64- United Merchants v Country Bankers

Facts:

United Merchants was a manufacturer and retailer of Christmas lights. It

insured (fire policy) its Christmas lights stored in the warehouse with

Country Bankers.

The warehouse was burned down hence United sought indemnity from

Country. Country rejected the claim on the ground of Condition 15 of the

policy which states that

“If the claim be in any respect fraudulent, or if any false declaration be

made or used in support thereof, or if any fraudulent means or devices are

used by the Insured or anyone acting in his behalf to obtain any benefit

under this Policy; or if the loss or damage be occasioned by the willful act,

or with the connivance of the Insured, all the benefits under this Policy shall

be forfeited”.

CBIC alleged that UMC’s claim was fraudulent because UMC’s Statement

of Inventory showed that it had no stocks in trade as of 31 December

1995, and that UMC’s suspicious purchases for the year 1996 did not even

amount to P25,000,000.00. UMC’s GIS and Financial Reports further

revealed that it had insufficient capital, which meant UMC could not afford

the allegedP50,000,000.00 worth of stocks in trade.

United answered back saying that they have a certificate from the Bureau

of Fire Protection which states that : “The Bureau further certifies that no

evidence was gathered to prove that the establishment was willfully,

feloniously and intentionally set on fire.”

Issue: Whether UMC is entitled to claim from CBIC the full coverage of its

fire insurance policy.

Held: No!

If loss is proved apparently within a contract of insurance, the burden is

upon the insurer to establish that the loss arose from a cause of loss which

is excepted or for which it is not liable, or from a cause which limits its

liability. In the present case, CBIC failed to discharge its primordial burden

of establishing that the damage or loss was caused by arson, a limitation in

the policy.

Nevertheless just because the defense failed to prove arson does not

mean that fraud does not exist. In fact, fraud exists in this case. The Court

ruled that the submission of false invoices to the adjusters establishes a

clear case of fraud and misrepresentation which voids the insurer’s liability

as per condition of the policy.

A fraudulent discrepancy between the actual loss and that claimed in the

proof of loss voids the insurance policy. Mere filing of such a claim will

exonerate the insurer. Considering that all the circumstances point to the

inevitable conclusion that UMC padded its claim and was guilty of fraud,

UMC violated Condition No. 15 of the Insurance Policy. Thus, UMC

forfeited whatever benefits it may be entitled under the Insurance Policy,

including its insurance claim.

BACHRACH v. BRITISH AMERICAN ASSURANCEG.R. No. L-5715  December 20, 1910

Lessons Applicable: Effect of Change of Interest in Thing Insured (Insurance)Laws Applicable:  

FACTS: E. M. Bachrach insured goods belonging to a general furniture store, such as iron and brass bedsteads, toilet tables, chairs, ice boxes, bureaus, washstands, mirrors, and sea-grass furniture stored in the ground floor and first story of house and dwelling with an authorized agent of the British American Assurance Company 

British American Assurance Company denied alleging that:property covered by the policy to H. W. Peabody & Co. to secure certain indebtedness due and owing to said companyinterest in certain of the goods covered by the said policy is trasnferred to Macke to secure certain obligations assumed by Macke and on behalf of Bachrachwillfully placed a gasoline can containing 10 gallons of gasoline close to the insured goodsmade no proof of the loss with the time required by the conditionRTC: British American Assurance Company liable to bACHRACH  ISSUE: W/N Bachrach can claim

HELD: YES. lower court affirmedkeeping of inflammable oils on the premises, though prohibited by the policy, does not void it if such keeping is incidental to the businessIt may be added that there was no provision in the policy prohibiting the keeping of paints and varnishes upon the premises where the insured property was stored. If the company intended to rely upon a condition of that character, it ought to have been plainly expressed in the policy.alienation clause - forfeiture if the interest in the property pass from the insuredthere is no alienation within the meaning of the insurance law until the mortgage acquires a right to take possession by default under the terms of the mortgage. No such right is claimed to have accrued in the case at bar, and the alienation clause is therefore inapplicable.we can not find that there is a preponderance of evidence showing that the plaintiff did actually set fire or cause fire to be set to the goods in questionIt does not positively appear of record that the automobile in question was not included in the other policies. It does appear that the automobile was saved and was considered as a part of the salvaged. It is alleged that the salvage amounted to P4,000, including the automobile. This amount (P4,000) was distributed among the different insurers and the amount of their responsibility was proportionately reduced. The defendant and appellant in the present case made no objection at any time in the lower court to that distribution of the salvage. The claim is now made for the first time. 

Ong Guan Can v. The Century Insurance Co. (46 PHIL. 592), December 2, 1924

FACTS:

PLAINTIFFS-APPELLEES: Ong Guan Can and the Bank of the Philippine Islands

DEFENDANT-APPELLANT:   The Century Insurance Co., LTD.

PONENTE: Villamor, J.

The plaintiff owned a building that was insured against fire by the defendant in the sum of Php 30,000, including the merchandise therein contained in the sum of Php 15,000. Both the house and merchandise insured were burned in February 28, 1923 while the policies issued by the defendant in favor of the plaintiff were still in force.

The CFI of Iloilo granted the case in favor of the plaintiff that The Century Insurance Co. should pay Ong Guan Can the sum of Php 45,000 as the total value of the insured house and merchandise. The Insurance Company appealed that the judgment be modified to permit it to rebuild the house and that they be relieved from the payment of the sum in which the building was insured.

ISSUE:

Whether the defendant-appellant can rebuild the house burnt as a sufficient idemnity to the inured for the actual loss suffered by him.

APPLICABLE LAW:

Article 1199:

A person alternatively bound by different prestations shall completely perform one of them.

The creditor cannot be compelled to receive part of one and part of the other undertaking. (1131)

HELD:

Yes. The defendant may build the house as an alternative prestation, freeing him from the payment of the sum in which the building was insured. This conclusion is in line with The Civil Code’s Article 1131.

Paying the sum in which the building was insured is one of the 2 prestations provided in one of the clauses stipulating the conditions of the policies. Based on the same Article of the Civil Code, the complete performance of one of them is sufficient to extinguish the obligation. While there are several prestations, only one is due.

Insurance Case Digest: Tanco Jr. V. Philippine Guaranty Co. (1965)

Lessons Applicable: Definition and Coverage of Casualty Insurance (Insurance)

Laws Applicable: 

FACTS:While Tanco's automobile was driven by his brother Manuel Tanco, who at the time didn't have a valid license since it was not renewed until the next week, had a collision with a pick-up delivery van at the southern approach of the Jones bridgeThe repairs cost P2,536.99 so he filed a claim against the insurance company which was rejected He filed a claim in the Municipal Court of Manila and elevated to the Court of First Instance of Manila on Appeal which favored Tancoexception clause "the company shall not be liable in respect of any accident, loss, damage or liability caused, sustained or incurred ... whilst (the insured vehicle) is ... being driven by or is for the purpose of being driven by him in the charge of any person other than an Authorized Driver.Authorized Driver" to be the insured himself and "(b) any person driving on the Insured's order or with his permission, provided that the person driving is permitted in accordance with the licensing or other laws or regulations to drive the Motor Vehicle or has been permitted and is not disqualified by order of a court of law or by reason of any enactment or regulation in that behalf from driving such Motor Vehicle.ISSUE: W/N the Tanco can claim because it was not covered by the exemption clauseHELD: NO. appealed from is reversed, with costsThe exclusion clause in the contract invoked by appellant is clear. It does not refer to violations of law in general, which indeed would tend to render automobile insurance practically a sham, but to a specific situation where a person other than the insured himself, even upon his order or with his permission, drives the motor vehicle without a license or with one that has already expired. No principle of law or of public policy militates against the validity of such a provision.Labels: 1965, Case Digest, Definition and Coverage of Casualty Insurance, G.R. No.L-17312,  insurance,insurance case digest,  insurance code,  Juris Doctor, November 29, Tanco Jr v Philippine Guaranty Co

Insurance Case Digest: CCC Insurance Corp. V. CA (1970)

G.R. No. L-25920 January 30, 1970

Lessons Applicable: Motor vehicle liability insurance - "Authoried Driver Clause" (Insurance)

Laws Applicable: 

FACTS:Carlos F. Robes insured with the CCC Insurance Corporation his Dodge Kingsway car against loss or damage through accident for an amount not exceeding P8,000June 25 1961: Carlos' driver Domingo Reyes met a vehicular collision along Rizal Avenue Extension, Potrero, Malabon, RizalCcc Insurance Corporation denied his claim reasoning that the driver was not an "authorized driver"Reyes, who cannot read and write, who has never passed any examination for drivers, and has not applied for a license from the duly constituted government agency entrusted with the duty of licensing drivers, cannot be considered an authorized driverAUTHORIZED DRIVER: Any of the following: (a) The insured;(b)    Any person driving on the Insured's order or with his permission, provided that the person driving is permitted in accordance with licensing laws or regulations to drive the motor vehicle covered by this Policy, or has been so permitted and is not disqualified by order of a court of law or by reason of any enactment or regulation from driving such Motor Vehicle. RTC: favored Robes and CCC was order to payISSUE: W/N Domingo Reyes was an authorized driver

HELD: YES. CA affirmedCourt of Appeals found that the driver's license No. 271703 DP was genuineDomingo Reyes is in possession of a driver's license issued by the Motor Vehicles Office which on its face appears to have been regularly issuedNeither Gloria Presa nor the officer-in-charge Marciano A. Monzon was placed on the witness stand to be examined in order to determine whether said license is indeed voidSection 24 of the Revised Motor Vehicles Law, Act 3992 of the Philippine Legislature, as amended by Republic Acts Nos. 587, 1204 and 2863,1

An examination or demonstration to show any applicant's ability to operate motor vehicles may also be required in the discretion of the Chief, Motor Vehicles Office or his deputies.Section 26 of the Act prescribes further:

SEC. 26.    Issuance of chauffeur's license; professional badge: If, after examination, or without the same, the Chief, Motor Vehicles Office or his deputies, believe the applicant to possess the necessary qualifications and knowledge, they shall issue to such applicant a license to operate as chauffeur ... There is no proof that the owner of the automobile knew that the circumstance surrounding such issuance showed that it was irregularthe weight of authority is in favor of a liberal interpretation of the insurance policy for the benefit of the party insured, and strictly against the insurer Labels: 1970, Authoried Driver Clause, Case Digest, G.R. No. L-25920,  insurance,  insurance case digest,January 30, Motor Vehicle Liability Insurance

Association of Baptists for World Evangelism, Inc. v. Fieldmen’s Insurance Co.,Inc.GR No. L-28772 September 21, 1983

FACTS:

Plaintiff (herein Petitioner) Association of Baptists for World Evangelism, Inc., a domestic religious corporation, insured with the Fieldmen’s Insurance Co., Inc under its Private Car Comprehensive Policy a Chevrolet Carry-all, up to a maximum indemnity of ₱5,000.00, in case of loss or damage to the vehicle. In 1961, Dr. Antonio Lim, the representative of the association, displayed the Chevrolet for sale at the Jones Monument Mobilgas Service Station at Davao City, under the care of the station’s operator. However, on January 1962, instead of keeping it safe, one of the boys at the Jones Monument Mobilgas Service Station, Romeo Catiben, took the Chevrolet for a joy ride without the prior permission of Lim. On its way back to

Davao City, the Chevrolet, allegedly due to some mechanical defect, accidentally bumped an electric post causing actual damages to the tune of ₱5,518.61.

When defendant resisted payment, suit was brought by plaintiff to recover on the insurance indemnity. As per the terms of the contract, the trial court ordered the defendant insurance company to indemnify the association the amount of P5,000.00 for the damage sustained by the vehicle. On appeal, defendant interposed the defense that Catiben had not yet been proven to be guilty of theft, so recovery on the policy cannot be had.

ISSUE:

Is a prior conviction for theft required in order to recover on a comprehensive policy payable upon loss or damage to the vehicle?

HELD:

No. Prior conviction of Catiben is not necessary. The insurance company is liable to pay the association.

The comprehensive policy issued by the insurance company includes loss of or damage to the motor vehicle by burglary or theft. It is settled that the act of Catiben in taking the vehicle for a joy ride to Toril, Davao City, constitutes theft within the meaning of the insurance policy and that recovery for damage to the car is not barred by the illegal use of the car by one of the station boys. There need be no prior conviction for the crime of theft to make an insurer liable under the theft clause of the policy. Upon the facts stipulated by the parties it is admitted that Catiben had taken the vehicle for a joy ride and while the same was in his possession he bumped it against an electric post resulting in damages. The act is theft within a policy of insurance.

In a civil action for recovery on an automobile insurance, the question whether a person using a certain automobile at the time of the accident stole it or not is to be determined by a fair preponderance of evidence and not by the rule of criminal law requiring proof of guilt beyond reasonable doubt. Besides, there is no provision in the policy requiring prior criminal conviction for theft, in the absence of any provision in the policy to the contrary.

Judgment of the trial court was AFFIRMED.

JAMES STOKES vs. MALAYAN INSURANCE CO., INC. G.R. No. L-34768, 24 February 1984 127 SCRA 766

FACTS:

Daniel Adolfson had a subsisting Malayan car insurance policy with coverage against own damage as well as 3rd party liability when his car figured in a vehicular accident with another car, resulting to damage to both vehicles. At the time of the accident, Adolfson’s car was being driven by James Stokes, who was authorized to do so by Adolfson. Stokes, an Irish tourist who had been in the Philippines for only 90 days, had a valid and subsisting Irish driver’s license but without a Philippine driver’s license. Adolfson filed a claim with Malayan but the latter refused to pay contending that Stokes was not an authorized driver under the “Authorized Driver” clause of the insurance policy in relation to Section 21 of the Land Transportation Office.

 

ISSUE: Whether or not Malayan is liable to pay the insurance claim of Adolfson

 

HELD:

 

NO. A contract of insurance is a contract of indemnity upon the terms and conditions specified therein. When the insurer is called upon to pay in case of loss or damage, he has the right to insist upon compliance with the terms of the contract. If the insured cannot bring himself within the terms and conditions of the contract, he is not entitled as a rule to recover for the loss or damage suffered. For the terms of the contract constitute the measure of the insurer’s liability, and compliance therewith is a condition precedent to the right of recovery. At the time of the accident, Stokes had been in the Philippines for more than 90 days. Hence, under the law, he could not drive a motor vehicle without a Philippine driver’s license. He was therefore not an “authorized driver” under the terms of the insurance policy in question, and Malayan was right in denying the claim of the insured. Acceptance of premium within the stipulated period for payment thereof, including the agreed period of grace, merely assures continued effectivity of the insurance policy in accordance with its terms. Such acceptance does not estop the insurer from interposing any valid defense under the terms of the insurance policy. The principle of estoppel is an equitable principle rooted upon natural justice which prevents a person from going back on his own acts and representations to the prejudice of another whom he has led to rely upon them. The principle does not apply to the instant case. In accepting the premium payment of the insured, Malayan was not guilty of any inequitable act or representation. There is nothing inconsistent between acceptance of premium due under an insurance policy and the enforcement of its terms. WHEREFORE, the appealed judgment is reversed. The complaint is dismissed. Costs against appellees.

Malayan Insurance Co, Inc. V CA (1986)

G.R. No. L-59919 November 26, 1986

Lessons Applicable: Motor Vehicle Liability Insurance - Authorized Driver Cause (Insurance)Laws Applicable: 

FACTS:Aurelio Lacson ,owner of a Toyota NP Land Cruiser, Model 1972, bearing Plate No. NY-362 and with engine Number F-374325 insured with Malayan Insurance CoDec. 1, 1975: Aurelio brought it to the shop of Carlos Jamelo for repairDec. 2, 1975: Rogelio Mahinay, together with Johnny Mahinay, Rogelio Macapagong and Rogelio Francisco took and drove the Toyota Land Cruiser and it met an accident with BoCarlos reported the incident to the police and instituted a criminal case for Qualified Theft against his employeesRogelio Mahinay pleaded guilty and was convicted of theftAurelio was not allowed to claim on the ground that the claim is not covered by the policy inasmuch as the driver of the insured vehicle at the time of the accident was not a duly licensed driverTrial Court: favored AurelioCA: AffirmedISSUE: W/N the taking of the vehicle by another person without permission or authority from the owner or person-in-charge thereof is sufficient to place it within the ambit of the word theft in the policy

HELD: YES.The damages therefore were sustained in the course of the unlawful takingBacolod IFCs interest in the insured vehicle was in the amount of P2,000.00 only compared to plaintiff's P26,000.00 it is well to presume that Bacolod IFC did not deem it wise to be impleaded as party-plaintiff in this case. This inaction on the part of BIFC will only show that it was not really interested to intervene.

ANDREW PALERMO, plaintiff-appellee, vs. PYRAMID INSURANCE CO., INC., defendant- appellant.

G.R. No. L-36480 May 31, 1988 ANDREW PALERMO, plaintiff-appellee, vs. PYRAMID INSURANCE CO., INC., defendant- appellant.

FACTS: 

On March 7, 1969, the insured, appellee Andrew Palermo, filed a complaint in the Court of First Instance of Negros Occidental against Pyramid Insurance Co., Inc., for payment of his claim under a Private Car Comprehensive Policy MV-1251 issued by the defendant (Exh. A). In its answer, the appellant Pyramid Insurance Co., Inc., alleged that it disallowed the claim because at the time of the accident, the insured was driving his car with an expired driver's license. After the trial, the court a quo rendered judgment on October 29, 1969 ordering the defendant "to pay the plaintiff the sum of P20,000.00, value of the insurance of the motor vehicle in question and to pay the costs." On November 26, 1969, the plaintiff filed a "Motion for Immediate Execution Pending Appeal." It was opposed by the defendant, but was granted by the trial court on December 15, 1969.

 

ISSUE: WON plaintiff was not authorized to drive the insured motor vehicle because his driver's license had expired.

 

RULING:

 

There is no merit in the appellant's allegation that the plaintiff was not authorized to drive the insured motor vehicle because his driver's license had expired. The driver of the insured motor vehicle at the time of the accident was, the insured himself, hence an "authorized driver" under the policy. While the Motor Vehicle Law prohibits a person from operating a motor vehicle on the highway without a license or with an expired license, an infraction of the Motor Vehicle Law on the part of the insured, is not a bar to recovery under the insurance contract. It however renders him subject to the penal sanctions of the Motor Vehicle Law. The requirement that the driver be "permitted in accordance with the licensing or other laws or regulations to drive the Motor Vehicle and is not disqualified from driving such motor vehicle by order of a Court of Law or by reason of any enactment or regulation in that behalf," applies only when the driver" is driving on the insured's order or with his permission." It does not apply when the person driving is the insured himself.

Pan Malayan Insurance Corporation v CA (Insurance)

G.R. No. 81026 April 3, 1990PAN MALAYAN INSURANCE CORPORATION, petitioner, vs. COURT OF APPEALS, ERLINDA FABIE AND 

HER UNKNOWN DRIVER, respondents. 

FACTS: 

On December 10, 1985, PANMALAY filed a complaint for damages with the RTC of Makati against private respondents Erlinda Fabie and her driver. PANMALAY averred the following: that it insured a Mitsubishi Colt Lancer car with plate No. DDZ-431 and registered in the name of Canlubang Automotive Resources Corporation [CANLUBANG]; that on May 26, 1985, due to the "carelessness, recklessness, and imprudence" of the unknown driver of a pick-up with plate no. PCR-220, the insured car was hit and suffered damages in the amount of P42,052.00; that PANMALAY defrayed the cost of repair of the insured car and, therefore, was subrogated to the rights of CANLUBANG against the driver of the pick-up and his employer, Erlinda Fabie; and that, despite repeated demands, defendants, failed and refused to pay the claim of PANMALAY. private respondents filed a Motion to Dismiss alleging that PANMALAY had no cause of action against them. They argued that payment under the "own damage" clause of the insurance policy precluded subrogation under Article 2207 of the Civil Code, since indemnification thereunder was made on the assumption that there was no wrongdoer or no third party at fault. 

DECISION OF LOWER COURTS: 

(1) Trial Court: dismissed for no cause of action PANMALAY's complaint for damages against private respondents Erlinda Fabie and her driver(2) CA: affirmed trial court. 

ISSUE: 

Whether or not the insurer PANMALAY may institute an action to recover the amount it had paid its assured in settlement of an insurance claim against private respondents as the parties allegedly responsible for the damage caused to the insured vehicle. 

RULING: 

PANMALAY is correct. Article 2207 of the Civil Code is founded on the well-settled principle of subrogation. If the insured property is destroyed or damaged through the fault or negligence of a party other than the assured, then the insurer, upon payment to the assured, will be subrogated to the rights of the assured to recover from the wrongdoer to the extent that the insurer has been obligated to pay. Payment by

the insurer to the assured operates as an equitable that the insurer has been obligated to pay. Payment by the insurer to the assured operates as an equitable or negligence of a third party. CANLUBANG is apparently of the same understanding. Based on a police report assignment to the former of all remedies that the latter may have against the third party whose negligence or wrongful act caused the loss. The right of subrogation is not dependent upon, nor does it grow out of, any privity of contract or upon written assignment of claim. It accrues simply upon payment of the insurance claim by the insurer. The exceptions are:(1) if the assured by his own act releases the wrongdoer or third party liable for the loss or damage, from liability, the insurer's right of subrogation is defeated(2) where the insurer pays the assured the value of the lost goods without notifying the carrier who has in good faith settled the assured's claim for loss, the settlement is binding on both the assured and the insurer, and the latter cannot bring an action against the carrier on his right of subrogation(3) where the insurer pays the assured for a loss which is not a risk covered by the policy, thereby effecting "voluntary payment", the former has no right of subrogation against the third party liable for the loss 

None of the exceptions are availing in the present case. Also, even if under the above circumstances PANMALAY could not be deemed subrogated to the rights of its assured under Article 2207 of the Civil Code, PANMALAY would still have a cause of action against private respondents. In the pertinent case of Sveriges Angfartygs Assurans Forening v. Qua Chee Gan, supra., the Court ruled that the insurer who may have no rights of subrogation due to "voluntary" payment may nevertheless recover from the third party responsible for the damage to the insured property under Article 1236 of the Civil Code. WHEREFORE, in view of the foregoing, the present petition is GRANTED. Petitioner's complaint for damages against private respondents is hereby REINSTATED. Let the case be remanded to the lower court for trial on the merits. 

Perla v CA G.R. No. 96452 May 7, 1992

Facts:

The Lim spouses opened a chattel mortgage and bought a Ford Laser from Supercars for Php 77,000 and insured it with Perla Compania de Seguros. The vehicle was stolen while Evelyn Lim was driving it with an expired license. The spouses requested for a moratorium on payments but this was denied by FCP, the assignee of rights over collection of the mortgage amount of the car. The spouses also called on the insurance company to pay the balance of the mortgage due to theft but this was denied by the company due to the spouses’ violation of the Authorized Driver clause stating (driving with an expired license before being carnapped):

 Any of the following: (a) The Insured (b) Any person driving on the Insured's order, or with his permission. Provided that the person driving is permitted, in accordance with the licensing or other laws or regulations, to drive the Scheduled Vehicle, or has been permitted and is not disqualified by order of a Court of Law or by reason of any enactment or regulation in that behalf.

Since the spouses didn’t pay the mortgage, FCP filed suit against them. The trial court ruled in its favor ordering spouses to pay. The appellate court reversed their decision. FCP and Perla appealed to the SC.

Issues:

1.Was there grave abuse of discretion on the part of the appellate court in holding that private respondents did not violate the insurance contract because the authorized driver clause is not applicable to the "Theft" clause of said Contract?

2. Whether or not the loss of the collateral exempted the debtor from his admitted obligations under the promissory note particularly the payment of interest, litigation expenses and attorney's fees.

Held: No, No. Petition dismissed.

Ratio:

1. The car was insured against a malicious act such as theft. Therefore the “Theft” clause in the contract should apply and not the authorized driver clause. The risk against accident is different from the risk against theft. 

The appellate court stated: The "authorized driver clause" in a typical insurance policy is in contemplation or anticipation of accident in the legal sense in which it should be understood, and not in contemplation or anticipation of an event such as theft. The distinction — often seized upon by insurance companies in resisting claims from their assureds — between death occurring as a result of accident and death occurring as a result of intent may, by analogy, apply to the case at bar.

There was no connection between valid possession of a license and the loss of a vehicle. Ruling in a different way would render the policy a sham because the company can then easily cite restrictions not applicable to the claim.

2.  The Supreme Court stated:

“The chattel mortgage constituted over the automobile is merely an accessory contract to the promissory note. Being the principal contract, the promissory note is unaffected by whatever befalls the subject matter of the accessory contract. Therefore, the unpaid balance on the promissory note should be paid, and not just the installments due and payable before the automobile was carnapped, as erronously held by the Court of Appeals.”

The court, however, construed the insurance, chattel mortgage, and promissory note as interrelated contracts, hence eliminating the payment of interests, litigation expenses, and attorney’s fees stated in the promissory note. The promissory note required securing a chattel mortage which in turn required opening an insurance contract. The insurance was made as an accessory to the principal contract, making sure that the value in the promissory note will be

paid even if the car was lost. The insurance company promised to pay FCP for loss or damage of the property.

CA didn’t err in requiring Perla to pay the spouses, but the spouses must pay FCP for the balance in the note.

Sun v CA G.R. No. 92383 July 17, 1992

J. Cruz

Facts:

Lim accidentally killed himself with his gun after removing the magazine, showing off, pointing the gun at his secretary, and pointing the gun at his temple. The widow, the beneficiary, sued the petitioner and won 200,000 as indemnity with additional amounts for other damages and attorney’s fees. This was sustained in the Court of Appeals then sent to the Supreme court by the insurance company.

Issue:

1. Was Lim’s widow eligible to receive the benefits?

2. Were the other damages valid?

Held:

1. Yes  2. No

Ratio: 1. There was an accident.

De la Cruz v. Capital Insurance says that "there is no accident when a deliberate act is performed unless some additional, unexpected, independent and unforeseen happening occurs which produces or brings about their injury or death." This was true when he fired the gun.

Under the insurance contract, the company wasn’t liable for bodily injury caused by attempted suicide or by one needlessly exposing himself to danger except to save another’s life.

Lim wasn’t thought to needlessly expose himself to danger due to the witness testimony that he took steps to ensure that the gun wasn’t loaded. He even assured his secretary that the gun was loaded.

There is nothing in the policy that relieves the insurer of the responsibility to pay the indemnity agreed upon if the insured is shown to have contributed to his own accident.

2. “In order that a person may be made liable to the payment of moral damages, the law requires that his act be wrongful. The adverse result of an action does not per se make the act wrongful and subject the act or to the payment of moral damages. The law could not have meant to impose a penalty on the right to litigate; such right is so precious that moral damages may not be charged on those who may exercise it erroneously. For these the law taxes costs.”

If a party wins, he cannot, as a rule, recover attorney's fees and litigation expenses, since it is not the fact of winning alone that entitles him to recover such damages of the exceptional circumstances enumerated in Art. 2208. Otherwise, every time a defendant wins, automatically the plaintiff must pay attorney's fees thereby putting a premium on the right to litigate which should not be so. For those expenses, the law deems the award of costs as sufficient.”

FINMAN GENERAL ASSURANCE CORPORATION vs. THE HONORABLE COURT OF APPEALS 213 SCRA 493, September 2, 1992 NOCON, J.:

 

 

FACTS:

On October 22, 1986, deceased, Carlie Surposa was insured with petitioner Finman General Assurance Corporation with his parents, spouses Julia and Carlos Surposa, and brothers Christopher, Charles, Chester and Clifton, all surnamed, Surposa, as beneficiaries. While said insurance policy was in full force and effect, the insured, Carlie Surposa, died on October 18, 1988 as a result of a stab wound inflicted by one of the three (3) unidentified men. Private respondent and the other beneficiaries of said insurance policy filed a written notice of claim with the petitioner insurance company which denied said claim contending that murder and assault are not within the scope of the coverage of the insurance policy. Private respondent filed a complaint with the Insurance Commission which rendered a favorable response for the respondent. The appellate court ruled likewise. Petitioner filed this petition alleging grave abuse of discretion on the part of the appellate court in applying the principle of "expresso unius exclusio alterius" in a personal accident insurance policy, since death resulting from murder and/or assault are impliedly excluded in said insurance policy considering that the cause of death of the insured was not accidental but rather a deliberate and intentional act of the assailant. Therefore, said death was committed with deliberate intent which, by the very nature of a personal accident insurance policy, cannot be indemnified.

 

ISSUE: Whether or not the insurer is liable for the payment of the insurance premiums

 

HELD:

 

Yes, the insurer is still liable. Contracts of insurance are to be construed liberally in favor of the insured and strictly against the insurer. Thus ambiguity in the words of an insurance contract should be interpreted in favor of its beneficiary. The terms "accident" and "accidental" as used in insurance contracts have not acquired any technical meaning, and are construed by the courts in their ordinary and common acceptation. Thus, the terms have been taken to mean that which

happen by chance or fortuitously, without intention and design, and which is unexpected, unusual, and unforeseen. Where the death or injury is not the natural or probable result of the insured's voluntary act, or if something unforeseen occurs in the doing of the act which produces the injury, the resulting death is within the protection of the policies insuring against death or injury from accident. In the case at bar, it cannot be pretended that Carlie Surposa died in the course of an assault or murder as a result of his voluntary act considering the very nature of these crimes. Neither can it be said that where was a capricious desire on the part of the accused to expose his life to danger considering that he was just going home after attending a festival. Furthermore, the personal accident insurance policy involved herein specifically enumerated only ten (10) circumstances wherein no liability attaches to petitioner insurance company for any injury, disability or loss suffered by the insured as a result of any of the stimulated causes. The principle of " expresso unius exclusio alterius" — the mention of one thing implies the exclusion of another thing — is therefore applicable in the instant case since murder and assault, not having been expressly included in the enumeration of the circumstances that would negate liability in said insurance policy cannot be considered by implication to discharge the petitioner insurance company from liability for, any injury, disability or loss suffered by the insured. Thus, the failure of the petitioner insurance company to include death resulting from murder or assault among the prohibited risks leads inevitably to the conclusion that it did not intend to limit or exempt itself from liability for such death.