FINMAN GENERAL ASSURANCE CORPORATION v. CA, GR No.
100970, 1992-09-02 principle of "expresso unius exclusio alterius" -- the mention of one thing implies the exclusion
Facts:
October 22, 1986, deceased Carlie Surposa was insured with petitioner Finman General
Assurance Corporation under Finman General Teachers Protection Plan Master Policy No. 2005
and Individual Policy No. 08924 with his parents, spouses
Julia and Carlos Surposa and brothers Christopher, Charles, Chester and Clifton, all surnamed
Surposa, as beneficiaries.
While said insurance policy was in full force and effect, the insured Carlie Surposa, died on
October 18, 1988 as a result of a stab wound inflicted by one of the three (3) unidentified men
without provocation and warning on the part of the former as... he and his cousin, Winston
Surposa, were waiting for a ride on their way home along Rizal-Locsin Streets, Bacolod City
after attending the celebration of the "Maskarra Annual Festival."... private respondent and
the other beneficiaries of said insurance policy filed a written notice of claim with the
petitioner insurance company which denied said claim contending that murder and assault are
not within the scope of the coverage of the insurance... policy.
Insurance Commission ruled in favor of insured/beneficiaries
On February 24, 1989, private respondent filed a complaint with the Insurance Commission
"In the light of the foregoing, we find respondent liable to pay complainant the sum of
P15,000.00 representing the proceeds of the policy with interest. As no evidence was
submitted to prove the claim for mortuary aid in the sum of P1,000.00, the same... cannot be
entertained.
On July 11, 1991, the appellate court affirmed said decision.
petitioner filed this petition alleging grave abuse of discretion on the part of the appellate court
in applying the principle of "expresso unius exclusion alterius" in a personal accident insurance
policy... since death resulting from murder and/or assault are impliedly excluded in said
insurance policy considering that the cause of death of the insured was not accidental but
rather a deliberate and intentional act of the assailant in killing the former as indicated by the
location... of the lone stab wound on the insured.
Therefore, said death was committed with deliberate intent which, by the very nature of a
personal accident insurance policy, cannot be indemnified.
Issues:
WON the death of the insured was committed...... with deliberate intent which, by the
very nature of a personal accident insurance policy, cannot be indemnified
Ruling:
We do not agree. In the case at bar, it cannot, be pretended that Carlie Surposa died in the
course of an assault or murder as a result of his voluntary act considering the very nature of
these crimes.
the personal accident insurance policy, involved herein specifically enumerated only ten (10)
circumstances wherein no liability attaches to petitioner insurance company for any injury,
disability or loss suffered by the insured as a result of any of the... stipulated causes. The
of another thing -- is therefore applicable in the instant case since murder and assault, not
having been expressly included in the enumeration of the... circumstances that would negate
liability in said insurance policy cannot be considered by implication to discharge the petitioner
insurance company from liability for any injury, disability Or loss suffered by the insured.
Thus, the failure of the petitioner insurance company... to include death resulting from murder
or assault among the prohibited risks leads inevitably to the conclusion that it did not intend
to limit or exempt itself from liability for such death.
Principles:
The terms 'accident' and 'accidental', as used in insurance contracts have not acquired any
technical meaning, and are construed by the courts in their ordinary and common acceptation.
Thus, the terms have been taken to mean that which happen by chance or... fortuitously,
without intention and design, and which is unexpected, unusual, and unforeseen. An accident
is an event that takes place without one's foresight or expectation -- an event that proceeds
from an unknown cause, or is an unusual effect of a known cause and, therefore,... not
expected."
The generally accepted rule is that, death or injury does not result from accident or accidental
means within the terms of an accident-policy if it is the natural result of the insured's voluntary
act, unaccompanied by anything unforeseen except the death or... injury.
Zenith Insurance Corporation v. CA
G.R. No. 85296 May 14, 1990
J. Medialdea
Doctrine: It is clear that under the Insurance Code, in case of unreasonable delay in the
payment of the proceeds of an insurance policy, the damages that may be awarded are: 1)
attorney's fees; 2) other expenses incurred by the insured person by reason of such
unreasonable denial or withholding of payment; 3) interest at twice the ceiling prescribed by
the Monetary Board of the amount of the claim due the injured; and 4) the amount of the
claim.
Facts: On January 25, 1983, private respondent Lawrence Fernandez insured his car for "own
damage" with petitioner Zenith Insurance Corporation. On July 6, 1983, the car figured in an
accident and suffered actual damages in the amount of P3,640. After allegedly being given a
run around by Zenith for two months, Fernandez filed a complaint with the Regional Trial Court
of Cebu for sum of money and damages resulting from the refusal of Zenith to pay the amount
claimed. Aside from actual damages and interests, Fernandez also prayed for moral damages
in the amount of P10,000.00, exemplary damages of P5,000.00, attorney's fees of P3,000.00
and litigation expenses of P3,000.00.
On September 28, 1983, Zenith filed an answer alleging that it offered to pay the claim of
Fernandez pursuant to the terms and conditions of the contract which, the private respondent
rejected. On June 4, 1986, a decision was rendered by the trial court in favor of private
respondent Fernandez. On August 17, 1988, the Court of Appeals rendered its decision
affirming in toto the decision of the trial court.
Issue: Whether or not the Court of Appeals had legal basis in awarding more than the amount
prayed for in the complaint?
Held: The award of damages in case of unreasonable delay in the payment of insurance claims
is governed by the Philippine Insurance Code, which provides:
Sec. 244. In case of any litigation for the enforcement of any policy or contract of insurance, it
shall be the duty of the Commissioner or the Court, as the case may be, to make a finding as
to whether the payment of the claim of the insured has been unreasonably denied or withheld;
and in the affirmative case, the insurance company shall be adjudged to pay damages which
shall consist of attorney's fees and other expenses incurred by the insured person by reason of
such unreasonable denial or withholding of payment plus interest of twice the ceiling
prescribed by the Monetary Board of the amount of the claim due the insured, from the date
following the time prescribed in section two hundred forty-two or in section two hundred
forty-three, as the case may be, until the claim is fully satisfied; Provided, That the failure to
pay any such claim within the time prescribed in said sections shall be considered prima facie
evidence of unreasonable delay in payment.
It is clear that under the Insurance Code, in case of unreasonable delay in the payment of the
proceeds of an insurance policy, the damages that may be awarded are: 1) attorney's fees; 2)
other expenses incurred by the insured person by reason of such unreasonable denial or
withholding of payment; 3) interest at twice the ceiling prescribed by the Monetary Board of
the amount of the claim due the injured; and 4) the amount of the claim.
In the instant case, there was a finding that private respondent was given a “run-around” for
2 months which is the basis for the award of the damages granted under the Insurance Code
for unreasonable delay in the payment of the claim. However, such delay is not so wanton as
to justify an award of P20,000 as moral damages. The amount awarded as attorney’s fees and
actual damages were justified under the circumstances, but respondent court correctly ruled
that the deductions claimed by petitioners as agreed upon in the contract had no basis. The
appealed decision is modified.
Sun v CA G.R. No. 89741 March 13, 1991
J. Paras
Facts: Tan took from Sun Insurance a Php 300,000 policy to cover his electrical store in Iloilo
city. Tan’s request for an indemnity in 1983 was repeatedly denied, firstly in 1984. He wrote
for a reconsideration in the same year. This was rejected in 1985, prompting him to file a civil
case in the same year. The insurance company filed a motion to dismiss due to prescription in
1987, but this was denied. The company went to the court of appeals to petition the same
thing, but this was denied.
Issue: 1. WON the filing of a motion for reconsideration interrupts the twelve months
prescriptive period to contest the denial of the insurance claim.
2. WON the rejection of the claim shall be deemed final only if it contains words to the effect
that denial is final. (ie. the first letter in 1984)
3. When does the cause of action accrue?
Held: 1.No 2.No 3. At the time of the first rejection of the insurance company
Ratio: 1. The policy states in section 27.
Action or suit clause — If a claim be made and rejected and an action or 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
provided herein, within twelve (12) months after due notice of the award made by the
arbitrator or arbitrators or umpire, then the claim shall for all purposes be deemed to have
been abandoned and shall not thereafter be recoverable hereunder.
Respondent Tan admitted that he received a copy of the letter of rejection on April 2, 1984.
Thus, the 12-month prescriptive period started to run from the said date of April 2, 1984, under
section 27.
2. It was clear in the letter.
Ang v. Fulton Fire Insurance Co.- The condition contained in an insurance policy that claims
must be presented within one year after rejection is not merely a procedural requirement but
an important matter essential to a prompt settlement of claims against insurance companies
as it demands that insurance suits be brought by the insured while the evidence as to the origin
and cause of destruction have not yet disappeared.
Therefore, there was a necessity of bringing suits against the Insurer within one year from the
rejection of the claim. (1984) The contention of the respondents that the one-year prescriptive
period does not start to run until the petition for reconsideration had been resolved by the
insurer (1985), runs counter to the doctrine.
The provision in the contract was pursuant to Sec. 63.
A condition, stipulation or agreement in any policy of insurance, limiting the time for
commencing an action thereunder to a period of less than one year from the time when the
cause of action accrues, is void.
3. Eagle star- The right of the insured to the payment of his loss accrues from the happening of
the loss. However, the cause of action in an insurance contract does not accrue until the
insured's claim is finally rejected by the insurer. This is because before such final rejection there
is no real necessity for bringing suit.
The cause of action, then, started when the insurer denied his claim in the first instance(1984).
This rejection of a petition for reconsideration as insisted by respondents wasn’t the beginning
of the cause of action.
Villacorta v. Insurance Commission
G.R. No. L-54171, 28 October 1980, 100 SCRA 467
FACTS:
Villacorta had her Colt Lancer car insured with Empire Insurance Company against own
damage, theft and 3rdparty liability. While the car was in the repair shop, one of the employees
of the said repair shop took it out for a joyride after which it figured in a vehicular accident.
This resulted to the death of the driver and some of the passengers as well as to extensive
damage to the car. Villacorta filed a claim for total loss with the said insurance company.
However, it denied the claim on the ground that the accident did not fall within the provisions
of the policy either for the Own Damage or Theft coverage, invoking the policy provision on
“Authorized Driver Clause”. This was upheld by the Insurance Commission further stating that
the car was not stolen and therefore not covered by the Theft Clause because it is not evident
that the person who took the car for a joyride intends to permanently deprive the insured of
his/ her car.
ISSUE:
Whether or not the insurer company should pay the said claim.
HELD:
Yes. Where the insured’s car is wrongfully taken without the insured’s consent from the car
service and repair shop to whom it had been entrusted for check-up and repairs (assuming that
such taking was for a joy ride, in the course of which it was totally smashed in an accident),
respondent insurer is liable and must pay insured for the total loss of the insured vehicle under
the Theft Clause of the policy.
Assuming, despite the totally inadequate evidence, that the taking was “temporary” and for a
“joy ride”, the Court sustains as the better view that which holds that when a person, either
with the object of going to a certain place, or learning how to drive, or enjoying a free ride,
takes possession of a vehicle belonging to another, without the consent of its owner, he is
guilty of theft because by taking possession of the personal property belonging to another and
using it, his intent to gain is evident since he derives therefrom utility, satisfaction, enjoyment
and pleasure.
ACCORDINGLY, the appealed decision is set aside and judgment is hereby rendered sentencing
private respondent to pay petitioner the sum of P35,000.00 with legal interest from the filing
of the complaint until full payment is made and to pay the costs of suit.
ANDREW PALERMO, plaintiff-appellee, vs. PYRAMID INSURANCE CO., INC., defendant-
appellant.
G.R. No. L-36480 May 31, 1988 ANDREW PALERMO, plaintiff-appellee, vs. PYRAMID
INSURANCE CO., INC., defendant- appellant.
FACTS:
On March 7, 1969, the insured, appellee Andrew Palermo, filed a complaint in the Court of First
Instance of Negros Occidental against Pyramid Insurance Co., Inc., for payment of his claim
under a Private Car Comprehensive Policy MV-1251 issued by the defendant (Exh. A). In its
answer, the appellant Pyramid Insurance Co., Inc., alleged that it disallowed the claim because
at the time of the accident, the insured was driving his car with an expired driver's license.
After the trial, the court a quo rendered judgment on October 29, 1969 ordering the defendant
"to pay the plaintiff the sum of P20,000.00, value of the insurance of the motor vehicle in
question and to pay the costs." On November 26, 1969, the plaintiff filed a "Motion for
Immediate Execution Pending Appeal." It was opposed by the defendant, but was granted by
the trial court on December 15, 1969.
ISSUE: WON plaintiff was not authorized to drive the insured motor vehicle because his driver's
license had expired.
RULING:
There is no merit in the appellant's allegation that the plaintiff was not authorized to drive the
insured motor vehicle because his driver's license had expired. The driver of the insured motor
vehicle at the time of the accident was, the insured himself, hence an "authorized driver" under
the policy. While the Motor Vehicle Law prohibits a person from operating a motor vehicle on
the highway without a license or with an expired license, an infraction of the Motor Vehicle
Law on the part of the insured, is not a bar to recovery under the insurance contract. It however
renders him subject to the penal sanctions of the Motor Vehicle Law. The requirement that the
driver be "permitted in accordance with the licensing or other laws or regulations to drive the
Motor Vehicle and is not disqualified from driving such motor vehicle by order of a Court of
Law or by reason of any enactment or regulation in that behalf," applies only when the driver"
is driving on the insured's order or with his permission." It does not apply when the person
driving is the insured himself.
PERLA COMPANIA DE SEGUROS v. CA, GR No. 78860, 1990-05-28
Facts: Private respondent Milagros Cayas was the registered owner of a Mazda bus with serial
no. TA3H4 P-000445 and plate no. PUB-4G-593.[4] Said passenger vehicle was insured with
Perla Compania de Seguros, Inc. (PCSI) under policy no. LT0/60CC-04241 issued on February 3,
1978. On December 17, 1978, the bus figured in an accident in Naic, Cavite injuring several of
its passengers. One of them, 19--year-old Edgardo Perea, sued Milagros Cayas for damages in
the Court... of First Instance of Cavite, Branch I[6] docketed as Civil Case No. NC-794; while
three others, namely: Rosario del Carmen, Ricardo Magsarili and Charlie Antolin, agreed to...
a settlement of P4,000.00 each with Milagros Cayas.
Issues: Petitioner seeks to limit its liability only to the payment made by private respondent to
Perea and only up to the amount of P12,000.00. It altogether denies liability for the payments
made by private... respondents to the other three (3) injured passengers Rosario del Carmen,
Ricardo Magsarili and Charlie Antolin in the amount of P4,000.00 each or a total of P12,000.00.
Ruling: In the case at bar, the insurance policy clearly and categorically placed petitioner's
liability for all damages arising out of death or bodily injury sustained by one person as a result
of any one accident at P12,000.00. Said amount complied with... the minimum fixed by the law
then prevailing, Section 377 of Presidential Decree No. 612 (which was retained by P.D. No.
1460, the Insurance Code of 1978), which provided that the liability of land transportation
vehicle... operators for bodily injuries sustained by a passenger arising out of the use of their
vehicles shall not be less than P12,000. In other words, under the law, the minimum liability is
P12,000 per passenger. Petitioner's liability under the insurance contract not being less than
P12,000.00, and therefore not contrary to law, morals, good customs, public order or public
policy, said stipulation must be upheld as effective, valid and binding as between the... parties.
It being specifically required that petitioner's written consent be first secured before any
payment in settlement of any claim could be made, private respondent is precluded from
seeking reimbursement of the payments made to del Carmen, Magsarili... and Antolin in view
of her failure to comply with the condition contained in the insurance policy. Clearly, the
fundamental principle that contracts are respected as the law between the contracting parties
finds application in the present case.[17] Thus, it was error on the part of the trial and appellate
courts to have... disregarded the stipulations of the parties and to have substituted their own
interpretation of the insurance policy. The first and fundamental duty of the courts is the
application of the law according to... its express terms, interpretation being called for only
when such literal application is impossible.
Principles:
contracts which are the private laws of the contracting parties should be fulfilled according to
the literal sense of their stipulations, if their terms are clear and... leave no room for doubt as
to the intention of the contracting parties, for contracts are obligatory, no matter what form
they may be, whenever the essential requisites for their validity are present.
Geagonia v CA G.R. No. 114427 February 6, 1995
Facts:
Geagonia, owner of a store, obtained from Country Bankers fire insurance policy for
P100,000.00. The 1 year policy and covered thestock trading of dry goods. The policy noted the
requirement that "3. The insured shall give notice to the Company of any insurance or
insurances already effected, or which may subsequently be effected, covering any of the
property or properties consisting of stocks in trade, goods in process and/or inventories only
hereby insured, and unless notice be given and the particulars of such insurance or insurances
be stated therein or endorsed in this policy pursuant to Section 50 of the Insurance Code, by
or on behalf of the Company before the occurrence of any loss or damage, all benefits under
this policy shall be deemed forfeited, provided however, that this condition shall not apply
when the total insurance or insurances in force at the time of the loss or damage is not more
than P200,000.00." The petitioners’ stocks were destroyed by fire. He then filed a claim which
was subsequently denied because the petitioner’s stocks were covered by two other fire
insurance policies for Php 200,000 issued by PFIC. The basis of the private respondent's denial
was the petitioner's alleged violation of Condition 3 of the policy. Geagonia then filed a
complaint against the private respondent in the Insurance Commission for the recovery of
P100,000.00 under fire insurance policy and damages. He claimed that he knew the existence
of the other two policies. But, he said that he had no knowledge of the provision in the private
respondent's policy requiring him to inform it of the prior policies and this requirement was
not mentioned to him by the private respondent's agent. The Insurance Commission found
that the petitioner did not violate Condition 3 as he had no knowledge of the existence of the
two fire insurance policies obtained from the PFIC; that it was Cebu Tesing Textiles w/c
procured the PFIC policies w/o informing him or securing his consent; and that Cebu Tesing
Textile, as his creditor, had insurable interest on the stocks. The Insurance Commission then
ordered the respondent company to pay complainant the sum of P100,000.00 with interest
and attorney’s fees. CA reversed the decision of the Insurance Commission because it found
that the petitioner knew of the existence of the two other policies issued by the PFIC.
Issues:
1. WON the petitioner had not disclosed the two insurance policies when he obtained the fire
insurance and thereby violated Condition 3 of the policy.
2. WON he is prohibited from recovering
Held: Yes. No. Petition Granted
Ratio:
1. The court agreed with the CA that the petitioner knew of the prior policies issued by the
PFIC. His letter of 18 January 1991 to the private respondent conclusively proves this
knowledge. His testimony to the contrary before the Insurance Commissioner and which the
latter relied upon cannot prevail over a written admission made ante litem motam. It was,
indeed, incredible that he did not know about the prior policies since these policies were not
new or original.
2. Stated differently, provisions, conditions or exceptions in policies which tend to work a
forfeiture of insurance policies should be construed most strictly against those for whose
benefits they are inserted, and most favorably toward those against whom they are intended
to operate. With these principles in mind, Condition 3 of the subject policy is not totally free
from ambiguity and must be meticulously analyzed. Such analysis leads us to conclude that (a)
the prohibition applies only to double insurance, and (b) the nullity of the policy shall only be
to the extent exceeding P200,000.00 of the total policies obtained. Furthermore, by stating
within Condition 3 itself that such condition shall not apply if the total insurance in force at the
time of loss does not exceed P200,000.00, the private respondent was amenable to assume a
co-insurer's liability up to a loss not exceeding P200,000.00. What it had in mind was to
discourage over-insurance. Indeed, the rationale behind the incorporation of "other
insurance" clause in fire policies is to prevent over-insurance and thus avert the perpetration
of fraud. When a property owner obtains insurance policies from two or more insurers in a
total amount that exceeds the property's value, the insured may have an inducement to
destroy the property for the purpose of collecting the insurance. The public as well as the
insurer is interested in preventing a situation in which a fire would be profitable to the insured.
Edillon v. Manila Bankers Life
G.R. No. L-34200, 30 September 1982, 117 SCRA 187
FACTS:
In April 1969, Carmen Lapuz filled out an application form for insurance under Manila Banker
Life Assurance Corporation. She stated that her date of birth was July 11, 1904. Upon payment
of the Php 20.00 premium, she was issued the insurance policy in April 1969. In May 1969,
Carmen Lapuz died in a vehicular accident. Regina Edillon, who was named a beneficiary in the
insurance policy sought to collect the insurance proceeds but Manila Banker denied the claim.
Apparently, it is a rule of the insurance company that they were not to issue insurance policies
to “persons who are under the age of sixteen (16) years of age or over the age of sixty (60)
years …” Note, that Lapuz was already 65 years old when she was applying for the insurance
policy.
ISSUE:
Whether or not Edillon is entitled to the insurance claim as a beneficiary.
HELD:
Yes. Carmen Lapuz did not conceal her true age. Despite this, the insurance company still
received premium from Lapuz and issued the corresponding insurance policy to her. When the
accident happened, the insurance policy has been in force for 45 days already and such time
was already sufficient for Manila Banker to notice the fact that Lapuz is already over 60 years
old and thereby cancel the insurance policy. If Manila Banker failed to act, it is either because
it was willing to waive such disqualification; or, through the negligence or incompetence of its
employees for which it has only itself to blame, it simply overlooked such fact. Under the
circumstances, Manila Banker is already deemed in estoppel.
Perla v CA G.R. No. 96452 May 7, 1992
Facts:
The Lim spouses opened a chattel mortgage and bought a Ford Laser from Supercars for Php
77,000 and insured it with Perla Compania de Seguros. The vehicle was stolen while Evelyn Lim
was driving it with an expired license. The spouses requested for a moratorium on payments
but this was denied by FCP, the assignee of rights over collection of the mortgage amount of
the car. The spouses also called on the insurance company to pay the balance of the mortgage
due to theft but this was denied by the company due to the spouses’ violation of the
Authorized Driver clause stating (driving with an expired license before being carnapped):
Any of the following: (a) The Insured (b) Any person driving on the Insured's order, or with his
permission. Provided that the person driving is permitted, in accordance with the licensing or
other laws or regulations, to drive the Scheduled Vehicle, or has been permitted and is not
disqualified by order of a Court of Law or by reason of any enactment or regulation in that
behalf.
Since the spouses didn’t pay the mortgage, FCP filed suit against them. The trial court ruled in
its favor ordering spouses to pay. The appellate court reversed their decision. FCP and Perla
appealed to the SC.
Issues: 1.Was there grave abuse of discretion on the part of the appellate court in holding that
private respondents did not violate the insurance contract because the authorized driver
clause is not applicable to the "Theft" clause of said Contract?
2. Whether or not the loss of the collateral exempted the debtor from his admitted obligations
under the promissory note particularly the payment of interest, litigation expenses and
attorney's fees.
Held: No, No. Petition dismissed.
Ratio:
1. The car was insured against a malicious act such as theft. Therefore the “Theft” clause in the
contract should apply and not the authorized driver clause. The risk against accident is different
from the risk against theft.
The appellate court stated: The "authorized driver clause" in a typical insurance policy is in
contemplation or anticipation of accident in the legal sense in which it should be understood,
and not in contemplation or anticipation of an event such as theft. The distinction — often
seized upon by insurance companies in resisting claims from their assureds — between death
occurring as a result of accident and death occurring as a result of intent may, by analogy, apply
to the case at bar.
There was no connection between valid possession of a license and the loss of a vehicle. Ruling
in a different way would render the policy a sham because the company can then easily cite
restrictions not applicable to the claim.
2. The Supreme Court stated:
“The chattel mortgage constituted over the automobile is merely an accessory contract to the
promissory note. Being the principal contract, the promissory note is unaffected by whatever
befalls the subject matter of the accessory contract. Therefore, the unpaid balance on the
promissory note should be paid, and not just the installments due and payable before the
automobile was carnapped, as erronously held by the Court of Appeals.”
The court, however, construed the insurance, chattel mortgage, and promissory note as
interrelated contracts, hence eliminating the payment of interests, litigation expenses, and
attorney’s fees stated in the promissory note. The promissory note required securing a chattel
mortage which in turn required opening an insurance contract. The insurance was made as an
accessory to the principal contract, making sure that the value in the promissory note will be
paid even if the car was lost. The insurance company promised to pay FCP for loss or damage
of the property.
CA didn’t err in requiring Perla to pay the spouses, but the spouses must pay FCP for the
balance in the note.
Aisporna v CA (DIGEST)
Aisporna v Court of Appeals and the People of the Philippines
G.R. No. L-39419 12 April 1982
TOPIC: Statutory Construction, Doctrine of Associated Words (Noscitur a Sociis)
FACTS: Petitioner Aisporna was charged for violation of Section 189 of the Insurance Act.
Petitioner’s husband, Rodolfo S. Aisporna (Rodolfo) was duly licensed by the Insurance
Commission as agent to Perla Compania de Seguros. Thru Rodolfo, a 12- month Personal
Accident Policy was issued by Perla with beneficiary to Ana M. Isidro for P50,000. The insured
died by violence during lifetime of policy. Subsequently, petitioner was charged because the
aforementioned policy was issued with her active participation, which is not allowed because
she did not possess a certificate of authority to act as agent from the office of the Insurance
Commission. Petitioner contended that being the wife of Rodolfo, she naturally helped him in
his work, and that the policy was merely a renewal and was issued because her husband was
not around when Isidro called by telephone. Instead, appellant left a note on top of her
husband’s desk. The trial court found petitioner guilty as charged. On appeal, the trial court’s
decisions was affirmed by respondent appellate court, finding petitioner guilty of a violation of
the first paragraph of Sec 189 of the insurance act.
ISSUE:
Whether or not a person can be convicted of having violated the first paragraph of Section 189
of the Insurance Act without reference to the second paragraph of the same section.
RULING: The petition is meritorious. Petition appealed from is reversed, and accused is
acquitted of the crime charged. A perusal of the provision in question shows that the first
paragraph thereof prohibits a person from acting as agent, sub-agent or broker in the
solicitation or procurement of applications for insurance without first procuring a certificate of
authority so to act from the Insurance Commissioner, while its second paragraph defines who
an insurance agent is within the intent of this section and, finally, the third paragraph thereof
prescribes the penalty to be imposed for its violation. The definition of an insurance agent as
found in the second paragraph of Section 189 is intended to define the word “agent”
mentioned in the first and second paragraphs of the aforesaid section. More significantly, in
its second paragraph, it is explicitly provided that the definition of an insurance agent is within
the intent of Section 189. Applying the definition of an insurance agent in the second paragraph
to the agent mentioned in the first and second paragraphs would give harmony to the
aforesaid three paragraphs of Section 189. Legislative intent must be ascertained from a
consideration of the statute as a whole. The particular words, clauses and phrases should not
be studied as detached and isolated expressions, but the whole and every part of the statute
must be considered in fixing the meaning of any of its parts and in order to produce
harmonious whole. A statute must be so construed as to harmonize and give effect to all its
provisions whenever possible. More importantly the doctrine of associated words (Noscitur a
Sociis) provides that where a particular word or phrase in a statement is ambiguous in itself or
is equally susceptible of various meanings, its true meaning may be made clear and specific by
considering the company in which it is found or with which it is associated. Considering that
the definition of an insurance agent as found in the second paragraph is also applicable to the
agent mentioned in the first paragraph, to receive compensation by the agent is an essential
element for a violation of the first paragraph of the aforesaid section.
In the case at bar, the information does not allege that the negotiation of an insurance
contracts by the accused with Eugenio Isidro was one for compensation. This allegation is
essential, and having been omitted, a conviction of the accused could not be sustained. It is
well-settled in Our jurisprudence that to warrant conviction, every element of the crime must
be alleged and proved.
The accused did not violate Section 189 of the Insurance Act.
White Gold Marine Services Inc. v Pioneer Insurance & Surety Corporation (Insurance)
[G.R. No. 154514. July 28, 2005]
WHITE GOLD MARINE SERVICES, INC., petitioner, vs. PIONEER INSURANCE AND SURETY
CORPORATION AND THE STEAMSHIP MUTUAL UNDERWRITING ASSOCIATION (BERMUDA)
LTD., respondents.
FACTS:
White Gold Marine Services, Inc. (White Gold) procured a protection and indemnity coverage
for its vessels from The Steamship Mutual Underwriting Association (Bermuda) Limited
(Steamship Mutual) through Pioneer Insurance and Surety Corporation (Pioneer).
Subsequently, White Gold was issued a Certificate of Entry and Acceptance. Pioneer also issued
receipts evidencing payments for the coverage. When White Gold failed to fully pay its
accounts, Steamship Mutual refused to renew the coverage.
Steamship Mutual thereafter filed a case against White Gold for collection of sum of money to
recover the latter’s unpaid balance.
DECISION OF LOWER COURTS:
(1) Insurance Commissioner: dismissed the complaint. There was no violation of the Insurance
Code and the respondents do not need license as insurer and insurance agent/broker because
it was not engaged in the insurance business. It explained that Steamship Mutual was a
Protection and Indemnity Club (P & I Club). Moreover, Pioneer was already licensed, hence, a
separate license solely as agent/broker of Steamship Mutual was already superfluous.
(2) CA: affirmed Insurance Commissioner.
ISSUES:
(1) Is Steamship Mutual, a P & I Club, engaged in the insurance business in the Philippines? (2)
Does Pioneer need a license as an insurance agent/broker for Steamship Mutual?
RULING:
(1) Yes. To continue doing business here, Steamship Mutual or through its agent Pioneer, must
secure a license from the Insurance Commission.
Since a contract of insurance involves public interest, regulation by the State is necessary. Thus,
no insurer or insurance company is allowed to engage in the insurance business without a
license or a certificate of authority from the Insurance Commission.
The parties admit that Steamship Mutual is a P & I Club. Steamship Mutual admits it does not
have a license to do business in the Philippines although Pioneer is its resident agent. This
relationship is reflected in the certifications issued by the Insurance Commission.
It cites the definition of a P & I Club in Hyopsung Maritime Co., Ltd. v. Court of Appeals as “an
association composed of shipowners in general who band together for the specific purpose of
providing insurance cover on a mutual basis against liabilities incidental to shipowning that the
members incur in favor of third parties.”
The test to determine if a contract is an insurance contract or not, depends on the nature of
the promise, the act required to be performed, and the exact nature of the agreement in the
light of the occurrence, contingency, or circumstances under which the performance becomes
requisite. It is not by what it is called.
Relatedly, a mutual insurance company is a cooperative enterprise where the members are
both the insurer and insured. In it, the members all contribute, by a system of premiums or
assessments, to the creation of a fund from which all losses and liabilities are paid, and where
the profits are divided among themselves, in proportion to their interest. Additionally, mutual
insurance associations, or clubs, provide three types of coverage, namely, protection and
indemnity, war risks, and defense costs. A P & I Club is “a form of insurance against third party
liability, where the third party is anyone other than the P & I Club and the members.” By
definition then, Steamship Mutual as a P & I Club is a mutual insurance association engaged in
the marine insurance business.
(2) Yes. Although Pioneer is already licensed as an insurance company, it needs a separate
license to act as insurance agent for Steamship Mutual. Section 299 of the Insurance Code
clearly states:
SEC. 299 . . .
No person shall act as an insurance agent or as an insurance broker in the solicitation or
procurement of applications for insurance, or receive for services in obtaining insurance, any
commission or other compensation from any insurance company doing business in the
Philippines or any agent thereof, without first procuring a license so to act from the
Commissioner, which must be renewed annually on the first day of January, or within six
months thereafter.