THELMA VDA. DE CANILANG vs. COURT OF APPEALS

THELMA VDA. DE CANILANG vs. COURT OF APPEALS G.R. No. 92492, 17 June 1993

FACTS:

 

Jaime Canilang applied for a “non-medical” insurance policy with respondent Great Pacific Life Assurance Company naming his wife, Thelma Canilang as his beneficiary. 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 or not the non-disclosure of certain facts about the insured’s previous health conditions is material to warrant the denial of the claims of Thelma Canilang

 

HELD: YES. The SC agreed with the Court of Appeals that the information which Jaime Canilang failed to disclose was material to the ability of Great Pacific 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 medicines prescribed by such doctor, in the insurance application, it may be reasonably assumed that Great Pacific 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 Great Pacific 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 ensure. 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. WHEREFORE, the Petition for Review is DENIED for lack of merit and the Decision of the Court of Appeals dated 16 October 1989 in C.A.-G.R. SP No. 08696 is hereby AFFIRMED. No pronouncement as to the costs.

CATHAY INSURANCE CO., petitioner, vs. HON. COURT OF APPEALS, and REMINGTON INDUSTRIAL SALES CORPORATION

G.R. No. 76145 June 30, 1987 CATHAY INSURANCE CO., petitioner, vs. HON. COURT OF APPEALS, and REMINGTON INDUSTRIAL SALES CORPORATION, respondents.

FACTS:

A complaint was filed by private respondent corporation against petitioner (then defendant) company seeking collection of the sum of P868,339.15 representing private respondent's losses and damages incurred in a shipment of seamless steel pipes under an insurance contract in favor of the said private respondent as the insured, consignee or importer of aforesaid merchandise while in transit from Japan to the Philippines on board vessel SS "Eastern Mariner." The total value of the shipment was P2,894,463.83 at the prevailing rate of P7.95 to a dollar in June and July 1984, when the shipment was made. The trial court decided in favor of private respondent corporation by ordering petitioner to pay it the sum of P866,339.15 as its recoverable insured loss equivalent to 30% of the value of the seamless steel pipes; ordering petitioner to pay private respondent interest on the aforecited amount at the rate of 34% or double the ceiling prescribed by the Monetary Board per annum from February 3, 1982 or 90 days from private respondent's submission of proof of loss to petitioner until paid as provided in the settlement of claim provision of the policy; and ordering petitioner to pay private respondent certain amounts for marine surveyor's fee, attorney's fees and costs of the suit.

 

ISSUE: WON 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.

 

RULING:

 

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, We 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. Be it noted that any attack of the 15-day clause in the policy was foreclosed right in the pre-trial conference.

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

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

FACTS:

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

 

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

 

RULING:

 

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

AMADOR CORPUZ and ROMEO GONZALES vs. EDISON LUGUE and CATHERINE BALUYOT,

AMADOR CORPUZ and ROMEO GONZALES vs. EDISON LUGUE and CATHERINE BALUYOT, G.R. No. 137772, July 29, 2005

FACTS:

On 14 September 1984, at around 7:15 in the morning, while an Isuzu KC-20 passenger jeep (KC-20), then being driven by Jimmy Basilio, was traversing the right side of the Roman Highway in Barangay Pias, Orion, Bataan, it collided with a tanker truck driven by Gerardo Lim, which was then moving from the right shoulder of the highway. As a consequence of the accident, passengers of the KC-20, including respondent Lugue, suffered physical injuries. Respondent Lugue then filed an action for damages arising from the vehicular incident before the Balanga, Bataan RTC, Branch 2, against herein petitioners Amador Corpuz and Romeo Gonzales, owner and driver of the minibus, respectively, and Oscar Jaring and Gerardo Lim, owner and driver of the tanker truck, respectively. Therein defendants filed a third-party complaint against Ricardo Santiago and Jimmy Basilio, owner/operator and driver of the KC-20, respectively.

 

ISSUE: whether or not the appellate court erred in holding them liable for damages based on the findings of facts adduced by the trial court.

 

RULING:

 

It is clear that the proximate cause of the injuries suffered by respondent Lugue was the collision between the KC-20 and the tanker truck. As correctly pointed out by the lower court, proximate legal cause is that acting first and producing the injury either immediately or by setting other events in motion, all constituting a natural and continuous chain of events, each having a close causal connection with its immediate predecessor, the final event in the chain immediately effecting the injury as a natural and probable result of the cause which first acted, under such circumstances that the person responsible for the first event should, as an ordinarily prudent and intelligent person, have reasonable ground to expect at the moment of his act or default that an injury to some person might probably result therefrom. This conclusion of the appellate court of recklessness on the part of petitioner Gonzales is, however, unwarranted. Based on the unchallenged testimony of petitioner Gonzales, he signaled to overtake the KC-20 because the way was clear. That despite his best effort to do everything to avoid hitting the KC-20, petitioner failed to do so because the KC-20 had moved to a position blocking the way of the minibus as a result of the tanker bumping the KC-20. Furthermore, based on the unrebutted testimony of both Remigio Gervacio and Patrocinio Carillo, at the time when the minibus hit the KC-20, the former was already moving towards the middle portion of the highway, occupying the left portion of the road, a little beyond the center line. Certainly, even assuming that petitioner Gonzales had a few seconds before actual collision, he no longer had any opportunity to avoid it. Petitioner Gonzales cannot be deemed negligent for failing to prevent the collision even after applying all means available to him within the few instants when he had discovered the impending peril.

FINMAN GENERAL ASSURANCE CORPORATION vs. THE HONORABLE COURT OF APPEALS

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

 

 

FACTS:

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

 

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

 

HELD:

 

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

IVOR ROBERT DAYTON GIBSON, petitioner, vs. HON. PEDRO A. REVILLA

IVOR ROBERT DAYTON GIBSON, petitioner, vs. HON. PEDRO A. REVILLA, in his official capacity as Presiding Judge of Branch XIII, Court of First Instance of Rizal, and LEPANTO CONSOLIDATED MINING COMPANY, respondents. G.R. No. L-41432 July 30, 1979

 

FACTS:

 

 Lepanto Consolidated Mining Company filed a complaint against Malayan Insurance Company, Inc. The civil suit thus instituted by Lepanto against Malayan was founded on the fact that Malayan issued a Marine Open Policy covering all shipments of copper, gold, and silver concentrates in bulk from Poro, San Fernando, La Union to Tacoma, Washington or to other places in the United States. Thereafter, Malayan obtained reinsurance abroad through Sedgwick, Collins & Co., Limited, a London insurance brokerage. The Memorandum of Insurance issued by Sedgwick to Malayan listed three groups of underwriters or reinsurers – Lloyds 62.808%, Companies (I.L.U.) 34.705%, Other companies 2.487%. At the top of the list of underwriting members of Lloyds is Syndicate No. 448, assuming 2.48% of the risk assumed by the reinsurer, which syndicate number petitioner Ivor Robert Dayton Gibson claims to be himself. Petitioner then filed a motion to intervene as defendant, which motion was denied by the lower court.

 

ISSUE: WON THE LOWER COURT COMMITTED, REVERSIBLE ERROR IN REFUSING THE INTERVENTION OF THE PETITIONER IN THE SUIT BETWEEN LEPANTO AND MALAYAN COMPANIES.

 

HELD:

 

No. The respondent Judge committed no error of law in denying petitioner’s Motion to Intervene and neither has he abused his discretion in his denial of petitioner’s Motion for Intervention. We agree with the holding of the respondent court that since movant Ivor Robert Dayton Gibson appears to be only one of several re-insurers of the risks and liabilities assumed by Malayan Insurance Company, Inc., it is highly probable that other re-insurers may likewise intervene. If petitioner is allowed to intervene, We hold that there is good and sufficient basis for the Court a quo to declare that the trial between Lepanto and Malayan would be definitely disrupted and would certainly unduly delay the proceedings between the parties especially at the stage where Lepanto had already rested its case and that the issue would also be compounded as more parties and more matters will have to be litigated. In other words, the Court’s discretion is justified and reasonable. We also hold that respondent Judge committed no reversible error in further sustaining the fourth ground of Lepanto’s Opposition to the Motion to Intervene that the rights, if any, of petitioner are not prejudiced by the present suit and will be fully protected in a separate action against him and his co-insurers by Malayan. Petitioner’s contention that he has to pay once Malayan is finally adjudged to pay Lepanto because of the very nature of a contract of reinsurance and considering that the re-insurer is obliged to pay as may be paid thereon (referring to the original policies), although this is subject to other stipulations and conditions of the reinsurance contract, is without merit. The general rule in the law of reinsurance is that the re-insurer is entitled to avail itself of every defense which the re-insured (which is Malayan) might urge in an action by the person originally insured (which is Lepanto). As to the effect of the clause “to pay as may be paid thereon” contained in petitioner’s re-insurance contract, Arnould, on the Law of Marine Insurance and Average, 13th Ed., Vol. 1, Section 327, p. 315, states the rule, this: “It has been decided that this clause does not preclude the reinsurer from insisting upon proper proof that a loss strictly within the terms of the original policy has taken place. “This clause does not enable the original underwriter to recover from his reinsurer to an extent beyond the subscription of the latter. “Wherefore, in view of the foregoing, the petition is hereby dismissed. No costs.” Pacific Timber Export Corporation vs Court of Appeals In 1963, Pacific Timber Export Corporation (PTEC) applied for a temporary marine insurance from Workmen’s Insurance Company (WIC) in order for the latter to insure 1,250,000 board feet of logs to be exported to Japan. In March 1963, WIC issued a cover note to PTEC for the said logs. On April 2, 1963, WIC issued two policies for the logs. However, the total board feet covered this time is only 1,195,498. On April 4, 1963, while the logs were in transit to Japan, bad weather prevailed and this caused the loss of 32 pieces of logs. WIC then asked an adjuster to investigate the loss. The adjuster submitted that the logs lost were not covered by the two policies issued on April 2, 1963 but said logs were included in the cover note earlier issued. WIC however denied the insurance claim of PTEC as it averred that the cover note became null and void when the two policies were subsequently issued. The Court of Appeals ruled that the cover note is void for lack of valuable consideration as it appeared that no premium payment therefor was made by PTEC. ISSUE: Whether or not a separate premium is needed for cover notes. HELD: No. The Cover Note was not without consideration for which the Court of Appeals held the Cover Note as null and void, and denied recovery therefrom. 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 PTEC’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. At any rate, it is not disputed that PTEC paid in full all the premiums as called for by the statement issued by WIC after the issuance of the two regular marine insurance policies, thereby leaving no account unpaid by PTEC 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.

Geagonia v CA G.R. No. 114427

Geagonia v CA G.R. No. 114427 February 6, 1995

 

Facts:

 

Geagonia, owner of a store, obtained from Country Bankers fire insurance policy for P100,000.00. The 1 year policy and covered thestock trading of dry goods. The policy noted the requirement that "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 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." 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 Php 200,000 issued by PFIC. The basis of the private respondent's denial was the petitioner's alleged violation of Condition 3 of the policy. 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. He claimed that he knew the existence of the other two policies. But, he said that he had no knowledge of the provision in the private respondent's policy requiring him to inform it of the prior policies and this requirement was not mentioned to him by the private respondent's agent. 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 w/c procured the PFIC policies w/o informing him or securing his consent; and that Cebu Tesing Textile, as his creditor, had insurable interest on the stocks. The Insurance Commission then ordered the respondent company to pay complainant the sum of P100,000.00 with interest and attorney’s fees. CA reversed the decision of the Insurance Commission because it found that the petitioner knew of the existence of the two other policies issued by the PFIC.

 

Issues:

1. WON the petitioner had not disclosed the two insurance policies when he obtained the fire insurance and thereby violated Condition 3 of the policy.

2. WON he is prohibited from recovering

 

Held: Yes. No. Petition Granted

 

Ratio:

 

1. The court agreed with the CA that the petitioner knew of the prior policies issued by the PFIC. His letter of 18 January 1991 to the private respondent conclusively proves this knowledge. His testimony to the contrary before the Insurance Commissioner and which the latter relied upon cannot prevail over a written admission made ante litem motam. It was, indeed, incredible that he did not know about the prior policies since these policies were not new or original.

 

2. Stated differently, provisions, conditions or exceptions in policies which tend to work a forfeiture of insurance policies should be construed most strictly against those for whose benefits they are inserted, and most favorably toward those against whom they are intended to operate. With these principles in mind, Condition 3 of the subject policy is not totally free from ambiguity and must be meticulously analyzed. Such analysis leads us to conclude that (a) the prohibition applies only to double insurance, and (b) the nullity of the policy shall only be to the extent exceeding P200,000.00 of the total policies obtained. Furthermore, by stating within Condition 3 itself that such condition shall not apply if the total insurance in force at the time of loss does not exceed P200,000.00, the private respondent was amenable to assume a co-insurer's liability up to a loss not exceeding P200,000.00. What it had in mind was to discourage over-insurance. Indeed, the rationale behind the incorporation of "other insurance" clause in fire policies is to prevent over-insurance and thus avert the perpetration of fraud. When a property owner obtains insurance policies from two or more insurers in a total amount that exceeds the property's value, the insured may have an inducement to destroy the property for the purpose of collecting the insurance. The public as well as the insurer is interested in preventing a situation in which a fire would be profitable to the insured.