CALANOC VS. COURT OF APPEALS, ET. AL. 98 PHIL 79 (G.R. NO.

L-8151) DECEMBER 16, 1995 Petitioner: Respondent: Virginia Calanoc Court of Appeals and the Philippine American Life Insurance Co. J. Bautista Angelo: FACT: Melencio Basilio was a watchman of the Manila Auto Supply. He secured a life insurance policy from the Philippine American Life Insurance Company in the amount of 2,000.00 to which was attached a supplementary contract covering death by accident. On January 25, 1951, he died of a gunshot wound on the occasion of a robbery committed in the house of Atty. Ojeda. Virginia Calanoc, the widow, was paid the sum of 2,000.00, face value of the policy, but when she demanded the payment of additional sum of 2,000.00 representing the value of the supplemental policy, the company refused alleging, as main defense, that the deceased died because he was murdered by a person who took part in the commission of the robbery and while making an arrest as an officer of the law which contingencies were expressly excluded in the contract and have the effect of exempting the company from liability. The widow then filed the collection suit in the Municipal Court of Manila, which rendered a favorable judgment. Philamlife (respondent) appealed the case to the Court of First Instance of Manila which affirmed the lower courts judgment. On appeal to the Court of Appeals, the court reversed the decision of the two lower courts. Hence this petition for review. ISSUE: Whether or not the insurer is correct in construing the ambiguity in its favor. HELD: While as a general rule the parties may limit the coverage of the policy to certain particular accidents and risks or causes of loss, and may expressly except other risks or causes of loss therefrom (45 C.J. S, 781 782), however, it is to be desired that the terms and phraseology of the exception clause be clearly expressed so as to be within the easy grasp and understanding of the insured, for if the terms are doubtful or

obscure the same must of necessity be interpreted or resolved against the one who has caused the obscurity. (Article 1377, new Civil Code.) And so it has been generally held that the terms in an insurance policy, which are ambiguous, equivocal, or uncertain * * * are to be construed strictly and most strongly against the insurer, and liberally in favor of the insured so as to effect the dominant purpose of indemnity or payment to the insured, especially where a forfeiture is involved (29 Am. Jur., 181), and the reason for this rule is that the insured usually has no voice in the selection or arrangement of the words employed and that the language of the contract is selected with great care and deliberation by experts and legal advisers employed by, and acting exclusively in the interest of, the insurance company. (44 C.J. S., p. 1174.)

Petitioner/Appellant: The Insular Life Assurance Company Ltd. Respondent/Appellee: Emilia T. Biagtan, Juan T. Biagtan, Jr., Miguel T. Biagtan, Gil T. Biagtan and Gracia T. Biagtan J. Makalintal: FACT: Juan S. Biagtan was insured with defendant Insular Life Assurance Company Ltd. for the sum of 5,000.00 and under a supplementary contract denominated Accidental Death Benefit Clause, for an additional sum of 5,000.00 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. On the night of May 20, 1964 or during the first hours of the following day a band of robbers entered the house of the insured Juan Biagtan, and that in committing the robbery, the robbers, on reaching the staircase landing on the second floor, rushed towards the door of the second floor room, where they suddenly met a person who turned to be insured who received nine wounds (five mortal wounds and four non-mortal wounds) from their sharp pointed instruments resulting in Mr. Biagtans death. Beneficiaries of the insured then filed a claim under the policy the insurance company paid the basic amount of 5,000.00 but refused to

pay additional sum of 5,000.00 under the accidental benefit clause, on the ground that the insureds death resulted from injuries intentionally inflicted by third parties and therefore was not covered. (Respondent) Beneficiaries then filed suit to recover in the CFI of Pangasinan who rendered a decision in their favor. Hence the present appeal by the petitioner. ISSUE: Whether under the facts stipulated and found by the trial court the wounds received by the insured at the hands of the robbers were inflicted intentionally, hence the benefit clause cannot apply. HELD: Under an Accidental Death Benefit Clause providing for an additional sum of P5,000.00 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 but expressly excepting therefrom a case where death resulted from an injury intentionally inflicted by a third party, the insured who died under the following circumstances is not entitled to the said additional sum, to wit: That on the night while the said life policy and supplementary contract were in full force and effect the house of the insured . . . was robbed by a band of robbers who-were charged in and convicted by the Court of First Instance of Pangasinan for robbery with homicide; that in committing the robbery, the robbers, on reaching the staircase landing of the second floor, rushed towards the doors of the second floor room, where they suddenly met a person near the door of one of the rooms who turned out to be the insured . . . who received thrusts from their sharp-pointed instruments, causing wounds on the body . . . resulting in his death 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.

Zenith Insurance Corporation vs. CA [G.R. No. 85296 May 14, 1990] Facts: On January 25, 1983, private respondent Lawrence Fernandez insured his car for "own damage" with petitioner Zenith Insurance Corporation. On July 6, 1983, the car figured in an accident and suffered actual damages in the amount of P3,640.00. After allegedly being given a run around by Zenith for two (2) months, Fernandez filed a complaint with the Regional Trial Court of Cebu for sum of money and damages resulting from the refusal of Zenith to pay the amount claimed. Aside from actual damages and interests, Fernandez also prayed for moral damages in the amount of P10,000.00, exemplary damages of P5,000.00, attorney's fees of P3,000.00 and litigation expenses of P3,000.00.

On September 28, 1983, Zenith filed an answer alleging that it offered to pay the claim of Fernandez pursuant to the terms and conditions of the contract which, the private respondent rejected. On June 4, 1986, a decision was rendered by the trial court in favor of private respondent Fernandez. On August 17, 1988, the Court of Appeals rendered its decision affirming in toto the decision of thetrial court. Issue: The propriety of the award of moral damages, exemplary damages and attorney's fees is the main issue raised herein by petitioner. Held: The award of damages in case of unreasonable delay in thepayment of insurance claims is governed by the Philippine Insurance Code, which provides: Sec. 244. 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 thepayment 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 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 unreasonable delay in payment. It is clear that under the Insurance Code, in case of unreasonable delay in the payment of the proceeds of an insurance policy, the damages that may be awarded are: 1) attorney's fees; 2) other expenses incurred by the insured person by reason of such unreasonable denial or withholding of payment; 3) interest at twice the ceiling prescribed by the Monetary Board of the amount of the claim due the injured; and 4) the amount of the claim.

SUN INSURANCE OFFICE, LTD. VS. COURT OF APPEALS 211 SCRA 554 (G.R. NO. 92383) JULY 17, 1992 Petitioner: Sun Insurance Office, Ltd. Respondent: Court of Appeals and Nerissa Lim J. Cruz: FACTS: The petitioner issued personal accident insurance policy to Felix Lim Jr. with a face value of 200,000.00. Two months later, he was dead with a bullet wound in his head. As beneficiary, his wife Nerissa Lim sought payment on the policy but her claim was rejected. The petitioner agreed that there was no suicide. It agreed, however that there was no accident either. Pilar Nalagon, Lims secretary, was the only eyewitness to his death. It happened on October 6, 1982, at about 10 oclock in the evening, after his mothers birthday party. According to Nalagon, Lim was in a happy mood (but not drunk) and 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. The widow sued the petitioner in the Regional Trial Court of Zamboanga City and was sustained. The petitioner was sentenced to pay her 200,000.00, representing the face value of the policy, with interest at the legal rate; 10,000.00 as moral damages; 5,000.00 as exemplary damages; 5,000.00 as actual and compensatory damages; and 5,000.00 as attorneys fees, plus cost of the suit. This decision was affirmed on appeal, and the motion for reconsideration was denied. The petitioner then came to this Court to fault the Court of Appeals for approving the payment of the claim and the award of damages. ISSUE: Whether the policy relieves the insurer of the responsibility to pay the indemnity agreed upon if the insured is shown to have contributed to his accident. HELD: 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 insured without his design, consent, or voluntary cooperation. In light of these definitions, the Court is convinced that the incident that resulted in Lims death was indeed an accident. The petitioner, invoking the case of De la Cruz v. Capital Insurance, says that there is no accident when a deliberate act is performed unless some additional, unexpected, independent and unforeseen happening occurs which produces or brings about their injury or death. There was such a happening. This was the firing of the gun, which was the additional unexpected and independent and unforeseen occurrence that led to the insured persons death. It should be noted at the outset that suicide and willful exposure to needless peril are in pari materia because they both signify a disregard for ones life. The only difference is in degree, as suicide imports a positive act of ending such life whereas the second act indicates a reckless risking of it that is almost suicidal in intent. Lim was unquestionably negligent and that negligence cost him his own life. But it should not prevent his widow from recovering from the insurance policy he obtained precisely against accident. There is nothing in the policy that relieves the insurer of the responsibility to pay the indemnity agreed upon if the insured is shown to have contributed to his own accident. Indeed, most accidents are caused by negligence. There are only four exceptions expressly made in the contract to relieve the insurer from liability, and none of these exceptions is applicable in the case at bar. It bears noting that insurance contracts are as a rule supposed to be interpreted liberally in favor of the assured. There is no reason to deviate from this rule, especially in view of the circumstances of this case as above analyzed. JEWEL VILLACORTA vs. THE INSURANCE COMMISSION G.R. No. L54171 BY ADMIN ON 2010 LEAVE A COMMENT JEWEL VILLACORTA vs. THE INSURANCE COMMISSION G.R. No. L-54171, 28 October 1980 100 SCRA 467 FACTS: Villacorta had her Colt Lancer car insured with Empire Insurance

Company against own damage, theft and 3rd party liability. While the car was in the repair shop, one of the employees of the said repair shop took it out for a joyride after which it figured in a vehicular accident. This resulted to the death of the driver and some of the passengers as well as to extensive damage to the car. Villacorta filed a claim for total loss with the said insurance company. However, it denied the claim on the ground 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. This was upheld by the Insurance Commission further stating that the car was not stolen and therefore not covered by the Theft Clause because it is not evident that the person who took the car for a joyride intends to permanently deprive the insured of his/ her car. ISSUE: Whether or not the insurer company should pay the said claim HELD: Yes. Where the insureds car is wrongfully taken without the insureds consent from the car service and repair shop to whom it had been entrusted for check-up and repairs (assuming that such taking was for a joy ride, in the course of which it was totally smashed in an accident), respondent insurer is liable and must pay insured for the total loss of the insured vehicle under the Theft Clause of the policy. Assuming, despite the totally inadequate evidence, that the taking was temporary and for a joy ride, the Court sustains as the better view that which holds that when a person, either with the object of going to a certain place, or learning how to drive, or enjoying a free ride, takes possession of a vehicle belonging to another, without the consent of its owner, he is guilty of theft because by taking possession of the personal property belonging to another and using it, his intent to gain is evident since he derives there from utility, satisfaction, enjoymet and pleasure. ACCORDINGLY, the appealed decision is set aside and judgment is hereby rendered sentencing private respondent to pay petitioner the sum of P35,000.00 with legal interest from thefiling of the complaint until full payment is made and to pay the costs of suit. VDA. DE MAGLANA vs. CONSOLACION

August 6, 1992 Romero, J. RATIO DECIDENDI The underlying reason behind the third party liability (TPL) of the Compulsory Motor Vehicle Liability Insurance is to protect injured persons against the insolvency of the insured who causes such injury, and to give such injured person a certain beneficial interest in the proceeds of the policy. FACTS Petitioner: Figuracion Vda. De Maglana, Editha M. Cruz, Erlinda M. Masesar, Leonila M. Mallari, Gilda Antonio and the minors Maglana Respondents: Honorable Francisco Consolacion, Presiding Judge of Davao City Branch II and AFISCO Insurance Corporation The nature of the liability of an insurer sued together with the insured/operator-owner of a common carrier which figured in an accident causing the death of a third person is sought to be defined in this petition for certiorari. Lope Maglana was an employee of the Bureau of Customs whose work station was at Lasa, Davao City. On December 20, 1978, early morning, Lope Maglana was on his way to his work station, driving a motorcycle owned by the Bureau of Customs. Subsequently, he met an accident that resulted in his death. He died on the spot. The PUJ jeep that bumped the deceased was driven by Pepito Into, operated and owned by defendant Destrajo. From the investigation conducted by the traffic investigator, the PUJ jeep was overtaking another passenger jeep that was going towards the city poblacion. While overtaking, the PUJ jeep of defendant Destrajo running abreast with the overtaken jeep, bumped the motorcycle driven by the deceased who was going towards the direction of Lasa, Davao City. The point of impact was on the lane of the motorcycle and the deceased was thrown from the road and met his untimely death.

 Consequently, the heirs of Lope Maglana filed an action for damages and attorneys fees against operator Patricio Destrajo and AFISCO. An information for homicide thru reckless imprudence was also filed against Pepito Into. During the pendency of the civil case, Into was held to be guilty of homicide thru reckless imprudence and was sentenced accordingly. Trial Court: The trial court found that Destrajo had not exercised sufficient diligence as the operator of the jeepney. In the dispositive portion of the decision, it was expressly stipulated by the court that the defendant insurance company is ordered to reimburse defendant Destrajo whatever amounts the latter shall have paid only up to the extent of his insurance coverage. In denying the motions for reconsideration, the Court said that since the insurance contract is in the nature of suretyship, then the liability of the insurer is secondary only up to the extent of the insurance coverage. Petitioners contention: AFISCO should not merely be held secondarily liable because the Insurance Code provides that the insurers liability is direct and primary and/or jointly and severally with the operator of the vehicle, although only up to the extent of the insurance coverage. Hence, the P20,000 coverage of the insurance policy issued by AFISCO should have been awarded in their favor. The liability of the insurer is direct, primary and solidary with the jeepney operator because the petitioners became direct beneficiaries under the provision of the policy which, in effect, is a stipulation pour autrui. Respondent AFISCOs contention Since the Insurance Code does not expressly provide for a solidary obligation, the presumption is that the obligation is joint. ISSUE

WON the liability of the insurance company is solidary with the jeepney operator. NO. HELD The particular provision of the insurance policy on which petitioners base their claim is as follows: Sec. 1 LIABILITY TO THE PUBLIC 1. The Company will, subject to the Limits of Liability, pay all sums necessary to discharge liability of the insured in respect of (a) death of or bodily injury to any THIRD PARTY (b) . . . . 2. . . . . 3. In the event of the death of any person entitled to indemnity under this Policy, the Company will, in respect of the liability incurred to such person indemnify his personal representatives in terms of, and subject to the terms and conditions hereof. The above-quoted provision leads to no other conclusion but that AFISCO can be held directly liable by petitioners. Shafer vs. Judge, RTC of Olongapo City: Where an insurance policy insures directly against liability, the insurers liability accrues immediately upon the occurrence of the injury or even upon which the liability depends, and does not depend on the recovery of judgment by the injured party against the insured. The underlying reason behind the third party liability (TPL) of the Compulsory Motor Vehicle Liability Insurance is to protect injured persons against the insolvency of the insured who causes such injury, and to give such injured person a certain beneficial interest in the proceeds of the policy. AFISCO is not solidarily liable with Destrajo. Malayan Insurance Co., Inc. vs. Court of Appeals [issue as to the nature of the liability of the insurer and the insured vis--vis the third party injured in an accident]: While it is true that where the insurance contract provides for indemnity against liability to third persons, such third persons can directly sue the insurer, however, the direct liability of the insurer under indemnity contracts against third party liability does not mean that the insurer can be

FERNAN, C.J.: FACTS: Milagros Cayas was the registered owner of a Mazda bus. Said passenger vehicle was insured with Perla Compania de Seguros, Inc. (PCSI) under a policy issued on February 3, 1978. On December 17, 1978, the bus figured in an accident in Naic, Cavite injuring several of its passengers. One of them, 19-year old Edgardo Perea, sued Milagros Cayas for damages in the Court of

held solidarily liable with the insured and/or the other parties found at fault. The liability of the insurer is based on contract; that of the insured is based on tort. While in solidary obligations, the creditor may enforce the entire obligation against one of the solidary debtors, in an insurance contract, the insurer undertakes for a consideration to indemnify the insured against loss, damage or liability arising from an unknown or contingent event. Petitioners herein cannot validly claim that AFISCO, whose liability under the insurance policy is also P20,000 can be held solidarily liable with Destrajo for the total amount of P53,901.70. Since under both the law and the insurance policy, AFISCOs liability is only up to P20,000 the second paragraph of the dispositive portion of the decision in question may have unwittingly sown confusion among the petitioners and their counsel. What should have been clearly stressed as to leave no room for doubt was the liability of AFISCO under the explicit terms of the insurance contract. In fine, the Court concludes that the liability of AFISCO based on the insurance contract is direct, but not solidary with that of Destrajo which is based on Article 2180 of the Civil Code. As such, petitioners have the option either to claim P15,000 from AFISCO and the balance from Destrajo or enforce the entire judgment from Destrajo subject to reimbursement from AFISCO to the extent of the insurance coverage. Perla Compania de Seguros, Inc. vs Honorable Court of Appeals and Milagros Cayas G.R. No. 78860 May 28, 1990

First Instance; while three others, namely: Rosario del Carmen, Ricardo Magsarili and Charlie Antolin, agreed to a settlement of P4,000.00 each. At the pre-trial, Milagros Cayas failed to appear and hence, she was declared as in default. After trial, the court rendered a decision in favor of Perea to compensate the Perea with damages of Pl0,000.00 for medical fees; P10,000.00 for exemplary damages; P5,000.00 for moral damages; P7,000.00 for Attorney's fees. On November 11, 1981, Milagros Cayas filed a complaint for a sum of money and damages against PCSI in the Court of First Instance. Milagros Cayas filed a motion to declare PCSI in default for its failure to file an answer. The motion was granted and Cayas was allowed to adduce evidence ex-parte. On July 13, 1982, the court rendered judgment by default ordering PCSI to pay Milagros Cayas P50,000 as compensation for the injured passengers, P5,000 as moral damages and P5,000 as attorney's fees. Said decision was set aside after the PCSI filed a motion therefor. In due course, the court promulgated a decision in favor of Cayas, but removed the award of moral damages. PCSI appealed to the Court of Appeals, which, in its decision of May 8, 1987 the lower court's decision. Its motion for reconsideration having been denied, PCSI filed the instant petition charging the Court of Appeals with having erred in affirming in toto the decision of the lower court. ISSUE: Whether or not the amount of award of damages was proper. RULING: NO. PCSI seeks to limit its liability only to the payment made by Cayas to Perea and only up to the amount of P12,000.00. It altogether denies liability for the payments made by Cayas to the other three (3) injured passengers Rosario del Carmen, Ricardo Magsarili and Charlie Antolin in the amount of P4,000.00 each or a total of P12,000.00. The insurance policy involved explicitly limits PCSI's liability to P12,000.00 per person and to P50,000.00 per accident.

 We have ruled in Stokes vs. Malayan Insurance Co., Inc., that the terms of the contract constitute the measure of the insurer's liability and compliance therewith is a condition precedent to the insured's right of recovery from the insurer. In the case at bar, the insurance policy clearly and categorically placed PCSI's liability for all damages arising out of death or bodily injury sustained by one person as a result of any one accident at P12,000.00. Said amount complied with the minimum fixed by the law then prevailing, Section 377 of Presidential Decree No. 612 (which was retained by P.D. No. 1460, the Insurance Code of 1978), which provided that the liability of land transportation vehicle operators for bodily injuries sustained by a passenger arising out of the use of their vehicles shall not be less than P12,000. In other words, under the law, the minimum liability is P12,000 per passenger. PCSI's liability under the insurance contract not being less than P12,000.00, and therefore not contrary to law, morals, good customs, public order or public policy, said stipulation must be upheld as effective, valid and binding as between the parties. In like manner, we rule as valid and binding upon Cayas the condition in the policy in requiring her to secure the written permission of PCSI before effecting any payment in settlement of any claim against her. There is nothing unreasonable, arbitrary or objectionable in this stipulation as would warrant its nullification. The same was obviously designed to safeguard the insurer's interest against collusion between the insured and the claimants. In her cross-examination before the trial court, Milagros Cayas admitted that PCSI did not give any written authority that Cayas were supposed to pay those claims. It being specifically required that PCSI's written consent be first secured before any payment in settlement of any claim could be made, Cayas is precluded from seeking reimbursement of the payments made to del Carmen, Magsarili and Antolin in view of her failure to comply with the condition contained in the insurance policy. Clearly, the fundamental principle that contracts are respected as the law between the contracting parties finds application in the present case. Thus, it was error on the part of the trial and appellate courts to have disregarded the stipulations of the

parties and to have substituted their own interpretation of the insurance policy. We observe that although Milagros Cayas was able to prove a total loss of only P44,000.00, PCSI was made liable for the amount of P50,000.00, the maximum liability per accident stipulated in the policy. This is patent error. An insurance indemnity, being merely an assistance or restitution insofar as can be fairly ascertained, cannot be availed of by any accident victim or claimant as an instrument of enrichment by reason of an accident. WHEREFORE, the decision of the Court of Appeals is hereby modified in that petitioner shall pay Milagros Cayas the amount of Twelve Thousand Pesos (P12,000. 00) plus legal interest from the promulgation of the decision of the lower court until it is fully paid and attorney's fees in the amount of P5,000.00. No pronouncement as to costs. 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 petitioners 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 thathe 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 attorneys 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 totalinsurance 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. Fortune Insurance and Surety Co., Inc., vs. CA [G.R. No. 115278, May 23, 1995] Facts: On June 29, 1987, Producers Bank of the Philippinesarmored vehicle was robbed, in transit, of seven hundred twenty-five thousand pesos (Php 725,000.00) that it was transferring from its branch in Pasay to its main branch in Makati. To mitigate their loss, they claim the amount from their insurer, namely Fortune Insuranceand Surety Co.. Fortune Insurance, however, assails that the general exemptionclause in the Casualty Insurance coverage had a general exemptionclause, to wit: GENERAL EXCEPTIONS

The company shall not be liable under this policy in respect of xxx xxx xxx (b) any loss caused by any dishonest, fraudulent or criminal act of the insured or any officer, employee, partner, director, trustee or authorized representative of the Insured whether acting alone or in conjunction with others. . . . And, since the driver (Magalong) and security guard (Atiga) of thearmored vehicle were charged with three others as liable for the robbery, Fortune denies Producers Bank of its insurance claim. The trial court and the court appeals ruled in favor of recovery, hence, the case at bar. Issue: Whether recovery general exemptionclause. is precluded under the

Held: Yes, recovery is precluded under the general exemptionclause. 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 thearmored 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." 23 In view of the foregoing, Fortune is exempt from liability under the general exceptions clause of the insurance policy.