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FIELDMEN'S INSURANCE VS MERCEDES VARGAS VDA. DE SONGCO (GR L-24833 Sept.

23, 1968) Facts: The case involves a "Common Carrier Insurance" contract entered into by Songcowithpetitioner over the former's owner type jeepney. Songco's son informed Sambat (petitioner's agent) hat the vehicle was not a common carrier but is privately owned and used by the family. Sambat said it did not matter because the insurance company was not owned by the government and the petitioner's rules and regulations do not specify that the vehicles insured must be a common carrier. Songco hence insured his vehicle effective September 1960-1962. On October 1961, Songco died due a vehicular accident in Bulacan. His heirs claimed proceeds from petitioner butthe latter refused to pay because the vehicle wasnot a common carrier. Issue: WON the heirs may claim the proceeds from Fieldmen. Ruling: yes. the company is estopped from asserting that the vehicle was not covered. Sambat led Songco to believe that it was covered and qualified under the Common Carrier Insurance policy, despite the fact that Songco's son already informed him that it was not used as a common carrier. The SC said the company could not change its stand to the detriment of the hers of the insured. BONIFACIO BROS. INC VS ENRIQUE MORA(GR L-20853 MAY 29, 1967) Facts:Mora mortgaged his Oldsmobile Sedan cow to HS Reyes with the condition that Mora would insure the car with HS Reyes as beneficiary. Mora then insured the vehicle at State Insurance Company. Later, the vehicle engaged in an accident. It was fixed by Bonifacio Bros and the materials ere supplied by Ayala. Total expensesamounted to P2,102.73. Said amount was reimburses by the insurance company through a check delivered to Mora. Bonifacio Bros. and Ayala sued for collection of sum of money claiming that they should be the recipients of the insurance proceeds. Issue: WON there is privity of contract between petitioners and the insurance company. Ruling:None. The SC held that the only parties to the contract are the insured and the insurer unless there exists a stipulation pour autrii, which allows third persons to be parties to a contract. in this case, it was only HS Reyes who was intended to benefit from the insurance proceeds. Appellants have no cause of action insofar as the proceeds are concerned. BAYVIEW HOTEL INC VS KER AND CO. LTD AND PHOENIX INSURANCE (GR L-28237 AUG 31, 1982) FACTS: Bayview secured a fidelity guarantee bond from Ker for its accountable employees against acts of fraud and dishonesty. when one of the bonded employees was discovered to have cash shortagesand unremitted collections, Bayview filed claims for payment on said fidelity guarantee bond but Ker refused and denied indemnification. Ker claims that Bayview did not comply with the conditions in the insurance contract and did not present evidence as to the charges against the employee nd the alleged loss. Further, Ker staed that it was merely an agent of Phoenix, hence not liable. Issue: WON Condition 8 of the policy, which requires a decision of an arbitrator upon the company's liability, is a condition precedent to the insurer's liability. Ruiling:No. Condition 8 requires arbitration only as to diputes regarding the amount of theinsurer's liability but not as to any dispute as to the existence or non-existence of liability. it comes into play only if the insurer admits liability but cannot agree with the amount thereofand does not apply in this case where the insurer completely denies liability. Defendant's claim cannot be sustained considering the established principle that the contracts of adhesion are to be strictly construed against the insurer. However, since Ker is merely acting as an aget of Phoenix and it was really the latter who entered into the contract of insurance with Bayview,the case against Ker was dismissed. Philamcare Health Systems Inc. vs Court of Appeals on January 15, 2012 Insurance Law Representation Concealment Rescission of an Insurance Contract In 1988, Ernani Trinos applied for a health care insurance under the Philamcare Health Systems. He was asked if he was ever treated for high blood, heart trouble, diabetes, cancer, liver disease, asthma, or peptic ulcer; he answered no. His application was approved and it was effective for one year. His coverage was subsequently renewed twice for one year each. While

the coverage was still in force in 1990, Ernani suffered a heart attack for which he was hospitalized. The cost of the hospitalization amounted to P76,000.00. Julita Trinos, wife of Ernani, filed a claim before Philamcare for them to pay the hospitalization cost. Philamcare refused to pay as it alleged that Ernani failed to disclose the fact that he was diabetic, hypertensive, and asthmatic. Julita ended up paying the hospital expenses. Ernani eventually died. In July 1990, Julita sued Philamcare for damages. Philamcare alleged that the health coverage is not an insurance contract; that the concealment made by Ernani voided the agreement. ISSUE: Whether or not Philamcare can avoid the health coverage agreement. HELD: No. The health coverage agreement entered upon by Ernani with Philamcare is a non-life insurance contract and is covered by the Insurance Law. It 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. There is no concealment on the part of Ernani. He answered the question with good faith. He was not a medical doctor hence his statement in answering the question asked of him when he was applying is an opinion rather than a fact. Answers made in good faith will not void the policy. Further, Philamcare, in believing there was concealment, should have taken the necessary steps to void the health coverage agreement prior to the filing of the suit by Julita. Philamcare never gave notice to Julita of the fact that they are voiding the agreement. Therefore, Philamcare should pay the expenses paid by Julita. Insurance Case Digest: Philamcare Health Systems, Inc. V. CA (2002) G.R. No. 125678 March 18, 2002 Lessons Applicable: Elements (Insurance) Blood Relationship (Insurance) FACTS: Ernani Trinos, deceased husband of Julita Trinos, applied for a health care coverage with Philamcare Health Systems, Inc. He answered the standard application form: 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). - NO 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, respondents 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. Upon the termination of the agreement, the same was extended for another year from March 1, 1989 to March 1, 1990, then from March 1, 1990 to June 1, 1990. The amount of coverage was increased to a maximum sum of P75,000.00 per disability. During the period of his coverage, Ernani suffered a heart attack and was confined at the Manila Medical Center (MMC) for 1 month beginning March 9, 1990. While her husband was in the hospital, Julina Trinos tried to claim the benefits under the health care agreement. Philamcare denied her claim saying that the Health Care Agreement was void for concealing Ernanis medical history so she paid the hospitalization expenses of P76,000.00 herself. Doctors at the MMC allegedly discovered at the time of Ernanis confinement that he was hypertensive, diabetic and asthmatic, contrary to his answer in the application form. After being discharged from the MMC, he was attended by a physical therapist at home. Later, he was admitted at the Chinese General Hospital.

Due to financial difficulties, however, he was brought home again. April 13, 1990 morning: Ernani had fever and was feeling very weak He was brought to Chinese General Hospital where he died July 24, 1990: She brought action for damages against Philamcare Health Systems Inc. and its president, Dr. Benito Reverente RTC: Philamcare and Dr. Benito Reverent to pay and reimburse P76k plus interest, moral damages, exemplary damages, attorney's fees and cost of suit CA: affirmed the decision of RTC but deleted all awards for damages and absolved Philamcare Philamcare brought an instant petition for review arguing that: health care agreement is not an insurance contract; hence the "incontestability clause" under the Insurance Code does not apply. grants "living benefits," such as medical check-ups and hospitalization which a member may immediately enjoy so long as he is alive upon effectivity of the agreement until its expiration one-year thereafter only medical and hospitalization benefits are given under the agreement without any indemnification, unlike in an insurance contract where the insured is indemnified for his loss since Health Care Agreements are only for a period of one year, as compared to insurance contracts which last longer; incontestability clause does not apply, as the same requires an effectivity period of at least two years insurance company is governed by the Insurance Commission, but a Health Maintenance Organization under the authority of the Department of Health ISSUE: 1. W/N the health care agreement is a contract of insurance. - YES 2. W/N the spouse being "not" legal wife can claim - YES

Sec. 3. Any contingent or unknown event, whether past or future, which may damnify a person having an insurable interest, or create a liability against him, may be insured against, subject to the provisions of this chapter. The consent of the husband is not necessary for the validity of an insurance policy taken out bya married woman on her life or that of her children. Any minor of the age of eighteen years or more, may, notwithstanding such minority, contract for life, health and accident insurance, with any insurance company duly authorized to do business in the Philippines, provided the insurance is taken on his own life and the beneficiary appointed is the minor's estate or the minor's father, mother, husband, wife, child, brother or sister. The married woman or the minor herein allowed to take out an insurance policy may exercise all the rights and privileges of an owner under a policy. All rights, title and interest in the policy of insurance taken out by an original owner on the life or health of a minor shall automatically vest in the minor upon the death of the original owner, unless otherwise provided for in the policy.

HELD: 1.

Petition

is

DENIED.

CA

AFFIRMED. YES.

P.D. 612 Insurance Code Sec. 2 (1) (1) 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. Sec. 3

In the case at bar, the insurable interest of respondent's husband in obtaining the health care agreement was his own health. 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. The answer in response to the question relating to the medical history of the applicant largely depends on opinion rather than fact, especially coming from respondent's husband who was not a medical doctor. Where matters of opinion or judgment are called for, answers made in good faith and without intent to deceive will not avoid a policy even though they are untrue. 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.

P.D. 612 Insurance Code Sec. 27 Sec. 27. A concealment whether intentional or unintentional entitles the injured party to rescind a contract of insurance. cancellation of health care agreements as in insurance policies require the concurrence of the following conditions: - none of these was made 1. Prior notice of cancellation to insured; 2. Notice must be based on the occurrence after effective date of the policy of one or more of the grounds mentioned; 3. Must be in writing, mailed or delivered to the insured at the address shown in the policy; 4. Must state the grounds relied upon provided in Section 64 of the Insurance Code and upon request of insured, to furnish facts on which cancellation is based. When the terms of insurance contract contain limitations on liability, courts should construe them in such a way as to preclude the insurer from non-compliance with his obligation. Being a contract of adhesion, the terms of an insurance contract are to be construed strictly against the party which prepared the contract - the insurer. (U)nder the title Claim procedures of expenses, the defendant Philamcare Health Systems Inc. had twelve months from the date of issuance of the Agreement within which to contest the membership of the patient if he had previous ailment of asthma, and six months from the issuance of the agreement if the patient was sick of diabetes or hypertension. The periods having expired, the defense of concealment or misrepresentation no longer lie. 2. YES. P.D. 612 Insurance Code Sec. 10 Sec. 10. Every person has an insurable interest in the life and health: (1) of himself, of his spouse and of his children; (2) of any person on whom he depends wholly or in part for education or support, or in whom he has a pecuniary interest; (3) of any person under a legal obligation to him for the payment of money, respecting property or service, of which death or illness might delay or prevent the performance; and (4) of any person upon whose life any estate or interest vested in him depends.

White Gold Marine Services vs Pioneer Insurance (2005) Facts: White Gold procured a protection and indemnity coverage for its vessels from Steamship Mutual through Pioneer Insurance. 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. - Steamship Mutual thereafter filed a case against White Gold for collection of sum of money to recover the latters unpaid balance. White Gold on the other hand, filed a complaint before the Insurance Commission claiming that Steamship Mutual violated Sections 186 and 187 of the Insurance Code, while Pioneer violated Sections 299, 300 and 301 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. - The Court of Appeals affirmed the decision of the Insurance Commissioner. In its decision, the appellate court distinguished between P & I Clubs vis--visconventional insurance. The appellate court also held that Pioneer merely acted as a collection agent of Steamship Mutual. Issues: 1. WON Steamship Mutual, a P & I Club, is engaged in the insurance business in the Philippines 2. WON Pioneer needs a license as an insurance agent/broker for Steamship Mutual HELD 1. YES - 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. - The records reveal Steamship Mutual is doing business in the country albeit without the requisite certificate of authority mandated by Section 187 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 nonpayment of the calls. Thus, to continue doing business here, Steamship Mutual or through its agent Pioneer, must secure a license from the Insurance Commission. - Since a contract of insurance involves public interest, regulation by the State is necessary. Thus, no insurer or insurance company is allowed to engage in the insurance business without a license or a certificate of authority from the Insurance Commission. 2. YES - SEC. 299 . . .

not the legal wife (deceased was previously married to another woman who was still alive) health care agreement is in the nature of a contract of indemnity. payment should be made to the party who incurred the expenses

- 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. DBP Pool of Accredited insurance vs Radio Mindanao Network (2006) Facts: In the evening of July 27, 1988, the radio station of Radio Mindanao Network located at the SSS Building in Bacolod City was burned down causing damage in the amount of over one million pesos. Respondent sought to recover under two insurance policies but the claims were denied on the basis that the case of the loss was an excepted risk under condition no. 6 (c) and (d), to wit: 6. This insurance does not cover any loss or damage occasioned by or through or in consequence, directly or indirectly, of any of the following consequences, namely: (c) War, invasion, act of foreign enemies, hostilities, or warlike operations (whether war be declared or not), civic war. (d) Mutiny, riot, military or popular uprising, insurrection, rebellion, revolution, military or usurped power. The insurers maintained that based on witnesses and evidence gathered at the site, the fire was caused by the members of the Communist Party of the Philippines/New Peoples Army. Hence the refusal to honor their obligations. The trial court and the CA found in favor of the respondent. In its findings, both courts mentioned the fact that there was no credible evidence presented that the CCP/NPA did in fact cause the fire that gutted the radio station in Bacolod. Issue: WON the insurance companies are liable to pay Radio Mindanao Network under the insurance policies? Held: Yes. The Court will not disturb the factual findings of the appellant and trial courts absent compelling reason. Under this mode of review, the jurisdiction of the court is limited to reviewing only errors of law. - Particularly in cases of insurance disputes with regard to excepted risks, it is the insurance companies which have the burden to prove that the loss comes within the purview of the exception or limitation set up. It is sufficient for the insured to prove the fact of damage or loss. Once the insured makes out a prima facie case in its favor, the duty or burden of evidence shifts to the insurer to controvert said prima facie case. Insurance Case Digest: South Sea Surety And Insurance Co., Inc. V. CA (1995) G.R. No. 102253 June 2, Lessons Applicable: Authority to Receive Payment/Effect of Payment (Insurance) Binding Effect of Payment (Insurance) Laws Applicable: Section 77,Section 301, Section 306 of the Insurance 1995

January 25 1984: M/V Seven Ambassador sank January 30 1984: The check was tendered to South Sea but it refused. Instead it cancelled the insurance policy for non-payment of the premium RTC: favored Valenzuela against South Sea and Seven Brothers CA: Absolved Seven Brothers stipulation in the charter party that the ship owner would be exempted from liability in case of loss South Sea contends that it is cancelled and that Mr. Chua is not authorized ISSUE: W/N Mr. Chua is an authorized representative to receive the payment

HELD:

YES. petition

is

DENIED

payment of the premium is a condition precedent to, and essential for, the efficaciousness of the contract. The only two statutorily provided exceptions are (a) in case the insurance coverage relates to life or industrial life (health) insurance when agrace period applies and (b) when the insurer makes a written acknowledgment of the receipt of premium, this acknowledgment being declared by law to be then conclusive evidence of the premium payment South Sea Surety and Insurance Co., Inc. delivered to him the policy on 21 January 1984 at his office to be delivered to the Valenzuela - deemed to have been authorized by the South Sea Surety and Insurance Co., Inc. to receive the premium

Insurance Case Digest: Cha V. CA (1997) G.R. No. 124520 August 18, 1997 Lessons Applicable: Effect of Lack of Insurable Interest (Insurance) Laws Applicable: Sec. 17, Sec. 18, Sec. 25 of the

Insurance

Code

Code

FACTS:

Valenzuela Hardwood and Industrial Supply, Inc. shipped with Seven Brothers' vessel M/V Seven Ambassador lauan round logs numbering 940 at the port of Maconacon, Isabela for shipment to Manila Valenzuela insured the logs against loss and/or, damage with South Sea Surety and Insurance Co., Inc. for P2,000,000 issuing a Marine Cargo Insurance Policy January 24 1984: Valenzuela gave the check in payment of the premium on the insurance policy to Mr. Victorio Chua

FACTS: Spouses Nilo Cha and Stella Uy-Cha and CKS Development Corporation entered a 1 year lease contract with a stipulation not to insure against fire the chattels, merchandise, textiles, goods and effects placed at any stall or store or space in the leased premises without first obtaining the written consent and approval of the lessor. But it insured against loss by fire their merchandise inside the leased premises for P500,000 with the United Insurance Co., Inc. without the written consent of CKS On the day the lease contract was to expire, fire broke out inside the leased premises and CKS learning that the spouses procured an insurance wrote to United to have the proceeds be paid directly to them. But United refused so CKS filed against Spouses Cha and United. RTC: United to pay CKS the amount of P335,063.11 and Spouses Cha to pay P50,000 as exemplary damages, P20,000 as attorneys fees and costs of suit CA: deleted exemplary damages and attorneys fees ISSUE: W/N the CKS has insurable interest because the spouses Cha violated the stipulation

HELD: NO. CA set aside. Awarding the proceeds to spouses Cha. Sec. 18. 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 petitioner-spouses over their merchandise is primarily a contract of indemnity. Insurable interest in the property insured must exist a t 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 sound 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. SECTION 25. Every stipulation in a policy of Insurance for the payment of loss, whether the person insured has or has not any interest in the property insured, or that the policy shall be received as proof of such interest, and every policy executed by way of gaming or wagering, is void Section 17. The measure of an insurable interest in property is the extent to which the insured might be damnified by loss of injury thereof 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 proceeds of the fire insurance policy thus rightfully belong to the spouses. The liability of the Cha spouses to CKS for violating their lease contract in that Cha spouses obtained a fire insurance policy over their own merchandise, without the consent of CKS, is a separate and distinct issue which we do not resolve in this case.

insurance policy is clear that the subject of the insurance is the book debts and NOT goods sold and delivered to the customers and dealers of the insured ART. 1504. Unless otherwise agreed, the goods remain at the seller's risk until the ownership therein is transferred to the buyer, but when the ownership therein is transferred to the buyer the goods are at the buyer's risk whether actual delivery has been made or not, except that: (1) Where delivery of the goods has been made to the buyer or to a bailee for the buyer, in pursuance of the contract and the ownership in the goods has been retained by the seller merely to secure performance by the buyer of his obligations under the contract, the goods are at the buyer's risk from the time of such delivery; 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. Anyone has an insurable interest in property who derives a benefit from its existence or would suffer loss from its destruction. 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 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 insurance in this case is not for loss of goods by fire but for petitioner's accounts with IMC and LSPI that remained unpaid 45 days after the fire - obligation is pecuniary in nature obligor should be held exempt from liability when the loss occurs thru a fortuitous event only holds true when the obligation consists in the delivery of a determinate thing and there is no stipulation holding him liable even in case of fortuitous event Article 1263 of the Civil Code in an obligation to deliver a generic thing, the loss or destruction of anything of the same kind does not extinguish the obligation (Genus nunquan perit) The subrogation receipt, by itself, is sufficient to establish not only the relationship of respondent as insurer and IMC as the insured, but also the amount paid to settle the insurance claim Art. 2207. If the plaintiff's 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. As to LSPI, no subrogation receipt was offered in evidence. Failure to substantiate the claim of subrogation is fatal to petitioner's case for recovery of the amount of P535,613

Insurance Case Digest: Gaisano Cagayan, Inc. V. Insurance Company Of North America (2006) G.R. No. 147839 June 8, 2006

Lessons Applicable: Existing Interest (Insurance) Laws Applicable: Article 1504,Article 1263, Article 2207 of the Civil Code, Section 13 of Insurance Code

FACTS: Intercapitol Marketing Corporation (IMC) is the maker of Wrangler Blue Jeans. while Levi Strauss (Phils.) Inc. (LSPI) is the local distributor of products bearing trademarks owned by Levi Strauss & Co IMC and LSPI separately obtained from Insurance Company of North America fire insurance policies for their book debt endorsements related to their ready-made clothing materials which have been sold or delivered to various customers and dealers of the Insured anywhere in the Philippines which are unpaid 45 days after the time of the loss February 25, 1991: Gaisano Superstore Complex in Cagayan de Oro City, owned by Gaisano Cagayan, Inc., containing the ready-made clothing materials sold and delivered by IMC and LSPI was consumed by fire. February 4, 1992: Insurance Company of North America filed a complaint for damages against Gaisano Cagayan, Inc. alleges that IMC and LSPI filed their claims under their respective fire insurance policies which it paid thus it was subrogated to their rights Gaisano Cagayan, Inc: not be held liable because it was destroyed due to fortuities event or force majeure RTC: IMC and LSPI retained ownership of the delivered goods until fully paid, it must bear the loss (res perit domino) CA: Reversed - sales invoices is an exception under Article 1504 (1) of the Civil Code to res perit domino ISSUE: W/N Insurance Company of North America can claim against Gaisano Cagayan for the debt that was isnured HELD: YES. petition is partly GRANTED. order to pay P535,613 is DELETED

FIRST INTEGRATED Case No: G.R. No. L-51221 Topic: Casualty Insurance; Compulsory motor vehicle liability; Third party suit against insurer Date: July 31, 1991 Ponente: Justice Medialdea Facts: Silverio Blanco was the owner of a passenger jeepney which he insured against liabilities for death and injuries to third persons with First Integrated Bonding and Insurance Company, Inc. for P30,000. The said jeepney driven by Blanco himself bumped a five-year old child, Deogracias Advincula, causing the latter's death. The boys parents filed a complaint for damages against Blanco and First Insurance, which was granted by the lower court. First Insurance filed a petition for certiorari contending that the victims parents have no cause of action against it because they are not parties to the insurance contract and that they may only proceed against the driver based on the provisions of the New Civil Code. Issue: W/N an injured party for whom the contract of insurance is intended can sue directly the insurer Held: YES Doctrine: Where the insurance contract provides for indemnity against liability to a third party, such third party can directly sue the insurer. The liability of the insurer to such third person is based on contract while the liability of the insured to the third party is based on tort. It cannot evade its liability as insurer by hiding under the cloak of the insured. Its liability is primary and not dependent on the recovery of judgment from the insured.

Insurance Case Digest: Gulf Resorts Inc. V. Philippine Charter Insurance Corp. (2005) G.R. No. 156167 May 16, 2005 Lessons Applicable: Stipulations Cannot Be Segregated (Insurance)

FACTS: Gulf Resorts, Inc at Agoo, La Union was insured with American HomeAssurance 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 so the properties and 2 swimming pools in its Agoo Playa Resort were damaged August 23, 1990: Gulf's claim was denied on the ground that its insurance policy only afforded earthquake shock coverage to the two swimming pools of the resort Petitioner contends that pursuant to this rider, no qualifications were placed on the scope of the earthquake shock coverage. Thus, the policy extended earthquake shock coverage to all of the insured properties. RTC: Favored American Home - endorsement rider means that only the twoswimming pools were insured against earthquake shock CA: affirmed RTC ISSUE: W/N Gulf can claim for its properties aside from the 2 swimming pools

HELD: YES. Affirmed. 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. Insurance Code Section 2(1) 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 premium is the consideration paid an insurer for undertaking to indemnify the insured against a specified peril. In the subject policy, no premium payments were made with regard to earthquake shock coverage, except on the two swimming pools.