1.

Traveler's insurance & surety corp vs CA 72 scra 536 x

2. del Rosario vs Euita!le "nsurance &Casualty Co. # scra 3$3 c%ec&
3. 'eilds(en's "nsurance co. vs )da. de *on+co 25scra 7, c%ec&
$. -andic%o vs .*"* $$ scra 7 c%ec&
5. /e0 -i1e Enterprises vs CA
6. 2ara(ount "nsurance Cop. vs 3apson 211 scra#74
7. )erinda vs CA 217 scra $17 c%ec&
#. 'irst 5ue6on City insurance co. vs CA 21# scra 535
4. 7ev't !an& o1 t%e p%ils vs CA 213 scra 37,
1,. ri6al surety & insurance co. vs CA 336 scra 12 c%ec&
11. 1ilipinas cid de se+uros vs c%ristern %uene1eld & co #4 p%il c%ec&
12. +ea+onia vs CA 2$1 scra 152
13. p%il national !an& vs CA 15# scra 2,1
1$. ri6al co((ercial !an&in+ co vs CA 2#4 s 242
15. 8ardin+ vs san (i+uel !re0ery $3. p 522
16. palileo vs casio 47 p%il 414 c%ec&
17. el oriente vs posadas 56 p%il 1$7 c%ec&
1#. t%e insuirance li1e assurance vs e!rado #, scra 1#1 c%ec&
14. sout%ern lu6on e(ployees association vs +olpeo 46 p%il #3 c%ec&
2,. *** vs davac 17 scra #63 c%ec&
21. "nre9 (ario c%anlion+eo 74 scra 3$$ c%ec&
22. )da. de cosu+ra vs .*"* 37 scra 315 c%ec&
23. .ercio v p%ilippine a(erican li1e insurance 2, scra$16
2$. nario vs p%il a( li1e 2, scra $34 c%ec&
25. p%il a( li1e vs pineda 175 scra $16 c%ec&
26. traders insurance & surety co vs .o lanco 45 p%il #26 c%ec&
27. 'il (erc%ants insurance co vs CA 174 scra
2#. c%a vs CA 277 scra 64, c%ec&
24. tai ton+ c%uac%e co vs insurance co((ission 15# scra 366 c%ec&


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SIMEON DEL ROSARIO vs. THE EQUITABLE INSURANCE and CASUALTY CO.,
INC. 8 SCRA 343
2,1, ,49$, : -eave a Co((ent : ad(in
SIMEON DEL ROSARIO vs. THE EQUITABLE INSURANCE and CASUALTY CO.,
INC. ..R. /o. -;16215< 3une 24< 1463 # *CRA 3$3
'ACT*9
T%e de1endant insurance co(pany issued a personal accident
policy on t%e li1e o1 'rancisco del Rosario< %erein plainti11=s son<
!indin+ itsel1 to pay t%e su( o1 21<,,,.,, to 23<,,,.,, as
inde(nity 1or t%e deat% o1 t%e insured. "n t%e said policy< 1or t%e
di11erent causes o1 deat%< disa!ility o1 t%e insured< t%ere is a
correspondin+ is a speci1ic a(ount as inde(nity. As 1or deat%
due to dro0nin+< t%ere 0as no speci1ic a(ount< %ence< an
a(!i+uous provision.
-ater< 'rancisco died o1 dro0nin+ as %e 0as 1orced to >u(p o11
t%e (otor launc% on 0%ic% %e 0as ridin+ on account o1 1ire t%at
!ro&e out on t%e said vessel. *i(eon t%en 1iled a clai( 1or
pay(ent 0it% de1endant co(pany 0%ic% t%en paid %i( t%e su(
o1 21<,,,.,,. 8o0ever< *i(eon=s la0yer< in1or(ed t%e said
co(pany t%at t%e a(ount 0as 0ron+. "n turn< t%e de1endant
co(pany re1erred t%e (atter to t%e "nsurance Co((issioner<
0%o rendered an opinion t%at t%e lia!ility o1 t%e co(pany 0as
only 21<,,,.,,. 8ence< it re1used to pay (ore t%an 21<,,.,,. A
co(plaint 1or t%e recovery o1 t%e !alance o1 22<,,,.,, 0as
instituted 0it% t%e C'" o1 Ri6al.
"**?E9
@%et%er or not t%e a(ount paid is t%e correct inde(nity
8E-79
And so it %as !een +enerally %eld t%at t%e Ater(s in an
insurance policy< 0%ic% are a(!i+uous< euivocal or uncertainB
are to !e construed strictly a+ainst< t%e insurer< and li!erally in
1avor o1 t%e insured so as to e11ect t%e do(inant purpose o1
inde(nity or pay(ent to t%e insured< especially 0%ere a
1or1eiture is involved<C and t%e reason 1or t%is rule is t%at t%e
Ainsured usually %as no voice in t%e selection or arran+e(ent o1
t%e 0ords e(ployed and t%at t%e lan+ua+e o1 t%e contract is
selected 0it% +reat care and deli!eration !y expert and le+al
advisers e(ployed !y< and actin+ exclusively in t%e interest o1<
t%e insurance co(panyC.
@%ere t0o interpretations< eually 1air< o1 lan+ua+es used in aninsurance policy (ay !e (ade<
t%at 0%ic% allo0s t%e +reater inde(nity 0ill prevail.At any event< t%e policy under consideration<
covers deat% or disa!ility !y accidental (eans< and t%e appellant insurance co(pany a+reed to
pay 21<,,,.,, to 23<,,,.,, is inde(nity 1or deat% o1 t%e insured. "n vie0 o1 t%e conclusions
reac%ed< it 0ould see( unnecessary to discuss t%e ot%er issued raised in t%e appeal.T%e >ud+(ent
appealed 1ro( is %ere!y a11ir(ed. @it%out costs.
'"E-7DE/=* "/*?RA/CE CE.< "/C. vs. DERCE7E* )7A. 7E*E/.CE..R. /o. -
2$#33< 23 *epte(!er 146#
'ACTs 9'ederico *on+co< a (an 0%o 0as only a!le to 1inis% +rade 1<o0ned a private >eepney
0%ic% %e< t%rou+% t%e induce(ent o1 'ield(en=s insurance a+ent< insured 0it% t%e plainti11
co(pany. T%e policy is a Co((on Carrier=s Accident "nsurance 2olicy. T%einsurance a+ent told
'ederico t%at 0%et%er %is ve%icle 0as
anAo0nerC type or 1or passen+ers it could !e insured !ecauset%eir co(pany is not o0ned !y t%e
.overnent and t%at t%e.overn(ent %as not%in+ to do 0it% t%eir co(pany< %ence< t%eycould do
0%at t%ey please 0%enever t%ey !elieve a ve%icle
isinsura!le. 7urin+ t%e policy=s covered period< t%e insuredve%icle 0%ile !ein+ driven !y
Rodol1o< a duly licensed driver andson o1 'ederico 1i+ured in a ve%icular accident resultin+ in
t%edeat% o1 !ot% 1at%er and son as 0ell as p%ysical in>uries to t%eot%er passen+ers o1 t%e
>eepney. T%e insurance co(pany re1used pay(ent.
"**?E9@%et%er or not t%e insurance co(pany is lia!le
8E-79 FE*. @%ere ineuita!le conduct is s%o0n !y an insurance 1ir(<it is Aestopped 1ro(
en1orcin+ 1or1eitures in its 1avor< in order to1orestall 1raud or i(position on
t%e insured.CA1ter petitioner 'ield(en=s "nsurance Co.< "nc. %ad led t%einsured 'ederico *on+co
to !elieve t%at %e could uali1y undert%e co((on carrier lia!ility insurance policy< and to enter
intocontract o1 insurance payin+ t%e pre(iu(s due< it could not<t%erea1ter< in any liti+ation
arisin+ out o1 suc% representation<!e per(itted to c%an+e its stand to t%e detri(ent o1 t%e %eirs
o1 t%e insured. As estoppel is pri(arily !ased on t%e doctrine
o1 +ood 1ait% and t%e avoidance o1 %ar( t%at 0ill !e1all t%einnocent party due to its in>urious
reliance< t%e 1ailure to apply itin t%is case 0ould result in a +ross travesty o1 >ustice. T%at is all
t%at needs !e said inso1ar as t%e 1irst alle+ed error
o1 respondent Court o1 Appeals is concerned< petitioner !ein+ada(ant in its 1ar;1ro(;reasona!le
plea t%at estoppels couldnot !e invo&ed !y t%e %eirs o1 t%e insured as a !ar to t%ealle+ed !reac%
o1 0arranty and condition in t%e policy. "t 0ould no0 rely on t%e 1act t%at t%e insured o0ned a
private ve%icle<not a co((on carrier< so(et%in+ 0%ic% it &ne0 all alon+ 0%ennot once !ut t0ice
its a+ent< no dou!t 0it%out any o!>ection inits part< exerted t%e ut(ost pressure on t%e insured< a
(an o1 scant education< to enter into suc% a
contract.@8ERE'ERE< t%e decision o1 respondent Court o1 Appeals o1 3uly 2,< 1465< is
a11ir(ed in its entirety. Costs a+ainst petitioner'ield(en=s "nsurance Co.< "nc.
(89) Insular Life. Ebrado80 SCRA 181a!"s:

Buenaventura Ebrado was issued al lie !lan b" Insular

#o$!an". Hedesi%nated #a!riona as his bene&ciar"' reerrin% to her as his wie.

The insured then died and #ar!onia tried to clai$ the !roceeds o thesaid
!lan.

She ad$itted to bein% onl" the co$$on law wie o the insured.

(ascuala' the le%al wie' also &led a clai$ assertin% her ri%ht as the le%alwie. The
co$!an" then &led an action or inter!leader.
Issue:
)ON the co$$on law wie na$ed as bene&ciar" can collect the!roceeds.
Held: #$%E.
The civil code !rohibitions on donations $ade between !ersons %uilt" o adulterous
concubina%e a!!lies to insurance contracts. On $atters nots!eci&call"
!rovided or b" the Insurance Law' the %eneral rules on #ivil lawshall a!!l". A
lie insurance !olic" is no di*erent ro$ a civil donation as ar as the
bene&ciar" is concerned' since both are ounded on liberalit".
-andic%o vs. .*"*
G..R./o.-;2##66Darc%17<1472H
'ACT*9

En 3une 1< 146$< t%e .*"* issued in 1avor
o1 ' l a v i a n o - a n d i c % o < a c i v i l e n + i n e e r o 1 t % e
I u r e a u
o 1 2 u ! l i c @ o r & s < s t a t i o n e d a t D a ( ! u r a o < Dindoro
Eccidental<optional additional li1e insurance policy /o. E.;1361,7in t%e su( o1 27<4,,. Jxx
E8 $,3"/*?RA/CE -A@ CA*E 7".E*T*
Ie1ore t%e issuance o1 said policy< -andic%o %ad 1iledan application< !y 1ilin+ and si+nin+ a
printed 1or( o1 t%e .*"*on t%e !asis o1 0%ic% t%e policy 0as issued.2ara+rap%
7 o1 said application *tates97. xxx " %ere!y a+reea s 1 o l l o 0 s 9 x x x c . T % a
t t % i s a p p l i c a t i o n s e r v e s a s a l e t t e r o 1
a u t % o r i t y t o t % e C o l l e c t i n + E 1 1 i c e r o 1 o u r
E 1 1 i c e t % r u t % e
. * " * t o d e d u c t 1 r o ( ( y s a l a r y t % e (
o n t % l y p r e ( i u ( i n t % e
a ( o u n t o 1 2 3 3 . 3 6 < ! e + i n n i n + t % e ( o n t
% o 1 D a y < 1 4 6 $ < a n d e v e r y ( o n t % t % e r e a 1 t e r u n t i l n o t i c
e o 1 i t s d i s c o n t i n u a n c e s % a l l % a v e ! e e n r e c
e i v e d 1 r o ( t % e * y s t e ( K . d . T % a t t % e 1 a i l u
r e t o d e d u c t 1 r o ( ( y s a l a r y t % e ( o n t % p r e ( i u ( s
s % a l l n o t ( a & e t % e p o l i c y l a p s e < % o 0 e v e r < t % e p r e
( i u ( a c c o u n t s % a l l ! e
c o n s i d e r e d a s i n d e ! t e d n e s s 0 % i c % < " ! i n d ( y s e
l 1 t o p a y t % e * y s t e ( K . e . T % a t ( y p o l i c y s
% a l l ! e ( a d e e 1 1 e c t i v e o n t % e 1irst day o1
t%e( o n t % n e x t 1 o l l o 0 i n + t % e ( o n t %
t % e 1 i r s t p r e ( i u ( i s p a i d K p r o v i d e d
< t % a t i t i s n o t ( o r e n i n e t y L 4 , M d a y s
! e 1 o r e o r a 1 t e r t % e d
a t e o 1 t % e ( e d
i c a l e x a ( i n a t i o
n < 0 a s c o n d u c t e d i 1 r e u i r e d . N
@ % i l e s t i l l a n e ( p l o y e e o 1 t % e I u r e a u o 1 2 u ! l i c @
o r & s < D r . - a n d i c % o d i e d i n a n a i r p l a n e c r a s % o n 3 u n e 2 4 < 1
4 6 6 . Dr s . - a n d i c % o < i n % e r o 0 n ! e % a l 1 a n d t % a t o 1 % e r c o ;
p l a i n t i 1 1 s a n d ( i n o r c % i l d r e n < R a 1 a e l 3 .
a n d D a r i a - o u r d e s E u + e n i a < 1 i l e d 0 i t % t % e
. * " * a c l a i ( 1 o r 2 1 5 < # , , < a s t % e d o u ! l e i
n d e ( n i t y due under policy /o.E.;1361,7. .*"* denied t%e clai(< upon
t%e+ r o u n d t % a t t % e p o l i c y % a d
n e v e r ! e e n i n
1 o r c e ! e c a u s e < p u r s u a n t t o
s u ! d i v i s i o n L e M o 1 t % e a ! o v e ; u o t e d p a r a + r a p % 7
o 1 t % e a p p l i c a t i o n < t % e p o l i c y N s % a l l ! e . . . e 1 1 e c t i v e o n
t % e 1 i r s t d a y o 1 t % e (o n t % n e x t 1 o l l o 0i n + t % e (o n t % t % e
1 i r s t p r e (i u ( i s p a i d < N a n d n o
p r e (i u (% a d e v e r ! e e n paid on said policy. T%e -o0er Courtdecided in 1avor o1
t%e petitioner. .*"* appealed to t%e*upre(e Court
**?E9
@E/ t%einsurancepolicyinuestion %as ever !een in1orce< notasin+le pre(iu(%avin+ !eenpaid t%ereon.
R?-"/.9
-o0er Court decision is sustained.LTM%e lan+ua+e< o1 su!divisions LcM< LdM and
LeMi s s u c % a s t o c r e a t e a n a ( ! i + u i t y t % a t s % o u
l d ! e r e s o l v e d a + a i n s t
t % e p a r t y r e s p o n s i ! l e t % e r e 1 o r
O
d e 1 e n d a n t . * " * < a s t % e p a r t y 0 % o p r e p a r e d a n d
1 u r n i s % e d t % e a p p l i c a t i o n 1 o r (
O
a n d i n 1avor o1 t%e party (isledt%ere!y< t%e insured e(ployee."ndeed< our Civil Code provides9T%e
interpretation o1 o!scure 0ords orstipulations in a contract s%all not 1avort%e party 0%o caused t%e o!scurity.

T%is is particularly true as re+ards insurance policies<in respect o1 0%ic% it is settled t%at t%e
N Nter(s ina n i n s u r a n c e p o l i c y < 0 % i c % a r e a ( ! i + u o u s <
e u i v o c a l < o r u n c e r t a i n . . .

a r e t o ! e c o n s t r u e d s t r i c t l y a n d ( o s t s t r o n +
l y a + a i n s t t % e i n s u r e r < a n d l i ! e r a l l y i n 1 a v o r
o 1 t % e i n s u r e d
s o as t o e1 1 ect t %e do(i nant pur pos e o1 i nde(ni t y or pa y(ent t o t %e
i ns ur ed< es peci al l y
0%er ea 1 o r 1 e i t u r e i s i n v o l v e d N L 2 4 A(. 3 u r . < 1 # 1 M < a n d t % e r e a s o n
1 o r t % i s r u l e i s t % e N i n s u r e d u s u a l l y % a s n o v o i c e i n t%e selection or
arran+e(ent o1 t%e 0ords e(ployedand t%at t%e lan+ua+e o1 t%e contract is
selected0 i t % + r e a t c a r e a n d d e l i ! e r a t i o n
! y e x p e r t s a n d l e + a l a d v i s e r s e ( p l o
y e d ! y < a n d a c t i n + e x c l u s i v e l y i n t % e i n t e r e s t o 1 <
t % e i n s u r a n c e c o ( p a n y . N L $ $ C . 3 . * . < p . 1 1 7 $ . M
. T%e eui t a!l e and et %i cal cons i der at i ons
> us t i 1 yi n+ t %e1 or e+oi n+ vi e0 ar e !ol s t er ed up !y t 0oL 2 M
1 a c t o r s < n a ( e l y 9 L a M T % e a 1 o r e ( e n t i o n e d s u ! d i v i s i o n
L c M s t a t e s N t % a t t % i s a p p l i c a t i o n s e r v e s a s a l et t er o1
aut %or i t y t o t %eCol l ect i n+ E1 1 i cer o1 our E1 1 i ceN
O
t%e Iureau o1 2u!lic@or&s
O
N
t%ru

t%e

.*"* to deduct 1ro( (y salary t%e(ont%ly pre(iu( in t%e a(ount o1 233.36.N /o
suc%deduction 0as (ade
O
a n d <
c o n s e u e n t l y < n o t e v e n t % e 1 i r s t p r e ( i u ( N p a
i d N
O
! e c a u s e t % e c o l l e c t i n + o 1 1 i c e r o 1 t % e Iureau o1 2u!lic
@or&s 0as

not
advi s ed!y t %e .*" * t o (a&e i t L t %e deduct i onM pur s uant t os ai d aut %or i t y.
*ur el y< t %i s o(i s s i on o1 t %e .*" *s%ouldnot inure to its !ene1it. .L!M

T % e . * " * % a d i ( p l i e d l y
i n d u c e d t % e i n s u r e d t o ! e l i e v e t % a t 2 o l i c y
/ o

. E.;1361,7

0as in 1orce<% e % a v i n + ! e e n p a i d ! y
t % e . * " * t % e d i v i d e n d s c o r r
e s p o n d i n + t o s a i d policy
. 8 a d t % e i n s u r e d % a d t % e s l i + % t e s t i n & l
i n + t % a t t % e l a t t e r 0 a s n o t < a s y e t < e 1 1
e c t i v e 1 o r n o n ; p a y ( e n t o 1 t % e 1 i r s t p r e ( i u ( < % e 0 o u l d
% a v e < i n a l l p r o ! a ! i l i t y < c a u s e d t % e s a ( e t o !e1ort%0it%
satis1ied.@8ERE'ERE< t%e decision appealed 1ro( s%ould !e< itis %ere!y a11ir(ed< 0it% costs
a+ainstt%e de1endant;appellant< .overn(ent *ervice "nsurance *yste(. "t isso ordered. .
+i,al Suret" vs. #A
-A#TS.
+i,al Suret" / Insurance #o$!an" issued a &re insurance !olic" in avor
o Transworld 0nittin% 1ills' Inc. The sub2ect !olic" stated that +i,al Suret" is 3res!onsible in
case o loss whilst contained and4or stored durin% the currenc" o this (olic" in the
!re$ises occu!ied b" the$ or$in% !art o the buildin%s situated within own #o$!ound
555.6 The !olic" also described therein the our7s!an buildin% covered b" the sa$e.
On 8an. 9:' 9;<9' &re bro=e out in the co$!ound' ra,in% the $iddle !ortion o its our7s!an
buildin% and !artl" %uttin% the let and ri%ht sections thereo. A two7store" buildin% >behind
said our7s!an buildin%? was also destro"ed b" the &re.
ISSUE.
)hether or not +i,al Suret" is liable or loss o the two7store" buildin% considerin%
that the &re insurance !olic" sued u!on covered onl" the contents o the our7s!an
buildin%
HEL@.
Both the trial court and the #A ound that the so7called 3anne56 as not an anne5 buildin% but
an inte%ral and inse!arable !art o the our7s!an buildin% described in the !olic" and
consequentl"' the $achines and s!are !arts stored therein were covered b" the &re
insurance in dis!ute.
So also' considerin% that the two7store" buildin% aore$entioned was alread" e5istin% when
sub2ect &re insurance !olic" contract was entered into on 8an. 9:' 9;<9' havin% been
constructed so$e ti$e in 9;A<' !etitioner should have s!eci&call" e5cluded the said two7
store" buildin% ro$ the covera%e o the &re insurance i $inded to e5clude the sa$e but i
did not' and instead' went on to !rovide that such &re insurance !olic" covers the !roducts'
raw $aterials and su!!lies stored within the !re$ises o Transworld which was an inte%ral
!art o the our7s!an buildin% occu!ied b"Transworld' =nowin% ull" well the e5istence o
such buildin% ad2oinin% and interco$$unicatin% with the ri%ht section o the our7s!an
buildin%.
Also' in case o doubt in the sti!ulation as to the covera%e o the &re insurance !olic"' under
Art. 9BAA o the New #ivil #ode' the doubt should be resolved a%ainst the +i,al Suret"'
whose la"er or $ana%ers drated the &re insurance !olic" contract under scrutin".
In Landicho vs. Govern$ent Service Insurance S"ste$' the #ourt ruled that 3the ter$s in an
insurance !olic"' which are a$bi%uous' equivocal or uncertain 5 5 5 are to be construed
strictl" and $ost stron%l" a%ainst the insurer' and liberall" in avor o the insured so as to
e*ect the do$inant !ur!ose o inde$nit" or !a"$ent to the insured' es!eciall" where
oreiture is involved' and the reason or this is that the insured usuall" has no voice in the
selection or arran%e$ent o the words e$!lo"ed and that the lan%ua%e o the contract is
selected with %reat care and deliberation b" e5!erts and le%al advisers e$!lo"ed b"' and
actin% e5clusivel" in the interest o' the insurance co$!an".6
11)ili&inas Cia de Se'uros (. C)ris"ern Huenfeld * Co.80 %HIL
+,a!"s:

Oct. 9' 9;C9' @o$estic #or! #hristern' ater !a"$ent o the

!re$iu$'obtained ro$ -ili!inas' &re
!olic" no. :;BBB or (9DDT coverin%$erchandise contained in a buildin%
located in Binondo.

On -eb. :A' 9;C:' durin% the 8a! occu!ation' the buildin% and
theinsured $erchandise were burned. #hristern sub$itted to -ili!inas
itsclai$.

Salva%ed %oods were sold and the total loss o #hristern was (;:T.

-ili!inas denied liabilit" on the %round that #hristern was an ene$" cor!and cannot be
insured.
Issue:
)ON -ili!inas is liable to #hristern' Hueneld / #o.
Held: #$.
1a2orit" o the stoc=holders o #hristern were Ger$an sub2ects. Thisbein% so'
S# ruled that said cor!oration beca$e an ene$" cor!oration u!onthe war between
the US and Ger$an". The (hil Insurance Law in Sec. <!rovides that an"one
e5ce!t a !ublic ene$" $a" be insured. It stands toreason that an insurance
!olic" ceases to be allowable as soon as an insuredbeco$es a !ublic ene$".The
!ur!ose o the war is to cri!!le the !ower ad e5haust the resourceso the ene$"' and it
is inconsistent that one countr" should destro" its ene$"!ro!ert" and re!a"
in insurance the value o what has been so destro"ed' or that it should in such
$anner increase the resources o the ene$" or render
itaid. All individuals who co$!ose the belli%erent !owers' e5ist as to eachothe
r' in a state o utter e5clusion and are !ublic ene$ies. #hristern
havin%beco$e an ene$" cor!oration on @ec. 9D. 9;C9' the insurance !olic"
issuedi n hi s avor on Oct . 9' 9;C9 b" -i l i !i nas had ceased t o be
val i d andenorceable' and since the insured %oods were burned ater @ec.
9D' 9;C9'and durin% the war' #hristern was NOT entitled to an" inde$nit"
under said!olic" ro$ -ili!inas.Ele$entar" rules o 2ustice require that the
!re$iu$ !aid b" #hristernor the !eriod covered b" the !olic" ro$ @ec. 9D' 9;C9
should be returned b"-ili!inas
(-) .erendia (. CA/1- SCRA 1990a!"s:

-idelit" and Suret" Insurance #o$!an" >-idelit"? issued -ire Insurance(olic"

No. -79<<AE e*ective between 8une :B' 9;<D and 8une :B'
9;<9cover i n% +a ael > +e5? Ferendi aG s resi dent i al i n t he a$ount
o (B<H'DDD.DD. @esi%nated as bene&ciar" was the 1onte de (iedad
/Savin%s Ban=.

Ferendia also insured the sa$e buildin% with

two other co$!anies'na$el"' The #ountr"
Ban=ers Insurance or (HE'DDD.DD and The@evelo!$ent Insurance or
(CDD'DDD.DD.

)hile the three &re insurance !olicies were in orce' the insured !ro!ert"was co$!letel"
destro"ed b" &re.

-idelit" a!!raised the da$a%e a$ountin% to B<H'DDD

when it wasaccordin%l" inor$ed o the loss. @es!ite de$ands' -idelit"
reused!a"$ent under its !olic"' thus !ro$!tin% Ferendia to &le a co$!laint
or the recover" o B<H'DDD

-i del i t "' averred t hat t he !ol i c" was avoi ded b" reason o over
7 insurance' that Ferendia $aliciousl" re!resented that the buildin% at theti$e o
the &re was leased under a contract e5ecuted on 8une :H' 9;<Dto a certain
+oberto Garcia' when actuall" it was a 1arcelo Garcia whowas the lessee.
Issue:
)ON Fe r e n di a c a n c l a i $ o n t he i ns ur a n c e des !i t e t he $isr
e!resentation as to the lessee and the overinsurance.
Held: #$%E.
T%e contract o1 lease upon 0%ic% )erendia relies to support %is clai( 1or insurance !ene1its< 0as
entered into !et0een %i( and one Ro!ert .arcia< acouple o1 days a1ter t%e e11ectivity o1 t%e
insurance policy. @%en t%e rentedresidential !uildin+ 0as ra6ed to t%e +round< it appears t%at
Ro!ert .arcia0as still 0it%in t%e pre(ises. 8o0ever< accordin+ to t%e investi+ation !y t%epolice<
t%e !uildin+ appeared to %ave Nno occupantsN and t%at Dr. Ro!erto.arcia 0as Nrentin+ on t%e
ot%erside o1 said co(poundN T%ese pieces o1 evidence !elie )erendia's uncorro!orated testi(ony
t%at Darcelo .arcia0%o( %e considered as t%e real lessee< 0as occupyin+ t%e !uildin+ 0%en
it0as !urned.
#onsiderin%' however' the ore%oin% discussion !ointin% to the
act thatFerendi a used a al se l ease cont ract t o su!!ort hi s cl ai
$ under -i reInsurance (olic"' the ter$s o the !olic" should be strictl"
construed a%ainstthe insured. Ferendia ailed to live b" the ter$s o
the !olic"'
s!eci&call"Sect i on 9B t hereo whi ch i s e5!ressed i n t er$s t hat
are cl ear anduna$bi%uous' that all bene&ts under the !olic" shall
be oreited I
i the clai$be in an" res!ect raudulent' or i an" alse declaration be $ade
or used insu!!ort thereo' or i an" raudulent $eans or devises are
used b" theInsured or an"one actin% in his behal to obtain an" bene&t under the
!olic"
I.Ferendia' havin% !resented a alse declaration to su!!ort
his clai$ or bene&ts in the or$ o a raudulent lease contract' he oreited
all bene&tstherein b" virtue o Section 9B o the !olic" in the absence
o !roo that-idelit" waived such !rovision
(1,)%alilieo (. Cosio9- %HIL 919a!"s:

On @ec. 9<' 9;H9' (alileo obtained ro$ #osio a loan o (9:T.

To secure !a"$ent' #osio required (alileo to si%n a docu$ent =nown as3conditional

sale o residential buildin%6' !ur!ortin% to conve" to #osio'with a ri%ht
to re!urchase >on the !art o (alileo?' a two7stor" buildin% o stron% $aterials
belon%in% to (alileo.

Ater e5ecution o the docu$ent' #osio insured the buildin% a%ainst &rewith
Associated Insurance / Suret" #o. >Associated? or 9HT.

The insurance !olic" was issued in the na$e o #osio.

The buildin% was !artl" destro"ed b" &re and ater !ro!er
de$and'#osio was able to collect ro$ the insurance co$!an" an inde$nit"
o (9B'9DA.

(alileo de$anded ro$ #osio that she be credited with the necessar"a$ount
to !a" her obli%ation out o the insurance !roceeds' but #osioreused to do so.
Trial #ourt ound that the debt had an un!aid balance o
(9:T. Itdeclared the obli%ation o (alileo to #osio ull" co$!ensated b" virtue o the
!roceeds collected b" #osio and urther held that the e5cess
o (9'9DA >9B'9DA J 9:'DDD? be reunded to (alileo
Issue:
)ON the trial court was 2usti&ed in considerin% the obli%ation
o (alileo ull" co$!ensated b" the insurance a$ount that #osio was able
tocollect ro$ Associated' and )ON the trial court was correct in
requirin%#osio to reund the e5cess o (9'9DA to (alileo.
Held. #$ and #$.
The rule is that 3where a $ort%a%ee' inde!endentl" o the $ort%a%or'insures
the $ort%a%ed !ro!ert" in his own na$e and or his own interest' heis
entitled to the insurance !roceeds in case o loss' but in such case' he isnot
allowed to retain his clai$ a%ainst the $ort%a%or' but is !assed
b"subro%ation to the insurer to the e5tent o the $one" !aid.6The lower court erred
in declarin% that the !roceeds o the insuranceta=en out b" #osio on the
!ro!ert" insured to the bene&t o (alileo and inorderin% the or$er
to deliver to the latter' the di*erence between theindebtedness and
the a$ount o insurance received b" #osio. In the li%ht o this rulin%' the correct
solution would be that the !roceeds o the Insurance
bedelivered to #osio' but her clai$ a%ainst (alileo should
be consideredassi%ned to the insurance co$!an" who is dee$ed
subro%ated to the ri%htso #osio to the e5tent o the $one" !aid as inde$nit".
(19) El $rien"e (. %osadas+1 %HIL 1,- (1901)a!"s:

El Oriente in order to !rotect itsel a%ainst the loss that it $i%ht su*er
b"reason o the death o its $ana%er' A. Felha%en' who had had $orethan
thirt"7&ve >BH? "ears o e5!erience in the $anuacture o ci%ars inthe
(hili!!ines' !rocured ro$ the 1anuacturers Lie Insurance #o.' o Toronto'
#anada' thru its local a%ent E. E. Elser' an insurance !olic" onthe lie o the
said A. Felha%en or the su$ o KHD'DDD' United Statescurrenc" desi%natin%
itsel as the bene&ciar".

El Oriente !aid or the !re$iu$s due thereon and char%ed as e5!enseso its business
all the said !re$iu$s and deducted the sa$e ro$ its%ross inco$es
as re!orted in its annual inco$e ta5 returns' whichdeductions
were allowed u!on a showin% that such !re$iu$s werele%iti$ate
e5!enses o its business.

U!on the death o A. Felha%en in 9;:;' the El Oriente received all

the!roceeds o the said lie insurance !olic"' to%ether with the interests andthe
dividends accruin% thereon' a%%re%atin% (9DC';HA.<<

#I+ assessed El Oriente or de&cienc" ta5es because El Oriente did notinclude as

inco$e the !roceeds received ro$ the insurance.
Issue:
)ON the !roceeds o insurance ta=en b" a cor!oration on the lie o an
i$!ortant oLcial to inde$ni" it a%ainst loss in case o his death'
areta5able as inco$e under the (hili!!ine Inco$e Ta5 Law
Held: #$2 2A3A4LE.
In #ha!ter I o the Ta5 #ode' is to be ound section C which !rovidesthat' I
The ollowin% inco$es shall be e5e$!t ro$ the !rovisions o this law.>a? The
!roceeds o lie insurance !olicies !aid to bene&ciaries u!on thedeat h o
t he i nsured . . .
I Sect i on 9D' as a$ended' i n #ha!t er I I On#or!orations' !rovides
that' I
There shall be levied' assessed' collected' and !aid annuall" u!on the
total net inco$e received in the !recedin% calendar "ear ro$ all sources b"
ever" cor!oration . . .a ta5 o three !er centu$ u!onsuch inco$e . .
.I Section 99 in the sa$e cha!ter' !rovides the e5e$!tionsunder the law'
but neither here nor in an" other section is reerence $ade tothe !rovisions o
section C in #ha!ter I.Under the view we ta=e o the case' it is suLcient or our
!ur!oses todirect attention to the ano$alous and va%ue condition o the law.
It is certainthat the !roceeds o lie insurance !olicies !aid to individual
bene&ciariesu!on t he deat h o t he i nsured are e5e$!t . I t i s not
so cert ai n t hat t he!roceeds o lie insurance !olicies !aid to cor!orate
bene&ciaries u!on thedeath o the insured are li=ewise e5e$!t. But at least'
it $a" be said that thelaw is inde&nite in !hraseolo%" and does not !er$it us
unequivocall" to holdthat the !roceeds o lie insurance !olicies received b"
cor!orations constituteinco$e which is ta5ableIt will be recalled that El Oriente'
too= out the insurance on the lie o its$ana%er' who had had $ore than
thirt"7&ve "earsG e5!erience in the$anuacture o ci%ars in the
(hili!!ines' to !rotect itsel a%ainst the loss it$i%ht su*er b" reason o the death
o its $ana%er. )e do not believe that thisact si%ni&es that when the
!lainti* received (9DC';HA.<< ro$ the insuranceon the lie o its $ana%er' it
thereb" reali,ed a net !ro&t in this a$ount. It istrue that the Inco$e Ta5 Law' in
e5e$!tin% individual bene&ciaries' s!ea=s o the !roceeds o lie insurance
!olicies as inco$e' but this is a ver" sli%htindication o le%islative
intention. In realit"' what the !lainti* received was inthe nature o an
inde$nit" or the loss which it actuall" su*ered because o the death o its
$ana%er.
(22)S!"#$% L!&n E'()*$$+s Ass,-a"-n v. .)($
91 %HIL 80a!"s:

SLEA is co$!osed o laborers and e$!lo"ees o the LTB# and BT#>now BLTB
#o.?' and one o its !ur!oses is $utual aid o its $e$bersand their de!endents
in case o death.

+o$an #once!cion was a $e$ber until his death in 9;HD.

In 9;C;' SLEA ado!ted a resolution !rovidin% that.

A $e$ber $a"' i he chooses' !ut down his co$$on law wie and4or children he
had withher as his bene&ciariesM and such !erson so na$ed b" the $e$ber will be the
sole !ersons to be reco%ni,ed b" SLEA re%ardin% clai$s or condolence
contributions.

+o$an listed as his bene&ciaries Aquilina 1aloles and their C children. Ater
his death' SLEA was able to collect voluntar" contribution ro$ its$e$bers
a$ountin% to (:':DH.

Three sets o clai$ants to the a$ount !resented the$selves to

theassociation na$el".
o
8uanita Gol!eo' le%al wie' and her children
o
Aquilina 1aloles' the co$$on law wie' and her children
o
Elsie Hicban' another co$$on law wie o +o$an' and her child.

SLEA then &led an action or inter!leader

a%ainst the B conNictin%clai$ants.

Trial court rendered a decision declarin% 1aloles and her children thesole
bene&ciaries o the a$ount citin% @el Fal v. @el Fal.

Onl" Gol!eo a!!ealed. She ar%ues that.

o
The insurance code does not a!!l" since the association isnot an insurance
co$!an" but a $utual bene&t association.
o
The sti!ulation between SLEA and +o$an was void or bein%contrar" to law' !ublic
$orals and !ublic !olic"' !ursuant
to Art. AB; o the ## > donations between !ersons %uilt" o concubina%e at the
ti$e o donation are void?
Issue:
)ON Gol!eo' the le%al wie is entitled to the a$ount.
Held: #$.
-irst o all' the lower court did not consider the association as a
re%ular insurance co$!an"' but $erel" ruled that the death bene&t in
question isanalo%ous to insurance. Besides' even the Ad$inistrative #ode
describes a$utual bene&t co$!an" as one which !rovides an" $ethod o lie
insurancea$on% i t s $e$bers out o dues or assess$ent s col l ect
ed ro$ i t s$e$bershi!.Secondl"' without considerin% the inti$ation in the
brie or 1aloles thatGol!eo' b" her silence and actions had acquiesced
in the illicit relationsbetween her husband and 1aloles' Gol!eoOs
ar%u$ent would certainl"
NOTa!!l " t o t he chi l dren o 1al ol es l i =ewi se na$ed bene& ci ari
es b" t hedeceased. As a $atter o act' the N## reco%ni,es certain
successionalri%hts o ille%iti$ate children.
(/0) #ario (. %)ila5life Insuran!e Co5&an6/0 SCRA ,0,a!"s:

1rs. Nario a!!lied or and was issued a lie Insurance !olic"

>no.HDBE9A? b" (HILA1LI-E under a :D7"r endow$ent !lant' with a
acevalue o HT. Her husband @el&n and their une$anci!ated son
Ernestowere her revocable bene&ciaries.

1rs. Nario then a!!lied or a loan on the above !olic" with (HILA1LI-Ew4c she is
entitled to as !olic" holder' ater the !olic" has been in orceor B "ears. The
!ur!ose o such loan was or the school e5!enses o Ernesto.

The a!!lication bore the written si%nature and consent o @el&n in :ca!acities
o
As one o the irrevocable bene&ciaries o the !olic"
o
As ather7%uardian o Ernesto and also the le%al ad$inistrator o the $inorOs
!ro!erties !ursuant to Art. B:D o the ##.

(HILA1LI-E denied the loan a!!lication contendin% that written consento the $inor
son $ust not onl" be %iven b" his ather as le%al %uardianbut it $ust also be
authori,ed b" the court in a co$!etent %uardianshi!!roceedin%.

1rs. Nario then si%ni&ed her decision to surrender

her !olic" andde$and its cash value which then a$ounted to ( H:D.

(HILA1LI-E also denied the surrender o the !olic" on the

sa$e%round as that %iven in disa!!rovin% the loan a!!lication.
1rs. Nario sued (HILA1LI-E !ra"in% that
the latter %rant their loana!!lication and4or acce!t the surrender o said !olic" in
e5chan%e or itscash value.

(HILA1LI-E contends that the loan a!!lication and the surrender o the!olic"
involved acts o dis!osition and alienation o the !ro!ert" ri%hts o the $inor'
said acts are not within the !ower o ad$inistrator %rantedunder Art. B:D
in relation to art. B:E ##' hence court authorit" isrequired.
Issue:
)ON (HI LA1LI -E was 2 ust i & ed i n re usi n% t o %rant t he l oana!!l
ication and the surrender o the !olic".
Held: 7ES.
S# a%reed with the trial court that the vested interest or ri%ht o
thebene&ciaries in the !olic" should be $easured on its ull ace value and
noton i t s cash surrender val ue' or i n case o deat h o t he
i nsured' sai dbene&ciaries are !aid on the basis o its ace value and in
case the insuredshould discontinue !a"in% !re$iu$s' the bene&ciaries $a" continue
!a"in% itand are entitled to auto$atic e5tended ter$ or !aid7u! insurance o!tions
andthat said vested ri%ht under the !olic" cannot be divisible at an" %iven ti$e.S#
also a%reed with T# that the said acts >loan a!! and
surrender?constitute acts o dis!osition or alienation o !ro!ert" ri%hts and
not
$erel"$ana%e$ent or ad$inistration because the" involve the incurr
in% or ter$ination o contractual obli%ations.Under the laws >## and rules o
#ourt? The ather is constituted as the$inorOs le%al ad$inistrator o the
!ro!t"' and when the !ro!t" o the child isworth $ore than (:T >as in the
case at bar' the $inorOs !ro!t" was worth:' HDD hi s P share
as bene& ci ar"? ' t he at her a $ust & l e a !et i t i on or %uardianshi!
and !ost a %uardianshi! bond. In the case at bar' the ather didnot &le an" !etition
or %uardianshi! nor !ost a %uardianshi! bond' and
assuch cannot !ossi bl " e5erci se t he !owers vest ed on hi $ as l
e%al ad$inistrator o the $inorOs !ro!ert". The consent %ive or and in behal
o the son without !rior court authori,ation to the loan a!!lication
and thesurrender was
insuLcient and ine*ective
and (HILA1LI-E was 2usti&ed indisa!!rovin% the said a!!lications. Assu$in% that the
!ro!t" o the ward was less than :T' the e*ect wouldbe the sa$e' since the
!arents would onl" be e5e$!ted ro$ &lin% a bondand
2udicial authori,ation' but their acts as le%al ad$inistrators are
onl"l i $i t ed t o act s o $ana%e$ent or ad$i ni st rat i on and not t
o act s o encu$brance or dis!osition.
(/+)%)ila5life (. %ineda1-+ SCRA ,11a!"s:

On 8an. 9H 9;EB' @i$a"u%a !rocessed an ordinar" lie insurance !olic"ro$

(hila$lie and desi%nated his wie
and children as irrevocablebene&ciaries.

On -eb. ::' 9;<D' @i$a"u%a &led a !etition in court to a$end

thedesi %nat i on o t he bene& ci ari es i n hi s !ol i c" ro$ i rrevoca
bl e t orevocable.

Lower #ourt %ranted the !etition.

Issue:
)ON the court erred in %rantin% @i$a"u%aOs !etition.
Held: 7ES.
Under the Insurance Act' the bene&ciar" desi%nated in a lie
insurancecontract cannot be chan%ed without the consent o the bene&ciar"
becausehe has a vested interest in the !olic". The !olic" contract states that
thedesi%nation o the bene&ciaries is irrevocable. Thereore' based on the
said!rovision o the contract' not to $ention the law then a!!licable' it is
onl" withthe consent o all the bene&ciaries that an" chan%e or
a$end$ent in the!oic" $a" be le%all" and validl" e*ected. The contract between
the !arties isthe law bindin% on the$. >
This case rule is no lon%er controllin% under theInsurance #ode.?
(/1)SSS (. 8a(ao1- SCRA 810a!"s:

@avac was an SSS $e$ber' and desi%nated #andelaria @avac' hisalle%ed wie'
as his bene&ciar".

)hen he di ed' bot h hi s & rst wi e' Lourdes and hi s second wi e

' #andelaria &led clai$s or the death bene&ts.

@ue to the conNictin% clai$s' the SSS &led a !etition !ra"in% that both o the$ be
required to inter!lead and liti%ate the conNictin% clai$s.

The death bene&ts were awarded to #andelaria @avac.

Issue:
)ho is entitled to the SSS bene&tsQ
Held:

Candelaria.
Under the SSS Act' the bene&ciar"
as recorded b" the e$!lo"eeOse$!lo"er is the one entitled to the death
bene&ts' hence the" should %o to#andelaria. Lourdes contends that the
desi%nation $ade in the !erson o #andelaria who is !art" in a bi%a$ous
$arria%e is null and void or bein%a%ainst Art. AB; o the ##. S# held that the
disquali&cation $entioned in Art.AB;
i s NOT a!!l i cabl e t o #andel ari a' because she was not %ui l t " o
concubina%e ' there biein% NO !roo that she had actual =nowled%e o
the!revious $arria%e o her husband.
(/-)In Re: 9ario C)anlion'!o-9 SCRA 01,a!"s:

Att". #han%lion%co' an att" o the S# and a GSIS $e$ber' died abintestate.

He ailed or overloo=ed to state in his a!!lication or $e$bershi!

withthe GSIS the bene&ciar"
or bene&ciaries o his retire$ent bene&tsshould he die beore the
retire$ent.
Issue:
)ho will bene&t ro$ the !roceedsQ
Held:
T%e retire(ent !ene1its s%all accrue to %is estate and !e distri!uteda(on+ %is le+al %eirs
in accordance 0it% t%e la0 on intestate succession< asin t%e case o1 a li1e insurance policy i1 /E
!ene1iciary is na(ed in t%einsurance policy.
/8).da. 8e Consue'ra (. :SIS0- SCRA 01+a!"s:

8ose #onsue%ra was e$!lo"ed as a sho! ore$an o the OLce o the@istrict

En%ineer in Suri%ao @el Norte.

)hen he was still alive' he contracted two $arria%es.

o
-irst J +osario @ia,M : children R 8ose #onsue%ra 8r.and (edro but both
!redeceased hi$
o
:
nd
P Basilia BerdinM A children.
>this was contracted inG- while the &rst $arria%e subsisted?

Bein% a GSIS $e$ber when he died' the !roceeds o his lie

insurancewere !ai d b" t he GSI S
t o Berdi n and her chi l dren who were t hebene&ciaries na$ed in the
!olic".

Since he was in the %ovOt service or ::.HD:< "ears' he was entitled

toretire$ent insurance bene&ts' or which no bene&ciar" was desi%nated.

Both a$ilies &led their clai$s with the GSIS' which ruled that the le%alheirs
were @ia, who is entitled to one7hal or <49E o the retire$ent bene&ts
and Berdin and her children were entitled to the re$ainin% hal'each to receive an equal
share o 949E.

Berdin went to #-I on a!!eal. #-I aLr$ed GSIS decision.

Issue:
To who$ should the retire$ent insurance bene&ts be !aidQ
Held:

4o") fa5ilies are en"i"led "o )alf of ")e re"ire5en" bene;"s.
The bene&ciar" na$ed in the lie insurance does NOT auto$aticall"beco$e
the bene&ciar" in the retire$ent insurance. )hen #onsue%ra' durin%the earl" !art o
9;CB' or beore 9;CB' desi%nated his bene&ciaries in his
lieinsurance' he could NOT have intended those bene&ciaries o his
lieinsurance as also the bene&ciaries o his retire$ent insurance because
the!rovisions on retire$ent insurance under the GSIS ca$e about onl" when #A9<E
was a$ended b" +A EED on 8une 9<' 9;H9.Sec. 99>b? clearl" indicates that there
is need or the e$!lo"ee to
&le ana!!lication or retire$ent insurance bene&ts
when he beco$es a GSIS$e$ber and to state his bene&ciar". The lie
insurance and the retire$entinsurance are two se!arate and distinct
s"ste$s o bene&ts !aid out ro$ :se!arate and distinct unds.In case
o ailure to na$e a bene&ciar" in an insurance !olic"' the!roceeds
will accrue to the estate o the insured. And when there e5ists two$arria%es'
each a$il" will be entitled to one7hal o the estate.
(0/)2raders Insuran!e and Sure"6 Co. (. :olan'!o9+ %HIL 8/1a!"s:

A decision was rendred in #ivil #ase No. EBDE %rantin% Golan%co theri%ht to
collect rentals ro$ a buildin% in Sta. #ru,' 1anila.
Golan%co then sou%ht &re insurance ro$ Traders. Beore the !olic"was
issued' Golan%co $ade a ull and clear e5!osal o his interests inthe !re$ises'
i.e. that he was not the owner.

The &re !olic" that deendant issued covered onl" all o

Golan%coOsinterest in the !re$ises and his ri%ht to collect the rentals.

The buildin% burned down in a &re and Golan%co sou%ht to collect

ro$Traders. Traders denied an" liabilit" on the %round that since Golan%cowas not
the owner o the !re$ises then he had no insurable interest
int he sa$e and consequent l "' he coul d not col l ect t he i nsuran
ce!roceeds.
Issue:
)ON !lainti* can clai$ the insurance !roceeds.
Held. 7ES.
Both at the ti$e o the issuance o the !olic" and at the ti$e o the&re'
!lainti* Golan%co was in le%al !ossession o the !re$ises' collectin%rentals
ro$ its occu!ant. It see$s !lain that i the !re$ises were destro"edas the"
were' b" &re' Golan%co would be' as he was' directl"
da$ni&edthereb"M and hence he had an insurable interest therein.
(08) C)a (. C)a/-- SCRA 190 (199-)a!"s:

S!ouses Nilo #ha and Stella U"7#ha' as lessees' entered into a leasecontract
with #0S @evelo!$ent #or!oration >#0S?' as lessor.

One o the sti!ulations o the one >9? "ear lease contract states.
I9<.. . . The LESSEE shal l not i nsure
a%ai nst & re t he chat t el s' $erchandise' te5tiles' %oods and e*ects
!laced at an" stall or store or s!ace in the leased !re$ises without
&rst obtainin% the written consent and a!!roval o the LESSO+. I the LESSEE
obtain>s? the insurancethereo without the consent o the LESSO+ then the
!olic" is dee$ed assi%ned and transerred to the LESSO+ or its own bene&tM . . .I

Notwithstandin% the above sti!ulation' the #ha s!ouses insured a%ainstloss b" &re
their $erchandise inside the leased !re$ises or -iveHundred Thousand
>(HDD'DDD.DD? with the United Insurance without thewritten consent #0S.

On the da" that the lease contract was to e5!ire' &re bro=e out inside theleased
!re$ises. )hen #0S learned o the insurance earlier !rocuredb" the #ha
s!ouses >without its consent?' it wrote the United a de$andletter as=in% that
the !roceeds o the insurance contract >between the#ha s!ouses and United?
be !aid directl" to #0S' based on its leasecontract with the #ha s!ouses.

United reused to !a" #0S' alle%in% that the latter had no

insurableinterest. Hence' the latter &led a co$!laint a%ainst the #ha s!ouses
andUnited.
Issue:
)ON #0S can clai$ the !roceeds o the &re insurance.
Held: #$. C<S )as no insurable in"eres".
Sec. 9< o the Insurance #ode !rovides.
ISec. 9<. No contract or !olic" o insurance on !ro!ert" shall be enorceable e5ce!t
or the bene&t o so$e !erson havin% aninsurable interest in the !ro!ert"
insured.I
A non7lie insurance !olic" such as the &re insurance !olic"
ta=en b"!et i t i oner7 s!ouses over t hei r $erchandi se i s !ri $ari l "
a cont ract o inde$nit". Insurable interest in the !ro!ert" insured $ust e5ist at
the ti$e theinsurance ta=es e*ect and at the ti$e the loss occurs. The basis
o suchrequire$ent o insurable interest in !ro!ert" insured is based on sound
!ublic!olic". to !revent a !erson ro$ ta=in% out an insurance !olic" on
!ro!ert"u!on which he has no insurable interest and collectin% the !roceeds
o said!olic" in case o loss o the !ro!ert".
In the !resent case' it cannot be denied that #0S has no
insurableinterest in the %oods and $erchandise inside the leased !re$ises
under the!rovisions o Section 9A o the Insurance #ode which !rovide.
I S e c t i o n 9 A . T h e $ e a s u r e o a n i n s u r a b l e
i n t e r e s t i n !ro!ert" is the e5tent to which the insured $i%ht be
da$ni&ed b" loss o in2ur" thereo.I
Thereore' #0S cannot' under the Insurance #ode S a s!ecial law Sbe
validl" a bene&ciar" o the &re insurance !olic" ta=en b" the !etitioner7
s!ouses over t hei r $erchandi se. Thi s i nsurabl e i nt erest over s
ai d$erchandise re$ains with the insured' the #ha
s!ouses. The auto$aticassi%n$ent o the !olic" to #0S under the
!rovision o the lease contract!reviousl" quoted is void or bein% contrar" to
law and4or !ublic !olic". The!roceeds o the &re insurance !olic" thus ri%htull"
belon% to the s!ouses Nilo#ha and Stella U"7#ha >herein co7!etitioners?. The insurer
>United? cannot beco$!elled to !a" the !roceeds o the &re insurance !olic" to
a !erson >#0S?who has no insurable interest in the !ro!ert" insured.
(,1)2ai 2on' C)ua C)e * Co. (. Insuran!e Co55ission1+8 SCRA 011
a!"s:

(alo$o obtained a loan ro$ Taiton% or 9DDT. To secure this'

he$ort%a%ed a !arcel o land with a buildin%. Taiton% insured
the$ort%a%ed !ro!ert" with Travelers 1ulti7Inde$nit" #or! or 9DDT.

The insured !ro!ert" was ra,ed b" &re. Taiton% clai$ed the !roceedsro$ the
insurance co$!an".

Travelers reused to !a"' clai$in% that Taiton% had no $ore insurableinterest

in the !ro!ert" since (alo$o had alle%edl" !aid the $ort%a%eddebt alread".
Issue:
)ON Taiton% can collect the !roceeds.
Held: 7es.
The alle%ation o the insurance co$!an" that the debt had alread" been!aid was
NOT !roved. Taiton% on the other hand !resented evidence'na$el"
the contract o $ort%a%e which does not a!!ear to have beencanceled
or release.
8e(elo&5en" 4an= of ")e %)ili&&ines (s. Cour" of A&&eals
[:R 10990-> /1 9ar!) 199,]
-irst @ivision' Tuiason >8?. C concur
a!"s:
In 1a" 9;<A' 8uan B. @ans' to%ether with his wie #andida' his son and
dau%hter7in7law' a!!lied or aloan o (HDD'DDD.DD with the @evelo!$ent
Ban= o the (hili!!ines >@B(?' Basilan Branch. As the !rinci!al$ort%a%or'
@ans' then AE "ears o a%e' was advised b" @B( to obtain a
$ort%a%e rede$!tion insurance>1+I? with the @B( 1ort%a%e +ede$!tion
Insurance (ool >@B( 1+I (ool?. A loan' in the reduced a$ounto (BDD'DDD.DD'
was a!!roved b" @B( on C Au%ust 9;<A and released on 99 Au%ust 9;<A.
-ro$ the !roceedso the loan' @B( deducted the a$ount o (9'CAE.DD as
!a"$ent or the 1+I !re$iu$. On 9H Au%ust 9;<A'@ans acco$!lished and
sub$itted the I1+I A!!lication or InsuranceI and the IHealth State$ent or
@B(1+I (ool.I On :D Au%ust 9;<A' the 1+I !re$iu$ o @ans' less the @B(
service ee o 9DU' was credited b"@B( to the savin%s account o the @B( 1+I
(ool. Accordin%l"' the @B( 1+I (ool was advised o the credit.On B Se!te$ber 9;<A'
@ans died o cardiac arrest. The @B(' u!on notice' rela"ed this inor$ation to
the @B(1+I (ool. On :B Se!te$ber 9;<A' the @B( 1+I (ool noti&ed
@B( that @ans was not eli%ible or 1+I covera%e' bein% over the
acce!tance a%e li$it o ED "ears at the ti$e o a!!lication. On :9
October 9;<A'@B( a!!rised #andida @ans o the disa!!roval o her
late husbandGs 1+I a!!lication. The @B( o*ered toreund the
!re$iu$ o (9'CAE.DD which the deceased had !aid' but #andida
@ans reused to acce!t the sa$e'de$andin% !a"$ent o the ace
value o the 1+I or an a$ount equivalent to the loan. She' li=ewise'
reusedto acce!t an e5 %ratia settle$ent o (BD'DDD.DD' which
the @B( later o*ered. On 9D -ebruar" 9;<;' the Estateo the Late
8uan B. @ans' throu%h #andida @ans as ad$inistratri5' &led a
co$!laint with the +e%ional Trial#ourt' Branch I' Basilan' a%ainst
@B( and the insurance !ool or collection o Su$ o 1one" with
@a$a%es.On 9D 1arch 9;;D' the trial court rendered a decision in
avor o the Estate and a%ainst @B(. The @B( 1+I(ool' however' was
absolved ro$ liabilit"' ater the trial court ound no !rivit" o
contract between it and thedeceased. The trial court declared @B( in
esto!!el or havin% led @ans into a!!l"in% or 1+I and
actuall"collectin% the !re$iu$ and the service ee' des!ite
=nowled%e o his a%e ineli%ibilit". The court ordered @B(to return
and rei$burse the Estate the a$ount o (9B;'HDD.DD !lus le%al rate
o interest as a$orti,ation!a"$ent !aid under !rotestM to consider
the $ort%a%e loan o (BDD'DDD.DD includin% all interest
accu$ulatedor otherwise to have been settled' satis&ed or set7o* b"
virtue o the insurance covera%e o the late 8uan B. @ansM t o !a"
t he Estat e t he a$ount o (9D' DDD. DD as at t orne"G s eesM
t o !a" t he Est at e t he a$ount o (9D'DDD.DD as costs o liti%ation
and other e5!enses' and other relie 2ust and equitable. The @B(
a!!ealed tothe #ourt o A!!eals. In a decision dated A Se!te$ber
9;;:' the a!!ellate court aLr$ed in toto the decisiono the trial
court. The @B(Gs $otion or reconsideration was denied in a
resolution dated :D A!ril 9;;B. @B(&led the !etition or review on
certiorari.
Issue [1]:
)hether there was a !erected contract o insurance or @B( 1+I (ool to be
held liable.
Held [1]:
NO. )hen @ans a!!lied or 1+I' he &lled u! and !ersonall" si%ned a IHealth
State$ent or
@B((ool I wi t h t he ol l owi n% decl arat i on. II hereb" decl are and
a%ree t hat al l t he stat e$ent s and answerscontained herein are
true' co$!lete and correct to the best o $" =nowled%e and belie and or$
!art o $"a!!lication or insurance. It is understood and a%reed that no
insurance covera%e shall be e*ected unless anduntil this a!!lication is
a!!roved and the ull !re$iu$ is !aid durin% $" continued %ood health.I
Under theaore$entioned !rovisions'
:ea'oni a (s. Cour" of A&&eal s [:R 11,,/-> 1 ebruar6
199+]
-irst @ivision' @avide 8r. >8?. C concur
a!"s:
Ar$ando Gea%onia is the owner o Nor$anGs 1art located in the
!ublic $ar=et o San -rancisco'A%usan del Sur. On :: @ece$ber
9;<;' he obtained ro$ #ountr" Ban=ers Insurance #or!oration
&reinsurance !olic" No. -79CE:: : or (9DD'DDD.DD. The !eriod o the !olic"
was ro$ :: @ece$ber 9;<; to ::@ece$ber 9;;D and covered the
ollowin%. IStoc=7in7trade consistin% !rinci!all" o dr" %oods such as +T)Gsor
$en and wo$en wear and other usual to assuredGs business.I Gea%onia
declared in the !olic" under thesubheadin% entitled #O7INSU+AN#E that
1ercantile Insurance #o.' Inc. was the co7insurer or (HD'DDD.DD.-ro$ 9;<;
to 9;;D' Gea%onia had in his inventor" stoc=s a$ountin% to (B;:'9BD.HD'
ite$i,ed as
ollows.Venco Sal es' I nc. ' (HH' E;<. DDM -. Le%as!i Gen. 1erchand
i se' <E' CB:. HDM and #ebu Tesi n% Te5t i l es' :HD'DDD.DD >on credit?M
totallin% (B;:'9BD.HD. The !olic" contained the ollowin% condition' that Ithe
insuredshall %ive notice to the #o$!an" o an" insurance or insurances
alread" e*ected' or which $a" subsequentl"be e*ected' coverin% an" o the
!ro!ert" or !ro!erties consistin% o stoc=s in trade' %oods in !rocess
and4orinventories onl" hereb" insured' and unless notice be %iven and the
!articulars o such insurance or insurancesbe stated therein or endorsed in
this !olic" !ursuant to Section HD o the Insurance #ode' b" or on behal
othe #o$!an" beore the occurrence o an" loss or da$a%e' all
bene&ts under this !olic" shall be dee$edoreited' !rovided however'
that this condition shall not a!!l" when the total insurance or insurances in
orceat the ti$e o the loss or da$a%e is not $ore than (:DD'DDD.DD.I On :A
1a" 9;;D' &re o accidental ori%inbro=e out at around A.BD !.$. at the
!ublic $ar=et o San -rancisco' A%usan del Sur. Gea%oniaGs
insuredstoc=s7in7trade were co$!letel" destro"ed !ro$!tin% hi$ to
&le with #ountr" Ban=ers a clai$ under the!olic". On :< @ece$ber
9;;D' #ountr" Ban=ers denied the clai$ because it ound that at the ti$e o
the loss Gea%oniaGs stoc=s7in7trade were li=ewise covered b" &re insurance
!olicies GA7:<9CE and GA7:<9CC' or(9DD'DDD.DD each' issued b" the
#ebu Branch o the (hili!!ines -irst Insurance #o.' Inc. >(-I#?.
These!olicies indicate that the insured was I1essrs. @iscount 1art
>1r. Ar$ando Gea%onia' (ro!.?I with a$ort%a%e clause readin%
II1O+TGAGEE. Loss' i an"' shall be !a"able to 1essrs. #ebu Tesin%
Te5tiles'#ebu #it" as their interest $a" a!!ear sub2ect to the ter$s o this
!olic". #O7INSU+AN#E @E#LA+E@.(9DD'DDD. S (hils. -irst #EB4-7
:CAH<I The basis o #ountr" Ban=ersG denial was Gea%oniaGs
alle%edviolation o #ondition B o the !olic". Gea%onia then &led a
co$!laint a%ainst #ountr" Ban=ers with theInsurance #o$$ission
>#ase BBCD? or the recover" o (9DD'DDD.DD under &re insurance !olic" -7
9CE:: andor attorne"Gs ees and costs o liti%ation. He attached his
letter o 9< 8anuar" 9;;9 which as=ed or thereconsideration o the
denial. He ad$itted in the said letter that at the ti$e he obtained #ountr"
Ban=ersGs &reinsurance !olic" he =new that the two !olicies issued b" the
(-I# were alread" in e5istenceM however' he hadno =nowled%e o the
!rovision in #ountr" Ban=ersG !olic" requirin% hi$ to inor$ it o the !rior
!oliciesM thisrequire$ent was not $entioned to hi$ b" #ountr" Ban=ersG
a%entM and had it been so $entioned' he wouldnot have withheld such
inor$ation. He urther asserted that the total o the a$ounts clai$ed under
the three!olicies was below the actual value o his stoc=s at the ti$e o loss'
which was (9'DDD'DDD.DD. In its decisiono :9 8une 9;;B' the Insurance
#o$$ission ound that Gea%onia did not violate #ondition B as he had
no=nowled%e o the e5istence o the two &re insurance !olicies obtained
ro$ the (-I#M that it was #ebu Tesin%Te5tiles which !rocured the (-I#
!olicies without inor$in% hi$ or securin% his consentM and that
#ebuTesin% Te5tile' as his creditor' had insurable interest on the stoc=s.
These &ndin%s were based on Gea%oniaGstesti$on" that he ca$e to =now o
the (-I# !olicies onl" when he &led his clai$ with #ountr" Ban=ers andthat
#ebu Tesin% Te5tile obtained the$ and !aid or their !re$iu$s
without inor$in% hi$ thereo. TheInsurance #o$$ission ordered
#ountr" Ban=ers to !a" Gea%ibua the su$ o (9DD'DDD.DD with le%al
interestro$ the ti$e the co$!laint was &led until ull" satis&ed !lus the
a$ount o (9D'DDD.DD as attorne"Gs
ees.)i t h cost s. I t s $ot i on or t he reconsi derat i on o t he deci si
on havi n% been deni ed b" t he I nsurance#o$$ission in
its resolution o :D Au%ust 9;;B' #ountr" Ban=ers a!!ealed to the #ourt o
A!!eals b" wa" oa !etition or review >#A7G+ S( B9;9E?. In its decision o
:; @ece$ber 9;;B' the #ourt o A!!eals reversedthe decision o the
Insurance #o$$ission because it ound that Gea%onia =new o the e5istence
o the twoother !olicies issued b" the (-I#. His $otion to reconsider
the adverse decision havin% been denied' Gea%onia &led the !etition or
review on certiorari.
Issue [1]:
)hether the non7disclosure o other insurance !olicies violate condition B o
the !olic"' so as toden" Gea%onia ro$ recoverin% on the !olic".
Held [1]:
#ondition B o #ountr" Ban=ersGs (olic" -79CE:: is a condition which is not
!roscribed b" law. Itsincor!oration in the !olic" is allowed b" Section AH o
the Insurance #ode' Such a condition is a !rovisionwhich invariabl" a!!ears
in &re insurance !olicies and is intended to !revent an increase in the $oral
ha,ard.It is co$$onl" =nown as the additional or Iother insuranceI
clause and has been u!held as valid and as awarrant" that no other
insurance e5ists. Its violation would thus avoid the !olic". However'
in order toconstitute a violation' the other insurance $ust be u!on the
sa$e sub2ect $atter' the sa$e interest therein' andthe sa$e ris=. The &re
insurance !olicies issued b" the (-I# na$e Gea%onia as the assured and
contain a$ort%a%e clause which reads. ILoss' i an"' shall be !a"able to
1ESS+S. TESING TEWTILES' #ebu #it" astheir interest $a" a!!ear sub2ect to
the ter$s o the !olic".I This is clearl" a si$!le loss !a"able clause'
not astandard $ort%a%e clause. The #ourt concludes that >a? the !rohibition
in #ondition B o the sub2ect !olic"a!!lies onl" to double insurance' and
>b? the nullit" o the !olic" shall onl" be to the e5tent
e5ceedin%(:DD'DDD.DD o the total !olicies obtained. The &rst conclusion is
su!!orted b" the !ortion o the conditionreerrin% to other insurance
Icoverin% an" o the !ro!ert" or !ro!erties consistin% o stoc=s in trade'
%oods in!rocess and4or inventories onl" hereb" insured'I and the !ortion
re%ardin% the insuredGs declaration on thesubheadin% #O7INSU+AN#E that
the co7insurer is 1ercantile Insurance #o.' Inc. in the su$ o (HD'DDD.DD.
10Ri?al Co55er!ial 4an=in' Cor&ora"ion (RC4C) (s. Cour" of
A&&eals [:R 1/8800> /0 A&ril 1998]
Malso +#B# vs. #ourt o A!!eals XG+ 9:<<BCY
Second @ivision' 1elo >8?. C concur
a!"s:
Go"u / Sons' Inc. >Go"u? a!!lied or credit acilities and acco$$odations
with +i,al #o$$ercialBan=in% #or!oration >+#B#? at its Binondo Branch.
Ater due evaluation' +#B# Binondo Branch' throu%hits =e" oLcers'
!etitioners U" #hun Bin% and Eli @. Lao' reco$$ended Go"uGs a!!lication or
a!!roval b"+#B#Gs e5ecutive co$$ittee. A credit acilit" in the
a$ount o (BD $illion was initiall" %ranted. U!onGo"uGs a!!lication
and U"Gs and LaoGs reco$$endation' +#B#Gs e5ecutive co$$ittee increased
Go"uGs creditacilit" to (HD $illion' then to (;D $illion' and &nall" to (99A
$illion. As securit" or its credit acilities with+#B#' Go"u e5ecuted two real
estate $ort%a%es and two chattel $ort%a%es in avor o +#B#' which
werere%istered with the +e%istr" o @eeds at Falen,uela' 1etro
1anila. Under each o these our $ort%a%econtracts' Go"u co$$itted
itsel to insure the $ort%a%ed !ro!ert" with an insurance co$!an" a!!roved
b"+#B#' and subsequentl"' to endorse and deliver the insurance !olicies to
+#B#. Go"u obtained in its na$e atotal o 9D insurance !olicies ro$ 1I#O.
In -ebruar" 9;;:' Alchester Insurance A%enc"' Inc.' the
insurancea%ent where Go"u obtained the 1ala"an insurance !olicies'
issued ; endorse$ents in avor o +#B#see$in%l" u!on instructions o
Go"u. On :A A!ril 9;;:' one o Go"uGs actor" buildin%s in Falen,uela
was%utted b" &re. #onsequentl"' Go"u sub$itted its clai$ or inde$nit" on
account o the loss insured a%ainst.1I#O denied the clai$ on
the %round that the insurance !olicies were either attached
!ursuant to writs oattach$ents4%arnish$ents issued b" various courts or
that the insurance !roceeds were also clai$ed b" othercreditors o Go"u
alle%in% better ri%hts to the !roceeds than the insured. Go"u &led a
co$!laint or s!eci&c!eror$ance and da$a%es which was doc=eted at the
+e%ional Trial #ourt o the National #a!ital 8udicial+e%ion >1anila' Branch B?
as #ivil #ase ;B7EHCC:. +#B#' one o Go"uGs creditors' also &led with 1I#O
itsor$al clai$ over the !roceeds o the insurance !olicies' but said
clai$s were also denied or the sa$ereasons that AG#O denied Go"uGs
clai$s. In an interlocutor" order dated 9: October 9;;B' the +e%ional Trial
#ourt o 1anila >Branch B?' con&r$ed that Go"uGs other creditors' na$el"'
Urban Ban=' Alredo Sebastian'and (hili!!ine Trust #o$!an" obtained their
res!ective writs o attach$ents ro$ various courts' coverin% ana%%re%ate
a$ount o (9C';B<'D<D.:B' and ordered that the !roceeds o the 9D
insurance !olicies be de!ositedwith the said court $inus the
aore$entioned (9C';B<'D<D.:B. Accordin%l"' on A 8anuar" 9;;C'
1I#Ode!osited the a$ount o (HD'HDH'H;C.ED with Branch B o the 1anila
+T#. In the $eanti$e' another notice o%arnish$ent was handed down b"
another 1anila +T# sala >Branch :<? or the a$ount o (<'E;E'<B<.AH.Ater
trial' Branch B o the 1anila +T# rendered 2ud%$ent in a avor o Go"u'
orderin% 1ala"an to !a" Go"uits &re loss clai$s in the total a$ount o
(AC'DCD'H9<.H< less the a$ount o (HD'DDD'DDD.DD which isde!osited
with the #ourtM da$a%es b" wa" o interest or the duration o the dela"
since :A 8ul" 9;;: >;D da"sater 1ala"anGs recei!t o the required !roo
o loss and notice o loss? at the rate o twice the ceilin%!rescribed b"
the 1onetar" Board' on the a$ounts o >9? (HD'DDD'DDD.DD ro$ :A 8ul" 9;;:
u! to the ti$esaid a$ount was de!osited with the #ourt on A 8anuar" 9;;CM
and >:? (:C'DCD'H9<.H< S ro$ 9A 8ul" 9;;:u! to the ti$e when the writs o
attach$ents were received b" 1ala"an. The court also ordered +#B# to
!a"Go"u actual and co$!ensator" da$a%es in the a$ount o
(:'DDD'DDD.DD' and both 1ala"an and +#B# tosolidaril" !a" Go"u >9?
(9'DDD'DDD.DD as e5e$!lar" da$a%esM >:? (9'DDD'DDD.DD as' and or'
attorne"s eesMand >B? #osts o suit. The #ourt' on the #ounterclai$ o +#B#'
ordered Go"u to !a" its loan obli%ations with+#B# in the a$ount o
(E<'A<H'DE;.DC' as o :A A!ril 9;;:' with interest thereon at the
rate sti!ulated in theres!ective !ro$issor" notes >without surchar%es and
!enalties?. -ro$ this 2ud%$ent' all !arties inter!osedtheir res!ective
a!!eals. Go"u was unsatis&ed with the a$ounts awarded in its
avor. 1I#O and +#B#dis!uted the trial courtGs &ndin%s o liabilit" on their
!art. The #ourt o A!!eals !artl" %ranted Go"uGs a!!eal'but sustained the
&ndin%s o the trial court with res!ect to 1I#O and +#B#Gs liabilities. The
a!!ellate court$odi & ed t he deci si on b" orderi n% 1al a"an t o !a"
Go"u i t s & re l oss cl ai $ i n t he t ot al a$ount o (AC'DCD'H9<.H< less
than the a$ount o (HD'HDH'HC;.ED >!er O.+. No. BEC;:<H? !lus de!osited in
court andda$a%es b" wa" o interest co$$encin% :A 8ul" 9;;: until the
ti$e Go"u receives the said a$ount at the rateo BAU !er annu$ which is
twice the ceilin% !rescribed b" the 1onetar" BoardM orderin% +#B# to !a"
Go"uactual and co$!ensator" da$a%es in the a$ount o (H'DDD'DDD.DDM
and 1ala"an and +#B#' U" #hun Bin%and Eli Lao to !a" Go"u solidaril"
in the a$ounts o >9? (9'HDD'DDD.DD as e5e$!lar" da$a%esM and
>:?(9'HDD'DDD.DD as and or attorne"Gs ees. The #ourt' on +#B#Gs
#ounterclai$' ordered Go"uto !a" its loanobli%ation with +#B# in the
a$ount o (E<'A<H.DE;.DC as o :A A!ril 9;;: without an" interest'
surchar%esand !enalties. +#B# and 1ala"an a!!ealed se!aratel" but' in
view o the co$$on acts and issues involved'their individual !etitions were
consolidated.
Issue [1]:
)hether +#B#' as $ort%a%ee' has an" ri%ht over the insurance
!olicies ta=en b" Go"u' the$ort%a%or' in case o the occurrence o loss.
Held [1]:
ZES. It is settled that a $ort%a%or and a $ort%a%ee have se!arate and
distinct insurable interests inthe sa$e $ort%a%ed !ro!ert"' such that
each one o the$ $a" insure the sa$e !ro!ert" or his own
solebene&t. There is no question that Go"u could insure the $ort%a%ed
!ro!ert" or its own e5clusive bene&t.Herein' althou%h it a!!ears that Go"u
obtained the sub2ect insurance !olicies na$in% itsel as the sole !a"ee'the
intentions o the !arties as shown b" their conte$!oraneous acts' $ust be
%iven due consideration in orderto better serve the interest o 2ustice
and equit". It is to be noted that nine endorse$ent docu$ents
were!re!ared b" Alchester in avor o +#B#. The #ourt is in a quandar" how
Alchester could arrive at the idea oendorsin% an" s!eci&c insurance !olic" in
avor o an" !articular bene&ciar" or !a"ee other than the insuredhad not
such na$ed !a"ee or bene&ciar" been s!eci&call" disclosed b" the insured
itsel. It is also si%ni&cantthat Go"u voluntaril" and !ur!osel" too= the
insurance !olicies ro$ 1I#O' a sister co$!an" o +#B#' andnot 2ust ro$
an" other insurance co$!an". Alchester would not have ound out
that the sub2ect !ieces o!ro!ert" were $ort%a%ed to +#B# had not such
inor$ation been voluntaril" disclosed b" Go"u itsel. Had itnot been or
Go"u' Alchester would not have =nown o Go"uGs intention o obtainin%
insurance covera%e inco$!liance with its underta=in% in the $ort%a%e
contracts with +#B#' and veri"' Alchester would not haveendorsed the
!olicies to +#B# had it not been so directed b" Go"u. On equitable !rinci!les'
!articularl" onthe %round o esto!!el' the #ourt is constrained to rule in
avor o $ort%a%or +#B#. +#B#' in %ood aith' relied upon t%e endorse(ent
docu(ents sent to it as t%is 0as only pursuant to t%e stipulation in t%e (ort+a+econtracts. *uc%
reliance is >usti1ied under t%e circu(stances o1 t%e case. .oyu 1ailed to seasona!ly
repudiatet%e aut%ority
o1 t%e person or persons 0%o prepared suc% endorse(ents. Ever and a!ove t%is< .oyucontinued<
in t%e (eanti(e< to en>oy t%e !ene1its o1 t%e credit 1acilities extended to it !y RCIC. A1ter
t%eoccurrence o1 t%e loss insured a+ainst< it 0as too late 1or .oyu to diso0n t%e endorse(ents
1or any i(a+inedor contrived lac& o1 aut%ority o1 Alc%ester to prepare and issue said
endorse(ents. "1 t%ere %ad not !eenactually an i(plied rati1ication o1 said endorse(ents !y
virtue o1 .oyu's inaction in t%is case< .oyu is at
t%every least estopped 1ro( assailin+ t%eir operative e11ects. To per(it .oyu to capitali6e on its n
on;con1ir(ation o1 t%ese endorse(ents 0%ile it continued to en>oy t%e !ene1its o1 t%e credit
1acilities o1 RCIC0%ic% !elieved in +ood 1ait% t%at t%ere 0as due endorse(ent pursuant to t%eir
(ort+a+e contracts< is tocountenance +rave contravention o1 pu!lic policy< 1air dealin+< +ood
1ait%< and >ustice. *uc% an un>ustsituation< t%e Court cannot sanction. ?nder t%e peculiar
circu(stances< t%e Court is !ound to reco+ni6eRCIC's ri+%t to t%e proceeds o1 t%e insurance
policies i1 not 1or t%e actual endorse(ent o1 t%e policies< at leaston t%e !asis o1 t%e euita!le
principle o1 estoppel.
00ili&ino 9er!)an"s Insuran!e Co. In!. (s. Cour" of A&&eals
[:R 8+1,1> /8 #o(e5ber 1989]
Second @ivision' +e%alado >8?. B concur' 9 on leave
a!"s:
In @ece$ber 9;AE' #hoa Tie= Sen% insured said shi!$ent with
-ili!ino 1erchants Insurance#o$!an" >-1I#I? under car%o (olic" 17:EA<
or the su$ o (:EA'EHB.H; or the %oods described as EDD$etric tons o
&sh$eal in new %unn" ba%s o ;D =ilos each ro$ Ban%=o=' Thailand
to 1anila a%ainst allris=s under warehouse to warehouse ter$s. Actuall"'
what was i$!orted was H;.;CD $etric tons not EDD tonsat KB;H.C: a ton
#N- 1anila. The &sh$eal in EEE new %unn" ba%s were unloaded
ro$ the shi! on 99@ece$ber 9;AE at 1anila unto the arrastre contractor
E. +a,on' Inc. and -1I#IGs surve"or ascertained andcerti&ed that in such
dischar%e 9DH ba%s were in bad order condition as 2ointl" surve"ed b" the
shi!Gs a%entand the arrastre contractor. The condition o the bad order was
reNected in the turn over surve" re!ort o BadOrder car%oes 9:DB:D t o
9:DB::' consi st i n% o B !a%es. The car%o was al so surve"ed
b" t he arrast recontractor beore deliver" o the car%o to the consi%nee
and the condition o the car%o on such deliver" wasreNected in E. +a,onGs
Bad Order #erti&cates 9C<H;' 9C<EB and 9C<E; coverin% a total o ::A ba%s
in badorder condition. -1I#IGs surve"or has conducted a &nal and detailed
surve" o the car%o in the warehouse orwhich he !re!ared a surve" re!ort
with the &ndin%s on the e5tent o shorta%e or loss on the bad order
ba%stotallin% ::A ba%s a$ountin% to 9:'9C< =ilos. Based on said
co$!utation' #hoa $ade a or$al clai$ a%ainst-1I#I or (H9'HE<.E: the
co$!utation o which clai$ is contained therein. A or$al clai$ state$ent
wasalso !resented b" the #hoa a%ainst the vessel dated :9 @ece$ber 9;AE'
but -1I#I reused to !a" the clai$.#onsequentl"' an action was brou%ht b"
the consi%nee >#hoa Tie= Sen%? o the shi!$ent o &sh$eal loadedon board
the vessel SS Bou%ainville and unloaded at the (ort o 1anila on or about 99
@ece$ber 9;AE andsee=s to recover ro$ -1I#I the a$ount o (H9'HE<.E:
re!resentin% da$a%es to said shi!$ent which hasbeen insured b" -1I#I
under (olic" 17:EA<. -1I#I brou%ht a third !art" co$!laint a%ainst
third !art"deendants #o$!a%nie 1ariti$e @es #har%eurs +eunis and4or E.
+a,on' Inc. see=in% 2ud%$ent a%ainst thethird !art" deendants in case
2ud%$ent is rendered a%ainst -1I#I. The court below' ater trial on the
$erits'rendered 2ud%$ent in avor o #hoa' orderin% -1I#I to !a" #hoa the
su$ o (H9'HE<.E: with interest at le%alrate ro$ the date o the &lin% o the
co$!laintM and' on the third !art" co$!laint' the third !art"
deendant#o$!a%nie 1ariti$e @es #har%eurs +eunis and third !art"
deendant E. +a,on' Inc. are ordered to !a"-1I#I 2ointl" and severall"
rei$burse$ent o the a$ounts !aid b" -1I#I with le%al interest ro$ the
date osuch !a"$ent until the date o such rei$burse$entM without
!ronounce$ent as to costs. On a!!eal' and on 9<8ul" 9;<<' the #ourt o
A!!eals aLr$ed the decision o the lower court insoar as the award on the
co$!laintis concerned and $odi&ed the sa$e with re%ard to the
ad2udication o the third7!art" co$!laint. A $otion orreconsideration o the
aoresaid decision was denied' hence -1I#I &led the !etition or review.
Issue [1]:
)hether an Iall ris=sI $arine !olic" has a technical $eanin% in insurance in
that beore a clai$ canbe co$!ensable it is essential that there $ust
be Iso$e ortuit"'I Icasualt"I or Iaccidental causeI to which thealle%ed loss
is attributable.
Held [1]:
NO. The Iall ris=s clauseI o the Institute #ar%o #lauses read as
ollows IH. This insurance isa%ainst all ris=s o lo%s or da$a%e to the
sub2ect7$atter insured but shall in no case be dee$ed to e5tend tocover
loss' da$a%e' or e5!ense !ro5i$atel" caused b" dela" or inherent vice or
nature o the sub2ect7$atterinsured. #lai$s recoverable hereunder shall
be !a"able irres!ective o !ercenta%e.I An Iall ris=s !olic"Ishould be
read literall" as $eanin% all ris=s whatsoever and coverin% all losses b" an
accidental cause o an"=ind. The ter$s IaccidentI and IaccidentalI' as used
in insurance contracts' have not acquired an" technical$eanin%. The" are
construed b" the courts in their ordinar" and co$$on acce!tance. Thus' the
ter$s have !een ta&en to (ean t%at 0%ic% %appens !y c%ance or 1ortuitously< 0it%out
intention and desi+n< and 0%ic% isunexpected< unusual and un1oreseen. An accident is an event
t%at ta&es place 0it%out one's 1oresi+%t orexpectationK an event t%at proceeds 1ro( an un&no0n
cause< or is an unusual e11ect o1 a &no0n cause and<t%ere1ore< not expected. T%e very nature o1
t%e ter( Nall ris&sN (ust !e +iven a !road and co(pre%ensive(eanin+ as coverin+ any loss ot%er
t%an a 0il1ul and 1raudulent act o1 t%e insured. T%is is pursuant to t%e verypurpose o1 an
Nall ris&sN insurance to +ive protection to t%e insured in t%ose cases 0%ere di11iculties o1
lo+icalexplanation or so(e (ystery surround t%e loss or da(a+e to property. An Nall ris&sN
policy %as !een evolvedto +rant +reater protection t%an t%at a11orded !y t%e Nperils clause<N in
order to assure t%at no loss can %appent%rou+% t%e incidence o1 a cause neit%er insured a+ainst
nor creatin+ lia!ility in t%e s%ipK it is 0ritten a+ainstall losses< t%at is< attri!uta!le to external
causes. T%e ter( Nall ris&sN cannot !e +iven a strained tec%nical(eanin+< t%e lan+ua+e o1 t%e
clause under t%e "nstitute Car+o Clauses !ein+ uneuivocal and clear< to t%ee11ect t%at it extends
to all da(a+es:losses su11ered !y t%e insured car+o except LaM loss or da(a+e or
expenseproxi(ately caused !y delay< and L!M loss or da(a+e or expense proxi(ately caused !y
t%e in%erent vice ornature o1 t%e su!>ect (atter insured.
#e@ Life En"er&rises (s Cour" of A&&eals
B". Zin Oliveros
AC2S:

8ulian S" and 8ose S" or$ed

a !artnershi!u n d e r t h e b u s i n e s s n a $ e o N e w L i e
Enter!rises. The" were holdin% their businessin a two7store" buildin%
in Lucena #it".

8ulian S"
insured ")e s"o!=s in "rade
o NewL i e E n t e r ! r i s e s u n d e r t h r e e i n s u r a n c e co$!anies
he buildin% occu!ied b" New Lie Enter!riseswas %utted b" &re caused b" a
ault" electricalwirin%. Accordin% to the !lainti*s' the stoc=s intrade were
inside said buildin% and were thusburned.

8ulian S"' to%ether with an a%ent o +elianceInsurance' &led his clai$.

To su!!ort his clai$'he sub$itted a &re
clearance' the insurance!olicies and the inventor" o stoc=s. He
urthertesti&ed that the three insurance co$!aniesare sister
co$!anies' and as a $atter o actwh en h e wa s o l l o wi n %7
u ! h i s c l a i $ wi t h Equitable Insurance' the #lai$s 1ana%er
toldhi$ to %o &rst to +eliance Insurance and i saidco$!an" a%rees to
!a"' the" would also !a".
Al"i5a"el6> ")e ")ree insuran!e !o5&aniesdenied &lain"iBsC !lai5
for &a65en"

due "o4REACH $ %$LIC7 C$#8I2I$#S
.
+e l i a nc e Su r et " a n d I ns ur a n c e #o$!a n" clai$ed that !lainti*
violated (olic" #onditionNo. I BI whi c h r e qui r es t he i ns ur ed t
o %i v e notice o an" insurance or insurances alread"e*ected coverin% the
stoc=s in trade.

The
2rial Cour"
ruled in avor o the !lainti* that was reversed b" the
Cour" of A&&eals.ISSAE:

)hether or not the !lainti* incurred a breachin the !olic" conditionsQ

RALI#::

T he Su !r e $e #ou r t r u l ed i n a v o r o t he insurance co$!anies.

T h e t e r $s o t h e c o n t r a c t a r e c l e a r a n d u na $bi %u ou s .
T he i n s u r e d i s s !e c i & c a l l " required to disclose to the insurer
an" otherinsurance and its !articulars that he $a"
havee* e c t ed on t h e s a $e s u b2 ec t $a t t e r. T he =nowled%e o
such insurance b" the insurerGsa%ents is not the InoticeI that would esto!
theinsurers ro$ den"in% the clai$.

Thus' it !oints out that while !etitioner

8ulianS" cl ai $ed t hat he had i n or$ed i nsurancea%ent Alvare, r
e%ardin% the co7insurance ont h e !r o!er t " ' he c on t r a di c t ed
h i $s el b" ine5!licabl" clai$in% that he had not read theter$s o the
!olicies.

-urther$ore'
@)en ")e @ords
and lan'ua'eo f d o ! u 5e n " s a r e ! l e a r a n d & l a i n o r rea
di l 6 unders"andabl e b6 an ordi nar6r eader " )er eof > " )er
e i s abs ol u" el 6 noroo5 for i n"er&re"a"i on or !ons"ru!"i
onan65ore
.
Cour"s are no" allo@ed "o 5a=e!on"ra!"s for ")e &ar"iesD ra")er> ")e6
@illi n" er (ene onl 6 @)en " )e " er 5s of " )e& o l i ! 6 a r e
a 5b i ' u o u s > e E u i ( o ! a l > o r un!er"ain
. T h e ! a r t i e s $u s t a b i d e b " t h e t e r $s o t h e c o nt r a c t
bec a us e s u c h t e r $s constitute the $easure o the insurerGs
liabilit"a nd c o $!l i a nc e t h er ewi t h i s a c o ndi t i on !recedent to t
he insuredGs ri%ht o recover"ro$ the insurer.