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CHANGES ON THIS PAGE! MAKE SURE IN ORDER SA CASE NUMBER YUNG
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34. WINTHER v. UCPB GENERAL INSURANCE CO., INC.

G.R. No. 247940 September 29, 2021

Topic: Conditions and Exclusions Prepared by: TAMBUSON, Carol Shane N.

(3D)

DOCTRINE: Section 51 of the Insurance Code enumerates the mandatory contents of an

insurance policy. The law provides that the policy must specify the property insured, among
others, but does not require that exclusions from the coverage be explicitly stated.

FACTS: Petitioner Emilita Ramas Winther is a sole proprietor of Kuzina Iliganon Restaurant.
Emilita secured a 1-year business insurance policy package covering risks such as fire, among
others, from respondent UPB General Insurance Co. Said policy was effective 12:00 PM of
March 11, 2011 to March 11, 2012. The property insured was a building occupied as a
restaurant located in Iligan City.

On January 1, 2012, a fire gutted Emilita’s living quarters and burned the roof of the adjoining
quarters occupied by staff April Lou Ramas and Flora Mae Ramas. Consequently, Emilita filed
a claim against the policy.

UCPB then assigned an independent adjuster, Tan-Gatue Adjustment Company, to evaluate

Emilita’s claim. Tan-Gatue found that the policy described the occupancy of the building
insured as a restaurant, while the structure that burned down was occupied as Emilita's living
quarters. Yet, the living quarters were not specifically described in the policy. Moreover, the
rear of the property insured was supposed to be an open space. However, there was a one-story
building used as storage area and another one-story building adjoining the rear right portion of
the restaurant constructed of light materials and occupied as a storage area, laundry area, living
quarters of the restaurant staff, and living quarters of Emilita that was razed by the fire.
Accordingly, UCPB denied Emilita's claim.

Aggrieved, Emilita filed a complaint for sum of money against UCPB. Emilita averred that the
structure which burden down was part of the restaurant and was used as administration office,
storage room, and living quarters.

ISSUE: Whether the structure that burned down which was used by petitioner Emilita as living
quarters is considered part of the restaurant which is covered by the insurance policy.

RULING: NO, the structure that burned down is not part of the coverage of the insurance

page 1
 34. WINTHER v. UCPB GENERAL INSURANCE CO., INC.

G.R. No. 247940 September 29, 2021

Topic: Conditions and Exclusions Prepared by: TAMBUSON, Carol Shane N.

(3D)

policy.

It is a cardinal rule in the interpretation of contracts that "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." Here, there is no ambiguity in the contract between the parties.
Section 51 of the Insurance Code enumerates the mandatory contents of an insurance policy.
The law provides that the policy must specify the property insured, among others, but does not
require that exclusions from the coverage be explicitly stated.

In this case, the policy explicitly provided that the insured property is a "building of one-story
in height constructed of concrete and timber under G.I. roof'' and occupied as a "restaurant."
There is no ambiguity in the language of the insurance policy. As such, the contract of
insurance, like other contracts, is to be construed according to the sense and meaning of the
terms which the parties themselves have used.

Emilita herself alleged in the petition that she "secured a property insurance of the one-story
building constructed of concrete and lumber with G.I. roof utilized solely for a restaurant
business with its accessories and appurtenances" from UCPB.

Clearly, the property insured was the building used as a restaurant alone. The living quarters of
Emilita and the restaurant staff, obviously not being used as a restaurant, were excluded from
the coverage of the policy. As the Court of Appeals aptly observed, "[i]t appears that the
properties damaged by fire, assured's living quarters and the storage area, are not a part of
the one-story building whose occupancy is described as a 'restaurant' in the insurance policy."

page 2
 1. Fortune Medicare Inc. v. Amorin, G.R. No. 195872, March 12, 2014

G.R. No. 195872 March 12, 2014

Topic: Section 2 of Insurance Code Prepared by: ABAOAG, Jenalyn T. (3D)

DOCTRINE: A health care agreement is in the nature of non-life insurance, which is

primarily a contract of indemnity. When the terms of an insurance contract contain limitations
on liability, courts should construe them in such a way as to preclude the insurer from non-
compliance with his obligation. Being a contract of adhesion, the terms of an insurance
contract are to be construed strictly against the party which prepared the contract – the insurer.

FACTS: David Robert U. Amorin was a member of Fortune Medicare Inc. (Fortune Care), a
corporation engaged in providing health maintenance services to its members. While on a trip
to Honolulu, Hawaii in 1999, he underwent an emergency appendectomy at a non-accredited
hospital. His total medical expenses amounted to $7,242.35 and $1,777.79,, covering both
hospital and professional fees. Upon his return to the Philippines, Amorin filed a
reimbursement claim under his healthcare plan.

Fortune Care reimbursed only ₱12,151.36, basing its computation on the average cost of
appendectomy less the medicare deduction if the procedure were performed in an accredited
hospital in Metro Manila. Amorin initially received the amount but requested for the full
payment of professional fees and 80% of the “approved standard charges” based on American
Standard due to the procedure being done in the US.

Amorin relied on Section 3, Article V of the Health Care Contract to support his claim.

A. EMERGENCY CARE IN ACCREDITED HOSPITAL. Whether as an in-patient or out-

patient, the member shall be entitled to full coverage under the benefits provisions of the
Contract at any FortuneCare accredited hospitals subject only to the pertinent provision of
Article VII (Exclusions/Limitations) hereof. For emergency care attended by non affiliated
physician (MSU), the member shall be reimbursed 80% of the professional fee which
should have been paid, had the member been treated by an affiliated physician. The
availment of emergency care from an unaffiliated physician shall not invalidate or diminish
any claim if it shall be shown to have been reasonably impossible to obtain such
emergency care from an affiliated physician.

B. EMERGENCY CARE IN NON-ACCREDITED HOSPITAL

Whether as an in-patient or out-patient, Fortune Care shall reimburse the total
hospitalization cost including the professional fee (based on the total approved charges) to

page 3
 a member who receives emergency care in a non-accredited hospital. The above
coverage applies only to Emergency confinement within Philippine Territory. However, if
the emergency confinement occurs in a foreign territory, Fortune Care will be
obligated to reimburse or pay eighty (80%) percent of the approved standard
charges which shall cover the hospitalization costs and professional fees

Fortune Care argued that the Health Care Contract covered only hospitalization and
professional fees incurred within the Philippines and that its liability ended when Amorin
accepted the ₱12,151.36 reimbursement.

ISSUE : Whether Amorin is entitled for the reimbursement of 80% of the professional and
hospitalization fees incurred in his appendectomy procedure in the US

RULING:

YES. Fortune Care’s liability to Amorin under the subject Health Care Contract should be
based on the expenses for hospital and professional fees which he actually incurred, and should
not be limited by the amount that he would have incurred had his emergency treatment been
performed in an accredited hospital in the Philippines.

In Philamcare Health Systems, Inc. v. CA, the court ruled that health care agreement is in the
nature of non-life insurance, which is primarily a contract of indemnity. When the terms of an
insurance contract contain limitations on liability, courts should construe them in such a way as
to preclude the insurer from non-compliance with his obligation. Being a contract of adhesion,
the terms of an insurance contract are to be construed strictly against the party which prepared
the contract – the insurer.

The word "standard" as used in the cited stipulation was vague and ambiguous, as it could be
susceptible to different meanings. Plainly, the term "standard charges" could be read as
referring to the "hospitalization costs and professional fees" which were specifically cited as
compensable even when incurred in a foreign country. Contrary to Fortune Care’s argument,
from nowhere in the Health Care Contract could it be reasonably deduced that these "standard
charges" referred to the "Philippine standard", or that cost which would have been incurred if
the medical services were performed in an accredited hospital situated in the Philippines.

All told, in the absence of any qualifying word that clearly limited Fortune Care's liability to
costs that are applicable in the Philippines, the amount payable by Fortune Care should not be
limited to the cost of treatment in the Philippines, as to do so would result in the clear
disadvantage of its member.

page 4
 4. Steamship Mutual Underwriting Association (Bermuda) Limited vs.
Sulpicio Lines, Inc.

G.R. Nos. 196072 and 208603 September 20, 2017

Topic:Perfection Prepared by: ARQUERO, Jinky Mae I. (3E)

DOCTRINE: The contract, to be binding from the date of application, must have been a
completed contract, one that leaves nothing to be done, nothing to be completed, nothing to be
passed upon, or determined, before it shall take effect. There can be no contract of insurance
unless the minds of the parties have met in agreement. When the text of a contract is explicit
and leaves no doubt as to its intention, the court may not read into it any other intention that
would contradict its plain import.

FACTS: Steamship was a Bermuda-based Protection and Indemnity Club, managed outside
London, England. It insures its members-shipowners against "third party risks and liabilities"
for claims arising from (a) death or injury to passengers; (b) loss or damage to cargoes; and (c)
loss or damage from collisions. Sulpicio insured its fleet of inter-island vessels with Steamship
for Protection & Indemnity risks through local insurance agents, Pioneer Insurance and Surety
Corporation (Pioneer Insurance) or Seaboard-Eastern Insurance Co., Inc. (Seaboard-Eastern).
One (1) of these vessels was the M/V Princess of the World, evidenced by a Certificate of
Entry and Acceptance issued by Steamship, which provided:

CERTIFICATE OF ENTRY AND ACCEPTANCE

by the Club of your proposal for entering the ship(s) specified below, and of
the tonnage set out against each, in:
Class 1 PROTECTION AND INDEMNITY
of the Club from
Noon 20th February 2005 to Noon 20th February 2006

or until sold, lost, withdrawn or the entry is terminated in accordance with the
rules, to the extent specified and in accordance with the Act, By(e)-Laws and
the Rules from time to time in force and the special terms specified overleaf.
Your name has been entered in the Register of Members of the Club as a
Member.

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
Department of the Interior and Local Government to be "accidental" in nature. Sulpicio
claimed indemnity from Steamship under the Protection & Indemnity insurance policy,
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."

page 5
 4. Steamship Mutual Underwriting Association (Bermuda) Limited vs.
Sulpicio Lines, Inc.

G.R. Nos. 196072 and 208603 September 20, 2017

Topic:Perfection Prepared by: ARQUERO, Jinky Mae I. (3E)

ISSUE : Whether a contract of insurance is perfected between Sulpicio and Steamship.

RULING: YES. A contract of insurance is perfected between the parties upon Steamship's
issuance of the Certificate of Entry and Acceptance. A contract of insurance, like other
contracts, must be assented to by both parties either in person or by their agents. So long as an
application for insurance has not been either accepted or rejected, it is merely an offer or
proposal to make a contract. The contract, to be binding from the date of application, must have
been a completed contract, one that leaves nothing to be done, nothing to be completed,
nothing to be passed upon, or determined, before it shall take effect. There can be no contract
of insurance unless the minds of the parties have met in agreement.

Title VI, Section 49 of Presidential Decree No. 612 or the Insurance Code defines an insurance
policy as "the written instrument in which a contract of insurance is set forth." Section 50 of
this Code provides that the policy, which is required to be in printed form, "may contain blank
spaces; and any word, phrase, clause, mark, sign, symbol, signature, number, or word
necessary to complete the contract of insurance shall be written on the blank spaces." Any
rider, clause, warranty, or endorsement attached and referred to in the policy by its descriptive
title or name is considered part of this policy or contract of insurance and binds the insured.
Section 51 of the Insurance Code prescribes the information that must be stated in the policy.
However, there is nothing in the law that prohibits the parties from agreeing to other terms and
conditions that would govern their relationship.

The Certificate of Entry and Acceptance plainly provides that the Class 1 protection and
indemnity coverage would be to the extent specified and in accordance with the Act, the By-
Laws, and the Rules of the Club in force at the time of the coverage. When a contract is
embodied in two (2) or more writings, the writings of the parties should be read and interpreted
together in such a way as to render their intention effective. The Certificate of Entry and
Acceptance does not contain the details of the insurance coverage. A person would have to
refer to the Club Rules to have a complete understanding of the contract between the parties.
The Club Rules contain the terms and conditions of the relationship between the Steamship and
its members including the scope, nature, and extent of insurance coverage of its members'
vessels.

There is no ambiguity in the terms and clauses of the Certificate of Entry Acceptance. Contrary
to the ruling of the Court of Appeals, the Certificate clearly incorporates the entire Club Rules.
When the text of a contract is explicit and leaves no doubt as to its intention, the court may not
read into it any other intention that would contradict its plain import.

page 6
 5. Loyola Life Plans, Inc. v. ATR Professional Life Assurance Corp.

G.R. Nos. 228402 & 222912 August 26, 2020

Topic: Perfection Prepared by: BARTE, Diana N. (3D)

DOCTRINE: A contract of insurance is defined as an agreement whereby one undertakes for

a consideration to indemnify another against loss, damage, or liability arising from an
unknown or contingent event. An insurance contract exists where the following elements
concur: (1) the insured has an insurable interest; (2) the insured is subject to a risk of loss by
the happening of the designated peril; (3) the insurer assumes the risk; (4) such assumption of
risk is part of a general scheme to distribute actual losses among a large group of persons
bearing a similar risk; and (5) in consideration of the insurer's promise, the insured pays a
premium.

FACTS: Loyola Life Plans, Inc. (Loyola) is a pre-need company engaged in the business of
insuring the lives of its plan holders through its Timeplans (pension contracts) and Lifeplans
(memorial service contracts), which are covered by insurance benefits provided by several
insurance companies including GE Life Insurance Company, Incorporated (GE Life), later
known as ATR Professional Life Assurance Corporation (ATR). Loyola applied with ATR for
a Group Creditors Life Insurance plan, with Group Yearly Renewable Term Life and
Accidental Death Benefit as supplementary benefits.

On April 28, 2000, Dwight L. Lumiqued, husband of Angelita Lumiqued, purchased a

Timeplan from Loyola payable in 120 monthly installments in the amount of P5,040.00 per
month. To pay for the first monthly premium, Dwight issued two Metrobank checks in the
amounts of P2,824.75 and P600.00. He also paid in cash P1,615.25. Simultaneous with the
payment of the first monthly premium, Dwight executed a Timeplan Application for which
Timeplan Contract was issued. He was then issued an Official Receipt, which expressly states:
This Receipt is valid for down payment only. Checks and other similar forms shall be valid
only when cleared by the Bank.

Belen Ganit, Loyola's Sales Operation Assistant, deposited on the same day the two Metrobank
checks while the cash payment was deposited to the account of Loyola on May 2, 2000.

On May 1, 2000, Dwight died due to multiple stab wounds.

Thereafter, Angelita filed a claim to recover the proceeds of the insurance benefits through
Loyola's broker, Network Unlimited, Inc. However, in a letter, ATR denied the claim on the
ground that the initial installment payment was not completed. Loyola asked for a
reconsideration, insisting that the Timeplan Dwight obtained was already in full force and
effect upon payment of the premium on April 28, 2000. To bar Angelita from further pursuing
any claim for the insurance benefits, ATR instituted a complaint to declare the individual

page 7
insurance coverage of Dwight under Master Policy No. GCL-878 void and of no effect at the
time of his death on May 1, 2000.

ISSUE : Whether an insurance contract was perfected between Dwight and ATR on April 28,
2000 when Dwight paid Loyola's agent, Gumiran, cash in the amount of P1,615.25 and two
checks amounting to P2,824.75, and P600.00, thus entitling his heirs to the proceeds of the
policy following his death on May 1, 2000.

RULING: YES. The fact that Dwight was only able to make an initial payment of the
insurance premium and that Loyola failed to immediately remit the cash portion of the initial
payment to ATR should not affect the validity of the perfected insurance contract.

ATR argues that the date of receipt of payment of premium is the date when the cash was
actually deposited in the bank. The Court finds this proposition contrary to logic and
unreasonable.

Here, it is undisputed that at 10:34 am on April 28, 2000, Loyola's Sales Operation Assistant
deposited the two Metrobank checks at Metrobank Solano, Nueva Viscaya branch. However,
instead of immediately depositing the cash payment of P1,615.25, Loyola used the money and
waited until May 2, 2000, the next banking day which fell on a Tuesday, to deposit the
remainder of the initial payment of Dwight. By then, Dwight had already passed away due to
the multiple stab wounds he sustained on May 1, 2000. Loyola admitted that the delay in the
deposit of the P1,615.25 cash was due to its district office's immediate need for cash.

It is important to clarify that Loyola is an agent of ATR. In a contract of agency, "a person
binds himself to render some service or to do something in representation or on behalf of
another, with the consent or authority of the latter." Therefore, a planholder's payment made to
Loyola has the same legal effect as payment made to ATR, even if Loyola failed to
immediately deposit the cash payment to its account.

As far as Dwight is concerned, his payment to Gumiran is considered his payment to Loyola
and ATR for the initial monthly installment of the Timeplan even if the cash portion of his
payment was not immediately deposited to Loyola's account.

Furthermore, upon payment of the premium, Dwight was issued a copy of the Timeplan
contract that was pre-signed by Jesusa Puyat-Concepcion, President and Chief Executive
Officer of Loyola, and Francisco D. Cauilan, Area Manager of Loyola. Dwight's receipt of the
Timeplan contract, while he was in good health, signifies that the contract was perfected. The
delivery of the corresponding Timeplan contract signifies the perfection of the contract
between him and Loyola.

The insurance coverage of Dwight should not be adversely affected by Loyola's delay.

page 8
 7. Dela Fuente v. Fortune Life Insurance Co., Inc., G.R. No. 224863, December 2, 2020

G.R. no. 224863 December 02, 2020

Topic: Insurable Interest Prepared by: DEMETRIA, Luigi Miguel

Z. (3D)

DOCTRINE: The policy of the State against wagering contracts is apparent in Section 3 of the
Insurance Code, as amended, requiring the presence of insurable interest for a contract of
insurance to be valid. This is meant to eliminate the temptation of taking out a policy for
speculative or evil purposes. Insurance policies should be obtained in good faith, and not for
the purpose of speculating upon the hazard of a life in which one has no interest. Therefore, a
debtor may name his creditor as a beneficiary on a life insurance policy taken out in good faith
and maintained by the debtor. Likewise, a creditor may take out an insurance policy on the life
of his debtor.

FACTS: Petitioner Susan Co Dela Fuente invested a total of ₱16,000,000.00 in the lending
business of Reuben Protacio between February 17 and March 28, 2011, and was named
revocable beneficiary of Fortune’s Policy No. 61761 in the face amount of ₱15,000,000.00,
issued on March 25, 2011. About a month after the issuance of the policy, Susan submitted a
copy of Policy No. 61761 with a face value of P15,000,000.00 to claim its proceeds. Based on
the Death Certificate, Reuben died on April 15, 2011 due to a gunshot wound on the chest.
Fortune denied the claim of Susan on the ground that Reuben’s death was a suicide,
which is an excepted risk under the policy. Fortune refunded Susan P80,643.00, which
represents the amount of premiums paid on the policy, less service charge but Susan refused to
accept it. Thereafter, Susan filed a complaint for a sum of money and damages against Fortune.
The Regional Trial Court of Makati City ruled in Susan’s favor, finding that the
petitioner was able to establish that she is entitled to the proceeds of the policy. On the other
hand, the RTC found that Fortune failed to establish by preponderance of evidence its defense
that Reuben committed suicide. The Court of Appeals reversed the decision of the lower court,
finding that the evidence on record proved that Reuben committed suicide and dismissed the
complaint. The CA denied the Motion for Reconsideration. Susan filed a petition for review on
certiorari under Rule 45 of the Rules of Court.

ISSUE : Whether or Susan, as creditor of Reuben and beneficiary of the policy, is entitled to
the entire face value of the policy in the amount of P15,000,000.00

RULING: Yes. The Supreme Court held that in the context of life insurance policies, the
burden of proving suicide as the cause of death of the insured to avoid liability rests on the
insurer. Therefore, Fortune must prove suicide to defeat Susan's claim. The Court ruled that
Fortune failed to discharge its burden of proving, by preponderance of evidence, that Reuben's
death was caused by suicide, an excluded risk in his policy.
Furthermore the Court held that at the time the policy took effect, the investment Susan
made was already P4,000,000.00. After the policy took effect, Susan invested P12,000,000.00
more to Reuben's business. The argument of Fortune is belied by the Endorsement Letter, of

page 9
which nowhere it is stated that the insurer shall only be liable to the beneficiary for the amount
owing to Susan at the time the policy took effect.
Instead, what is clear is that Susan, as the creditor of Reuben and the designated
beneficiary of his policy, is entitled to her claim up to the extent of his indebtedness. Fortune
Life Insurance Co., is ordered by the Supreme Court to pay petitioner Susan Co Dela Fuente.

8. Gonzales-Asdala v. Metropolitan Bank and Trust Company

G.R. No. 257982 February 22, 2023

Topic: The Parties Prepared by: COLIS, Betha Marie P. (3E)

DOCTRINE: Section 3 of The Insurance Code provides that the consent of the spouse is not
necessary for the validity of an insurance policy taken out by a married person on his or her
life. A co-mortgagor, could secure an Mortgage Redemption Insurance (MRI) on her life alone
without a similar action by her husband, her co-mortgagor.

FACTS: On July 2002, Petitioner Fatima Gonzales-Asdala and her husband, Wynne B.
Asdala, applied with Metrobank for a loan to finance the renovation of their house built on a
parcel of land and registered in the name of "Wynne B. Asdala, married to Fatima G. Asdala."

Consequently, Petitioner and her husband executed three sets of Promissory Notes in favor of
Metrobank, all of which specifically providing for the procurement of a Mortgage Redemption
Insurance (MRI) by the mortgagor, in case Metrobank would so require. As security therefor,
petitioner and her husband were required to constitute a Real Estate Mortgage on the subject
land.

In the years that followed, petitioner alleged that she and her husband were periodically
billed for MRI premiums, but no receipts were issued, and neither was a policy released in
their favor. The only proof of payment of the MRI premiums was a debit memo issued by
Metrobank to petitioner's husband.

On March 2008, petitioner's husband died. Petitioner notified Metrobank of his death and
requested for the immediate discharge of the mortgage on account of the fact that the MRI
premiums were paid by her husband during his lifetime.

However, Metrobank denied the request and averred that the documents for the
procurement of the MRI were signed by petitioner only, thus, was issued only in her name.
Metrobank also showed that the payment of the insurance premiums was sourced from the
savings account under the name of petitioner alone.

On July 2008, petitioner received a letter with an attached Statement of Account,

demanding payment for two months unpaid amortization inclusive of penalty charges.

page 10
 Petitioner filed a Complaint claiming that the proceeds of the MRI should be applied to the
loan since her husband's death activated the insurer's commitment, and that the property
offered as security for the loan was her husband's exclusive property, thus, he alone was the
mortgagor in the Real Estate Mortgage and consequently, the insured under the MRI.

RTC ruled in favor of Metrobank. CA affirmed.

ISSUE: Whether petitioner's husband was the insured under the subject MRI.

RULING: NO. The Insured under the subject MRI is petitioner Fatima.

Considering that the property is conjugal in nature, it follows that both the petitioner and her
husband were mortgagors for whose benefit an MRI may be made.

According to Section 3 of the Insurance Code, the consent of the spouse is not necessary for
the validity of an insurance policy taken out by a married person on his or her life. Thus, as
correctly held by the RTC and CA, a co-mortgagor, could secure an MRI on her life alone
without a similar action by her husband, her co-mortgagor.

In the instant case, the court found that the documents for the procurement of the MRI were
signed by the plaintiff-appellant herself, and the Certificate of Group Life Insurance was issued
only in her name. These documents sufficiently establish that the plaintiff-appellant is the only
named insured under the MRI. Furthermore, Metrobank has shown, and it is not disputed, that
the payment of the insurance premium was sourced from the savings account under the name
of plaintiff-appellant alone. Hence, Metrobank was able to convincingly prove that it was
plaintiff-appellant alone who applied for insurance in connection with the housing loan and
that the proceeds under the MRI cannot be applied to the loan upon the death of Wynne Asdala
because he was not the borrower insured under the MRI.

9. Heirs of Loreto C. Maramag v. Eva Verna De Guzman Maramag, et al.

G.R. No. 181132 June 5, 2009

Topic: (check at the syllabus) COLORGE, John Dave C. (3E)

DOCTRINE: Pursuant to Section 53 of the Insurance Code, it is only in cases where the
insured has not designated any beneficiary, or when the designated beneficiary is disqualified
by law to receive the proceeds, that the insurance policy proceeds shall redound to the benefit
of the estate of the insured.

FACTS: Petitioners filed a petition against respondents before the RTC, Branch 29, for
revocation and/or reduction of insurance proceeds. The petition alleged that: 1) the petitioners

page 11
were the legitimate wife and children of the deceased, Loreto Maramag; 2) Eva Verna De
Guzman Maramag was a concubine of Loreto and a suspect in the killing of the latter, thus, she
is disqualified to receive any proceeds from Loreto’s insurance policies from Insular and
Grepalife; 3) Odessa, Karl Brian, and Trisha Angelie were the illegitimate children of Loreta,
thus, they were entitled only to one-half of the legitime of the legitimate children, and 4)
petitioners’ legitime must be satisfied first.

In its answer, Insular alleged that it disqualified Eva upon ascertaining that Loreto
misrepresented her as his legitimate wife and Odessa, Karl Brian, and Trisha Angelie as his
legitimate children. However, Insular claimed that it was bound to honor the insurance policies
designating Odessa, Karl Brian, and Trisha Angelie as beneficiaries pursuant to Section 53 of
the Insurance Code. Meanwhile, Grepalife, in its compulsory counterclaim, alleged that Loreto
was ineligible for the insurance due to misrepresentation in his application form, that the case
was premature - there being no claim filed by the legitimate family of Loreto, and that the law
on succession does not apply where the designation of insurance beneficiaries is clear. Both
Insular and Grepalife claimed that the insurance proceeds belong exclusively to the designated
beneficiaries in the policies and not to the estate or heirs of the insured.

ISSUE : Whether the members of the legitimate family are entitled to the proceeds of the
insurance for the concubine and the illegitimate children.

RULING: No. Petitioners are not entitled to the proceeds of Loreto’s insurance policies.

Pursuant to Section 53 of the Insurance Code, the only persons entitled to claim the insurance
proceeds are either the insured, if still alive, or the beneficiary, if the insured is already
deceased., upon the maturity of the policy. The exception to this rule is a situation where the
insurance contract was intended to benefit third persons who are not parties to the same in the
form of favorable stipulations or indemnity. In such a case, third parties may directly sue and
claim from the insurer. Petitioners are third parties to the insurance contracts with Insular and
Grepalife and, thus, are not entitled to the proceeds thereof. Notwithstanding the revocation of
Eva as beneficiary and her disqualification as such, the designation of Odessa, Karl Brian, and
Trisha Angelie remains valid.

10. UCPB General Insurance Co., Inc. v. Asgard Corrugated Box

Manufacturing Corp.

G.R. No. 244407 January 26, 2021

Topic: Risk Insured Against DACANAY, Orlyne Mhay D. (3D)

DOCTRINE: Section 89 of the Insurance Code provides that an insurer is not liable for loss
caused by the willful act of the insured. Public policy prohibits a person from profiting from

page 12
his own wrongful act. Insurable interest exists when the insured will benefit from the
preservation of the property or suffer pecuniary loss from its destruction. Ownership is not
essential; a contractual relationship giving such interest is sufficient. Furthermore, if a contract
establishing insurable interest continues by automatic renewal or month-to-month extension
without proper termination, the interest subsists at the time of loss.

FACTS: Asgard Corrugated Box Manufacturing Corp. (Asgard) and Milestone entered into a
Toll Manufacturing Agreement (TMA) effective February 1, 2006 until January 31, 2008,
which provided for automatic month-to-month renewal unless terminated with a 60-day written
notice or for cause in writing. Milestone installed its own parts into Asgard’s corrugating
machines. On July 15, 2010, Milestone removed its equipment and maliciously damaged
Asgard’s corrugating machines.

At that time, both Asgard and Milestone were co-insureds under an Industrial All Risk Policy
issued by UCPB General Insurance Co., effective August 1, 2009 to August 1, 2010, which
included a “malicious damage” endorsement. Asgard filed a claim under the policy, but UCPB
denied liability, invoking Section 89 of the Insurance Code and asserting that the loss was
caused by the willful act of a co-insured. The RTC ruled in favor of Asgard, holding that
Milestone had no insurable interest at the time of loss. On appeal, the Court of Appeals
reversed, ruling that the TMA was still in effect and that Milestone retained an insurable
interest in the machines, thus making Section 89 applicable to bar recovery.

ISSUE : Whether UCPB is liable under the Industrial All Risk Policy for the malicious
damage to Asgard’s machines caused by its co-insured, Milestone.

RULING: No. UCPB is not liable. The Supreme Court held that the TMA continued on a
month-to-month basis since there was no valid termination, thereby preserving Milestone’s
contractual rights and insurable interest in the machines. The Court explained that Milestone’s
insurable interest existed because it had a direct pecuniary interest in the preservation of the
property. However, since the damage was caused by the willful act of Milestone, a co-insured,
Section 89 of the Insurance Code applied, exempting the insurer from liability for losses
caused by the willful act of the insured. The Court stressed that public policy forbids
indemnifying a party for intentional wrongdoing, even if the policy contained a “malicious
damage” endorsement.

13. Gonzales-Asdala vs. Metropolitan Bank

G.R. No. 257982 February 22, 2023

Topic: Insurable Interest; MRI FAJARDO, Elijah Christiane M.

DOCTRINE: Section 8 of the Insurance Code provides, “Where a mortgagor of property

effects insurance in his own name providing that the loss shall be payable to the mortgagee, or

page 13
assigns a policy of insurance to a mortgagee, the insurance is deemed to be upon the interest
of the mortgagor, who does not cease to be a party to the original contract.”

FACTS: Petitioner (Fatima) Gonzales-Asdala and her husband (Wynne) obtained a loan with
Metropolitan Bank worth Php 1,500,000 to finance a renovation in their house. They executed
promissory notes and a real estate mortgage on a property registered in the name of "Wynne B.
Asdala, married to Fatima G. Asdala.” Metrobank required a Mortgage Redemption Insurance
(MRI) and the spouses were periodically billed for premiums of the MRI, however neither
receipts nor the policy were issued

Wynne later died, so Fatima notified Metrobank and asked for the immediate discharge of the
mortgage because the premiums were paid by her husband. This was denied by Metrobank
because the documents for the procurement of the MRI was signed only by Fatima, herein
petitioner, thus, it was issued only in her name. Further, there was proof that premiums were
sourced from the savings account of Fatima.

Petitioner then filed a Complaint for Specific Performance, Injunction and Damaged, with
prayer for temporary restraining order and preliminary injunction against Metrobank.
Metrobank insists that the MRI was applied for and taken on the life of the petitioner, so her
husband’s death did not extinguish the loan or the mortgage.

The RTC dismissed the complaint. According to the RTC, even assuming that the lot was the
exclusive property of petitioner’s husband, petitioner effectively became a co-mortgagor when
she signed the deed of mortgage. Further, the death of the husband did not activate the
insurer’s commitment under the MRI to apply its proceeds to the full payment of the loan. The
CA upheld the decision of the RTC.

Among others, the petitioner claims that the promissory notes was not only the procurement of
a property insurance and an MRI, but also a life insurance on the life of her husband

ISSUE : Whether the petitioner’s husband was insured under the MRI

RULING: No, it was the petitioner that was insured.

In this case, both petitioner and her late husband were mortgagors for whose benefit an MRI
may be made. And as a co-mortgagor, the petitioner can secure an MRI on her life without any
action or consent from her husband as per Section 3 of the Insurance Code.

Section 3, Paragraph 2
The consent of the spouse is not necessary for the validity of an insurance
policy taken out by a married person on his or her life or that of his or
her children.

Despite this, Metrobank was still able to prove that the petitioner was the lone applicant for the
insurance in connection with the housing loan.

page 14
Being the sole mortgagor in the MRI, only the petitioner is a party to the contract. According
to Section 8 of the Insuracne Code, where a mortgagor of property effects insurance in his own
name providing that the loss shall be payable to the mortgagee, or assigns a policy of insurance
to a mortgagee, the insurance is deemed to be upon the interest of the mortgagor, who
does not cease to be a party to the original contract. In this case, that mortgagor is the
petitioner.

To that effect, the death of her husband did not give up the rights or interests in the insurance
to Metrobank because the husband was not a party to the contract.

15. UCPB General Insurance Co., Inc. v.

Asgard Corrugated Box Manufacturing Corp

G.R. No. 244407 January 26, 2021

Topic: Insurable Interest Prepared by: FLORES, Mylen S. (3E)

DOCTRINE: An insurable interest exists when a party stands to benefit from the preservation
of property or suffer loss from its destruction, but under Section 89 of the Insurance Code, no
recovery lies for losses willfully caused by the insured, as such is against public policy.

FACTS: Asgard and Milestone Paper Products, Inc. (Milestone) entered into a Toll
Manufacturing Agreement (TMA) whereby Asgard undertook to perform toll-manufacturing
of paper products for Milestone.

Asgard and Milestone further agreed that the latter would convert the paper products into
corrugated carton boxes using the corrugating machines owned by Asgard. The agreement
likewise included the modification of the corrugated machines by replacing the parts with the
ones owned by Milestone. As a result thereof, all vital parts of the corrugating machines of
Asgard were detached and replaced with parts owned by Milestone.

Asgard and Milestone took out an insurance policy from UCPB Insurance. Upon payment of
insurance premium, UCPB Insurance issued Industrial All Risk to Milestone and/or Market
Link and/or Nova Baile and/or Asgard to insure, among others, Asgard's machinery and
equipment of every kind and description in Novaliches, Quezon City.

Milestone pulled out its stocks, machinery, and equipment from Asgard's plant in Novaliches,
Quezon City for relocation to Milestone's own premises in Laguna. In the course thereof, it
caused damage to Asgard's complete line of Isowa corrugating machine and accessories as well
as its printer-slotter-stacker.

Asgard notified UCPB Insurance about the loss and filed an insurance claim under the Policy
based on the Malicious Damage Endorsement provision. However, UCPB Insurance denied the

page 15
claim explaining that the Policy had no cross-liability cover, and the malicious damage was
committed by Milestone, one of the names insured, and not committed by a third party.

The RTC held that UCPB Insurance is liable for the insurance claim of Asgard. It did not apply
Section 87 (now Section 89) of the Insurance Code stressing that Milestone cannot be
considered as an insured with respect to the damaged machine as it has no insurable interest
either at the time the policy took effect. The CA agreed with the RTC that Milestone lacked
insurable interest and could not properly be considered insured under the Policy.

Hence, the petition.

ISSUE/S:
A. Whether Milestone had insurable interest over Asgard's corrugating machines at the time of
the loss or damage.
B. Whether UCPB Insurance be held liable under the policy.

RULING:

A. YES. 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.

An insurable interest in property does not necessarily imply a property interest in, or a lien
upon, or possession of, the subject matter of the insurance, and neither the title nor a beneficial
interest is requisite to the existence of such an interest. It is sufficient that the insured is so
situated with reference to the property that he would be liable to loss should it be injured or
destroyed by the peril against which it is insured. Anyone has an insurable interest in property
who derives a benefit from its existence or would suffer loss from its destruction.

Insurable interest in property is not limited to property ownership in the subject matter of the
insurance. Where the interest of the insured in, or his relation to, the property is such that he
will be benefitted by its continued existence, or will suffer a direct pecuniary loss by its
destruction, his contract of insurance will be upheld, although he has no legal or equitable title.

As in this case, when Milestone removed its parts and machines, Milestone still had an actual
and real interest in the preservation of the corrugating machines while the TMA is not
effectively terminated and non-preservation will render Milestone liable for breach of contract

page 16
as no corrugated carton boxes would be manufactured under the TMA.

B. NO. Section 89 of the Insurance Code provides that an insurer is not liable for a loss caused
by the willful act or through the connivance of the insured; but he is not exonerated by the
negligence of the insured, or of the insurance agents or others.

The insurer is not liable for a loss caused by the intentional act of the insured or through his
connivance. Such damage/loss is not an insurable risk because the occurrence of the loss was
subject to the control of one of the parties and not merely caused by the negligence of the
insured.

However, the insurer is not relieved from liability by the mere fact that the loss was caused by
the negligence of the insured, or of his agents or others. Accordingly, it is no defense to an
action on the policy that the negligence of the insured caused or contributed to the injury.
However, when the insured's negligence is so gross that it is tantamount to misconduct, or
willful or wrongful act, the insurer is not liable.

Since the damage or loss caused by Milestone to Asgard's corrugating machines was willful or
intentional, UCPB Insurance was not liable under the Policy. To permit Asgard to recover from
the Policy for a loss caused by the willful act of the insured is contrary to public policy, i.e.,
denying liability for willful wrongs.

page 17
 17. UCPB GENERAL INSURANCE COMPANY, INC. vs. FRABELLE FISHING
CORPORATION

G.R. No. 252785 July 05, 2023

Topic: Insurable Interest Prepared by: KIWAH KO, Karl Ryan T. (3E)
(Secs. 10 to 15, IC)

DOCTRINE:
An insurable interest in property does not necessarily imply a property interest in, or a lien
upon, or possession of, the subject matter of the insurance, and neither the title nor a beneficial
interest is requisite to the existence of such an interest. It is sufficient that the insured is so
situated with reference to the property that he would be liable to loss should it be injured or
destroyed by the peril against which it is insured. Anyone has an insurable interest in property
who derives a benefit from its existence or would suffer loss from its destruction.

FACTS:

Frabelle Fishing Corporation procured a marine insurance policy from UCPB General
Insurance Co., Inc. to cover its fishing vessel, M/V Frabelle 18, including its hull, machinery,
and equipment. The vessel was damaged during a voyage, prompting Frabelle to file a claim
under the policy.

UCPB denied the claim, arguing that Frabelle had no insurable interest in the vessel at
the time of the loss. UCPB contended that the vessel was registered under a different entity,
and thus Frabelle was not the legal owner. UCPB also claimed that the insurance contract was
void for lack of insurable interest under Section 10 of the Insurance Code, which requires that

page 18
 17. UCPB GENERAL INSURANCE COMPANY, INC. vs. FRABELLE FISHING
CORPORATION

G.R. No. 252785 July 05, 2023

Topic: Insurable Interest Prepared by: KIWAH KO, Karl Ryan T. (3E)
(Secs. 10 to 15, IC)

the insured must have an interest in the subject matter insured.

Frabelle countered that it had actual possession and control of the vessel, operated it for
its business, and bore the risk of loss. It argued that it had a substantial economic interest in the
vessel, which qualifies as insurable interest under the law.

The trial court ruled in favor of Frabelle, finding that it had insurable interest. The
Court of Appeals affirmed. UCPB elevated the case to the Supreme Court.

ISSUE :
Whether Frabelle Fishing Corporation had insurable interest in M/V Frabelle 18 at the
time of the loss.
Whether the insurance contract was valid under Sections 10 to 25 of the Insurance
Code.

RULING:
Yes, Frabelle had insurable interest in the vessel.

The Court emphasized that ownership is not the sole basis for insurable interest. Under
Section 13 of the Insurance Code states that, 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, is an insurable interest. Which means a
person has insurable interest in property if he derives benefit from its existence or would suffer
loss from its destruction.

Frabelle’s actual possession, control, and use of the vessel for its fishing operations
established a substantial economic interest, which is sufficient to meet the requirement of
insurable interest. The Court cited that Frabelle stood to benefit from the continued existence
of the vessel and would suffer economic loss from its damage.

Yes,The insurance contract was valid and enforceable.

The Court reiterated that Section 10 of the Insurance Code, states that every person has an

page 19
 17. UCPB GENERAL INSURANCE COMPANY, INC. vs. FRABELLE FISHING
CORPORATION

G.R. No. 252785 July 05, 2023

Topic: Insurable Interest Prepared by: KIWAH KO, Karl Ryan T. (3E)
(Secs. 10 to 15, IC)

insurable interest in the life and health: (a) Of himself, of his spouse and of his children; (b) Of
any person on whom he depends wholly or in part for education or support, or in whom he has
a pecuniary interest; (c) Of any person under a legal obligation to him for the payment of
money, or respecting property or services, of which death or illness might delay or prevent the
performance; and (d) Of any person upon whose life any estate or interest vested in him
depends. Which prohibits insurance contracts without insurable interest. Frabelle’s situation
fell within the scope of Sections 13 to 15, which recognize economic interest and possession
as valid grounds.

23. WINTHER V. UCPB GENERAL INSURANCE CO., INC.

G.R. No. 247940 September 29, 2021

Topic: Policy Prepared by: MONTEREY, Cindy O.

DOCTRINE:

FACTS:
Emilita Ramas Winther (Emilita), sole proprietor of Kuzina Iliganon Restaurant,
secured a one-year business insurance policy package covering fidelity guarantee,
money insurance, robbery/burglary, fire and lightning, and compulsory public liability
from UCPB General Insurance Company (UCPB) effective 12:00 p.m. of March 11,
2011 to 12:00 p.m. of March 11, 2012. The property insured was a building occupied as
a restaurant, located inside a compound along the National Highway, Brgy. Tibanga,
Iligan City.

ISSUE : (ANSWERABLE BY YES OR NO)

RULE: if you will use Whether format - do not put “or not” na.

Example : Whether the petitioner is the insured?

page 20
 23. WINTHER V. UCPB GENERAL INSURANCE CO., INC.

G.R. No. 247940 September 29, 2021

Topic: Policy Prepared by: MONTEREY, Cindy O.

RULING: (NO. One sentence direct response to the issue)

Ex: NO. The petitioner Vice Ganda is not the insured.

page 21
 Philamcare Health Systems, Inc. v. Court of Appeals and Julita Trinos,

Docket number: G.R. No. 125678 Date: March 18, 2002

Topic: Cancellation of the Policy Prepared by: MONTERO, Marc Bryan Lemuell
S.

DOCTRINE:

FACTS: Ernani Trinos, deceased, husband of respondent Julita Trinos applied for a health care
coverage with petitioner Philamcare Health Systems Inc. In the application form, he answered
“NO” to the question – “Have you or any family member ever consulted or been treated for
high blood pressure, heart trouble, diabetes, cancer, liver disease, asthma or peptic ulcer?”

The application for was approved for a period of one year, from March 1, 1988 to March 1,
1989, and he was issued Health Care Agreement, wherein the husband Ernani was entitled to
avail of hospitalization benefits; out patient benefits such as annual physical examinations and
preventive health cared.

The agreement was extended with the coverage amount increasing to P75,000 per disability.
During the period, Ernani suffered a heart attack and was confined in Manila Medical Center
(MMC) for one month. While he was at the hospital, Julita tried to claim the benefits under the
health care agreement, but Philamcare denied liability saying that such was void. Apparently,
Ernani concealed his medical history since the Manila Medical doctors discovered that he was
hypertensive, diabetic and asthmatic, which was contrary to his answer in the application form.
Julita paid the expenses amounting to P76,000.

The Trial Court ruled in favor of Julita; ordered Philamcare to pay and reimburse the medical
expenses + Moral Damages + exemplary damages. On appeal, the CA affirmed RTC decision
in favor of Julita but removed the damages.

ISSUE :
(1) Whether a health care agreement is an insurance contract.
(2) Whether the alleged concealment avoided the agreement.

RULING:
(1) Yes, a health care agreement is an insurance contract.
Under Section 2 of the Insurance Code, an insurance contract is defined as “a contract of
insurance as an agreement whereby one undertakes for a consideration to indemnify another
against loss, damage or liability arising from an unknown or contingent event.” The Supreme
Court held that an insurance contract exists where the following elements concur: (1) the
insured has insurable interest; (2) the insured is subject to a risk of loss by the happening
of the designated peril; (3) the insurer assumes the risk; (4) Such assumption of risk is part
of a general scheme to distribute actual losses among a large group of persons bearing a

page 22
 Philamcare Health Systems, Inc. v. Court of Appeals and Julita Trinos,

Docket number: G.R. No. 125678 Date: March 18, 2002

Topic: Cancellation of the Policy Prepared by: MONTERO, Marc Bryan Lemuell
S.

similar risk; and (5) in consideration of the insurers promise, the insured pays a premium

In the case at bar, the insurable interest of respondents husband in obtaining the health care
agreement was his own health. The health care agreement was in the nature of non-life
insurance, which is primarily a contract of indemnity. Once the member incurs hospital,
medical or any other expense arising from sickness, injury or other stipulated contingent, the
health care provider must pay for the same to the extent agreed upon under the contract.

(2) No, the alleged concealment does not avoid the agreement
The question relating to an applicant’s medical history largely depends on opinion, rather than
fact, especially coming from Ernani, who was not a medical doctor. Where matters of opinion
are called for, answers made in good faith and without intent to deceive will not avoid a policy
even though they are untrue. The fraudulent intent on the part of the insured must be
established to warrant rescission of the insurance contract. Concealment as a defense for the
health care provider or insurer to avoid liability is an affirmative defense and the duty to
establish such defense by satisfactory and convincing evidence rests upon the provider or
insurer. In any case, with or without the authority to investigate, petitioner is liable for claims
made under the contract. Having assumed a responsibility under the agreement, petitioner is
bound to answer the same to the extent agreed upon. In the end, the liability of the health care
provider attaches once the member is hospitalized for the disease or injury covered by the
agreement or whenever he avails of the covered benefits which he has prepaid.

Under Section 27 of the Insurance Code, a concealment entitles the injured party to rescind a
contract of insurance. The right to rescind should be exercised previous to the commencement
of an action on the contract. In this case, no rescission was made. Besides, the cancellation of
health care agreements as in insurance policies require the concurrence of the following
conditions: (1) Prior notice of cancellation to insured; (2) Notice must be based on the
occurrence after effective date of the policy of one or more of the grounds mentioned; (3) Must
be in writing, mailed or delivered to the insured at the address shown in the policy; (4) Must
state the grounds relied upon provided in Section 64 of the Insurance Code and upon request of
insured, to furnish facts on which cancellation is based.

None of the above pre-conditions was fulfilled in this case. When the terms of insurance
contract contain limitations on liability, courts should construe them in such a way as to
preclude the insurer from non-compliance with his obligation.

page 23
 26. Vda. De Canilang v. Court of Appeals, G.R. No. 92492, 17 June 1993

G.R. No. 92492 June 17, 1993

Topic: Concealment Prepared by: MUROS, Ella Marie (3D)

DOCTRINE: Section 27 of the Insurance Code, provides that, “A concealment whether

intentional or unintentional entitles the injured party to rescind a contract of insurance.” Thus,
proof of intent is not required.

FACTS: Jaime Canilang was diagnosed by Dr. Wilfredo B. Claudio with sinus tachycardia
and later acute bronchitis. The next day, he applied for a non-medical life insurance policy
with Great Pacific, naming his wife Thelma as beneficiary. He was issued Policy No. 345163
for ₱19,700, effective August 9, 1982. On August 5, 1983, he died of congestive heart failure,
anemia, and chronic anemia. Thelma’s claim for the proceeds was denied by Great Pacific on
the ground of material concealment by the insured.

The petitioner filed a complaint with the Insurance Commission against Great Pacific to
recover insurance proceeds. She testified she was unaware of any serious illness in her late
husband, believing he died of a kidney disorder. She presented the deposition of Dr. Wilfredo
Claudio, the family physician, who had treated the deceased for sinus tachycardia and acute
bronchitis. Great Pacific presented Dr. Esperanza Quismorio, its physician and medical
underwriter, who stated the policy was approved based on the deceased’s medical declaration
and explained that medical exams are usually required only if the applicant discloses prior
consultations or hospitalizations.

The Insurance Commission, through Commissioner Armando Ansaldo, ordered Great Pacific
to pay ₱19,700 plus legal interest and ₱2,000 attorney’s fees. It held that: a) Jaime Canilang’s
ailment was not serious enough to affect Great Pacific’s decision to insure him, even if
disclosed; b) Great Pacific waived its right to further inquire into his health by issuing the
policy despite unanswered pertinent questions in the application; c) There was no intentional
concealment, as Canilang believed he only had a minor ailment and a simple cold; and d) Batas
Pambansa Blg. 874, which voids insurance contracts for concealment regardless of intent, was
inapplicable since it took effect only on June 1, 1985, after Canilang’s case.

The Court of Appeals reversed the Insurance Commissioner’s decision, dismissed both Thelma
Canilang’s complaint and Great Pacific’s counterclaim, and ruled that: a) The Insurance
Commissioner’s use of the term “intentionally” was unsupported by evidence; b) The agreed
issue was whether Jaime Canilang committed material concealment of his health condition

page 24
when applying for insurancec) Canilang’s failure to disclose prior medical consultations and
treatments was material information that should have been revealed to allow Great Pacific to
make proper inquiries; and d) The Ng Gan Zee case on misrepresentation was inapplicable, as
the present case involved concealment.

Petitioner then elevated the case to the Supreme Court via Petition for Review on Certiorari.

ISSUE: Whether Jaime Canilang’s non-disclosure of certain facts about his previous health
conditions constituted intentional material concealment justifying the denial of the insurance
claim?

RULING: YES. Jaime Canilang’s non-disclosure of certain facts about his previous health
conditions constituted intentional material concealment. The Supreme Court upheld the Court
of Appeals’ decision, ruling that Jaime Canilang committed material concealment by failing to
disclose two medical consultations shortly before applying for a non-medical life insurance
policy. He had been diagnosed with sinus tachycardia and acute bronchitis and was prescribed
medications for these conditions, yet omitted these facts in his application. Under Sections 26,
28, and 31 of the Insurance Code of 1978, such information was material because it could have
reasonably influenced Great Pacific’s decision to conduct further inquiries, and would have
probably refused to issue a non-medical insurance policy or, at the very least, required a higher
premium for the same coverage. The materiality of the information withheld does not depend
on Jaime Canilang’s state of mind or on actual events that occurred. Instead, it is judged
objectively based on the probable and reasonable influence the concealed facts would have had
on the insurer’s decision to assess the risk involved in making or omitting to make further
inquiries and in accepting the application for insurance; that "probable and reasonable
influence of the facts" concealed must, of course, be determined objectively, by the judge
ultimately.

Under Section 27 of the Insurance Code of 1978, provides that, “A concealment whether
intentional or unintentional entitles the injured party to rescind a contract of insurance.” Thus,
proof of intent is not required. The Court rejected the Insurance Commissioner’s view that
deleting the phrase “whether intentional or unintentional” from the 1978 Insurance Code meant
only intentional concealment could justify rescinding a policy. It explained that the phrase was
superfluous, and the law has always covered any concealment, regardless of intent. The
restoration in 1985 by B.P. Blg. 874 of the phrase "whether intentional or unintentional"
merely underscored the fact that all throughout (from 1914 to 1985), the statute did not require
proof that concealment must be "intentional" in order to authorize rescission by the injured
party.

In this case, however, the Court noted that the concealment was likely intentional, as Jaime
Canilang could not have been unaware of his alarming heart condition and had consulted a
doctor twice in the two (2) months before applying for non-medical insurance.

page 25
 28. UCPB General Insurance Co., Inc. v. Frabelle Fishing Corp.

G.R. No. 252785 05 July 2023

Topic: Concealment Prepared by: PACLIBARE, Clarence Ayessa O.

3E

DOCTRINE: Concealment is when there is a neglect to communicate that which a party

knows and ought to communicate. However, the right to rescind is not automatic and the party
entitled to it may either enforce or waive the right to rescind the contract. The failure of the
party entitled to exercise such right before an action on the contract was commenced will make
such party to be estopped from rescinding or revoking the insurance policy.

FACTS:
Petitioner UCPB General Insurance Company, Inc. (UCPB Gen) issued a marine hull policy in
favor of Frabelle Fishing Corporation (Frabelle), respondent, a corporation engaged in
domestic and international deep-sea fishing and domestic and overseas shipping. The marine
hull policy provides insurance coverage for Frabelle’s several fishing vessels including APPLE
BLOSSOM 888. The policy was valid for a period of one year from November 14, 2012 to
November 14, 2013.. Sometime in September 2013, just a few months before the expiration of
the original insurance policy, Frabelle transferred ownership of APPLE BLOSSOM 888 to
FFC Subic. After the expiration of the policy, Frabelle renewed the policy providing insurance
coverage for the same fishing vessels from November 14, 2013 to November 14, 2014. Also,
the marine hull policy includes a "Disclosure Obligation" provision which states that:

"Failure by the assured to disclose all material information to insurers of misrepresentation of

any material information whether deliberately or innocently prior to attachment of the policy
shall entitle insurers to treat this policy as void from inception at underwriter's discretion.
Furthermore, the assured and assured's insurance agent shall be under a continuing duty to
disclose any material change in circumstance throughout the currency of this policy and
failure to do so shall similarly entitle underwriters to treat this policy as void from inception
arising hereunder.”

Within the period covered by the renewal policy, Frabelle through its insurance broker,
Winebrenner & Iñigo Insurance Brokers, Inc., informed UCPB Gen that its vessel, APPLE
BLOSSOM 888, capsized and sank on February 04, 2014 while on dry-dock at the shipyard
Tsuneishi Heavy Industries (Cebu), Inc. (Tsuneishi). The same day, Frabelle served its claim
letter to Tsuneishi holding it liable for the loss of APPLE BLOSSOM 888. UCPB Gen paid
Frabelle the amount US$2,050,000.00. By right of subrogation, UCPB Gen sent a letter to
Tsuneishi asking for reimbursement. Tsuneishi replied that a Compromise Agreement has been
reached between it and FFC SUBIC without recourse. After the loss of the vessel, UCPB
issued an endorsement to Frabelle correcting the insured’s name for APPLE BLOSSOM 888
and acknowledging continued liability under the policy.

UCPB Gen sought confirmation from Frabelle regarding the Compromise Agreement entered

page 26
 28. UCPB General Insurance Co., Inc. v. Frabelle Fishing Corp.

G.R. No. 252785 05 July 2023

Topic: Concealment Prepared by: PACLIBARE, Clarence Ayessa O.

3E

into between Tsuneishi and FFC Subic/Frabelle. Frabelle replied, confirming the settlement
agreement with Tsuneishi. It claimed that the settlement was reached to maintain good
business relations; not to compensate for the damage sustained by the vessel but to answer for
other losses suffered. As such UCPB Gen sent a demand letter to Frabelle for the return of the
insurance proceeds. Afterwards, UCPB Gen received a copy of the Certificate of Ownership
issued by the Maritime Industry Authority (MARINA) indicating that as of September 05,
2013 Frabelle no longer owned APPLE BLOSSOM 888, and that FFC Subic is its new owner.

UCPB Gen filed a Complaint to the RTC to recover the amount paid to Frabelle due to the
fraudulent and deceptive acts of Frabelle that breached the "Disclosure Obligations" provision
of the policy when it was not informed about the transfer of ownership of APPLE BLOSSOM
888 which should have avoided recovery under the marine hull policy. However, Frabelle
claimed that it never concealed the transfer of ownership of APPLE BLOSSOM 888. The
RTC ruled in favor of Frabelle ruling that there was no concealment on the part of Frabelle as
evidenced by the documents and correspondences made by UCPB Gen to Frabelle. The same
decision was affirmed by the CA. Hence, this petition.

ISSUE : Whether Frabelle is guilty of concealment under the insurance code when it did not
disclose the transfer of ownership of APPLE BLOSSOM 888 to FFC Subic Seafoods
Corporation.

RULING: YES, the Court ruled that Frabelle is guilty of concealment. Under Section 26 of
the Insurance Code, concealment is when there is a neglect to communicate that which a party
knows and ought to communicate. Hence, the failure of Frabelle to disclose the transfer of
ownership of APPLE BLOSSOM 888 to FFC Subic Seafoods Corporation to UCPB Gen. is
considered concealment under the Insurance Code. Moreover, such failure violated the
“Disclosure Obligations” provided in the policy. As a consequence of such concealment,
Section 27 of the Insurance Code provides that a concealment whether intentional or
unintentional entitles the injured party to rescind the contract. However, the Court ruled that
the right to rescind is not automatic and the party entitled to it may either enforce or waive the
right to rescind the contract. In this case, UCPB Gen became aware of the transfer of
ownership, but instead of rescinding the policy, UCPB Gen issued an Endorsement, correcting
the insured's name for APPLE BLOSSOM 888 and even acknowledging its continued liability
under the renewed policy. Therefore, notwithstanding the concealment and the violation to the
"Disclosure Obligation" of Frabelle, UCPB Gen is deemed estopped from rescinding or
revoking the marine hull insurance policy because of its failure to exercise its right to rescind
before an action on the contract was commenced. Hence it must suffer the consequences of its
inaction.

page 27
 31. LOYOLA LIFE PLANS, INC. v. ATR PROFESSIONAL LIFE
ASSURANCE CORP.

GR Nos. 228402 & 222912 August 26, 2020

Topic: Warranties Prepared by: PINGUL, Allyssa Joye C. (3D)

DOCTRINE: Once the insurance contract is perfected and the premium is paid, the insurer
warrants coverage for risks stated in the policy.

FACTS: Loyola Life Plans, Inc. engaged in pre-need memorial and pension contracts, secured
insurance coverage through a Group Creditors Life Insurance Agreement (Master Policy No.
GCL-878) with ATR Professional Life Assurance Corporation, effective June 15, 1999.

On April 28, 2000, Dwight L. Lumiqued purchased a Timeplan from Loyola and paid the
initial monthly installment of ₱5,040, comprising two Metrobank checks totaling ₱3,424.75
and ₱1,615.25 in cash. Loyola’s agent issued an Official Receipt marked “valid for
downpayment only” and handed over a pre-signed Timeplan contract. The checks were
deposited on the same day, while the cash was deposited on May 2, 2000.

Tragically, Dwight died of multiple stab wounds on May 1, 2000. His widow, Angelita D.
Lumiqued, filed a claim for the insurance proceeds, which ATR denied, citing incomplete
premium payment and alleged forgery of Dwight’s signature. ATR then filed suit to void
Dwight’s coverage. In response, Loyola and Angelita counterclaimed for ₱1,809,360 in actual
damages—covering benefits under the Group Creditors Life Insurance, Group Yearly
Renewable Term Life, and Accidental Death Benefit—along with moral and exemplary
damages, attorney’s fees, and costs.

The RTC dismissed ATR’s complaint and granted Loyola and Angelita the full counterclaim.
The CA partially affirmed the decision, awarding only ₱992,000 in plan benefits and striking
out the damages and fees. Both parties subsequently elevated the case to the SC.

ISSUE: Did ATR Professional Life Assurance Corp. breach its warranty under the Group
Creditors Life Insurance Agreement by denying coverage despite partial payment made to its
agent, Loyola?

RULING: Yes. SC ruled:

“ATR undertook to insure Loyola's planholders upon the fulfillment of any of the
instances enumerated in the ‘Date of Effectivity of Individual Insurance’ clause of
Master Policy No. GCL-878”.

“Customers who intend to avail the Timeplan of Loyola do not transact with ATR
and merely submit all the requirements, including the payment of premiums, to

page 28
 Loyola. As such, it is apparent that Loyola acted as agent of ATR with respect to
the insurance feature of its Timeplan product”.

“The acts of Loyola, as an agent of ATR, binds the latter. The effectivity of the
Timeplan cannot be left to the will of Loyola and ATR”.

“Therefore, a planholder's payment made to Loyola has the same legal effect as
payment made to ATR, even if Loyola failed to immediately deposit the cash
payment to its account”.

These affirm that ATR was bound by its warranty of coverage once payment was made to its
agent, Loyola, and could not deny liability based on internal delays or technicalities.

page 29
 32. Platinum Group Metals Corp. v.
Mercantile Insurance Co., Inc.

G.R. No. 253716 July 10, 2023

Topic: Warranties Prepared by: PIÑERA, Audrey B. (3D)

DOCTRINE: As long as the fact of loss has been proved, the burden would lie upon the
insurer to prove that the cause of loss falls within the excepted perils stated in the policy.

FACTS: Petitioner PGMC obtained an Insurance Policy from respondent Mercantile, covering
100 brand new units of Sinotruck Howo 6x4 Tipper LHD Model No. ZZ3257M3241 (insured
trucks) against all risks of physical loss or damage due to external causes. On October 3, 2011,
at least 300 armed persons who identified themselves as members of the Communist Party of
the Philippines/New People’s Army/Nationalist Democratic Front (CNN) simultaneously
raided and seized control of three mining companies in the Municipality of Claver, Surigao del
Norte, one of which was PGMC’s mine site where PGMC employees were held hostage as
CNN members denounced PGMC’s purported destruction of the environment and its refusal to
pay revolutionary taxes while airing other grievances. Further, CNN members blamed the
officials of the Philippine Government for supposedly allowing foreign investors to operate
large-scale mining industries in Surigao del Norte, and PGMC employees for the progress of
the mining operations. Thereafter, CNN members fired shots at and burned PGMC’s facilities,
equipment, and vehicles; among those destroyed and deemed totally lost were 89 of the insured
trucks (damaged trucks).

PGMC requested Penta Insurance Broker Services, as its insurance broker, to send an
insurance adjuster to its mine site at Claver, Surigao del Norte regarding the October 3 incident
and to assist the same on its claim against Mercantile under the Insurance Policy. More than 9
months had already lapsed since the incident yet PGMC has not received any report on its
pending claim. Thus, PGMC made a final demand upon Penta and Mercantile to remit the
proceeds of the insurance claim.

Mercantile denied PGMC’s claim under the Insurance Policy, stating that the destruction of the
insured trucks was caused by riot and civil commotion, both of which are excluded risks.
Mercantile also stated that insurrection and/or rebellion, which are also excluded risks, may
also qualify as the proximate cause of the losses sustained by PGMC.

ISSUE : Did Mercantile breach its obligation under the Insurance Policy?

RULING: NO.

As to WON PGMC has insurable interest. In property insurance, one’s interest is determined
not by concept of title, but by possession of a substantial economic interest in the property.
Here, PGMC had an actual and substantial economic interest in the damaged trucks. It is

page 30
undisputed that PGMC was in physical possession of the damaged trucks when the attack took
place as they were being used in its day-to-day business. Thus, PGMC stood to benefit from
their continued existence, and stood to suffer loss from their destruction.

As to WON Mercantile is liable under the Insurance Policy. An all-risk policy insurance is
one which insures against all causes of conceivable loss or damage, except as otherwise
excluded in the policy or due to fraud or intentional misconduct on the part of the insured. As
long as the fact of loss has been proved, the burden would lie upon the insurer to prove that the
cause of loss falls within the excepted perils stated in the policy. Here, while the Insurance
Policy was denominated as “Special Risks Policy,” its provisions would reveal that it is an all-
risk policy. The fact of damage to the insured trucks having been proved, it is now incumbent
upon Mercantile to prove that the loss of, or damage to, the trucks fall under the excepted
perils enumerated in the Insurance Policy.

First, three mining companies in the Municipality of Claver, Surigao del Norte, including
PGMC, were simultaneously raided and eventually controlled by armed individuals. Second, it
was established that the attack on PGMC’s mine site was for a political purpose or impelled by
a political motive. Third, the attack was violent, the attackers having fired shots at and burned
PGMC’s facilities, equipment, and vehicles. Mercantile has discharged its burden by proving
that the destruction of the insured trucks was caused by an excepted peril, that is insurrection
and/or rebellion, under the Insurance Policy.

page 31
 38. PHILAMCARE HEALTH SYSTEMS INC. VS COURT OF APPEALS
AND TRINOS

G.R. NO. 125678 MARCH 18, 2002

Topic: Incontestability Clause Prepared by: VILLENA, Nina Alexandria R.

(3E)

DOCTRINE: After the incontestability clause period lapses, coverage becomes irreversible for
the parties. Furthermore, vague provisions are to be construed liberally in favor of the policy
holder and against the the insurance company

FACTS: Ermani Trinos, the deceased husband of respondent, applied for healthcare coverage
with the petitioner. Such was approved and he was eligible for hospitalization benefits
including ordinary and emergency. He was also entitled for out-patient benefits (annual
physical exams, preventive health care, etc.). After the termination of such, it was extended for
another year and the coverage was expanded to P75,000 per disability.
Ermani had a heart attack and was confined. Respondent Julita Trinos claimed the benefits
of the health care agreement but was denied since petitioner argued that it was void. Petitioner,
moreover,

ISSUE : (ANSWERABLE BY YES OR NO)

RULE: if you will use Whether format - do not put “or not” na.

Example : Whether the petitioner is the insured?

RULING: (NO. One sentence direct response to the issue)

Ex: NO. The petitioner Vice Ganda is not the insured.

page 32
 39. SUN LIFE OF CANADA (PHILIPPINES), INC. v. SIBYA

G.R. No. 211212 June 08, 2016

Topic: Incontestability Clause Prepared by: YUSON, Rosalinda R. (3E)

DOCTRINE: After the lapse of the two-year period, 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.

FACTS: On January 10, 2001, Atty. Jesus Sibya, Jr. applied for life insurance with Sun Life of
Canada (Philippines), Inc. In his insurance application, he indicated that he had sought advice
for kidney problems. On February 5, 2001, Sun Life approved the application and issued
Insurance Policy No. 031097335. In the policy, the respondents were indicated as beneficiaries
and entitled them to a death benefit of PHP1,000,000.00 should Atty. Sibya, Jr. die on or
before February 5, 2021, or a sum of money if Atty. Sibya, Jr. is still alive on the endowment
date.

On May, 11, 2001, or three months after the insurance policy was issued, Atty. Sibya, Jr. died
of a gunshot wound. Ma. Daisy, one of the beneficiaries filed a Claimant’s Statement with Sun
Life to seek the death benefits indicated in the insurance policy. However, Sun Life denied the
claim on the ground that the details on Atty. Sibya, Jr. 's medical history was not disclosed in
his application. Instead, it issued a check which represented the refund of the premium paid by
Atty. Sibya, Jr. Later on, Sun Life initiated a complaint with the Regional Trial Court praying
for the rescission of Atty. Sibya, Jr.’s insurance policy. Sun Life alleged that Atty. Sibya, Jr.
did not disclose in his insurance application about his previous medical treatment at the
National Kidney Transplant Institute in 1994. According to the Corporation, the undisclosed
fact suggested that the insured was in “renal failure” and at a high risk medical condition. Had
it known such a fact, it would not have issued the insurance policy to Atty. Sibya. Jr.

The respondents for their part claim that Atty. Sibya, Jr. did not commit any misrepresentation
in his insurance application since, the latter stated in said application that sought advice for
kidney problems and even authorized Sun Life to inquire further into his medical history for
verification purposes.

ISSUE : Whether the death of Atty. Jesus Sibya, Jr. rendered the right of Sun Life of Canada
(Philippines), Inc. to rescind the insurance policy nugatory.

page 33
 39. SUN LIFE OF CANADA (PHILIPPINES), INC. v. SIBYA

G.R. No. 211212 June 08, 2016

Topic: Incontestability Clause Prepared by: YUSON, Rosalinda R. (3E)

RULING: YES, the Supreme Court held that the right of Sun Life of Canada (Philippines),
Inc. to rescind the contract became nugatory upon the death of Atty. Sibya, Jr. In the case of
Manila Bankers Life Insurance Corporation vs. Aban, the Supreme Court ruled that if the
insured died within the two-year contestability period, the insurer is bound to make good of its
obligation under the policy, regardless of the presence or lack of concealment or
misrepresentation.

The high Court explained that Section 48 of the Insurance Code served a noble purpose since it
regulates the actions of both the insurer and the insured. Under the said provision, the insurer is
given a period of two years from the effectivity of the insurance contract and while the insured
is still 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 its agent. After the lapse of
the two-year period, 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 the insurance fraud must be awarded, but that insurers who recklessly
and indiscriminately solicit and obtain business must be penalized for such recklessness.

In the cast at bench, Sun Life issued an insurance policy to Atty. Sibya, Jr. on February 5,
2001, which means that it has two years from said issuance to investigate and verify whether
the policy was obtained by fraud, concealment, or misrepresentation. However upon the death
of Atty Sibya, Jr. three months from the date of issuance of the policy, or on May 11, 2001
from gunshot wounds, the Court held that Sun Life lost its right to rescind the same. As
discussed in the case of Manila Bankers, the death of the insured within the two-year period
rendered the right of the insurer, in this case Sun Life, to rescind the policy nugatory. As such
the period of incontestability would have set in.

Assuming that the incontestability period has not yet set in, the Court likewise agreed with the
Court of Appeals that Sun Life failed to prove that Atty. Sibya, Jr. committed and
misrepresentation for the reason that he had disclosed in his application about his medical
treatment for kidney ailment.

page 34
40. Bernardo Argente v. West Coast Life Insurance Company

G.R. No. 28499 March 19, 1928

Topic: Defenses of Insured Against Prepared by: ABAOAG, Jenalyn T. (3D)

Revocation

DOCTRINE:

FACTS:

ISSUE : (ANSWERABLE BY YES OR NO)

RULING:

44. Alpha Plus Intl. v. Phil. Charter Ins. Corp. (PCIC)

G.R. No. 203756 February 10, 2021

Topic: Prescription, Claims Settlement and Prepared by: BARTE, Diana N. (3D)
Subrogation

DOCTRINE: Prescription is a ground for the dismissal of a complaint without going into trial
on the merits. Prescription is based on a fixed time and is concerned with the fact of delay.
When it appears from the pleadings or the evidence on record that an action is barred by
prescription, the court is mandated to dismiss the same.

FACTS: Petitioner Alpha Plus International Enterprises Corporation, a company engaged in

optical media business, obtained two fire insurance policies from respondent PCIC covering
the period of June 9, 2007 to June 9, 2008. On February 24, 2008, petitioner's warehouse was
gutted by fire destroying its equipment and pieces of machinery stored therein. Thus, it sought
to recover from its insurance policies with the PCIC but its claim was denied in a letter dated
January 22, 2009, a copy of which was received by petitioner on January 24, 2009. The parties
exchanged clarification and reply letters but they failed to arrive at a settlement. Thus, on
January 20, 2010, Alpha Plus filed a Complaint before the RTC against respondent PCIC and
its officers for Specific Performance, Collection of Sum of Money and Damages. Respondents

page 35
averred that petitioner's insurance claim is already barred by prescription based on Condition
No. 27 of the fire insurance policies.
Arguments:
Petitioner contends that the appellate court erred in holding that its complaint filed before the
RTC had already been prescribed. Petitioner insists that the prescriptive period should have
been counted from the filing of its original complaint and not from the filing of the amended
complaint.

Respondents, riposte that the CA correctly reckoned the prescriptive period from the date of
filing of the Amended Complaint on February 9, 2010. Petitioner alleged in its Amended
Complaint the amount of P300 million as its insurance claim against respondents. In its
original complaint, petitioner merely paid the measly sum of P42,545.00 as docket fees, and it
was only upon the filing of the amended complaint that Alpha Plus paid additional docket fees.
Thus, the prescriptive period has not been interrupted by the filing of petitioner's original
complaint considering that it raised the additional claim of P300 million in its Amended
Complaint. Petitioner received the notice denying its insurance claim on January 24, 2009,
hence it had until January 24, 2010 within which to bring a court action. In this case, the
petitioner's amended complaint was only filed on February 9, 2010 which clearly shows that its
action had already prescribed.

ISSUE : Whether CA erred in ordering the dismissal of petitioner's complaint on the ground of
prescription. – NO.

RULING: NO, CA did not err in rendering its assailed Decision and Resolution. The petition
is bereft of merit.
In the present case, We agree with the CA's finding that petitioner's insurance claim had
already prescribed and that the RTC should dismiss the complaint before it based on said
ground. Nonetheless, We differ with the appellate court in the computation of the prescriptive
period. Instead of the 360-day period used by the CA in computing whether or not petitioner's
action has already been prescribed, We find that the 365-day period should be utilized instead.

To determine the prescription of the subject insurance claim, Article 63 of the Insurance Code
as well as Condition No. 27 of the two fire insurance policies should be considered. Section 63
of the Insurance Code states that: Sec. 63. A condition, stipulation or agreement in any policy
of insurance, limiting the time for commencing an action thereunder to a period of less than
one year from the time when the cause of action accrues, is void.

On the other hand, Condition No. 27 of the parties' fire insurance policies provides: 27. Action
or suit clause — If a claim be made and rejected and an action or suit be not commenced either
in the Insurance Commission or any court of competent jurisdiction within 12 months from
receipt of notice of such rejection , or in case of arbitration taking place as provided herein,
within 12 months after due notice of the award made by the arbitrator or arbitrators or umpire,
then the claim shall for all purposes be deemed to have been abandoned and shall not thereafter

page 36
be recoverable hereunder.

Thus, contrary to the finding of the appellate court that the 12-month period should mean 360
days, We hold that the 12-month period in Condition No. 27 of the parties' fire insurance
policies should refer to the period of one (1) year, or 365 days, in line with Section 63 of the
Insurance Code and prevailing jurisprudence. This is also consistent with Article 13 of the
Civil Code which provides that when the law speaks of a year, it is understood to be equivalent
to 365 days.

In the instant case, Condition No. 27 of the parties' fire insurance policies to be considered as
an integral part of their agreement and compliance therewith is a condition precedent to
petitioner's right to recover on the insurance policy that it secured from the respondents.

It is settled that respondents' rejection of petitioner's claim was embodied in a Letter dated
January 22, 2009, copy of which was received by petitioner on January 24, 2009. Hence, in
accordance with the parties' Condition No. 27 of their f ire insurance policies, the prescriptive
period should be reckoned from petitioner's receipt of the notice of rejection, specifically on
January 24, 2009. One (1) year or 365 days from January 24, 2009 would show that petitioner's
prescriptive period to file its insurance claim ends on January 24, 2010.

Based on the records, petitioner Alpha Plus filed its original Complaint on January 20, 2010.
Subsequently, it filed an Amended Complaint on February 9, 2010. Petitioner posits that its
action has not yet prescribed and that the suit is deemed to have been commenced on the date
that the original complaint was filed on January 20, 2010. We do not agree.

Also, as the Amended Complaint superseded the original complaint of petitioner, the suit of the
latter is deemed to have been commenced on the date of filing of the Amended Complaint on
February 9, 2010. During this time, prescription had already set in as petitioner had only until
January 24, 2010 within which to file its insurance claim. In sum, We agree with the appellate
court as to its ruling that petitioner's Amended Complaint should have been dismissed by the
RTC on the ground of prescription. No hearing by the RTC was even needed thereon since it
could determine the fact of prescription by simply looking at the date of filing of the
complaints.

From the foregoing disquisition, We find that the appellate court did not err in rendering its
assailed Decision and Resolution. WHEREFORE, the Petition for Review on Certiorari is
DENIED.

48. 2100 Customs Brokers, Inc. v. Philam Insurance Company, Inc.

G.R. No. 223377 June 10, 2020

page 37
 Marine Insurance COLORGE, John Dave C. (3E)

DOCTRINE: The scope of marine insurance includes inland marine insurance and covers
over the land transportation perils of property shipped by airplanes.

FACTS: TSPIC notified 2300 CBI that their shipment from Ablestik Laboratories had arrived
in NAIA at 2:47 P.M. on March 1, 2001. The goods were insured by Philam Insurance
Company (Philam) against all risks per Marine Cargo Certificate and Open Policy Number
9595292. TSPIC allegedly forwarded to 2100 CBI the packing list from Ablestik with
instructions of:

“SHIPMENTS CONTAINING DRY ICE ARE PERISHABLE AND MUST DELIVER TO

OUR CUSTOMER WITHIN 72 HOURS. DO NOT DELAY.”

“Frozen products must maintain temperatures of-40F.

If transit is to be longer than 72 hours total shipment
must be re-iced in transit or at broker's import
destination, depending on flight schedule.
Shipment must be stored upon arrival in destination
broker's freezer with temperatures of 32F or colder.”

Before the shipment can be discharged from the custody of the Bureau of Customs, the freight
charges must be paid. TSPIC informed 2100 CBI that the latter will have to advance the
necessary funds for the freight charges in the amount of P14, 672.00. However, since it was
already past 3 p.m. on a Friday, the banks were already closed, and there were no available
signatories to sign the checks, the freight charges were only settled on March 5, 2001.

At around 2:00 A.M. on March 6, 2001, 2100 CBI delivered the cargo to TSPIC wherein the
latter found that the dry ice stuffed inside had melted due to delay in delivery as shown in the
Damage Report and photographs taken by the Manila Adjusters Surveyors Company. TSPIC
filed a claim for recovery of the value of the goods against Philam. Philam paid the insurance
claim of TSPIC.

Philam filed a claim for reimbursement against 2100 CBI. The MeTC ruled that 2100 CBI, as a
common carrier, is mandated by law to exercise extraordinary diligence in handling the
shipment. 2100 CBI failed to adduce evidence that it exerted extraordinary diligence to prevent
the damage of the shipment. The RTC affirmed the MeTC decision. The CA affirmed the RTC
decision.

2100 CBI argues that it was incumbent upon Philam to show that the alleged damage was
within the coverage of the insurance with TSPIC named “Marine Cargo Certificate”. 2100 CBI
alleged that the insurance only covers goods transported by sea and even if the same covers
goods by air, the specific goods must be proven to be shown within the scope of coverage.

page 38
ISSUE : Whether a Marine Cargo Certificate may include goods transported by air.

RULING: Yes. A Marine Cargo Certificate may include goods transported by air.

Section 101(a)(2) of Republic Act No. (R.A). 10607 states: Sec. 101. Marine Insurance
includes:

(a) Insurance against loss of or damage to:

xxxx

2) Person or property in connection with or appertaining to a

marine, inland marine, transit or transportation insurance, including liability
for loss of or damage arising out of or in connection with the construction,
repair, operation, maintenance or use of the subject matter of such insurance
(but not including life insurance or surety bonds nor insurance against loss by
reason of bodily injury to any person arising out of ownership, maintenance, or
use of automobiles);

Thus, the scope of marine insurance includes inland marine insurance and covers over the land
transportation perils of property shipped by airplanes. 2100 CBI is mistaken. Simply because
the word "marine" was used in Marine Cargo Certificate does not mean that TSPIC availed the
wrong insurance policy for its cargo transported through airplane.

52. FINMAN VS. COURT OF APPEALS

G.R. No. 100970 September 2, 1992

Topic: Life Insurance Prepared by: FAJARDO, Elijah Christiane M.

DOCTRINE: An insurance upon life may be made payable on the death of the person, or on
his surviving a specified period, or otherwise contingently on the continuance or cessation of
life. The generally accepted rule is that, death or injury does not result from accident/accidental
means within the terms of an accident policy if it is the natural result of the insured’s
voluntary act.

FACTS:
Carlie Surposa was insured with Finman, with his parents, spouse, and brothers as his
beneficiaries. On October 18, 1988, Carlie died after being stabbed by one of three unidentified
men without provocation

Finman denied liability to pay the insurance proceeds on the ground that murder and assault are

page 39
 52. FINMAN VS. COURT OF APPEALS

G.R. No. 100970 September 2, 1992

Topic: Life Insurance Prepared by: FAJARDO, Elijah Christiane M.

not within the scope of the coverage of the insurance policy.

Private respondent, the deceased wife Julia Surposa filed a complaint with the Insurance
Commission which subsequently rendered a decision.

The Insurance Commission found Finman liable to pay the complainant. The appellate
court affirmed the said decision, leading the petitioner to file a petition alleging grave abuse
of discretion of the appellate court. According to Finman, death by murder or assault are
impliedly excluded in said insurance policy considering that the cause of death was not
accidental but a deliberate act of the assailant.

ISSUE : Whether death resulting from murder and/or assault is deemed included in the term
‘accident,’ therefore covered under the personal accident insurance policy

RULING: Yes, death resulting from murder or assault is covered under the personal accident
insurance policy in this case.

The Supreme Court rejected the claim of Finman in its interpretation of the term ‘accident.’ The Court
said that ‘accident,’ as used in insuence contracts, does not have a technical meaning, and is
construed in its ordinary and common acceptation. It then defined an accident as an event that takes
palce without one’s foresign or expectation—an event that proceeds from an unknown cause, or is an
unusual effect of a known cause, and therefore, not expected.

Applying the said definition in this case, the Supreme Court held that while Carlie’s cause of death
was, in fact, due to the deliberate acts of the assailant, what happened was still an accident in the part
of the victim. Here, the insured died from an event that took place without his foresight.

54. Sun Insurance Office, Ltd. v. The Hon. Court of Appeals and Nerissa
Lim

G.R. No. 92383 July 17, 1992

Topic: Casualty Insurance and Compulsory Prepared by: FLORES, Mylen S. (3E)
Third Party Liability Insurance

DOCTRINE: In insurance law, accident and accidental refer to events that occur by chance,
without intention, and are unexpected or unforeseen, whether arising without human agency or
through human action whose outcome was not anticipated. Negligence by the insured does not

page 40
bar recovery unless expressly excluded in the policy. In the absence of such exclusion, the
insurer remains liable, and insurance contracts are to be interpreted liberally in favor of the
insured, with exclusions strictly construed against the insurer.

FACTS: Sun Insurance Office, Ltd, petitioner, issued to Felix Lim a Personal Accident Policy
with a face value of P 200, 000. 00. Two months later, he was dead with a bullet wound in his
head. As beneficiary, his wife Nerissa Lim sought payment on the policy but her claim was
rejected. The petitioner agreed that there was no suicide. It argued, however, that there was no
accident either.

The only eyewitness Pilar Nalagon, Lim’s secretary, testified that after a family party, Lim, in
a happy but not drunk, played with his handgun after removing the magazine. He pointed it at
her, then at his temple, assuring it was unloaded. The gun fired, killing him instantly.

Nerissa Lim, respondent, sued the petitioner in the Regional Trial Court of Zamboanga City
and was sustained. The petitioner was sentenced to pay her P200,000.00, representing the face
value of the policy. The petitioner then came to this Court to fault the Court of Appeals for
approving the payment of the claim and the award of damages.

ISSUE :Whether Sun Insurance be absolved from liability on the ground that Felix Lim
wilfully exposed himself to needless peril.

RULING: NO. The Supreme Court ruled that Sun Insurance Office, Ltd., cannot be absolved
from the liability.

The Supreme Court in ruling the case interpreted the words accident and accidental, according
to it, in insurance law, accident and accidental are interpreted in their ordinary sense as events
occurring by chance, without intention, and which are unexpected, unusual, and unforeseen.
An accident may occur without human agency, or through human action if the outcome is not
anticipated by the person involved. It is also defined as an injury caused by violence or
casualty without the person’s design, consent, or voluntary cooperation. Applying these
definitions, the Court held that Lim’s death was accidental. Although Lim deliberately handled
the gun, the firing was an additional, unexpected, independent, and unforeseen event that
directly caused his death.

The Supreme Court explained that Lim was unquestionably negligent and that negligence cost
him his own life. But it should not prevent his widow from recovering from the insurance
policy he obtained precisely against the accident. There is nothing in the policy that relieves
the insurer of the responsibility to pay the indemnity agreed upon if the insured is shown to
have contributed to his own accident. Indeed, most accidents are caused by negligence. There
are only four exceptions expressly made in the contract to relieve the insurer from liability, and
none of these exceptions is applicable in the case at bar.

The Supreme Court furtherly said that it bears noting that insurance contracts are as a rule

page 41
supposed to be interpreted liberally in favor of the assured. There is no reason to deviate from
this rule, especially in view of the circumstances of this case as analyzed above.
none of these exceptions is applicable in the case at bar.

55. SIMON DE LA CRUZ vs. THE CAPITAL INSURANCE AND SURETY CO., INC.

G.R. No. L-21547 June 30, 1966

Topic: Casualty Insurance and Compulsory Prepared by: KIWAH KO, Karl Ryan T.
Third Party Liability Insurance (3E)
(Sec. 176 & 386 402, IC)

DOCTRINE:
An injury or death is considered caused by accidental means if it results from an
unforeseen or unexpected event, even if the insured voluntarily engaged in the activity. Under
Section 176 of the Insurance Code, casualty insurance includes coverage for accidents. The
insurer must honor claims unless the event falls under explicit exclusions. Section 402,
exclusion clauses must be clear and specific. Ambiguities are construed against the insurer.

FACTS:
Eduardo De La Cruz, employed as a mucker at Itogon-Suyoc Mines, Inc., held an accident
insurance policy issued by Capital Insurance and Surety Co., Inc. The policy covered death or
disability caused by accidental means and was valid from November 13, 1956 to November 12,
1957.

On January 1, 1957, during a New Year celebration sponsored by his employer, Eduardo
participated in a non-professional boxing contest. During the match, he slipped unintentionally,
and his opponent landed a blow on the back of his head, causing him to fall and hit the ropes.
He was hospitalized and later died due to intracranial hemorrhage.

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55. SIMON DE LA CRUZ vs. THE CAPITAL INSURANCE AND SURETY CO., INC.

G.R. No. L-21547 June 30, 1966

Topic: Casualty Insurance and Compulsory Prepared by: KIWAH KO, Karl Ryan T.
Third Party Liability Insurance (3E)
(Sec. 176 & 386 402, IC)

Simon De La Cruz, Eduardo’s father and named beneficiary, filed a claim for indemnity
under the policy. The insurance company denied the claim, arguing that Eduardo’s voluntary
participation in the boxing match meant his death was not caused by accidental means, and
thus not covered by the policy.

Simon filed a case for specific performance in the Court of First Instance of Pangasinan,
which ruled in his favor. The insurance company appealed to the Supreme Court.

ISSUE:
1. Whether Eduardo’s death was caused by “accidental means” as defined in the
insurance policy.

2. Whether Capital Insurance is liable under the casualty insurance policy despite
Eduardo’s voluntary participation in the boxing match.

3. Whether the exclusion clause in the policy covers death resulting from boxing
contests.

RULING:
Yes, Eduardo’s death was caused by “accidental means” as defined in the insurance policy.

The Court clarified that the terms “accident” and “accidental means” are construed in their
ordinary and common acceptation, meaning unintentional, unforeseen, and unexpected
events. The Court rejected the insurer’s narrow interpretation that only the “means” must be
accidental.

Yes, the Capital Insurance is liable under the casualty insurance policy despite Edwardo’s
voluntary participation in the boxing match.

The Court said that although Eduardo voluntarily participated in the boxing match, the injury
was sustained when he slid, giving occasion to the infliction by his opponent of the blow that
threw him to the ropes of the ring. Without this unfortunate incident, that is, the unintentional
slipping of the deceased, perhaps he could not have received that blow in the head and would
not have died.

Yes, the exclusion clause in the policy covers death resulting from boxing.

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55. SIMON DE LA CRUZ vs. THE CAPITAL INSURANCE AND SURETY CO., INC.

G.R. No. L-21547 June 30, 1966

Topic: Casualty Insurance and Compulsory Prepared by: KIWAH KO, Karl Ryan T.
Third Party Liability Insurance (3E)
(Sec. 176 & 386 402, IC)

The insurance policy explicitly excluded death or disablement from certain activities (e.g.,
football, hunting, motorcycling), but did not include boxing. The Court held that the failure
to exclude boxing indicated the insurer’s intent to cover such risks, and thus it could not
deny liability.

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