Beruflich Dokumente
Kultur Dokumente
LOSS AND CLAIMS SETTLEMENTS The RTC, in the Order dated November 22, 2005, pegged the interest rate at
6% per annum by explaining that Stronghold's obligation did not equate to a
loan or forbearance of money. On the other hand, the CA explained that the
1 STRONGHOLD INSURANCE CO. v. PAMANA ISLAND RESORT HOTEL double rate should be based on 12% per annum, as the Insurance Code
pertained to a rate "twice the ceiling prescribed by the Monetary Board" and
Facts: thus could only refer to the rate applicable to obligations constituting a loan
The case stems from an action for sum of money filed by Pamana Island or forbearance of money.
Resort Hotel and Marina Club, Inc. (Pamana) and Flowtech Construction
Corporation (Flowtech) against Stronghold on the basis of a Contractor's All Issue:
Risk Bond of ?9,047,960.14 obtained by Flowtech in relation to the Whether or not the RTC was correct in its ruling about the interest. (No)
construction of Pamana's project in Pamana Island, Subic Bay. On January
27, 1992, a fire in the project burned down cottages being built by Flowtech, Ruling:
resulting in losses to Pamana. No, The Court agrees with the CA that given the provisions of the Insurance
Code, which is a special law, the applicable rate of interest shall be that
In a Decision dated October 14, 1999, the Regional Trial Court (RTC) of imposed in a loan or forbearance of money as imposed by the Bangko
Makati City, Branch 135 declared Stronghold liable for the claim. Besides the Sentral ng Pilipinas (BSP), even irrespective of the nature of Stronghold's
award of insurance proceeds, exemplary damages and attorney's fees, the liability. In the past years, this rate was at 12% per annum. However, in light
trial court ordered the payment of interest at double the applicable rate, of Circular No. 799 issued by the BSP on June 21, 2013 decreasing interest
following Section 243 of the Insurance Code which Stronghold was declared on loans or forbearance of money, the CA's declared rate of 12% per annum
to have violated. shall be reduced to 6% per annum from the time of the circular's effectivity on
July 1, 2013. The Court explained in Nacar v. Gallery Frames that the new
Stronghold filed an Urgent Motion to Suspend Execution and to Rationalize rate imposed under the circular could only be applied prospectively, and not
Enforcement of the Decision, contending that the interest penalty being retroactively.
demanded from it through the Sheriff was unconscionable and iniquitous. As regards the issue of estoppel raised by Stronghold in view of Pamanas' s
receipt of checks issued by the former pursuant to the R TC' s order to
The RTC rendered its Order granting Stronghold's motion. Interest was implement, the Court rejects the argument in view of a failure to sufficiently
substantially reduced following the court's pronouncement that its establish that Pamana accepted the sums in full satisfaction of their claims.
computation should be reckoned from the date of promulgation of judgment
until its finality and not from the date of demand until full payment as
enunciated in the Decision. 2 PIONEER INSURANCE and SURETY CORPORATION vs. APL CO.
PTE. LTD.
RTC: The claim of [Pamana and Flowtech] for the interest of the principal
The present case involves lost or damaged cargo. It has long been settled
amount in the sum of P7,528,774.05, does not appear to be accurate. The
that in case of loss or damage of cargoes, the one-year prescriptive period
principal amount of P4,728,297.82 demanded x x x was ascertained only
under the COOSA applies.
after the trial of the case on its merits. The obligation of [Stronghold] is not a
loan or [forbearance] of money. The interest on the obligation shall begin to
FACTS:
run from the time the claim is made judicially and extrajudicially when the
On January 13, 2012, the shipper, Chillies Export House Limited,
demand was established with certainty. But when such certainty cannot be
so reasonably established at the time of the demand, the interest shall begin turned over to respondent APL Co. Pte. Ltd. {APL) 250 bags of chili pepper
only from the date of judgment of the court. for transport from the port of Chennai, India, to Manila. The shipment, with a
total declared value of $12,272.50, was loaded on board MN Wan Hai 262. In
tum, BSFIL Technologies, Inc. (BSFIL), as consignee, insured the cargo with
A disagreement, however, concerns the question of whether an interest rate
petitioner Pioneer Insurance and Surety Corporation. On February 2, 2012,
of 6 percent or 12% per annum should apply in the computation, as this
subject was not specifically defined in the RTC judgment in the main case. the shipment arrived at the port of Manila and was temporarily stored at
North Harbor, Manila. On February 6, 2012, the bags of chili were withdrawn
and delivered to BSFIL. Upon receipt thereof, it discovered that 76 bags were be discharged from all liability whatsoever in respect of the goods, unless suit
wet and heavily infested with molds. The shipment was declared unfit for is brought in the proper forum within nine (9) months after delivery of the
human consumption and was eventually declared as a total loss. As a result, goods or the date when they should have been delivered. The same,
BSFIL made a formal claim against APL and Pioneer Insurance. The latter however, is qualified in that when the said nine-month period is contrary to
hired an independent insurance adjuster, which found that the shipment was any law compulsory applicable, the period prescribed by the said law shall
wet because of the water which seeped inside the container van APL apply. The present case involves lost or damaged cargo. It has long been
provided. Pioneer Insurance paid BSFIL Pl 95,505.65. Having been settled that in case of loss or damage of cargoes, the one-year prescriptive
subrogated to all the rights and cause of action of BSFIL, Pioneer Insurance period under the COOSA applies. It is at this juncture where the parties are
sought payment from APL, but the latter refused. This prompted Pioneer at odds, with Pioneer Insurance claiming that the one-year prescriptive
Insurance to file a complaint for sum of money against APL. period under the COOSA governs; whereas APL insists that the nine-month
prescriptive period under the Bill of Lading applies. A reading of the Bill of
Pioneer Insurance insists the action, which was filed on February 1, Lading between the parties reveals that the nine-month prescriptive period is
2013, was within the one year prescriptive period under the COGSA after not applicable in all actions or claims. As an exception, the nine-month period
BSFIL received the goods on February 6, 2012. It argues that the ninemonth is inapplicable when there is a different period provided by a law for a
period provided under the Bill of Lading was inapplicable because the Bill of particular claim or action-unlike in Philippine American where the Bill of
Lading itself states that in the event that such time period is found to be Lading stipulated a prescriptive period for actions without exceptions. Thus, it
contrary to any law compulsorily applicable, then the period prescribed by is readily apparent that the exception under the Bill of Lading became
such law shall then apply. Pioneer Insurance is of the view that the operative because there was a compulsory law applicable which provides for
stipulation in the Bill of Lading is subordinate to the COOSA. It asserts that a different prescriptive period. Hence, strictly applying the terms of the Bill of
while parties are free to stipulate the terms and conditions of their contract, Lading, the one-year prescriptive period under the COOSA should govern
the same should not be contrary to law, morals, good customs, public order, because the present case involves loss of goods or cargo. In finding so, the
or public policy. APL countered that Pioneer Insurance erred in claiming that Court does not construe the Bill of Lading any further but merely applies its
the nine-month period under the Bill of Lading applies only in the absence of terms according to its plain and literal meaning.
an applicable law. It stressed that the nine-month period under the Bill of
Lading applies, unless there is a law to the contrary. APL explained that
"absence" differs from "contrary." It, thus, argued that the nine-month period 3 ALPHA INSURANCE AND SURETY CO., VS. ARSENIA SONIA
was applicable because it is not contrary to any applicable law. CASTOR
Facts:
MTC granted the complaint and ordered APL to pay Pioneer Castor entered into a contract of insurance (Motor Car Policy) with
Insurance the amount claimed plus six percent ( 6%) interest per annum from Alpha Insurance (company), involving her motor vehicle (Toyota Revo). Sec
the filing of the complaint until fully paid. the RTC concurred with the MTC. III - Loss or Damage - Of the Insurance policy provides that the company will
CA reversed the decisions of the trial courts and ruled that the present action pay Castor the amount of P630K in case of loss or damage to said vehicle
was barred by prescription. during the period covered, which is from Feb 26, 2007-Feb 26 2008.
ISSUE: Castor instructed her driver, Jose, to bring the said vehicle to a
WHETHER THE HONORABLE COURT OF APPEALS SERIOSULY ERRED nearby auto-shop for a tune-up but Jose no longer returned the vehicle.
IN HOLDING THAT THE ONE YEAR PRESCRIPTIVE PERIOD PROVIDED Castor immediately reported the incident to the police and later notified
UNDER THE CARRIAGE OF GOODS BY SEA ACT (COGSA) IS NOT Company of said loss and demanded payment of the insurance proceeds.
APPLICABLE IN THE INSTANT CASE
The company denied the claim of Castor, because according to the
RULING: former, the incident in this case falls within the exceptions provided to Sec III
YES. After a closer persual of the the Bill of Lading, the Court finds that its which provides that The Company shall not be liable for Any malicious
provisions are clear and unequivocal leaving no room for interpretation. In damage caused by the Insured, any member of his family or by “A PERSON
the Bill of Lading, it was categorically stated that the carrier shall in any event IN THE INSURED’S SERVICE.”
refers to the act or fact of losing, or failure to keep possession, while the
Arguments: word “damage” means deterioration or injury to property.
Castor - the exception refers to damage of the motor vehicle and not to its
loss Therefore, petitioner cannot exclude the loss of respondent’s vehicle
Company - the word "damage" under paragraph 4 of "exceptions to Section under the insurance policy under paragraph 4 of “Exceptions to Section III,”
III" means loss due to injury or harm to person, property, or reputation and since the same refers only to “malicious damage,” or more specifically,
should be construed to cover malicious loss as in theft. “injury” to the motor vehicle caused by a person under the insured’s service.
Paragraph 4 clearly does not contemplate “loss of property,” as what
RTC and CA ruled in favor of Castor, hence this petition. happened in the instant case. "malicious damage,” as provided for in the
subject policy as one of the exceptions from coverage, is the damage that is
Issue: the direct result from the deliberate or willful act
Whether or not Alpha Insurance is liable to Castor for the loss of the latter's
motor vehicle due to theft committed by her driver. If the intention of the defendant-appellant was to include the term
“loss” within the term “damage” then logic dictates that it should have used
Ruling: the term “damage” alone in the entire policy or otherwise included a clear
Yes. Theft perpetrated by a driver of the insured is not an exception definition of the said term as part of the provisions of the said insurance
to the coverage from the insurance policy subject of this case. This is evident contract
from the very provision of Section III – “Loss or Damage.” The insurance
company, subject to the limits of liability, is obligated to indemnify the insured Lastly, a contract of insurance is a contract of adhesion. So, when
against theft. Said provision does not qualify as to who would commit the the terms of the insurance contract contain limitations on liability, courts
theft. Thus, even if the same is committed by the driver of the insured, there should construe them in such a way as to preclude the insurer from non-
being no categorical declaration of exception, the same must be covered. compliance with his obligation.
PETITION DENIED.
As correctly pointed out by the plaintiff, “(A)n insurance contract
should be interpreted as to carry out the purpose for which the parties 4 PRUDENTIAL GUARANTEE and ASSURANCE INC., petitioner, vs.
entered into the contract which is to insure against risks of loss or damage to TRANS-ASIA SHIPPING LINES, INC., Respondent. (G.R. No.
the goods. Such interpretation should result from the natural and reasonable 151890 June 20, 2006)
meaning of language in the policy. Where restrictive provisions are open to
two interpretations, that which is most favorable to the insured is adopted. FACTS:
Trans Asia is the owner of M/V Asia Korea. Prudential Guarantee and
The Company would argue that if the person employed by the Assurance Inc. insured the vessel for loss and damage of the hull and
insured would commit the theft and the insurer would be held liable, then this machinery arising from perils of fire and explosion beginning July 1,1993 until
would result to an absurd situation where the insurer would also be held July 1,1994. October 25,1993 a fire broke out. Trans Asia filed its notice of
liable if the insured would commit the theft. This argument is certainly flawed. claim for damages sustained by the vessel. It also reserved its right to
Of course, if the theft would be committed by the insured himself, the same subsequently notify Prudential as to the full amount of the claim upon final
would be an exception to the coverage since in that case there would be survey and determination by the average adjuster Richard Hogg International
fraud on the part of the insured or breach of material warranty under Section of the damage sustained by reason of the fire.
69 of the Insurance Code.
Trans Asia executed a document denominated “Loan and Trust Receipt”
Moreover, contracts of insurance, like other contracts, are to be amounting to P3,000. Prudential Guarantee denied the claim and requested
construed according to the sense and meaning of the terms which the parties for the return of the said amount, they contend that there was a breach in the
themselves have used. Adverse to petitioner’s claim, the words “loss” and policy condition ; specifically the Warranted Vessel Classed and Class
“damage” mean different things in common ordinary usage. The word “loss” Maintained.
Trial Court held that Trans Asia failed to prove its compliance with the terms whether the insurer was in fact prejudiced by such untruth or non-fulfillment,
of the warranty and that the concealment made by Trans Asia is sufficient to renders the policy voidable by the insurer.”
avoid the policy. Prudential Guarantee is entitled to rescind the contract.
However, it is similarly indubitable that for the breach of a warranty to avoid a
Court of Appeals reversed the decision as it contended that Prudential had policy, the same must be duly shown by the party alleging the same. We
the burden to show that there was a breach in the warranty and it had failed cannot sustain an allegation that is unfounded. Consequently, PRUDENTIAL,
to do so. The appellate court considered Prudential’s admission that at the not having shown that TRANS-ASIA breached the warranty condition,
time the insurance contract was entered into, the vessel was classed by the CLASSED AND CLASS MAINTAINED, it remains that TRANS-ASIA must be
Bureau Veritas, a classification society recognized by the industry. It further allowed to recover its rightful claims on the policy.
contended that the then subject warranty was in a form of a rider, hence such
contract should be construed against Prudential Guarantee. It also construed Assuming arguendo that TRANS-ASIA violated the policy condition on
the transaction between both parties as one of subrogation instead of a loan. WARRANTED VESSEL CLASSED AND CLASS MAINTAINED,
PRUDENTIAL made a valid waiver of the same.
ISSUE:
WON there was a breach in the warranty Prudential can be deemed to have made a valid waiver of Trans Asia’s
breach of warranty, because after the loss it had renewed the insurance
RULING: policy for two consecutive years. Such renewal is deemed a waiver of any
NO. breach of warranty. Breach of a warranty or of a condition renders the
As found by the Court of Appeals and as supported by the records, Bureau contract defeasible at the option of the insurer; but if he so elects, he may
Veritas is a classification society recognized in the marine industry. As it is waive his privilege and power to rescind by the mere expression of an
undisputed that TRANS-ASIA was properly classed at the time the contract intention so to do. In that event his liability under the policy continues as
of insurance was entered into, thus, it becomes incumbent upon before. There can be no clearer intention of the waiver of the alleged breach
PRUDENTIAL to show evidence that the status of TRANS-ASIA as being than the renewal of the policy insurance granted by PRUDENTIAL to
properly CLASSED by Bureau Veritas had shifted in violation of the warranty. TRANS-ASIA in MH94/1595 and MH95/1788, issued in the years 1994 and
Unfortunately, PRUDENTIAL failed to support the allegation. 1995, respectively
The lack of a certification in PRUDENTIAL’s records to the effect that 5 New World Int'l Development Phils., Inc. vs. NYK-FILJAPAN Shipping
TRANS-ASIA’s "M/V Asia Korea" was CLASSED AND CLASS MAINTAINED Corp (GR No. 171468, August 24, 2011)
at the time of the occurrence of the fire cannot be tantamount to the Facts:
conclusion that TRANS-ASIA in fact breached the warranty contained in the New World International Development (Phils.) Inc. (New World) bought 3
policy. emergency generator sets worth $721,500.00 from DMT Corporation (DMT)
through its agent, Advatech Industries Inc. (Advatech). New world Insured
It was likewise the responsibility of the average adjuster, Richards Hogg the same with Seaboard-Eastern Insurance Company (Seaboard).
International (Phils.), Inc., to secure a copy of such certification, and the
alleged breach of TRANS-ASIA cannot be gleaned from the average The generator sets were shipped from United States to Hongkong and
adjuster’s survey report, or adjustment of particular average per "M/V Asia supposedly be delivered by NYK Fil-Japan Shipping Corporation (NYK) (the
Korea" of the 25 October 1993 fire on board. common carrier) to Philippines. However, during its transit, it encountered
typhoon Kadiang so the captain filed a sea protest on arrival at the Manila
The Supreme Court are not unmindful of the clear language of Sec. 74 of the South Harbor on Oct 5, 1993 respecting the loss and damage that the goods
Insurance Code which provides that, "the violation of a material warranty, or on board his vessel suffered.
other material provision of a policy on the part of either party thereto, entitles
the other to rescind." It is generally accepted that "[a] warranty is a statement The shipment was found to be irreparable because of the extensive damage
or promise set forth in the policy, or by reference incorporated therein, the it suffered, so New World filed a claim against DMT, Advatech, NYK and
untruth or non-fulfillment of which in any respect, and without reference to Seaboard, etc.
due to fraud or intentional misconduct committed by the insured. The policy
NYK denied its liability by claiming that the loss was due to a fortuitous event. covered all losses during the voyage whether or not arising from a marine
Seaboard on the other hand required New world an itemized list of the peril. Here, the policy enumerated certain exceptions like unsuitable
damage units and their corresponding value. But New World did not submit packaging, inherent vice, delay in voyage, or vessels unseaworthiness,
what was required of it, insisting that the insurance policy did not include the among others. But Seaboard had been unable to show that petitioner New
submission of such a list in connection with an insurance claim. Reacting to World’s loss or damage fell within some or one of the enumerated
this, Seaboard refused to process the claim. Thus, on October 11, 1994, exceptions.
New World filed an action for specific performance against Seaboard.
Moreover, Seaboard caused an inspection of the goods and should have
RTC ruled that Seaboard cannot be faulted for denying the claim against it determined whether the claim of New World is genuine. It should have
since New World refused to submit the itemized list that Seaboard needed examined the same, found it unsubstantiated by documents if that were the
for assessing the damage to the shipment. Likewise, the belated filing of the case, and formally rejected it but it failed to do so prejudicing New World.
complaint prejudiced Seaboard’s right to pursue a claim against NYK in the
event of subrogation. It absolved NYK from liability since the claim was not The record shows that petitioner New World filed its formal claim for its loss
filed the 1 year prescriptive period as provided by Carriage of Goods by Sea with Seaboard, its insurer, a remedy it had the right to take, as early as
Act. November 16, 1993 or about 11 months before the suit against NYK would
have fallen due. The Court also ruled that the submission of itemized list is
CA affirmed RTC's ruling except with respect to Seaboard's liability. It ruled an unreasonable demand because the policy does not require for it.
that the submission of the itemized list is an unreasonable imposition and
that that the one-year prescriptive period under the COGSA did not affect Ultimately, the fault for the delayed court suit could be brought to Seaboard’s
New World’s right under the insurance policy since it was the Insurance doorstep.
Code that governed the relation between the insurer and the insured.
However, CA completely changed its mind upon the MR of Seaboard, ruling Section 241 of the Insurance Code provides that no insurance company
that the submission of the said list is reasonable and that the one-year doing business in the Philippines shall refuse without just cause to pay or
prescriptive period for maritime claims applied to Seaboard, as insurer and settle claims arising under coverages provided by its policies. And, under
subrogee of New World’s right against the vessel owner. Section 243, the insurer has 30 days after proof of loss is received and
ascertainment of the loss or damage within which to pay the claim. If such
Hence, this petition by New world. ascertainment is not had within 60 days from receipt of evidence of loss, the
insurer has 90 days to pay or settle the claim. And, in case the insurer
Issue: refuses or fails to pay within the prescribed time, the insured shall be entitled
1)Whether or not NYK (Common Carrier) should be held liable for the loss to interest on the proceeds of the policy for the duration of delay at the rate of
2)Whether or not Seaboard is liable for the loss in this case twice the ceiling prescribed by the Monetary Board.
Ruling: Notably, Seaboard already incurred delay when it failed to settle petitioner
1) No. while it true that the generator sets were totally damaged during the New World’s claim as Section 243 required. Under Section 244, a prima facie
typhoon which beset the vessel’s voyage from Hong Kong to Manila and that evidence of unreasonable delay in payment of the claim is created by the
it was her negligence in continuing with that journey despite the adverse failure of the insurer to pay the claim within the time fixed in Section 243.
condition which caused petitioner New World’s loss, the claim was not filed
within the prescriptive period provided by COGSA thereby completely Consequently, Seaboard should pay interest on the proceeds of the policy for
releasing and absolving NYK from liability the duration of the delay until the claim is fully satisfied at the rate of twice
the ceiling prescribed by the Monetary Board. The term “ceiling prescribed by
2) Yes. The marine open policy that Seaboard issued to New World was an the Monetary Board” means the legal rate of interest of 12% per annum
all-risk policy. Such a policy insured against all causes of conceivable loss or provided in Central Bank Circular 416, pursuant to Presidential Decree 116.
damage except when otherwise excluded or when the loss or damage was Section 244 of the Insurance Code also provides for an award of attorney’s
fees and other expenses incurred by the assured due to the unreasonable provided herein, within twelve (12) months after due notice of the
withholding of payment of his claim. award made by the arbitrator or arbitrators or umpire, then the claim
shall for all purposes be deemed to have been abandoned and shall
6 SUN INSURANCE OFFICE, LTD. vs. COURT OF APPEALS and EMILIO not thereafter be recoverable hereunder.
TAN
The right of the insured to the payment of his loss accrues from the As the terms are very clear and free from any doubt or ambiguity
happening of the loss. However, the cause of action in an insurance contract whatsoever, it must be taken and understood in its plain, ordinary and
does not accrue until the insured's claim is finally rejected by the insurer. popular sense pursuant to the above-cited principle laid down by this
This is because before such final rejection there is no real necessity for Court. Respondent Tan admitted that he received a copy of the letter of
bringing suit. rejection on April 2, 1984. Thus, the 12-month prescriptive period started to
FACTS: run from the said date of April 2, 1984.
Private respondent Emilio Tan took from herein petitioner a
P300,000.00 property insurance policy to cover his interest in the electrical Also, Sec 63 of IC, states Section 63 of the Insurance Code, which
supply store of his brother housed in a building in Iloilo City. Four (4) days states that a condition, stipulation or agreement in any policy of insurance,
after the issuance of the policy, the building was burned including the insured limiting the time for commencing an action thereunder to a period of less than
store. On August 20, 1983, Tan filed his claim for fire loss with petitioner, but one year from the time when the cause of action accrues, is void.
on February 29, 1984, petitioner wrote Tan denying the latter's claim. April 3, The contention of the respondents that the one-year prescriptive period does
1984, Tan wrote petitioner, seeking reconsideration of the denial of his claim. not start to run until the petition for reconsideration had been resolved by the
On September 3, 1985, Tan's counsel wrote the Insurer inquiring about the insurer, runs counter to the declared purpose for requiting that an action or
status of his April 3, 1984 request for reconsideration. Petitioner answered suit be filed in the Insurance Commission or in a court of competent
the letter on October 11, 1985, advising Tan's counsel that the Insurer's jurisdiction from the denial of the claim. it can easily be used by insured
denial of Tan's claim remained unchanged. November 20, 1985, Tan filed persons as a scheme or device to waste time until any evidence which may
Civil RTC of Iloilo but petitioner filed a motion to dismiss on the alleged be considered against them is destroyed.
ground that the action had already prescribed. The MD was denied. Said
motion was denied in an order dated November 3, 1987; and petitioner's The right of the insured to the payment of his loss accrues from the
motion for reconsideration was also denied in an order dated January 14, happening of the loss. However, the cause of action in an insurance contract
1988. Petitioner went to the Court of Appeals and sought the nullification of does not accrue until the insured's claim is finally rejected by the insurer.
the said Nov. 3, 1987 and January 14, 1988 orders, but the Court of Appeals, This is because before such final rejection there is no real necessity for
in its June 20, 1989 decision denied the petition and held that the court a bringing suit. The insured's cause of action or his right to file a claim either in
quo may continue until its final termination. the Insurance Commission or in a court of competent jurisdiction commences
from the time of the denial of his claim by the Insurer, either expressly or
ISSUE: impliedly.
WHETHER OR NOT THE FILING OF A MOTION FOR
RECONSIDERATION INTERRUPTS THE TWELVE (12) MONTHS Thus, to allow the filing of a motion for reconsideration to suspend
PRESCRIPTIVE PERIOD TO CONTEST THE DENIAL OF THE the running of the prescriptive period of twelve months, a whole new body of
INSURANCE CLAIM rules on the matter should be promulgated so as to avoid any conflict that
may be brought by it, such as:
RULING: a) whether the mere filing of a plea for reconsideration of a denial is
No. Condition 27 of the Insurance Policy, which is the subject of the sufficient or must it be supported by arguments/affidavits/material
conflicting contentions of the parties, reads: evidence;
27. Action or suit clause — If a claim be made and rejected and an action or b) how many petitions for reconsideration should be permitted?
suit be not commenced either in the Insurance Commission or in any
court of competent jurisdiction within twelve (12) months from receipt
of notice of such rejection, or in case of arbitration taking place as
7 CHERIE PALILEO, plaintiff-appellee, vs. BEATRIZ COSIO, defendant- Whether or not the lower court erred in considering the obligation of Palileo
appellant. fully compensated by the insurance amount and in ordering Cosio to refund
(G.R. No. L-7667. November 28, 1955 Bautista Angelo, J.) to Palileo the excess of the insurance amount less the loan owed by Palileo
FACTS: (YES)
On December 18, 1951, Palileo obtained from Cosio a loan in the
sum of P12,000 subject to the following conditions: (a) Palileo shall pay to RULING:
defendant an interest in the amount of P250 a month; (b) that Cosio shall YES. Lower court’s ruling runs counter to the rule governing an
deduct from the loan certain obligations of Palileo to third persons amounting insurance taken by a mortgagee independently of the mortgagor.
to P4,550, plus the sum of P250 as interest for the first month; and (c) that The rule is that "where a mortgagee, independently of the mortgagor,
after making the above deductions, defendant shall deliver to Palileo only the insures the mortgaged property in his own name and for his own interest, he
balance of the loan of P12,000. is entitled to the insurance proceeds in case of loss, but in such case, he is
Pursuant to their agreement, Palileo paid to Cosio as interest on the not allowed to retain his claim against the mortgagor, but is passed by
loan a total of P2,250.00 corresponding to nine months from December 18, subrogation to the insurer to the extent of the money paid."
1951, on the basis of P250.00 a month, which is more than the maximum "If a mortgagee procures insurance on his separate interest at his
interest authorized by law. To secure the payment of the aforesaid loan, own expense and for his own benefit, without any agreement with the
Cosio required Palileo to sign a document known as "Conditional Sale of mortgagor with respect thereto, the mortgagor has no interest in the policy,
Residential Building", purporting to convey to Cosio, with right to repurchase, and is not entitled to have the insurance proceeds applied in reduction of the
a two-story building of strong materials belonging to plaintiff. This document mortgage debt". Further, the mortgagee "has still a right to recover his whole
did not express the true intention of the parties which was merely to place debt of the mortgagor."
said property as security for the payment of the loan. Considering the foregoing rules, it would appear that the lower court
After execution, Cosio insured the building against fire for P15,000. erred in declaring that the proceeds of the insurance taken out by the
The building was then partly destroyed and thus, Cosio collected P13,107.00 defendant on the property mortgaged inured to the benefit of the plaintiff and
from AISCO in ordering said defendant to deliver to the plaintiff the difference between
Cherie Palileo filed a complaint against Beatriz Cosio praying that her indebtedness and the amount of insurance received by the defendant,
their transaction be declared as loan and the document executed covering it for, in the light of the majority rule we have above enunciated, the correct
to be as equitable mortgage. Palileo also prayed that Cosio be ordered to solution should be that the proceeds of the insurance should be delivered to
credit to Palileo the amount received by Cosio to Associated Insurance & the defendant but that her claim against the plaintiff should be considered
Surety Co., Inc. as payment of the alleged loan. assigned to the insurance company who is deemed subrogated to the rights
In Cosio’s defense, she contended that the transaction is a sale with of the defendant to the extent of the money paid as indemnity.
option to repurchase but Palileo failed to exercise it. Thus, ownership was
consolidated in Cosio’s name 8 LOADMASTERS CUSTOMS SERVICES, INC., v GLODEL BROKERAGE
On 7 April1953, the case was set for trial, but was postponed and was finally CORPORATION and R&B INSURANCE CORPORATION
set on 12 January 1954. The defendant and her counsel did not appear on
the said date despite notice sent a month before the trial. Thus, on January FACTS:
18, the court rendered judgment holding that the insurance proceeds On August 28, 2001, R&B Insurance issued a Marine Policy in favor of
collected by Cosio be applied to Palileo’s debt to Cosio and the excess Columbia to insure the shipment of 132 bundles of electric copper cathodes
thereof to be refunded to Palileo. against All Risks. On August 28, 2001, the cargoes were shipped on board
On 2 February 1954, the counsel for defendant was substituted and the vessel Richard Rey from Isabela, Leyte, to Pier 10, North Harbor, Manila.
the new counsel immediately moved for the judgment to be set aside due to They arrived on the same date.
mistake and excusable negligence resulting in Cosio’s failure to present
evidence. The motion was denied. Hence, the present appeal. Columbia engaged the services of Glodel for the release and withdrawal of
the cargoes from the pier and the subsequent delivery to its
ISSUE: warehouses/plants. Glodel, in turn, engaged the services of Loadmasters for
the use of its delivery trucks to transport the cargoes to Columbias 4. Can Petitioner Loadmasters be held liable to Respondent Glodel in spite of
warehouses/plants in Bulacan and Valenzuela City. the fact that the latter respondent Glodel did not file a cross-claim against it
(Loadmasters)?
The goods were loaded on board twelve (12) trucks owned by Loadmasters,
driven by its employed drivers and accompanied by its employed truck ARGUMENTS
helpers. Six (6) truckloads of copper cathodes were to be delivered to
Balagtas, Bulacan, while the other six (6) truckloads were destined for Loadmasters argues that it cannot be considered an agent of Glodel
Lawang Bato, Valenzuela City. The cargoes in six truckloads for Lawang because it never represented the latter in its dealings with the consignee. At
Bato were duly delivered in Columbias warehouses there. Of the six (6) any rate, it further contends that Glodel has no recourse against it for its
trucks en route to Balagtas, Bulacan, however, only five (5) reached the (Glodels) failure to file a cross-claim pursuant to Section 2, Rule 9 of the
destination. One (1) truck, loaded with 11 bundles or 232 pieces of copper 1997 Rules of Civil Procedure.
cathodes, failed to deliver its cargo.
Glodel counters that Loadmasters is liable to it under its cross-claim
Later on, the said truck was recovered but without the copper cathodes. because the latter was grossly negligent in the transportation of the subject
Because of this incident, Columbia filed with R&B Insurance a claim for cargo. With respect to Loadmasters claim that it is already estopped from
insurance indemnity in the amount of P1,903,335.39. After the requisite filing a cross-claim, Glodel insists that it can still do so even for the first time
investigation and adjustment, R&B Insurance paid Columbia the amount of on appeal because there is no rule that provides otherwise. Finally, Glodel
P1,896,789.62 as insurance indemnity. argues that its relationship with Loadmasters is that of Charter wherein the
transporter (Loadmasters) is only hired for the specific job of delivering the
R&B Insurance, thereafter, filed a complaint for damages against both merchandise. Thus, the diligence required in this case is merely ordinary
Loadmasters and Glodel before the Regional Trial Court of Manila (RTC). It diligence or that of a good father of the family, not the extraordinary diligence
sought reimbursement of the amount it had paid to Columbia for the loss of required of common carriers.
the subject cargo. It claimed that it had been subrogated to the right of the
consignee to recover from the party/parties who may be held legally liable for R&B Insurance claims that Glodel is deemed to have interposed a cross-
the loss. RTC rendered a decision holding Glodel liable for damages for the claim against Loadmasters because it was not prevented from presenting
loss of the subject cargo and dismissing Loadmasters counterclaim for evidence to prove its position even without amending its Answer. As to the
damages and attorneys fees against R&B Insurance. relationship between Loadmasters and Glodel, it contends that a contract of
agency existed between the two corporations.
Both R&B Insurance and Glodel appealed the RTC decision to the CA. The
CA rendered the appeal is PARTLY GRANTED in that the appellee HELD:
Loadmasters is likewise held liable to appellant Glodel in the amount of 1. YES. As subrogee of the rights and interest of the consignee, R&B
P1,896,789.62 representing the insurance indemnity appellant Glodel has Insurance has the right to seek reimbursement from either
been held liable to appellant R&B Insurance Corporation. Loadmasters or Glodel or both for breach of contract and/or tort.
Subrogation is the substitution of one person in the place of another with
ISSUES: reference to a lawful claim or right, so that he who is substituted succeeds to
1. Does R&B Insurance has the right to seek reimbursement from either the rights of the other in relation to a debt or claim, including its remedies or
Loadmasters or Glodel or both for breach of contract and/or tort? securities. Doubtless, R&B Insurance is subrogated to the rights of the
2. Under the set of facts established and undisputed in the case, can insured to the extent of the amount it paid the consignee under the
petitioner Loadmasters be legally considered as an Agent of respondent marine insurance.
Glodel?
3. What then is the extent of the respective liabilities of Loadmasters and The issue now is who, between Glodel and Loadmasters, is liable to
Glodel? pay R&B Insurance for the amount of the indemnity it paid Columbia.
2. YES. A loss which, in the ordinary course of events, results from the
natural and inevitable action of the sea, from the ordinary wear and tear of
the ship, or from the negligent failure of the ship's owner to provide the
vessel with proper equipment to convey the cargo under ordinary conditions,
is not a peril of the sea. Such a loss is rather due to what has been aptly
called the "peril of the ship." The insurer undertakes to insure against perils
of the sea and similar perils, not against perils of the ship. The term 'perils of
the sea' extends only to losses caused by sea damage, or by the violence of
the elements, and does not embrace all losses happening at sea. They
insure against losses from extraordinary occurrences only, such as stress of
weather, winds and waves, lightning, tempests, rocks and the like. These are
understood to be the "perils of the sea" referred in the policy, and not those
ordinary perils which every vessel must encounter.
However, as evidence by the trial court at the time Mable 10 sank, there was
no typhoon but ordinary strong wind and waves, a condition which is natural
and normal in the open sea. The evidence shows that the sinking of Mable
10 was due to improper loading of the logs on one side so that the barge was
tilting on one side and for that it did not navigate on even keel; that it was no
longer seaworthy that was why it developed leak; that the personnel of the
tugboat and the barge committed a mistake when it turned loose the barge
from the tugboat east of Cabuli point where it was buffeted by storm and
waves, while the tugboat proceeded to west of Cabuli point where it was
protected by the mountain side from the storm and waves coming from the
east direction. Thus, because the loss was caused by perils of the ship, it
cannot be insured by the insurer.