Antido, Zyra Mae B.

3-B
02 October 2018
INSURANCE MAKE-UP QUIZ

1. The Insurance Commission is correct. In the case of Geagonia vs CA, the Supreme
Court held that the insurable interests of a mortgagor and a mortgagee on the
mortgaged property are distinct and separate, thus, there is no double insurance and
the non-disclosure of the prior policies obtained by the mortgagee was not fatal to the
right to recover of the mortgagor. In this case, the petitioner, despite knowledge of the
prior policies may still recover from the insurance company as no double insurance
exists and Condition 3 of the policy is actually amenable to assume a con-insurer’s
liability.

2. The petitioner’s contention is untenable. In one case decided by the Supreme Court, it
was held that where the insured who is primarily entitled to receive the proceeds of the
policy has by its fraud or misrepresentation, forfeited said right, the assignee/endorsee
claiming said right, cannot be entitled to such proceeds. In the present case, the
mortgage clause of the policy clearly states that fraud, misrepresentation, or arson of
the mortgagor or owner are exceptions to the general rule that insurance as to the
interest of the mortgagee cannot be invalidated. Thus, the petitioner cannot recover
the proceeds of the policy due to the fraud or misrepresentation of the insured which
avoided the policy.

3. The Court of Appeals is wrong. The Supreme Court consistently held in many cases
that a waiver must be express; if it is to be implied from the conduct mainly, said
conduct must be clearly indicative of a clear intent to waive such right, made with full
knowledge of the circumstances. In this case, the petitioner have not waived the formal
requirement of endorsing the policy of co-insurance which was violated by Oliva Yap,
thus, the latter cannot recover the value of the policy.

4. The contention of the petitioners will not prosper. The Supreme Court held in one case
that the knowledge of the insurer’s agents of the existence of any other insurance
policies acquired by the insured when such is required to be disclosed to the insurer is
not the notice that would estop the insurers from denying the claim. Thus, in the case
at bar, the petitioners’ claim that the insurer’s agent has knowledge of the existence of
the other insurance coverage and therefore will not avoid the policy despite the
absence of notice is untenable.

5. The appellee’s contention is correct. In insurance cases, settled is the rule that if, with
the knowledge of existence of other insurances which the insurer deemed violations of
the contract, it has preferred to continue the policy, its action amounts to a waiver of
the annulment of the contract. In the case at bar, the appellant, despite knowledge of
the existence of the other policies, continued to collect the increased premium. Thus,
the Yek Tong Lin Fire and Marine Insurance Co., is already estopped from denying the
claim.

6. The Fieldmen’s claim that cancellation of the principal reinsurance contracts or treaties
carried with it the termination of all reinsurance cessions thereunder has no merit. The
Supreme Court held in one case that when it was express by the agreement of the
parties to the reinsurance contracts or treaties that the liability of the reinsurer under
 any current cession which are not cancelled in the ordinary course of business shall
continue in full force until their expiry unless otherwise withdrawn. Thus, the
reinsurance cessions which exists prior to the termination of the principal reinsurance
with the Fieldmen’s shall still continue unless otherwise terminated.

7. The Court of Appeals is correct. Settled is the rule that in reinsurance cases, if a
property is insured and the owner receives the indemnity from the insurer, the insurer
is deemed subrogated to the rights of the insured against the wrongdoer. In the cash
at hand, the petitioner, Pioneer had reinsured its risk of liability under the surety bond
in favor of JDA and subsequently collected the proceeds. Thus, pioneer can no longer
recover from Lim as it already collected from the reinsurer the value of reinsurance
policy.

8. The petitioners’ arguments have no merit. The Supreme Court decided in one case
that though a shipper of cargo may have no control over the vessel, he has full control
in the choice of the common carrier that will transport his/her goods. Thus, in the case
decided by the Supreme Court, the petitioners’ contention that they have no control
over the vessel carrying the goods transported by them so as to determine its
seaworthiness is unfounded.

9. The trial court is correct. The Supreme Court in one of its decisions, distinguished
between ‘peril of the ship’ and ‘perils of the seas’ in marine insurance. Peril of the ship
refers to a loss which, in the ordinary course of events, results from the natural and
inevitable action 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 his ordinary conditions.
Perils of the sea includes only those casualties due to the unusual violence or
extraordinary action of wind and wave, or to other extraordinary causes connected with
navigation. The insurer in marine insurance, undertakes to insure against perils of the
sea and similar perils. In the case, the inflow of seawater during the voyage was due
to a defect in one of the drain pipes of the ship which is a peril of the ship. Thus, it
cannot be covered by the marine insurance policy.

10. The respondent insurance company is wrong in rejecting the claim. The Supreme
Court held in one case that an all risk insurance policy insures against all causes of
conceivable loss or damage, except as otherwise excluded in the policy or due to fraud
or intentional misconduct on the part of the insured. In the case at bar, the marine
insurance policy is an all risk policy and the damage caused to the cargo during its
transport has not been attributed to any of the exceptions provided for. Thus, the
respondent insurer is liable for the loss incurred by the petitioner.

11. The petitioner’s contention is untenable. The Supreme Court held in one of its decided
cases that an all risks policy must be given a broad and comprehensive meaning as
covering all losses by an accidental cause of any kind other than a willful and fraudulent
act of the insured. In the case at bar, the petitioner claims that an all risks marine policy
has a technical meaning in that for a loss to be compensable, such must be due to a
fortuitous event. Therefore, the contention of the petitioner is untenable.

12. Sulpicio’s argument has no merit. Under the Philippine Maritime laws, the charterer
has no liability for damages in a contract of affreightment or voyage charter which
leaves the general owner in possession of the ship as owner for the voyage. In the
given case, Caltex entered into a contract of voyage charter with MT Vector for the
 carriage of its petroleum products. Thus, Caltex cannot be held liable for damages
incurred by Sulpicio Lines, Inc. when MV Doa Paz, a passenger and cargo vessel
owned by it, collided with MV Vector.

13. The petitioner’s claims were untenable. The Supreme Court held that an “arrest”
caused by ordinary judicial process is deemed included among the covered risks of
the “Perils” Clause pursuant to the incorporation of subsection 1.1 of Section 1 of the
Institute War Clauses. In the case at bar, the petitioner claimed that the “Perils” Clause
only assumed the risk of arrest caused solely by executive or political acts of the
government of the seizing state. This claim of the petitioner is untenable.

14. Oriental Assurance is correct in refusing payment for the loss. In one case decided by
the Supreme Court, it was held that when the liability of the insurer is for total loss only,
the absence of either constructive or actual total loss, avoids the liability of the insurer.
In the case, the loss incurred by Panama is only 41.45% of the entire shipment. Thus,
there was no actual or constructive total loss which will entitle Panama to recover from
the policy in question.

15. The attached clause shall prevail. Settled is the rule that in case inconsistency exists
between written and printed portions of a policy, the written portion prevails. In the case
at bar, the policy contained typewritten rider which are inconsistent with the printed
policy. Thus, between the typed rider and the printed provisions of the policy, the
former shall prevail.