, it becomes evident that the matter of insurable interest is entirely irrelevant. The real point of
contention herein is whether Eulogio was able to reinstate the lapsed insurance policy on his life before his death. He
did not.
To reinstate a policy means to restore the same to premium-paying status after it has been permitted to lapse. Both the
Policy Contract and the Application for Reinstatement provide for specific conditions for the reinstatement of a lapsed
policy.

In the case at bar, the overdue premiums should be paid with compound interest. In addition, the policy shall not be
considered reinstated until this application is approved by the Company during my/our lifetime and good health and
until all other Company requirements for the reinstatement of said Policy are fully satisfied.

That any payment made in connection with this application shall be considered as deposit only and shall not bind the
Company until this application is finally approved by the Company.

In the instant case, Eulogio's death rendered impossible full compliance with the conditions for reinstatement. True,
Eulogio, before his death, managed to file his Application for Reinstatement and deposit the amount for payment of his
overdue premiums and interests thereon with Malaluan; the policy could only be considered reinstated after the
Application for Reinstatement had been processed and approved by Insular Life during Eulogio's lifetime and good
health.

It does not matter that when he died, Eulogio's Application for Reinstatement and deposits for the overdue premiums
and interests were already with Malaluan. Insular Life, through the Policy Contract, expressly limits the power or
authority of its insurance agents.

Malaluan did not have the authority to approve Eulogio's Application for Reinstatement. Malaluan still had to turn over
to Insular Life Eulogio's Application for Reinstatement and accompanying deposits, for processing and approval by the
latter.

Furthermore, the conditions for reinstatement under the Policy Contract and Application for Reinstatement were
written in clear and simple language, which could not admit of any meaning or interpretation other than those that they
so obviously embody. A construction in favor of the insured is not called for, as there is no ambiguity in the said
provisions in the first place.

Eulogio's death, just hours after filing his Application for Reinstatement and depositing his payment for overdue
premiums and interests with Malaluan, does not constitute a special circumstance. Said circumstance cannot override
the clear and express provisions of the Policy Contract and Application for Reinstatement and operate to remove the
prerogative of Insular Life thereunder to approve or disapprove the Application for Reinstatement.

The policy remained lapsed and void. Violeta, therefore, cannot claim any death benefits from Insular Life; but she is
entitled to receive the full refund of the payments made by Eulogio thereon.

SPS. NILO CHA AND STELLA UY CHA v. CA

Petitioner-spouses Nilo Cha and Stella Uy-Cha, as lessees, entered into a lease contract with respondent CKS
Development Corporation (hereinafter CKS), as lessor.

One of the stipulations of the one (1) year lease contract states:

The LESSEE shall not insure against fire the chattels, merchandise, textiles, goods and effects placed at any stall
or store or space in the leased premises without first obtaining the written consent and approval of the LESSOR. If
 the LESSEE obtain(s) the insurance thereof without the consent of the LESSOR then the policy is deemed assigned
and transferred to the LESSOR for its own benefit;

Notwithstanding the above stipulation in the lease contract, the Cha spouses insured against loss by fire their
merchandise inside the leased premises for Five Hundred Thousand (P500,000.00) with the United Insurance Co., Inc.
(hereinafter United) without the written consent of CKS.

On the day that the lease contract was to expire, fire broke out inside the leased premises. When CKS learned of the
insurance earlier procured by the Cha spouses (without its consent), it wrote the insurer (United) a demand letter asking
that the proceeds of the insurance contract (between the Cha spouses and United) be paid directly to CKS, based on its
lease contract with Cha spouses.

United refused to pay CKS. Hence, the latter filed a complaint against the Cha spouses and United.

Regional Trial Court rendered a decision ordering United to pay CKS the amount of P335,063.11 and Cha spouses to pay
P50,000.00 as exemplary damages.

On appeal, Court of Appeals affirmed the trial court decision, deleting however the awards for exemplary damages and
attorney's fees.

ISSUE: Whether or not CKS has insurable interest over the property insured. (NO)

A non-life insurance policy such as a fire insurance policy over their merchandise is primarily a contract of indemnity.
Insurable interest in the property insured must exist at the time the insurance takes effect and at the time the loss
occurs. The basis of such requirement of insurable interest in property insured is to prevent a person from taking out an
insurance policy on property upon which he has no insurable interest and collecting the proceeds of said policy in case
of loss of the property. In such a case, the contract of insurance is a mere wager which is void under Section 25 of the
Insurance Code:

"SECTION 25. Every stipulation in a policy of Insurance for the payment of loss, whether the person insured has or has not
any interest in the property insured, or that the policy shall be received as proof of such interest, and every policy
executed by way of gaming or wagering, is void."

In the present case, CKS has no insurable interest in the goods and merchandise inside the leased premises under the
provisions of Section 17 of the Insurance Code.

"Section 17. The measure of an insurable interest in property is the extent to which the insured might be damnified by
loss of injury thereof."

Therefore, CKS cannot be validly a beneficiary of the fire insurance policy taken by the petitioner-spouses over their
merchandise. This insurable interest over said merchandise remains with the insured, the Cha spouses. The automatic
assignment of the policy to CKS under the provision of the lease contract previously quoted is void for being contrary to
law and/or public policy. The proceeds of the fire insurance policy thus rightfully belong to the spouses Nilo Cha and
Stella Uy-Cha (co-petitioners). The insurer (United) cannot be compelled to pay the proceeds of the fire insurance policy
to a person (CKS) who has no insurable interest in the property insured.

MALAYAN INSURANCE COMPANY VS. PAP CO. (PHIL. BRANCH)

Malayan Insurance Company (Malayan) issued Fire Insurance Policy to PAP Co., Ltd. (PAP Co.) for the latter's machineries
and equipment located at Rosario, Cavite (Sanyo Building). The insurance, which was for Fifteen Million Pesos
(15,000,000.00) and effective for a period of one (1) year, was procured by PAP Co. for Rizal Commercial Banking
Corporation (RCBC), the mortgagee of the insured machineries and equipment.

After the passage of almost a year but prior to the expiration of the insurance coverage, PAP Co. renewed the policy on
an "as is" basis. And during the subsistence of the renewal policy, the insured machineries and equipment were totally
lost by fire. Hence, PAP Co. filed a fire insurance claim with Malayan in the amount insured.

Malayan denied the claim upon the ground that, at the time of the loss, the insured machineries and equipment were
transferred by PAP Co. to a location different from that indicated in the policy. Specifically, that the insured machineries
were transferred in September 1996 from the Sanyo Building to the Pace Pacific Bldg. (Pace Pacific). Contesting the
denial, PAP Co. argued that Malayan cannot avoid liability as it was informed of the transfer by RCBC, the party duty-
bound to relay such information. However, Malayan reiterated its denial of PAP Co.'s claim. Distraught, PAP Co. filed the
complaint against Malayan.

RTC ordered Malayan to pay PAP Company Ltd (PAP) an indemnity for the loss under the fire insurance policy.

The RTC explained that Malayan is liable to indemnify PAP because, although there was a change in the condition of the
thing insured as a result of the transfer of the subject machineries to another location, said insurance company failed to
show proof that such transfer resulted in the increase of the risk insured against. In the absence of proof that the
alteration of the thing insured increased the risk, the contract of fire insurance is not affected per Article 169 of the
Insurance Code.

The RTC further stated that PAP's notice to Rizal Commercial Banking Corporation (RCBC) sufficiently complied with the
notice requirement under the policy considering that it was RCBC which procured the insurance. PAP acted in good faith
in notifying RCBC about the transfer and the latter even conducted an inspection of the machinery in its new location.

CA affirmed the RTC decision.

The CA stated that even if there was such a provision on transfer restrictions of the insured properties, still Malayan
could not escape liability because the transfer was made during the subsistence of the original policy, not the renewal
policy. PAP transferred the insured properties from the Sanyo Factory to the Pace Pacific Building (Pace Factory)
sometime in September 1996. Therefore, Malayan was aware or should have been aware of such transfer when it issued
the renewal policy on May 1997. And since an insurance policy was a contract of adhesion, any ambiguity must be
resolved against the party that prepared the contract, which, in this case, was Malayan.

ISSUE: WON Malayan should be held liable. (NO)

The policy forbade the removal of the insured properties unless sanctioned by Malayan.

The respondent failed to notify, and to obtain the consent of, Malayan regarding the removal

The Court found nothing that would show that Malayan was duly notified of the transfer of the insured properties. What
PAP did to prove that Malayan was notified was to show that it relayed the fact of transfer to RCBC, the entity which
made the referral and the named beneficiary in the policy. Malayan and RCBC might have been sister companies, but
such fact did not make one an agent of the other. The fact that RCBC referred PAP to Malayan did not clothe it with
authority to represent and bind the said insurance company. After the referral, PAP dealt directly with Malayan.

Granting that any notice to RCBC was binding on Malayan, PAP's claim that it notified RCBC and Malayan was not
established. At best, PAP could only come up with the hearsay testimony of its principal witness, Branch Manager (Mr.
Yoneda), who testified that he instructed his secretary to notify. He obviously had no personal knowledge of the notice
to either Malayan or RCBC.

PAP should have presented his secretaries, Dory Ramos and Maricar Jardiniano, at the witness stand. Moreover, the
Court takes note of the fact that Mr. Yoneda admitted that the insured properties were transferred to a different
location only after the renewal of the fire insurance policy.

The transfer from the Sanyo Factory to the PACE Factory increased the risk.

Malayan argues that the change of location of the subject properties from the Sanyo Factory to the Pace Factory
increased the hazard to which the insured properties were exposed because the Sanyo factory of automotive/computer
parts, and of zinc & aluminum die cast, plastic gear for copy machine by Sanyo Precision Phils., Inc.

But under Pace Pacific Mfg. Corporation this was a factory that repacks silicone sealant to plastic cylinders with a rate of
0.657%. Hence, there was an increase in the hazard as indicated by the increase in rate.[18]

The Court agrees with Malayan that the transfer to the Pace Factory exposed the properties to a hazardous environment
and negatively affected the fire rating stated in the renewal policy. The increase in tariff rate from 0.449% to 0.657% put
the subject properties at a greater risk of loss. Such increase in risk would necessarily entail an increase in the premium
payment on the fire policy.

Unfortunately, PAP chose to remain completely silent on this very crucial point. Despite the importance of the issue, PAP
failed to refute Malayan's argument on the increased risk.

Malayan is entitled to rescind the insurance contract

Considering that the original policy was renewed on an "as is basis," it follows that the renewal policy carried with it the
same stipulations and limitations. Pace Factory was not the location stipulated in the renewal policy. There being an
unconsented removal, the transfer was at PAP's own risk. Consequently, it must suffer the consequences of the fire.

It can also be said that with the transfer of the location of the subject properties, without notice and without Malayan's
consent, after the renewal of the policy, PAP clearly committed concealment, misrepresentation and a breach of a
material warranty.

Section 26. A neglect to communicate that which a party knows and ought to communicate, is called a concealment.

Under Section 27 of the Insurance Code, "a concealment entitles the injured party to rescind a contract of insurance.

Moreover, under Section 168 of the Insurance Code, the insurer is entitled to rescind the insurance contract in case of
an alteration in the use or condition of the thing insured.
Section 68. An alteration in the use or condition of a thing insured from that to which it is limited by the policy made
without the consent of the insurer, by means within the control of the insured, and increasing the risks, entitles an insurer
to rescind a contract of fire insurance.

Accordingly, an insurer can exercise its right to rescind an insurance contract when the following conditions are present,
to wit:

1. The policy limits the use or condition of the thing insured;

2. There is an alteration in said use or condition;
3. The alteration is without the consent of the insurer;
4. The alteration is made by means within the insured's control; and
5. The alteration increases the risk of loss.

In the case at bench, all these circumstances are present.

ARMANDO GEAGONIA VS. COURT OF APPEALS

The petitioner is the owner of Norman's Mart located in the public market of Agusan del Sur. He obtained from
respondent COUNTRY BANKERS INSURANCE CORPORATION fire insurance policy for P100,000.00. The period of the
policy was from 22 December 1989 to 22 December 1990 and covered the following: "Stock-in-trade consisting
principally of dry goods such as RTW's for men and women wear and other usual to assured's business."

The petitioner declared in the policy under the subheading entitled CO-INSURANCE that Mercantile Insurance Co., Inc.
was the co-insurer for P50,000.00.

The policy contained the following condition:

The insured shall give notice to the Company of any insurance or insurances already effected, or which may subsequently
be effected, and unless such notice be given, all benefits under this policy shall be deemed forfeited.

A fire of accidental origin broke out at the public market of Agusan del Sur. The petitioner's insured stocks-in-trade were
completely destroyed prompting him to file with the respondent a claim under the policy. But Country Bankers denied
the claim because it found that at the time of the loss, the petitioner's stocks-in-trade were also covered by fire
insurance policies issued by Philippines First Insurance Co., Inc. (PFIC). These policies indicate that the insured was
"Messrs. Discount Mart (Mr. Armando Geagonia, Prop.).

The basis of the respondent's denial was the petitioner's alleged violation of Condition 3 of the policy.

The petitioner then filed a complaint against the respondent with the Insurance Commission for the recovery of
P100,000.00 under fire insurance policy. He admitted in the said letter that at the time he obtained the fire insurance
policy he knew that the two policies issued by the PFIC were already in existence; however, he had no knowledge of the
provision in the respondent's policy requiring him to inform it of the prior policies; this requirement was not mentioned
to him by the agent; and had it been so mentioned, he would not have withheld such information.

The Insurance Commission found that the petitioner did not violate Condition 3 as he had no knowledge of the existence
of the two fire insurance policies obtained from the PFIC; that it was Cebu Tesing Textiles which procured the PFIC
policies without informing him or securing his consent; and that Cebu Tesing Textile, as his creditor, had insurable
interest on the stocks. These were based on the petitioner's testimony that he came to know of the PFIC policies only
when he filed his claim with the respondent and that Cebu Tesing Textile obtained them and paid for their premiums
without informing him thereof.

Court of Appeals reversed the decision of the Insurance Commission because it found that the petitioner knew of the
existence of the two other policies issued by the PFIC. It said:

It is apparent from the face of Fire Policy that the insurance was taken in the name of [petitioner]. In addition, the
premiums on both policies were paid for by respondent, not by the Tesing Textiles. It is clear that it was the [petitioner]
who took out the policies on the same property subject of the insurance with petitioner.

ISSUE:

a) Whether the petitioner had prior knowledge of the two insurance policies issued by the PFIC when he obtained
the fire insurance policy from the private respondent, thereby, for not disclosing such fact, violating Condition 3
of the policy. (YES)
b) If he had, whether he is precluded from recovering therefrom.

Petitioner knew of the prior policies issued by the PFIC.

His letter to the respondent conclusively proves this knowledge. It was, indeed, incredible that he did not know about
the prior policies since these policies were not new or original.

Condition 3 of the respondent's Policy is a condition which is not proscribed by law. Its incorporation in the policy is
allowed by Section 75 of the Insurance Code which provides that "[a] policy may declare that a violation of specified
provisions thereof shall avoid it, otherwise the breach of an immaterial provision does not avoid the policy."

Such a condition is intended to prevent an increase in the moral hazard. It is commonly known as the additional or
"other insurance" clause and has been upheld as valid and as a warranty that no other insurance exists. Its violation
would thus avoid the policy. However, in order to constitute a violation, the other insurance must be upon the same
subject matter, the same interest therein, and the same risk.

Separate insurances covering different insurable interests may be obtained by the mortgagor and the mortgagee.

As to a mortgaged property, the mortgagor and the mortgagee have each an independent insurable interest therein and
both interests may be covered by one policy, or each may take out a separate policy covering his interest, either at the
same or at separate times. The mortgagor's insurable interest covers the full value of the mortgaged property, even
though the mortgage debt is equivalent to the full value of the property. The mortgagee's insurable interest is to the
extent of the debt, since the property is relied upon as security thereof, and in insuring he is not insuring the property
but his interest or lien thereon. His insurable interest is prima facie the value mortgaged and extends only to the amount
of the debt, not exceeding the value of the mortgaged property.

A mortgagor may, however, take out insurance for the benefit of the mortgagee, which is the usual practice. The
mortgagee may become the assignee of the policy with the consent of the insurer; or the mere pledgee without such
consent; or the original policy may contain a mortgage clause; or a rider making the policy payable to the mortgagee "as
his interest may appear" may be attached; or a "Standard Mortgage Clause," containing a collateral independent
contract between the mortgagee and insurer; or the policy, though by its terms payable absolutely to the mortgagor,
may have been procured by a mortgagor under a contract duty to insure for the mortgagee's benefit, in which case the
mortgagee acquires an equitable lien upon the proceeds.

A STANDARD MORTGAGE CLAUSE (also called a union mortgage clause) is an insurance provision that covers the
mortgage lender but not the borrower for a loss involving the mortgaged property. This clause protects the lender in the
event that the borrower intentionally damages the property.

In the policy obtained by the mortgagor with Loss Payable Clause in favor of the mortgagee as his interest may appear,
the mortgagee is only a beneficiary under the contract, and recognized as such by the insurer but not made a party to
the contract itself. Hence, any act of the mortgagor which defeats his right will also defeat the right of the mortgagee.
This kind of policy covers only such interest as the mortgagee has at the issuing of the policy.

On the other hand, a mortgagee may also procure a policy as a contracting party in accordance with the terms of an
agreement by which the mortgagor is to pay the premiums upon such insurance. But although the mortgagee is himself
the insured, as where he applies for a policy, fully informs the authorized agent of his interest, pays the premiums, and
obtains a policy on the assurance that it insures him, the policy is in fact in the form used to insure a mortgagor with
Loss Payable Clause.

A LOSS PAYABLE CLAUSE is an insurance contract endorsement where an insurer pays a third party for a loss instead of
the named insured or beneficiary. The loss payable provision limits the rights of the loss payee to be no higher than the
rights guaranteed to the insured.

A loss payable clause might also be called a loss payee clause.

The fire insurance policies issued by the PFIC name the petitioner as the assured and contain a mortgage clause which
reads:

"Loss, if any, shall be payable to MESSRS. TESING TEXTILES, Cebu City as their interest may appear subject to the terms
of this policy."

This is clearly a simple loss payable clause, not a standard mortgage clause.

Condition 3 in the private respondent's policy does not absolutely declare void any violation thereof. It expressly
provides that the condition "shall not apply when the total insurance or insurances in force at the time of the loss or
damage is not more than P200,000.00."

It is a cardinal principle of law that forfeitures are not favored and that any construction which would result in the
forfeiture of the policy benefits for the person claiming, will be avoided. Provisions, conditions or exceptions in policies
which tend to work a forfeiture of insurance policies should be construed most favorably toward those that are intended
for them to operate.

Condition 3 of the subject policy is not totally free from ambiguity and must, perforce, be meticulously analyzed. Such
analysis leads us to conclude that:

a) The prohibition applies only to double insurance, and

b) The nullity of the policy shall only be to the extent exceeding p200,000.00 of the total policies obtained.
A Double Insurance exists where the same person is insured by several insurers separately in respect of the same
subject and interest. As earlier stated, the insurable interests of a mortgagor and a mortgagee on the mortgaged
property are distinct and separate. Since the two policies of the PFIC do not cover the same interest as that covered by
the policy of the respondent, no double insurance exists. The non-disclosure then of the former policies was not fatal to
the petitioner's right to recover on the private respondent's policy.

Furthermore, by stating within Condition 3 itself that such condition shall not apply if the total insurance in force at the
time of loss does not exceed P200,000.00, the respondent was amenable to assume a co-insurer's liability up to a loss
not exceeding P200,000.00. What it had in mind was to discourage over-insurance.

The decision of the Court of Appeals is SET ASIDE and the decision of the Insurance Commission is REINSTATED.

MALAYAN INSURANCE CO., INC., VS. PHILIPPINE FIRST INSURANCE CO., INC. AND REPUTABLE FORWARDER SERVICES,
INC.

Since 1989, Wyeth Philippines, Inc. (Wyeth) and Reputable Forwarder Services, Inc. (Reputable) had been annually
executing a contract of carriage, whereby the latter undertook to transport and deliver the former's products to its
customers, dealers or salesmen.

Wyeth procured (Marine Policy) from Philippines First Insurance Co., Inc. (Philippines First) to secure its interest over its
own products. Philippines First thereby insured Wyeth's nutritional, pharmaceutical and other products usual or
incidental to the insured's business while the same were being transported or shipped in the Philippines. The policy
covers all risks of direct physical loss or damage from any external cause, if by land, and provides a limit of
P6,000,000.00 per any one land vehicle.

On December 1993, Wyeth executed its annual contract of carriage with Reputable. It turned out, however, that the
contract was not signed by Wyeth's representative/s. Nevertheless, it was admittedly signed by Reputable's
representatives, the terms thereof are the same as what had been annually executed by the parties every year since
1989.

Under the contract, Reputable undertook to answer for "all risks with respect to the goods and shall be liable to the
COMPANY (Wyeth), for the loss, destruction, or damage of the goods/products due to any and all causes whatsoever,
including theft, robbery, flood, storm, earthquakes, lightning, and other force majeure while the goods/products are in
transit and until actual delivery to the customers, salesmen, and dealers of the COMPANY". The contract also required
Reputable to secure an insurance policy on Wyeth's goods. Thus, Reputable signed a Special Risk Insurance Policy (SR
Policy) with petitioner Malayan for the amount of P1,000,000.00.

On October 1994, during the effectivity of the Marine Policy and SR Policy, Reputable received from Wyeth 1,000 boxes
of Promil infant formula to be delivered by Reputable to Mercury Drug Corporation in Libis, Quezon City. Unfortunately,
on the same date, the truck carrying Wyeth's products was hijacked by about 10 armed men. They threatened to kill the
truck driver and two of his helpers should they refuse to turn over the truck and its contents to the said highway
robbers. The hijacked truck was recovered two weeks later without its cargo.

Philippines First, after due investigation and adjustment, and pursuant to the Marine Policy, paid Wyeth P2,133,257.00
as indemnity. Philippines First then demanded reimbursement from Reputable, having been subrogated to the rights of
Wyeth by virtue of the payment. The latter, however, ignored the demand.
Consequently, Philippines First instituted an action for sum of money against Reputable. In its complaint, Philippines
First stated that Reputable is a "private corporation engaged in the business of a common carrier." In its answer,
Reputable claimed that it is a private carrier. It also claimed that it cannot be made liable under the contract of carriage
with Wyeth since the contract was not signed by Wyeth's representative and that the cause of the loss was force
majeure.

Subsequently, Reputable impleaded Malayan as third-party defendant.

Disclaiming any liability, Malayan argued that under Section 5 of the SR Policy, the insurance does not cover any loss or
damage to property which at the time of the happening of such loss or damage is insured by any marine policy and that
the SR Policy expressly excluded third-party liability.

RTC found Reputable liable to Philippines First for the amount of indemnity it paid to Wyeth. Malayan was found by the
RTC to be liable to Reputable to the extent of the policy coverage.

CA affirmed the RTC decision stating, among others, that:

a) Reputable is estopped from assailing the validity of the contract of carriage on the ground of lack of signature of
Wyeth's representative/s;
b) Reputable is liable under the contract for the value of the goods even if the same was lost due to fortuitous
event; and
c) Section 12 of the SR Policy prevails over Section 5, it being the latter provision; however, since the ratable
proportion provision of Section 12 applies only in case of double insurance, which is not present, then it should
not be applied and Malayan should be held liable for the full amount of the policy coverage, that is,
P1,000,000.00.

Malayan insists that the CA failed to properly resolve the issue on the "difference between an 'other insurance clause'
and an 'over insurance clause'." And that there was an impairment of contract when the CA failed to apply the express
provisions of Section 5 (referred to by Malayan as over insurance clause) and Section 12 (referred to by Malayan as
other insurance clause) of its SR Policy as these provisions could have been read together, there being no actual conflict
between them.

ISSUE:

 Whether the RTC and CA erred in rendering "irrelevant" Sections 5 and Section 12 of the SR Policy; and
 Whether Reputable should be held solidarily liable with Malayan for the amount of P998,000.00 due to
Philippines First.

CA judgement: Since Sec. 5 calls for [Malayan's] complete absolution in case the other insurance would be sufficient to
cover the entire amount of the loss, it is in direct conflict with Sec. 12 which provides only for a pro-rated contribution
between the two insurers. Being the later provision, and pursuant to the rules on interpretation of contracts, Sec. 12
should therefore prevail.

In questioning said ruling, Malayan posits that Sections 5 and 12 are separate provisions applicable under distinct
circumstances. Malayan argues that "it will not be completely absolved under Section 5 of its policy if it were the
assured itself who obtained additional insurance coverage on the same property and the loss incurred by [Wyeth's]
cargo was more than that insured by [Philippines First's] marine policy. On the other hand, Section 12 will not
completely absolve Malayan if additional insurance coverage on the same cargo were obtained by someone besides
[Reputable], in which case [Malayan's] SR policy will contribute or share ratable proportion of a covered cargo loss."

Similar to condition no. 3: Section 5 is actually the OTHER INSURANCE CLAUSE (also called "additional insurance" and
"double insurance"). It is a condition which is not prohibited by law as its incorporation in the policy is allowed by
Section 75 of the Insurance Code. That unlike the other insurance clauses, Condition No. 3 does not absolutely declare
void any violation thereof but expressly provides that the condition "shall not apply when the total insurance or
insurances in force at the time of the loss or damage is not more than P200,000.00."

Section 5 does not provide for the nullity of the SR Policy but simply limits the liability of Malayan only up to the excess
of the amount that was not covered by the other insurance policy. In interpreting the "other insurance clause". The
Court ruled that the prohibition applies only in case of double insurance. The other insurance must be upon same
subject matter, the same interest therein, and the same risk.

Section 12 of the SR Policy, on the other hand, is the OVER INSURANCE CLAUSE. It covers the situation where there is
over insurance due to double insurance. In such case, Section 15 provides that Malayan shall "not be liable to pay or
contribute more than its ratable proportion of such loss or damage." This is in accord with the principle of contribution
provided under Section 94(e) of the Insurance Code, which states that "where the insured is over insured by double
insurance, each insurer is bound, as between himself and the other insurers, to contribute ratably to the loss in
proportion to the amount for which he is liable under his contract."

Clearly, both Sections 5 and 12 presuppose the existence of a double insurance. The requisites in order for double
insurance to arise are as follows:

 The person insured is the same;

 Two or more insurers insuring separately;
 There is identity of subject matter;
 There is identity of interest insured; and
 There is identity of the risk or peril insured against.

In the present case, while it is true that the Marine Policy and the SR Policy were both issued over the same subject
matter, i.e. goods belonging to Wyeth, and both covered the same peril insured against, the said policies were issued to
two different persons or entities. Wyeth is the recognized insured of Philippines First under its Marine Policy, while
Reputable is the recognized insured of Malayan under the SR Policy. The fact that Reputable procured Malayan's SR
Policy over the goods of Wyeth pursuant merely to the stipulated requirement under its contract of carriage and it does
not make Reputable an agent of Wyeth in obtaining the said SR Policy.

The interest of Wyeth over the property subject matter of both insurance contracts is also different and distinct from that
of Reputable's.

The policy issued by Philippines First was in consideration of the legal and/or equitable interest of Wyeth over its own
goods. On the other hand, what was issued by Malayan to Reputable was over the latter's insurable interest over the
safety of the goods, which may become the basis of the latter's liability in case of loss or damage to the property.
Therefore, even though the two concerned insurance policies were issued over the same goods and cover the same risk,
there arises no double insurance since they were issued to two different persons/entities having distinct insurable
interests. Hence neither Section 5 nor Section 12 of the SR Policy can be applied.
The Court also won’t strictly construe the controversial provisions of the SR Policy against Malayan.

To rule that Sec. 12 operates even in the absence of double insurance would work injustice to Reputable which, despite
paying premiums for a P1,000,000.00 insurance coverage, would not be entitled to recover said amount for the simple
reason that the same property is covered by another insurance policy, a policy to which it was not a party to and much
less, from which it did not stand to benefit. x x x

Reputable is not solidarily liable with Malayan

There is solidary liability only when the obligation expressly so states, when the law so provides or when the nature of
the obligation so requires.

Where the insurance contract provides for indemnity against liability to third persons, the liability of the insurer is direct
and such third persons can directly sue the insurer. The direct liability of the insurer under indemnity contracts against
third party-liability does not mean, however, that the insurer can be held solidarily liable with the insured and/or the
other parties found at fault, since they are being held liable under different obligations. The liability of the insured is
based on tort, in accordance with the provisions of the Civil Code; while that of the insurer arises from contract,
particularly, the insurance policy.

Suffice it to say that Malayan's and Reputable's respective liabilities arose from different obligations-Malayan's is based
on the SR Policy while Reputable's is based on the contract of carriage.

GREAT PACIFIC LIFE VS. COURT OF APPEALS

A contract of group life insurance was executed between petitioner Great Pacific Life Assurance Corporation (Grepalife)
and Development Bank of the Philippines (DBP). Grepalife agreed to insure the lives of eligible housing loan mortgagors
of DBP.

Dr. Wilfredo Leuterio, a physician and a housing debtor of DBP applied for membership in the group life insurance plan.
In an application form, Dr. Leuterio answered no to:

"Have you ever had, or consulted, a physician for a heart condition, high blood pressure, cancer, diabetes, lung, kidney
or stomach disorder or any other physical impairment?

And YES to WON he is in good health.

Grepalife issued an insurance coverage of Dr. Leuterio, to the extent of his DBP mortgage indebtedness amounting to
eighty-six thousand, two hundred (P86,200.00) pesos.

On August 1984, Dr. Leuterio died due to "massive cerebral hemorrhage." Consequently, DBP submitted a death claim to
Grepalife. Grepalife denied the claim alleging that Dr. Leuterio was not physically healthy when he applied for an
insurance coverage on November 15, 1983. Grepalife insisted that Dr. Leuterio did not disclose he had been suffering
from hypertension, which caused his death. Allegedly, such non-disclosure constituted concealment that justified the
denial of the claim.
The widow of the late Dr. Leuterio, Medarda V. Leuterio, filed a complaint with the Regional Trial Court "Specific
Performance with Damages." During the trial, Dr. Hernando Mejia, who issued the death certificate, was called to testify.
Dr. Mejia's findings stated that Dr. Leuterio complained of headaches presumably due to high blood pressure.

The trial court rendered a decision in favor of widow and against Grepalife. Court of Appeals sustained the trial court's
decision.

Petitioner alleges that the complaint was instituted by the widow of Dr. Leuterio, not the real party in interest, hence
the trial court acquired no jurisdiction over the case. It argues that when the Court of Appeals affirmed the trial court's
judgment, Grepalife was held liable to pay the proceeds of insurance contract in favor of DBP, the indispensable party
who was not joined in the suit.

ISSUE: Whether the Court of Appeals erred in holding petitioner liable to DBP as beneficiary in a group life insurance
contract from a complaint filed by the widow of the decedent/mortgagor? (NO)

The rationale of a group insurance policy of mortgagors, otherwise known as the " Mortgage Redemption Insurance," is
a device for the protection of both the mortgagee and the mortgagor. On the part of the mortgagee, it has to enter into
such form of contract so that in the event of the unexpected demise of the mortgagor during the subsistence of the
mortgage contract, the proceeds from such insurance will be applied to the payment of the mortgage debt, thereby
relieving the heirs of the mortgagor from paying the obligation.

In a similar vein, ample protection is given to the mortgagor so that in the event of death; the mortgage obligation will
be extinguished by the application of the insurance proceeds to the mortgage indebtedness. Consequently, where the
mortgagor pays the insurance premium under the group insurance policy, making the loss payable to the mortgagee, the
insurance is on the mortgagor's interest, and the mortgagor continues to be a party to the contract.

In this type of policy insurance, the mortgagee is simply an appointee of the insurance fund, such loss-payable clause
does not make the mortgagee a party to the contract.

Section 8 of the Insurance Code provides:

"Unless the policy provides, where a mortgagor of property effects insurance in his own name providing that the
loss shall be payable to the mortgagee, or assigns a policy of insurance to a mortgagee, the insurance is deemed
to be upon the interest of the mortgagor, who does not cease to be a party to the original contract, and any act
of his, prior to the loss, which would otherwise avoid the insurance, will have the same effect, although the
property is in the hands of the mortgagee, but any act which, under the contract of insurance, is to be
performed by the mortgagor, may be performed by the mortgagee therein named, with the same effect as if it
had been performed by the mortgagor."

The insured respondent did not cede to the mortgagee all his rights or interests in the insurance. When DBP submitted
the insurance claim against and it was denied payment, DBP collected the debt from the mortgagor and took the
necessary action of foreclosure on the residential lot of respondent.

Cited a case where SC ruled: Although a policy issued to a mortgagor is taken out for the benefit of the mortgagee and
is made payable to him, yet the mortgagor may sue thereon in his own name, especially where the mortgagee's interest
is less than the full amount recoverable under the policy. Further, an insured may be regarded as the real party in
interest, although he has assigned the policy for the purpose of collection or has assigned as collateral security any
judgment he may obtain."

And since a policy of insurance upon life or health may pass by transfer, will or succession to any person, whether he has
an insurable interest or not, and such person may recover it whatever the insured might have recovered, the widow of
the decedent Dr. Leuterio may file the suit against the insurer, Grepalife.

Petitioner contends that Dr. Leuterio failed to disclose that he had hypertension, which might have caused his death.

Concealment exists where the assured had knowledge of a fact material to the risk, and honesty, good faith, and fair
dealing requires that he should communicate it to the assured, but he designedly and intentionally withholds the same.

The medical findings were not conclusive because Dr. Mejia did not conduct an autopsy on the body of the decedent. Dr.
Mejia stated that he had no knowledge of Dr. Leuterio's any previous hospital confinement. Dr. Leuterio's death
certificate stated that hypertension was only "the possible cause of death." The respondent's statement, as to the
medical history of her husband, was due to her unreliable recollection of events. Hence, the statement of the physician
was properly considered by the trial court as hearsay.

Death was only put as cerebral hemorrhage, probably secondary to hypertension. But there was no sufficient proof that
the insured had suffered from hypertension. Aside from the statement of the widow who was not even sure if the
medicines taken by Dr. Leuterio were for hypertension, no other witnesses attested to Dr. Leuterio's medical history.

In the case at bar, the petitioner failed to clearly and satisfactorily establish its defense, and is therefore liable to pay the
proceeds of the insurance.

Additional notes: A life insurance policy is a valued policy. Unless the interest of a person insured is susceptible of exact
pecuniary measurement, the measure of indemnity under a policy of insurance upon life or health is the sum fixed in the
policy. The mortgagor paid the premium according to the coverage of his insurance, which states that upon receipt of
due proof of the Debtor's death during the terms of this insurance, a death benefit in the amount of P86,200.00 shall be
paid.

In the event of the debtor's death before his indebtedness with the creditor shall have been fully paid, an amount to pay
the outstanding indebtedness shall first be paid to the Creditor and the balance of the Sum Assured, if there is any shall
then be paid to the beneficiary/ies designated by the debtor.

However, DBP foreclosed in 1995 their residential lot, in satisfaction of their outstanding loan. The insurance proceeds
shall inure to the benefit of the heirs of the deceased person or his beneficiaries (widow).

MULTIWARE MANUFACTURING CORPORATION V CIBELES CORPORATION

Multi-Ware Manufacturing Corporation (Multi-Ware) is a domestic corporation engaged in the manufacture of various
plastic products. Petitioner took out Fire Policy Insurance from Western Guaranty Corporation (Western Guaranty) in
the amount of P10,000,000.00. The properties insured were the pieces of machinery and equipment, tools, spare parts
and accessories stored at Buildings 1 and 2 in Valenzuela.

Petitioner secured another fire insurance policy, this time from Cibeles Insurance Corporation (Cibeles Insurance) for
P7,000,000.00, covering the pieces of machinery and equipment, tools, spare parts and accessories excluding mould,
and stocks of manufactured goods and/or goods still in process, raw materials and supplies found in the PTA Central
Warehouse Compound, Building 1.

Subsequently, petitioner obtained from Prudential Guarantee Corp. (Prudential Guarantee) Fire Insurance Policy
covering the same machinery and equipment located at Building 1 PTA Compound.

On April 2000, a fire broke out in the PTA Compound causing damage and loss on the properties of petitioner covered by
the fire insurance policies. Consequently, petitioner filed insurance claims with respondents Cibeles Insurance and
Western Guaranty, but these were denied on the ground of Multi-Ware's violation of Policy Condition Nos. 3, on non-
disclosure of co-insurance; 15 on fraudulent claims; and 21, on arson.

Petitioner filed separate civil actions against these insurance companies before the RTC of Manila.

RTC rendered its Joint Decision that plaintiff violated Policy Condition No. 3, all the benefits due to plaintiff under the
policies are deemed forfeited.

On appeal, the CA sustained the RTC judgment.

ISSUE: Whether petitioner violated Policy Condition No. 3 or the "other insurance clause" uniformly contained in the
subject insurance contracts resulting to avoidance of the said policies. (YES)

Policy Condition No. 3 reads:

The insured shall give notice to the Company of any insurance or insurances already effected, or which may
subsequently be effected, covering any of the property or properties consisting of stocks in trade, goods in
process and/or inventories only hereby insured and unless such notice be given and the particulars of such
insurance or insurances be stated therein or endorsed on this policy pursuant to Section 50 of the Insurance Code,
by or on behalf of the company before the occurrence of any loss or damage, all benefits under this policy shall
be deemed forfeited, provided however, that this Condition shall not apply when the total insurance or
insurances in force at the time of loss or damage is not more than P200,000.00.

Policy Condition No. 3 is clear that it obligates petitioner, as insured, to notify the insurer of any insurance effected to
cover the insured items which involve any of its property or stocks in trade, goods in process and/or inventories and that
non-disclosure by the insured of other insurance policies obtained covering these items would result in the forfeiture of
all the benefits under the policy. To be regarded as a violation of Policy Condition No. 3, the other existing but
undisclosed policies must be upon the same matter and with the same interest and risk.

Petitioner obtained fire insurance policies from Cibeles Insurance simultaneously with Western Guaranty and Prudential
Guarantee covering the same matter and the same risk, i.e., the policies uniformly cover fire losses of petitioner's
machinery and equipment. Although Policy Condition No. 3 does not specifically state "machinery and equipment" as
among the subject of disclosure, it is apparent that the disclosure extends to pieces of machinery and equipment as well
since Policy Condition No. 3 speaks of disclosure of other insurance obtained covering "any of the property".

The word "property" is a generic term. Hence, it could include machinery and equipment which are assets susceptible of
being insured. So petitioner must give notice to the insurer of any other fire insurance policies on said machinery and
equipment. But petitioner did not notify Cibeles Insurance and Western Guaranty that it had procured other fire
insurance policies covering its property consisting of the same machinery and equipment.
If the insurance policy specifies as a condition the disclosure of existing co insurers, non-disclosure thereof is a violation
that entitles the insurer to avoid the policy. This condition is common in fire insurance policies and is known as the
"OTHER INSURANCE CLAUSE".

ADDITIONAL NOTES: The rationale behind the incorporation of "other insurance" clause in fire policies is to prevent
over-insurance and thus avert the perpetration of fraud. When a property owner obtains insurance policies from two or
more insurers in a total amount that exceeds the property's value, the insured may have an inducement to destroy the
property for the purpose of collecting the insurance. The public as well as the insurer is interested in preventing a
situation in which a fire would be profitable to the insured.

Petitioner contends that the insurers failed to prove that the insurance policies it procured from them covered the same
subject matter. It insists that the properties insured under the policies from the three insurance firms were NOT one and
the same even if they were all located in the same place.

An examination of these two fire insurance policies issued by Prudential Guarantee, reveals that the property subject of
insurance are machineries and equipment located at Building 1, PTA Compound, Valenzuela, Metro Manila. Likewise,
the properties subject of insurance in the fire insurance policies issued by Western Guaranty are machineries and
equipment located at Warehouse 1 & 2 within PTA Compound Valenzuela, M.M. and machineries and equipment
insured by Cibeles were contained in Building 1, within Phil. Tobacco Adm. Central Warehouse Cpd. along No. 26 Isidro
Francisco St. Brgy. Vicente Reales, Dalandanan, Valenzuela, M.M.

The properties such as the machineries and equipment subject of these four insurance policies are one and the same
properties considering that the location of these machineries and equipment are all contained in Building 1 within the
PTA Compound. The allegation therefore of the plaintiff that the properties mentioned in all the insurance policies are
not the same properties holds no water.

Since the policy procured by petitioner from Cibeles Insurance covered the same subject and interest as that covered by
the policies issued by Western Guaranty and Prudential Guarantee, the existence of other insurance policies referred to
under Policy Condition No. 3 is undeniable. The non-disclosure of these policies to the insurers was fatal to petitioner's
right to recover on the insurance policies.