Gulf Resorts v.

Philippine Charter
Insurance Corporation
By: Nelly Louie Casabuena
 Petitioner Respondent
GULF RESORTS, INC. PHILIPPINE
CHARTER
INSURANCE
CORPORATION
FACTS:
● Plaintiff Gulf Resorts is the owner of the Plaza Resort situated at Agoo,
La Union and had its properties in said resort insured originally with the
American Home Assurance Company (AHAC).
● In the first 4 policies issued, the risks of loss from earthquake shock
was extended only to petitioner’s two swimming pools.
● Gulf Resorts agreed to insure with Phil Charter the properties covered by
the AHAC policy provided that the policy wording and rates in said
policy be copied in the policy to be issued by Phil Charter.
● Phil Charter issued Policy No. 31944 to Gulf Resorts covering the period
of March 14, 1990 to March 14, 1991 for P10,700,600.00 for a total
premium of P45,159.92. the break-down of premiums shows that Gulf
Resorts paid only P393.00 as premium against earthquake shock (ES).
FACTS:
● On July 16, 1990 an earthquake struck Central Luzon and Northern
Luzon and plaintiff’s properties covered by Policy No. 31944 issued
by defendant, including the two swimming pools in its Agoo Playa
Resort were damaged.
● Petitioner advised respondent that it would be making a claim under
its Insurance Policy 31944 for damages on its properties.
● Respondent denied petitioner’s claim on the ground that its insurance
policy only afforded earthquake shock coverage to the two
swimming pools of the resort.
● The trial court ruled in favor of respondent. In its ruling, the schedule
clearly shows that petitioner paid only a premium of P393.00 against the
peril of earthquake shock, the same premium it had paid against
earthquake shock only on the two swimming pools in all the policies
issued by AHAC.
Issue:

Whether or not the policy covers only the two

swimming pools owned by Gulf Resorts and
does not extend to all properties damaged
therein

YES.
RATIO:
● The insurance policy covers only the two swimming pools.
● It is basic that all the provisions of the insurance policy should be
examined and interpreted in consonance with each other.[25] All its
parts are reflective of the true intent of the parties. The policy cannot be
construed piecemeal. Certain stipulations cannot be segregated and then
made to control; neither do particular words or phrases necessarily
determine its character. Petitioner cannot focus on the earthquake shock
endorsement to the exclusion of the other provisions.
● All the provisions and riders, taken and interpreted together,
indubitably show the intention of the parties to extend earthquake
shock coverage to the two swimming pools only.
RATIO:
● A careful examination of the premium recapitulation will show that
it is the clear intent of the parties to extend earthquake shock
coverage only to the two swimming pools.
● Section 2(1) of the Insurance Code defines 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. Thus, 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.[26] (Emphasis
ours)
RATIO:
● In the subject policy, no premium payments were made with regard to
earthquake shock coverage, except on the two swimming pools. There
is no mention of any premium payable for the other resort properties
with regard to earthquake shock. This is consistent with the history of
petitioners previous insurance policies from AHAC-AIU.
● In sum, there is no ambiguity in the terms of the contract and its
riders. Petitioner cannot rely on the general rule that insurance
contracts are contracts of adhesion which should be liberally
construed in favor of the insured and strictly against the insurer
company which usually prepares it.[31]
RATIO:
● A contract of adhesion is one wherein a party, usually a corporation,
prepares the stipulations in the contract, while the other party merely
affixes his signature or his "adhesion" thereto. Through the years, the
courts have held that in these type of contracts, the parties do not bargain
on equal footing, the weaker party's participation being reduced to the
alternative to take it or leave it. Consequently, any ambiguity therein is
resolved against the insurer, or construed liberally in favor of the insured.
[33]
● The case law will show that this Court will only rule out blind adherence
to terms where facts and circumstances will show that they are basically
one-sided.[34]
RATIO:
● In Development Bank of the Philippines v. National Merchandising
Corporation, et al.,[35] the parties, who were acute businessmen of
experience, were presumed to have assented to the assailed documents
with full knowledge.
● We cannot apply the general rule on contracts of adhesion to the case at
bar. Petitioner cannot claim it did not know the provisions of the
policy. From the inception of the policy, petitioner had required the
respondent to copy verbatim the provisions and terms of its latest
insurance policy from AHAC-AIU.
INNOVATIONS

MERCURY VENUS SATURN

Mercury is the closest Venus is the second It’s composed of

planet to the Sun planet from the Sun hydrogen and helium
INNOVATIONS

NEPTUNE JUPITER SATURN

Neptune is the Jupiter is giant and It’s composed mostly

farthest planet the biggest planet of hydrogen and
from the Sun in the Solar System helium and has rings

MERCURY VENUS

Mercury is the closest Venus has a beautiful

planet to the Sun and name and is the
the smallest one second planet
QUALITY IMPROVEMENT MEASURES

MERCURY VENUS MARS

Mercury is the closest Venus is the second Despite being red, Mars
planet to the Sun planet from the Sun is actually a cold place

SATURN JUPITER NEPTUNE

It’s composed mostly of It’s the biggest planet It’s the farthest planet
hydrogen and helium in the Solar System from the Sun
TESTIMONIALS

“Despite being red, Mars “Mercury is the closest

is actually a cold place planet to the Sun and the
full of iron oxide dust” smallest one”

—FRED BLOGGS, 34 —HELENA

PATTERSON, 43
AWARDS

AWARD Mercury Mars Jupiter

YEAR 2004 2006 2018

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