TRAVELLERS INSURANCE & SURETY CORP. v.

CA (MENDOZA)
272 SCRA 536 May 22, 1997

Facts:
An old lady was hit by a taxicab. The taxicab was later identified and a case was
filed against the driver and owner. Later, an amendment was filed to include the
insurance company. RTC and CA ordered that the owner, driver as well as the
insurance company be held solidarily liable.

Issue:
Whether Travelers Insurance is liable to private respondent?

Ruling:
NO. Where the contract provides for indemnity against liability to third persons,
then third persons to whom the insured is liable can sue the insurer. Where the
contract is for indemnity against actual loss or payment, then third persons
cannot proceed against the insurer, the contract being solely to reimburse the
insured for liability actually discharged by him thru payment to third persons,
said third persons' recourse being thus limited to the insured alone. But in the
case at bar,there was no contract shown.

Consequently, the trial court was confused as it did not distinguish between the
private respondent's cause of action against the owner and the driver of the
taxicab and his cause of action against petitioner.The former is based on torts and
quasi-delicts while the latter is based on contract. Even assuming arguendo that
there was such a contract, private respondent's cause of action cannot prevail
because he failed to file the written claim mandated by the Insurance Code (before
it was amended-action must be brought within six months from date of the accident
(this is what�s applicable here); after amendment - "action or suit for recovery of
damage due to loss orinjury must be brought in proper cases, with the Commissioner
or the Courts within one year from denial of the claim, otherwise the claimant's
right of action shall prescribe"). He is deemed, under this legal provision, to
have waived his rights as against petitioner-insurer.

FIELDMEN'S INSURANCE CO., INC. vs. VDA. DE SONGCO, ET AL.

25 SCRA 70 September 23, 1968

Facts:
Federico Songco, a man of scant education, owned a private jeepney. He was induced
by Fieldmen�s Insurance agent Benjamin Sambat to apply for a Common Carrier�s
Liability Insurance Policy covering his motor vehicle. Federico said that his
vehicle is an �owner� private vehicle and not for passengers, but agent Sambat said
that they can insure whatever kind of vehicle because their company is not owned by
the government, so they could do what they please whenever they believe a vehicle
is insurable. Songco paid an annual premium and he was issued a Common Carriers
Accident Insurance Policy. After the policy expired, he renewed the policy. During
the effectivity of the renewed policy, the insured vehicle while being driven by
Rodolfo Songco [duly licensed driver and Federico�s son] collided with a car. As a
result, Federico and Rodolfo died, while Carlos (another son) and his wife
Angelita, and a family friend sustained physical injuries. The lower court held
that Fieldmen�s Insurance cannot escape liability under a common carrier insurance
policy on the pretext that what was insured was a private vehicle and not a common
carrier, the policy being issued upon the agent�s insistence.

Issue:
Whether or not FIELDMEN'S INSURANCE is liable?

RULING:
YES. The fact that the insured owned a private vehicle, not a common carrier, was
something which the company knew all along. In fact, it exerted the utmost pressure
on the insured, a man of scant education, to enter into the contract of insurance.
The Court of Appeals also held that since some of the conditions in the policy were
impossible to comply with under the existing conditions at the time and
inconsistent with the known facts, the insurer is estopped from asserting breach of
such conditions. Except for the fact that the passengers were not fare-paying,
their status as beneficiaries under the policy is recognized. Even if the be
assumed that there was an ambiguity, such must be strictly interpreted against the
party that caused them.

NEW LIFE ENTERPRISES VS. CA

207 SCRA 669 March 31, 1992

Facts:
Julian Sy, owner of New Life, insured his building in 3 different insurance
agencies for 350,000, 1,000,000, and 200,000. When his building and the goods
inside burned down, he claimed for insurance indemnities, but these were rejected
by the three companies for violation of policy conditions. The said policy in
question follows: "The insured shall give notice to the Company of any insurance or
insurances already effected, or which may subsequently be effected ... unless such
notice be given and the particulars of such insurance or insurances be stated
therein or endorsed on this policy by or on behalf of the Company before the
occurrence of any loss or damage, all benefits under this policy shall be deemed
forfeited..." Sy filed for 3 different suits in the trial court, where he won all
suits against the insurance companies. The court of appeals reversed the decision
of the trial court.

Issue:
WON New Life Enterprises� claim for payment be denied.

Ruling:
YES. While it is a cardinal principle of insurance law that a policy or contract of
insurance is to be construed liberally in favor of the insured and strictly against
the insurer company, yet contracts of insurance, like other contracts, are to be
construed according to the sense and meaning of the terms which the parties
themselves have used. If such terms are clear and unambiguous, they must be taken
and understood in their plain, ordinary and popular sense. Moreover, obligations
arising from contracts have the force of law between the contracting parties and
should be complied with in good faith.

The terms of the contract are clear and unambiguous. The insured is specifically
required to disclose to the insurer any other insurance and its particulars which
he may have effected on the same subject matter. The knowledge of such insurance by
the insurer's agents, even assuming the acquisition thereof by the former, is not
the "notice" that would stop the insurers from denying the claim. Petitioners
should be aware of the fact that a party is not relieved of the duty to exercise
the ordinary care and prudence that would be exacted in relation to other
contracts. The conformity of the insured to the terms of the policy is implied from
his failure to express any disagreement with what is provided for.

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FILIPINAS DE COMPANIA DE SEGUROS vs. CHRISTERN, HUENFELD & CO

89 Phil 54

FACTS:
Christern, Huenefeld and Company, a German company, obtained a fire insurance
policy from Filipinas Compa�ia for the merchandise contained in a building located
in Binondo, Manila in the sum of P100,000. Filipinas Compa�ia is an American
controlled company. The building and the insured merchandise were burned during the
Japanese occupation. Christern filed its claim amounting to P92,650.00 but
Filipinas Compa�ia refused to pay alleging that Christern is a corporation whose
majority stockholders are Germans and that during the Japanese occupation, America
declared war against Germany hence the insurance policy ceased to be effective
because the insured has become an enemy. Filipinas Compa�ia was eventually ordered
to pay Christern as ordered by the Japanese government.

ISSUE:

Whether or not Christern, Huenefeld and Co is entitled to receive the proceeds from
the insurance claim.

HELD:

NO. There is no question that majority of the stockholders of Christern were German
subjects. This being so, Christern became an enemy corporation upon the outbreak of
the war between the United States and Germany. The Philippine Insurance Law (Act
No. 2427, as amended,) in Section 8, provides that �anyone except a public enemy
may be insured.� It stands to reason that an insurance policy ceases to be
allowable as soon as an insured becomes a public enemy.

The respondent having become an enemy corporation on December 10, 1941, the
insurance policy issued in its favor on October 1, 1941, by the petitioner had
ceased to be valid and enforceable, and since the insured goods were burned after
December 10, 1941, and during the war, the respondent was not entitled to any
indemnity under said policy from the petitioner. However, elementary rules of
justice (in the absence of specific provision in the Insurance Law) require that
the premium paid by the respondent for the period covered by its policy from
December 11, 1941, should be returned by the petitioner.

GEAGONIA vs. CA, COUNTRY BANKERS INSURANCE CORP

241 SCRA 152
FACTS:

Armando Geagonia is the owner of Norman�s Mart and obtained from Country Bankers a
fire insurance policy which covered Stock-in-trade consisting of RTW dry goods.
The policy contained a provision where the insured must give notice to the insurer
of any insurance or insurances already affected or which may be subsequently be
effected covering any of the property or properties consisting of stocks in trade,
goods in process and/or inventories already insured by such policy otherwise it
shall be deemed forfeited, provided that such condition does not apply when the
total insurance or insurances in force at the time of the loss is not more than
200k
Subsequently, a fire broke out and destroyed Geagonia�s stocks-in-trade. Country
bankers denied the claim because it was found that at the time of the loss, the
stocks were likewise covered by two other fire insurances for 100k each by PFIC. It
had a mortgage clause which stated that loss, if any, shall be payable to Cebu
Tesing Textiles.

ISSUE:
WON there was double insurance to justify denial of the claim

HELD:
NO (Country Bankers is liable).
It is a cardinal rule on insurance that a policy or insurance contract is to be
interpreted liberally in favor of the insured and strictly against the company, the
reason being, undoubtedly, to afford the greatest protection which the insured was
endeavoring to secure when he applied for insurance. Provisions, conditions, or
exceptions in policies which tend to work a forfeiture of insurance policies should
be construed most strictly against those for whose benefits they are inserted, and
most favorably toward those against whom they are intended to operate.
The condition in the policy is commonly known as the additional or �other
insurance� clause and has been upheld as valid and as a warranty that no other
insurance exists. Its violation would thus avoid the policy. However, in order to
constitute a violation, the other insurance must be upon the same subject matter,
the same insurable interest, and the same risk.

As to a mortgaged property, the mortgagor and the mortgagee have each an

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

A double insurance exists where the same person is insured by several insurers
separately in respect of the same subject and cover the same interest. Since the
two policies of the PFIC do not cover the same interest as that covered by the
policy in issue, no double insurance exists. The non-disclosure is not fatal.