DBP POOL OF ACCREDITED INSURANCE COMPANIES, Petitioner,

vs.
RADIO MINDANAO NETWORK, INC., Respondent.

Facts:
In the evening of July 27, 1988, the radio station of Radio Mindanao Network located at the SSS
Building in Bacolod City was burned down causing damage in the amount of over one million pesos.
Respondent sought to recover under two insurance policies but the claims were denied on the basis
that the case of the loss was an excepted risk under condition no. 6 (c) and (d), to wit:
6. This insurance does not cover any loss or damage occasioned by or through or in consequence,
directly or indirectly, of any of the following consequences, namely:
(c) War, invasion, act of foreign enemies, hostilities, or warlike operations (whether war be declared
or not), civic war.
(d) Mutiny, riot, military or popular uprising, insurrection, rebellion, revolution, military or usurped
power.
The insurers maintained that based on witnesses and evidence gathered at the site, the fire was
caused by the members of the Communist Party of the Philippines/New Peoples Army. Hence the
refusal to honor their obligations.
The trial court and the CA found in favor of the respondent. In its findings, both courts mentioned the
fact that there was no credible evidence presented that the CCP/NPA did in fact cause the fire that
gutted the radio station in Bacolod.
Issue:
WON the insurance companies are liable to pay Radio Mindanao Network under the insurance
policies?
Held: Yes.
The Court will not disturb the factual findings of the appellant and trial courts absent compelling
reason. Under this mode of review, the jurisdiction of the court is limited to reviewing only errors of
law.
Particularly in cases of insurance disputes with regard to excepted risks, it is the insurance
companies which have the burden to prove that the loss comes within the purview of the exception or
limitation set up. It is sufficient for the insured to prove the fact of damage or loss. Once the insured
makes out a prima facie case in its favor, the duty or burden of evidence shifts to the insurer to
controvert said prima facie case.
Disposition Petition dismissed. Decision of the CA is affirmed.

AMERICAN HOME ASSURANCE COMPANY, petitioner,

vs.
TANTUCO ENTERPRISES, INC., respondent.

INSURANCE LAW: Liberality is the rule of construction in insurance contracts.

FACTS:
Tantuco Enterprises, Inc. is a coconut oil milling and refining company. It owned two mills (the first oil
mill and a new one), both located at its factory compound at Iyam, Lucena City. The two oil mills are
separately covered by fire insurance policies issued by American Home Assurance Co.
On Sept. 30, 1991, a fire broke out and gutted and consumed the new oil mill. American Home
rejected the claim for the insurance proceeds on the ground that no policy was issued by it covering
the burned oil mill. It stated that the new oil mill was under Building No. 15 while the insurance
coverage extended only to the oil mill under Building No. 5.
ISSUE:

Whether or not the new oil mill is covered by the fire insurance policy

HELD:
In construing the words used descriptive of a building insured, the greatest liberality is shown by the
courts in giving effect to the insurance. In view of the custom of insurance agents to examine
buildings before writing policies upon them, and since a mistake as to the identity and character of the
building is extremely unlikely, the courts are inclined to consider the policy of insurance covers any
building which the parties manifestly intended to insure, however inaccurate the description may be.
Notwithstanding, therefore, the misdescription in the policy, it is beyond dispute, to our mind, that what
the parties manifestly intended to insure was the new oil mill.
If the parties really intended to protect the first oil mill, then there is no need to specify it as new.
Indeed, it would be absurd to assume that the respondent would protect its first oil mill for different
amounts and leave uncovered its second one.

G.R. No. 125678

March 18, 2002

PHILAMCARE HEALTH SYSTEMS, INC., petitioner,

vs.
COURT OF APPEALS and JULITA TRINOS, respondents.

FACTS:
In 1988, Ernani Trinos applied for a health care insurance under the Philamcare Health Systems, Inc. He
was asked if he was ever treated for high blood, heart trouble, diabetes, cancer, liver disease, asthma, or
peptic ulcer; he answered no. His application was approved and it was effective for one year. His
coverage was subsequently renewed twice for one year each. While the coverage was still in force in
1990, Ernani suffered a heart attack for which he was hospitalized. The cost of the hospitalization
amounted to P76,000.00. Julita Trinos, wife of Ernani, filed a claim before Philamcare for the latter to pay
the hospitalization cost. Philamcare refused to pay as it alleged that Ernani failed to disclose the fact that
he was diabetic, hypertensive, and asthmatic. Julita ended up paying the hospital expenses. Ernani
eventually died. In July 1990, Julita sued Philamcare for damages. Philamcare alleged that the health
coverage is not an insurance contract; that the concealment made by Ernani voided the agreement.
ISSUE: Whether or not Philamcare can avoid the health coverage agreement.
HELD: No. The health coverage agreement (health care agreement) entered upon by Ernani with
Philamcare is a non-life insurance contract and is covered by the Insurance Law. It is primarily a contract
of indemnity. Once the member incurs hospital, medical or any other expense arising from sickness, injury
or other stipulated contingent, the health care provider must pay for the same to the extent agreed upon
under the contract. There is no concealment on the part of Ernani. He answered the question with good
faith. He was not a medical doctor hence his statement in answering the question asked of him when he
was applying is an opinion rather than a fact. Answers made in good faith will not void the policy.
Further, Philamcare, in believing there was concealment, should have taken the necessary steps to void
the health coverage agreement prior to the filing of the suit by Julita. Philamcare never gave notice to
Julita of the fact that they are voiding the agreement. Therefore, Philamcare should pay the expenses paid
by Julita.