Set 1 Digest Prelims
Set 1 Digest Prelims
Set 1 Digest Prelims
Mich
3. (G.R. No. L-52756 October 12, 1987)
MANILA
MAHOGANY
MANUFACTURING
CORPORATION, petitioner, vs. COURT OF APPEALS AND
ZENITH INSURANCE CORPORATION, respondents.
May 6 1970 to March 6 1971, petitioner Manila Mahogany
Manufacturing Corporation insured its Mercedes Benz 4-door
sedan with respondent Zenith Insurance Corporation.
May 4 1970 the insured vehicle was bumped and damaged by a truck
owned by San Miguel Corporation which respondent insurance
company paid petitioner 5,000 in amicable settlement for the damage
caused.
Petitioner's general manager executed a Release of Claim,
subrogating respondent company to all its right to action against San
Miguel Corporation.
Thereafter, respondent company wrote Insurance Adjusters, Inc. to
demand reimbursement from San Miguel Corporation of the amount
it had paid petitioner but they refused reimbursement, alleging that
San Miguel had already paid petitioner P4,500.00 for the damages to
petitioner's motor vehicle, as evidenced by a cash voucher and a
Release of Claim executed by the General Manager of petitioner
discharging San Miguel from all actions and claims.
Respondent insurance company thus demanded from petitioner
reimbursement of the sum of P4,500.00 paid by San Miguel
Corporation. Petitioner refused; hence, respondent company filed suit
in the City Court of Manila for the recovery of P4,500.00. The court
ordered petitioner to pay respondent P4,500.00. On appeal the CFI
affirmed the City Court's decision.
PETITIONERS CONTENTION: it is not bound to pay P4,500.00,
and much more, P5,000.00 to respondent company as the subrogation
in the Release of Claim it executed in favor of respondent was
conditioned on recovery of the total amount of damages petitioner
had sustained. Since total damages were valued by petitioner at
P9,486.43 and only P5,000.00 was received by petitioner from
respondent, petitioner argues that it was entitled to go after San
Miguel Corporation to claim the additional P4,500.00 eventually paid
to it by the latter, without having to turn over said amount to
respondent. It cited Art. 2207 of the Civil Code, which states: If the
plaintiff's property has been insured, and he has received indemnity
from the insurance company for the injury or loss arising out of the
wrong or breach of contract complained of the insurance company
shall be subrogated to the rights of the insured against the
wrongdoer or the person who has violated the contract. If the amount
paid by the insurance company does not fully cover the injury or loss
the aggrieved party shall be entitled to recover the deficiency from
the person causing the loss or injury. It also invokes Art. 1304 of the
Civil Code, stating: A creditor, to whom partial payment has been
made, may exercise his right for the remainder, and he shall be
preferred to the person who has been subrogated in his place in
virtue of the partial payment of the same credit.
RESPONDENTS CONTENTION: It disputes this allegation and
states that there was no qualification to its right of subrogation under
the Release of Claim executed by petitioner, the contents of said deed
having expressed all the intents and purposes of the parties.
ISSUE: WON the petitioner has the alleged right not to return
the P4,500.00 paid by San Miguel Corporation.
RULING: NO
In the absence of any other evidence to support its allegation that a
gentlemen's agreement existed between it and respondent, not
embodied in the Release of Claim, such ease of Claim must be taken
as the best evidence of the intent and purpose of the parties.
Torres wrote to the Manila office of the company stating that Herrer
desired to withdraw his application.
The following day the local office replied to Mr. Torres, stating that
the policy had been issued, and called attention to the notification of
November 26, 1917. This letter was received by Mr. Torres on the
morning of December 21, 1917. Mr. Herrer died on December 20,
1917.
We hold that the contract for a life annuity in the case at bar
was not perfected because it has not been proved satisfactorily that
the acceptance of the application ever came to the knowledge of the
applicant.
Ada
the fact that the place he was in duty-bound to guard was only a block
away.
In volunteering to extend help under the situation, he might have
thought, rightly or wrongly, that to know the truth was in the interest
of his employer it being a matter that affects the security of the
neighborhood. No doubt there was some risk coming to him in
pursuing that errand, but that risk always existed it being inherent in
the position he was holding. He cannot therefore be blamed solely for
doing what he believed was in keeping with his duty as a watchman
and as a citizen. And he cannot be considered as making an arrest as
an officer of the law, as contended, simply because he went with the
traffic policeman, for certainly he did not go there for that purpose
nor was he asked to do so by the policeman. Much less can it be
pretended that Basilio died in the course of an assault or murder
considering the very nature of these crimes.
In the first place, there is no proof that the death of Basilio is the
result of either crime for the record is barred of any circumstance
showing how the fatal shot was fired. Nor can it be said that the
killing was intentional for there is the possibility that the malefactor
had fired the shot merely to scare away the people around for his own
protection and not necessarily to kill or hit the victim. In any event,
while the act may not exempt the triggerman from liability for the
damage done, the fact remains that the happening was a pure accident
on the part of the victim. The victim could have been either the
policeman or Atty. Ojeda for it cannot be pretended that the
malefactor aimed at the deceased precisely because he wanted to take
his life.
We take note that these defenses are included among the risks
excluded in the supplementary contract which enumerates the cases
which may exempt the company from liability. While as a general
rule "the parties may limit the coverage of the policy to certain
particular accidents and risks or causes of loss, and may expressly
except other risks or causes of loss therefrom" (45 C. J. S. 781-782),
however, it is to be desired that the terms and phraseology of the
exception clause be clearly expressed so as to be within the easy
grasp and understanding of the insured, for if the terms are doubtful
or obscure the same must of necessity be interpreted or resolved
against the one who has caused the obscurity. (Article 1377, new
Civil Code) And so it has been generally held that the "terms in an
insurance policy, which are ambiguous, equivocal, or uncertain . . .
are to be construed strictly and most strongly against the insurer, and
liberally in favor of the insured so as to effect the dominant purpose
of indemnity or payment to the insured, especially where a forfeiture
is involved" (29 Am. Jur., 181), and the reason for this rule is that the
"insured usually has no voice in the selection or arrangement of the
words employed and that the language of the contract is selected with
great care and deliberation by experts and legal advisers employed
by, and acting exclusively in the interest of, the insurance company."
(44 C. J. S., p. 1174.)
Insurance is, in its nature, complex and difficult for the layman to
understand. Policies are prepared by experts who know and can
anticipate the bearings and possible complications of every
contingency. So long as insurance companies insist upon the use of
ambiguous, intricate and technical provisions, which conceal rather
than frankly disclose, their own intentions, the courts must, in
fairness to those who purchase insurance, construe every ambiguity
in favor of the insured. (Algoe vs. Pacific Mut. L. Ins. Co., 91 Wash.
324, LRA 1917A, 1237.)
An insurer should not be allowed, by the use of obscure phrases and
exceptions, to defeat the very purpose for which the policy was
procured. (Moore vs. Aetna Life Insurance Co., LRA 1915D, 264.)
We are therefore persuaded to conclude that the circumstances
unfolded in the present case do not warrant the finding that the death
of the unfortunate victim comes within the purview of the exception
clause of the supplementary policy and, hence, do not exempt the
company from liability. Wherefore, reversing the decision appealed
from, we hereby order the company to pay petitioner-appellant the
amount of P2,000, with legal interest from January 26, 1951 until
fully paid, with costs.
Karlo
Facts:
In 1980, Rizal Insurance issued Fire Insurance Policy in favor of
Transworld initially for 1 M and eventually increased to 1.5M ,
covering the period from August 14, 1980 to March 13, 1981.
Pertinent portions of subject policy on the buildings insured, and
location thereof, read:
"On stocks of finished and/or unfinished products, raw
materials and supplies of every kind and description, the
properties of the Insureds and/or held by them in trust, on
commission or on joint account with others and/or for
which they (sic) responsible in case of loss whilst
contained and/or stored during the currency of this
Policyin the premises occupied by them forming part of
the buildings situate (sic) within own Compound
The same pieces of property insured with the petitioner were also
insured with New India Assurance Company
1981. Fire broke out in the compound of Transworld, razing the
middle portion of its four-span building and partly gutting the left and
right sections thereof. A two-storey building (behind said four-
storey building", formed part thereof, and meets the requisites for
compensability under the fire insurance policy sued upon.
So also, considering that the two-storey building aforementioned was
already existing when subject fire insurance policy contract was
entered into on January 12, 1981, having been constructed sometime
in 1978, petitioner should have specifically excluded the said twostorey building from the coverage of the fire insurance if minded to
exclude the same but if did not, and instead, went on to provide that
such fire insurance policy covers the products, raw materials and
supplies stored within the premises of respondent Transworld which
was an integral part of the four-span building occupied by
Transworld, knowing fully well the existence of such building
adjoining and intercommunicating with the right section of the fourspan building.
Franz
9. TAURUS TAXI CO., INC., FELICITAS V. MONJE, ET AL.,
plaintiffs-appellees, vs. THE CAPITAL INSURANCE &
SURETY CO., INC., defendant-appellant.
Facts:
Alfredo Monje, according to the complaint, was employed as taxi
driver by the plaintiff Taurus Taxi Co., Inc. On December 6, 1962, the
taxi he was driving collided with a Transport Taxicab at the
intersection of Old Sta. Mesa and V. Mapa Streets, Manila, resulting
in his death.
At the time of the accident, there was subsisting and in force
Commercial Vehicle Comprehensive Policy No. 101, 737 ... issued by
the defendant to the Taurus Taxi Co., Inc. The amount for which each
passenger, including the driver, is insured is P5,000.00. After the
issuance of policy No. 101, 737, the defendant issued the Taurus Taxi
Co., Inc. Indorsement No. 1 which forms part of the policy ...
Felicitas Monje, the widow of Alfredo, together with their children
but excluding the Taurus Taxi Co., Inc., being the plaintiff appellees,
demanded from the defendant the payment of the insurance benefit.
However, despite repeated demands, nothing was availed by the
former.
Defendants raised the defense that the heirs of the deceased are
disqualified from claiming for the indemnities which are supposed to
be provided by them since the latters insurance policy with the Taurus
Taxi provided that "the company will indemnify any authorized
driver provided that such authorized driver is not entitled to
indemnity under any other policy."
Defendants further alleged that because of such provision, the heirs
cannot receive any indemnity from them since the heirs of the
deceased actually received a separate indemnity from Ed. A. Keller
Co., Ltd., by virtue of Policy No. 50PH-1605 as evidenced by the
records of W.C.C. Case No. A88637 entitled "Felicitas V. Monje, et
al. vs. Taurus Taxi Co., Inc.", Regional Office No. 4, Department of
Labor, Manila ... " on December of 1962.
Such award was in the nature of a workmen's compensation by virtue
of The Workmen's Compensation Act which the deceased driver was
rightfully entitled and was settled by the employer through a policy
issued by another insurance firm. The Workmen's Compensation Act,
explicitly requires that an employee suffering any injury or death
arising out of or in the course of employment be compensated.
Issue: WON a provision in the insurance contract that defendantappellant will indemnify any authorized driver provided that [he] is
not entitled to any indemnity under any other policy. (it being shown
that the deceased was paid his workman's compensation from another
insurance policy, should defeat such a right to recover under the
insurance contract subject of this suit)
Held: Yes
The heirs of the deceased may still recover indemnities from the
defendant even if they have already recovered indemnity from other
insurance policy.
taking here was for a "joy ride" and "merely temporary in nature," a
"temporary taking is held not a taking insured against."
The insurer must therefore indemnify the petitioner-owner for the
total loss of the insured car under the theft clause of the policy.
Kang
11. FE DE JOYA LANDICHO, vs. GOVERNMENT SERVICE
INSURANCE SYSTEM,.
Facts:
On June 1, 1964, the GSIS issued in favor of FlavianoLandicho, a
civil engineer of the Bureau of Public Works. Optional additional life
insurance policy No. OG-136107.
Before the issuance of said policy, the insured had filed an
application, by filing and signing a printed form of the GSIS on the
basis of which the policy was issued.
While still under the employment of the Bureau of Public Works, Mr.
Landicho met his death, on June 29, 1966, in an airplane crash in
Mindoro. Thereupon, Mrs. Landicho, filed with the GSIS a claim for
P15,800, as the double indemnity due under policy No. OG-136107,
because of the untimely death of the insured owing to said accident.
The GSIS denied the claim, upon the ground that the policy had
never been in force because, pursuant to subdivision (e) of paragraph
7 of the application, the policy "shall be ... effective on the first day
of the month next following the month the first premium is paid," and
no premium had ever been paid on said policy.
In support of the affirmative, plaintiffs invoke the stipulation in the
policy that the application filed shall serve "as a letter of authority to
the Collecting Officer of our Office" the Bureau of Public Works
"thru the GSIS to deduct from my salary the monthly premium
and every month thereafter," and that "failure to deduct from my
salary the monthly premiums shall not make the policy lapse,
however,
the premium
account
shall be
considered
as indebtedness which, I" the insured "bind myself to pay the
System."
The Court of First Instance of Manila, rendered in due course its
decision ordering GSIS to pay plaintiffs, from which the GSIS has
taken the present appeal.
Issue: WON the insurance policy in question has ever been in force
Ruling: YES
The actual receipt by them of their full pay without any deduction
for premiums on their optional additional life insurance policies
may not impart to them the warning which, otherwise, it would
necessarily convey that said policy is not, as yet, in force, for they
are liable to believe "that failure to deduct" from the salary of the
insured "the monthly premiums shall not" in the language of
subdivision (d) "make the policy lapse" and that "the premiums
account shall be considered as indebtedness," to be paid or deducted
later, because, after all, the so called "payment" of premiums is
nothing but a "paper" or "accounting" process, whereby funds are
merely transferred, not physically, but constructively, from one office
of the government to another. In other words, the language, of
subdivisions (c), (d) and (e) is such as to create an ambiguity that
should be resolved against the party responsible therefor
defendant GSIS, as the party who prepared and furnished the
application form and in favor of the party misled thereby, the
insured employee.