1. EGUARAS vs.

GREAT EASTERN
33 PHIL 263
FACTS:
Francisca Eguaras filed a written complaint in court, alleging as a cause of action that her son-inlaw Dominador Albay had applied in writing to the defendant insurance company to insure his life for the
sum of P5,000, naming as the beneficiary in case of his death the plaintiff FranciscaEguaras; that
after compliance with the requisites and the investigation carried on by the defendant company, it
accepted the application for insurance and issued the policy; that, said policy being in force, the insured died,
and despite the fact that the beneficiary submitted satisfactory proofs of his death and that the defendant
company investigated the event, still it refused and continues to refuse to pay to the plaintiff the
value of the policy.
Defendant set forth in special defense that the insurance policy issued in the name of Dominador
Albay had been obtained through fraud and deceit known and consent to by theinterested parties
and is therefore completely illegal, void, and ineffective.
A criminal case for frustrated estafa was filed by defendant against Ponciano Remigio, CastorGarcia and
Francisca Eguaras. They were acquitted, and claim that the judgment produces theeffect of res
judicata in the present suit.
ISSUE:
WON
the life insurance obtained by Dominador Albay was issued through fraud and deceit
HELD:
YES.Ratio
In a contract where one of the contracting parties may have given his consent through error,violence,
intimidation, or deceit, and in any of such cases the contract is void, even though, despite
thisnullity, no crime was committed. There may not have been estafa in the case at bar, but it wasconclusively
demonstrated by the trial that deceit entered into the insurance contract, fulfillmentwhereof is claimed, and
therefore the conclusions reached by the court in the judgment it rendered inthe criminal
proceedings for estafa do not affect this suit, nor can they produce in the present suit theforce
ofres adjudicata.
Reasoning:
It is proven that the signatures on the insurance applications reading "Dominado Albay" arefalse and forged;
that the person who presented himself to Dr. Vidal to be examined was not the realDominador
Albay, but Castor Garcia who was positively identified by Dr. Vidal; that at the time of
theapplication for insurance and the issuance of the policy which is the subject matter of this suit
the realDominador Albay was informed of all those machinations, wherefore it is plain that the
insurancecontract between the defendant and Dominador Albay is null and void because it is false, fraudulent
andillegal.
Disposition
:The judgment appealed from is reversed and the defendant absolved from the complaintwithout
special finding as to the costs

2. GREAT PACIFIC LIFE ASSURANCE CO. VS. CA

89 scra 543

Facts:
> On March 14, 1957, respondent Ngo Hing filed an application with Grepalife for a 20-yr
endowment policy for 50T on the life of his one year old daughter Helen Go.
> All the essential data regarding Helen was supplied by Ngo to Lapu-Lapu Mondragon, the
branch manager of Grepalife-Cebu. Mondragon then typed the data on the application form
which was later signed by Ngo.
> Ngo then paid the insurance premium and a binding deposit receipt was issued to him. The
binding receipt contained the following provision: If the applicant shall not have been
insurable xxx and the Company declines to approve the application, the insurance applied for
shall not have been in force at any time and the sum paid shall be returned to the applicant upon
the surrender of this receipt.
> Mondragon wrote on the bottom of the application form his strong recommendation for the
approval of the insurance application.
> On Apr 30, 1957, Mondragon received a letter from Grepalife Main office disapproving the
insurance application of Ngo for the simple reason that the 20yr endowment plan is not available
for minors below 7 yrs old.
> Mondragon wrote back the main office again strongly recommending the approval of the
endowment plan on the life of Helen, adding that Grepalife was the only insurance company
NOT selling endowment plans to children.
> On may 1957, Helen died of influenza with complication of broncho pneumonia. Ngo filed a
claim with Gepalife, but the latter denied liability on the ground that there was no contract
between the insurer and the insured and a binding receipt is NOT evidence of such contract.

Issue:
Whether or not the binding deposit receipt, constituted a temporary contract of life insurance.

Held:
NO.
The binding receipt in question was merely an acknowledgement on behalf of the company, that
the latters branch office had received from the applicant, the insurance premium and had
accepted the application subject for processing by the insurance company, and that the latter will

either approve or reject the same on the basis of whether or not the applicant is insurable on
standard rates.
Since Grepalife disapproved the insurance application of Ngo, the binding deposit receipt had
never became on force at any time, pursuant to par. E of the said receipt. A binding receipt is
manifestly merely conditional and does NOT insure outright. Where an agreement is made
between the applicant and the agent, NO liability shall attach until the principal approves the risk
and a receipt is given by the agent.
The acceptance is merely conditional, and is subordinated to the act of the company in approving
or rejecting the application. Thus in life insurance, a binding slip or binding receipt does NOT
insure by itself.

3. NEW LIFE ENTERPRISES VS. CA

207 scra 669

FACTS:

May 15, 1981: Western Guaranty Corporation

issued Fire Insurance Policy to New Life Enterprises foar P350,000
o renewed on May, 13, 1982
July 30,1981: Reliance Surety and Insurance Co., Inc. issued Fire
Insurance Policy to New Life Enterprises for P300,000
o November 12, 1981; Additional P700,000
February 8, 1982: Equitable Insurance
Corporation issued Fire Insurance Policy to New Life
Enterprises for P200,000
October 19, 1982 2 am: fire electrical in nature destroyed the stock in
trade worth P1,550,000
Julian Sy went to Reliance to claim but he was refused. Same thing
happened with the others who were sister companies.
o Sy violated the "Other Insurance Clause"
RTC: favored New Life and against the three insurance companies
CA: reversed -failure to state or endorse the other insurance coverage

ISSUE: W/N Sy can claim against the three insurance companies for
violating the "Other Insurance Clause"
HELD: NO.

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 which he may have effected
on the same subject matter.
o The knowledge of such insurance
by the insurer's agents, even assuming the acquisition thereof
by the former, is not the "notice" that would estop the insurers
from denying the claim.
o conclusion of
the trial court that Reliance and Equitable are "sister
companies" is an unfounded conjecture drawn from the mere
fact that Yap Kam Chuan was an agent for both companies which
also had the same insurance claims adjuster
Availmentof the
services of the same agents and adjusters by different
companies is a
common practice in the insurancebusiness and such facts
do not warrant the speculative conclusion of the trial court.
The conformity of the insured to the terms of the
policy isimplied from his failure to express any disagreement with
what is provided for.
a clear misrepresentation and a vital one because where
the insured had been asked to reveal but did not, that was deception guilty of clear fraud
total absence of such notice nullifies the policy
assuming arguendo that petitioners felt the
legitimate need to be clarified as to the policy condition violated, there
was a considerable lapse of time from their receipt of the insurer's
clarificatory letter dated March 30, 1983, up to the time the complaint
was filed in court on January 31, 1984. The oneyear prescriptive period was yet
toexpire on November 29, 1983, or about eight (8) months from the
receipt of the clarificatory letter, but petitioners let the
period lapse without bringing their action in court
o

4. Filipinas Cia de Seguros vs Christern 89 Phil 54

89 scra 54

Fact:
On October 1, 1941, the respondent corporation, Christern Huenefeld and Co., Inc., after
payment of corresponding premium, obtained from the petitioner, Filipinas Cia de Seguros fire
policy covering merchandise contained in a building located at Binondo, Manila. On February
27, 1942 or during the Japanese military occupation, the building and insured merchandise were
burned. In due time the respondent submitted to the petitioner its claim under the policy. The

petitioner refused to pay the claim on the ground that the policy in favor of the respondent that
ceased to be a force on the date the United States declared war against Germany, the respondent
corporation (through organized under and by virtue of the laws of Philippines) being controlled
by German subjects and the petitioner being a company under American jurisdiction when said
policy was issued on October 1, 1941. The theory of the petitioner is that the insured
merchandise was burned after the policy issued in 1941 had ceased to be effective because the
outbreak of the war between United States and Germany on December 10, 1941, and that the
payment made by the petitioner to the respondent corporation during the Japanese military
occupation was under pressure.
Issue:
W/N a public enemy can be insured.
Ruling:
Since the majority of stockholders of the respondent corporation were German subjects, the
respondent became an enemy of the state upon the outbreak of the war between US and
Germany. The English and American cases relied upon by the Court of Appeals lost in force
upon the latest decision of the Supreme Court of US in which the control test has adopted.
Since World War I, the determination of enemy nationality of corporations has been discussed in
many countries, belligerent and neutral. A corporation was subject to enemy legislation when it
was controlled by enemies, namely managed under the influence of individuals or corporations
themselves considered as enemies...
The Philippine Insurance Law (Act No 2427, as amended), in Section 8, provides that "anyone
except a public enemy may be insured". It stands to reason that an insurance policy ceases to be
allowable as soon as an insured becomes a public enemy.
The respondent having an enemy corporation on December 10, 1941, the insurance policy issued
in its favor on October 1, 1941, by the petitioner had ceased to be valid and enforceable, and
since the insured good were burned during the war, the respondent was not entitled to any
indemnity under said policy from the petitioner. However, elementary rule of justice (in the
absence of specific provisions in the Insurance Law) require that the premium paid by the
respondent for the period covered by its policy from December 11, 1941, should be returned by
the petitioner.
5. Insular Life Assurance Company, Ltd. vs Ebrado
80 SCRA 181
Facts:Buenaventura Cristor Ebrado was issued by the Insular Life Assurance an insurancepolicy on a whole-life plan for
P5,882.00 with a rider for Accidental Death Benefits for the sameamount. He designated Carponia T. Ebrado, his
common-law wife, as his revocable beneficiaryin his policy. In the policy he referred to her as his wife.Time came when
Buenaventura died from a falling tree branch. Carponia filed a claim tothe insurance company to get the proceeds as the
designated beneficiary. She admits however that the deceased-insured and she lived together as husband and wife
without the benefit of marriage.Pascual T. Ebrado, also filed a claim to the insurance company, this time claiming to
bethe legal wife Buenaventura. She asserts that she has a better right over the proceeds thanCarponia who is a

common-law wife.As the insurance company is at a loss as to whom to give the proceeds, it commencedan action for
interpleader in court.Issue:Whether a common-law wife named as a beneficiary in the life insurance policy of a
legallymarried man entitled to claim the proceeds thereof in case of the death of the latter.Held:A common-law wife
named as a beneficiary in the life insurance policy of a legallymarried man cannot claim the proceeds thereof in case the
death of the latter.The contract of insurance is govern by the provisions of the new civil code on mattersnot specifically
provided for in the insurance code.xxx When not otherwise specifically provided for by the Insurance Law the contract
of insurance is governed by the provisions of the civil law regulating contracts. And under Article2012 of the same Code,
any person who is forbidden from receiving any donation under article739 cannot be named beneficiary of a life
insurance policy by the person who cannot make adonation to him.xxxUnder the Article 739, paragraph 1 specifically
states those made between persons whowere guilty of adultery or concubinage at the time of donation. Thus
common-law spouses arebarred from receiving donations from each other. Also conviction for adultery or concubinage
isnot required as only preponderance of evidence is necessary.In essence, a life insurance policy is no different from a
civil donation insofar as thebeneficiary is concerned. Both are founded upon the same consideration: liberality. A
beneficiary is like a donee, because the premiums of the policy which the insured pays out of liberality, the beneficiary will
receive the proceeds or profits of said insurance.
6. TANCO VS. PHILIPPINE GUARANTY COMPANY
15 SCRA 313

FACTS:

While Tanco's automobile was driven by his brother Manuel Tanco,

who at the time didn't have a valid license since it was not renewed
until the next week, had a collision with a pick-up delivery van at
the southern approach of the Jones bridge
The repairs cost P2,536.99 so he filed a claim against the insurance
company which was rejected
He filed a claim in the Municipal Court of Manila and elevated to
the Court of First Instance of Manila on Appeal which favored Tanco
exception clause "the company shall not be liable in respect of any
accident, loss, damage or liability caused, sustained or incurred ...
whilst (the insured vehicle) is ... being driven by or is for the purpose
of being driven by him in the charge of any person other than an
Authorized Driver.
o Authorized Driver" to be the insured himself and "(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 Motor 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
from driving such Motor Vehicle.

ISSUE: W/N the Tanco can claim because it was not covered by the
exemption clause
HELD: NO. appealed from is reversed, with costs

The exclusion clause in the contract invoked by appellant is clear. It

does not refer to violations of law in general, which indeed would tend
to render automobile insurance practically a sham, but to a specific
situation where a person other than the insured himself, even upon his
order or with his permission, drives the motor vehicle without a license
or with one that has already expired. No principle of law or of public
policy militates against the validity of such a provision.

7. CCC Insurance Corp. v. CA (1970)

31 SCRA 264

FACTS:

Carlos F. Robes insured with the CCC Insurance Corporation his Dodge
Kingsway car against loss or damage through accident for an amount
not exceeding P8,000
June 25 1961: Carlos' driver Domingo Reyes met a vehicular collision
along Rizal Avenue Extension, Potrero, Malabon, Rizal
Ccc Insurance Corporation denied his claim reasoning that the driver
was not an "authorized driver"
o Reyes, who cannot read and write, who has never passed any
examination for drivers, and has not applied for a license from
the duly constituted government agency entrusted with the duty
of licensing drivers, cannot be considered an authorized driver
o AUTHORIZED DRIVER:
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 licensing laws or regulations to drive the motor
vehicle covered by this Policy, or has been so permitted and is
not disqualified by order of a court of law or by reason of any
enactment or regulation from driving such Motor Vehicle.

RTC: favored Robes and CCC was order to pay

ISSUE: W/N Domingo Reyes was an authorized driver

HELD: YES. CA affirmed

Court of Appeals found that the driver's license No. 271703 DP was
genuine
o Domingo Reyes is in possession of a driver's license issued by
the Motor Vehicles Office which on its face appears to have been
regularly issued
o Neither Gloria Presa nor the officer-in-charge Marciano A.
Monzon was placed on the witness stand to be examined in order
to determine whether said license is indeed void
Section 24 of the Revised Motor Vehicles Law, Act 3992 of the
Philippine Legislature, as amended by Republic Acts Nos. 587, 1204
and 2863,1

An examination or demonstration to show any applicant's ability to

operate motor vehicles may also be required in the discretion of the
Chief, Motor Vehicles Office or his deputies.

Section 26 of the Act prescribes further:

SEC. 26. Issuance of chauffeur's license; professional badge: If,

after examination, or without the same, the Chief, Motor Vehicles
Office or his deputies, believe the applicant to possess the necessary
qualifications and knowledge, they shall issue to such applicant a
license to operate as chauffeur ...

There is no proof that the owner of the automobile knew that the
circumstance surrounding such issuance showed that it was irregular
the weight of authority is in favor of a liberal interpretation of the
insurance policy for the benefit of the party insured, and strictly
against the insurer

8. JAMES STOKES vs. MALAYAN INSURANCE CO., INC.

127 SCRA 766
FACTS:
Daniel Adolfson had a subsisting Malayan car insurance policywith coverage
against own damage as well as 3rd party liabilitywhen his car figured in a vehicular
accident with another car,r e s u l t i n g t o d a m a g e t o b o t h v e h i c l e s .
A t t h e t i m e o f t h e accident, Adolfsons car was being driven by James Stokes,
whowas aut horiz ed to do so b y Adol fson. S tokes, an Iri sh tourist who had
been in the Philippines for only 90 days, had a valid and subsisting Iri sh
drivers li cense but wi thout a P hil ippi ne drivers license.Adolfson filed a claim
with Malayan but the latter refused to paycontending that Stokes was not an authorized
driver under theAuthorized Driver clause of the insurance policy in relation toSection 21
of the Land Transportation Office.
ISSUE:Whether or not Malayan is liable to pay the insurance claim of Adolfson
HELD:
NO. A contract of insurance is a contract of indemnity upon thet erm s and condit ions
s peci fi ed t herei n. When t he insurer is called upon to pay in case of loss or
damage, he has the right toi nsist upon com pliance wi th t he t erms of t he
contract. If t he insured cannot bring himself within the terms and conditions of the
contract, he is not entitled as a rule to recover for the loss or damage suffered. For the
terms of the contract constitute themeasure of the insurers liability, and compliance therewith
is acondition precedent to the right of recovery.At the time of the accident, Stokes had
been in the Philippinesfor more than 90 days. Hence, under the law, he could not drivea
m o to r v e hi cl e w it ho ut a P h il i pp i ne d riv e r s l ice nse . He wa st h e refo r e no t a n
a ut ho r i ze d d riv e r un d er t he t er m s o f t he insurance policy in question, and Malayan
was right in denyingthe claim of the insured.A c c e p t a n c e o f p r e m i u m w i t h i n t h e
s t i p u l a t e d p e r i o d f o r payment thereof, including the agreed period of grace,
merelya s s u r e s c o n t i n u e d e f f e c t i v i t y o f t h e i n s u r a n c e p o l i c y
i n accordance with its terms. Such acceptance does not estop theinsurer from interposing
any valid defense under the terms of the insurance policy. The principle of estoppel is
an equitable principle rooted uponnatural justice which prevents a person from going back
on hisown acts and representations to the prejudice of another whomhe has led to rely upon
them. The principle does not apply tot he i ns tan t ca se . In ac ce p t in g t he p re m i um
p ay m e nt o f t he i n s u r e d , M a l a y a n w a s n o t g u i l t y o f a n y i n e q u i t a b l e
act orrepresentation. There is nothing inc ons istent
b e t w e e n acceptance of premium due under an insurance policy and theenforcement of its
terms.WHEREFORE, the appealed judgment is reversed. The complaintis dismissed. Costs against appellees
9. ANDREW PALERMO vs.PYRAMID INSURANCE CO., INC.
161 scra 677

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.
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: Wether or not the plaintiff is authorized driver under insurance code??

Held:
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.

10. JEWEL VILLACORTA vs. THE INSURANCE COMMISSION

100 SCRA 467
FACTS:
Villacorta had her Colt Lancer car insured with Empire InsuranceC o m p a n y a g a i n s t o w n d a m a g e , t h e f t a n d
3 rd party liability.While the car was in the repair shop, one of the employees of t h e s a i d r e p a i r
s h o p t o o k i t o u t f o r a j o y r i d e a f t e r w h i c h i t figured in a vehicular accident. This resulted to
the death of thed r i v e r a n d s o m e o f t h e p a s s e n g e r s a s w e l l a s t o e x t e n s i v e damage to the
car.V i l l a c o r t a f i l e d a c l a i m f o r t o t a l l o s s wi t h t h e s a i d i n s u r a n c e company. However, it denied
the claim on the ground that the accident did not fall within the provisions of the policy either fort h e O w n
D a m a g e o r T h e f t c o v e r a g e , i n v o k i n g t h e p o l i c y provision on Authorized Driver
Clause. This was upheld by the Insurance Commission further statingthat the car was not stolen and
therefore not covered by the Theft Clause because it is not evident that the person who tookthe car for a joyride
intends to permanently deprive the insuredof his/ her car.
ISSUE:Whether or not the insurer company should pay the said claim
HELD: Y e s . W h e r e t h e i n s u r e d s c a r i s wr o n g f u l l y t a k e n wi t h o u t t h e insureds consent from the car
service and repair shop to whomit had been entrusted for check-up and repairs (assuming thats u c h t a k i n g w a s
f o r a j o y r i d e , i n t h e c o u r s e o f w h i c h i t w a s totally smashed in an accident), respondent insurer is
liable andmust pay insured for the total loss of the insured vehicle underthe Theft Clause of the policy.A s s u m i n g ,
d e s p i t e t h e t o t a l l y i n a d e q u a t e e v i d e n c e , t h a t t h e taking was temporary and for a joy ride, the Court
sustainsas the better view that which holds that when a person, eitherwith the object of going to a
certain place, or learning how tod r i v e , o r e n j o y i n g a fr e e r i d e , t a k e s p o s s e s s i o n o f a
v e h i c l e b e l o n g i n g t o a n o t h e r , wi t h o u t t h e c o n s e n t o f i t s o wn e r , h e i s g u i l t y o f t h e f t b e c a u s e
b y t a k i n g p o s s e s s i o n o f t h e p e r s o n a l property belonging to another and using it, his intent to gain
ise v i d e n t s i n c e h e d e r i v e s t h e r e f r o m u t i l i t y , s a t i s f a c t i o n , enjoymet and
pleasure.ACCORDINGLY, the appealed decision is set aside and judgmenti s h e r e b y r e n d e r e d
s e n t e n c i n g p r i v a t e r e s p o n d e n t t o p a y petitioner the sum of P35,000.00 with legal interest
from thefiling of the complaint until full payment is made and to pay thecosts of suit.