Insurance Digest Case 1 77

CASE 1: Enriquez vs Sunlife Assurance (1920)
TOPIC: LAWS GOVERNING INSURANCE

FACTS: Joaquin Herrer made an application to the Sun Life Assurance Company of Canada
through its office in Manila for a life annuity. The application was forwarded to the head office
of the company at Montreal, Canada. The head office gave notice of acceptance by cable to
Manila and the policy was issued at Montreal. Herrer decided to withdraw his application. The
local office replied that the policy had been issued and cannot be withdrawn. However, the
letter notifying Mr. Herrer that his application had been accepted, was prepared and signed in
the local office of the insurance company, was placed in the ordinary channels for transmission,
but was never actually mailed and thus was never received by the applicant.
ISSUE: W/N the Insurance Code will apply in the case at bar
HELD: the SC held in the NEGATIVE. Prior to July 1, 1915, all of the provisions concerning life
insurance in the Philippines were found in the Code of Commerce and the Civil Code. After July
1, 1915, the Insurance Act. No. 2427 took effect. Chapter IV of this Act concerns life and health
insurance. The Act expressly repealed Title VIII of Book II and Section III of Title III of Book III of
the code of Commerce. The law of insurance is consequently now found in the Insurance Act
and the Civil Code. While the Insurance Act deals with life insurance, it is silent as to the
methods to be followed in order that there may be a contract of insurance. Pursuant to Article
18 of the Civil Code, when the special law on the subject of insurance is deficient in enunciating
the principles governing acceptance, the Civil code would be controlling. Article 1262 of the
(OLD) Civil Code provides that "Consent is shown by the concurrence of offer and acceptance
with respect to the thing and the consideration which are to constitute the contract. An
acceptance made by letter shall not bind the person making the offer except from the time it
came to his knowledge. The contract, in such case, is presumed to have been entered into at
the place where the offer was made." Thus under the Civil Code rule, an acceptance made by
letter shall bind the person making the offer only from the date it came to his knowledge. In
this case, the acceptance letter was never received by Mr.Herrer and thus, the policy may still
be withdrawn.
CASE 2: Insular Life vs Ebrado (1977)

FACTS: Buenaventura CristorEbrado was issued by The Life Assurance Co., Ltd., Policy No.
009929 on a whole-life for P5,882.00 with a, rider for Accidental Death for the same amount
Buenaventura C. Ebrado designated CarponiaT. Ebrado, his common-law-wife, as the revocable
beneficiary in his policy.
Upon his death both common-law wife and legitimate wife claimed for the proceeds of the life
insurance. In doubt as to whom the insurance proceeds shall be paid, the insurer, The Insular
Life Assurance Co., Ltd. commenced an action for Interpleader.
ISSUE: Can a common-law wife named as beneficiary in the life insurance policy of a legally
married man claim the proceeds thereof in case of death of the latter?
HELD: No. It is quite unfortunate that the Insurance Act (RA 2327, as amended) or even the new
Insurance Code (PD No. 612, as amended) does not contain any specific provision grossly
resolutory of the prime question at hand.
Section 50 of the Insurance Act which provides that "(t)he insurance shall be applied exclusively
to the proper interest of the person in whose name it is made" 1 cannot be validly seized upon
to hold that the mm includes the beneficiary. The word "interest" highly suggests that the
provision refers only to the "insured" and not to the beneficiary, since a contract of insurance is
personal in character. 2 Otherwise, the prohibitory laws against illicit relationships especially on
property and descent will be rendered nugatory, as the same could easily be circumvented by
modes of insurance. Rather, the general rules of civil law should be applied to resolve this void
in the Insurance Law. Article 2011 of the New Civil Code states: "The contract of insurance is
governed by special laws. Matters not expressly provided for in such special laws shall be
regulated by this Code."When not otherwise specifically provided for by the Insurance Law, the
contract of life insurance is governed by the general rules of the civil law regulating
contracts. 3 And under Article 2012 of the same Code, "any person who is forbidden from
receiving any donation under Article 739 cannot be named beneficiary of a fife insurance policy
by the person who cannot make a donation to him.
CASE 3: Filipinas-Compania de Seguros de Nava (1966)

FACTS: On January 1, 1936, plaintiff and defendant Insular Life Assurance Co., Ltd. entered into
a contract of life insurance with a face value of P5,000.00 for which the insurer issued Policy
No. 58999.On February 28, 1939, plaintiff and defendant Filipinas Life Assurance Co. entered
into 17 separate contracts of life insurance for which the insurer issued 17 life insurance
policies, one of said policies having a face value of P10,000.00 while the rest a face value
ofP5,000.00 each, or a total of P90,000.00.
On April 28, 1948, plaintiff applied to defendants for a loan in the sum of P5,000.00 in line with
the loan clause contained in said policies, but defendants refused to grant the loan on the
excuse that certain regulations issued by the Insurance Commissioner on May20, 1946 required
the insurance companies to withhold the payments on premiums made during the Japanese
occupation because the same shall be subject to future adjustments “as soon as debtor-
creditor relationship is established” and because of such process of “withholding” plaintiff was
not entitled to borrow any amount until such adjustment has been made.
ISSUE: Whether or not the petitioners violated the loan clause contained in the insurance
policies thereby entitling respondent to their rescission.
HELD: There is no merit in this contention. Petitioners maintain that the Haw Pia case did not
settle the question of the valuation of premium payments in Japanese military notes during the
war on life insurance policies because the insured is by no means a debtor of the insurer, nor is
the insurer his creditor, considering that there is absolutely no obligation on his part to pay the
premiums. A life insurance policy involves a contractual obligation wherein the insured
becomes duty bound to pay thepremiums agreed upon, lest he runs the risk of having his
insurance policy lapse if he fails to pay such premiums. The fact that the insurance policy
contains an automatic premium payment clause cannot divest such policy of its contractual
nature, for the result of such failure would only be for him to pay the premium plus the
corresponding interest depending upon the condition of the policy. In effect, therefore, the
payments of premiums on the life insurance policies were made by a debtor to a creditor.
When regulations of Insurance Commissioner withholding payments on prewar policies is void,
the regulations issuedby the Insurance Commissioner, which required the withholding of the
payments made in fiat currency of the premiums on insurancepolicies issued before the war
subject to whatever adjustment that may be made after the relationship between debtor and
creditor shallhave been established, are of doubtful validity if their effect is to suspend the
effectivity of a provision or clause embodied in a validinsurance policy for that would partake of
the nature of a regulation the effect of which would be to infringe or impair a
contractualobligation in violation of Section 1 (10), Article III, of the Constitution, (Lim vs.
Register of Deeds, 82 Phil. 789).
CASE 4: White Gold Marine Services vs Pioneer Insurance (2005)

TOPIC: GENERAL CONCEPT OF INSURANCE AND TEST OF INSURANCE
FACTS: White Gold Marine Services, Inc. (White Gold) procured a protection and indemnity
coverage for its vessels from The Steamship Mutual Underwriting Association (Bermuda)
Limited (Steamship Mutual) through Pioneer Insurance and Surety Corporation (Pioneer).
Subsequently, White Gold was issued a Certificate of Entry and Acceptance. Pioneer also issued
receipts evidencing payments for the coverage. When White Gold failed to fully pay its
accounts, Steamship Mutual refused to renew the coverage. White gold filed a case before the
insurance commission claiming that Steamship Mutual is engaging in an insurance business
without a license.
ISSUE: whether or not Steamship Mutual is engaging in the business of insurance?
HELD: Yes. Section 2(2) of the Insurance Code enumerates what constitutes doing an insurance
business or transacting an insurance business. These are:
(a) making or proposing to make, as insurer, any insurance contract;
(b) making, or proposing to make, as surety, any contract of suretyship as a vocation and not as
merely incidental to any other legitimate business or activity of the surety;
(c) doing any kind of business, including a reinsurance business, specifically recognized as
constituting the doing of an insurance business within the meaning of this Code;
(d) doing or proposing to do any business in substance equivalent to any of the foregoing in a
manner designed to evade the provisions of this Code.
The test to determine if a contract is an insurance contract or not, depends on the nature of the
promise, the act required to be performed, and the exact nature of the agreement in the light
of the occurrence, contingency, or circumstances under which the performance becomes
requisite. It is not by what it is called. The records reveal Steamship Mutual is doing business in
the country albeit without the requisite certificate of authority mandated by Section 187[20] of
the Insurance Code. It maintains a resident agent in the Philippines to solicit insurance and to
collect payments in its behalf. Steamship Mutual even renewed its P & I Club cover until it was
cancelled due to non-payment of the calls. A P & I Club is a form of insurance against third party
liability, where the third party is anyone other than the P & I Club and the members. By
definition then, Steamship Mutual as a P & I Club is a mutual insurance association engaged in
the marine insurance business. The records reveal Steamship Mutual is doing business in the
country albeit without the requisite certificate of authority mandated by Section 187[20] of the
Insurance Code. It maintains a resident agent in the Philippines to solicit insurance and to
collect payments in its behalf. We note that Steamship Mutual even renewed its P & I Club
cover until it was cancelled due to non-payment of the calls. Thus, to continue doing business
here, Steamship Mutual or through its agent Pioneer, must secure a license from the Insurance
Commission. Thus, to continue doing business here, Steamship Mutual or through its agent
Pioneer, must secure a license from the Insurance Commission.
CASE 5: Philamcare Health Services Inc vs CA

TOPIC: TEST OF INSURANCE
FACTS: ErnaniTrinos applied for a health care coverage with petitioner Philamcare Health
Systems, Inc. He was issued Health Care Agreement No. P010194. Under the agreement, he was
entitled to avail of hospitalization benefits, whether ordinary or emergency, listed therein. He
was also entitled to avail of "out-patient benefits" such as annual physical examinations,
preventive health care and other out-patient services.
During the period of his coverage, Ernani suffered a heart attack and was hospitalized. Before
he died, his wife tried to claim the benefits under the health care agreement, but it was denied
by the petitioner company.
Ernani’s wife filed an action for damages against the petitioner asking for reimbursement of her
expenses. Both the lower court and the Court of Appeals decided in favor of her.
Philamcare Health Systems, Inc elevated the issue to the Supreme Cory contending, among
others, that the health care agreement was not an insurance contract; hence the
incompatibility clause under the Insurance Code will not apply.
ISSUE: Whether or not the incontestability clause under the Insurance code does not apply to a
health care agreement as it is not an insurance contract.
HELD: The court ruled that 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.
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. Consequently, Section 3 of the same code provides, that
any contingent or unknown event, whether past or future, which may damnify a person having
an insurable interest against him, may be insured against. Every person has an insurable
interest in the life and health of himself. The insurable interest of respondent’s husband in
obtaining the health care agreement was his own health.
CASE 6: Philippine Health Care Providers vs Commissioner of Internal Revenue
TOPIC: DOING AN INSURANCE BUSINESS
FACTS: The Commissioner of Internal Revenue [CIR] sent Philippine Health Care Providers, Inc.
(PHCP) a formal demand letter and the corresponding assessment notices demanding the
payment of deficiency taxes, including surcharges and interest, for the taxable years 1996 and
1997 in the total amount of ₱224,702,641.18. According to CIR, the deficiency documentary
stamp tax (DST) assessment was imposed on PHCP’s health care agreement with the members
of its health care program pursuant to Section 185 of the 1997 Tax Code. PHCP argued that the
DST under Section 185 of the National Internal Revenue of 1997 is imposed only on a company
engaged in the business of fidelity bonds and other insurance policies. PHCP, as an HMO, is a
service provider, not an insurance company. The Supreme Court HELD: that the DST must be
paid by PHCP. This case is the motion for reconsideration of PHCP.
ISSUE: W/N PHCP is an Insurance Company
HELD: the SC held in the NEGATIVE and said that Health Maintenance Organizations (HMOs) are
not engaged in the Insurance business. Section 2 (2) of PD20 1460 (otherwise known as the
Insurance Code) enumerates what constitutes "doing an insurance business" or "transacting an
insurance business:"
a) making or proposing to make, as insurer, any insurance contract;
b) making or proposing to make, as surety, any contract of suretyship as a vocation and not as
c) doing any kind of business, including a reinsurance business, specifically recognized as
d) doing or proposing to do any business in substance equivalent to any of the foregoing in a
In the application of the provisions of this Code, the fact that no profit is derived from the
making of insurance contracts, agreements or transactions or that no separate or direct
consideration is received therefore, shall not be deemed conclusive to show that the making
thereof does not constitute the doing or transacting of an insurance business.
Various courts in the United States have determined that HMOs are not in the insurance
business. One test that they have applied is whether the assumption of risk and indemnification
of loss (which are elements of an insurance business) are the principal object and purpose of
the organization or whether they are merely incidental to its business. If these are the principal
objectives, the business is that of insurance. But if they are merely incidental and service is the
principal purpose, then the business is not insurance. Applying the "principal object and
purpose test," a corporation (such as an HMO, whether or not organized for profit), whose
main object is to provide the members of a group with health services, is not engaged in the
insurance business since it was created primarily for the distribution of health care services
rather than the assumption of insurance risk.
CASE 7: White Gold Marine Services vs Pioneer Insurance (2005)
TOPIC: MUTUAL INSURANCE COMPANIES
FACTS: White Gold Marine Services, Inc. (White Gold) procured a protection and indemnity
coverage for its vessels from The Steamship Mutual Underwriting Association (Bermuda)
Limited (Steamship Mutual) through Pioneer Insurance and Surety Corporation (Pioneer). When
White Gold failed to fully pay its accounts, Steamship Mutual refused to renew the coverage.
Steamship Mutual thereafter filed a case against White Gold for collection of sum of money to
recover the latter’s unpaid balance.White Gold on the other hand, filed a complaint before the
Insurance Commission claiming that Steamship Mutual violated Sections 186 4 and 1875 of the
Insurance Code, while Pioneer violated Sections 299,63007 and 3018 in relation to Sections 302
and 303, thereof.
The Insurance Commission dismissed the complaint. It said that there was no need for
Steamship Mutual to secure a license because it was not engaged in the insurance business. It
explained that Steamship Mutual was a Protection and Indemnity Club (P & I Club). Likewise,
Pioneer need not obtain another license as insurance agent and/or a broker for Steamship
Mutual because Steamship Mutual was not engaged in the insurance business. Moreover,
Pioneer was already licensed, hence, a separate license solely as agent/broker of Steamship
Mutual was already superfluous.
ISSUE: 1. Is Steamship Mutual, a P & I Club, engaged in the insurance business in the
Philippines?
2. Does Pioneer need a license as an insurance agent/broker for Steamship Mutual?
HELD: 1. Yes. Section 2(2) of the Insurance Code enumerates what constitutes "doing an
insurance business" or "transacting an insurance business". These are:
making or proposing to make, as insurer, any insurance contract;
making, or proposing to make, as surety, any contract of suretyship as a vocation and not as
doing any kind of business, including a reinsurance business, specifically recognized as
doing or proposing to do any business in substance equivalent to any of the foregoing in a
The test to determine if a contract is an insurance contract or not, depends on the nature of the
promise, the act required to be performed, and the exact nature of the agreement in the light
of the occurrence, contingency, or circumstances under which the performance becomes
requisite. It is not by what it is called.
Basically, an insurance contract is a contract of indemnity. In it, one undertakes for a
consideration to indemnify another against loss, damage or liability arising from an unknown or
contingent event.
In particular, a marine insurance undertakes to indemnify the assured against marine losses,
such as the losses incident to a marine adventure. Section 99 of the Insurance Code
enumerates the coverage of marine insurance.
Relatedly, a mutual insurance company is a cooperative enterprise where the members are
both the insurer and insured. In it, the members all contribute, by a system of premiums or
assessments, to the creation of a fund from which all losses and liabilities are paid, and where
the profits are divided among themselves, in proportion to their interest. Additionally, mutual
insurance associations, or clubs, provide three types of coverage, namely, protection and
indemnity, war risks, and defense costs.
A P & I Club is "a form of insurance against third party liability, where the third party is anyone
other than the P & I Club and the members." By definition then, Steamship Mutual as a P & I
Club is a mutual insurance association engaged in the marine insurance business.
2. Yes. Although Pioneer is already licensed as an insurance company, it needs a separate
license to act as insurance agent for Steamship Mutual. Section 299 of the Insurance Code
clearly states: SEC. 299: No person shall act as an insurance agent or as an insurance broker in
the solicitation or procurement of applications for insurance, or receive for services in obtaining
insurance, any commission or other compensation from any insurance company doing business
in the Philippines or any agent thereof, without first procuring a license so to act from the
Commissioner, which must be renewed annually on the first day of January, or within six months
thereafter.
CASE 8: Pandiman Philippines vs Marine Manning (2005)

FACTS: Rosita Singhid’s deceased husband Benito Benito was hired by Fullwin, through its local
agent, respondent Marine Manning, as chief cook on board the vessel MV Sun Richie Five for a
term of twelve (12) months. The vessel and its crew were insured with Ocean Marine. Ocean
Marine transacted business in the Philippines through its local correspondent, petitioner
Pandiman Philippines, Inc. While the vessel was on its way to Shanghai from Ho Chih Minh City,
Vietnam Benito suffered a heart attack. Rosita filed a claim for death benefits with MMMC,
which, however, referred her to petitioner Pandiman. Petitioner approved the claim and
recommended payment in the amount of US$79,000.00. But Rosita’s death claims remained
unpaid.
ISSUES: (1) Whether or not MMMC and its foreign principal Fullwin with whom unquestionably
the late Benito had an employment contract, should be absolved from death claim liabilities in
this case.
(2) Whether or not petitioner Pandiman may be HELD: liable for Rosita’s claim for death
benefits as Benito’s widow
HELD: (1) Yes. Respondent MMMC is jointly and solidarily liable with its foreign principal
Fullwin, for whatever death benefits Benito’s widow is entitled to under Benito’s employment
contract.
It is undisputed that Benito was employed by Fullwin through its manning agency, MMMC.
Fullwin, Benito’s principal employer is, therefore, liable under the same employment contract.
For its part, MMMC is bound by its undertaking pursuant to the Rules and Regulations
Governing Overseas Employment (1991) that the manning applicants:
(3) Shall assume joint and solidary liability with the employer for all claims and liabilities
which may arise in connection with the implementation of the contract, including but not
limited to payment of wages, health and disability compensation and repatriation;
(2) No. Payment for claims arising from the peril insured against, to which the insurer is liable, is
definitely not one of the liabilities of an insurance agent. Thus, there is no legal basis
whatsoever for holding petitioner solidarily liable with insurer OMMIAL for Rosita’s claim for
death benefits on account of her husband’s demise while under the employ of MMMC’s
principal, Fullwin.
Even under the principle of “relativity of contracts,” petitioner PPI cannot be HELD: liable for
the same death benefits claims. The insurance contract between the insurer and the insured,
under Article 1311 of the Civil Code, is binding only upon the parties (and their assigns and
heirs) who execute the same. With the reality, as borne by the records, that petitioner PPI is
not a party to the insurance contract in question, no liability or obligation arising therefrom,
may be imposed upon it.
CASE 9: Steamship Mutual Underwriting Association vs Sulpicio Lines (2017)

FACTS: 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).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.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. Sulpicio filed a complaint for damages in RTC.
On the other hand, Pioneer Insurance sought to dismiss the complaint on failure to comply with
arbitration agreement.
ISSUE: whether or not the contract of insurance between Sulpicio and Steamship includes the
arbitration agreement?
HELD: Yes. By entering its vessels in Steamship, Sulpicio not only obtains insurance coverage for
its vessels but also becomes a member of Steamship.A protection and indemnity club, like
Steamship, is an association composed of shipowners generally formed for the specific purpose
of providing insurance cover against third-party liabilities of its members. A protection and
indemnity club is a mutual insurance association. 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.
Sulpicio's acceptance of the Certificate of Entry and Acceptance manifests its acquiescence to
all its provisions. There is no showing in the records or in Sulpicio's contentions that it objected
to any of the terms in this Certificate. Its acceptance, likewise, operated as an acceptance of the
entire provisions of the Club Rules.
CASE 10: Rizal Surety and Insurance Company vs CA

TOPIC: CHARACTERISTICS OF INSURANCE (CONTRACT OF ADHESION)
FACTS: Rizal Surety & Insurance Company (Rizal Insurance) issued Fire Insurance Policy No.
45727 in favor of Transworld Knitting Mills, Inc. (Transworld). The insurable interests, as stated
in the policy, were the buildings within the premises occupied by Transworld located at Pasig
City. However, there was ambiguity as to what particular buildings were covered.
Fire broke out in the compound of Transworld, razing the middle portion of its four-span
building and partly gutting the left and right sections thereof. A two-storey building (behind
said four-span building) where fun and amusement machines and spare parts were stored, was
also destroyed by the fire.
Rizal Insurance refused to indemnify Transworld based on its contention that the fire insurance
policy protected only the contents of the main building (four-span),12 and did not include those
stored in the two-storey annex building.
ISSUE: Whether or not the property that was destroyed by the fire is covered by the insurance
policy.
HELD: Citing the case of Fieldmen's Insurance Company, Inc. vs. Vda. De Songcoon contracts by
adherence, the Court rules in favor of the respondents.
'This rigid application of the rule on ambiguities has become necessary in view of current
business practices. The courts cannot ignore that nowadays monopolies, cartels and
concentration of capital, endowed with overwhelming economic power, manage to impose
upon parties dealing with them cunningly prepared 'agreements' that the weaker party may not
change one whit, his participation in the 'agreement' being reduced to the alternative to 'take it
or leave it' labelled since Raymond Saleilles 'contracts by adherence' (contrats [sic] d'adhesion),
in contrast to these entered into by parties bargaining on an equal footing, such contracts (of
which policies of insurance and international bills of lading are prime example) obviously call for
greater strictness and vigilance on the part of courts of justice with a view to protecting the
weaker party from abuses and imposition, and prevent their becoming traps for the unwary
Art.1377. The interpretation of obscure words or stipulations in a contract shall not favor the
party who caused the obscurity
CASE 11: Blue Cross vs Olivares (2008)

FACTS: Neomi T. Olivares applied for a health care program with Blue Cross Health Care, Inc., a
health maintenance firm. In the health care agreement, ailments due to pre-existing conditions
were excluded from the coverage. Neomi suffered a stroke and incurred hospital expenses.
Consequently, she requested from Blue Cross to settle her medical bills. But Blue Cross refused
to issue payment, pending the submission of a certification from her attending physician that
the stroke she suffered was not caused by a pre-existing condition. She was then constrained to
settle the bill. She filed a complaint for collection of sum of money against Blue Cross.
ISSUE: W/N the burden of proving that the ailment was not a pre-existing condition is with the
insured
HELD: the SC held in the NEGATIVE. It is an established rule in insurance contracts that when
their terms contain limitations on liability, they should be construed strictly against the insurer.
These are contracts of adhesion the terms of which must be interpreted and enforced
stringently against the insurer which prepared the contract. This doctrine is equally applicable
to health care agreements. Blue Cross never presented any evidence to prove that Neomi's
stroke was due to a pre-existing condition. It merely speculated that Dr. Saniel's report would
be adverse to Neomi, based on her invocation of the doctor-patient privilege. Since Blue Cross
had the burden of proving exception to liability, it should have made its own assessment of
whether Neomi had a pre-existing condition when it failed to obtain the attending physician's
report. It could not just passively wait for Dr. Saniel's report to bail it out.
CASE 12: Fortune Insurance and Surety Co. vs CA

FACTS: In a complaint for the sum of money, Fortune Insurance and Surety Co., Inc. (hereinafter
Fortune), refused to pay Producers the amount of P725,000 as indemnity for the loss sustained
by the latter, in a robbery incident. It contends that the case falls under the general exception
clause of the insurance policy, wherein any loss caused by any dishonest, fraudulent or criminal
act of the insured or any officer, employee, partner, director, trustee or authorized
representative, shall not render Fortune liable.
Since, Atiga and Magalong were charged with violation of P.D. 532 (Anti-Highway Robbery Law),
as security guard and driver contracted by Producer, to transfer money from Pasay branch to its
head office, make them its employee or authorized representative.
Trial court, as affirmed by the CA, held Fortune liable and dismissed the proposition that Atiga
and Magalong were Producer’s employee since the power of control is absent. Their services as
armored car driver and as security guard having been merely offered by PRC Management and
by Unicorn Security and which latter firms assigned them to plaintiff.
ISSUE: Whether recovery thereunder is precluded under the general exceptions clause thereof?
HELD: Yes. It should be noted that the insurance policy entered into by the parties is a theft or
robbery insurance policy which is a form of casualty insurance. Section 174 of the Insurance
Code provides:
Sec. 174. Casualty insurance is insurance covering loss or liability arising from accident or
mishap, excluding certain types of loss which by law or custom are considered as falling
exclusively within the scope of insurance such as fire or marine. It includes, but is not limited to,
employer's liability insurance, public liability insurance, motor vehicle liability insurance, plate
glass insurance, burglary and theft insurance, personal accident and health insurance as written
by non-life insurance companies, and other substantially similar kinds of insurance.
Except with respect to compulsory motor vehicle liability insurance, the Insurance Code
contains no other provisions applicable to casualty insurance or to robbery insurance in
particular. These contracts are, therefore, governed by the general provisions applicable to all
types of insurance. Outside of these, the rights and obligations of the parties must be
determined by the terms of their contract, taking into consideration its purpose and always in
accordance with the general principles of insurance law.
A contract of insurance is a contract of adhesion, thus any ambiguity therein should be resolved
against the insurer, or it should be construed liberally in favor of the insured and strictly against
the insurer. It goes without saying then that if the terms of the contract are clear and
unambiguous, there is no room for construction and such terms cannot be enlarged or
diminished by judicial construction.
An insurance contract is a contract of indemnity upon the terms and conditions specified
therein. It is settled that the terms of the policy constitute the measure of the insurer's
liability. In the absence of statutory prohibition to the contrary, insurance companies have the
same rights as individuals to limit their liability and to impose whatever conditions they deem
best upon their obligations not inconsistent with public policy.
It is clear to us that insofar as Fortune is concerned, it was its intention to exclude and exempt
from protection and coverage losses arising from dishonest, fraudulent, or criminal acts of
persons granted or having unrestricted access to Producers' money or payroll. When it used
then the term "employee," it must have had in mind any person who qualifies as such as
generally and universally understood, or jurisprudentially established in the light of the four
standards in the determination of the employer-employee relationship, 21 or as statutorily
declared even in a limited sense as in the case of Article 106 of the Labor Code which considers
the employees under a "labor-only" contract as employees of the party employing them and
not of the party who supplied them to the employer.
But even granting for the sake of argument that these contracts were not "labor-only"
contracts, and PRC Management Systems and Unicorn Security Services were truly independent
contractors, we are satisfied that Magalong and Atiga were, in respect of the transfer of
Producer's money from its Pasay City branch to its head office in Makati, its "authorized
representatives" who served as such with its teller MaribethAlampay. Howsoever viewed,
Producers entrusted the three with the specific duty to safely transfer the money to its head
office, with Alampay to be responsible for its custody in transit; Magalong to drive the armored
vehicle which would carry the money; and Atiga to provide the needed security for the money,
the vehicle, and his two other companions. In short, for these particular tasks, the three acted
as agents of Producers. A "representative" is defined as one who represents or stands in the
place of another; one who represents others or another in a special capacity, as an agent, and is
interchangeable with "agent."
CASE 13: Gulf Resorts vs Philippine Charter Insurance Corporation (2005)

FACTS: Gulf Resort, Inc. at Agoo, La Union was insured with American Home Assurance
Company which includes loss or damage to shock to any of the property insured by this policy
occasioned by or through or in consequence of earthquake. July 16, 1990, an earthquake struck
Central Luzon and Northern Luzon. Thus, the properties and swimming pools in the said resort
were damaged.
ISSUE: Whether or not the insurance policy issued covers only the two swimming pools owned
by Gulf Resorts and does not extend to all properties damaged.
HELD: Yes, the 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. All its
parts are reflective of the true intent of the parties. The policy cannot be construed piecemeal.
In sum, there is no ambiguity in the terms of the contract and its riders. Petitioner cannot rely
on the general rule thatinsurance 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. 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. Thus, these contracts are viewed as traps for the weaker party whom the
courts of justice must protect.
Consequently, any ambiguity therein is resolved against the insurer, or construed liberally in
favor of the insured. 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. Thus, we have
called on lower courts to remain careful in scrutinizing the factual circumstances behind each
case to determine the efficacy of the claims of contending parties. In Development Bank of the
Philippines v. National Merchandising Corporation, et al., the parties, who were acute
businessmen of experience, were presumed to have assented to the assailed documents with
full knowledge.
CASE 14: Eternal Gardens Memorial vs Philamlife Insurance (2008)

FACTS: Philippine American Life Insurance Company (Philamlife) entered into an agreement
denominated as Creditor Group Life Policy No. P-19202 with petitioner Eternal Gardens
Memorial Park Corporation (Eternal). Under the policy, the clients of Eternal who purchased
burial lots from it on installment basis would be insured by Philamlife. The amount of insurance
coverage depended upon the existing balance of the purchased burial lots.Eternal was required
under the policy to submit to Philamlife a list of all new lot purchasers, together with a copy of
the application of each purchaser, and the amounts of the respective unpaid balances of all
insured lot purchasers. In relation to the instant petition, Eternal complied by submitting a
letter dated December 29, 1982,4 containing a list of insurable balances of its lot buyers for
October 1982. One of those included in the list as "new business" was a certain John Chuang.
His balance of payments was PhP 100,000. On August 2, 1984, Chuang died. However, Philam
denied such claim.Eternal claims that the evidence that it presented before the trial court
supports its contention that it submitted a copy of the insurance application of Chuang before
his death. On the other hand, Philamlife claims that the evidence presented by Eternal is
insufficient, arguing that Eternal must present evidence showing that Philamlife received a copy
of Chuang’s insurance application.
ISSUE: whether or not there is an insurance coverage?
HELD: Yes. The fact of the matter is, the letter dated December 29, 1982, which Philamlife
stamped as received, states that the insurance forms for the attached list of burial lot buyers
were attached to the letter. Such stamp of receipt has the effect of acknowledging receipt of
the letter together with the attachments. Such receipt is an admission by Philamlife against its
own interest. The burden of evidence has shifted to Philamlife, which must prove that the letter
did not contain Chuang’s insurance application. However, Philamlife failed to do so; thus,
Philamlife is deemed to have received Chuang’s insurance application. it was Philamlife’s
bounden duty to make sure that before a transmittal letter is stamped as received, the
contents of the letter are correct and accounted for.
Moreover, since an insurance contract is a contract of adhesion, any doubt in the interpretation
thereof should be construed in favor in the insured. It means that that upon a party’s purchase
of a memorial lot on installment from Eternal, an insurance contract covering the lot purchaser
is created and the same is effective, valid, and binding until terminated by Philamlife by
disapproving the insurance application. The second sentence of Creditor Group Life Policy No.
P-1920 on the Effective Date of Benefit is in the nature of a resolutory condition which would
lead to the cessation of the insurance contract. Moreover, the mere inaction of the insurer on
the insurance application must not work to prejudice the insured; it cannot be interpreted as a
termination of the insurance contract. The termination of the insurance contract by the insurer
must be explicit and unambiguous.
CASE 15: Manila Bankers Life Insurance vs Aban (2013)

FACTS: Delia Sotero (Sotero) took out a life insurance policy from Manila Bankers Life Insurance
Corporation (Bankers Life), designating respondent Cresencia P. Aban (Aban), her niece,5 as her
beneficiary. When Sotero died, Aban filed a claim for the insurance proceeds to which Banker’s
Life refused. It argued that the policy was obtained under fraudulent circumstances. It also
added that Aban has no insurable interest in the life of her aunt, Sotero.
ISSUE: Whether or not, the insurance company has a cause of action to rescind the policy by
reason of fraud, thus, no liability to indemnify the respondent.
HELD: The Court ruled in favor of the respondent. It explained that under Section 48, an insurer
is given two years – from the effectivity of a life insurance contract and while the insured is
alive – to discover or prove that the policy is void ab initio or is rescindible by reason of the
fraudulent concealment or misrepresentation of the insured or his agent. After the two-year
period lapses, or when the insured dies within the period, the insurer must make good on the
policy, even though the policy was obtained by fraud, concealment, or misrepresentation.
Life insurance policies that pass the statutory two-year period are essentially treated as
legitimate and beyond question, and the individuals who wield them are made secure by the
thought that they will be paid promptly upon claim. In this manner, Section 48 contributes to
the stability of the insurance industry.
Insurers may not be allowed to delay the payment of claims by filing frivolous cases in court,
hoping that the inevitable may be put off for years – or even decades – by the pendency of
these unnecessary court cases. In the meantime, they benefit from collecting the interest
and/or returns on both the premiums previously paid by the insured and the insurance
proceeds which should otherwise go to their beneficiaries. The business of insurance is a highly
regulated commercial activity in the country, and is imbued with public interest. "An insurance
contract is a contract of adhesion which must be construed liberally in favor of the insured and
strictly against the insurer in order to safeguard the former’s interest."
CASE 16: Verendia vs CA

TOPIC: CONTRACT OF INDEMNITY
FACTS: Fidelity and Surety Insurance Company of the Philippines issued a Fire Insurance Policy
covering Rafael Verendia's residential building. While the fire insurance policy were in force, the
insured property was completely destroyed by fire. Fidelity was informed of the loss and
despite demands, refused payment under its policy, thus prompting Verendia to file a
complaint. Fidelity averred that Verendia maliciously represented that the building at the time
of the fire was leased under a contract executed to a certain Roberto Garcia, when actually it
was a Marcelo Garcia who was the lessee.
ISSUE: W/N the insured is entitled to payment under the fire insurance policy
HELD: the SC held in the NEGATIVE. A contract of indemnity, an insurance contract is the law
between the parties. Its terms and conditions constitute the measure of the insurer's liability
and compliance therewith is a condition precedent to the insured's right to recovery from the
insurer. As it is also a contract of adhesion, an insurance contract should be liberally construed
in favor of the insured and strictly against the insurer company which usually prepares it.
However, Verendia used a false lease contract to support his claim under Fire Insurance Policy;
thus, the terms of the policy should be strictly construed against the insured. Verendia failed to
live by the terms of the policy, which states: that all benefits under the policy shall be forfeited
"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 devises are used by the Insured or anyone acting in his
behalf to obtain any benefit under the policy". Verendia, having presented a false declaration to
support his claim for benefits in the form of a fraudulent lease contract, forfeited all benefits by
virtue of the provisions of the policy, in the absence of proof that Fidelity waived such
provision.
CASE 17: Gulf Resorts vs Philippine Charter Insurance Corporation (2005)

TOPIC: ELEMENTS OF INSURANCE
FACTS: Petitioner avers that, pursuant to its earthquake shock endorsement rider, Insurance
Policy No. 31944 covers all damages to the properties within its resort caused by earthquake.
Respondent contends that the rider limits its liability for loss to the two swimming pools of
petitioner.
PICC contends that in order for the earthquake shock endorsement to be effective, premiums
must be paid for all the properties covered. In all of its seven insurance policies, petitioner only
paid P393.00 as premium for coverage of the swimming pools against earthquake shock. No
other premium was paid for earthquake shock coverage on the other properties.
ISSUE: Whether or not insurance coverage extends to all properties of Gulf damaged by
earthquake?
HELD: No. 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:
The insured has an insurable interest;
The insured is subject to a risk of loss by the happening of the designated peril;
The insurer assumes the risk;
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
In consideration of the insurer's promise, the insured pays a premium.
An insurance premium is the consideration paid an insurer for undertaking to indemnify the
insured against a specified peril.27 In fire, casualty, and marine insurance, the premium payable
becomes a debt as soon as the risk attaches.28 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 petitioner’s previous insurance policies
from AHAC-AIU.
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 verbatimthe provisions and terms of its latest insurance
policy from AHAC-AIU.
CASE 18: Philamlife Health Systems vs CA

TOPIC: ELEMENTS OF INSURANCE
FACTS: ErnaniTrinos applied for a health care coverage with Philamcare Health Systems, Inc. To
the question ‘Have you or any of your family members ever consulted or been treated for high
blood pressure, heart trouble, diabetes, cancer, liver disease, asthma or peptic ulcer?’, Ernani
answered ‘No’. Under the agreement, Ernani is entitled to avail of hospitalization benefits and
out-patient benefits. The coverage was approved for a period of one year from March 1, 1988
to March 1, 1989. The agreement was however extended yearly until June 1, 1990 which
increased the amount of coverage to a maximum sum of P75,000 per disability.During the
period of said coverage, Ernani suffered a heart attack and was confined at the Manila Medical
Center (MMC) for one month. He was also admitted at the Chinese General Hospital. Due to
financial difficulties.Julita tried to claim the benefits under the health care agreement. But the
Philamcare denied her claim alleging that the agreement was void because Ernani concealed his
medical history. Hence, Julita filed an action for damages and reimbursement of her expenses
plus moral damages attorney’s fees against Philamcare and its president.
ISSUE: Whether or not the health care agreement is an insurance contract

HELD: Yes. A contract of insurance is an agreement whereby one undertakes for a consideration
to indemnify another against loss, damage or liability arising from an unknown or contingent
event. 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. 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.
Section 3 of the Insurance Code states that any contingent or unknown event, whether past or
future, which may damnify a person having an insurable against him, may be insured against.
Every person has an insurable interest in the life and health of himself.
The insurable interest of respondent’s 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.
In the case at bar, the insurable interest of respondent’s 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.
CASE 19: Manila Mahogany Manufacturing Corp. vs CA

TOPIC: RIGHT OF SUBROGATION & EXCEPTIONS TO THE SUBROGATION RULE
FACTS: Petitioner insured its Mercedes Benz 4-door sedan with respondent insurance company.
On 4 May 1970 the insured vehicle was bumped and damaged by a truck owned by San Miguel
Corporation. For the damage caused, respondent company paid petitioner five thousand pesos
(P5,000.00) in amicable settlement. Petitioner's general manager executed a Release of Claim,
subrogating respondent company to all its right to action against San Miguel Corporation.On 11
December 1972, respondent company wrote Insurance Adjusters, Inc. to demand
reimbursement from San Miguel Corporation of the amount it had paid petitioner. Insurance
Adjusters, Inc. refused reimbursement, alleging that San Miguel Corporation had already paid
petitioner P4,500.00 for the damages to petitioner's motor vehicle, as evidenced by a cash
voucher and a Release of Claim executed by the General Manager of petitioner discharging San
Miguel Corporation from "all actions, claims, demands the rights of action that now exist or
hereafter [sic] develop arising out of or as a consequence of the accident.Respondent insurance
company thus demanded from petitioner reimbursement of the sum of P4,500.00 paid by San
Miguel Corporation. The court ordered the petitioner to pay P 5000.
ISSUE: Whether or not the petitioner is obliged to retain the P5000?

HELD: Yes. petitioner is entitled to keep the sum of P4,500.00 paid by San Miguel Corporation
under its clear right to file a deficiency claim for damages incurred, against the wrongdoer,
should the insurance company not fully pay for the injury caused (Article 2207, New Civil Code).
However, when petitioner released San Miguel Corporation from any liability, petitioner's right
to retain the sum of P5,000.00 no longer existed, thereby entitling private respondent to
recover the same.
The right of subrogation can only exist after the insurer has paid the otherwise the insured will
be deprived of his right to full indemnity. If the insurance proceeds are not sufficient to cover
the damages suffered by the insured, then he may sue the party responsible for the damage for
the the [sic] remainder. To the extent of the amount he has already received from the insurer
enjoy's [sic] the right of subrogation.
Since the insurer can be subrogated to only such rights as the insured may have, should the
insured, after receiving payment from the insurer, release the wrongdoer who caused the loss,
the insurer loses his rights against the latter. But in such a case, the insurer will be entitled to
recover from the insured whatever it has paid to the latter, unless the release was made with
the consent of the insurer.
CASE 20: Federal Express Corporation vs American Home Insurance

FACTS: SMITHKLINE delivered to Burlington Air Express a shipment of 109 cartons of veterinary
biologicals for delivery to consignee SMITHKLINE and French Overseas Company. The shipment
was covered by Burlington Airway Bill No. 11263825 with the words, 'REFRIGERATE WHEN NOT
IN TRANSIT' and 'PERISHABLE' stamp marked on its face. That same day, Burlington insured the
cargoes in the amount of $39,339.00 with American Home Assurance Company.
Upon receipt of the insurance proceeds, the consignee (Smithkline) executed a subrogation
Receipt12 in favor of respondents. The latter were thus authorized "to file claims and begin suit
against any such carrier, vessel, person, corporation or government."
However, the cargoes were stored only in a room with two (2) air conditioners running, to cool
the place instead of a refrigerator. As a consequence, SMITHKLINE abandoned the shipment
and, declaring 'total loss' for the unusable shipment, filed a claim with AHAC.
ISSUE: Whether or not the respondents have no personality to sue because the payment was
made by the respondents to Smithkline when the insured under the policy is Burlington Air
Express.
HELD: AHAC was authorized "to file claims and begin suit against any such carrier, vessel,
person, corporation or government." Undeniably, the consignee had a legal right to receive the
goods in the same condition it was delivered for transport to petitioner. If that right was
violated, the consignee would have a cause of action against the person responsible therefor.
Upon payment to the consignee of an indemnity for the loss of or damage to the insured goods,
the insurer's entitlement to subrogation pro tanto -- being of the highest equity -- equips it with
a cause of action in case of a contractual breach or negligence. Further, the insurer's
subrogatory right to sue for recovery under the bill of lading in case of loss of or damage to the
cargo is jurisprudentially upheld.
In the exercise of its subrogatory right, an insurer may proceed against an erring carrier. To all
intents and purposes, it stands in the place and in substitution of the consignee. A fortiori, both
the insurer and the consignee are bound by the contractual stipulations under the bill of lading.
CASE 21: Keppel Cebu Shipyard vs Pioneer Insurance (2009)

FACTS: Keppel Cebu Shipyard, Inc. (KCSI) and WG&A Jebsens Shipmanagement, Inc. (WG&A)
executed a Shiprepair Agreement wherein KCSI would renovate and reconstruct WG&As M/V
Superferry 3 using its dry docking facilities pursuant to its restrictive safety and security rules
and regulations. Prior to the execution of the Shiprepair Agreement, Superferry 3 was already
insured by WG&A with Pioneer Insurance and Surety Corporation (Pioneer). In the course of its
repair, M/V Superferry 3 was gutted by fire. WG&A declared the vessels damage as a total
constructive loss and, hence, filed an insurance claim with Pioneer. Pioneer paid the insurance
claim of WG&A. WG&A, in turn, executed a Loss and Subrogation Receipt in favor of Pioneer.
Armed with the subrogation receipt, Pioneer tried to collect from KCSI, but the latter denied
any responsibility for the loss of the subject vessel. Pioneer asseverates that by operation of
law, it was entitled to be subrogated to the rights of WG&A to claim the amount of the
loss. KCSI counters that there is no proof of payment of the insurance proceeds.
ISSUE: W/N Pioneer has a right to collect from KCSI
HELD: the SC ruled in the AFFIRMATIVE. Art. 2207 of the New Civil Code: If the plaintiffs
property has been insured and he has received indemnity from the insurance company for the
injury or loss arising out of the wrong or breach of contract complained of, the insurance
company shall be subrogated to the rights of the insured against the wrongdoer or the person
who has violated the contract. If the amount paid by the insurance company does not fully cover
the injury or loss, the aggrieved party shall be entitled to recover the deficiency from the person
causing the loss or injury.
Subrogation is the substitution of one person by another with reference to a lawful claim or
right, so that he who is substituted succeeds to the rights of the other in relation to a debt or
claim, including its remedies or securities. The principle covers a situation wherein an insurer
has paid a loss under an insurance policy is entitled to all the rights and remedies belonging to
the insured against a third party with respect to any loss covered by the policy. It contemplates
full substitution such that it places the party subrogated in the shoes of the creditor, and he
may use all means that the creditor could employ to enforce payment.
The Supreme Court held that payment by the insurer to the insured operates as an equitable
assignment to the insurer of all the remedies that the insured may have against the third party
whose negligence or wrongful act caused the loss. The right of subrogation is not dependent
upon, nor does it grow out of, any privity of contract. It accrues simply upon payment by the
insurance company of the insurance claim. The doctrine of subrogation has its roots in equity. It
is designed to promote and to accomplish justice; and is the mode that equity adopts to compel
the ultimate payment of a debt by one who, in justice, equity, and good conscience, ought to
pay.
Here, Pioneer, finding the claim compensable, paid the claim, with WG&A issuing a Loss and
Subrogation Receipt evidencing receipt of the payment of the insurance proceeds from
Pioneer. The claim of KCSI that there was no ample proof of payment simply because the
person who signed the Receipt appeared to be an employee of Aboitiz Shipping Corporation
was unacceptable. The Loss and Subrogation Receipt issued by WG&A to Pioneer is the best
evidence of payment of the insurance proceeds to the former, and no controverting evidence
was presented by KCSI to rebut the presumed authority of the signatory to receive such
payment. Therefore, Pioneer has a right to collect payment from KCSI.
CASE 22: Malayan Insurance vs Alberto (2012)

FACTS: An accident occurred at the corner of EDSA and Ayala Avenue, Makati City, involving
four (4) vehicles, to wit: (1) a Nissan Bus operated by Aladdin Transit with plate number NYS
381; (2) an Isuzu Tanker with plate number PLR 684; (3) a Fuzo Cargo Truck with plate number
PDL 297; and (4) a Mitsubishi Galant with plate number TLM 732.
Malayan Insurance issued Car Insurance Policy No. PV-025-00220 in favor of First Malayan
Leasing and Finance Corporation (the assured), insuring the aforementioned Mitsubishi Galant
against third party liability, own damage and theft, among others. Having insured the vehicle
against such risks, Malayan Insurance claimed in its Complaint dated October 18, 1999 that it
paid the damages sustained by the assured amounting to PhP 700,000.6
Maintaining that it has been subrogated to the rights and interests of the assured by operation
of law upon its payment to the latter, Malayan Insurance sent several demand letters to
respondents Rodelio Alberto (Alberto) and Enrico Alberto Reyes (Reyes), the registered owner
and the driver, respectively, of the Fuzo Cargo Truck, requiring them to pay the amount it had
paid to the assured.
Malayan Insurance contends that there was a valid subrogation in the instant case, as
evidenced by the claim check voucher30 and the Release of Claim and Subrogation
Receipt31 presented by it before the trial court. Respondents, however, claim that the
documents presented by Malayan Insurance do not indicate certain important details that
would show proper subrogation.
ISSUE: Whether or not Malayan Insurance is entitled to Subrogation?
HELD: Yes. Bearing in mind that the claim check voucher and the Release of Claim and
Subrogation Receipt presented by Malayan Insurance are already part of the evidence on
record, and since it is not disputed that the insurance company, indeed, paid PhP 700,000 to
the assured, then there is a valid subrogation in the case at bar.
The Supreme Court held that payment by the insurer to the insured operates as an equitable
assignment to the insurer of all the remedies that the insured may have against the third party
whose negligence or wrongful act caused the loss. The right of subrogation is not dependent
upon, nor does it grow out of, any privity of contract. It accrues simply upon payment by the
insurance company of the insurance claim. The doctrine of subrogation has its roots in equity. It
is designed to promote and to accomplish justice; and is the mode that equity adopts to compel
the ultimate payment of a debt by one who, in justice, equity, and good conscience, ought to
pay.
CASE 23: Asian Terminals vs First Lepanto (2014)

FACTS: A shipment of 3,000 bags of sodium tripolyphosphate arrived in Manila through China
Ocean Shipping Co. (COSCO) and was discharged into the possession and custody of Asian
Terminals, Inc. (ATI), a domestic corporation engaged in arrastre business. The shipment
remained for quite some time at ATI’s storage area until it was withdrawn by broker, Proven
Customs Brokerage Corporation (PROVEN), on for delivery to the consignee. Upon receipt of
the shipment, it was found out that the delivered goods incurred shortages and spillage for a
loss/damage valued at P166,772.41. Grand Asian Sales, Inc. (GASI) sought recompense from
COSCO, thru its Philippine agent SMITH BELL, ATI and PROVEN but was denied. Hence, it
pursued indemnification from the shipment’s insurer, FIRST LEPANTO. As subrogee, FIRST
LEPANTO demanded from COSCO, its shipping agency in the Philippines, SMITH BELL, PROVEN
and ATI, reimbursement of the amount it paid to GASI. ATI and PROVEN denied liability for the
lost/damaged shipment and claimed that it exercised due diligence and care in handling the
same.
ISSUE: Whether or not the presentation of the insurance policy is indispensable in proving the
right of FIRST LEPANTO to be subrogated to the right of the consignee.
HELD: The Court denies the petition. Non-presentation of the insurance contract is not fatal to
FIRST LEPANTO’s cause of action for reimbursement as subrogee.
As a general rule, the marine insurance policy needs to be presented in evidence before the
insurer may recover the insured value of the lost/damaged cargo in the exercise of its
subrogatory right. But the rule is not inflexible. In certain cases, the Court has admitted
exceptions by declaring that marine insurance policy is dispensable evidence in reimbursement
claims instituted by the insurer.
The payment by the insurer to the insured operates as an equitable assignment to the insurer
of all the remedies which the insured may have against the third party whose negligence or
wrongful act caused the loss. The right of subrogation is not dependent upon, nor does it grow
out of any privity of contract or upon payment by the insurance company of the insurance
claim. It accrues simply upon payment by the insurance company of the insurance claim.
CASE NO.24 DBP vs. CA

Topic: Liability of insurance agent
Facts; In May 1987, Juan B. Dansapplied for a loan of P500,000.00 with the Development Bank
of the Philippines (DBP), Basilan Branch. As the principal mortgagor, Dans, then 76 years of age,
was advised by DBP to obtain a mortgage redemption insurance (MRI) with the DBP Mortgage
Redemption Insurance Pool (DBP MRI Pool). Dans accomplished and submitted the "MRI
Application for Insurance" and the "Health Statement for DBP MRI Pool."On August 20, 1987,
the MRI premium of Dans, less the DBP service fee of 10 percent, was credited by DBP to the
savings account of the DBP MRI Pool. Accordingly, the DBP MRI Pool was advised of the credit.
Dans accomplished and submitted the "MRI Application for Insurance" and the "Health
Statement for DBP MRI Pool."On August 20, 1987, the MRI premium of Dans, less the DBP
service fee of 10 percent, was credited by DBP to the savings account of the DBP MRI Pool.
Accordingly, the DBP MRI Pool was advised of the credit.
Issue 1; Whether or not the insurance company is liable under the insurance contract;
Issue 2; Whether or not the insurance agent, which is DBP, is liable?
Held 1; No. When Dans applied for MRI, he filled up and personally signed a "Health Statement
for DBP MRI Pool" (Exh. "5-Bank") with the following declaration:
I hereby declare and agree that all the statements and answers contained herein are true,
complete and correct to the best of my knowledge and belief and form part of my application
for insurance. It is understood and agreed that no insurance coverage shall be effected unless
and until this application is approved and the full premium is paid during my continued good
health (Records, p. 40).
Under the aforementioned provisions, the MRI coverage shall take effect: (1) when the
application shall be approved by the insurance pool; and (2) when the full premium is paid
during the continued good health of the applicant. These two conditions, being joined
conjunctively, must concur.Undisputably, the power to approve MRI applications is lodged with
the DBP MRI Pool. The pool, however, did not approve the application of Dans. There is also no
showing that it accepted the sum of P1,476.00, which DBP credited to its account with full
knowledge that it was payment for Dan's premium. There was, as a result, no perfected
contract of insurance; hence, the DBP MRI Pool cannot be held liable on a contract that does
not exist.
Held 2; Yes. As an insurance agent, DBP made Dans go through the motion of applying for said
insurance, thereby leading him and his family to believe that they had already fulfilled all the
requirements for the MRI and that the issuance of their policy was forthcoming. Apparently,
DBP had full knowledge that Dan's application was never going to be approved. The maximum
age for MRI acceptance is 60 years as clearly and specifically provided in Article 1 of the Group
Mortgage Redemption Insurance Policy signed in 1984 by all the insurance companies
concerned (Exh. "1-Pool").
Under Article 1987 of the Civil Code of the Philippines, "the agent who acts as such is not
personally liable to the party with whom he contracts, unless he expressly binds himself or
exceeds the limits of his authority without giving such party sufficient notice of his powers."
The DBP is not authorized to accept applications for MRI when its clients are more than 60
years of age (Exh. "1-Pool"). Knowing all the while that Dans was ineligible for MRI coverage
because of his advanced age, DBP exceeded the scope of its authority when it accepted Dan's
application for MRI by collecting the insurance premium, and deducting its agent's commission
and service fee.
CASE NO.25 Enriquez vs SunLife

Facts :Joaquin Herrer made application to the Sun Life Assurance Company of Canada through
its office in Manila for a life annuity. The application was immediately forwarded to the head
office of the company in Canada. The head office gave notice of acceptance by cable to Manila.
The policy was later issued. On December 20, 1917, Mr. Herrer died without knowing that his
insurance application was already approved.
Issue: Whether or not the insurance contract was perfected.
Held: The Court held that the contract for a life annuity was not perfected because it has not
been proved satisfactorily that the acceptance of the application ever came to the knowledge
of the applicant. The Civil Code rule, that an acceptance made by letter shall bind the person
making the offer only from the date it came to his knowledge, may not be the best expression
of modern commercial usage. Still it must be admitted that its enforcement avoids uncertainty
and tends to security. The courts who take this view have expressly held that an acceptance of
an offer of insurance not actually or constructively communicated to the proposer does not
make a contract. Only the mailing of acceptance, it has been said, completes the contract of
insurance, as the locus poenitentiae is ended when the acceptance has passed beyond the
control of the party.
CASE 26: Great Pacific Life Assurance vs CA (1979)

TOPIC: Perfection of a contract of insurance
FACTS: Ngo Hing filed an application with the Great Pacific Life Assurance Company policy on
the life of his 1 year old daughter. Upon the payment of the insurance premuim, the binding
deposit receipt was issued to Ngo Hing. The Branch Manager of Pacific Life Cebu wrote at the
application form his strong recommendation for the approval of the insurance application.
Pacific Life sent a letter to the Branch Manager disapproving the insurance application. The
letter stated that the life insurance application is not available for minors below 7 years old, but
Pacific Life can consider the same under the Juvenile Triple Action Plan. The non-acceptance of
the insurance plan by Pacific Life was allegedly not communicated to Ngo Hing. Ngo Hing’s
daughter died of influenza and he sought payment of the insurance, but having failed in his
effort, he filed the action for recovery of the same before the Court of First Instance.
ISSUE: Whether the Contract of Insurance was perfected
HELD: the Supreme Court held that there was no contract of insurance perfected. The binding
deposit receipt in question is merely an acknowledgment, on behalf of the company, that the
branch office had received from the applicant the insurance premium and had accepted the
application, subject for processing by the insurance company; and that the latter will either
approve or reject the same on the basis of whether or not the applicant is "insurable on
standard rates." Since Pacific Life disapproved the insurance application of Ngo Hing, the
binding deposit receipt in question had never been in force at any time. The binding deposit
receipt is merely conditional and does not insure outright. Where an agreement is made
between the applicant and the agent, no liability shall attach until the principal approves the
risk and a receipt is given by the agent. The acceptance of the agent is merely conditional and is
subordinated to the act of the company in approving or rejecting the application. Thus, in life
insurance, a "binding slip" or "binding receipt" does not insure by itself. In the absence of
meeting of the minds between Pacific Life and Ngo Hing over the life insurance, there could
have been no insurance contract duly perfected between them.
CASE 27: Gaisano Cagayan Inc vs Insurance Company of North America (2006)
Facts: Intercapitol Marketing Corporation (IMC) is the maker of Wrangler Blue Jeans. Levi
Strauss (Phils.) Inc. (LSPI) is the local distributor of clothing products separately obtained from
respondent fire insurance policies with book debt endorsements. The insurance policies
provide for coverage on "book debts in connection with ready-made clothing materials which
have been sold or delivered to various customers and dealers of the Insured anywhere in the
Philippines.The policies defined book debts as the "unpaid account still appearing in the Book of
Account of the Insured 45 days after the time of the loss covered under this Policy. On February
25, 1991, the Gaisano Superstore Complex in Cagayan de Oro City, owned by petitioner, was
consumed by fire. Included in the items lost or destroyed in the fire were stocks of ready-made
clothing materials sold and delivered by IMC and LSPI.
ISSUE: Whether or not there is an insurable interest in the property
HELD: the SC held that there is an insurable interest in property. Section 14 of the Insurance
Code states: an insurable interest in property may consist in: a.) an existing interest; b.) an
inchoate interest founded on existing interest; or c.) an expectancy coupled with an existing
interest in that out of which the expectancy arises. Therefore, an insurable interest in property
does not necessarily imply a property interest in, or lienupon, or possession of, the subject
matter of the insurance, and neither the title nor a beneficial interest is requisite to the
existence of such 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 injured. In this case, the insurable interest of IMC and LSPI pertain to the unpaid
accounts appearing in their books of account, 45 days after the time of the loss covered by the
policies, and Gaisano is liable for such unpaid accounts.
Case No. 28 Geagonia vs. Court of Appeals

Topic: Insurable Interest in case of mortgaged property
FACTS: Armando Geagonia is the owner of Norman's Mart located in the public market of San
Francisco, Agusan del Sur. He obtained from Country Bankers Insurance Corporation fire
insurance policy No. F-14622 2 for P100,000.00. The 1 year policy and covered the stock trading
of dry goods. Geagonia declared in the policy under the subheading entitled CO-INSURANCE
that Mercantile Insurance Co., Inc. was the co-insurer for P50,000.00. The policy required the
insured to notify the insurer of any existing insurance. Otherwise, all the benefits under the
policy shall be deemed forfeited, provided that the condition shall not apply when loss or
damage is not more than P200,000. The petitioners’ stocks were destroyed by fire. He then
filed a claim which was subsequently denied because the petitioner’s stocks were covered by
two other fire insurance policies for P200,000 issued by PFIC. Also, the policies indicate that the
insured was "Messrs. Discount Mart (Mr. Armando Geagonia, Prop.)" with a mortgage clause
reading: "MORTGAGEE: Loss, if any, shall be payable to Messrs. Cebu Tesing Textiles, Cebu City
as their interest may appear subject to the terms of this policy. CO-INSURANCE DECLARED:
P100,000.—Phils. First CEB/F-24758"
Geagonia then filed a complaint against the private respondent in the Insurance Commission
for the recovery of P100,000.00 under fire insurance policy and damages.
ISSUE:Whether or not the mortgagor has an existing interest that may be the subject of an
insurance.
HELD:Yes. As to a mortgaged property, the mortgagor and the mortgagee have each an
independent insurable interest therein and both interests may be covered by one policy, or
each may take out a separate policy covering his interest, either at the same or at separate
times. The mortgagor insurable interest covers the full value of the mortgaged property, even
though themortgage debt is equivalent to the full value of the property. The mortgagee
insurable interest is tothe extent of the debt, since the property is relied upon as security
thereof, and in insuring he is notinsuring the property but his interest or lien thereon. His
insurable interest is prima facie the valuemortgaged and extends only to the amount of the
debt, not exceeding the value of the mortgagedproperty. Thus, separate insurances covering
different insurable interests may be obtained by themortgagor and the mortgagee.
Case No. 29 RCBC vs. CA

Topic: Insurable interes
Facts; GOYU applied for credit facilities and accommodations with RCBC at its Binondo Branch.
As security for its credit facilities with RCBC, GOYU executed two real estate mortgages and two
chattel mortgages in favor of RCBC. GOYU committed itself to insure the mortgaged property
with an insurance company approved by RCBC, and subsequently, to endorse and deliver the
insurance policies to RCBC. GOYU obtained in its name a total of ten insurance policies from
MICO. In February 1992, Alchester Insurance Agency, Inc., the insurance agent where GOYU
obtained the Malayan insurance policies, issued nine endorsements in favor of RCBC seemingly
upon instructions of GOYU (Exhibits 1-Malayan to 9-Malayan).On April 27, 1992, one of GOYUs
factory buildings in Valenzuela was gutted by fire. Consequently, GOYU submitted its claim for
indemnity on account of the loss insured against.
Issue; Whether or not RCBC has insurable interest in this case?
Held; Yes. It is settled that a mortgagor and a mortgagee have separate and distinct insurable
interests in the same mortgaged property, such that each one of them may insure the same
property for his own sole benefit. There is no question that GOYU could insure the mortgaged
property for its own exclusive benefit. In the present case, although it appears that GOYU
obtained the subject insurance policies naming itself as the sole payee, the intentions of the
parties as shown by their contemporaneous acts, must be given due consideration in order to
better serve the interest of justice and equity.It is to be noted that nine endorsement
documents were prepared by Alchester in favor of RCBC. On equitable principles, particularly
on the ground of estoppel, the Court is constrained to rule in favor of mortgagor RCBC. GOYU
cannot seek relief under Section 53 of the Insurance Code which provides that the proceeds of
insurance shall exclusively apply to the interest of the person in whose name or for whose
benefit it is made.
The peculiarity of the circumstances obtaining in the instant case presents a justification to take
exception to the strict application of said provision, it having been sufficiently established that
it was the intention of the parties to designate RCBC as the party for whose benefit the
insurance policies were taken out.
CASE NO.30 Great Pacific vs CA (mortgage)

Facts:A contract of group life insurance was executed between Grepalife and DBP. Grepalife
agreed to insure the lives of eligible housing loan mortgagors of DBP. Dr. Wilfredo Leuterio, one
of the housing debtors of DBP applied for membership in the group life insurance plan.
Grepalife issued Certificate No. B-18558, as insurance coverage of Dr. Leuterio, to the extent of
his DBP mortgage indebtedness amounting to P86,200. When Leuterio died, DBP submitted a
death claim to Grepalife, but the same was denied. Both RTC and CA ruled in favor of DBP,
ordering Grepalife to pay DBP of the P86,200.
Issue: Whether or not DBP has the right to claim the 86,200 to Grepalife being a creditor of the
deceased.
Held: The rationale of a group insurance policy of mortgagors, otherwise known as the
"mortgage redemption insurance," is a device for the protection of both the mortgagee and the
mortgagor. On the part of the mortgagee, it has to enter into such form of contract so that in
the event of the unexpected demise of the mortgagor during the subsistence of the mortgage
contract, the proceeds from such insurance will be applied to the payment of the mortgage
debt, thereby relieving the heirs of the mortgagor from paying the obligation. In a similar vein,
ample protection is given to the mortgagor under such a concept so that in the event of death;
the mortgage obligation will be extinguished by the application of the insurance proceeds to
the mortgage indebtedness. Consequently, where the mortgagor pays the insurance premium
under the group insurance policy, making the loss payable to the mortgagee, the insurance is
on the mortgagor's interest, and the mortgagor continues to be a party to the contract. In this
type of policy insurance, the mortgagee is simply an appointee of the insurance fund, such loss-
payable clause does not make the mortgagee a party to the contract.
CASE 31: Spouses Cha vs CA (1997)

TOPIC: Insurable interest in property
FACTS: Spouses Cha, as lessees, entered into a lease contract with CKS Development
Corporation (lessor). One of the stipulations of the lease contract states: The LESSEE shall not
insure against fire the chattels placed in the leased premises without first obtaining the written
consent and approval of the LESSOR. If the LESSEE obtains the insurance thereof without the
consent of the LESSOR then the policy is deemed assigned and transferred to the LESSOR.
Notwithstanding the stipulation in the lease contract, the Cha spouses insured against loss by
fire their merchandise inside the leased premises with United Insurance Co. without the written
consent of CKS. Fire broke out inside the leased premises. When CKS learned of the insurance
procured by the Cha spouses without its consent, it wrote to United a demand letter asking that
the proceeds of the insurance contract be paid directly to CKS, based on its lease contract with
Cha spouses. United refused to pay CKS. Hence, CKS filed a complaint against the Cha spouses
and United.
ISSUE: Whether United Insurance must pay the insurance proceeds to CKS
HELD: the SC held that the insurance proceeds must not be paid to CKS but to the Spouses Cha.
Section 18 of the Insurance Code provides: No contract or policy of insurance on property shall
be enforceable except for the benefit of some person having an insurable interest in the
property insured.
A non-life insurance policy such as the fire insurance policy taken by the spouses over their
chattels is primarily a contract of indemnity. Insurable interest in the property insured must
exist at the time the insurance takes effect and at the time the loss occurs. The basis of such
requirement of insurable interest in property insured is based on the public policy: to prevent a
person from taking out an insurance policy on property upon which he has no insurable interest
and collecting the proceeds of said policy in case of loss of the property. In such a case, the
contract of insurance is a mere wager which is void under Section 25 of the Insurance Code. In
the present case, CKS has no insurable interest in the chattels inside the leased premises under
the provisions of Section 17 of the Insurance Code. Therefore, CKS cannot, under the Insurance
Code, be validly a beneficiary of the fire insurance policy. The insurable interest over said
chattels remains with the insured, the Cha spouses. The automatic assignment of the policy to
CKS under the provision of the lease contract previously quoted is void for being contrary to law
and/or public policy. The insurer (United) cannot be compelled to pay the proceeds of the fire
insurance policy to CKS who has no insurable interest in the property insured.
CASE 32: Geagonia vs. Court of Appeals

Facts: Geagonia obtained a fire insurance policy in the sum of P100,000 covering his stock-in-
trade in his business Norman Mart. The policy contained the following condition:
"3. The insured shall give notice to the Company of any insurance or insurances already
effected, or which may subsequently be effected, covering any of the property or properties
consisting of stocks in trade, goods in process and/or inventories only hereby insured, and
unless such notice be given and the particulars of such insurance or insurances be stated
therein or endorsed in this policy pursuant to Section 50 of the Insurance Code, by or on behalf
of the Company before the occurrence of any loss or damage, all benefits under this policy shall
be deemed forfeited, provided however, that this condition shall not apply when the total
insurance or insurances in force at the time of the loss or damage is not more than
P200,000.00."
While the policy is in force, fire broke out which completely destroyed Geagonia’s store. Thus
he filed an insurance claim. The claim was denied because it found that at the time of the loss
the petitioner's stocks-in-trade were likewise covered by fire insurance policies No. GA-28146
and No. GA-28144, for P100,000.00 each, issued by the Cebu Branch of the Philippines First
Insurance Co., Inc. (hereinafter PFIC).3 These policies indicate that the insured was "Messrs.
Discount Mart (Mr. Armando Geagonia, Prop.)" with a mortgage clause reading:
"MORTGAGEE: Loss, if any, shall be payable to Messrs. Cebu Tesing Textiles, Cebu City as their
interest may appear subject to the terms of this policy. CO-INSURANCE DECLARED: P100,000.—
Phils. First CEB/F-24758"4
The basis of the private respondent's denial was the petitioner's alleged violation of Condition 3
of the policy.
The Insurance Commission found that the petitioner did not violate Condition 3 as he had no
knowledge of the existence of the two fire insurance policies obtained from the PFIC; that it
was Cebu Tesing Textiles which procured the PFIC policies without informing him or securing his
consent; and that Cebu Tesing Textile, as his creditor, had insurable interest on the stocks. CA
reversed the decision because it found that the petitioner knew of the existence of the two
other policies issued by the PFIC. And that the premiums on both policies were paid for by
private respondent, not by the Tesing Textiles which is alleged to have taken out the other
insurances without the knowledge of private respondent.
Issue: Whether the petitioner had prior knowledge of the two insurance policies issued by the
PFIC when he obtained the fire insurance policy from the private respondent, thereby, for not
disclosing such fact, violating Condition 3 of the policy, and if he had, whether he is precluded
from recovering therefrom.
Held: Yes, he had knowledge but he may recover. It was, indeed, incredible that he did not
know about the prior policies since these policies were not new or original. Policy No. GA-28144
was a renewal of Policy No. F-24758, while Policy No. GA-28146 had been renewed twice, the
previous policy being F-24792.
Condition 3 of the private respondent's Policy No. F-14622 is a condition which is not
proscribed by law. Its incorporation in the policy is allowed by Section 75 of the Insurance
Code15 which provides that "[a] policy may declare that a violation of specified provisions
thereof shall avoid it, otherwise the breach of an immaterial provision does not avoid the
policy."
However, in order to constitute a violation, the other insurance must be upon the same subject
matter, the same interest therein. As to a mortgaged property, the mortgagor and the
mortgagee have each an independent insurable interest therein and both interests may be
covered by one policy, or each may take out a separate policy covering his interest, either at
the same or at 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. His insurable interest is prima facie the value mortgaged and extends only to the
amount of the debt, not exceeding the value of the mortgaged property. Thus, separate
insurances covering different insurable interests may be obtained by the mortgagor and the
mortgagee.
A double insurance exists where the same person is insured by several insurers separately in
respect of the same subject and interest. As earlier stated, the insurable interests of mortgagor
and a mortgagee on the mortgaged property are distinct and separate. Since the two policies of
the PFIC do not cover the same interest as that covered by the policy of the private respondent,
no double insurance exists. The non-disclosure then of the former policies was not fatal to the
petitioner's right to recover on the private respondent's policy.
Case No. 33: Rizal Commercial Banking Corporation (RCBC) vs. Court of Appeals
Topic: Insurable Interest
FACTS: RCBC Binondo Branch initially granted a credit facility of P30M to Goyu& Sons, Inc.
GOYU’s applied again and through Binondo Branch key officer's Uy’s and Lao’s
recommendation, RCBC’s executive committee increased its credit facility to P50M to P90M
and finally to P117M. As security, GOYU executed 2 real estate mortgages and 2 chattel
mortgages in favor of RCBC. GOYU obtained in its name 10 insurance policy on the mortgaged
properties from Malayan Insurance Company, Inc. (MICO). In February 1992, he was issued 8
insurance policies in favor of RCBC.
On April 27, 1992, one of GOYU’s factory buildings was burned so he claimed against MICO for
the loss who denied contending that the insurance policies were either attached pursuant to
writs of attachments/garnishments or that creditors are claiming to have a better right
GOYU filed a complaint for specific performance and damages.
Issue [1]: Whether RCBC, as mortgagee, has any right over the insurance policies taken by
Goyu, the mortgagor, in case of the occurrence of loss.
Held [1]: YES. RCBC has preferential rights over the MICO insurance policies. It is basic that the
first mortgagee has superior rights over junior mortgagees or attaching creditors. It is settled
that a mortgagor and a mortgagee have separate and distinct insurable interests in the same
mortgaged property, such that each one of them may insure the same property for his own sole
benefit. There is no question that GOYU could insure the mortgaged property for its own
exclusive benefit. In the present case, although it appears that GOYU obtained the subject
insurance policies naming itself as the sole payee, the intentions of the parties as shown by
their contemporaneous acts, must be given due consideration in order to better serve the
interest of justice and equity.
Issue [2]: Whether Goyu can insist that the proceeds of insurance shall exclusively apply to the
interest of the person in whose name or for whose benefit it is made.
Held [2]: NO. The proceeds of the 8 insurance policies endorsed to RCBC aggregate to
P89,974,488.36. Being exclusively payable to RCBC by reason of the endorsement by Alchester
to RCBC, which we already ruled to have the force and effect of an endorsement by GOYU itself,
these 8 policies cannot be attached by GOYU’s other creditors up to the extent of the GOYU’s
outstanding obligation in RCBC’s favor. Section 53 of the Insurance Code ordains that the
insurance proceeds of the endorsed policies shall be applied exclusively to the proper interest
of the person for whose benefit it was made. In this case, to the extent of GOYU’s obligation
with RCBC, the interest of GOYU in the subject policies had been transferred to RCBC effective
as of the time of the endorsement.
Case No. 34 GAISANOCAGAYAN,INC. vs. INSURANCE COMPANY OF NORTH AMERICA
Topic; Insurable Interest
Facts; Intercapitol Marketing Corporation (IMC) is the maker of Wrangler Blue Jeans. Levi
Strauss (Phils.) Inc. (LSPI) is the local distributor of clothing products separately obtained from
respondent fire insurance policies with book debt endorsements. The insurance policies
provide for coverage on "book debts in connection with ready-made clothing materials which
have been sold or delivered to various customers and dealers of the Insured anywhere in the
Philippines.The policies defined book debts as the "unpaid account still appearing in the Book of
Account of the Insured 45 days after the time of the loss covered under this Policy. On February
25, 1991, the Gaisano Superstore Complex in Cagayan de Oro City, owned by petitioner, was
consumed by fire. Included in the items lost or destroyed in the fire were stocks of ready-made
clothing materials sold and delivered by IMC and LSPI.
Issue; Whether of not IMC and LSPI have insurable interest despite good were already delivered
to the mall?
Ruling; Yes. Thus, when the seller retains ownership only to insure that the buyer will pay its
debt, the risk of loss is borne by the buyer.27 Accordingly, petitioner bears the risk of loss of the
goods delivered.IMC and LSPI did not lose complete interest over the goods. They have an
insurable interest until full payment of the value of the delivered goods. Unlike the civil law
concept of res perit domino, where ownership is the basis for consideration of who bears the
risk of loss, in property insurance, one's interest is not determined by concept of title, but
whether insured has substantial economic interest in the property. Section 13 of our 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; (b) an inchoate interest founded on
existing interest; or (c) an expectancy, coupled with an existing interest in that out of which the
expectancy arises.
Therefore, 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.29 Anyone has an insurable interest
in property who derives a benefit from its existence or would suffer loss from its destruction.30
Indeed, a vendor or seller retains an insurable interest in the property sold so long as he has
any interest therein, in other words, so long as he would suffer by its destruction, as where he
has a vendor's lien.31 In this case, the insurable interest of IMC and LSPI pertain to the unpaid
accounts appearing in their Books of Account 45 days after the time of the loss covered by the
policies.
Case No.35: Great Pacific vs CA (concealment)

Facts: A contract of group life insurance was executed between Grepalife and DBP. Grepalife
agreed to insure the lives of eligible housing loan mortgagors of DBP. Dr. Wilfredo Leuterio, one
of the housing debtors of DBP applied for membership in the group life insurance plan, but
failed to disclose his medical history of any health problem. Grepalife issued Certificate No. B-
18558, as insurance coverage of Dr. Leuterio, to the extent of his DBP mortgage indebtedness
amounting to P86,200. When Leuterio died due to massive cerebral hemorrhage, DBP
submitted a death claim to Grepalife, but the same was denied due to alleged concealment of
the health conditon of Leuterio. Both RTC and CA ruled in favor of DBP, ordering Grepalife to
pay DBP of the P86,200.
Issue: Whether or not Leuterio concealed his hypertension that would vitiate the insurance
contract.
Held: No, he did not.

Concealment exists where the assured had knowledge of a fact material to the risk, and
honesty, good faith, and fair dealing requires that he should communicate it to the assured, but
he designedly and intentionally withholds the same. The insured, Dr. Leuterio, had answered in
his insurance application that he was in good health and that he had not consulted a doctor or
any of the enumerated ailments, including hypertension; when he died the attending physician
had certified in the death certificate that the former died of cerebral hemorrhage, probably
secondary to hypertension. From this report, the appellant insurance company refused to pay
the insurance claim. Appellant alleged that the insured had concealed the fact that he had
hypertension. Contrary to appellant's allegations, there was no sufficient proof that the insured
had suffered from hypertension. Aside from the statement of the insured's widow who was not
even sure if the medicines taken by Dr. Leuterio were for hypertension, the appellant had not
proven nor produced any witness who could attest to Dr. Leuterio's medical history
CASE 36: Sun Life Assurance Co. of Canada vs CA (1995)

TOPIC: Concealment
FACTS: Robert John B. Bacani procured a life insurance contract for himself from Sun Life
Assurance Co. of Canada. The designated beneficiary was his mother, Bernarda Bacani. The
insured died in a plane crash. Bernarda filed a claim with Sun Life, seeking the benefits of the
insurance policy taken by her son. In its letter, Sun Life informed Bernarda, that the insured did
not disclose material facts relevant to the issuance of the policy, thus rendering the contract of
insurance voidable. Sun Life discovered that two weeks prior to his application for insurance,
the insured was examined and confined at the Lung Center of the Philippines, where he was
diagnosed for renal failure.
ISSUE: Whether the nondisclosure of the insured’s disease is sufficient to render the contract of
insurance void
HELD: the SC held that the contract of insurance was void in this case. Section 26 of The
Insurance Code is explicit in requiring a party to a contract of insurance to communicate to the
other, in good faith, all facts within his knowledge which are material to the contract and as to
which he makes no warranty, and which the other has no means of ascertaining. Said Section
provides: A neglect to communicate that which a party knows and ought to communicate, is
called concealment.
The terms of the contract are clear. The insured is specifically required to disclose to the insurer
matters relating to his health. The information which the insured failed to disclose were
material and relevant to the approval and issuance of the insurance policy. The matters
concealed would have definitely affected Sun Life's action on the insured’s application, either
by approving it with the corresponding adjustment for a higher premium or rejecting the same.
Moreover, a disclosure may have warranted a medical examination of the insured by Sun Life in
order for it to reasonably assess the risk involved in accepting the application. Materiality of the
information withheld does not depend on the state of mind of the insured. Neither does it
depend on the actual or physical events which ensue. Thus, "good faith" is no defense in
concealment. The insured's failure to disclose the fact that he was hospitalized for two weeks
prior to filing his application for insurance, raises grave doubts about his bonafides. It appears
that such concealment was deliberate on his part. Anent the finding that the facts concealed
had no bearing to the cause of death of the insured, it is well settled that the insured need not
die of the disease he had failed to disclose to the insurer. It is sufficient that his non-disclosure
misled the insurer in forming his estimates of the risks of the proposed insurance policy or in
making inquiries.
CASE 37: Philamcare Health Systems, Inc. vs. Court of Appeals

Facts: ErnaniTrinos, deceased husband of respondent JulitaTrinos, applied for a health care
coverage with petitioner Philamcare Health Systems, Inc. In the standard application form, he
answered no to the following question:
Have you or any of your family members ever consulted or been treated for high blood
pressure, heart trouble, diabetes, cancer, liver disease, asthma or peptic ulcer? (If Yes, give
details).
The application was approved for a period of one year from March 1, 1988 to March 1, 1989.
Accordingly, he was issued Health Care Agreement No. P010194. Under the agreement,
respondent’s husband was entitled to avail of hospitalization benefits, whether ordinary or
emergency, listed therein. He was also entitled to avail of “out-patient benefits” such as annual
physical examinations, preventive health care and other out-patient services.
During the period of his coverage, Ernani suffered a heart attack and was confined at the
Manila Medical Center (MMC) for one month beginning March 9, 1990. While her husband was
in the hospital, respondent tried to claim the benefits under the health care agreement.
However, petitioner denied her claim saying that the Health Care Agreement was void.
According to petitioner, there was a concealment regarding Ernani’s medical history. Doctors at
the MMC allegedly discovered at the time of Ernani’s confinement that he was hypertensive,
diabetic and asthmatic, contrary to his answer in the application form.
An action for damages against petitioner and its president, Dr. Benito Reverente was instituted.
CA ruled in favor of Trinos. Ca affirmed.
Issue: Whether or not Philamcare may rescind the heath care coverage despite on the ground
of alleged concealment of Trinos?
Held: No. 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.
Case No. 38 Vda. de Canilang vs. Court of Appeals

Topic: Devices for ascertaining and controlling risk and loss
FACTS: On 18 June 1982, Jaime Canilang consulted Dr. Claudio and was diagnosed as suffering
from "sinus tachycardia." The doctor prescribed the following for him: Trazepam, a tranquilizer;
and Aptin, a beta-blocker drug. Mr. Canilang consulted the same doctor again on 3 August 1982
and this time was found to have "acute bronchitis." On the next day, 4 August 1982, Jaime
Canilang applied for a "non-medical" insurance policy with Great Pacific Life Assurance
Company (Grepalife) naming his wife, Thelma Canilang, as his beneficiary. Jaime Canilang was
issued ordinary life insurance Policy 345163, with the face value of P19,700, effective as of 9
August 1982. But he did not disclose the fact that he was diagnosed as suffering from sinus
tachycardia and that he has consulted a doctor twice. Jaime was issued an ordinary life
insurance policy with the face value of P19,700.00. Jaime died of “congestive heart failure”,
“anemia”, and “chronic anemia”. Petitioner widow and beneficiary of the insured, filed a claim
with Great Pacific which the insurer denied upon the ground that the insured had concealed
material information from it. Hence, Thelma filed a complaint against Great Pacific with the
Insurance Commission for recovery of the insurance proceeds.
ISSUE:Whether the information Canilang failed to disclose was material to the ability of
Grepalife to estimate the probable risk he presented as a subject of life insurance.
Held: YES. The information which Jaime Canilang failed to disclose was material to the ability of
Grepalife to estimate the probable risk he presented as a subject of life insurance. Had Canilang
disclosed his visits to his doctor, the diagnosis made and the medicines prescribed by such
doctor, in the insurance application, it may be reasonably assumed that Grepalife would have
made 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 by Grepalife did not depend upon the state of mind of Jaime Canilang.
A man's state of mind or subjective belief is not capable of proof in our judicial process, except
through proof of external acts or failure to act from which inferences as to his subjective belief
may be reasonably drawn. Neither does materiality depend upon the actual or physical events
which ensue. Materiality relates rather to the "probable and reasonable influence of the facts"
upon the party to whom the communication should have been made, in assessing 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.
Case No. 39 Tan vs. CA

Topic; Fraud and misrepresentation
Facts; On September 23,1973, Tan Lee Siong, father of herein petitioners, applied for life
insurance in the amount of P 80,000.00 with respondent company. Said application was
approved and Policy No. 1082467 was issued effective November 6,1973. On April 26,1975, Tan
Lee Siong died of hepatoma (Exhibit B). Petitioners then filed with respondent company their
claim for the proceeds of the life insurance policy. However, in a letter dated September 11,
1975, respondent company denied petitioners' claim and rescinded the policy by reason of the
alleged misrepresentation and concealment of material facts made by the deceased Tan Lee
Siong in his application for insurance.
Issue; Whether or not there is breach and misrepresentation that would be a ground for
rescission of the insurance contract?
Ruling; No. The pertinent section in the Insurance Code provides:

Section 48. Whenever a right to rescind a contract of insurance is given to the insurer by any
provision of this chapter, such right must be exercised previous to the commencement of an
action on the contract. After a policy of life insurance made payable on the death of the insured
shall have been in force during the lifetime of the insured for a period of two years from the
date of its issue or of its last reinstatement, the insurer cannot prove that the policy is void ab
initio or is rescindable by reason of the fraudulent concealment or misrepresentation of the
insured or his agent.
The so-called "incontestability clause" precludes the insurer from raising the defenses of false
representations or concealment of material facts insofar as health and previous diseases are
concerned if the insurance has been in force for at least two years during the insured's lifetime.
The phrase "during the lifetime" found in Section 48 simply means that the policy is no longer
considered in force after the insured has died. The key phrase in the second paragraph of
Section 48 is "for a period of two years.
the evidence for respondent company shows that on September 19,1972, the deceased was
examined by Dr. Victoriano Lim and was found to be diabetic and hypertensive; that by January,
1973, the deceased was complaining of progressive weight loss and abdominal pain and was
diagnosed to be suffering from hepatoma, (t.s.n. August 23, 1976, pp. 8-10; Exhibit 2). Another
physician, Dr. WenceslaoVitug, testified that the deceased came to see him on December 14,
1973 for consolation and claimed to have been diabetic for five years. (t.s.n., Aug. 23,1976, p. 5;
Exhibit 6) Because of the concealment made by the deceased of his consultations and
treatments for hypertension, diabetes and liver disorders, respondent company was thus
misled into accepting the risk and approving his application as medically standard (Exhibit 5- C)
and dispensing with further medical investigation and examination (Exhibit 5-A). For as long as
no adverse medical history is revealed in the application form, an applicant for insurance is
presumed to be healthy and physically fit and no further medical investigation or examination is
conducted by respondent company.
Case No. 40: Prudential Guarantee vs Trans

Facts: PRUDENTIAL insured M/V Asia Korea for loss/damage of the hull and machinery arising
from perils, inter alia, of fire and explosion. TRANS-ASIA, the owner of the said vessel, was
required to maintain the vessel at a certain class at all times pertinent during the life of the
policy. While the policy was in force, a fire broke out while MV Asia Korea was undergoing
repairs at Cebu. Trans-Asia filed its notice of claim, but the same was denied by Prudential as it
found out that Trans-Asia committed a breach of policy condition, in particular: WARRANTED
VESSEL CLASSED AND CLASS MAINTAINED.
Issue: Whether or not TRANS-ASIA violated and breached the policy condition, thus, allowing
Prudential to rescind the isurance contract.
Held: The Court held that PRUDENTIAL failed to establish that TRANS-ASIA violated and
breached the policy condition on WARRANTED VESSEL CLASSED AND CLASS MAINTAINED, as
contained in the subject insurance contract.
the lack of a certification in PRUDENTIAL’s records to the effect that TRANS-ASIA’s "M/V Asia
Korea" was CLASSED AND CLASS MAINTAINED at the time of the occurrence of the fire cannot
be tantamount to the conclusion that TRANS-ASIA in fact breached the warranty contained in
the policy. Sec. 74 of the Insurance Code provides that, "the violation of a material warranty, or
other material provision of a policy on the part of either party thereto, entitles the other to
rescind." It is generally accepted that "[a] warranty is a statement or promise set forth in the
policy, or by reference incorporated therein, the untruth or non-fulfillment of which in any
respect, and without reference to whether the insurer was in fact prejudiced by such untruth or
non-fulfillment, renders the policy voidable by the insurer." However, it is similarly indubitable
that for the breach of a warranty to avoid a policy, the same must be duly shown by the party
alleging the same. We cannot sustain an allegation that is unfounded. Consequently,
PRUDENTIAL, not having shown that TRANS-ASIA breached the warranty condition, CLASSED
AND CLASS MAINTAINED, it remains that TRANS-ASIA must be allowed to recover its rightful
claims on the policy.
CASE 41: Manila Bankers Life Insurance vs Aban (2013)

TOPIC: Concealment
FACTS: Delia Sotero bought a life insurance policy from Manila Bankers Life Insurance
Corporation, designating Cresencia P. Aban, her niece, as her beneficiary.When the insurance
policy had been in force for more than two years, Sotero died. Aban filed a claim for the
insurance proceeds.
Manila Bankers denied the claim and filed a case for rescission and/or annulment of the policy,
stating that the policy was obtained by fraud, concealment and/or misrepresentation under the
Insurance Code.
ISSUE: Whether Manila Bankers can rescind the policy based on fraud, concealment and/or
misrepresentation under the Insurance Code
HELD: the SC held that Manila Bankers cannot rescind the policy. Fraudulent intent on the part
of the insured must be established to entitle the insurer to rescind the contract. In the absence
of proof of such fraudulent intent, no right to rescind arises. Moreover, an insurer is given two
years – from the effectivity of a life insurance contract and while the insured is alive – to
discover or prove that the policy is void ab initio or is rescindible by reason of the fraudulent
concealment or misrepresentation of the insured or his agent. After the two-year period lapses,
or when the insured dies within the period, the insurer must make good on the policy, even
though the policy was obtained by fraud, concealment, or misrepresentation. The
"incontestability clause" is a provision in law that after a policy of life insurance made payable
on the death of the insured shall have been in force during the lifetime of the insured for a
period of 2 years from the date of its issue or of its last reinstatement, the insurer cannot prove
that the policy is void ab initio or is rescindible by reason of fraudulent concealment or
misrepresentation of the insured or his agent. The insurer is deemed to have the necessary
facilities to discover such fraudulent concealment or misrepresentation within a period of two
(2) years. It is not fair for the insurer to collect the premiums as long as the insured is still alive,
only to raise the issue of fraudulent concealment or misrepresentation when the insured dies in
order to defeat the right of the beneficiary to recover under the policy. In this case, the
insurance policy was thus in force for a period of 3 years. Considering that the insured died
after the two-year period, Manila Bankers is, therefore, barred from proving that the policy is
void ab initio by reason of the insured’s fraudulent concealment or misrepresentation or want
of insurable interest on the part of the beneficiary.
Case No. 42: Florendo vs. Philam Plans, Inc.

Facts: On October 23, 1997 Manuel Florendo filed an application for comprehensive pension
plan with respondent Philam Plans, Inc. (Philam Plans) after some convincing by respondent
PerlaAbcede. The plan had a pre-need price of P997,050.00, payable in 10 years, and had a
maturity value of P2,890,000.00 after 20 years.1 Manuel signed the application and left to Perla
the task of supplying the information needed in the application.2
The comprehensive pension plan that Philam Plans issued contains a one-year incontestability
period.
Eleven months later or on September 15, 1998, Manuel died of blood poisoning. Subsequently,
Lourdes filed a claim with Philam Plans for the payment of the benefits under her husband’s
plan.10 Because Manuel died before his pension plan matured and his wife was to get only the
benefits of his life insurance, Philam Plans forwarded her claim to Philam Life. 11
Her claim was denied because Philam Life found that Manuel was on maintenance medicine for
his heart and had an implanted pacemaker. Further, he suffered from diabetes mellitus and was
taking insulin. Lourdes renewed her demand for payment under the plan13 but Philam Plans
rejected it,14 prompting her to file the present action against the pension plan company before
the Regional Trial Court (RTC) of Quezon City. RTC ruled in favor of Florendo but CA reversed.
In a final attempt to defend her claim for benefits under Manuel’s pension plan, Lourdes points
out that any defect or insufficiency in the information provided by his pension plan application
should be deemed waived after the same has been approved, the policy has been issued, and
the premiums have been collected.
Issue: Whether or not the CA erred in finding that Philam Plans’ approval of Manuel’s pension
plan application and acceptance of his premium payments precluded it from denying Lourdes’
claim.
Held: No. The Court cannot agree. The comprehensive pension plan that Philam Plans issued
contains a one-year incontestability period. It states: VIII. INCONTESTABILITY After this
Agreement has remained in force for one (1) year, we can no longer contest for health reasons
any claim for insurance under this Agreement, except for the reason that installment has not
been paid (lapsed), or that you are not insurable at the time you bought this pension program
by reason of age. If this Agreement lapses but is reinstated afterwards, the one (1) year
contestability period shall start again on the date of approval of your request for reinstatement.
The above incontestability clause precludes the insurer from disowning liability under the policy
it issued on the ground of concealment or misrepresentation regarding the health of the
insured after a year of its issuance. Since Manuel died on the eleventh month following the
issuance of his plan, the one year incontestability period has not yet set in. Consequently,
Philam Plans was not barred from questioning Lourdes’ entitlement to the benefits of her
husband’s pension plan.
Case No. 43 Ma. Lourdes Florendo vs, Philam Plans

Topic: Devices for ascertaining and controlling risk and loss
FACTS: On October 23, 1997 Manuel Florendo filed an application for comprehensive pension
plan with respondent Philam Plans, Inc. (Philam Plans). The plan had a pre-need price of
P997,050.00, payable in 10 years, and had a maturity value of P2,890,000.00 after 20 years.
Then, petitioner Ma. Lourdes S. Florendo, his wife, is the beneficiary. Manuel signed the
application and left to Perla the task of supplying the information needed in the application.
Respondent Ma. Celeste Abcede, Perla’s daughter, signed the application as sales
counselor.Eleven months later, Manuel died of blood poisoning. Subsequently,Lourdes filed a
claim with Philam Plans for the payment of the benefits under her husband’s plan but Philam
Plans declined her claim prompting her to file the present action against thepension plan
company before the Regional Trial Court (RTC) of Quezon City and ruled in favor of Ma.
Lourdes. However, the Court of Appeals then reversed the RTC decision.
ISSUE:[1] Whether or not Manuel guilty of concealing his illness when he kept blank and did not
answer questions in his pension plan application regarding the ailments he suffered from.
HELD: [1] Yes. Manuel had been taking medicine for his heart condition and diabetes when he
submitted his pension plan application. These clearly fell within the five-year period. More,
even if Perla’s knowledge of Manuel’s pacemaker may be applied to Philam Plans under the
theory of imputed knowledge,26 it is not claimed that Perla was aware of his two other
afflictions that needed medical treatments. Pursuant to Section 27 of the Insurance Code,
Manuel’s concealment entitles Philam Plans to rescind its contract of insurance with him.
ISSUE: [2] Whether or not Ma. Lourdes could claim benefits as the beneficiary of her husband
under the insurance plan despite consideration that her husband Manuel concealed the true
condition of his health.
HELD: [2] No. The comprehensive pension plan that Philam Plans issued contains a one-year
incontestability period. It states:
VIII. INCONTESTABILITY - After this Agreement has remained in force for one (1) year, we can
no longer contest for health reasons any claim for insurance under this Agreement, except for
the reason that installment has not been paid (lapsed), or that you are not insurable at the time
you bought this pension program by reason of age. If this Agreement lapses but is reinstated
afterwards, the one (1) year contestability period shall start again on the date of approval of
your request for reinstatement.
The above incontestability clause precludes the insurer from disowning liability under the policy
it issued on the ground of concealment or misrepresentation regarding the health of the
insured after a year of its issuance.Since Manuel died on the eleventh month following the
issuance of his plan, the one year incontestability period has not yet set in. Consequently,
Philam Plans was not barred from questioning Lourdes’ entitlement to the benefits of her
husband’s pension plan.
CASE 44: Pacific Timber Export Corporation vs CA

Facts: The plaintiff secured temporary insurance from the defendant for its exportation of
1,250,000 board feet of Philippine Lauan and Apitong logs to be shipped from the Diapitan. Bay,
Quezon Province to Okinawa and Tokyo, Japan.The regular marine cargo policies were issued
by the defendant in favor of the plaintiff on April 2, 1963.After the issuance of Cover Note No.
1010 (Exhibit A), but before the issuance of the two marine policies Nos. 53 HO 1032 and 53 HO
1033, some of the logs intended to be exported were lost during loading operations in the
DiapitanBay.Thedefendant informed the Insurance Commissioner that, on advice of their
attorneys, the claim of the plaintiff is being denied on the ground that the cover note is null and
void for lack of valuable consideration.
Issue; Whether or not the cover note was void and without consideration?
Held;No.The fact that no separate premium was paid on the Cover Note before the loss insured
against occurred, does not militate against the validity of petitioner's contention, for no such
premium could have been paid, since by the nature of the Cover Note, it did not contain, as all
Cover Notes do not contain particulars of the shipment that would serve as basis for the
computation of the premiums. As a logical consequence, no separate premiums are intended or
required to be paid on a Cover Note. This is a fact admitted by an official of respondent
company, Juan Jose Camacho, in charge of issuing cover notes of the respondent company. At
any rate, it is not disputed that petitioner paid in full all the premiums as called for by the
statement issued by private respondent after the issuance of the two regular marine insurance
policies, thereby leaving no account unpaid by petitioner due on the insurance coverage, which
must be deemed to include the Cover Note. If the Note is to be treated as a separate policy
instead of integrating it to the regular policies subsequently issued, the purpose and function of
the Cover Note would be set at naught or rendered meaningless, for it is in a real sense a
contract, not a mere application for insurance which is a mere offer
CASE 45: Great Pacific Life Assurance Corporation vs CA

Facts: Ngo Hing filed an application with the Great Pacific Life Assurance Company for a twenty-
year endownment policy in the amount of P50,000.00 on the life of his one-year old daughter
Helen Go. Upon the payment of the insurance premuim, the binding deposit receipt was issued
to private respondent Ngo Hing. Likewise, Mondragon (insurance agent) handwrote at the
bottom of the back page of the application form his strong recommendation for the approval of
the insurance application.
Mondragon received a letter from Pacific Life disapproving the insurance application. The letter
stated that the said life insurance application for 20-year endowment plan is not available for
minors below seven years old, but Pacific Life can consider the same under the Juvenile Triple
Action Plan, and advised that if the offer is acceptable, the Juvenile Non-Medical Declaration be
sent to the company.
The non-acceptance of the insurance plan by Pacific Life was allegedly not communicated by
petitioner Mondragon to private respondent Ngo Hing.
Helen Go died of influenza with complication of bronchopneumonia. Thereupon, Ngo Hing
sought the payment of the proceeds of the insurance, but was denied.
Issue: Whether or not the insurance policy has been perfected.
Held: There could have been no insurance contract duly perfected between them since Pacific
Life disapproved the insurance application on the ground that it is not offering the twenty-year
endowment insurance policy to children less than seven years of age. Accordingly, the deposit
paid by private respondent shall have to be refunded by Pacific Life.
The undisputed fact reveals that the associate of Mondragon that he was, Ngo Hing should only
be presumed to know what kind of policies are available in the company for minors below 7
years old. The Court is convinced that what he and Mondragon were apparently trying to do in
the premises was merely to prod the company into going into the business of issuing
endowment policies for minors just as other insurance companies allegedly do. Until such a
definite policy is however, adopted by the company, it can hardly be said that it could have
been bound at all under the binding slip for a plan of insurance that it could not have, by then
issued at all.
CASE 46: PhilAm Life and General Insurance Co vs Judge Valencia-Bagalacsa (2002)
TOPIC: Time to commence action on the policy
FACTS: The legitimate children of Faustino Lumaniog, filed with the RTC a complaint for
recovery of sum of money against PhilAm Life. Their father was insured by PhilAm under a life
insurance policy. Their father died of coronary thrombosis and despite repeated demands for
payment of the claim, PhilAm finally refused said claim. PhilAm filed a motion to dismiss
contending that: the cause of action had prescribed and they are guilty of laches; it had denied
the claim in a letter dated March 12, 1982 on ground of concealment on the part of the
deceased insured. The Lumaniogs requested for reconsideration of the denial but in a letter
dated July 11, 1983, PhilAm reiterated its decision to deny the claim. More than 10 years later,
or on December 1, 1994, it received a letter from a provincial board member of Camarines Sur,
reiterating the request for reconsideration which PhilAm denied in a letter dated February 14,
1995.
ISSUE: Whether the cause of action has prescribed
HELD: the SC held that the prescription in this case was not sufficiently proven. It must be
emphasized that PhilAm had specifically alleged in the Answer that it had denied the claim per
its letter dated July 11, 1983. Hence, due process demands that PhilAm be given the
opportunity to prove that the Lumaniogs had received said letter, dated July 11, 1983. Said
letter is crucial to their defense that the filing of the complaint for recovery of sum of money in
June, 1995 is beyond the 10-year prescriptive period. The ruling of the RTC that the cause of
action of had not prescribed, is arbitrary and patently erroneous for not being founded on
evidence on record, and therefore, the same is void.
CASE NO. 47: Makati Tuscany Condominium Corporation vs CA
Facts: Sometime in early 1982, private respondent American Home Assurance Co. (A H A C),
represented by American International Underwriters (Phils.), Inc., issued in favor of petitioner
Makati Tuscany Condominium Corporation (TUSCANY) Insurance Policy No. AH-CPP-9210452 on
the latter’s building and premises, for a period beginning 1 March 1982 and ending 1 March
1983. The premium was paid on installment, all of which were accepted by private respondent.
On 10 February 1983, private respondent issued to petitioner Insurance Policy No. AH-CPP-
9210596, which replaced and renewed the previous policy, for a term covering 1 March 1983 to
1 March 1984. Premiums on this policy were likewise paid in installment and were accepted by
the insurer.
On 20 January 1984, the policy was again renewed and private respondent issued to petitioner
Insurance Policy No. AH-CPP-9210651 for the period 1 March 1984 to 1 March 1985. On this
renewed policy, petitioner made two installment payments but refused to pay the balance.
Thus, Insurer instituted an action to recover the balance. Petitioner explained that it
discontinued the payment of premiums because the policy did not contain a credit clause in its
favor and the receipts for the installment payments covering the policy for 1984-85 as well as
the two (2) previous policies, stated the following reservations:
“2. Acceptance of this payment shall not waive any of the company rights to deny liability on
any claim under the policy arising before such payments or after the expiration of the credit
clause of the policy; and
“3. Subject to no loss prior to premium payment. If there be any loss such is not covered.”
Petitioner further claimed that the policy was never binding and valid, and no risk attached to
the policyand sought the refund the premium payments for 1982-85.
Issue: Whether payment by installment of the premiums due on an insurance policy invalidates
the contract of insurance, in view of Sec. 77 of P.D. 612?
Held: No. We hold that the subject policies are valid even if the premiums were paid on
installments. The records clearly show that petitioner and private respondent intended subject
insurance policies to be binding and effective notwithstanding the staggered payment of the
premiums. The initial insurance contract entered into in 1982 was renewed in 1983, then in
1984. In those three (3) years, the insurer accepted all the installment payments. Such
acceptance of payments speaks loudly of the insurer’s intention to honor the policies it issued
to petitioner. Certainly, basic principles of equity and fairness would not allow the insurer to
continue collecting and accepting the premiums, although paid on installments, and later deny
liability on the lame excuse that the premiums were not prepaid in full.
It appearing from the peculiar circumstances that the parties actually intended to make the
three (3) insurance contracts valid, effective and binding, petitioner may not be allowed to
renege on its obligation to pay the balance of the premium after the expiration of the whole
term of the third policy (No. AH-CPP-9210651) in March 1985. Moreover, as correctly observed
by the appellate court, where the risk is entire and the contract is indivisible, the insured is not
entitled to a refund of the premiums paid if the insurer was exposed to the risk insured for any
period, however brief or momentary.
CASE NO. 48: UCPB GENERAL INSURANCE CO. INC. vs. MASAGANA TELAMART, INC.,
FACTS: On April 15, 1991, UCPB General Insurance Co. Inc. issued five (5) insurance policies
covering respondent's various property described therein against fire, for the period from May
22, 1991 to May 22, 1992.
In March 1992, petitioner evaluated the policies and decided not to renew them upon
expiration of their terms on May 22, 1992. Petitioner advised respondent's broker, Zuellig
Insurance Brokers, Inc. of its intention not to renew the policies.On June 13, 1992, fire razed
respondent's property covered by three of the insurance policies petitioner issued. Then, the
respondent filed with petitioner its formal claim for indemnification of the insured property
razed by fire.
On July 14, 1992, petitioner returned to respondent the five (5) manager's checks that it
tendered, and at the same time rejected respondent's claim for the reasons (a) that the policies
had expired and were not renewed, and (b) that the fire occurred on June 13, 1992, before
respondent's tender of premium payment.
The respondent filed civil complaint against petitioner for recovery of P18,645,000.00,
representing the face value of the policies covering respondent's insured property razed by fire,
and for attorney's fees.
ISSUE: Whether the fire insurance policies issued by UCPB General Insurance to the respondent
covering the period May 22, 1991 to May 22, 1992, had expired on the latter date or had been
extended or renewed by an implied credit arrangement though actual payment of premium
was tendered on a later date after the occurrence of the risk (fire) insured against.
HELD: No, an insurance policy, other than life, issued originally or on renewal, is not valid and
binding until actual payment of the premium. Any agreement to the contrary is void. The
parties may not agree expressly or impliedly on the extension of credit or time to pay the
premium and consider the policy binding before actual payment.
UCPB General Insurance vs. Masagana Telamart Inc.
GR 137172, 14 April 2001
FACTS: In the Supreme Court's decision of 15 June 1999, it reversed and set aside the decision
of the Court of Appeals, which affirmed with modification the judgment of the trial court (a)
allowing Masagana to consign the sum of P225,753.95 as full payment of the premiums for the
renewal of the five insurance policies on Masagana's properties; (b) declaring the replacement-
renewal policies effective and binding from 22 May 1992 until 22 May 1993; and (c) ordering
UCPBGen to pay Masagana P18,645,000.00 as indemnity for the burned properties covered by
the renewal-replacement policies. The modification consisted in the (1) deletion of the trial
court's declaration that three of the policies were in force from August 1991 to August 1992;
and (2) reduction of the award of the attorney's fees from 25% to 10% of the total amount due
the Masagana. Masagana seasonably filed a motion for the reconsideration of the adverse
verdict.
ISSUE: Whether there are exceptions to Section 77, to allow Masagana to recover from
UCPBGen.
HELD: YES. The first exception is provided by Section 77 itself, and that is, in case of a life or
industrial life policy whenever the grace period provision applies. The second is that covered by
Section 78 of the Insurance Code, which provides that "Any acknowledgment in a policy or
contract of insurance of the receipt of premium is conclusive evidence of its payment, so far as
to make the policy binding, notwithstanding any stipulation therein that it shall not be binding
until premium is actually paid." A third exception was laid down in Makati Tuscany
Condominium Corporation vs. Court of Appeals, 5 wherein the Court ruled that Section 77 may
not apply if the parties have agreed to the payment in installments of the premium and partial
payment has been made at the time of loss. Further, in Tuscany, the Court also quoted with
approval the following pronouncement of the Court of Appeals in its Resolution denying the
motion for reconsideration of its decision that "While the import of Section 77 is that
prepayment of premiums is strictly required as a condition to the validity of the contract, We
are not prepared to rule that the request to make installment payments duly approved by the
insurer would prevent the entire contract of insurance from going into effect despite payment
and acceptance of the initial premium or first installment. Section 78 of the Insurance Code in
effect allows waiver by the insurer of the condition of prepayment by making an
acknowledgment in the insurance policy of receipt of premium as conclusive evidence of
payment so far as to make the policy binding despite the fact that premium is actually unpaid.
CASE NO. 49: American Home Insurance vs Chua (1999)

Facts; Petitioner is a domestic corporation engaged in the insurance business. Sometime in
1990, respondent obtained from petitioner a fire insurance covering the stock-in-trade of his
business, Moonlight Enterprises, located at Valencia, Bukidnon. The insurance was due to
expire on 25 March 1990.On 5 April 1990 respondent issued PCIBank Check No. 352123 in the
amount of P2,983.50 to petitioners agent, James Uy, as payment for the renewal of the policy.
In turn, the latter delivered Renewal Certificate No. 00099047 to respondent. The check was
drawn against a Manila bank and deposited in petitioners bank account in Cagayan de Oro City.
The corresponding official receipt was issued on 10 April. Subsequently, a new insurance policy,
Policy No. 206-4234498-7, was issued, whereby petitioner undertook to indemnify respondent
for any damage or loss arising from fire up to P200,000 for the period 25 March 1990 to 25
March 1991.On 6 April 1990 Moonlight Enterprises was completely razed by fire. Petitioner
claimed there was no existing insurance contract when the fire occurred since respondent did
not pay the premium.
Issue; Whether or not the contract of insurance is perfected despite the check has not yet been
encashed?
Held; Yes. The general rule in insurance laws is that unless the premium is paid the insurance
policy is not valid and binding. The only exceptions are life and industrial life insurance. [6]
Whether payment was indeed made is a question of fact which is best determined by the trial
court. The trial court found, as affirmed by the Court of Appeals, that there was a valid check
payment by respondent to petitioner. According to the trial court the renewal certificate issued
to respondent contained the acknowledgment that premium had been paid. It is not disputed
that the check drawn by respondent in favor of petitioner and delivered to its agent was
honored when presented and petitioner forthwith issued its official receipt to respondent on 10
April 1990. Section 306 of the Insurance Code provides that any insurance company which
delivers a policy or contract of insurance to an insurance agent or insurance broker shall be
deemed to have authorized such agent or broker to receive on its behalf payment of any
premium which is due on such policy or contract of insurance at the time of its issuance or
delivery or which becomes due thereon.[8] In the instant case, the best evidence of such
authority is the fact that petitioner accepted the check and issued the official receipt for the
payment. It is, as well, bound by its agents acknowledgment of receipt of payment.
Section 78 of the Insurance Code explicitly provides:
An acknowledgment in a policy or contract of insurance of the receipt of premium is conclusive
evidence of its payment, so far as to make the policy binding, notwithstanding any stipulation
therein that it shall not be binding until the premium is actually paid.
CASE NO. 50: Tibay vs CA

Facts: Fortune Life and General Insurance Co., Inc. issued Fire Insurance Policy No. 136171 in
favor of Violeta R. Tibay and/or Nicolas Roraldo on their two-storey residential building. The
insurance was for P600,000.00 covering the period from 23 January 1987 to 23 January 1988.
On 23 January 1987, of the total premium of P2,983.50, petitioner Violeta Tibay only paid
P600.00 thus leaving a considerable balance unpaid.
On 8 March 1987 the insured building was completely destroyed by fire. Two days later or on
10 March 1987 Violeta Tibay paid the balance of the premium. On the same day, she filed with
FORTUNE a claim on the fire insurance policy. FORTUNE refused to indemnify her by reason of
express stipulation in the policy contract that partial payment of premium will not entitle the
insured to collect on the policy.
CA ruled that FORTUNE is not to liable to plaintiff-appellees but ordered it to return the
premium of P2,983.50 plus 12% interest from 10 March 1987 until full payment.
Issue: May a fire insurance policy be valid, binding and enforceable upon mere partial payment
of premium?
Held: Insurance is a contract whereby one undertakes for a consideration to indemnify another
against loss, damage or liability arising from an unknown or contingent event. The
consideration is the premium, which must be paid at the time and in the way and manner
specified in the policy, and if not so paid, the policy will lapse and be forfeited by its own terms.
The Policy provides for payment of premium in full. Accordingly, where the premium has only
been partially paid and the balance paid only after the peril insured against has occurred, the
insurance contract did not take effect and the insured cannot collect at all on the policy. This is
fully supported by Sec. 77 of the Insurance Code which provides —
Sec. 77. An insurer is entitled to payment of the premium as soon as the thing insured is
exposed to the peril insured against. Notwithstanding any agreement to the contrary, no policy
or contract of insurance issued by an insurance company is valid and binding unless and until
the premium thereof has been paid, except in the case of a life or an industrial life policy
whenever the grace period provision applies.
CASE 51: Philippine Phoenix Surety vs Woodworks Inc

TOPIC: Premium, Effect of non-payment
FACTS: Philippine Phoenix Surety & Insurance issued to Woodworks, Inc a fire insurance policy.
The premiums of said policy amounted to P6,051.95. Woodworks paid P3,000. Philippine
Phoenix made several demands to pay the remaining amount but Woodworks failed to pay.
ISSUE: Whether non-payment of premium produced the cancellation of the contract of

insurance
HELD: The Court did not agree with the theory that non-payment by the premium due
produced the cancellation of the contract of insurance. Such theory would place exclusively in
the hands of one of the contracting parties the right to decide whether the contract should
stand or not. Rather the correct view would seem to be this: as the contract had become
perfected, the parties could demand from each other the performance of whatever obligations
they had assumed. In the case of the insurer, it is obvious that it had the right to demand from
the insured the completion of the payment of the premium due or sue for the rescission of the
contract. As it chose to demand specific performance of the insured's obligation to pay the
balance of the premium, the latter's duty to pay is indeed indubitable. In this case, the fire
insurance policy was issued by Philippine Phoenix and delivered to Woodworks, and that the
latter paid to the former P3,000 on account of the total premium of P6,051.95. There is,
consequently, no doubt that, as between the insurer and the insured, there was not only a
perfected contract of insurance but a partially performed one as far as the payment of the
agreed premium was concerned. Thus, the obligation of the insurer to pay the insured the
amount for which the policy was issued arose and became binding upon it, while the obligation
of the insured to pay the remainder of the total amount of the premium due became
demandable.
CASE NO. 52: Marquez vs Far East Bank (2011)
Facts: Maxilite Technologies, Inc. (Maxilite) is a domestic corporation engaged in the
importation and trading of equipment for energy-efficiency systems. Jose N. Marques
(Marques) is the President and controlling stockholder of Maxilite.Far East Bank and Trust Co.
(FEBTC)5 is a local bank which handled the financing and related requirements of Marques and
Maxilite. Marques and Maxilite maintained accounts with FEBTC. Accordingly, FEBTC financed
Maxilite’s capital and operational requirements through loans secured with properties of
Marques under the latter’s name.
Maxilite and Marques entered into a trust receipt transaction with FEBTC, in the sum of
US$80,765.00, for the shipment of various high-technology equipment from the United States,9
with the merchandise serving as collateral. It agreed to keep said merchandise insured against
fire to its full value.FEBIBI, upon the advice of FEBTC, facilitated the procurement and
processing from Makati Insurance Company of four separate and independent fire insurance
policies over the trust receipted merchandise. Maxilite paid the premiums for these policies
through debit arrangement. FEBTC would debit Maxilite’s account for the premium payments.
Insurance Policy No. 1024439, covering the period 24 June 1994 to 24 June 1995, was released
to cover the trust receipted merchandise.
Maxilite failed to pay the insurance premium in the sum of P8,265.60 for Insurance Policy No.
1024439 covering the period 24 June 1994 to 24 June 1995, FEBIBI sent written reminders to
FEBTC but no payment was made. It appears however that on 24 and 26 October 1994, Maxilite
fully settled its trust receipt account. Fire broke out in the Maxilite’s office and warehouse were
located, Makati Insurance Company denied the fire loss claim on the ground of non-payment of
premium. FEBTC and FEBIBI disclaimed any responsibility for the denial of the claim.
Issue: Whether or not claim against the insurance may be denied by reason of alleged non
payment of premiums?
Held: No. FEBTC’s conduct clearly constitutes negligence in handling Maxilite’s and Marques’
accounts. Negligence is defined as “the omission to do something which a reasonable man,
guided upon those considerations which ordinarily regulate the conduct of human affairs,
would do, or the doing of something which a prudent man and reasonable man could not do.”
As a consequence of its negligence, FEBTC must be held liable for damages pursuant to Article
2176 of the Civil Code which states “whoever by act or omission causes damage to another,
there being fault or negligence, is obliged to pay for the damage done.”
Prior to the full settlement of the trust receipt account on 24 and 26 October 1994, FEBTC had
insurable interest over the merchandise, and thus had greater reason to debit Maxilite’s
account. Further, as found by the trial court, and apparently undisputed by FEBTC, FEBIBI and
Makati Insurance Company, Maxilite had sufficient funds at the time the first reminder, dated
19 October 1994, was sent by FEBIBI to FEBTC to debit Maxilite’s account for the payment of
the insurance premium. Since (1) FEBTC committed to debit Maxilite’s account corresponding
to the insurance premium; (2) FEBTC had insurable interest over the property prior to the
settlement of the trust receipt account; and (3) Maxilite’s bank account had sufficient funds to
pay the insurance premium prior to the settlement of the trust receipt account, FEBTC should
have debited Maxilite’s account as what it had repeatedly done, as an established practice, with
respect to the previous insurance policies. However, FEBTC failed to debit and instead
disregarded the written reminder from FEBIBI to debit Maxilite’s account. Indisputably, had the
insurance premium been paid, through the automatic debit arrangement with FEBTC, Maxilite’s
fire loss claim would have been approved. Hence, Maxilite suffered damage to the extent of the
face value of the insurance policy or the sum of P2.1 million.
CASE NO. 53: Bonifacio Bros. Inc vs Mora (1967)

FACTS: Enrique Mora mortgaged his Odlsmobile sedan car to HS Reyes Inc. with the condition
that Mora would insure the car with HS Reyes as beneficiary.The car was then insured with
State Insurance Company and the policy delivered to Mora.During the effectivity of the
insurance contract, the car figured in an accident. The company then assigned the accident to
an insurance appraiser for investigation and appraisal of the damage.Mora without the
knowledge and consent of HS Reyes, authorized Bonifacio Bros to fix the car, using materials
supplied by the Ayala Auto Parts Company.
For the cost of Labor and materials, Mora was billed P2,102.73. The bill was sent to the
insurer’s appraiser. The insurance company drew a check in the amount of the insurance
proceeds and entrusted the check to its appraiser for delivery to the proper party.The car was
delivered to Mora without the consent of HS Reyes, and without payment to Bonifacio Bros and
Ayala.
Upon the theory that the insurance proceeds should be directly paid to them, Bonifacio and
Ayala filed a complaint against Mora and the insurer with the municipal court for the collection
of P2,102.73.
ISSUE: Whether there is privity of contract between the Bonifacio Bros. Inc. and the Ayala Auto
Parts Co. against the insurance company.
HELD: No. The insurance contract does not contain any words or clauses to disclose an intent to
give any benefit to any repairmen or material men in case of repair of the car in question. The
parties to the insurance contract omitted such stipulation, which is a circumstance that
supports the said conclusion. On the other hand, the "loss payable" clause of the insurance
policy stipulates that "Loss, if any, is payable to H.S. Reyes, Inc." indicating that it was only the
H.S. Reyes, Inc. which they intended to benefit. It is likewise observed from the brief of the
State Bonding & Insurance Company that it has vehemently opposed the assertion or
pretension of Bonifacio Bros. that they are privy to the contract. Also, “A policy of insurance is a
distinct and independent contract between the insured and insurer, and third persons have no
right either in a court of equity, or in a court of law, to the proceeds of it, unless there be some
contract of trust, expressed or implied between the insured and third person." In this case, no
contract of trust, expressed or implied exists. We, therefore, agree with the trial court that no
cause of action exists in favor of the appellants in so far as the proceeds of insurance are
concerned. The appellants' claim, if at all, is merely equitable in nature and must be made
effective through Enrique Mora who entered into a contract with the Bonifacio Bros. Inc. This
conclusion is deducible not only from the principle governing the operation and effect of
insurance contracts in general, but is clearly covered by the express provisions of section 50 of
the Insurance Act which read:The insurance shall be applied exclusively to the proper interests
of the person in whose name it is made unless otherwise specified in the policy.
CASE NO. 54: The Insular Life Assurance vs Ebrado

Facts; Buenaventura CristorEbrado was issued by The Life Assurance Co., Ltd., Policy No.
009929 on a whole-life for P5,882.00 with a, rider for Accidental Death for the same amount
Buenaventura C. Ebrado designated T. Ebrado as the revocable beneficiary in his policy. He to
her as his wife.Buenaventura C. Ebrado died as a result of an t when he was hit by a failing
branch of a tree.Carponia T. Ebrado filed with the insurer a claim for the proceeds of the Policy
as the designated beneficiary therein, although she admits that she and the insured
Buenaventura C. Ebrado were merely living as husband and wife without the benefit of
marriage. PascualaVda. deEbrado also filed her claim as the widow of the deceased insured.
She asserts that she is the one entitled to the insurance proceeds, not the common-law wife,
Carponia T. Ebrado.
Issue; Whether or not a common law wife is entitled to be a beneficiary under an insurance
policy?
Held; NO. A common law wife can only be designated as a beneficiary when there is no
impediment on their part to be married.In essence, a life insurance policy is no different from a
civil donation insofar as the beneficiary is concerned. Both are founded upon the same
consideration: liberality. A beneficiary is like a donee, because from the premiums of the policy
which the insured pays out of liberality, the beneficiary will receive the proceeds or profits of
said insurance. As a consequence, the proscription in Article 739 of the new Civil Code should
equally operate in life insurance contracts. The mandate of Article 2012 cannot be laid aside:
any person who cannot receive a donation cannot be named as beneficiary in the life insurance
policy of the person who cannot make the donation. In this case, requisite proof of common-
law relationship between the insured and the beneficiary has been conveniently supplied by
the stipulations between the parties in the pre-trial conference of the case. Ibn case agreed
upon and stipulated therein that the deceased insured Buenaventura C. Ebrado was married to
PascualaEbrado with whom she has six legitimate children; that during his lifetime, the
deceased insured was living with his common-law wife, CarponiaEbrado, with whom he has two
children. These stipulations are nothing less than judicial admissions which, as a consequence,
no longer require proof and cannot be contradicted.
CASE NO. 55: Vda. De Consuegra vs GSIS

Facts: Consuegra contracted two marriages, the first with herein respondent Rosario Diaz, and
the second, which was contracted in good faith while the first marriage was subsisting, with
herein petitioner Basilia Berdin.
Being a member of the Government Service Insurance System (GSIS, for short) when Consuegra
died, the proceeds of his life insurance under policy No. 601801 were paid by the GSIS to
petitioner Basilia Berdin and her children who were the beneficiaries named in the policy.
Likewise, he was also entitled to retirement insurance benefits in the sum of P6,304.47. He did
not designate any beneficiary who would receive the retirement insurance benefits due to him.
Respondent Rosario Diaz, the widow by the first marriage, filed a claim with the GSIS asking
that the retirement insurance benefits be paid to her as the only legal heir of Consuegra,
considering that the deceased did not designate any beneficiary with respect to his retirement
insurance benefits.
Berdin and children contended that the designated beneficiaries in the life insurance of the late
Jose Consuegra were also the exclusive beneficiaries in the retirement insurance of said
deceased. This contention was denied by the lower court. Hence, this appeal.
Issue: Whether or not herein petitioners should receive the retirement benefit of the deceased
spouse being the designated beneficiaries in the life insurance.
Held: No. The beneficiary named in the life insurance does not automatically become the
beneficiary in the retirement insurance unless the same beneficiary in the life insurance is so
designated in the application for retirement insurance. The proceeds of the retirement
insurance of the late Jose Consuegra should be divided equally between his first living wife
Rosario Diaz, on the one hand, and his second wife Basilia Berdin and his children by her, on the
other.
Retirement insurance is primarily intended for the benefit of the employee — to provide for his
old age, or incapacity, after rendering service in the government for a required number of
years. If the employee reaches the age of retirement, he gets the retirement benefits even to
the exclusion of the beneficiary or beneficiaries named in his application for retirement
insurance. The beneficiary of the retirement insurance can only claim the proceeds of the
retirement insurance if the employee dies before retirement. If the employee failed or
overlooked to state the beneficiary of his retirement insurance, the retirement benefits will
accrue to his estate and will be given to his legal heirs in accordance with law, as in the case of a
life insurance if no beneficiary is named in the insurance policy.
CASE 56: Go vs Redfern

TOPIC: Persons entitled to recover on the policy
FACTS: Edward K. Redfern obtained an accident insurance policy from the International
Assurance Co. Redfern died as a result of an accident. His mother tried to collect from the
International Assurance the amount of the policy but it refused to make full payment, since the
policy had been amended by the addition of a co-beneficiary, Concordia Go.
ISSUE: Whether Redfern is entitled to the full amount of the claim
HELD: the SC held that Redfern is entitled to the full amount of the claim. When a policy is
issued, the beneficiary acquires a right from which it cannot be deprived without its consent,
unless the right to modify the policy has been reserved expressly by the insured. Here, the
insured, Edward K. Redfern did not expressly reserved the right to change or modify the policy.
However, Go maintains that the addition of her name as one of the beneficiaries of the policy
did not constitute change. Change implies the idea of alteration and all additions are
alterations. Thus, having added the name of Go, the insurance was altered in its form.
CASE NO. 57: Country Bankers Insurance Corporation vs Lianga Bay (2002)
Facts: It appears that sometime in 1989, the petitioner and the respondent entered into a
contract of fire insurance. Under Fire Insurance Policy No. F-1397, the petitioner insured the
respondent’s stocks-in-trade against fire loss, damage or liability during the period starting
from June 20, 1989 at 4:00 p.m. to June 20, 1990 at 4:00 p.m., for the sum of Two Hundred
Thousand Pesos (P200,000.00).
On July 1, 1989, at or about 12:40 a.m., the respondent’s building located at Barangay
Diatagon, Lianga, Surigao del Sur was gutted by fire and reduced to ashes, resulting in the total
loss of the respondent’s stocks-in-trade, pieces of furniture and fixtures, equipments and
records. Due to the loss, the respondent filed an insurance claim with the petitioner under its
Fire Insurance Policy No. F-1397, submitting: (a) the Spot Report of Pfc. Arturo V. Juarbal, INP
Investigator, dated July 1, 1989; (b) the Sworn Statement of Jose Lomocso; and (c) the Sworn
Statement of Ernesto Urbiztondo. The petitioner, however, denied the insurance claim on the
ground that, based on the submitted documents, the building was set on fire by two (2) NPA
rebels who wanted to obtain canned goods, rice and medicines as provisions for their comrades
in the forest, and that such loss was an excepted risk under paragraph No. 6 of the policy
conditions of Fire Insurance Policy No. F-1397.
Issue: Whether or not Country Bankers Insurance Corporation is liable under the insurance
contract?
Held: Yes. Where a risk is excepted by the terms of a policy which insures against other perils or
hazards, loss from such a risk constitutes a defense which the insurer may urge, since it has not
assumed that risk, and from this it follows that an insurer seeking to defeat a claim because of
an exception or limitation in the policy has the burden of proving that the loss comes within the
purview of the exception or limitation set up. If a proof is made of a loss apparently within a
contract of insurance, the burden is upon the insurer to prove 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.
Stated elsewise, since the petitioner in this case is defending on the ground of non-coverage
and relying upon an exemption or exception clause in the fire insurance policy, it has the
burden of proving the facts upon which such excepted risk is based, by a preponderance of
evidence. But petitioner failed to do so.
The petitioner relies on the Sworn Statements of Jose Lomocso and Ernesto Urbiztondo as well
as on the Spot Report of Pfc. Arturo V. Juarbal which are inadmissible in evidence, for being
hearsay, inasmuch as they did not take the witness stand and could not therefore be cross-
examined.
CASE NO. 58: Heirs of Maramag vs Maramag (2009)

FACTS: Loreto Maramag designated as beneficiary his concubine Eva de Guzman Maramag.
Vicenta Maramag and Odessa, Karl Brian, and Trisha Angelie (heirs of Loreto Maramag) and his
concubine Eva de Guzman Maramag, also suspected in the killing of Loreto and his illegitimate
children are claiming for his insurance.
Vicenta alleges that Eva is disqualified from claiming. They further add that Eva’s children with
Loreto, being illegitimatechildren, are entitled to a lesser share of the proceeds of the policies.
Thus, they prayed that the share of Eva and portions of the share of Loreto’s illegitimate
children should be awarded to them, being thelegitimate heirs of Loreto entitled to their
respective legitimes.
ISSUE: Whether or not Eva can claim even though prohibited under the civil code against
donation.
HELD: YES. Any person who is forbidden from receiving any donation under Article 739 cannot
be named beneficiary of a life insurance policy of the person who cannot make any donation to
him.If a concubine is made the beneficiary, it is believed that the insurance contract will still
remain valid, but the indemnity must go to the legal heirs and not to the concubine, for
evidently, what is prohibited under Art. 2012 is the naming of the improper beneficiary.
SECTION 53. The insurance proceeds shall be applied exclusively to the proper interest of the
person in whose name or for whose benefit it is made unless otherwise specified in the policy.
As a general rule, 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 maturation of the
policy. However, the exception is that the 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.
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.
CASE NO. 59: Malayan Insurance vs Philippine First Insurance (2012)

Facts; Wyeth Philippines, Inc. (Wyeth) and respondent Reputable Forwarder Services, Inc.
(Reputable) had been annually executing a contract of carriage, whereby the latter undertook
to transport and deliver the former s products to its customers, dealers or salesmen. Wyeth
procured Marine Policy No. MAR 13797 (Marine Policy) from respondent Philippines First
Insurance Co., Inc. (Philippines First) to secure its interest over its own products.Under the
contract, Reputable undertook to answer for "all risks with respect to the goods and shall be
liable to the COMPANY (Wyeth), for the loss, destruction, or damage of the goods/products due
to any and all causes whatsoever, including theft, robbery, flood, storm, earthquakes, lightning,
and other force majeure while the goods/products are in transit and until actual delivery to the
customers, salesmen, and dealers of the COMPANY".6Ï‚rÎ½ll The contract also required
Reputable to secure an insurance policy on Wyeth s goods.7Thus, on February 11, 1994,
Reputable signed a Special Risk Insurance Policy (SR Policy) with petitioner Malayan for the
amount of P1,000,000.00.On October 6, 1994,the truck carrying Wyeth s products was hijacked
by about 10 armed men. They threatened to kill the truck driver and two of his helpers should
they refuse to turn over the truck and its contents to the said highway robbers.
Issue; Whether Reputable should be held solidarily liable with Malayan?
Held; No. There is solidary liability only when the obligation expressly so states, when the law
so provides or when the nature of the obligation so requires.
In Heirs of George Y. Poe v. Malayan lnsuranceCompany., lnc.,42 the Court ruled that:Ï‚rÎ±lÎ±Ï‰
Where the insurance contract provides for indemnity against liability to third persons, the
liability of the insurer is direct and such third persons can directly sue the insurer. The direct
liability of the insurer under indemnity contracts against third party[-]liability does not mean,
however, that the insurer can be held solidarily liable with the insured and/or the other parties
found at fault, since they are being held liable under different obligations. The liability of the
insured carrier or vehicle owner is based on tort, in accordance with the provisions of the Civil
Code; while that of the insurer arises from contract, particularly, the insurance policy: 43
(Citation omitted and emphasis supplied)
Suffice it to say that Malayan's and Reputable's respective liabilities arose from different
obligations- Malayan's is based on the SR Policy while Reputable's is based on the contract of
carriage.
CASE NO. 60: Cebu Shipyard vs William Lines (1999) [Inchmaree Clause]
Facts: Cebu Shipyard and Engineering Works, Inc. is a domestic corporation engaged in the
business of dry-docking and repairing of marine vessels while the private respondent,
Prudential Guarantee and Assurance, Inc. (Prudential), also a domestic corporation is in the
non-life insurance business.
William Lines, Inc. (plaintiff below) is in the shipping business. It the owner of M/V Manila City,
a luxury passenger-cargo vessel, which caught fire and sank on February 16, 1991. At the time
of the unfortunate occurrence sued upon, subject vessel was insured with Prudential for
P45,000,000.00 pesos for hull and machinery. The Hull Policy included an "Additional Perils
(INCHMAREE)" Clause covering loss of or damage to the vessel through the negligence of,
among others, ship repairmen.
William Lines, Inc. filed a complaint for damages against CSEW, alleging that the fire which
broke out in M/V Manila City was caused by CSEW's negligence and lack of care.
Cebu Shipyard contended that there can be no right of subrogation as it is deemed a co-assured
under the subject insurance policy. To buttress its stance that it is a co-assured, it placed
reliance on Clause 20 of the Work Order which states:
The insurance on the vessel should be maintained by the customer and/or owner of the vessel
during the period the contract is in effect. 13
According to petitioner, under the said clause, William Lines, Inc., agreed to assume the risk of
loss of the vessel while under dry-dock or repair and to such extent, it is benefited and
effectively constituted as a co-assured under the policy.
Issue: Whether or not the Prudential has the right of subrogation against its own insured.
Held: Yes. Clause 20 of the Work Order in question is clear in the sense that it requires William
Lines to maintain insurance on the vessel during the period of dry-docking or repair.
Concededly, such a stipulation works to the benefit of CSEW as the ship repairer. However, the
fact that CSEW benefits from the said stipulation does not automatically make it as a co-assured
of William Lines. The intention of the parties to make each other a co-assured under an
insurance policy is to be gleaned principally from the insurance contract or policy itself and not
from any other contract or agreement because the insurance policy denominates the assured
and the beneficiaries of the insurance.
The Additional perils Clause of the Marine Insurance Policy provides that the insurance covers
loss of or damage to vessel directly caused by the negligence of charterers and/or Repairers,
provided such Charterers and/or Repairers are not an Assured hereunder.
If CSEW were deemed a co-assured under the policy, it would nullify any claim of William Lines,
Inc. from Prudential for any loss or damage caused by the negligence of CSEW. Certainly, no
shipowner would agree to make a shiprepairer a co-assured under such insurance policy;
otherwise, any claim for loss or damage under the policy would be invalidated. Such result
could not have been intended by William Lines, Inc.
CASE 61: Roque vs IAC

TOPIC: Marine Insurance
FACTS: The Manila Bay Lighterage Corporation, a common carrier, entered into a contract with
Roque whereby the former would load and carry on board logs from Palawan to Manila. Roque
insured the logs with Pioneer Insurance. The shipment never reached its destination because
the barge sank with the logs somewhere off Cabuli Point in Palawan on its way to Manila.
Apparently, the barge where the logs were loaded was not seaworthy such that it developed a
leak.
ISSUE: Whether in cases of Marine Cargo Insurance, there is a warranty of seaworthiness by the
cargo owner
HELD: the SC held that in cases of Marine Cargo Insurance, there is a warranty of seaworthiness
by the cargo owner
Section 113 of the Insurance Code provides: In every marine insurance upon a ship or freight, or
freightage, or upon any thing which is the subject of marine insurance, a warranty is implied
that the ship is seaworthy.
Thus, the term "cargo" can be the subject of marine insurance and that once it is so made, the
implied warranty of seaworthiness immediately attaches to whoever is insuring the cargo
whether he be the shipowner or not. Moreover, the fact that the unseaworthiness of the ship
was unknown to the insured is immaterial in ordinary marine insurance and may not be used by
him as a defense in order to recover on the marine insurance policy. Since the law provides for
an implied warranty of seaworthiness in every contract of ordinary marine insurance, it
becomes the obligation of a cargo owner to look for a reliable common carrier which keeps its
vessels in seaworthy condition. The shipper of cargo may have no control over the vessel but he
has full control in the choice of the common carrier that will transport his goods. Or the cargo
owner may enter into a contract of insurance which specifically provides that the insurer
answers not only for the perils of the sea but also provides for coverage of perils of the ship.
CASE NO. 62: Go Tiaco vs Union Insurance Society of Canton
Facts: A policy of marine insurance issued by the Union Insurance Society of Canton, Ltd., upon
a cargo of rice belonging to the plaintiffs, Go Tiaoco Brothers, which was transported in the
early days of May, 1915, on the steamship Hondagua from the port of Saigon to Cebu. On
discharging the rice from one of the compartments in the after hold, upon arrival at Cebu, it
was discovered that one thousand four hundred seventy-three sacks and been damages by sea
water. The loss so resulting to the owners of rice, after proper deduction had been made for
the portion saved, was three thousand eight hundred seventy five pesos and twenty-five
centavos (P3,875.25). The trial court found that the inflow of the sea water during the voyage
was due to a defect in one of the drain pipes of the ship and concluded that the loss was not
covered by the policy of insurance.
The court found in effect that the opening above described had resulted in course of time from
ordinary wear and tear and not from the straining of the ship in rough weather on that voyage.
The court also found that the repairs that had been made on the pipe were slovenly and
defective and that, by reason of the condition of this pipe, the ship was not properly equipped
to receive the rice at the time the voyage was begun. For this reason the court held that the
ship was unseaworthy.
The policy of insurance was signed upon a form long in use among companies engaged in
maritime insurance. It purports to insure the cargo from the following among other risks:
"Perils . . . of the seas, men of war, fire, enemies, pirates, rovers, thieves, jettisons, . . . barratry
of the master and mariners, and of all other perils, losses, and misfortunes that have or shall
come to the hurt, detriment, or damage of the said goods and merchandise or any part
thereof."
Issue: Whether the insurer is liable on this policy for the loss caused in the manner above stated
presents two phases which are in a manner involved with each other. One has reference to the
meaning of the expression "perils of the seas and all other perils, losses, and misfortunes," as
used in the policy; the other has reference to the implied warranty, on the part of the insured,
as to the seaworthiness of the ship?
Held: No. It is universally accepted that in every contract of insurance upon anything which is
the subject of marine insurance, a warranty is implied that the ship shall be seaworthy at the
time of the inception of the voyage.
It must be considered to be settled, furthermore, that a loss which, in the ordinary course of
events, results from the natural and inevitable action of the sea, from the ordinary wear and
tear of the ship, or from the negligent failure of the ship's owner to provide the vessel with
proper equipment to convey the cargo under ordinary conditions, is not a peril of the sea. Such
a loss is rather due to what has been aptly called the "peril of the ship." The insurer undertakes
to insure against perils of the sea and similar perils, not against perils of the ship. As was well
said by Lord Herschell in Wilson, Sons & Co. vs. Owners of Cargo per the Xantho ([1887], 12 A.
C., 503,509), there must, in order to make the insurer liable, be "some casualty, something
which could not be foreseen as one of the necessary incidents of the adventure. The purpose of
the policy is to secure an indemnity against accidents which may happen, not against events
which must happen."
In the present case the entrance of the sea water into the ship's hold through the defective
pipe already described was not due to any accident which happened during the voyage, but to
the failure of the ship's owner properly to repair a defect of the existence of which he was
apprised. The loss was therefore more analogous to that which directly results from simple
unseaworthiness than to that which results from perils of the sea.
By parity of reasoning the insurer is not liable; for, generally speaking, the shipownerexcepts
the perils of the sea from his engagement under the bill of lading, while this is the very peril
against which the insurer intends to give protection. As applied to the present case it results
that the owners of the damages rice must look to the shipowner for redress and not to the
insurer.
CASE NO. 63: Cathay Insurance vs CA

FACTS: Cathay Insurance Co. seeks the review of the decision of CA affirming the RTC in
itsdecision awarding damages to Remington Industrial Sales Corporation the amount of P
866,000.00representing the loss it sustained due to the rusting of the seamless steel pipes it is
insuredwith the petitioner while being transported from Japan to the Philippines on board the
vesselSS Eastern Mariner. Petitioner averred that it could not have been liable for the
lossbecause, according to it, “rusting is not a risk insured against, since a risk to be
insuredagainst should be a casualty or some casualty, something which could not be foreseen
asone of the necessary incidents of adventure.” However, Remington contends that “rust is not
an inherent vice of the seamless steel pipes without interferenceof external factors,” that is,
the external factors are the elements contemplated during seavoyage which would constitute
Perils of the Sea.
ISSUE: Whether the rusting of steel pipes in the course of a voyage is a "peril of the sea," and
whether rusting is a risk insured against.
Held: YES. There is no question that the rusting of steel pipes in the course of a voyage is a
"peril of the sea" in view of the toll on the cargo of wind, water, and salt conditions. At any rate
if the insurer cannot be held accountable therefor, the Court would fail to observe a cardinal
rule in the interpretation of contracts, namely, that any ambiguity therein should be construed
against the maker/issuer/drafter thereof, namely, the insurer. Besides the precise purpose of
insuring cargo during a voyage would be rendered fruitless.
CASE NO. 64: Filipino Merchants Insurance Co. vs CA

TOPIC: Loss: Marine Insurance
FACTS: This is an action brought by the consignee of the shipment of fishmeal loaded on board
the vessel SS Bougainville and unloaded at the Port of Manila and seeks to recover from the
insurance company damages to said shipment which has been insured by the insurance
company. Choa Tiek Seng insured said shipment with Filipino Merchants Insurance for 600
metric tons of fishmeal in new gunny bags from Bangkok, Thailand to Manila against all risks.
The fishmeal in 666 new gunny bags were unloaded from the ship at Manila unto the arrastre
contractor and the surveyor ascertained and certified that in such discharge 105 bags were in
bad order condition as jointly surveyed by the ship's agent and the arrastre contractor.
ISSUE: Whether Filipino Merchants Insurance is liable for damages under the insurance contract
HELD: the SC held that Filipino Merchants Insurance is liable for damages under the insurance
contract. Coverage under an "all risks" provision of a marine insurance policy creates a special
type of insurance which extends coverage to risks not usually contemplated and avoids putting
upon the insured the burden of establishing that the loss was due to the peril falling within the
policy's coverage; the insurer can avoid coverage upon demonstrating that a specific provision
expressly excludes the loss from coverage. A marine insurance policy providing that the
insurance was to be "against all risks" must be construed as creating a special insurance and
extending to other risks than are usually contemplated, and covers all losses except those such
as: fraud of the insured. The burden of the insured, therefore, is to prove merely that the goods
he transported have been lost, destroyed or deteriorated. Thereafter, the burden is shifted to
the insurer to prove that the loss was due to excepted perils. To impose on the insured the
burden of proving the precise cause of the loss or damage would be inconsistent with the broad
protective purpose of "all risks" insurance. In the present case, there being no showing that the
loss was caused by any of the excepted perils, the insurer is liable under the policy.
CASE NO. 65: Oriental Assurance Corporation vs CA

TOPIC: Loss: Marine Insurance
FACTS: Panama Sawmill bought 1,208 pieces of apitong logs. It hired Transpacific Towage to
transport the logs by sea from Palawan to Manila and insured it against loss with Oriental
Assurance Corporation. During the voyage, rough seas and strong winds caused damage to the
barge resulting in the loss of 497 pieces of logs out of the 598 pieces loaded thereon. Panama
demanded payment for the loss but Oriental Assurance refused on the ground that its
contracted liability was for "TOTAL LOSS ONLY."
ISSUE: Whether or not Oriental Assurance can be held liable under its marine insurance policy
HELD: the SC held that Oriental Assurance cannot be held liable under its marine insurance
policy. A total loss may be either actual or constructive (Sec. 129, Insurance Code). An actual
total loss is caused by: (a) A total destruction of the thing insured; (b) The irretrievable loss of
the thing by sinking, or by being broken up; (c) Any damage to the thing which renders it
valueless to the owner for the purpose for which he held it; or (d) Any other event which
effectively deprives the owner of the possession, at the port of destination, of the thing
insured. (Section 130, Insurance Code).
A constructive total loss is one which gives to a person insured a right to abandon, under
Section 139 of the Insurance Code. This provision reads:
SECTION 139. A person insured by a contract of marine insurance may abandon the thing
insured, or any particular portion thereof separately valued by the policy, or otherwise
separately insured, and recover for a total loss thereof, when the cause of the loss is a peril
injured against,
(a) If more than three-fourths thereof in value is actually lost, or would have to be expended to
recover it from the peril;
(b) If it is injured to such an extent as to reduce its value more than three-fourths;
In this case, the loss is not more than three-fourths of the logs. Thus, Oriental Assurance cannot
be held liable since their liability was for total loss.
CASE 66: Sun Insurance Office Ltd vs CA (1992)

TOPIC: Casualty Insurance
FACTS: Sun Insurance Office issued a personal accident policy to Felix Lim, Jr. Two months later,
he was dead with a bullet wound in his head. According to Lim's secretary, Lim was playing with
his handgun, from which he had previously removed the magazine. As she watched television,
he stood in front of her and pointed the gun at her. She pushed it aside and said it might be
loaded. He assured her it was not and then pointed it to his temple. The next moment there
was an explosion and Lim slumped to the floor. He was dead before he fell. As beneficiary, his
wife sought payment on the policy but her claim was rejected. Sun Insurance agreed that there
was no suicide. It argued, however that there was no accident either.
ISSUE: Whether the act committed by the insured is covered by the personal accident policy
HELD: the SC held that the act committed by the insured is covered by the personal accident
policy. The words "accident" and "accidental" when used in an insurance contract are to be
construed and considered according to the ordinary understanding and common usage and
speech of people generally. In substance, the courts agreed that the words "accident" and
"accidental" mean that which happens by chance or fortuitously, without intention or design,
and which is unexpected, unusual, and unforeseen. The definition that has usually been
adopted by the courts is that an accident is an event that takes place without one's foresight or
expectation — an event that proceeds from an unknown cause, or is an unusual effect of a
known case, and therefore not expected. An accident is an event which happens without any
human agency or, if happening through human agency, an event which, under the
circumstances, is unusual to and not expected by the person to whom it happens. It has also
been defined as an injury which happens by reason of some violence or casualty to the injured
without his design, consent, or voluntary co-operation. In light of these definitions, the Court is
convinced that the incident that resulted in Lim's death was indeed an accident.
CASE 67: Finman General Assurance vs CA (2001)

FACTS: Usiphil Incorporated obtained a fire insurance policy from Finman General Assurance.
Usiphil filed with Finman an insurance claim for the loss of the insured properties due to
fire. Finman required Usiphil to file a formal claim and submit proof of loss. The latter complied
but despite repeated demands, Finman refused to pay.
ISSUE: Whether Finman must pay Usiphil’s insurance claim

HELD: the SC held that Finman must pay Usiphil’s insurance claim. The records show that
Usiphil, after the fire, immediately notified Finman and complied with the submission of proper
documents. The submission of these documents, to the Court’s mind, constitutes substantial
compliance with the insurance contract. As regards the submission of documents to prove loss,
substantial compliance with the requirements will always be deemed sufficient. Further, even
assuming that Usiphil failed to submit certain required documents as proof of loss, such
violation was waived by Finman when it signed the breakdown of the amount due to Usiphil on
the insurance claim. By such act, Finman acknowledged its liability under the insurance policy.
CASE NO. 68: Biagtan vs Insular Life Assurance

FACTS: Juan S. Biagtan was insured with Insular Life Assurance Company under a
supplementary contract denominated "Accidental Death Benefit Clause, for an additional sum
of P5,000 if "the death of the insured resulted directly from bodily injury effected solely
through external and violent means sustained in an accident and independently of all other
causes." The clause, however, expressly provided that it would not apply where death resulted
from an injury "intentionally inflicted by another party." While the said life policy was in effect,
the house of the insured was robbed and in committing the robbery, the robbers stabbed the
insured resulting in his death. The beneficiaries of the insured filed a claim under the policy.
The insurance company paid the basic amount of P5,000 but refused to pay the additional
P5,000 under the accidental death benefit clause, on the ground that the insured's death
resulted from injuries intentionally inflicted by third parties and therefore was not covered.
ISSUE: Whether the wounds received by the insured at the hands of the robbers were inflicted
intentionally, making the insurer not liable
HELD: the SC held that the wounds received by the insured at the hands of the robbers were
inflicted intentionally, making the insurer not liable. Nine wounds were inflicted upon the
deceased, all by means of thrusts with sharp-pointed instruments wielded by the robbers. This
is a physical fact as to which there is no dispute. So is the fact that five of those wounds caused
the death of the insured. Whether the robbers had the intent to kill or merely to scare the
victim or to ward off any defense he might offer, it cannot be denied that the act itself of
inflicting the injuries was intentional. A gun which discharges while being cleaned and kills a
bystander; a hunter who shoots at his prey and hits a person instead; an athlete in a
competitive game involving physical effort who collides with an opponent and fatally injures
him as a result: these are instances where the infliction of the injury is unintentional and
therefore would be within the coverage of an accidental death benefit clause. But where a gang
of robbers enter a house and coming face to face with the owner, even if unexpectedly, stab
him repeatedly, it is contrary to all reason and logic to say that his injuries are not intentionally
inflicted, regardless of whether they prove fatal or not. As it was, in the present case they did
prove fatal, and the robbers have been accused and convicted of the crime of robbery with
homicide.
CASE NO. 69: Paramount Insurance vs Sps. Remonduelaz (2012)

TOPIC: Compulsory Motor Vehicle Liability Insurance
FACTS: Sps. Remonduelaz insured with Paramount Insurance their Toyota Corolla sedan under a
comprehensive motor vehicle insurance policy for one year. During the effectivity of said
insurance, the car was unlawfully taken. The spouses alleged that Ricardo Sales took possession
of the subject vehicle to add accessories and improvements thereon, however, Sales failed to
return the subject vehicle within the agreed three-day period. As a result, the spouses notified
Paramount Insurance to claim for the reimbursement of their lost vehicle. However, Paramount
Insurance refused to pay.
ISSUE: whether or not Paramount Insurance is liable under the insurance policy for the loss of
the vehicle
HELD: the SC held that Paramount Insurance is liable under the insurance policy for the loss of
the vehicle.
Here, policy clearly undertook to indemnify the insured against loss of or damage to the
scheduled vehicle when caused by theft. The principal distinction between Estafa and Theft is
that, in theft the thing is taken while in estafa the accused receives the property and converts it
to his own use or benefit. However, there may be theft even if the accused has possession of
the property. If he was entrusted only with the material or physical or de facto possession of
the thing, his misappropriation of the same constitutes theft, but if he has the juridical
possession of the thing his conversion of the same constitutes embezzlement or estafa. In the
instant case, Sales did not have juridical possession over the vehicle. Hence, it is apparent that
the taking of the vehicle is without any consent or authority from the former. Records would
show that the spouses entrusted possession of their vehicle only to the extent that Sales will
introduce repairs and improvements thereon, and not to permanently deprive them of
possession thereof. Since, Theft can also be committed through misappropriation, the fact that
Sales failed to return the subject vehicle constitutes Qualified Theft. Hence, since the car is
undeniably covered by a Comprehensive Motor Vehicle Insurance Policy that allows for
recovery in cases of theft, Paramount Insurance is liable under the policy for the loss of the
vehicle under the "theft clause."
CASE NO. 70: Tiu vs Arriesgado (2004)

TOPIC: Basis & Extent of Insurer’s liability
FACTS: One of the rear tires of a cargo truck exploded. The driver parked along the right side of
the national highway. D Rough Riders passenger bus rammed into the truck’s left rear. The
impact damaged the right side of the bus and left several passengers injured. Pedro Arriesgado
suffered a fracture in his right colles. His wife died. Pedro Arriesgado filed a complaint for
breach of contract of carriage against D Rough Riders’ bus operator William Tiu.
A Third-Party Complaint was filed against the Philippine Phoenix Surety and Insurance, Inc.
(PPSII), Tiu’s insurer. However, when the Third-Party Complaint was filed, they failed to attach a
copy of the terms of the insurance contract itself.
ISSUE: Whether PPSII is liable as an insurer

HELD: the SC held that PPSII is still liable as an insurer. In its Answer to the Third-Party
Complaint, PPSII admitted the existence of the contract of insurance. It did not even dispute the
existence of such contract, and admitted that it was liable thereon. It claimed, however, that it
had attended to and settled the claims of those injured during the incident. Considering the
admissions made by PPSII, the existence of the insurance contract and the salient terms thereof
cannot be dispatched. It must be noted that after filing its answer, PPSII no longer objected to
the presentation of evidence by Arriesgado and Tiu. The nature of Compulsory Motor Vehicle
Liability Insurance is such that it is primarily intended to provide compensation for the death or
bodily injuries suffered by innocent third parties or passengers as a result of the negligent
operation and use of motor vehicles. The victims and/or their dependents are assured of
immediate financial assistance, regardless of the financial capacity of motor vehicle owners.
However, the insurer could be held liable only up to the extent of what was provided for by the
contract of insurance, in accordance with the law.
CASE 71: Malayan Insurance vs Philippine First Insurance (2012)

TOPIC: Basis & Extent of Insurer’s Liability
FACTS: Wyeth Philippines executed its annual contract of carriage with Reputable Forwarder
Services, whereby the latter undertook to transport and deliver the former’s products to its
customers, dealers or salesmen. Wyeth procured a marine policy from Philippines First
Insurance Co. to secure its interest over its own products. The policy covers all risks of direct
physical loss or damage from any external cause, if by land. Under the contract, Reputable
undertook to answer for "all risks with respect to the goods and shall be liable to Wyeth, for the
loss, destruction, or damage of the goods/products due to any and all causes whatsoever,
including theft, robbery, flood, storm, earthquakes, lightning, and other force majeure while
the goods/products are in transit and until actual delivery to the customers, salesmen, and
dealers of Wyeth". The contract also required Reputable to secure an insurance policy on
Wyeth’s goods. Thus, Reputable signed a Special Risk Insurance Policy (SR Policy) with Malayan.
During the effectivity of the Marine Policy and SR Policy, Reputable’s truck carrying Wyeth’s
products was hijacked by about 10 armed men. They threatened to kill the truck driver and two
of his helpers should they refuse to turn over the truck and its contents to the highway robbers.
The hijacked truck was recovered two weeks later without its cargo. Philippines First paid
Wyeth as indemnity. Philippines First then demanded reimbursement from Reputable, having
been subrogated to the rights of Wyeth. The latter, however, ignored the demand.
Consequently, Philippines First instituted an action for sum of money against Reputable.
Reputable impleaded Malayan as third-party defendant in an effort to collect the amount
covered in the SR Policy. Malayan disclaimed any liability and argued that under Section 5 of
the SR Policy, the insurance does not cover any loss or damage to property which at the time of
the happening of such loss or damage is insured by any marine policy.
ISSUE: Whether Reputable is solidarily liable with Malayan
HELD: the SC held that Reputable is not solidarily liable with Malayan and Malayan is liable for
the full amount of the policy coverage. There is solidary liability only when the obligation
expressly so states, when the law so provides or when the nature of the obligation so requires.
Where the insurance contract provides for indemnity against liability to third persons, the
liability of the insurer is direct and such third persons can directly sue the insurer. The direct
liability of the insurer under indemnity contracts against third party liability does not mean,
however, that the insurer can be held solidarily liable with the insured and/or the other parties
found at fault, since they are being held liable under different obligations. The liability of the
insured carrier or vehicle owner is based on tort, in accordance with the provisions of the Civil
Code; while that of the insurer arises from contract, particularly, the insurance policy. In this
case, Malayan's and Reputable's respective liabilities arose from different obligations:
Malayan's is based on the SR Policy while Reputable's is based on the contract of carriage.
CASE 72: Villacorta vs IC (1980)

TOPIC: Authorized driver and theft clause
FACTS: Villacorta was the owner of a Colt Lancer insured with Empire Insurance Company. The
vehicle was brought to the Sunday Machine Works for general check-up and repairs and while it
was in the custody of the Sunday Machine Works, the car was taken by 6 persons and driven
out to Montalban, Rizal. While travelling, the car figured in an accident. Villacorta then filed a
claim for total loss with Empire Insurance but claim was denied. Empire Insurance's argument is
that the accident did not fall within the provisions of the policy either for the Own Damage or
Theft coverage, invoking the policy provision on "Authorized Driver" clause. According to
Empire, the policy limits the use of the insured vehicle to 2 persons only, namely: the insured
himself or any person on his permission. Under the second category, it is to be noted that the
words "any person' is qualified by the phrase ‘on the insured's order or with his permission' and
the thief is not an authorized driver of the complainant; thus violating the “authorized driver”
clause.
ISSUE: Whether Villacorta’s claim must be denied by the insurance company
HELD: the SC held that Villacorta’s claim must not be denied by the insurance company. First,
the interpretation of the “authorized driver” clause by Empire is too restrictive and contrary to
the established principle that insurance contracts, being contracts of adhesion, obviously call
for greater strictness and vigilance on the part of courts of justice with a view of protecting the
weaker party from abuse and imposition. The main purpose of the "authorized driver" clause is
that a person other than the insured owner, who drives the car on the insured's order, such as
his regular driver, or with his permission, such as a friend or member of the family or the
employees of a car service or repair shop must be duly licensed drivers and have no
disqualification to drive a motor vehicle. A car owner who entrusts his car to an established car
service and repair shop necessarily entrusts his car key to the shop owner and employees who
are presumed to have the insured's permission to drive the car for legitimate purposes of
checking or road-testing the car. The mere happenstance that the employee of the shop owner
diverts the use of the car to his own illicit or unauthorized purpose in violation of the trust
reposed in the shop by the insured car owner does not mean that the "authorized driver"
clause has been violated such as to bar recovery, provided that such employee is duly qualified
to drive under a valid driver's license.
Secondly, when a car is unlawfully taken, it is the theft clause, not the "authorized driver"
clause, that applies. The insurer must therefore indemnify the owner for the total loss of the
insured car under the theft clause of the policy, subject to the filing of such claim for
reimbursement as subrogee against Sunday Machine Works.
CASE 73: Malayan Insurance vs Alberto (2012)

TOPIC: Basis & extent of insurer’s liability
FACTS: An accident occurred at the corner of EDSA and Ayala Avenue involving four 4 vehicles.
Malayan Insurance issued s car insurance policy in favor of First Malayan Leasing and Finance
Corporation whose vehicle was involved in the accident. The driver of Alberto’s vehicle invoked
that the incident was the fault of the other vehicle which made him not liable for the damages.
ISSUE: Whether Alberto and his driver are liable for damages
HELD: the SC held that the accused is liable based on the doctrine of res ipsa loquitur. The
requisites for the application of the res ipsa loquitur rule are the following: (1) the accident was
of a kind which does not ordinarily occur unless someone is negligent; (2) the instrumentality or
agency which caused the injury was under the exclusive control of the person charged with
negligence; and (3) the injury suffered must not have been due to any voluntary action or
contribution on the part of the person injured. In the instant case, the Fuzo Cargo Truck (drived
by Alberto’s driver) would not have had hit the rear end of the Mitsubishi Galant unless
someone is negligent. Even if Alberto averts liability by putting the blame on another driver,
still, this allegation was self-serving and totally unfounded. Consequently, all the requisites for
the application of the doctrine of res ipsa loquitur are present, thereby creating a reasonable
presumption of negligence on the part of Alberto and his driver.
CASE 74: American Home Insurance vs FF Cruz (2011)

TOPIC: Suretyship
FACTS: The Philippine Ports Authority (PPA) conducted a bidding for the dredging of the
entrance channel and harbor basin of the Cebu International Port in Cebu City. The PPA
awarded the contract to the winning bidder, F.F. Cruz & Co. FF Cruz and Genaro Reyes
Construction, Inc. executed a Sub-Contract Agreement where the latter agreed to undertake
the performance of 50% of the dredging projects. FF Cruz gave G. Reyes an advance payment
of P2.2 million guaranteed by a surety bond for the same amount issued by American Home.
The surety bond was issued to guarantee payment of the advance payment made by FF Cruz to
G. Reyes for the dredging project in the event that the latter will fail to comply with the terms
and conditions of the sub-contract. G. Reyes informed FF Cruz that the equipment used for the
project had been encountering difficulties because of siltation problems. G. Reyes finally
admitted that continuing the project was no longer a wise investment and called on FF Cruz to
take over the project. FF Cruz thus took over the unfinished project. Consequently, FF Cruz
demanded from American Home the payment of P2.2 million representing the amount of the
bond. American Home, in turn, informed G. Reyes of FF Cruzs demand. Both claims were left
unheeded.
ISSUE: Whether American Home is liable to FF Cruz
HELD: the SC held that American Home is liable to FF Cruz. The payment of the P2.2 million
advanced by FF Cruz is the principal liability of G. Reyes. However, with the issuance of the
surety bond, a contract of suretyship was entered into making American Home equally liable. A
contract of suretyship is an agreement whereby a party called the surety, guarantees the
performance by another party, called the principal or obligor, of an obligation or undertaking in
favor of another party called the obligee. By its very nature, under the laws regulating
suretyship, the liability of the surety is joint and several but is limited to the amount of the
bond, and its terms are determined strictly by the terms of the contract of suretyship in relation
to the principal contract between the obligor and the obligee. The surety is considered as
possessed of the identity of the debtor in relation to whatever is adjudged touching upon the
obligation of the latter. Their liabilities are so interwoven as to be inseparable. Although the
contract of suretyship is, in essence, secondary only to a valid principal obligation, the surety’s
liability to the creditor is direct, primary, and absolute; he becomes liable for the debt and duty
of another although he possesses no direct or personal interest over the obligations nor does
he receive any benefit therefrom.
CASE 75: Tio Khe Chio vs CA (1991)

TOPIC: Claims settlement
FACTS: Tio Khe Chio imported 1,000 bags of fishmeal from Texas, U.S.A. The goods were
insured with EASCO and shipped on board a vessel owned by Far Eastern Shipping Company.
When the goods reached Manila, they were found to have been damaged by sea water which
rendered the fishmeal useless. Tio Khe Chio filed a claim with EASCO and Far Eastern Shipping.
Both refused to pay. He then sued them before the Court of First Instance of Cebu. The trial
court ruled in favor of Tio Khe Chio and held EASCO liable. The sheriff enforcing the writ, fixed
the legal rate of interest at twelve 12%. The Court of Appeals reduced the rate to 6%. Tio Khe
Chio appealed to the SC.
ISSUE: Whether the interest rates under Sec. 250 of the Insurance Code shall apply
HELD: the SC held that the interest rates under Sec. 250 of the Insurance Code shall not apply.
Section 244 of the Insurance Code provides: In case of any litigation for the enforcement of any
policy or contract of insurance, it shall be the duty of the Commissioner or the Court, as the case
may be, to make a finding as to whether the payment of the claim of the insured has been
unreasonably denied or withheld; and in the affirmative case, the insurance company shall be
adjudged to pay damages which shall consist of attorney's fees and other expenses incurred by
the insured person by reason of such undeniable denial or withholding of payment plus interest
of twice the ceiling prescribed by the Monetary Board of the amount of the claim due the
insured, from the date following the time prescribed in section two hundred forty-two or in
section two hundred forty-three, as the case may be, until the claim is fully satisfied; Provided,
That the failure to pay any such claim within the time prescribed in said sections shall be
considered prima facie evidence of unreasonable delay in payment.In the case at bar, there was
no finding that there was an unjustified refusal or withholding of payment on Tio Khe Chio's
claim. Sec.250 applies only when the court finds an unreasonable delay or refusal in the
payment of the claims.
CASE 76: Finman General Assurance vs CA (2001)

FACTS: Usiphil Incorporated obtained a fire insurance policy from Finman General Assurance.
Usiphil filed with Finman an insurance claim for the loss of the insured properties due to
fire. Finman required Usiphil to file a formal claim and submit proof of loss. The latter complied
but despite repeated demands, Finman refused to pay.
ISSUE: Whether the interest rates under Sec. 250 of the Insurance Code shall apply
HELD: the SC held that the interest rates under Sec. 250 of the Insurance Code shall apply. Sec.
250 of the Insurance Code states: In case of any litigation for the enforcement of any policy or
contract of insurance, it shall be the duty of the Commissioner or the Court, as the case may be,
to make a finding as to whether the payment of the claim of the insured has been unreasonably
denied or withheld; and in the affirmative case, the insurance company shall be adjudged to pay
damages which shall consist of attorneys fees and other expenses incurred by the insured
person by reason of such unreasonable denial or withholding of payment plus interest of twice
the ceiling prescribed by the Monetary Board of the amount of the claim due the insured, from
the date following the time prescribed in section two hundred forty-two or in section two
hundred forty-three, as the case may be, until the claim is fully satisfied: Provided, That the
failure to pay any such claim within the time prescribed in said sections shall be
considered prima facie evidence of reasonable delay in payment. Notably, under Section 250,
a prima facie evidence of unreasonable delay in payment of the claim is created by the failure
of the insurer to pay the claim within the time fixed in both Sections 249 and 250. Further, in
this case, the fire insurance policy itself provides for the payment of such interest.
CASE 77: Prudential Guarantee vs Trans-Asia Shipping Lines (2006)

FACTS: TRANS-ASIA is the owner of the vessel M/V Asia Korea. In consideration of payment of
premiums, PRUDENTIA] insured M/V Asia Korea for loss/damage of the hull and machinery
arising from perils, inter alia, of fire and explosion. While the policy was in force, a fire broke
out while M/V Asia Korea was undergoing repairs at the port of Cebu. TRANS-ASIA filed its
notice of claim for the damage sustained by the vessel. PRUDENTIAL denied the claim.
ISSUE: Whether the interest rates under Sec. 249 and 250 of the Insurance Code shall apply
HELD: the SC held that the interest rates under Sec. 249 and 250 of the Insurance Code shall
apply. Section 250 of the Insurance Code is categorical in imposing an interest twice the ceiling
prescribed by the Monetary Board due the insured, from the date following the time prescribed
in Section 249 until the claim is fully satisfied. In the case at bar, the Court found Section 250 to
be applicable as what is involved herein is a marine insurance, clearly, a policy other than life
insurance. SEC. 249 states: The amount of any loss or damage for which an insurer may be
liable, under any policy other than life insurance policy, shall be paid within thirty days after
proof of loss is received by the insurer and ascertainment of the loss or damage is made either
by agreement between the insured and the insurer or by arbitration; but if such ascertainment is
not had or made within sixty days after such receipt by the insurer of the proof of loss, then the
loss or damage shall be paid within ninety days after such receipt. Refusal or failure to pay the
loss or damage within the time prescribed herein will entitle the assured to collect interest on
the proceeds of the policy for the duration of the delay at the rate of twice the ceiling prescribed
by the Monetary Board, unless such failure or refusal to pay is based on the ground that the
claim is fraudulent. As specified, the assured is entitled to interest on the proceeds for the
duration of the delay at the rate of twice the ceiling prescribed by the Monetary Board except
when the failure or refusal of the insurer to pay was founded on the ground that the claim is
fraudulent.

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CASE 1: Enriquez vs Sunlife Assurance (1920)

TOPIC: LAWS GOVERNING INSURANCE

CASE 2: Insular Life vs Ebrado (1977)

CASE 3: Filipinas-Compania de Seguros de Nava (1966)

CASE 4: White Gold Marine Services vs Pioneer Insurance (2005)

ISSUE: whether or not Steamship Mutual is engaging in the business of insurance?

CASE 5: Philamcare Health Services Inc vs CA

ISSUE: W/N PHCP is an Insurance Company

CASE 8: Pandiman Philippines vs Marine Manning (2005)

CASE 9: Steamship Mutual Underwriting Association vs Sulpicio Lines (2017)

CASE 10: Rizal Surety and Insurance Company vs CA

CASE 11: Blue Cross vs Olivares (2008)

CASE 12: Fortune Insurance and Surety Co. vs CA

CASE 13: Gulf Resorts vs Philippine Charter Insurance Corporation (2005)

CASE 14: Eternal Gardens Memorial vs Philamlife Insurance (2008)

CASE 15: Manila Bankers Life Insurance vs Aban (2013)

CASE 16: Verendia vs CA

CASE 17: Gulf Resorts vs Philippine Charter Insurance Corporation (2005)

CASE 18: Philamlife Health Systems vs CA

ISSUE: Whether or not the health care agreement is an insurance contract

CASE 19: Manila Mahogany Manufacturing Corp. vs CA

ISSUE: Whether or not the petitioner is obliged to retain the P5000?

CASE 20: Federal Express Corporation vs American Home Insurance

CASE 21: Keppel Cebu Shipyard vs Pioneer Insurance (2009)

ISSUE: W/N Pioneer has a right to collect from KCSI

CASE 22: Malayan Insurance vs Alberto (2012)

ISSUE: Whether or not Malayan Insurance is entitled to Subrogation?

CASE 23: Asian Terminals vs First Lepanto (2014)

CASE NO.24 DBP vs. CA

CASE NO.25 Enriquez vs SunLife

Issue: Whether or not the insurance contract was perfected.

CASE 26: Great Pacific Life Assurance vs CA (1979)

ISSUE: Whether the Contract of Insurance was perfected

Case No. 28 Geagonia vs. Court of Appeals

Case No. 29 RCBC vs. CA

Issue; Whether or not RCBC has insurable interest in this case?

CASE NO.30 Great Pacific vs CA (mortgage)

CASE 31: Spouses Cha vs CA (1997)

CASE 32: Geagonia vs. Court of Appeals

Case No.35: Great Pacific vs CA (concealment)

Held: No, he did not.

CASE 36: Sun Life Assurance Co. of Canada vs CA (1995)

CASE 37: Philamcare Health Systems, Inc. vs. Court of Appeals

Case No. 38 Vda. de Canilang vs. Court of Appeals

Case No. 39 Tan vs. CA

Ruling; No. The pertinent section in the Insurance Code provides:

Case No. 40: Prudential Guarantee vs Trans

CASE 41: Manila Bankers Life Insurance vs Aban (2013)

Case No. 42: Florendo vs. Philam Plans, Inc.

Case No. 43 Ma. Lourdes Florendo vs, Philam Plans

CASE 44: Pacific Timber Export Corporation vs CA

CASE 45: Great Pacific Life Assurance Corporation vs CA

Issue: Whether or not the insurance policy has been perfected.

ISSUE: Whether the cause of action has prescribed

CASE NO. 49: American Home Insurance vs Chua (1999)

CASE NO. 50: Tibay vs CA

CASE 51: Philippine Phoenix Surety vs Woodworks Inc

ISSUE: Whether non-payment of premium produced the cancellation of the contract of

CASE NO. 53: Bonifacio Bros. Inc vs Mora (1967)

CASE NO. 54: The Insular Life Assurance vs Ebrado

CASE NO. 55: Vda. De Consuegra vs GSIS

CASE 56: Go vs Redfern

ISSUE: Whether Redfern is entitled to the full amount of the claim