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I. GENERAL PROVISIONS (Section 1) A. Origin of Insurance B. Laws Governing Insurance in the Philippines i. Insurance Code of 1978 ii. Civil Code (Articles 739, 2012, 2011, 2207) iii. Special Laws C. Insurance Contract (Section 2) i. Definition ii. Elements iii. Characteristics iv. Interpretation of Insurance Contracts A fire broke out in the motor launch ISLAMA. As a consequence of which, Francisco del Rosario and 33 others were forced to jump off the launch. This resulted in the death of Francisco and his beneficiary Remedios Jayme. Equitable insurance paid Simeon del Rosario, father of Francisco Php1000 pursuant to Sec.1 of Part 1 of the policy. On the day of receipt, Atty. Francisco wrote Equitable acknowledging the receipt of Simeon of the amount of Php1000 but informed the company that the amount is incorrect as Simeon was entitled to Php1,500, under Sec.2 Part 1 of the policy. Equitable referred the matter to the Insurance Commissioner who opined that the liability of the company is only Php1000. Thus, Equitable refused to pay. Subsequently, Atty. Francisco asked for Php3000 from Equitable. The company refused to pay. Hence a complaint for the recovery of the balance was instituted. Issue: How much should the indemnity be? Ruling: The CFI ruled that: On the face of the policy Exhibit "A" itself, death by drowning is a ground for recovery apart from the bodily injury because death by bodily injury is covered by Part I of the policy while death by drowning is covered by Part VI thereof. But while the policy mentions specific amounts that may be recovered for death for bodily injury, yet, there is not specific amount mentioned in the policy for death thru drowning although the latter is, under Part VI of the policy, a ground for recovery thereunder. Since the defendant has bound itself to pay P1000.00 to P3,000.00 as indemnity for the death of the insured but the policy does not positively state any definite amount that may be recovered in case of death by drowning, there is an ambiguity in this respect in the policy, which ambiguity must be interpreted in favor of the insured and strictly against the insurer so as to allow greater indemnity. Thus, del Rosario is entitled to Php3000. Since Equitable has already paid Php1000, a balance of Php2000 remains to be paid. SC upheld the ruling of the CFI for it is supported by the generally accepted principles of insurance, which enunciate that where there is an ambiguity with respect to the terms and conditions of the policy, the same will be resolved against the one responsible thereof. It should be recalled in this connection, that generally, the insured, has little, if any, participation in the preparation of the policy, together with the drafting of its terms and Conditions. The interpretation of obscure stipulations in a contract should not favor the party
Simeon del Rosario vs. The Equitable Insurance and Casualty Co Inc. (1963) Facts: On February 7, 1957, Equitable Insurance and Casualty Co., Inc., issued Personal Accident Policy No. 7136 on the life of Francisco del Rosario, alias Paquito Bolero, son of Simeon, binding itself to pay the sum of P1,000.00 to P3,000.00, as indemnity for the death of the insured. The provisions of the insurance policy pertinent to the case are as follows: Part I. Indemnity For Death If the insured sustains any bodily injury which is effected solely through violent, external, visible and accidental means, and which shall result, independently of all other causes and within sixty (60) days from the occurrence thereof, in the Death of the Insured, the Company shall pay the amount set opposite such injury: Section 1. Injury sustained other than those specified below unless excepted hereinafter. . . . . . . . P1,000.00 Section 2. Injury sustained by the wrecking or disablement of a railroad passenger car or street railway car in or on which the Insured is travelling as a farepaying passenger. . . . . . . P1,500.00 Part VI. Exceptions This policy shall not cover disappearance of the Insured nor shall it cover Death, Disability, Hospital fees, or Loss of Time, caused to the insured: . . . (h) By drowning except as a consequence of the wrecking or disablement in the Philippine waters of a passenger steam or motor vessel in which the Insured is travelling as a farepaying passenger; . . . . A rider to the Policy contained the following: IV. DROWNING It is hereby declared and agreed that exemption clause Letter (h) embodied in PART VI of the policy is hereby waived by the company, and to form a part of the provision covered by the policy.
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-Ty New Life Enterprises vs Court of Appeals By: Yin Oliveros FACTS: Julian Sy and Jose Sy formed a partnership under the business name of New Life Enterprises. They were holding their business in a two-storey building in Lucena City.
TYPE OF INSURANCE Fire Insurance Policy This policy was renewed Fire Insurance Policy This policy was also renewed.
300, 000. 00
- There was an
additional insurance issued in the amount of 700, 000. 00 200, 000. 00 TOTAL: 1, 550, 000. 00
The building occupied by New Life Enterprises was gutted by fire caused by a faulty electrical wiring. According to the plaintiffs, the stocks in trade were inside said building and were thus burned.
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RULING: The Supreme Court ruled in favor of the insurance companies. The terms of the contract are clear and unambiguous. The insured is specifically required to disclose to the insurer any other insurance and its particulars that he may have effected on the same subject matter. The knowledge of such insurance by the insurer's agents is not the "notice" that would estop the insurers from denying the claim. Thus, it points out that while petitioner Julian Sy claimed that he had informed insurance agent Alvarez regarding the co-insurance on the property, he contradicted himself by inexplicably claiming that he had not read the terms of the policies.
D. Perfection of the Contract of Insurance a. Offer and Acceptance/Consensuality (1) Delay in Acceptance (2) Delivery of Policy II. CONTRACT OF INSURANCE A. What may be insured (Sections 3, 4 and 5) B. Parties to the Contract (Sections 6, 7, 8 and 9) i. Who may be an insurer ii. Who may be insured iii. Rules on insurance by mortgagor or mortgagee iv. Transfer of insurance from mortgagor to mortgagee -Filipinas -Geagonio -PNB PALILEO v. COSIO [G.R. No. L-7667 November 28, 1955] FACTS: On Dec. 18, 1951, Palileo obtained from Cosio a loan in the sum of 12,000. Pursuant to their agreement, Palileo paid to Cosio as interest on the loan a total of P2,250 corresponding to 9 mos from Dec 18, 1951, on the basis of P250 a month, which is more than the maximum interest allowed by law. To secure the payment of the aforesaid loan, defendant required plaintiff to sign a a document known as Conditional Sale of Residential Bldg purporting to convey to defendant, with right to repurchase, a two-story building of strong materials belonging to plaintiff. This document did not express the true intention of the parties, which was merely to place said property as security for the payment of the loan. After the execution of the document, defendant insured the building against fire with the Associated Insurance & Surety Co., Inc. for the sum of P15000, the insurance policy having been issued in the name of defendant.
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i.
and
health
El Oriente Fabrica de Tabacos, Inc. vs. Juan Posadas, Collector of Internal Revenue [G.R. No. 34774, September 21, 1931] Facts: Insurer: Manufacturers Life Insurance Co., of Toronto, Canada, thru its local agent E.E. Elser Insured: A. Velhagen (manager of El Oriente) Beneficiary: El Oriente Fabrica de Tabacos, Inc. El Oriente, in order to protect itself against the loss that it might suffer by reason of the death of its manager, whose death would be a serious loss to El Oriente procured from the Insurer an insurance policy on the life of the said manager for the sum of 50,000 USD with El Oriente as the designated sole beneficiary. The insured has no interest or participation in the proceeds of said life insurance policy. El Oriente charged as expenses of its business all the said premiums and deducted the same from its gross incomes as reported in its annual income tax returns, which deductions were allowed by Posadas (Collector of Internal Revenue) upon showing by El Oriente that such premiums were legitimate expenses of the business. Upon the death of the manager, El Oriente received all the proceeds of the life insurance policy together with the interest and the dividends accruing thereon, aggregating P104,957.88. Posadas assessed and levied the sum of P3,148.74 as income tax on the proceeds of the insurance policy, which was paid by El Oriente under protest. El Oriente claiming exemption under Section 4 of the Income Tax Law. Issue: Whether or not the proceeds of insurance taken by a corporation on the life of an important official to indemnify it against loss in case of his death, are
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SOUTHERN LUZON EMPLOYEES ASSN. V. GOLPEO Digested by Margaret Frances Aparte Note: A common law wife of the insured who has a legal wife is disqualified as beneficiary. It is not required that there be a previous conviction for adultery or concubinage for the prohibition to apply. However, in an earlier case (such as the present case), the common-law wife designated prevailed over the legal wife because the case took place while the Old Civil Code was still applicable, under which there was no provision similar to Art.2012. FACTS: Southern Luzon Employees' Association is composed of laborers and employees of Laguna tayabas Bus Co., and Batangas Transportation Company, and one of its purposes is mutual aid of its members and their defendants in case of death. Roman A. Concepcion was a member until his death on December 13, 1950. In the form required by the
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Digested by: Birondo Tai Tong Chuache & Co. v. Insurance Commission Facts: Complainants acquired a parcel of land and a building they assumed the mortgage of the latter in favor of SSS, which was insured with respondent SSS Accredited Group of Insurers. On April 19, 1975, Azucena Palomo obtained a loan from petitioner Tai Tong Chuache Inc. securing it with a mortgage was executed over the land and the building in favor of petitioner. On April 25, 1975, Arsenio Chua, petitioners representative insured the latter's interest with Travellers Multi-Indemnity Corporation. On June 11, 1975, Pedro Palomo secured fire insurance covering the building with respondent Zenith Insurance Corporation and on July 16, 1975, another fire insurance was procured from respondent Philippine British Assurance Company, covering the same building and the contents thereof. However, on July
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Digested by: Lo, Justine GREAT PACIFIC LIFE ASSURANCE COMPANY vs. HONORABLE COURT OF APPEALS [G.R. No. L-31845 April 30, 1979] FACTS: It appears that on March 14, 1957, private respondent Ngo Hing filed an application with the Great Pacific Life Assurance Company (hereinafter referred to as Pacific Life) for a twenty-year endowment policy in the amount of P50,000.00 on the life of his one-year old daughter Helen Go. Said respondent supplied the essential data which petitioner Lapulapu D. Mondragon, Branch Manager of the Pacific Life in Cebu
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Author: Aldrin Montesco TAN VS. CA [174 SCRA 403] FACTS: Businessman Tan Lee Siong applied for life insurance policy with American Life Insurance Company in the amount of P80,000.00 by virtue of which he was issued Policy No. 1082467 effective November 6,1973, with his sons as designated beneficiaries thereof. On April 1975, Tan Lee Siong died and the sons subsequently filed their claim for the insurance proceeds. But in September of the same year, the company sent a letter denying petitioners' claim and rescinded the policy by reason of the alleged misrepresentation and concealment of material facts made by the deceased Tan Lee Siong in his application for insurance. The premiums paid on the policy, however, were thereupon refunded. ISSUES: Whether or not the insurance company no longer had the right to rescind the contract of insurance as rescission must allegedly be done during the lifetime of the insured within two years and prior to the commencement of the action. RULING: The so-called "incontestability clause" precludes the insurer from raising the defenses of false representations or concealment of material facts insofar as health and previous diseases are concerned if the insurance has been in force for at least two years during the insured's lifetime. The phrase "during the lifetime" found in Section 48 simply means that the policy is no longer considered in force after the insured has died. The key phrase in the second paragraph of Section 48 is "for a period of two years." As noted by the Court of Appeals, to wit: The policy was issued on November 6, 1973 and the insured died on April 26,1975. The policy was thus in force for a period of only one year and five months.
i.
Digested by: Archie Necesario Vicente Tang vs Court of Appeals, Philippine American Life Insurance Company Facts: Lee See Guat, a widow, 61 years old and an illeterate who spoke only Chinese, applied on two separate times for an insurance on her life from Philippine American Life Insurance Co. (Company), amounting to a total of P100,000. The application consisted of two parts, both in the English language. The second part of her application dealt with her state of health and because her answers indicated that she was healthy,
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ii. Form
of insurance Policy; etc)/Contents (Sections 50-51) iii. Cover notes (Section 52)
riders,
Digested by: Sharmine M. Odchigue De Lim vs. Sun Life Ass. Co. of Canada [41 Phil 263] Facts:
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Digested by: Gayle Opsima FRANCISCO DEL VAL ET AL.vs. ANDRES DEL VAL Facts: Plaintiff and defendant are siblings who are heirs at law of Gregorio Nacianceno del Val, who died intestate. The deceased, during his lifetime, took out an insurance on his life for the sum of P40,000 and made it payable to the defendant as sole beneficiary. Plaintiffs contend that the amount of the insurance policy belonged to the estate of the deceased and not to the defendant personally; that, therefore, they are entitled to a partition not only of the real and personal property, but also of the P40,000 life insurance. Issue: Whether or not the insurance policy belongs to the estate Ruling: With the finding of the trial court that the proceeds of the life-insurance policy belong exclusively to the
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Issue: Whether or not there is privity of contract between the Bonifacio Bros. Inc. and the Ayala Auto Parts Co. on the one hand and the insurance company on the other. Who has better right over the insurance proceeds? Ruling: The appellants are not mentioned in the contract as parties thereto nor is there any clause or provision thereof from which to infer that there is an obligation on the part of the insurance company to pay the cost of repairs directly to them. It is fundamental that contracts take effect only between the parties thereto, except in some specific instances provided by law where the contract contains some stipulation in favor of a third person. Such stipulation is known as stipulation pour autrui or a provision in favor of a third person not a pay to the contract. Under this doctrine, a third person is allowed to avail himself of a benefit granted to him by the terms of the contract, provided that the contracting parties have clearly and deliberately conferred a favor upon such person. Consequently, a third person not a party to the contract has no action against the parties thereto,
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This is a story about a consignee/buyer who bought fishmeal products from Bangkok and had it delivered to the port of Manila. He entered into an insurance contract with defendant insurance company (FilMerchant) under policy no. M-2678 for P267,653.59 and for goods described as 600 metric tons of fishmeal in new gunny bags of 90 kilos each. What was actually imported was 59.940mtons in 666 gunny bags. Upon arrival at Manila, arrastre and defendants surveyor found 227 bags in bad order condition. Because of this loss, buyer formally claimed from FilMerchant but the said insurance company refused to pay. He brought suit. Trial court ruled for him and against FilMerchant, CA affirmed trial court hence this petition. FilMerchant argues: (1) CA erred in the interpretation and application of the all risk clause of maritime insurance policy. It says it should not be held liable for partial loss notwithstanding the clear absence of proof of some fortuitous event, casualty, or accidental cause to which the loss is attributable. (2) Respondent had no insurable interest in the subject cargo. The shipment reveals that it is a C & F contract of shipment. The seller, not the consignee, paid for the shipment. As there was yet no delivery to the consignee, ownership (and interest) does not yet pass to him. Issues: W/N CA was correct in its interpretation of the all risk clause in the maritime insurance contract. W/N the insured had insurable interest over the property insured. Ruling: a) All risks policy has no technical meaning. The clause in question reproduced: 5. This insurance is against all risks of loss or damage to the subject-matter insured but shall in no case be deemed to extend to cover loss, damage, or expense proximately caused by delay or inherent vice or nature of the subjectmatter insured. Claims recoverable hereunder shall be payable irrespective of percentage
*In no event shall the publisher be held liable for any consequential damages arising out of or related to the use or inability to use this case brief material. INSURANCE LAW barcrammer_jed limitation to commence action/insurable interest in property
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WHEREFORE, the instant petition is DENIED and the assailed decision of the respondent Court of Appeals is AFFIRMED in toto. x. Cancellation of Policy (Sections 64-65) Digested by: Vicente Ynclino Paulino vs Capital Ins. & Surety Co. [105 Phil. 1315, May 15, 1959] Facts: Plaintiff Paulino secured a fire insurance policy issued by defendant Capital Insurance on Feb. 8, 1952. On April 30, 1952 the Plaintiff wrote the defendant requesting cancellation of the policy, which the latter received on May 10, 1952.
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UCPB General Insurance vs. Masagana Telamart Inc. , [GR 137172] Facts: On 15 April 1991, UCPB General Insurance Co. Inc. (UCPBGen) issued 5 insurance policies covering Masagana Telamart, Inc.'s various property described therein against fire, for the period from 22 May 1991 to 22 May 1992. In March 1992, UCPBGen evaluated the policies and decided not to renew them upon expiration of their terms on 22 May 1992. UCPBGen advised Masagana's broker, Zuellig Insurance Brokers, Inc. of its intention not to renew the policies. On 6 April 1992, UCPBGen gave written notice to Masagana of the non-renewal of the policies at the address stated in the policies. On 13 June 1992, fire razed Masagana's property covered by three of the insurance policies UCPBGen issued. On 13 July 1992, Masagana presented to UCPBGen's cashier at its head office 5 manager's checks in the total amount of P225,753.95, representing premium for the renewal of the policies from 22 May 1992 to 22 May 1993. No notice of loss
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Is respondent guilty of the policy violations imputed against him? We are not convinced by petitioners arguments. Ordinarily, where the insurance policy specifies as a condition the disclosure of existing coinsurers, non-disclosure thereof is a violation that entitles the insurer to avoid the policy. This condition is common in fire insurance policies and is known as the other insurance clause. The purpose for the inclusion of this clause is to prevent an increase in the moral hazard. We have ruled on its validity and the case of Geagonia v. Court of Appeals[10] clearly illustrates such principle. However, we see an exception in the instant case. Citing Section 29[11] of the Insurance Code, the trial court reasoned that respondents failure to disclose was not intentional and fraudulent. The application of Section 29 is misplaced. Section 29 concerns concealment which is intentional. The relevant provision is Section 75, which provides that: A policy may declare that a violation of specified provisions thereof shall avoid it, otherwise the breach of an immaterial provision does not avoid the policy.
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The purpose of the law in requiring that foreign corporations doing business in the country be licensed to do so, is to subject the foreign corporations doing business in the Philippines to the jurisdiction of the courts, 19 otherwise, a foreign corporation illegally doing business here because of its refusal or neglect to obtain the required license and authority to do business may successfully though unfairly plead such neglect or illegal act so as to avoid service and thereby impugn the jurisdiction of the local courts. Voluntary appearance before the lower court to question the jurisdiction is not equivalent to submission to jurisdiction The SC disposed the case in favor of the international insurers (petitioners) declaring that the lower court has not acquired and cannot acquire jurisdiction over them and was ordered to desist from maintaining further proceeding against them. III. CLASSES OF INSURANCE A. Marine Insurance (Sections 99166) i. Definition (Section 99) ii. Insurable Interest (Sections 100-106) iii. Concealment (Sections 107-110) iv. Representations (Sections 111-112) v. Implied Warranties (Sections 113-120) vi. The Voyage and Deviation (Sections 121126) vii. Loss (Sections 127-137) viii. Abandonment (Sections 138-155) ix. Measure of Indemnity (Sections 156-166) B. Fire Insurance (Sections 167-173) C. Casualty Insurance (Section 174) i. Compulsory Motor Vehicle Liability Insurance D. Suretyship (Sections 175-178) E. Life Insurance (Sections 179-183)
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