Insurance Cases From 2011 To 2021 Case Digests On Insurance Code of The Philippines

Insurance Cases from 2011 to 2021 Case Digests on
Insurance Code of the Philippines

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Commissioner of Internal Revenue vs. Manila Bankers' Life Insurance
Corporation
G.R. No. 169103 March 16, 2011
Facts:
Respondent Manila Bankers’ Life Insurance Corporation is a duly organized
domestic corporation primarily engaged in the life insurance business. Petitioner
Commissioner of Internal Revenue ordered the examination of books of accounts and other
accounting records of respondents for taxable year "1997 & unverified prior years."
Petitioner found deficiency on which the respondent agreed to its assessment except the
deficiency on documentary stamp taxes on its policy premiums and penalties. Petitioner
issued demand including the documentary stamp taxes due on respondent’s policy premiums.
Manila Bankers protest on the assessment for deficiency documentary stamp tax which was
not acted upon by the BIR. Respondent petitioned for the cancellation of assessment before
the CTA. The latter granted the petition which was later upheld by the CA.
Issue:
Whether or not it is valid to impose documentary stamp tax on increases in the
coverage or sum assured by existing life insurance policies, even without the issuance of new
policies.
Ruling:
Yes. The Court is clear to uphold the assessment for the deficiency of documentary
stamp tax. It is not because the additional premium payments or an agreement to change the
sum assured during the effectiveness of an insurance plan are subject to documentary stamp
tax, but because documentary stamp tax is levied on every document which establishes that
insurance was made or renewed upon a life. Hence, the petition was granted and the CA
decision was set aside.

Asian Terminals, Inc., Vs. Malayan Insurance, Co., Inc.
G.R. No. 171406 April 4, 2011
Facts:
On November 14, 1995, Shandong Weifang Soda Ash Plant shipped on board
the vessel MV "Jinlian I" 60,000 plastic bags of soda ash from China to Manila. The
shipment was insured with respondent Malayan Insurance Company, Inc. When it arrived in
Manila, the stevedores of petitioner Asian Terminals, Inc unloaded the 60,000 bags of soda
ash dense in a temporary storage and found 2,702 bags in bad order condition. When the bags
were transported and unloaded to the consignee, a total of 2,881 bags were in bad order due
to spillage, caking, and hardening of the contents. Respondent, as insurer, paid the value of
the lost/ damaged cargoes to the consignee. Respondent then filed before RTC of Manila a
Complaint for damages against petitioner, the shipper Inchcape Shipping Services, and the
cargo broker MEC Customs Brokerage. The RTC rendered a decision charging only the
herein petitioner for that the proximate cause of the damage/loss was the negligence of
petitioner’s stevedores. The CA then affirmed it. Now the petitioner contends that respondent
has no cause of action because it failed to present the insurance contract or policy
covering the subject shipment. Petitioner argues that the Subrogation Receipt presented by
respondent is not sufficient to prove that the subject shipment was insured and thus, the
respondent is not entitled to any reimbursement.
Issue:
Whether or not respondent’s non-presentation of the insurance contract or policy is
fatal to its cause of action.
Ruling:
No. Non-presentation of the insurance contract or policy is not fatal to its cause of
action. The presentation of the insurance contract or policy was not necessary. Although
petitioner objected to the admission of the Subrogation Receipt in its Comment to
respondent’s formal offer of evidence on the ground that respondent failed to present the
insurance contract or policy, a perusal of petitioner’s Answer and Pre-Trial Brief shows that
petitioner never questioned respondent’s right to subrogation, nor did it dispute the coverage
of the insurance contract or policy. Since there was no issue regarding the validity of the
insurance contract or policy, or any provision thereof, respondent had no reason to present the
insurance contract or policy as evidence during the trial.

Jose Marques And Maxilite Technologies, Inc., Vs. Far East Bank And
Trust Company, Far East Bank Insurance Brokers, Inc., And Makati Insurance
Company
G.R. No. 171379 January 10, 2011
Facts:
Maxilite Technologies, Inc. (Maxilite) is a domestic corporation and Marques
(Marques) is the President and controlling stockholder of Maxilite entered into a trust receipt
transaction with Far East Bank and Trust Co. (FEBTC) for the shipment of various high-
technology equipment from the US. The importation was covered by a trust receipt document
stating therein that Marques agree(s) to keep said merchandise insured against fire. Upon the
advice of FEBTC, Far East Bank Insurance Brokers, Inc. (FEBIBI) processed four separate
and independent fire insurance policies from Makati Insurance Company. Maxilite paid the
premiums through debit arrangement. FEBTC would debit Maxilite’s account for the
premium payments, as reflected in statements of accounts sent by FEBTC to Maxilite. On 19
August 1994, Insurance Policy No. 1024439, covering the period 24 June 1994 to 24 June
1995, was released to cover the trust received merchandise. FEBIBI sent written reminders to
FEBTC, dated 19 October 1994, 24 January 1995, and 6 March 1995, to remind to debit on
Maxilite’s account to pay Insurance Policy No. 1024439 covering the period 24 June 1994 to
24 June 1995. On 24 and 26 October 1994, Maxilite fully settled its trust receipt account.
Maxilite suffered losses from a fire. Maxilite claimed the fire insurance policy with Makati
Insurance Company. The latter denied the fire loss claim on the ground of non-payment of
premium. FEBTC and FEBIBI disclaimed any responsibility for the denial of the claim.
Issue:
Whether or not Maxilite paid the insurance premium.
Ruling:
Yes. FEBTC is estopped from claiming that the insurance premium has been unpaid.
FEBTC had insurable interest over the merchandise, and thus had greater reason to debit
Maxilite’s account. Further, as found by the trial court, and apparently undisputed by FEBTC,
FEBIBI and Makati Insurance Company, Maxilite had sufficient funds at the time of the first
reminder. However, FEBTC failed to debit and instead disregarded the written reminder from
FEBIBI to debit Maxilite’s account. As a consequence of its negligence, FEBTC must be
held liable for damages pursuant to Article 2176 of the Civil Code which states "whoever by
act or omission causes damage to another, there being fault or negligence, is obliged to pay
for the damage done." Indisputably, had the insurance premium been paid, through the
automatic debit arrangement with FEBTC, Maxilite’s fire loss claim would have been
approved. FEBTC is solely liable for the payment of the face value of the insurance policy
and the monetary awards stated in the Court of Appeals’ decision.

Loadmasters Customs Services, Inc. vs. Glodel Brokerage Corporation And
R&B Insurance Corporation
G.R. No.179446 January 10, 2011
Facts:
Columbia Wire and Cable Corporation (Columbia) insured a cargo of copper
cathodes through R&B Insurance Corporation (R&B). Columbia also engaged the services of
Glodel Brokerage Corporation (Glodel) for the transport of the cargo to Columbia facilities.
Glodel then engaged the services of Loadmasters Customs Services (Loadmasters) for the
delivery of said cargo to Columbia. Out of 12 trucks, owned by Loadmasters, used to deliver
the cargo of Columbia, only 11 made it to their respective destinations. Columbia claimed
the amount of loss from R&B, which sued both Glodel and Loadmasters. The RTC ruled in
favor of R&B, but did not hold Loadmasters liable. Both R&B and Glodel appealed the
judgement. The Court of Appeals modified the decision of the RTC and ruled that
Loadmasters, being the agent of Glodel, is liable to Glodel for all the damages it might be
required to pay.
Issue:
Whether or not Loadmasters is an agent of Glodel, and whether or not it may be held
liable under the transaction between Glodel and Columbia.
Ruling:
Petition is partly meritorious.
Glodel and Loadmasters are both common carriers, as they hold out their carriage
services to the public. As such, under the Civil Code, they are mandated to show
extraordinary diligence in the conduct of transport. In the case at bar, both Glodel and
Loadmasters were negligent as the cargo failed to reach its destination. Loadmasters failed to
ensure that its employees would not tamper with the cargo. Glodel failed to ensure that
Loadmasters is sufficiently capable of completing the delivery. Glodel and Loadmasters are
therefore joint tortfeasors and are solidarily liable to R&B Insurance.
Loadmasters cannot be considered an agent of Glodel. Loadmasters in no way represented
itself as such, and in the transfer of cargo, did not represent itself as doing so on behalf of
Glodel. In fact, Loadmasters is not privy to the agreement between Glodel and Columbia. It
cannot be considered an agent of Glodel, and cannot be held liable to Glodel.

Country Bankers Insurance Corporation V. Antonio Lagman
G.R. No. 165487 July 13, 2011
Facts:
Nelson Santos applied for a license with the National Food Authority (NFA) to
engage in the business of storing palay in his warehouse at Barangay Malacampa, Camiling,
Tarlac. Under Act No. 3893, the approval for said license was conditioned upon posting of a
cash bond, a bond secured by real estate, or a bond signed by a duly authorized bonding
company.
Accordingly, Country Bankers issued Warehouse Bond No. 03304 for P1,749,825.00
on 5 November 1989 and Warehouse Bond No. 02355 for P749,925.00 on 13 December
1989 through its agent, Antonio Lagman. In consideration of these issuances, corresponding
Indemnity Agreements were executed by Santos, as bond principal, together with Ban Lee
Lim Santos, Rhosemelita Reguine and Lagman, as co-signors.
Santos then secured a loan using his warehouse receipts as collateral. When the loan
matured, Santos defaulted in his payment. The sacks of palay covered by the warehouse
receipts were no longer found in the bonded warehouse. By virtue of the surety bonds,
Country Bankers was compelled to pay P1,166,750.37. Consequently, Country Bankers filed
a complaint for a sum of money before RTC Manila. In his Answer, Lagman alleged that the
1989 Bonds were valid only for 1 year from the date of their issuance, as evidenced by
receipts; that the bonds were never renewed and revived by payment of premiums.
Issue:
Whether or not the 1989 Bonds have expired and the 1990 Bond novates the 1989
Bonds.
Held:
No. Having discounted the existence and/or validity of the 1990 Bond, there can be
no novation to speak of. Novation is the extinguishment of an obligation by the substitution
or change of the obligation by a subsequent one which extinguishes or modifies the first,
either by changing the object or principal conditions, or by substituting another in place of
the debtor, or by subrogating a third person in the rights of the creditor. For novation to take
place, the following requisites must concur:
1) There must be a previous valid obligation; 2) The parties concerned must agree to a new
contract; 3) The old contract must be extinguished; and 4) There must be a valid new
contract.

First Lepanto-Taisho Insurance Corporation vs. Chevron Philippines, Inc.
G.R. No. 177839 January 18, 2012
Facts:
Chevron Philippines sued First Lepanto-Taisho Insurance Corp. for payment
of unpaid oil and petroleum purchases made by its distributor Fumitechniks Corp.
Fumitechniks applied for and was issued a Surety Bond by First Lepanto. As stated in the
attached rider, the bond was in compliance with the requirement for the grant of a credit line
with Chevron to guarantee payment/remittance of the cost of fuel products withdrawn within
the stipulated time in accordance with the terms and conditions of the agreement.
Fumitechniks defaulted on its obligation to Chevron. As such, Chevron notified First Lepanto
of Fumitechniks’ unpaid purchases. First Lepanto then demanded from Fumitechniks the
delivery of documents including, among others, a copy of the agreement secured by the
Surety Bond and information such as terms and conditions of any arrangement that
Fumitechniks might have made or ongoing negotiations with Chevron in connection with the
settlement of its obligations. Fumitechniks responded by saying that no such agreement was
executed with Chevron.
ISSUE:
Whether or not First Lepanto, as surety, is liable to Chevron, the creditor, in the
absence of a written contract with the principal.
RULING:
NO. Sec. 175, Insurance Code defines suretyship as a contract or agreement whereby
a party, called the surety, guarantees the performance by another party, called the principal or
obligor, of an obligation or undertaking in favor of a third party, called the obligee. It arises
upon the solidary binding of a person – deemed the surety – with the principal debtor, for the
purpose of fulfilling an obligation. Such undertaking makes a surety agreement an ancillary
contract as it presupposes the existence of a principal contract. Although the contract of a
surety is in essence secondary only to a valid principal obligation, the surety becomes liable
for the debt or duty of another although it possesses no direct or personal interest over the
obligations nor does it receive any benefit therefrom. And notwithstanding the fact that the
surety contract is secondary to the principal obligation, the surety assumes liability as a
regular party to the undertaking. The extent of the surety’s liability is determined by the
language of the suretyship contract or bond itself. It cannot be extended by implications
beyond the terms of the contract.

Malayan Insurance Co. V. Rodelio Alberto
G.R. No. 194320 February 1, 2012
Facts:
A vehicular accident occurred involving 4 vehicles, a Nissan Bus operated by
Aladdin transit, an Isuzu Tanker, a Fuzo Cargo Truck, and a Mitsubishi Galant. Malayan
Insurance insured the Mitsubishi
Galant against third party liability, own damage and theft, among others. Having
insured the vehicle against such risks, Malayan Insurance claimed in its Complaint that it
paid the damages sustained by the assured amounting to PhP 700,000. Maintaining that it has
been subrogated to the rights and interests of the assured by operation of law upon its
payment to the latter, Malayan Insurance sent several demand letters to respondents Alberto
and Reyes, the registered owner and the driver, respectively, of the Fuzo Cargo Truck,
requiring them to pay the amount it had paid to the assured. Respondents refused to settle
their liability. Respondents claim that the documents presented by Malayan Insurance do not
indicate certain important details that would show proper subrogation.
Issue:
Whether or not the subrogation of Malayan Insurance is impaired and/or
deficient?
Held:
No. Malayan Insurance has been properly subrogated to the rights of the assured.
Malayan Insurance contends that there was a valid subrogation in the instant case, as
evidenced by the claim check voucher and the Release of Claim and Subrogation Receipt
presented by it before the trial court.
Subrogation is the substitution of one person by another with reference to a lawful
claim or right, so that he who is substituted succeeds to the rights of the other in relation to a
debt or claim, including its remedies or securities. Payment by the insurer to the insured
operates as an equitable assignment to the insurer of all the remedies that the insured may
have against the third party whose negligence or wrongful act caused the loss. The right of
subrogation is not dependent upon, nor does it grow out of, any privity of contract. It accrues
simply upon payment by the insurance company of the insurance claim.

Ma. Lourdes S. Florendo vs. Philam Plans, Inc., Et Al.
G.R. No. 186983 February 22, 2012
Facts:
Manuel Florendo filed an application for comprehensive pension plan with
respondent Philam Plans, Inc. Ma. Lourdes S. Florendo, his wife, was stated as beneficiary.
On October 30, 1997, Philam Plans issued Pension Plan Agreement. Eleven months later or
on September 15, 1998, Manuel died of blood poisoning.
Subsequently, Lourdes filed a claim with Philam Plans for the payment of the benefits
under her husband’s plan. Because Manuel died before his pension plan matured and his wife
was to get only the benefits of his life insurance, Philam Plans forwarded her claim to Philam
Life. Philam Life declined the claim and found that Manuel was on maintenance medicine for
his heart and had an implanted pacemaker. Further, he suffered from diabetes mellitus and
was taking insulin. Lourdes contends that Manuel had concealed nothing since Perla, the
soliciting agent, knew that Manuel had a pacemaker implanted on his chest in the 70s or
about 20 years before he signed up for the pension plan and that it is the soliciting agent who
filled up the form.
Issue:
Whether or not there was misrepresentation on the part of Manuel that would avoid
the policy?
Held:
Yes. As already stated, Manuel had been taking medicine for his heart condition and
diabetes when he submitted his pension plan application. These clearly fell within the five-
year period. More, even if Perla’s knowledge of Manuel’s pacemaker may be applied to
Philam Plans under the theory of imputed knowledge, it is not claimed that Perla was aware
of his two other afflictions that needed medical treatments. Pursuant to Section 27 of the
Insurance Code, Manuel’s concealment entitles Philam Plans to rescind its contract of
insurance with him.
In a final attempt to defend her claim for benefits under Manuel’s pension plan,
Lourdes points out that any defect or insufficiency in the information provided by his
pension plan application should be deemed waived after the same has been approved. The
Court cannot agree. The comprehensive pension plan that Philam Plans issued contains a
one-year incontestability period. It states: After this Agreement has remained in force for one
(1) year, we can no longer contest for health reasons any claim for insurance under this
Agreement, except for the reason that installment has not been paid (lapsed), or that you are
not insurable at the time you bought this pension program by reason of age. If this Agreement
lapses but is reinstated afterwards, the one (1) year contestability period shall start again on
the date of approval of your request for reinstatement. The above incontestability clause
precludes the insurer from disowning liability under the policy it issued on the ground of
concealment or misrepresentation. Since Manuel died on the eleventh month following the
issuance of his plan, the one year incontestability period has not yet set in.

Malayan Insurance Co., Inc. vs Philippines First Insurance Co., Inc. And
Reputable Forwarder Services, Inc.
G.R. NO. 184300 July 11, 2012
Facts:
Wyeth Philippines, Inc. forged a contract of carriage with Reputable
Forwarder Services, Inc., a common carrier for the transport of its goods and product.
Wyeth insured the goods with Philippine First Insurance Co., Inc., while Republic insured the
same goods with Malayan Insurance Co, Inc. During transit, certain goods were lost due to
hijacking of 10 armed men. Philippine first paid the proceeds to Wyeth, subrogating the
rights of Wyeth to Philippine first which filed a claim against Reputable and Malayan as a
3rd party defendant. Reputable and Malayan refused the claim of Philippine first. Malayan
contended that there was double insurance and that the first insurer, Philippine First, should
bear all the loss.
Issue:
Is there double insurance in this case thereby justifying Malayan and
Reputable’s refusal to the claim?
Held:
No. 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 and falls within the contemplation of Section 15 of the
Insurance Code. 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. Necessarily,
over insurance by double insurance cannot likewise exist. Hence, as correctly ruled by the
RTC and CA, neither Section 5 nor Section 12 of the SR Policy can be applied.

United Merchants Corporation vs. Country Bankers Insurance Corporation
G.R. No. 198588 July 11, 2012
Facts:
UMC’s General Manager Alfredo Tan insured UMC’s stocks in trade of
Christmas lights against fire with Country Bankers Insurance Corporation. A fire gutted the
warehouse rented by UMC. Consequently, UMC, through the appointed adjuster of Country
Bankers, submitted its Sworn Statement of Formal Claim, with proof of its loss. It demanded
at least 50% payment of its claim from Country Bankers. However, Country Bankers
rejected the claim due to breach of Condition No. 15 of the Insurance Policy which states
that: If the claim be in any respect fraudulent, or if any false declaration be made or used in
support thereof, or if any fraudulent means or devices are used by the Insured or anyone
acting in his behalf to obtain any benefit under this Policy; or if the loss or damage be
occasioned by the willful act, or with the connivance of the Insured, all the benefits under this
Policy shall be forfeited. UMC filed a Complaint with the RTC of Manila.
Issue:
Whether or not UMC is entitled to claim from Country Bankers the full coverage of
its fire insurance policy?
Ruling:
No. It has long been settled that a false and material statement made with an intent to
deceive or defraud voids an insurance policy. Furthermore, the Insurance Code provides that
a policy may declare that a violation of specified provisions thereof shall avoid it. Thus, in
fire insurance policies, which contain provisions such as Condition No. 15 of the Insurance
Policy, a fraudulent discrepancy between the actual loss and that claimed in the proof of
loss voids the insurance policy. Mere filing of such a claim will exonerate the insurer. In
the present case, the claim is twenty five times the actual claim proved. The most liberal
human judgment cannot attribute such difference to mere innocent error in estimating or
counting but to a deliberate intent to demand from insurance companies payment for
indemnity of goods not existing at the time of the fire. This constitutes the so-called
fraudulent claim which, by express agreement between the insurers and the insured, is a
ground for the exemption of insurers from civil liability.

Manila Bankers Life Insurance Corporation vs. Cresencia P. Aban
G.R. No. 175666 July 29, 2013
Facts:
Delia Sotero took out a life insurance policy from Manila Bankers Life
Insurance designating respondent Cresencia P. Aban, her niece, as her beneficiary. Petitioner
issued Insurance Policy No. 747411, with a face value of P100,000.00, in Sotero's favor on
August 30, 1993, after the requisite medical examination and payment of the insurance
premium.
On April 10, 1996, when the insurance policy had been in force for more than two
years and seven months, Sotero died. Respondent filed a claim for the insurance
proceeds on July 9, 1996. Petitioner investigated the claim and found that Sotero did not
personally apply for insurance coverage, as she was illiterate. Petitioner filed a civil case for
rescission and/or annulment of the policy and alleged that the policy was obtained by fraud,
concealment and/or misrepresentation.
Respondent filed a Motion to Dismiss. claiming that petitioner's cause of action was
barred by prescription pursuant to Section 48. The trial court granted the motion to dismiss
by Aban. On appeal, it affirmed the trial court.
Issue:
Whether or not there was misrepresentation on the part of the insured that would
avoid the policy in relation to the prescription period in Section 48?
Held:
No. Section 48 serves a noble purpose, as it regulates the actions of both the insurer
and the insured. Under the provision, an insurer is given two years – from the effectivity of a
life insurance contract and while the insured is alive — to discover or prove that the policy is
void ab initio or is rescindible by reason of the fraudulent concealment or misrepresentation
of the insured or his agent. After the two-year period lapses, or when the insured dies within
the period, the insurer must make good on the policy, even though the policy was obtained
by fraud, concealment, or misrepresentation. This is not to say that insurance fraud must be
rewarded, but that insurers who recklessly and indiscriminately solicit and obtain business
must be penalized, for such recklessness and lack of discrimination ultimately work to the
detriment of bona fide takers of insurance and the public in general.

Malayan Insurance Company, Inc. vs. PAP Co. Ltd.
G.R. No. 200784 August 7, 2013
Facts:
Respondent PAP Co. procured a fire insurance policy from petitioner Malayan
Insurance for its machineries and equipment which was mortgaged to RCBC. The policy was
renewed on an “as is” basis after a year. The insured machineries and equipment were lost by
fire prompting PAP Co. to file an insurance claim from Malayan. Malayan, however, 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 in violation of their affirmative warranty. Contesting the denial, PAP Co. argued that
Malayan cannot avoid liability as it was informed of the transfer by RCBC.
Issue:
Whether or not the CA erred in affirming the lower court’s ruling holding Malayan
Insurance liable despite PAP Co.’s alleged concealment, misrepresentation, and breach of an
affirmative Warranty?
Held:
Yes. The appellate court erred in holding Malayan Insurance liable. By the clear and
express condition in the renewal policy, the removal of the insured property to any building
or place required the consent of Malayan. Any transfer effected by the insured, without the
insurer’s consent, would free the latter from any liability. The records, however, are bereft of
any convincing and concrete evidence that Malayan was notified of the transfer of the insured
properties from the Sanyo factory to the Pace factory. 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. The Court noted that
PAP’s Branch Manager, Mr. Yoneda only admitted that the insured properties were
transferred to a different location only after the renewal of the fire insurance policy. There
being an uncontested removal, the transfer was at PAP’s own risk. Malayan is thus entitled to
rescind the insurance contract as it clearly committed concealment, misrepresentation and a
breach of warranty. 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.

Alpha Insurance and Surety Co. vs. Arsenia Sonia Castor
G.R. No. 198174 September 02, 2013
Facts:
On February 21, 2007, respondent entered into a contract of insurance, Motor
Car Policy No. MAND/CV-00186, with petitioner, involving her motor vehicle, a Toyota
Revo DLX DSL. The contract of insurance obligates the petitioner to pay the respondent the
amount P630,000.00 in case of loss or damage to said vehicle during the period covered,
which is from February 26, 2007 to February 26, 2008.
On April 16, 2007, respondent's car was stolen by his driver but petitioner denied the
insurance claim on the ground that the insurance policy provides that: The Company shall
not be liable for any malicious damage caused by the Insured, any member of his family or
by “a person in the insured’s service.”
Respondent filed a Complaint for Sum of Money where RTC rendered a decision in
favor of respondent and directed petitioner to pay respondent the amount of the car plus
interest. The Court of Appeals affirmed the ruling of the RTC. Hence, this petition.
Issue:
Whether the theft perpetrated by the driver of the insured is an exception to the
coverage from the insurance policy of respondent.
Held:
The petition is denied. Ruling in favor of respondent, the RTC of Quezon City
scrupulously elaborated that theft perpetrated by the driver of the insured is not an exception
to the coverage from the insurance policy, since Section III thereof did not qualify as to who
would commit the theft.
The insurance company, subject to the limits of liability, is obligated to indemnify the
insured against theft. Even if the same is committed by the driver of the insured, there
being no categorical declaration of exception, the same must be covered. As correctly pointed
out by the plaintiff, “(A)n insurance contract should be interpreted as to carry out the purpose
for which the parties entered into the contract which is to insure against risks of loss or
damage to the goods. Such interpretation should result from the natural and reasonable
meaning of language in the policy.
Where restrictive provisions are open to two interpretations, that which is most
favorable to the insured is adopted. Moreover, contracts of insurance, like other contracts, are
to be construed according to the sense and meaning of the terms which the parties themselves
have used. If such terms are clear and unambiguous, they must be taken and understood in
their plain, ordinary and popular sense.

Sici vs Cuenca
G.R. No. 173297 March 6, 2013
Facts:
On January 19, 1998, Marañon filed a complaint in the RTC against the
Cuencas for the collection of a sum of money and damages. His complaint, docketed as Civil
Case No. 98-023, included an application for the issuance of a writ of preliminary
attachment. On January 26, 1998, the RTC granted the application for the issuance of the
writ of preliminary attachment conditioned upon the posting of a bond of P1,000,000.00
executed in favor of the Cuencas. Less than a month later, Marañon amended the complaint
to implead Tayactac as a defendant. On February 11, 1998, Marañon posted SICI Bond No.
68427 JCL (4) No. 02370 in the amount of P1,000,000.00 issued by Stronghold Insurance.
Two days later, the RTC issued the writ of preliminary attachment. The sheriff served the
writ, the summons and a copy of the complaint on the Cuencas on the same day. The service
of the writ, summons and copy of the complaint were made on Tayactac on February 16,
1998.
Issue:
Whether or not the respondents have the legal standing to sue petitioner for
the recovery of the attached properties and damages.
Ruling:
No. To ensure the observance of the mandate of the Constitution, Section 2, Rule 3 of
the Rules of Court requires that unless otherwise authorized by law or the Rules of Court
every action must be prosecuted or defended in the name of the real party in interest. Under
the same rule, a real party in interest is one who stands to be benefited or injured by the
judgment in the suit, or one who is entitled to the avails of the suit. Accordingly, a person , to
be a real party in interest in whose name an action must be prosecuted, should appear to be
the present real owner of the right sought to be enforced, that is, his interest must be a
present substantial interest, not a mere expectancy, or a future, contingent, subordinate, or
consequential interest.
Where the plaintiff is not the real party in interest, the ground for the motion to dismiss is
lack of cause of action. The reason for this is that the courts ought not to pass upon questions
not derived from any actual controversy. Truly, a person having no material interest to
protect cannot invoke the jurisdiction of the court as the plaintiff in an action. Nor does a
court acquire jurisdiction over a case where the real party in interest is not present or
impleaded.

Westwind Shipping Corp. v. UCPB General Insurance Co., Inc.
G.R. Nos. 200289 & 200314, November 25, 2013
Facts:
Kinsho-Mataichi Corporation shipped from the port of Kobe, Japan, 197 metal
containers/skids of tin-free steel for delivery to the consignee, San Miguel Corporation
(SMC). Loaded on board M/V Golden Harvest Voyage No. 66, a vessel owned and operated
by Westwind Shipping Corporation (Westwind). SMC insured the cargoes against all risks
with UCPB General Insurance Co., Inc. The shipment arrived in Manila, Philippines on
August 31, 1993 and was discharged in the custody of the arrastre operator, Asian Terminals,
Inc. (ATI). During the unloading operation, six containers/skids sustained dents and
punctures from the forklift used by the stevedores of Ocean Terminal Services, Inc. (OTSI) in
centering and shuttling the containers/skids. Orient Freight International, Inc. (OFII), the
customs broker of SMC, withdrew from ATI the 197 containers/skids, including the six in
damaged condition, and delivered the same at SMC's warehouse in Calamba, Laguna. Almost
a year after, on August 15, 1994, SMC filed a claim against UCPB, Westwind, ATI, and OFII
to recover the amount corresponding to the damaged 15 containers/skids. When UCPB paid
the total sum of Philippine Pesos: Two Hundred Ninety-Two Thousand Seven Hundred
Thirty-Two and Eighty Centavos (P292,732.80), SMC signed the subrogation receipt.
Thereafter, in the exercise of its right of subrogation, UCPB instituted on August 30, 1994 a
complaint for damages against Westwind, ATI, and OFI.
Issues:
Whether the shipping industry remains liable for the damages sustained despite the
fact that they have no custody.
Ruling:
Yes. Section 3 (2) of the Carriage of Goods by Sea Act states that among the carriers’
responsibilities are to properly and carefully load, care for and discharge the goods carried.
The bill of lading covering the subject shipment likewise stipulates that the carrier’s
liability for loss or damage to the goods ceases after its discharge from the vessel. Article 619
of the Code of Commerce holds a ship captain liable for the cargo from the time it is turned
over to him until its delivery at the port of unloading.

Fortune Medicare, Inc. vs. David Robert Amorin
G.R. No. 195872 March 12, 2014
Facts:
David Robert Amorin was a Fortune Medicare, Inc. cardholder/member.
Amorin underwent emergency surgery, specifically an appendectomy, at St. Francis Medical
Center while on vacation in Hawaii, incurring professional and hospitalization costs of
$7,242.35 and $1,777.79, respectively. When he returned to Manila, he attempted to recover
the full amount from Fortune Care, but the company only approved reimbursement of
P12,151, an amount based on the average cost of an appendectomy performed in an
accredited hospital in Metro Manila. Amorin received the amount under protest but requested
that it be adjusted to cover the total amount of professional fees he had paid, as well as 80
percent of the approved standard charges based on "American standard," given that the
emergency procedure occurred in the United States. Amorin cited Section 3, Art. V of the
Health Care Contract on Benefits and Coverages to back up his claim. Fortune Care denied
the request, prompting Amorin to file a complaint alleging breach of contract and requesting
damages. Fortune Care, for its part, claimed that because the Health Care Contract was
limited to Philippine territory, it did not cover hospitalization and professional fees incurred
in other countries. Amorin's complaint was dismissed by the RTC. Amorin filed an appeal
with the CA after being dissatisfied with the RTC decision. Following that, the CA issued its
decision granting the appeal, reversing and setting aside the trial court's decision. As a result,
the appeal. Fortune Care claims that the phrase "approved standard charges" does not always
mean "Philippine Standard."
Issue:
Whether Fortune Care is obligated to pay the member the amount demanded.
Held:
The petition was denied. To determine a health care provider's liability to its
members, jurisprudence holds that a health care agreement is similar to non-life insurance,
which is primarily a contract of indemnity. When a member incurs hospital, medical, or
other expenses as a result of sickness, injury, or another specified contingency, the health
care provider is obligated to pay for the same to the extent agreed upon in the contract. The
point of contention now is the proper interpretation of the phrase "approved standard
charges," which shall serve as the foundation for the allowable 80 percent benefit. In the
absence of any qualifying language limiting Fortune Care's liability to costs applicable in the
Philippines, the amount payable by Fortune Care should not be limited to the cost of
treatment in the Philippines, as doing so would disadvantage its member. If, as Fortune Care
claimed, the premium and other charges in the Health Care Contract were merely calculated
on the assumption and risk under Philippine cost and that the American cost standard or any
foreign country's cost was never considered, such limitations should have been specified and
reflected in the extent of coverage which the company voluntarily assumed.

Asian Terminals, Inc. vs. First Lepanto-Taisho Insurance Corporation
G.R. NO. 185964 June 16, 2014
Facts:
On July 6, 1996, the M/V "Da Feng," owned by China Ocean Shipping Co.
(COSCO), loaded and received 3,000 bags of sodium tripolyphosphate in favor of the
consignee, Grand Asian Sales, Inc. (GASI). The package appeared to have been covered
against all hazards, according to a Certificate of Insurance. GASI discovered that the
delivered goods had deficiencies and spills of loss/damage upon arrival of the shipment.
COSCO, through its Philippine agent Smith Bell Shipping Lines, Inc. (Smith Bell), ATI, and
PROVEN denied GASI's request for compensation. As a result, it sought compensation from
the shipper's insurer. First Lepanto paid GASI the amount of insurance indemnity. First
Lepanto demanded from COSCO, its shipping agency in the Philippines, Smith Bell,
PROVEN, and ATI, reimbursement of the amount it paid to GASI. When First Lepanto’s
demands were not heeded, it filed a complaint about the sum of money before MTC of
Manila. The MTC absolved ATI and PROVEN from any liability and instead found
COSCO to be the party at fault and hence liable for the loss/damage sustained by the
subject shipment. The RTC overturned the MTC’s findings on appeal. The CA dismissed the
appeal and held that First Lepanto was subrogated to its rights against those liable for the
lost/damaged shipment, as well as confirming the RTC's ruling that the subject shipment was
damaged while in the custody of ATI.
Issue:
Whether or not the presentation of the insurance policy is required to prove First
Lepanto's right to be subrogated to the right of the consignee.
Held:
The petition is denied by the Court. The failure to present the insurance contract does
not preclude First Lepanto from pursuing reimbursement as a subrogee. In some cases, the
Court has acknowledged exceptions by declaring that a marine insurance policy is not
required evidence in reimbursement claims brought by the insurer. The application of the
exception is justified based on the facts of the current case. As previously stated, the
loss/damage to GASI's shipment occurred while they were in ATI's custody, possession, and
control as arrastre operators. Indeed, the Certificate of Insurance and the Release of Claim
presented as evidence sufficiently established First Lepanto's right to reimbursement as a
subrogee of the consignee, GASI. The insurer's payment to the insured serves as an equitable
assignment to the insurer of all the insured's remedies against the third party whose
negligence or wrongful act caused the loss. The right of subrogation is not dependent on,
nor does it arise from, any contractual privity or payment of the insurance claim by the
insurance company. It simply accrues upon the insurance company's payment of the
insurance claim.

H.H. Hollero Construction, Inc. vs. Government Service Insurance System And
Pool Of Machinery Insurers
G.R. No. 152334 September 24, 2014
Facts:
The GSIS and H.H. Hollero Construction signed a Project Agreement under
which the latter agreed to build a GSIS housing project. It also agreed to insure the Project,
including all improvements, under a Contractors' All Risks Insurance policy with the GSIS
General Insurance Department at the time the Agreement was signed. The policies stated,
among other things, that if no action is taken within twelve (12) months of the rejection of a
claim for loss, damage, or liability, all benefits will be forfeited. Three typhoons hit the
country during construction, causing significant damage to the project. As a result, the
petitioner filed several indemnity claims with the GSIS. GSIS, on the other hand, denied the
petitioner's indemnity claims for the damages. As a result, the petitioner filed a Complaint
about Sum of Money and Damages with the RTC. GSIS filed a Motion to Dismiss
because the causes of action stated in the complaint are barred by the twelve-month
limitation. After all, the complaint was filed more than one(1) year after the indemnity claims
were rejected. The RTC denied the motion and granted the petitioner's indemnity claims, but
the CA overturned and reversed it. As a result, this petition was created.
Issue:
Whether or not H.H. Hollero Construction's indemnity claim has been
prescribed.
Held:
H.H. Hollero Construction's indemnity claim had already been barred by prescription.
The insured's right to payment for his loss arises as a result of the loss occurring. However, in
an insurance contract, the cause of action does not arise until the insurer rejects the insured's
claim. This is since there is no real reason to file a lawsuit before such a final rejection. The
prescriptive period for the insured's action for indemnity should be calculated from the
claim's final rejection in this regard. The term "final rejection" refers to the insurer's denial of
the insured's claims rather than the insurer's rejection or denial of the insured's motion or
request for reconsideration. The rejection in question should be interpreted as the initial
rejection. Given the foregoing, it is clear that the petitioner's causes of action for indemnity
arose upon receipt of the letters dated April 26, 1990, and June 21, 1990, or the date the GSIS
rejected its claims in the first instance. As a result, because it waited more than a year before
filing the necessary complaint with the RTC on September 27, 1991, its causes of action had
already been prescribed.

Loadstar Shipping Company, Incorporated vs. Malayan Insurance Company,
Incorporated
G.R. NO. 185565 November 26, 2014
Facts:
Loadstar International Shipping, Inc. (Loadstar Shipping) and the Philippine
Associated Smelting and Refining Corporation (PASAR) signed an agreement for the
domestic bulk transport of the latter's copper concentrates, which were loaded in Cargo Hold
Nos. 1 and 2 of the MV "Bobcat," a marine vessel owned by Loadstar International Shipping
Co., Inc. (Loadstar International) and operated by. Malayan Insurance Company, Inc. insured
the cargo (Malayan). During a routine inspection, the vessel's chief officer discovered a crack
on the starboard side of the main deck, allowing seawater to enter and wet the cargo.
Following an inspection, Elite Adjusters and Surveyor, Inc. (Elite Surveyor) determined that
samples of copper concentrate from Cargo Hold No. 2 had been contaminated by seawater.
PASAR issued a formal notice of claim to Loadstar Shipping in the amount of
P37,477,361.31. Malayan paid PASAR P32,351,102.32 based on the Elite Surveyor's
recommendation. PASAR signed a subrogation receipt in Malayan's favor. Malayan
demanded reimbursement from Loadstar Shipping to recover the amount paid and to exercise
its right of subrogation, but the company refused. As a result, on September 19, 2001,
Malayan filed a claim for damages with the RTC. Malayan primarily claimed in its complaint
that the cargo was lost as a direct and natural result of the vessel's unseaworthiness. Loadstar
Shipping and Loadstar International denied the respondent's allegations, claiming that the
respondent's payment to PASAR, based on the latter's fraudulent claim, did not entitle the
respondent to the automatic right of recovery under subrogation.
Issue:
Whether or not the respondent is entitled to subrogation recovery against petitioners
based on PASAR's claim.
Ruling:
Article 2207 of the New Civil Code establishes the right of subrogation. The rights of
a subrogee cannot be superior to those of a subrogor. In other words, a subrogee cannot
succeed in a right that the subrogor does not have. A subrogee effectively steps into the shoes
of the insured and can recover only if the insured could have recovered as well. If the insurer
pays the insured and it turns out that indemnification is not due or that if it is due, the amount
paid is excessive, the insurer risks being unable to seek recompense from the alleged
wrongdoer. This is because the alleged subrogor did not have the right to be indemnified, and
thus no right to collect is passed on to the subrogee. Malayan bears the burden of proof to
substantiate its claim because it is claiming actual damages. Actual damages cannot be based
solely on assumptions, speculations, or conjectures. The issue is whether

such contamination caused damage and, if so, the costs incurred by the insured PASAR.
Eastern Shipping Lines Inc., vs.Bpi/Ms Insurance Corp

G.R. No. 193986 January 15, 2014
Facts:
Sumitomo Corporation shipped through vessels of Eastern Shipping Lines
various steel sheets in coil in favor of the consignee Calamba Steel. In each of the three
shipments, several coils were observed to be in bad condition as evidenced by the Turn Over
Survey of Bad Order Cargo. The cargoes were then turned over to Asian Terminals, Inc.
(ATI) for stevedoring, storage and safekeeping pending Calamba Steel’s withdrawal of the
goods. When ATI delivered the cargo to Calamba Steel, the latter rejected its damaged
portion for being unfit for its intended purpose.
Calamba Steel filed an insurance claim with Mitsui through the latter’s settling
agent, respondent BPI/MS Insurance Corporation (BPI/MS), and the former was paid the
sums of US$7,677.12, US$14,782.05 and US$7,751.15 for the damage suffered by all three
shipments. Correlatively, on August 31, 2004, as insurer and subrogee of Calamba Steel,
Mitsui and BPI/MS filed a Complaint for Damages against petitioner and ATI.
Issue:
Whether or not Eastern Shipping was solidarily liable with ATI on account of the
damage incurred by the goods.
Held:
YES. The Court held that both Eastern Shipping and ATI were negligent in
handling and transporting the goods.
Verily, it is settled in maritime law jurisprudence that cargoes while being
unloaded generally remain under the custody of the carrier. As hereinbefore found by the
RTC and affirmed by the CA based on the evidence presented, the goods were damaged even
before they were turned over to ATI. Such damage was even compounded by the negligent
acts of petitioner and ATI which both mishandled the goods during the discharging
operations. Thus, it bears stressing unto petitioner that common carriers, from the nature of
their business and for reasons of public policy, are bound to observe extraordinary diligence
in the vigilance over the goods transported by them.
Subject to certain exceptions enumerated under Article 1734 of the Civil Code,
common carriers are responsible for the loss, destruction, or deterioration of the goods. The
extraordinary responsibility of the common carrier lasts from the time the goods are
unconditionally placed in the possession of, and received by the carrier for transportation
until the same are delivered, actually or constructively, by the carrier to the consignee, or to
the person who has a right to receive them.

Owing to this high degree of diligence required of them, common carriers, as a
general rule, are presumed to have been at fault or negligent if the goods they transported
deteriorated or got lost or destroyed. That is, unless they prove that they exercised
extraordinary diligence in transporting the goods. In order to avoid responsibility for any loss
or damage, therefore, they have the burden of proving that they observed such high level of
diligence. In this case, petitioner failed to hurdle such burden.
Eastern Shipping Lines, Inc. vs. Bpi/Ms Insurance Corp., & Mitsui Sumitomo
Insurance Co., Ltd.
GR. No. 182864 January 12, 2015
Facts:
On two separate occasions, BPI/MS and Mitsui shipped on board Eastern
Shipping Lines, Inc.(ESLI)’s vessels 22 and 55 coils of various steel sheets for transportation
to and delivery at Manila in favor of consignee Calamba Steel Center. The shipments were
insured with BPI/MS and Mitsui against all risks. Upon arrival at the port of Manila, the
shipments were turned over to Asian Terminals, Inc. for safekeeping. Upon withdrawal by
Calamba Steel, it was found out on both occasions that part of the shipment was damaged and
was in bad order, prompting Calamba Steel to reject the damaged shipment. When ESLI and
ATI refused to pay, Calamba Steel filed an insurance claim for the total amount of the cargo
against BPI/MS and Mitsui as cargo insurers.
As a result, BPI/MS and Mitsui became subrogated in place of and with all the rights
and favors accorded by law in favor of Calamba Steel. BPI/MS and Mitsui filed a complaint
against ESLI and ATI to recover actual damages amounting before the Regional Trial Court.
The RTC found both the ESLI and ATI liable for the damages sustained by the two
shipments. On appeal, the CA absolved ATI from liability.
Issue:
Is ESLI liable and to what extent is its liability?
Held:
Yes. Mere proof of delivery of the goods in good order to a common carrier
and of their arrival in bad order at their destination constitutes a prima facie case of fault or
negligence against the carrier. If no adequate explanation is given as to how the deterioration,
loss, or destruction of the goods happened, the transporter shall be held responsible. From the
foregoing, the fault is attributable to ESLI. While no longer an issue, it may be nonetheless
state that ATI was correctly absolved of liability for the damage.
Moreover, a review of the bill of ladings and invoice on the second shipment indicates
that the shipper declared the nature and value of the goods with the corresponding payment of
the freight on the bills of lading. Further, under the caption “description of packages and
goods,” it states that the description of the goods to be transported as “various steel sheet in
coil” with a gross weight of 383,532 kilograms (89.510 M3). On the other hand, the amount
of the goods is referred in the invoice, the due execution and genuineness of which has
already been admitted by ESLI, is US$186,906.35 as freight on board with payment of
ocean freight of US$32,736.06

and insurance premium of US$1,813.17. From the foregoing, we rule that the non-
limitation of liability applies in the present case.
Stronghold Insurance Co., Inc. vs. Interpacific Container Services

G.R. No. 194328 July 1, 2015
Facts:
Respondent Gloria Dee Chong is the owner of a Fuso Truck, insured by
petitioner Stronghold Insurance. The comprehensive motor car insurance policy for
P15,306.45 undertook to indemnify the insured against loss or damage to the car and death
or injury caused to third persons by reason of accident.
The vehicle figured in an accident along the national highway in Brgy. Palihan,
Hermosa, Bataan, resulting in the death of 4 persons, while seriously injuring 3 others. 2
vehicles were also heavily damaged as a result of the accident. Chong filed a claim for the
recovery of the proceeds of her policy in the amount of P50k. The insurer denied the claim on
the ground that at the time the accident took place, the driver of the insured vehicle was
heavily drunk as shown in the “Pagpapatunay” issued by Barangay Chairman Rafael Torres
and the Medico Legal Certificate.
The respondents filed an action for the recovery of the sum of money against
petitioner in the RTC Caloocan. They argued that there was no sufficient proof to support the
claim that the driver was drunk. Petitioner argued that the intoxication of the driver of the
insured legally avoided the liability of the insurance company under the policy. RTC held in
favor of the insured-respondents, ordering the insurer to deliver to the amount of P550k,
representing the proceeds of the insurance contract. CA affirmed, underscoring the absence
of any statement in the police blotter report about the crucial fact of intoxication.
Issue:
Whether or not Stronghold Insurance be held liable?
Held:
No. This case involves a contract of insurance, the authenticity and validity of
which was uncontested. In exempting insurers from liability under the contract, proof thereof
must be clear, credible and convincing. Fundamental is the rule that the contract is the law
between the parties and, that absent any showing that its provisions are wholly or in part
contrary to law, morals, good customs, public order, or public policy, it shall be enforced to
the letter by the courts.
The insurer failed to prove the fact of intoxication during the trial. Aside from the
Medico Legal Certificate and the Pagpapatunay, which were stripped of evidentiary value
because of the dubious circumstances under which they were obtained, the petitioner did not
adduce other proof to justify the avoidance of the policy. It must be emphasized that the
RTC doubted the authenticity of the Medico

Legal Certificate because of the attendant alteration and tampering on the face of the
document. The petition is denied.
Capital Insurance vs. Del Monte Motor Works

G.R. No. 159979 December 9, 2015
Facts:
On March 3, 1997, the respondent sued Vilfran Liner, Inc., Hilaria F. Villegas
and Maura F. Villegas in the RTC Quezon City to recover the unpaid billings related to the
fabrication and construction of 35 passenger bus bodies. It applied for the issuance of a writ
of preliminary attachment. RTC issued the writ of preliminary attachment, which the sheriff
served on the defendants, resulting in the levy of 10 buses and three parcels of land belonging
to the defendants. The sheriff also sent notices of garnishment of the defendants' funds in the
Quezon City branches of BPI Family Bank, China Bank, Asia Trust Bank, City Trust Bank,
and Bank of the Philippine Island. The levy and garnishment prompted defendant Maura F.
Villegas to file an Extremely Urgent Motion to Discharge Upon Filing of a Counterbond,
attaching thereto CISCO Bond No. 00011-00005/JCL (3) dated June 10, 1997 and its
supporting documents purportedly issued by the petitioner. On July 2, 1997, the RTC
approved the counterbond and discharged the writ of preliminary attachment. The court
rendered judgment in favor of the plaintiff ordering the defendants Vilfran Liner, Inc., Hilaria
and Maura Villegas jointly and solidarily liable to pay. P11,835,375.50 including interest as
of February 1997, representing the balance of their service contracts with plaintiff on the
fabrication and construction of 35 passenger bus bodies. On December 27, 2002, the sheriff
served a copy of the assailed resolution on the then Insurance Commissioner Edgardo T.
Malinis, with the request for him to release the security deposit. The CA opined that the
security deposit could answer for the depositor's liability, and be the subject of levy in
accordance with Section 203 of the Insurance Code.
Issue:
Whether or not the securities deposited by the petitioner insurance company may be
the subject of levy in contravention of section 203 of the insurance code.
Held:
No. Section 203 of the Insurance Code provides: Every domestic insurance company
shall, to the extent of an amount equal in value to twenty-five per centum of the minimum
paid-up capital required under section one hundred eighty-eight, invest its funds only in
securities, satisfactory to the Commissioner, consisting of bonds or other evidences of debt of
the Govt of the Philippines or its political subdivisions or instrumentalities, or of
government-owned or controlled corporations and entities, including the Central Bank of the
Philippines: Provided, That such investments shall at all times be maintained free from any
lien or encumbrance; and Provided, further, That such securities shall be deposited with
and held by the Commissioner for the

faithful performance by the depositing insurer of all its obligations under its insurance
contracts. The provisions of section 1 (192) shall, as far as practicable, apply to the securities
deposited under this section. Except as otherwise provided in this Code, no judgment
creditor or other claimant shall have the right to levy upon any securities of the insurer held
on deposit under this section or held on deposit pursuant to the requirement of the
Commissioner. Thus, the petition is granted.
Mapfre Asian Insurance Corp. v. Aquino

G.R. No. 164675 September 21, 2015
Facts:
After the respondent's residential house was damaged on April 9, 1993 by an
earthquake of Intensity 5 magnitude, he claimed against the insurance policy, but the
petitioner denied the claim on the ground that the damage had been caused by soil
subsidence, a risk not covered by the policy. He consequently sued the latter in the Regional
Trial Court (RTC) in Parañaque City, which ruled in his favor on May 23, 1997, to pay
plaintiff the following:
1. The amount of P398,065.85 representing actual damages;
2. The amount of P30,000.00 as moral damages;
3. The amount of P10,000.00 as exemplary damages;
4. The amount of P20,000.00 as attorney's fees; and
5. The cost of a suit.
On the basis that even if there had been soil subsidence as the petitioner theorized, the
undeniable fact that the proximate cause of the damage had been the earthquake remained.
On appeal, the CA affirmed the RTC on April 30, 2004, holding that the respondent had
established that the "Earthquake Endorsement" was a rider in the fire insurance policy; and
that the insurance contract should be accorded greater weight than the testimonial evidence
offered by the petitioner to refute the claim.
Issue:
Whether or not the proximate cause of the damage caused to the respondent's house
was the April 9, 1993 earthquake and therefore, the petitioner should be held liable for the
insurance.
Ruling:
Yes, Firstly, the determination of whether or not the petitioner established that soil
subsidence, not the April 9, 1993 earthquake, had been the proximate cause of the damage to
the insured house obviously requires the review of the evidence presented during the trial.

Pioneer Insurance and Surety Corporation vs. APL CO. PTE. LTD.
G.R. No. 226345 November 3, 2015
Facts:
January 13, 2012, the shipper, Chillies Export House Limited, turned over to
respondent APL Co. Pte. Ltd. 250 bags of chili pepper for transport from the port of Chennai,
India, to Manila. The shipment was loaded on board MN Wan Hai 262. In addition, BSFIL
Technologies, Inc., as consignee, insured the cargo with petitioner Pioneer Insurance and
Surety Corporation.
On February 2, 2012, the shipment arrived at the port of Manila and was temporarily
stored at North Harbor, Manila. On February 6, 2012, the bags of chili were withdrawn and
delivered to BSFIL. Upon receipt thereof, it discovered that 76 bags were wet and heavily
infested with molds. The shipment was declared unfit for human consumption and was
eventually declared as a total loss. As a result, BSFIL made a formal claim against APL and
Pioneer Insurance. The latter hired an independent insurance adjuster, which found that the
shipment was wet because of the water which seeped inside the container van APL provided.
Pioneer Insurance paid BSFIL Pl 95,505.65 after evaluating the claim. Having been
subrogated to all the rights and cause of action of BSFIL, Pioneer Insurance sought payment
from APL, but the latter refused.
Issue:
Whether or not the nine months prescriptive period stipulated shall be the
basis in considering the prescriptive period instead of the one year prescriptive stated by the
law.
Ruling:
The Court ruled in the negative. It is true that in Philippine American General
Insurance Co., Inc. v. Sweet Lines, Inc. (Philippine American), the Court recognized that
stipulated prescriptive periods shorter than their statutory counterparts are generally valid
because they do not affect the liability of the carrier but merely affects the shipper’s remedy.
The CA, nevertheless, erred in applying Philippine American in the case at bench as it does
not fall squarely with the present circumstances.
It is elementary that a contract is the law between the parties and the obligations it carries
must be complied with in good faith. In Norton Resources and Development Corporation v.
All Asia Bank Corporation, the Court reiterated that when the terms of the contract are clear,
its literal meaning shall control, to wit:
The cardinal rule in the interpretation of contracts is embodied in the first

paragraph of Article 1370 of the Civil Code: if the terms of a contract are clear and
leave no doubt upon the intention of the contracting parties, the literal meaning of its
stipulations shall control. This provision is akin to the “plain meaning rule” applied by
Pennsylvania courts, which assumes that the intent of the parties to an instrument is
“embodied in the writing itself, and when the words are clear and unambiguous the
intent is to be discovered only from the express language of the agreement”.
Paramount Life & General Insurance Corporation vs. Cherry T. Castro

G.R. No. 195728 April 19, 2016
Facts:
Virgilio J. Castro (Virgilio) — Cherry's husband and Glenn's father —
obtained a housing loan from the PPSBI in the amount of P1.5 million. PPSBI required
Virgilio to apply for a mortgage redemption insurance (MRI) from Paramount to cover
the loan in his application for the said insurance policy.
On 26 February 2009, Virgilio died of septic shock. Consequently, a claim was
filed for death benefits under the individual insurance coverage issued under the group
policy. Paramount however denied the claim, on the ground of the failure of Virgilio to
disclose material information, or material concealment or misrepresentation. The Castros
sought to implead the PPSBI as a third-party defendant in the nullification case instituted
by Paramount. According to the Castros, upon Virgilio's death, the obligation to pay the
third-party defendant (PPSBI) passed on to Paramount by virtue of the
Mortgage Redemption Insurance, and not to them as Virgilio's heirs.
Paramount, in opposing the PPSBI's inclusion as a third-party defendant, reasons
that it is only seeking the nullification of Virgilio's individual insurance
certificate, and not the group insurance policy forged between it and the PPSBI. It
concludes that the nullification action it filed has nothing to do with the PPSBI.
Issue:
Is the opposition of Paramount to the inclusion of PPSBI as third party
defendant correct?
Held:
The Court disagree. Should Paramount succeed in having the individual
insurance certificate nullified, the PPSBI shall then proceed against the Castros. This would
contradict the provisions of the group insurance policy that ensure the direct payment by the
insurer to the bank and will defeat the purpose of mortgage redemption insurance as a
device for the protection of both the mortgagee and the mortgagor.

Manulife Philippines, Inc. vs. Hermenegilda Ybañez
G.R. No. 204736 November 28, 2016
Facts:
Before the RTC of Makati City, Manulife Philippines, Inc. (Manulife)
instituted a Complaint for Rescission of Insurance Contracts against Hermenegilda
Ybañez (Hermenegilda) and the BPI Family Savings Bank (BPI Family).
It is alleged in the Complaint that Insurance Policy Nos. 6066517-1 and 6300532-6
(subject insurance policies) which Manulife issued on October 25, 2002 and on July 25,
2003, respectively, both in favor of Dr. Gumersindo Solidum Ybañez (insured), were void
due to concealment or misrepresentation of material facts in the latter's applications for life
insurance.
Issue:
Will the action prosper?
Held:
Manulife's Complaint for rescission of the insurance policies in question was
totally bereft of factual and legal bases because it had utterly failed to prove that the
insured had committed the alleged misrepresentation/s or concealment/s of material facts
imputed against him. The RTC correctly held that the CDH's medical records that might
have established the insured's purported misrepresentation/s or concealment/s was
inadmissible for being hearsay, given the fact that Manulife failed to present the physician
or any responsible official of the CDH who could confirm or attest to the due execution and
authenticity of the alleged medical records. Manulife had utterly failed to prove by
convincing evidence that it had been beguiled, inveigled, or cajoled into selling the
insurance to the insured who purportedly with malice and deceit passed himself off as
thoroughly sound and healthy, and thus a fit and proper applicant for life insurance.

UCPB General Insurance Company, Inc. vs. Hughes Electronics Corporation
G.R. No. 190385 November 16, 2016
Facts:
Hughes Electronics and OVC, on March 26, 1999, entered into a contract
whereby Hughes Electronics agreed to provide the latter with the equipment and services
necessary to establish, install and commission a Ku-band Satellite Communication
Network. The ISBN will consist of all hardware, software and services required to establish
a complete operational system that meets the technical and functional specifications set
forth in the Technical Specifications to the contract. By way of payment, Hughes
Electronics and OVC agreed that the consideration will be US$743,457.95 secured by
OVC's standby letter of credit issued in favor of Hughes Electronics.
On 26 March 1999, the terms of payment were modified upon issuance of a surety
bond with OVC as principal and UCPB Insurance as surety in favor of Hughes Electronics.
The surety bond guaranteed the payment of 95% of the purchase price of the ISBN. On 7
October 1999, OVC requested for a revision of the terms of payment which Hughes
Electronics granted subject to the condition that the revised terms would become effective
upon issuance of a revised surety bond.
On 21 December 1999, before the expiration of the warranties in the contract, OVC
informed Hughes Electronics that the ISBN system currently installed at its Napa hub
facility did not support the Burroughs poll/select protocol. Thus, it demanded from
Hughes Electronics an explanation and immediate solution of the problem.
Meanwhile, OVC failed to pay Hughes Electronics in accordance with the revised
payment terms. As a result, Hughes Electronics sent a letter to UCPB Insurance on 11
October 2000, demanding for the value of surety bond which, less the down payment of
US$60,000.00 amounting to US$683,457.95.
Issue:
Is UCPB Insurance liable?
Held:
No, UCPB Insurance is not liable. At the outset, the contract between
Hughes Electronics and OVC provided a specific provision on dispute resolution to govern the
parties in case of disagreement or any breach of contract. Based on the

cited provision, UCPB Insurance raised the issue of premature filing of complaint without
resorting first to the guidelines of dispute resolution. Thus, upon meticulous review of the
entire stipulations on dispute resolution in the contract and taking into consideration the
intention of the parties, it is necessary that arbitration proceedings be complied before
resorting to court action. To emphasize, in a contract containing a condition precedent, no
right or action is given or acquired until such condition is complied with; before the
compliance with the condition is accomplished there exists nothing but hope of acquiring
such right.
Insular Life vs Khu

G.R. No. 195176 April 18, 2016
Facts:
On March 6, 1997, Felipe N. Khu, Sr. (Felipe) applied for a life insurance
policy with Insular Life.However, Felipe’s policy lapsed on June 23, 1999 due to non-
payment of the premium covering the period from June 22, 1999 to June 23, 2000. On
September 7, 1999, Felipe applied for the reinstatement of his policy which was approved by
Insular life. Consequently, a Letter of Acceptance and an Endorsement was issued. On
September 22, 2001, Felipe died due to several illnesses including type 2 diabetes and liver
cirrhosis. On October 5, 2001, Felipe’s beneficiaries filed with Insular Life a claim for
benefit under the reinstated policy. This claim was denied. Instead, Insular Life advised
Felipe’s beneficiaries that it had decided to rescind the reinstated policy on the grounds of
concealment and misrepresentation by Felipe because the latter, apparently, did not disclose
his illness.
Issue:
Whether or not Felipe’s reinstated life insurance policy is already incontestable at the
time of his death?
Ruling:
Yes,Felipe’s reinstated life insurance policy was already incontestable at the time of
his death. The Insurance Code pertinently provides that:
Sec. 48. Whenever a right to rescind a contract of insurance is given to the insurer by
any provision of this chapter, such right must be exercised previous 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 rescissible by reason of the fraudulent concealment or misrepresentation of the insured
or his agent.
The date of last reinstatement mentioned in Section 48 of the Insurance Code pertains
to the date that the insurer approved’ the application for reinstatement.

Phil-Nippon Kyoei, Corp. v. Rosalia T. Gudelosao
G.R. No. 181375 July 13, 2016
Facts:
Petitioner, a domestic shipping corporation, purchased a "Ro-Ro"
passenger/cargo. For the vessel's one-month conduction voyage from Japan to the
Philippines, petitioner, as local principal, and Top Ever Marine Management Maritime Co.,
Ltd. (TMCL), as foreign principal, hired Gudelosao, Tancontian, and six other crewmembers.
They were hired through the local manning agency of TMCL, Top Ever Marine Management
Philippine Corporation (TEMMPC). Petitioner secured a Marine Insurance Policy from
SSSICI over the vessel for P10,800,000.00 against loss, damage, and third party liability or
expense, arising from the occurrence of the perils of the sea for the voyage of the vessel from
Onomichi, Japan to Batangas, Philippines. This Marine Insurance Policy included Personal
Accident Policies for the eight crewmembers for P3,240,000.00 each in case of accidental
death or injury.
On February 24, 2003, while still within Japanese waters, the vessel sank due to
extreme bad weather condition. Only Chief Engineer Nilo Macasling survived the incident
while the rest of the crewmembers, including Gudelosao and Tancontian, perished.
Issue:
Is the liability of petitioner extinguished only upon SSSICI's payment of
insurance proceeds.
Ruling:
No. Since, that while the Personal Accident Policies are casualty insurance, they do
not answer for petitioner's liabilities arising from the sinking of the vessel. It is an indemnity
insurance procured by petitioner for the benefit of the seafarers. As a result, petitioner is not
directly liable to pay under the policies because it is merely the policyholder of the Personal
Accident Policies.
Petitioner's claim that the limited liability rule and its corresponding exception apply
here is irrelevant because petitioner was not found liable under tort or quasi- delict.
Moreover, the insurance proceeds contemplated under the exception in the case of a lost
vessel are the insurance over the vessel and pending freightage for the particular voyage.
It is not the insurance in favor of the seafarers, the proceeds of which are intended for their
beneficiaries. Thus, if ever petitioner is liable for the value of the insurance proceeds
under tort or quasi-delict, it would be from the

Marine Insurance Policy over the vessel and not from the Personal Accident Policies over the
seafarers.
Sun Life of Canada (Philippines), Inc. vs. Ma. Daisy's. Sibya

G.R. No. 211212 June 08, 2016
Facts:
On January 10, 2001, Atty. Jesus Sibya, Jr. (Atty. Jesus Jr.) applied for life
insurance with Sun Life. In his Application for Insurance, he indicated that he had sought
advice for kidney problems. On February 5, 2001, Sun Life approved Atty. Jesus Jr.'s
application and issued Insurance Policy No. 031097335. On May 11, 2001, Atty. Jesus Jr.
died as a result of a gunshot wound in San Joaquin, Iloilo. As such, Ma. Daisy filed a
Claimant's Statement with Sun Life to seek the death benefits indicated in his insurance
policy. In a letter dated August 27, 2001, however, Sun Life denied the claim on the ground
that the details on Atty. Jesus Jr. 's medical history was not disclosed in his application. The
respondents reiterated their claim against Sun Life through a letter dated September 17, 2001.
Sun Life, however, refused to heed the respondents' requests and instead filed a Complaint
for Rescission before the RTC and prayed for judicial confirmation of Atty. Jesus Jr.'s
rescission of insurance policy. In its Complaint, Sun Life alleged that Atty. Jesus Jr. did not
disclose in his insurance application his previous medical treatment at the National Kidney
Transplant Institute in May and August of 1994. For their defense, the respondents claimed
that Atty. Jesus Jr. did not commit misrepresentation in his application for insurance. The
RTC held that Atty. Jesus Jr. did not commit material concealment and misrepresentation
when he applied for life insurance with Sun Life.
Issue:
Whether or not the CA erred when it affirmed the RTC decision finding that there was
no concealment or misrepresentation when Atty. Jesus Jr. submitted his insurance application
with Sun Life.
Ruling:
In Manila Bankers Life Insurance Corporation v. Aban, the Court held that if the
insured dies within the two-year contestability period, the insurer is bound to make good its
obligation under the policy, regardless of the presence or lack of concealment or
misrepresentation. Section 48 serves a noble purpose, as it regulates the actions of both the
insurer and the insured. Under the provision, an insurer is given two years - from the
effectiveness of a life insurance contract and while the insured is alive - to discover or
prove that the policy is void ab initio or is

rescindible by reason of the fraudulent concealment or misrepresentation of the insured or his
agent. After the two-year period lapses, or when the insured dies within the period, the
insurer must make good on the policy, even though the policy was obtained by fraud,
concealment, or misrepresentation. This is not to say that insurance fraud must be rewarded,
but that insurers who recklessly and indiscriminately solicit and obtain business must be
penalized, for such recklessness and lack of discrimination ultimately work to the detriment
of bona fide takers of insurance and the public in general.
Jaime T. Gaisano vs. Development Insurance and Surety Corporation

G.R. NO. 190702 February 27, 2017
Facts:
Development Insurance and Surety Corporation issued a comprehensive
commercial vehicle policy to petitioner Jaime Gaisano in the amount of P1,500,000.00 over
the vehicle for a period of one year commencing on September 27, 1996, up to September 27,
1997.
To collect the premiums and other charges on the policies, respondent's agent, Trans-
Pacific Underwriters Agency, issued a statement of account to petitioner's company, Noah's
Ark Merchandising. Noah's Ark immediately processed the payments and issued a check
payable to Trans-Pacific on the same day which is September 27, 1996. However, nobody
from Trans-Pacific picked up the check that day because its president and general manager,
Rolando Herradura, was celebrating his birthday. Trans-Pacific informed Noah's Ark that its
messenger would get the check the next day. On the evening of the issuance of the check and
while under the custody of Noah’s Ark manager Pacquing as a service company vehicle, the
vehicle was stolen in the vicinity of SM Megamall. The vehicle was not recovered. On
September 28, the check was picked up by Trans-Pacific and a receipt was issued
acknowledging the receipt of the premium and other charges.
Issue:
Was there a binding insurance contract between the petitioner and
respondent?
Held:
No, petitioner Gaisano is not entitled to the insurance proceeds because no
insurance policy became effective for lack of premium payment.
Pursuant to Section 77 of the Insurance Code, the general rule is that unless a
premium is paid, the insurance policy is not valid and binding. Exceptions to the rule are in
case of life or industrial life policy whenever the grace period provision applies (Section 77);
acknowledgement in a policy of the receipt of premium (Section 78); agreement of the parties
to payment in installments of the premium and partial payment was made at the time of the
loss; grant of a credit term by the insurer to the

insured for the payment and the loss occurs before the expiration of the term; and when
insurer is in estoppel as when it has consistently granted a 60 to 90 day credit term for the
payment of premiums.
Equitable Insurance Corporation, vs Transmodal International, Inc.

G.R. NO. 223592 August 7, 2017
Facts:
Sytengco hired respondent Transmodal to clear from the customs authorities and
withdraw, transport, and deliver to its warehouse, cargoes consisting of 200 cartons of gum.
Transmodal withdrew the same cargoes and delivered them to Sytengco’s warehouse. It was
noted in the delivery receipt that all the containers were wet. In the final report made by Elite
Surveyors after inspection, it fixed the computed loss payable at P728,712.
Petitioner Equitable Insurance, as insurer of the cargoes per Marino Policy, paid
Sytengco’s claim for P728, 712. Sytengco signed a subrogation receipt and loss receipt in
favor of the petitioner. As such, petitioner demanded from respondent reimbursement of the
payment given to Sytengco. Thereafter, petitioner filed a complaint for damages
invoking its right as subrogee after paying Sytenco’s insurance claim.
The RTC found for the petitioner and ruled that it was able to prove by substantial
evidence its right to institute an action as subrogee of Sytengco. CA, on appeal, ruled that
there was no proof of insurance of the cargoes at the time of the loss and that the subrogation
is improper. The insurance contract was neither attached in the complaint nor offered in
evidence.
Issue:
Is the attachment of the insurance contract necessary for the petitioner to exercise
its right of subrogation?
Held:
No, the attachment is not necessary.

The Court has held that as general rule, the marine insurance policy needs to be
presented in evidence before the insurer may recover the insured value of the lost/damaged
cargo in the exercise of its subrogatory right.
It was shown that the petitioner was able to accomplish its obligation under the
insurance policy as it has paid the assured of its insurance claim in the amount of P728,712,00.
The payment by the insurer to the insured operates as an equitable assignment to the
insurer of all the remedies which the insured may have against the third party whose
negligence or wrongful act caused the loss. The right of subrogation is not dependent
upon, nor does it grow out of any privity of contract or upon payment by the insurance
company of the insurance claim.
Steamship Mutual Underwriting Association Limited, vs Sulpicio Lines, Inc.

G.R. NO. 196072, September 20, 2017
Facts:
Steamship Mutual Underwriting Association Ltd (Steamship) was a Bermuda-
based Protection and Indemnity Club, managed outside London, England. Sulpicio insured
its fleet of inter-island vessels with Steamship for Protection & Indemnity risks through
local insurance agents. One (1) of these vessels was the M/V Princess of the World.
On July 7, 2005, M/V Princess of the World was gutted by fire while on voyage
from Iloilo to Zamboanga City, resulting in total loss of its cargoes. The fire incident was
found by the DILG to be “accidental” in nature. Sulpicio claimed indemnity from Steamship.
Steamship denied the claim and subsequently rescinded the insurance coverage of Sulpicio’s
other vessels on the ground that “Sulpicio was grossly negligent in conducting its business
regarding safety, maintaining the seaworthiness of its vessels as well as proper training of its
crew.”
Issue:
Whether or not there is a valid binding agreement between Steamship Mutual
Underwriting Limited and Sulpicio Lines, Inc.?
Held:
Yes, the arbitration agreement incorporated in the insurance is valid and
binding between Steamship and Sulpicio.
The Court has held in several cases that a contract need not be contained in a single
writing. It may be collected from several different writings which do not conflict with each
other and which, when connected, show the parties, subject matter, terms and consideration,
as in contracts entered by correspondence. A contract may be encompassed in several
instruments even though every instrument is not signed by the parties, since it is sufficient if
the unsigned instruments are clearly identified or referred to and made part of the
signed instrument or

instruments. Thus, an arbitration agreement that was not embodied in the main agreement but
set forth in another document is binding upon the parties, where the document was
incorporated by reference to the main agreement.
In the present case, the arbitration agreement contained in the Club Rules, which in
turn was referred to in the Certificate of Entry and Acceptance, is binding upon Sulpicio even
though there was no specific stipulation on dispute resolution in this Certificate. Petition is
granted.
Communication And Information System vs. Mark Sensing Australia

G.R. No. 192159 January 25, 2017
Facts:
Petitioner Communication and Information Systems Corporation (CISC) and
respondent Mark Sensing Australia Pty. Ltd. (MSAPL) entered into a Memorandum of
Agreement[4] (MOA) dated March 1, 2002 whereby MSAPL appointed CISC as "the
exclusive AGENT of [MSAPL] to PCSO during the [lifetime] of the recently concluded
Memorandum of Agreement entered into between [MSAPL], PCSO and other parties." The
recent agreement referred to in the MOA is the thermal paper and bet slip supply contract
(the Supply Contract) between the Philippine Charity Sweepstakes Office (PCSO), MSAPL,
and three other suppliers, namely Lamco Paper Products Company, Inc. (Lamco Paper),
Consolidated Paper Products, Inc. (Consolidated Paper) and Trojan Computer Forms
Manufacturing Corporation (Trojan Computer Forms).[5] As consideration for CISC's
services, MSAPL agreed to pay CISC a commission of 24.5% of future gross sales to PCSO,
exclusive of duties and taxes, for six years.[6] After initially complying with its obligation
under the MOA, MSAPL stopped remitting commissions to CISC during the second quarter
of 2004. As a result of MSAPL's refusal to pay, CISC filed a complaint before the RTC in
Quezon City for specific performance against MSAPL, Mark Sensing Philippines, Inc.
(MSPI), Atty. Ofelia Cajigal, and PCSO.[9] CISC prayed that private respondents be ordered
to comply with its obligations under the MOA. It also asked the RTC to issue a writ of
preliminary mandatory injunction and/or writ of attachment.
Issue:
Whether the RTC committed grave abuse of discretion when it approved the
attachment bond whose face amount exceeded the retention limit of the surety.
Ruling:
Section 215 of the old Insurance Code, the law in force at the time Plaridel issued the
attachment bond, limits the amount of risk that insurance companies can retain to a maximum
of 20% of its net worth. However, in computing the retention limit, risks that have been
ceded to authorized reinsurers are ipso jure deducted. In mathematical terms, the amount
of retained risk is computed by deducting

ceded/reinsured risk from insurable risk. If the resulting amount is below 20% of the insurer’s
net worth, then the retention limit is not breached. In this case, both the RTC and CA
determined that, based on Plaridel’s financial statement that was attached to its certificate of
authority issued by the Insurance Commission, its net worth is P289,332,999.00. Plaridel’s
retention limit is therefore P57,866,599.80, which is below the P113,197,309.10 face value
of the attachment bond. However, it only retained an insurable risk of P17,377,938.19
because the remaining amount of P98,819,770.91 was ceded to 16 other insurance
companies.
Malayan vs. Concepcion

G.R. No. 207277 January 16, 2017
Facts:
Lin filed a complaint for Collection of Sum of Money with damages against
Malayan. She alleged that she obtained various loans from RCBC secured by 6 clustered
warehouses at Bulacan. The 5 warehouses were insured with Malayan for Php 56 Million and
the other house for Php 2 Million. Later on, the warehouses were burned. The BFP issued a
Fire Clearance Certificate, after certifying that the fire was accidental. Despite this, Malayan
denied the claim of Lin stating that the forensic investigators hired by Malayan concluded
that the fire was caused by arson and not accidental. In this administrative case, Lin
claimed that since it had been conclusively found that the cause of the fire was
"accidental," the only issue left to be resolved is whether Malayan should be held liable for
unfair claim settlement practice under Section 241 in relation to Section 247 of the Insurance
Code due to its unjustified refusal to settle her claim; and that in consequence of the
foregoing failings, Malayan's license to operate as a non-life insurance company should be
revoked or suspended, until such time that it fully complies with the IC Resolution ordering it
to accord more weight to the BFP's findings. On August 17, 2010, Malayan filed a motion to
dismiss Civil Case No. 10-122738 based on forum shopping. It argued that the administrative
case was instituted to prompt or incite IC into ordering Malayan to pay her insurance claim;
that the elements of forum shopping are present in these two cases because there exists
identity of parties since Malayan's individual officers who were impleaded in the civil case
are also involved in the administrative case.
Issue:
Can claimants file both civil and administrative cases against the insurer?
Ruling:
Yes. The settled rule is that criminal and civil cases are altogether different from
administrative matters, such that the disposition in the first two will not inevitably govern the
third and vice versa. In the context of the case at bar, matters handled by the IC are delineated
as either regulatory or adjudicatory, both of which have distinct characteristics. The
provisions of the Insurance Code, as amended, clearly indicate

that the Office of the Insurance Commission is an administrative agency vested with
regulatory power as well as with adjudicatory authority. Go v. Office of the Ombudsman
reiterated the above-stated distinctions vis-a-vis the principles enunciating that a civil case
before the trial court involving recovery of payment of the insured's insurance claim plus
damages, can proceed simultaneously with an administrative case before the Insurance
Commission.
Spouses Chugani v. Philippine Deposit Insurance Corp.

G.R. No. 230037 March 19, 2018
Facts:
Petitioners, upon the invitation of Raymundo Garan (Garan), the President of
Rural Bank of Mawab (Davao), Inc., (RBMI), signified their intention to open Time Deposits
with RBMI.
RBMI then sent to petitioners, through courier, the Time Deposit Specimen Signature Cards
and Personal Information Sheet with the instruction that petitioners send them back, through
mail, to RBMI.
Petitioners then opened Time Deposit Accounts with RBMI through inter- branch
deposits to the accounts of RBMI maintained in Metrobank and China Bank- Tagum, Davao
Branches. Thereafter, Certificates of Time Deposits (CTDs) and Official Receipts were
issued to petitioners.
Sometime in September 2011, petitioners came to know that the Monetary Board of
the Bangko Sentral ng Pilipinas placed RBMI under receivership and thereafter closed the
latter. Petitioners then filed claims for insurance of their time deposits.
Respondent Philippine Deposit Insurance Corporation (PDIC) denied the claims on
the following grounds: 1.) based on bank records submitted by RBMI, petitioners' deposit
accounts are not part of RBMI's outstanding deposit liabilities; 2.) the time deposits of
petitioners are fraudulent and their CTDs were not duly issued by RBMI, but were mere
replicas of unissued CTD's in the inventory submitted by RBMI to PDIC; and 3.) the amounts
purportedly deposited by the petitioners were credited to the personal account of Garan,
hence, they could not be construed as valid liabilities of RBMI.
Issue/s:
Whether the PDIC committed grave abuse of discretion in denying petitioner's claim
for deposit insurance.
Ruling:

The petition has no merit. The PDIC was created by Republic Act (R.A.) No. 3591 on
June 22, 1963 as an insurer of deposits in all banks entitled to the benefits of insurance
under the PDIC Charter to promote and safeguard the interests of the depositing public by
way of providing permanent and continuing insurance coverage of all insured deposits. Based
on its charter, the PDIC has the duty to grant or deny claims for deposit insurance.
Specifically, under Section 4 (f) of R.A. No. 3591, as amended by R.A. No. 9576, provides
that:"The term "deposit" means the unpaid balance of money or its equivalent received by a
bank in the usual course of business and for which it has given or is obliged to give credit to
a commercial, checking, savings, time or thrift account, or issued in accordance with Bangko
Sentral rules and regulations and other applicable laws, together with such other obligations
of a bank, which, consistent with banking usage and practice.
The Insular Life Assurance Co., Ltd. vs. Heirs of Alvarez

G.R. Nos. 207526 & 210156 October 3, 2018
Facts:
Alvarez and his wife, Adelina, owned a residential lot with improvements
covered by Transfer Certificate of Title (TCT) No. C-315023 and registered in the Caloocan
City Registry of Deeds. On June 18, 1997, Alvarez applied for and was granted a housing
loan by UnionBank in the amount of P648,000.00. This loan was secured by a promissory
note, a real estate mortgage over the lot, and a mortgage redemption insurance taken on the
life of Alvarez with UnionBank as beneficiary. Alvarez was among the mortgagors included
in the list of qualified debtors covered by the Group Mortgage Redemption Insurance that
UnionBank had with Insular Life. Alvarez passed away on April 17, 1998. In May 1998,
UnionBank filed with Insular Life a death claim under Alvarez's name pursuant to the Group
Mortgage Redemption Insurance. In line with Insular Life's standard procedures, UnionBank
was required to submit documents to support the claim. These included: (1) Alvarez's birth,
marriage, and death certificates; (2) the attending physician's statement; (3) the claimant's
statement; and (4) Alvarez's statement of account. Insular Life denied the claim after
determining that Alvarez was not eligible for coverage as he was supposedly more than 60
years old at the time of his loan's approval.
Issue:
Whether or not petitioner The Insular Life Assurance Co., Ltd. is obliged to
pay Union Bank of the Philippines the balance of Jose H. Alvarez's loan given the claim
that he lied about his age at the time of the approval of his loan?
Ruling:
Yes. Fraud is not to be presumed, for "otherwise, courts would be indulging in
speculations and surmises." Moreover, it is not to be established lightly. Rather, "[i]t must be
established by clear and convincing evidence..[a] mere preponderance of evidence is not even
adequate to prove fraud."These precepts hold true when allegations of fraud are raised as
grounds justifying the invalidation of contracts, as the fraud committed by a party tends
to vitiate the other party's consent. Citing

Section 27 of the Insurance Code, however, Insular Life asserts that in cases of rescission due
to concealment, i.e., when a party "neglect/s to communicate that which [he or she] knows
and ought to communicate," proof of fraudulent intent is not necessary.
Industrial Personnel and Management Services, Inc. vs. Country Bankers

Insurance Corp.
G.R. No. 194126 October 17, 2018
Facts:
In 2000, Industrial Personnel and Management Services, Inc. (IPAMS) began
recruiting registered nurses for work deployment in the United States of America (U.S.). It
takes eighteen (18) to twenty four (24) months for the entire immigration process to
complete. As the process requires huge amounts of money, such amounts are advanced [to]
the nurse applicants. Because of the advances made to the nurse applicants, the latter were
required to post a surety bond. The purpose of the bond is to guarantee the following during
its validity period: (a) that they will comply with the entire immigration process, (b) that
they will complete the documents required, and (c) that they will pass all the qualifying
examinations for the issuance of immigration visa. The Country Bankers Insurance
Corporation (Country Bankers for brevity) and IPAMS agreed to provide bonds for the said
nurses. Under the agreement of IPAMS and Country Bankers, the latter will provide surety
bonds and the premiums therefore were paid by IPAMS on behalf of the nurse applicants. A
Memorandum of Agreement (MOA) was executed by the said parties on February 1, 2002
which stipulated the various requirements for collecting claims from Country Bankers.
Issue:
Whether or not the CA erred in issuing its assailed Decision which reversed
and set aside the rulings of the IC, DOF, and OP, which found that respondent Country
Bankers has no ground to refuse the payment of petitioner IPAMS' claims and shall
accordingly be subjected to disciplinary action pursuant to Sections 241 (now Section 247)
and 247 (now Section 254) of the Insurance Code if the latter does not settle the subject
claims of petitioner IPAMS?
Ruling:

Yes. While placing utmost concentration on Article 2199 of the Civil Code in ruling
that competent proof is required for the payment of the subject claims, the assailed Decision
of the CA failed to take into consideration the applicable provisions of the Insurance Code.
The subject agreement of the parties indubitably contemplates a surety agreement,which is
governed mainly by the Insurance Code, considering that a contract of suretyship shall be
deemed an insurance contract within the contemplation of the Insurance Code if made by a
surety which is doing an insurance business. In this case, the surety, i.e., respondent Country
Bankers, is admittedly an insurance company engaged in the business of insurance. In fact,
the CA itself in its assailed Decision mentioned that a contract of suretyship is defined and
covered by the Insurance Code.
Carlito B. Linsangan vs. Philippine Deposit Insurance Corporation

G.R. No. 228807 February 11, 2019
Facts:
The Monetary Board (MB) of the BSP ordered the closure of the Cooperative
Rural Bank of Bulacan, Inc. (CRBBI) and placed it under PDIC's receivership. Petitioner
filed a claim for payment of deposit insurance for his Special Incentive Savings Account
(SISA). Upon investigation, PDIC found that petitioner's account originated from the account
of "Cornelio Linsangan or Ligaya Linsangan" with an opening balance of P1,531,993.42. On
December 13, 2012, the source account was closed and its balance of P1,544,081.48 was
transferred and distributed to four accounts.PDIC then conducted a tracing of relationship for
the purpose of determining beneficial ownership of accounts. Petitioner's account was
consolidated with the other legitimate deposits of Cornelio and Ligaya for purposes of
computing the insurable deposit. The PDIC ruled that under PDIC Regulatory Issuance No.
2009-03, the transferee is considered the beneficial owner of the deposit. It held that CRBBI
was not furnished a copy of any document which could prove the transfer of the deposit from
the transferors to petitioner. The PDIC added that the documents which petitioner submitted
did not show that he is a relative of documents which petitioner submitted did not show that
he is a relative of Cornelio and Ligaya within the second degree of consanguinity or affinity.
It concluded that the transferors should be considered the beneficial owners of the transferred
deposit.
Issue:
Whether or not petitioner is a beneficial owner, thus, entitled to deposit
insurance.
Held:
No. Based on its charter, the PDIC has the duty to grant or deny claims for
deposit insurance. The term “insured deposit” means the amount due to any bona

fide depositor for legitimate deposits in an insured bank net of any obligation of the depositor
to the insured bank as of the date of closure, but not to exceed P500,000. Petitioner's
argument is erroneous. In deposit splitting, there is a presumption that the transferees have
no beneficial ownership considering that the source account, which exceeded the maximum
deposit insurance coverage, was split into two or more accounts within 120 days
immediately preceding bank closure. In this case, even assuming that Cornelio donated the
amount contained in the subject savings account to petitioner, not one document evidencing
the alleged donation is in the custody or possession of the bank upon takeover by PDIC.
Thus, the PDIC properly relied on the records of the bank which showed that Cornelio's
accounts remained in his name and for his account. Moreover, even if the Court disregards
the submission of transfer documents, petitioner could not be considered the beneficial owner
of the resulting deposit account because he is not a qualified relative of the transferor. Being
the son of Cornelio's cousin, petitioner is already a fifth degree relative of the transferor, 11
far from the requirement that the transferee must be a relative within the second degree of
consanguinity or affinity.
Empire Insurance, Inc. v. Bacalla, Jr.

G.R. No. 195215 March 6, 2019
Facts:
This case is an offshoot of the liquidation proceedings of the Tibayan Group of
Companies, involving the recovery of 650,225 Prudential Bank common shares allegedly
acquired in fraud of the Tibayan Group's investor-creditors, 230,225 shares of which formed
part of the assets of TMG Holdings and 420,000 shares formed part of the assets of Cielo
Azul Holdings Corporation. Both entities were allegedly dummy corporations used by the
Tibayan Group to dispose of assets in fraud of creditors by using illegally transferred assets
to buy and sell shares of stock, some of which were acquired by petitioner Empire Insurance,
Inc, Virginia Belinda S. Ocampo, Jose Augusto G. Santos, and Katrina G. Santos. On
November 29, 2005, the trial court issued an Order granting the Bacalla group's prayer for a
writ of preliminary injunction. The trial court relied mainly on the findings of the SEC,
which previously issued a Cease-and-Desist Order directing the Tibayan Group to stop
dealing in securities. Of the 46 defendants before the trial court, only EII, Mario A.
Remorosa, Virginia Belinda S. Ocampo, Jose Augusto G. Santos, and Katrina G. Santos
(hereinafter referred to the Empire group) filed a motion for reconsideration seeking to have
the Order dated November 29, 2005 set aside. However, both the trial court and, on petition
for certiorari, the CA, refused to do so, essentially ruling that the Bacalla group was able to
establish the existence of a material and substantial invasion of a clear and unmistakable right
in their favor, which would cause them serious damage if not stopped through a writ of
preliminary injunction.
Issue:
Whether or not the CA committed an error of law in upholding the trial court's
issuance of the writ of preliminary injunction, despite the Bacalla group's failure to pay
the correct filing fees.
Ruling:

The Court holds that the action filed by the Bacalla group in the case at bar is
incapable of pecuniary estimation. The action has for its primary objective the nullification of
the transactions which brought the shares in dispute outside the control of the debtor, i.e.,
Tibayan Group, and perforce to preserve them for inclusion in the assets to be liquidated.
Furthermore, the Bacalla group does not assert direct, personal claims over the shares.
Bacalla claims the shares only in his capacity as receiver of the Tibayan Group, while
Abacan, et al. and FITI claim the shares only for purposes of having them included in the
asset pool of the Tibayan Group, out of which their respective claims are to be paid. The
findings of the SEC which led to the issuance of the Cease-and-Desist Order against the
Tibayan Group, and the PSE memorandum only serve as further proof of the existence of this
clear and unmistakable right, by illustrating the flow of the assets from the Tibayan Group to
the dummy corporations to the defendants.
Blue Cross Insurance, Inc. vs. Bienvenido U. Juan

G.R. No. 203447 August 7, 2019
Facts:
Bienvenido U. Juan filed a complaint against Blue Cross before the Insurance
Commission for the reimbursement of his hospital and medical expenses, or in the
alternative, for refund of the annual fees he paid from 2004 to 2007 plus attorney's fees. Juan
alleged that: he obtained a medical insurance from Blue Cross; he was diagnosed with
"Perinephric Hematoma, Left 2º to Ruptured Renal Arterial Aneurysm"; on September 5,
2007, he underwent "Segmental Renal Artery Angioembolization"; and he submitted a notice
of claim with Blue Cross for hospital and medical expenses in the amount of P455,057.87,
but the latter denied his claim on the ground of non-declaration of illness. Juan argued that
the denial of his claim was illegal and unjust because the insurance policy was already in
force for more than three years before he was hospitalized and the final diagnosis for his
hospitalization was not directly due to the undisclosed illness. The Commission ruled in
favor of Juan. Blue Cross filed a motion for reconsideration. The Commission ruled that
the relief sought in Juan's memorandum is couched in the alternative — reimbursement of the
sum of P100,000.00 representing medical and hospital expenses incurred between August 23,
2007 to September 5, 2007 or in the alternative, to return the premiums paid from 2004 to
2007. Several motions filed by the petitioner were denied by the CA.
Issue:
Whether or not the CA erred for not finding that there was a compelling
reason to grant the second motion for extension of time to file petition for review
Ruling:
No. The CA, at its discretion, may grant the request for an additional period of 15
days to file the petition for review. This extension, however, may only be granted on reasons
that the CA finds meritorious. Here, there was no compelling reason to

justify the grant of the second motion for extension of time. Blue Cross claims that Atty.
Baldado was suffering from some physical handicap that prevented him from timely filing
the petition; yet, it did not present credible evidence to prove the same. In its first motion
for extension of time to file a petition for review before the CA, Blue Cross attached, as a
supporting document, an Orthopedic Report narrating Atty. Baldado's medical condition.
This belies the contention that Atty. Baldado's physician is hesitant to issue a medical
certificate. The absence of a new medical certificate showing the current physical condition
of Atty. Baldado is suspect, especially in light of Blue Cross' claim that its counsel had
regular appointments with his doctor to arrest the alleged infection in his hip wound. It
would be easy for Atty. Baldado to secure a medical certificate from his doctor. As to why he
did not do so, the Court may only assume that a new medical certificate would not be
beneficial to his cause.
Freyssinet Filipinas vs. Lapuz

G.R. No. 226722 March 18, 2019
Facts:
Respondent Amador. Lapuz (respondent) worked as warehouse supervisor
for petitioner Freyssinet Filipinas Corporation (FFC), now Frey-Fil Corporation, a domestic
corporation engaged in the business of general construction, pre-stressed, post-tensioning,
among others. Respondent claimed that he commenced work for FFC since 1977 under the
latter's previous company names, particularly: (a) FF Interior from 1977 to 1982, (b)
Freyssinet Post Tensioning System Philippines, Inc. (FPTSPI) or File System from 1982 to
1999, and (c) FFC from 2006 to 2012. Except for FPTSPI which was owned by one Philip
Cruz, the remaining firms were allegedly owned and operated by petitioner Eric A. Cruz
(Cruz). Respondent was assigned to the different projects of FFC, the last of which was at the
Wharton Parksuite Project in Binondo, Manila.
Sometime in December 2011, respondent averred that he was verbally informed of his
termination from work by the project manager, respondent Gaudencio
S. Reyes (Reyes), when he was told "Hoy umalis ka na dyan" and no longer allowed to
perform his work and enter the premises. This notwithstanding, respondent continued to
report at the project site until he received a notice of termination dated January 5, 2012 and
directed to secure his clearance from the HRD Department, which he complied. Believing to
have been dismissed without substantive and procedural due process, respondent filed a
complaint for illegal dismissal with prayer for reinstatement and payment of attorney's fees,
against FFC, Cruz, Reyes, and one Carlota R. Satorre (petitioners) before the NLRC,
docketed as NLRC Case No. RAB III 01-18500-12.
Issue:
The essential issue for the Court's resolution is whether or not the CA erred in
finding grave abuse of discretion on the part of the NLRC.

Ruling:
The petition is partly impressed with merit. To justify the grant of the extraordinary
remedy of certiorari, petitioners must satisfactorily show that the court or quasi-judicial
authority gravely abused the discretion conferred upon it. Grave abuse of discretion connotes
a capricious and whimsical exercise of judgment, done in a despotic manner by reason of
passion or personal hostility, the character of which being so patient and gross as to amount
to an evasion of positive duty or to a virtual refusal to perform the duty enjoined by or to act
at all in contemplation of law.It has also been held that grave abuse of discretion arises when
a lower court or tribunal patently violates the Constitution, the law or existing jurisprudence.
Mercantile Insurance Co. vs. Sara Yi

GR No. 234501 March 18, 2019
Facts:
FAM MART Co., Inc. (FAM MART), owned and operated by Young C. Chun
and Young H. Chun, (the Chuns) was secured by an insurance policy issued by petitioner
Mercantile Insurance Company, Inc. (MIC), through its California surplus lines broker, Great
Republic Insurance Agency (GRI), under policy number MIC 001007. On February 14, 1991,
Yi was involved in an accident while within the premises of FAM MART, a business
establishment located at El Cajon, California, United States of America. As a result of which,
her right little finger was severed. FAM MART notified MIC of the accident in November
1991. A memorandum from the latter, acknowledging that there is a valid policy in favor of
FAM MART and that a contract existed between FAM MART and MIC, was issued. On
March 16, 1992, Yi filed a personal injury action (Civil Case No. 649705) against the Chuns.
Upon service of summons, FAM MART tendered the claim to its insurer, MIC. Initially,
MIC, through counsel, defended FAM MART in said personal injury action without any
reservation of rights. However, sometime in August 1992, it withdrew its representation. On
October 14, 1993, the Superior Court of the State of California for the County of San Diego
(Superior Court of California) issued a judgment in favor of Yi. The dispositive portion of
which reads: WHEREFORE, IT IS ORDERED, ADJUDGED AND DECREED that
judgment be entered for Plaintiff against Defendants, Fam Mart Co., Inc., Young C. Chun
and Young H. Chun, in the amount of $350,000.00.
Issue:
Whether or not the judgment issued by the Superior Court of California may
be enforced in our jurisdiction.
Ruling:

Generally, in the absence of a special compact, no sovereign is bound to give effect
within its dominion to a judgment rendered by a tribunal of another country; however, the
rules of comity, utility and convenience of nations have established a usage among civilized
states by which final judgments of foreign courts of competent jurisdiction are reciprocally
respected and rendered efficacious under certain conditions that may vary in different
countries. Certainly, the Philippine legal system has long ago accepted into its jurisprudence
and procedural rules the viability of an action for enforcement of foreign judgment, as well as
the requisites for such valid enforcement, as derived from internationally accepted doctrines.
Pioneer Insurance & Surety Corporation vs Carmen G. Tan

G.R. No. 239989 July 13, 2020
Facts:
On August 28, 2004, the entire Save More warehouse, including Unilab's
goods, was razed by fire. Unilab then filed a claim with petitioner pursuant to the subject
policy. Successfully, Unilab obtained the amount of P13,430,528.22 which represented the
value of the goods stored by Unilab in the Save More warehouse lost by fire. In exchange,
Unilab executed in favor of petitioner a Release Claim and a Loss and Subrogation Receipt.
Consequently, petitioner sought to recover from respondent the amount it paid to Unilab.
However, respondent refused, prompting petitioner to file a complaint for damages.
In a Decision, the Regional Trial Court of Makati City, Branch 62 (RTC) maintained
that by subrogation, petitioner's payment to the insured, Unilab, operated as an assignment to
the former of all remedies that the latter may have against the third party whose negligence
caused the loss. Moreover, the RTC held that whether the cause of the loss was due to a
fortuitous event was beside the point. What is axiomatic is that the respondent's obligation is
the payment of money, which is a generic obligation; and failure to make payment shall not
relieve her of liability even by reason of fortuitous event.
Issues:
Whether or not petitioner can recover from respondent based on the former's right to
subrogation.
Held:

Yes, the petitioner can recover from respondent based on the petitioner’s right to
subrogation.
As it stands and as aptly ruled by the RTC, Unilab retained insurable interest over the
goods by virtue of the agreement between it and the respondent that the ownership thereof
shall remain with Unilab until full payment. Corollary, the liability of respondent stems from
the same agreement, stating that the buyer bears the risk of loss arising from any cause upon
delivery of the goods to respondent.
As it was uncontroverted during trial that the destroyed goods which were situated at
respondent's warehouse were still unpaid, the RTC was correct in directing the respondent to
pay the petitioner the amount which the petitioner paid to Unilab as insurance proceeds. By
right of subrogation, petitioner as the insurer may collect payment from respondent after the
satisfaction of the insurance claim of Unilab.
Icon Development Corporation vs National Life Insurance Company Of The

Philippines
G.R. No. 220686, March 9, 2020
Facts:
On various dates, petitioner Icon Development Corporation obtained several
loans from respondent National Life Insurance Company of the Philippines. As security for
the loans, several properties were mortgaged by the petitioner to the respondent. The
petitioner made several payments until 2008 when it suddenly refused to make further
payments despite repeated demands from the respondent.
In the complaint, the petitioner insisted that the respondent is collecting an exorbitant
and unconscionable interest; that the officers who secured the loans had no authority from the
petitioner; and that the respondent is under conservatorship; thus, the directors who initiated
the foreclosure had no authority to do so.
Atty. Clifford E. Chua, the appointed conservator of the respondent, filed a
Manifestation stating that he authorized the foreclosure petition. The RTC issued an Order
granting the TRO and enjoining the Ex-Officio Provincial Sheriff of Quezon Province and
the respondent from conducting the auction sale. It ruled that the respondent is under
conservatorship; thus, the filing of foreclosure petition by its directors was invalid. The RTC
also found that the conservator's Manifestation cannot be taken into consideration as it was
not formally offered as evidence.
Issue:
Can the board of directors of respondent initiate foreclose even without the
authority of the conservator?

Held:
Yes, it can initiate foreclosure even without authority of the conservator.

Under the Insurance Code, the appointed conservator has the power to
revoke or overrule the actions of the previous management and board of directors of the
distressed company. However, this should not be construed as to totally undress the present
and existing board of directors and corporate officers of their functions during rehabilitation
proceeding. The board of directors and corporate officers’ actions, however, can be revoked
by the conservator if they are prejudicial to the corporation and worsen the financial
difficulty that the company is facing. The insurance company’s juridical personality through
its board of directors is not replaced by the conservator.Accordingly, the foreclosure
proceeding initiated in this case was to collect petitioner’s debt. Such action is in accordance
with the purpose of conservatorship which is to preserve the assets of respondent and to
restore it to its previous financial status. There is no doubt that the board of directors of
respondent could validly authorize the foreclosure even if without the prior approval of the
conservator.
Multi-Ware Manufacturing, Corporation vs. Cibeles Insurance Corporation

G.R. No. 230528 February 1, 2021
Facts:
Petitioner Multi-Ware Manufacturing Corporation (Multi-Ware) is a domestic
corporation engaged in the manufacture of various plastic products. The petitioner, took out
fire policy insurance from Western Guaranty Corporation (Western Guaranty), Cibeles
Insurance Corporation (Cibeles Insurance) and Prudential Guarantee Corp. (Prudential
Guarantee) for almost the same properties to be insured which were machinery and
equipment, tools, spare parts, and accessories stored at Buildings 1 and 2, PTA, Compound,
No. 26 Isidro Francisco Street, Malinta, Valenzuela, Metro Manila.
On April 21, 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.
Its insurance claims for payment having been denied by Cibeles Insurance and
Western Guaranty, petitioner filed separate civil actions against these insurance companies
before the RTC of Manila. These cases were eventually consolidated for trial.
Issue:

Whether or not the petitioner violated Policy Condition No.3 or the “other
insurance clause” uniformly contained in the subject insurance contracts.
Held:
Yes. 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.
In Geagonia v. Court of Appeals, the Court explained that 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.
UCPB General Insurance Co., vs Asgard Corrugated Box Manufacturing

Corporation
G.R No. 244407 January 26, 2021
Facts:
Asgard and Milestone Paper Products, Inc. (Milestone) entered into a Toll
Manufacturing Agreement (TMA). Under the TMA, Asgard undertook to perform for
Milestone toll-manufacturing of paper products in accordance with the volume and
specifications as Milestone may define from time to time.
Asgard needed additional capital for the purchase of new equipment for its
manufacturing plant so, It invited Milestone to invest in the company. In 2007, Asgard and
Milestone further agreed that the latter would convert the paper products into corrugated
carton boxes using the corrugating machines owned by Asgard.
On December 22, 2007, Asgard filed with the Regional Trial Court (RTC) of Quezon
City, an Amended petition for Corporate Rehabilitation. On October 9, 2012. The RTC
dismissed Asgard’s complaint after UCPB filed a Motion for Summary Judgment declaring
that no genuine factual issue is extant in this case that would warrant threshing the same in a
full-blown trial.
On an appeal by Asgard, the CA reversed and set aside the RTC ruling and remanded
the case for further proceedings. The CA ruled that the core issue is whether Milestone has
insurable interest at the time of the loss, not at the time the policy was taken.
Issue:
Whether or not Milestone have insurable interest over the corrugating machines
at the time of the loss.
Held:

Yes. The Court disagrees with the finding of the RTC that Milestone lacked insurable
interest over the machine and equipment both at the time the Policy took effect on August 1,
2009 and at the time of the loss in July 2010. Asgard cannot take an inconsistent position that
Milestone had no more insurable interest under the Policy when in the Appellant's Brief, it
admitted that both Asgard and Milestone took out the insurance policy on August 1, 2009
effective until August 1, 2010. Under the condition cited above, it is very clear that Milestone
has insurable interest on the property at the time of the loss and damage on July 15, 2010.
Section 13 of the Insurance Code defines insurable interest as "every interest in
property, whether real or personal, or any relation thereto, or liability in respect thereof, of
such nature that a contemplated peril might directly damnify the insured." Parenthetically,
under Section 14 of the same Code, an insurable interest in property may consist in: (a) an
existing interest, like that of an owner or lienholder; (b) an inchoate interest founded on
existing interest, like that of a stockholder in corporate property; or (c) an expectancy,
coupled with an existing interest in that out of which the expectancy arises, like that of a
shipper of goods in the profits he expects to make from the sale thereof.

Insurance Cases From 2011 To 2021 Case Digests On Insurance Code of The Philippines

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Stronghold Insurance Co., Inc. vs. Interpacific Container Services

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Capital Insurance vs. Del Monte Motor Works

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Mapfre Asian Insurance Corp. v. Aquino

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Equitable Insurance Corporation, vs Transmodal International, Inc.

No, the attachment is not necessary.

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Empire Insurance, Inc. v. Bacalla, Jr.

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Blue Cross Insurance, Inc. vs. Bienvenido U. Juan