Bringing an action and prescription of actions

Alfonso G. Lopez v. Filipinas Compania De Seguros

G.R. No. L-19613, 30 April 1966

Facts:

Alfonso Lopez the plaintiff applied with Filipina Compania the defendant for the
insurance of his tractor and trailer from loss or damage in the amount of 26,000 pesos
and 10,000 pesos respectively. The defendant company inquired if the plaintiff has any
company in respect of the insurance of any car whether or not declined, cancelled or
refused to renew insurance or increased the premium on renewal. The plaintiff
answered non on both questions although the truth is the American international
underwriters had already declined a similar application for insurance by the plaintiff.

Thereafter, the plaintiff was issued tow commercial vehicle comprehensive

policies covering his properties. While the policies were in force the vehicles figured an
accident so the plaintiff made a demand upon the defendant for the payment to him for
27,962 pesos representing the total amount of damages on the accident however the
defendant rejected the claim.

The plaintiff then filed a complaint against the defendant due to the rejection of
claim. The Assistant insurance commissioner requested that the defendant company
give its side of the complaint. The defendant answered requesting the matter to be
settled thru arbitration considering the informative facts disclosed the plaintiff should
pursue his case in a court which has proper competence to resolve the problem. The
plaintiff answered that he is willing to submit his claim to arbitration and suggested that
the Assistant insurance commissioner be designated as the sole arbitrator which the
assistant agreed however the insurance commissioner could not consent to the
proposal since the claim of the plaintiff cannot be resolved by arbitration as the policy on
the contract envisioned only differences or disputes and not the cases where the
company does not admit its liability to the insured. With that rejection the plaintiff filed a
case in the RTC.

The defendant filed a motion to dismiss on the ground of prescription arguing that
the plaintiff’s claim had already prescribed since it was not filed within twelve moths
from its rejection by the insurance company as stipulated under paragraph 9 of the
policy which provides that “if a claim be made and rejected and an action or suit be
commenced within twelve months after such rejection or within twelve months after the
arbitrators or umpire shall have made their award then the claim shall for all purposes
be deemed to have been abandoned and shall not thereafter be recovered. The CA
dismissed the motion.
Issue:

Was the plaintiff’s action not yet prescribed because the complaint filed by him
with the office of the IC a commencement of an action?

Ruling:

No. the plaintiff’s action has already prescribed. The action before the insurance
commissioner is neither an action nor a suit.

Jurisprudence provides that action is the act by which one sues another in a
court of justice for the enforcement of protection of a right, or the prevention or redress
of a wrong. Special proceeding is the act by which one seeks to establish the status or
right of a party, or a particular fact. Under rule 2 section 1 of the rules of court, an action
means an ordinary suit in a court of justice by which one party prosecutes another for
the enforcement or protection of a right. Also as cited in Francisco’s Civil procedure, a
suit is defined as the prosecution of pursuit of some claim or demand in a court of
justice or any proceeding in a court of justice in which a plaintiff pursues his remedy to
recover a right or claim.

It is therefore settled that the terms action and suit are synonymous. The
operative act is the filling of suit with a court of justice. Filled elsewhere, as with some
other body or office is not a court of justice. Furthermore, an action or suit is essentially
for the enforcement or protection of a right or the prevention or redress of a wrong and
that there is no law empowering the insurance commissioner to adjudicate on disputes
relating to insurance claim because such issues only the regular court of justice can
resolve.