Gulf Resorts, Inc. Vs Phil. Charter Insurance Corp

550 SUPREMECOURTREPORTSANNOTATED
GulfResorts,Inc.vs.PhilippineCharterInsuranceCorporation
*
G.R.No.156167.May16,2005.
GULF RESORTS, INC., petitioner, vs. PHILIPPINE CHARTER

INSURANCECORPORATION,respondent.
Insurance It is basic that all the provisions of the insurance policy

should be examined and interpreted in consonance with each other.It is
basicthatalltheprovisionsoftheinsurancepolicyshouldbeexaminedand
interpreted in consonance with each other. All its parts are reflective of the
trueintentoftheparties.Thepolicycannotbeconstruedpiecemeal.Certain
stipulations cannot be segregated and then made to control neither do
particular words or phrases necessarily determine its character. Petitioner
cannot focus on the earthquake shock endorsement to the exclusion of the
other provisions. All the provisions and riders, taken and interpreted
together, indubitably show the intention of the parties to extend earthquake
shockcoveragetothetwoswimmingpoolsonly.
Same Elements Words and Phrases A contract of insurance is an
agreementwherebyoneundertakesforaconsiderationtoindemnifyanother
against loss, damage or liability arising from an unknown or contingent
event.A careful examination of the premium recapitulation will show that
itistheclearintentofthepartiestoextendearthquakeshockcoverageonly
to the two swimming pools. Section 2(1) of the Insurance Code defines a
contract of insurance as an agreement whereby one undertakes for a
consideration to indemnify another against loss, damage or liability arising
fromanun
_______________
*SECONDDIVISION.
551
VOL.458,MAY16,2005 551
known or contingent event. Thus, an insurance contract exists where the
following elements concur: 1. The insured has an insurable interest 2. The
insuredissubjecttoariskoflossbythehappeningofthedesignatedperil
3. The insurer assumes the risk 4. Such assumption of risk is part of a
general scheme to distribute actual losses among a large group of persons
bearing a similar risk and 5. In consideration of the insurers promise,
theinsuredpaysapremium.
Same Same Same Premium An insurance premium is the
consideration paid an insurer for undertaking to indemnify the insured
against a specified peril.An insurance premium is the consideration paid
aninsurerforundertakingtoindemnifytheinsuredagainstaspecifiedperil.
Infire,casualty,andmarineinsurance,thepremiumpayablebecomesadebt
as soon as the risk attaches. In the subject policy, no premium payments
were made with regard to earthquake shock coverage, except on the two
swimmingpools.Thereisnomentionofanypremiumpayablefortheother
resortpropertieswithregardtoearthquakeshock.Thisisconsistentwiththe
historyofpetitionerspreviousinsurancepoliciesfromAHACAIU.
Same Contracts of Adhesion Words and Phrases A contract of
adhesion is one wherein a party, usually a corporation, prepares the
stipulations in the contract, while the other party merely affixes his
signature or his adhesion thereto The Supreme Court will only rule out
blindadherencetotermswherefactsandcircumstanceswillshowthatthey
arebasicallyonesided.In sum, there is no ambiguity in the terms of the
contract and its riders. Petitioner cannot rely on the general rule that
insurance contracts are contracts of adhesion which should be liberally
construed in favor of the insured and strictly against the insurer company
which usually prepares it. A contract of adhesion is one wherein a party,
usually a corporation, prepares the stipulations in the contract, while the
other party merely affixes his signature or his adhesion thereto. Through
theyears,thecourtshaveheldthatinthesetypeofcontracts,thepartiesdo
not bargain on equal footing, the weaker partys participation being reduced
to the alternative to take it or leave it. Thus, these contracts are viewed as
traps for the weaker party whom the courts of justice must protect.
Consequently, any ambiguity therein is resolved against the insurer, or
construedliberallyinfavorofthe
552
insured. The case law will show that this Court will only rule out blind
adherence to terms where facts and circumstances will show that they are
basicallyonesided.Thus,wehavecalledonlowercourtstoremaincareful
in scrutinizing the factual circumstances behind each case to determine the
efficacy of the claims of contending parties. In Development Bank of the
Philippinesv.NationalMerchandisingCorporation,etal.,theparties,who
were acute businessmen of experience, were presumed to have assented to
theassaileddocumentswithfullknowledge.
PETITIONforreviewoncertiorariofadecisionoftheCourtof
Appeals.
ThefactsarestatedintheopinionoftheCourt.
SiguionReyna,Montecillo&Ongsiakoforpetitioner.
ConradoR.Ayuyaoforrespondent.
PUNO,J.:
BeforetheCourtisthepetitionforcertiorariunderRule45ofthe
Revised Rules of Court by petitioner GULF RESORTS, INC.,
against respondent PHILIPPINE CHARTER INSURANCE1
CORPORATION. Petitioner assails the appellate court decision
which dismissed its two appeals and affirmed the judgment of the
trialcourt.
For review are the warring interpretations of petitioner and
respondent on the scope of the insurance companys liability for
earthquake damage to petitioners properties. Petitioner avers that,
pursuanttoitsearthquakeshockendorsementrider,InsurancePolicy
No. 31944 covers all damages to the properties within its resort
causedbyearthquake.Respondentcontendsthattheriderlimitsits
liabilityforlosstothetwoswimmingpoolsofpetitioner.
_______________
1ThedecisionwaspennedbyJusticeJoseL.Sabio,Jr.,ofthe10thDivisionofthe
CourtofAppeals.
553
VOL.458,MAY16,2005 553
The facts as established by the court a quo, and affirmed by the

appellatecourtareasfollows:
[P]laintiff is the owner of the Plaza Resort situated at Agoo, La Union and
had its properties in said resort insured originally with the American Home
Assurance Company (AHACAIU). In the first four insurance policies
issued by AHACAIU from 198485 198586 19861987 and 198788
(Exhs. C, D, E and F also Exhs. 1, 2, 3 and 4
respectively), the risk of loss from earthquake shock was extended only to
plaintiffs two swimming pools, thus, earthquake shock endt. (Item 5
only) (Exhs. C1 D1, and E and two (2) swimming pools only
(Exhs. C1 D1, E and F1). Item 5 in those policies referred to
the two (2) swimming pools only (Exhs. 1B, 2B, 3B and F2)
that subsequently AHAC(AIU) issued in plaintiffs favor Policy No. 206
41823830 covering the period March 14, 1988 to March 14, 1989 (Exhs.
G also G1) and in said policy the earthquake endorsement clause as
indicatedinExhibitsC1,D1,ExhibitsEandF1wasdeletedand
the entry under Endorsements/Warranties at the time of issue read that
plaintiff renewed its policy with AHAC (AIU) for the period of March 14,
1989toMarch14,1990underPolicyNo.20645680619(Exh.H)which
carried the entry under Endorsement/Warranties at Time of Issue, which
read Endorsement to Include Earthquake Shock (Exh. 6B1) in the
amount of P10,700.00 and paid P42,658.14 (Exhs. 6A and 6B) as
premiumthereof,computedasfollows:
Item P7,691,000.00 ontheClubhouseonly@.392%

1,500,000.00 onthefurniture,etc.containedinthe
buildingabovementioned@.490%
393,000.00 onthetwoswimmingpools,
only(againsttheperilof
earthquakeshockonly)@0.100%
116,600.00 otherbuildingsincludeasfollows:
a)TilterHouse P19,800.000.551%
b)PowerHouse P41,000.000.551%
c)HouseShed P55,000.000.540%
P100,000.00 forfurniture,fixtures,linesaircon
andoperatingequipment
554
that plaintiff agreed to insure with defendant the properties covered by

AHAC(AIU)PolicyNo.20645680619(Exh.H)providedthatthepolicy
wording and rates in said policy be copied in the policy to be issued by
defendant that defendant issued Policy No. 31944 to plaintiff covering the
periodofMarch14,1990toMarch14,1991forP10,700,600.00foratotal
premiumofP45,159.92(Exh.I)thatinthecomputationofthepremium,
defendants Policy No. 31944 (Exh. I), which is the policy in question,
containedontherighthandupperportionofpage7thereof,thefollowing:
RateVarious
Premium P37,420.60F/L
2,061.52Typhoon
1,030.76EC
393.00ES
Doc.Stamps 3,068.10
F.S.T. 776.89
Prem.Tax 409.05
TOTAL 45,159.92
and4A1G2and5C16C1issuedbyAHAC(Exhs.C,
D, E, F, G and H) and in Policy No. 31944 issued by defendant,
theshockendorsementprovide(sic):
Inconsiderationofthepaymentbytheinsuredtothe
company of the sum included additional premium the Company agrees,
notwithstanding what is stated in the printed conditions of this policy due to the
contrary, that this insurance covers loss or damage to shock to any of the property
insuredbythisPolicyoccasionedbyorthroughorinconsequenceofearthquake(Exhs.
1D,2D,3A,4B,5A,6Dand7C)
that in Exhibit 7C the word included above the underlined portion

wasdeletedthatonJuly16,1990anearthquakestruckCentral
555
VOL.458,MAY16,2005 555
LuzonandNorthernLuzonandplaintiffspropertiescoveredbyPolicyNo.
31944 issued by defendant,2including the two swimming pools in its Agoo
PlayaResortweredamaged.
Aftertheearthquake,petitioneradvisedrespondentthatitwouldbe
making a claim under its Insurance Policy No. 31944 for damages
on its properties. Respondent instructed petitioner to file a formal
claim,thenassignedtheinvestigationoftheclaimtoanindependent
3
claims adjuster, Bayne Adjusters and Surveyors, Inc. On July 30,
1990,respondent,throughitsadjuster,requestedpetitionertosubmit
various documents in support of its claim. On August 7, 1990,
Bayne Adjusters 4
and Surveyors, Inc., through5 its VicePresident
A.R. de Leon, rendered a preliminary report finding extensive
damage caused by the earthquake to the clubhouse and to the two
swimmingpools.Mr.deLeonstatedthatexceptfortheswimming6
pools,allaffecteditemshavenocoverageforearthquakeshocks. 7
On August 11, 1990, petitioner filed its formal demand for
settlement of the damage to all its properties in the Agoo Playa
Resort.OnAugust23,1990,respondentdeniedpetitionersclaimon
thegroundthatitsinsurancepolicyonlyaffordedearthquakeshock
8
coverage to the two swimming pools of the 9
resort. Petitioner and
respondent failed to arrive at a settlement. Thus, on January 24,
10
1991, petitioner filed a complaint with the regional trial court of
10
1991, petitioner filed a complaint with the regional trial court of
Pasigprayingforthepaymentofthefollowing:
_______________
2Rollo,pp.1012.
3OriginalRecords,p.50.
4VicePresidentfortheFire,EngineeringandAlliedClaimsDivision.
5OriginalRecords,pp.4448.
7Id.,p.49.
8Id.,p.50.
9Id.,pp.5054.
10Id.,pp.17.
556
1.) ThesumofP5,427,779.00,representinglossessustainedby
the insured properties, with interest thereon, as computed
underpar.29ofthepolicy(AnnexB)untilfullypaid
2.) The sum of P428,842.00 per month, representing
continuing losses sustained by plaintiff on account of
defendantsrefusaltopaytheclaims
3.) ThesumofP500,000.00,bywayofexemplarydamages
4.) The sum of P500,000.00 by way of attorneys fees and
expensesoflitigation
11
5.) Costs.
RespondentfileditsAnswerwithSpecialandAffirmativeDefenses
12
withCompulsoryCounterclaims.
OnFebruary21,1994,thelowercourtaftertrialruledinfavorof
therespondent,viz.:
The above schedule clearly shows that plaintiff paid only a premium of
P393.00 against the peril of earthquake shock, the same premium it paid
againstearthquakeshockonlyonthetwoswimmingpoolsinallthepolicies
issued by AHAC(AIU) (Exhibits C, D, E, F and G). From this
fact the Court must consequently agree with the position of defendant that
the endorsement rider (Exhibit 7C) means that only the two swimming
poolswereinsuredagainstearthquakeshock.
Plaintiff correctly points out that a policy of insurance is a contract of
adhesion hence, where the language used in an insurance contract or
application is such as to create ambiguity the same should be resolved
against the party responsible therefor, i.e., the insurance company which
prepared the contract. To the mind of [the] Court, the language used in the
policy in litigation is clear and unambiguous hence there is no need for
interpretationorconstructionbutonlyapplicationoftheprovisionstherein.
From the above observations the Court finds that only the two (2)
swimming pools had earthquake shock coverage and were heavily damaged
bytheearthquakewhichstruckonJuly16,1990.Defendanthavingadmitted
thatthedamagetotheswimmingpoolswas
_______________
11Id.,pp.67.
557
VOL.458,MAY16,2005 557
appraisedbydefendantsadjusteratP386,000.00,defendantmust,byvirtue
ofthecontractofinsurance,payplaintiffsaidamount.
Because it is the finding of the Court as stated in the immediately
preceding paragraph that defendant is liable only for the damage caused to
thetwo(2)swimmingpoolsandthatdefendanthasmadeknowntoplaintiff
itswillingnessandreadinesstosettlesaidliability,thereisnobasisforthe
grantoftheotherdamagesprayedforbyplaintiff.Astothecounterclaimsof
defendant, the Court does not agree that the action filed by plaintiff is
baselessandhighlyspeculativesincesuchactionisalawfulexerciseofthe
plaintiffsrighttocometoCourtinthehonestbeliefthattheirComplaintis
meritorious. The prayer, therefore, of defendant for damages is likewise
denied.
WHEREFORE, premises considered, defendant is ordered to pay
plaintiffs the sum of THREE HUNDRED EIGHTY SIX THOUSAND
PESOS(P386,000.00)representingdamagetothetwo(2)swimmingpools,
withinterestat6%perannum from the date of the filing of the Complaint
untildefendantsobligationtoplaintiffisfullypaid.
13
Nopronouncementastocosts.
PetitionersMotionforReconsiderationwasdenied.Thus,petitioner
filed an appeal14with the Court of Appeals based on the following
assignederrors:
A. THE TRIAL COURT ERRED IN FINDING THAT PLAINTIFF

APPELLANT CAN ONLY RECOVER FOR THE DAMAGE TO ITS
TWO SWIMMING POOLS UNDER ITS FIRE POLICY NO. 31944,
CONSIDERING ITS PROVISIONS, THE CIRCUMSTANCES
SURROUNDING THE ISSUANCE OF SAID POLICY AND THE
ACTUATIONS OF THE PARTIES SUBSEQUENT TO THE
EARTHQUAKEOFJULY16,1990.
B. THE TRIAL COURT ERRED IN DETERMINING PLAINTIFF
APPELLANTS RIGHT TO RECOVER UNDER DEFENDANT
APPELLEES POLICY (NO. 31944 EXH I) BY LIMITING ITSELF
TOACONSIDERATIONOFTHESAIDPOLICY
_______________
14CARollo,p.42.
558
ISOLATED FROM THE CIRCUMSTANCES SURROUNDING ITS

ISSUANCE AND THE ACTUATIONS OF THE PARTIES AFTER THE
EARTHQUAKEOFJULY16,1990.
C. THE TRIAL COURT ERRED IN NOT HOLDING THAT
PLAINTIFFAPPELLANT IS ENTITLED TO THE DAMAGES
CLAIMED, WITH INTEREST COMPUTED AT 24% PERANNUM ON
CLAIMSONPROCEEDSOFPOLICY.
On the other hand, respondent filed a partial appeal, assailing the

lowercourtsfailuretoawarditattorneysfeesanddamagesonits
compulsorycounterclaim.
Afterreview,theappellatecourtaffirmedthedecisionofthetrial
courtandruled,thus:
However,aftercarefullyperusingthedocumentaryevidenceofbothparties,
We are not convinced that the last two (2) insurance contracts (Exhs. G
and H), which the plaintiffappellant had with AHAC (AIU) and upon
which the subject insurance contract with Philippine Charter Insurance
Corporation is said to have been based and copied (Exh. I), covered an
extendedearthquakeshockinsuranceonalltheinsuredproperties.
xxx
We also find that the Court a quo was correct in not granting the
plaintiffappellants prayer for the imposition of interest24% on the
insurance claim and 6% on loss of income allegedly amounting to
P4,280,000.00. Since the defendantappellant has expressed its willingness
to pay the damage caused on the two (2) swimming pools, as the Court a
quoandthisCourtcorrectlyfoundittobeliableonly,itthencannotbesaid
thatitwasindefaultandthereforeliableforinterest.
Coming to the defendantappellants prayer for an attorneys fees, long
standingistherulethattheawardthereofissubjecttothesounddiscretion
of the court. Thus, if such discretion is wellexercised, it will not be
disturbedonappeal(Castro,etal.v.CA,etal.,G.R.No.115838,July18,
2002).Moreover,beingtheawardthereofanexceptionratherthanarule,it
isnecessaryforthecourttomakefindingsoffactsandlawthatwouldbring
the case within the exception and justify the grant of such award (Country
Bankers Insurance Corp. v. Lianga Bay and Community MultiPurpose
Coop.,
559
VOL.458,MAY16,2005 559
Inc., G.R. No. 136914, January 25, 2002). Therefore, holding that the
plaintiffappellants action is not baseless and highly speculative, We find
thattheCourtaquodidnoterringrantingthesame.
WHEREFORE, in view of all the foregoing, both appeals are hereby
DISMISSED 15
and judgment of the Trial Court hereby AFFIRMED in toto.
Nocosts.
16
Petitionerfiledthepresentpetitionraisingthefollowingissues:
A.WHETHERTHECOURTOFAPPEALSCORRECTLYHELDTHAT
UNDER RESPONDENTS INSURANCE POLICY NO. 31944, ONLY
THE TWO (2) SWIMMING POOLS, RATHER THAN ALL THE
PROPERTIES COVERED THEREUNDER, ARE INSURED AGAINST
THERISKOFEARTHQUAKESHOCK.
B. WHETHER THE COURT OF APPEALS CORRECTLY DENIED
PETITIONERS PRAYER FOR DAMAGES WITH INTEREST
THEREON AT THE RATE CLAIMED, ATTORNEYS FEES AND
EXPENSESOFLITIGATION.
Petitionercontends:
First, that the policys earthquake shock endorsement clearly
covers all of the properties insured and not only the swimming
pools.Itusedthewordsanypropertyinsuredbythispolicy,andit
shouldbeinterpretedasallinclusive.
Second,theunqualifiedandunrestrictednatureoftheearthquake
shockendorsementisconfirmedinthebodyoftheinsurancepolicy
itself, which states that it is [s]ubject to: Other Insurance Clause,
TyphoonEndorsement,EarthquakeShockEndt.,ExtendedCoverage
Endt.,FEAWarranty&AnnualPaymentAgreementOnLongTerm
17
Policies.
_______________
15CARollo,pp.184186.
16Rollo,p.402.
17Rollo,pp.408409.
560
Third,thatthequalificationreferringtothetwoswimmingpoolshad
alreadybeendeletedintheearthquakeshockendorsement.
Fourth, it is unbelievable for respondent to claim that it only
madeaninadvertentomissionwhenitdeletedthesaidqualification.
Fifth, that the earthquake shock endorsement rider should be
givenprecedenceoverthewordingoftheinsurancepolicy,because
the rider is the more deliberate expression of the agreement of the
contractingparties.
Sixth,thatintheirpreviousinsurancepolicies,limitswereplaced
ontheendorsements/warrantiesenumeratedatthetimeofissue.
Seventh, any ambiguity in the earthquake shock endorsement
shouldberesolved in favor of petitioner and against respondent. It
wasrespondentwhichcausedtheambiguitywhenitmadethepolicy
inissue.
Eighth, the qualification of the endorsement limiting the
earthquakeshockendorsementshouldbeinterpretedasacaveaton
the standard fire insurance policy, such as to remove the two
swimmingpoolsfromthecoveragefortheriskoffire.Itshouldnot
beusedtolimittherespondentsliabilityforearthquakeshocktothe
twoswimmingpoolsonly.
Ninth, there is no basis for the appellate court to hold that the
additionalpremiumwasnotpaidundertheextendedcoverage.The
premiumfortheearthquakeshockcoveragewasalreadyincludedin
thepremiumpaidforthepolicy.
Tenth, the parties contemporaneous and subsequent acts show
that they intended to extend earthquake shock coverage to all
insured properties. When it secured an insurance policy from
respondent,petitionertoldrespondentthatitwantedanexactreplica
of its latest insurance policy from American Home Assurance
Company (AHACAIU), which covered all the resorts properties
forearthquakeshockdamageandrespondentagreed.AftertheJuly
16,1990earthquake,respon
561
VOL.458,MAY16,2005 561
dent assured petitioner that it was covered for earthquake shock.

Respondents insurance adjuster, Bayne Adjusters and Surveyors,
Inc., likewise requested petitioner to submit the necessary
documentsforitsbuildingclaimsandotherrepaircosts.Thus,under
thedoctrineofequitableestoppel,itcannotdenythattheinsurance
policyitissuedtopetitionercoveredallofthepropertieswithinthe
resort.
Eleventh,thatitisproperforittoavailofapetitionforreviewby
certiorari under Rule 45 of the Revised Rules of Court as its
remedy,andthereisnoneedforcalibrationoftheevidenceinorder
toestablishthefactsuponwhichthispetitionisbased.
On the18 other hand, respondent made the following counter
arguments:
First, none of the previous policies issued by AHACAIU from
1983to1990explicitlyextendedcoverageagainstearthquakeshock
to petitioners insured properties other than on the two swimming
pools. Petitioner admitted that from 1984 to 1988, only the two
swimmingpoolswereinsuredagainstearthquakeshock.From1988
until1990,theprovisions in its policy were practically identical to
its earlier policies, and 19there was no increase in the premium paid.
AHACAIU, in a letter by its representative Manuel C. Quijano,
categoricallystatedthatitspreviouspolicy,fromwhichrespondents
policy was copied, covered only earthquake shock for the two
swimmingpools.
Second, petitioners payment of additional premium in the
amount of P393.00 shows that the policy only covered earthquake
shock damage on the two swimming pools. The amount was the
same amount paid by petitioner for earthquake shock coverage on
the two swimming pools from 19901991. No additional premium
waspaidtowarrantcoverageoftheotherpropertiesintheresort.
_______________
18Rollo,pp.348395.
19Exhibit9.
562
Third, the deletion of the phrase pertaining to the limitation of the

earthquake shock endorsement to the two swimming pools in the
policyscheduledidnotexpandtheearthquakeshockcoveragetoall
of petitioners properties. As per its agreement with petitioner,
respondent copied its policy from the AHACAIU policy provided
by petitioner. Although the first five policies contained the said
qualification in their riders title, in the last two policies, this
qualification in the title was deleted. AHACAIU, through Mr. J.
BarandaIII,statedthatsuchdeletionwasamereinadvertence.This
inadvertencedidnotmakethepolicyincomplete,nordiditbroaden
the scope of the endorsement whose descriptive title was merely
enumerated.Anyambiguityinthepolicycanbeeasilyresolvedby
looking at the other provisions, specially the enumeration of the
items insured, where only the two swimming pools were noted as
coveredforearthquakeshockdamage.
Fourth, in its Complaint, petitioner alleged that in its policies
from1984through1988,thephraseItem5P393,000.00onthe
two swimming pools only (against the peril of earthquake shock
only) meant that only the swimming pools were insured for
earthquakedamage.Thesamephraseisusedintoto in the policies
from1989to1990,theonlydifferencebeingthedesignationofthe
twoswimmingpoolsasItem3.
Fifth, in order for the earthquake shock endorsement to be
effective, premiums must be paid for all the properties covered. In
all of its seven insurance policies, petitioner only paid P393.00 as
premium for coverage of the swimming pools against earthquake
shock. No other premium was paid for earthquake shock coverage
ontheotherproperties.Inaddition,theuseofthequalifierANY
instead of ALL to describe the property covered was done
deliberately to enable the parties to specify the properties included
forearthquakecoverage.
563
VOL.458,MAY16,2005 563
Sixth,petitionerdidnotinformrespondentofitsrequirementthatall
ofitspropertiesmustbeincludedintheearthquakeshockcoverage.
Petitionersownevidenceshowsthatitonlyrequiredrespondentto
followtheexactprovisionsofitspreviouspolicyfromAHACAIU.
Respondent complied with this requirement. Respondents only
deviation from the agreement was when it modified the provisions
regarding the replacement cost endorsement. With regard to the
issueunderlitigation,theridersoftheoldpolicyandthepolicyin
issueareidentical.
Seventh,respondentdidnotdoanyactorgiveanyassuranceto
petitioner as would estop it from maintaining that only the two
swimmingpoolswerecoveredforearthquakeshock.Theadjusters
letter notifying petitioner to present certain documents for its
building claims and repair costs was given to petitioner before the
adjusterknewthefullcoverageofitspolicy.
Petitioner anchors its claims on AHACAIUs inadvertent
deletion of the phrase Item 5 Only after the descriptive name or
titleoftheEarthquakeShockEndorsement.However,thewordsof
the policy reflect the parties clear intention to limit earthquake
shockcoveragetothetwoswimmingpools.
Before petitioner accepted the policy, it had the opportunity to
read its conditions. It did not object to any deficiency nor did it
institute any action to reform the policy. The policy binds the
petitioner.
Eighth, there is no basis for petitioner to claim damages,
attorneysfeesandlitigationexpenses.Sincerespondentwaswilling
andabletopayforthedamagecausedonthetwoswimmingpools,
itcannotbeconsideredtobeindefault,andtherefore,itisnotliable
forinterest.
Weholdthatthepetitionisdevoidofmerit.
In Insurance Policy No. 31944, four key items are important in
theresolutionofthecaseatbar.
564
First,inthedesignationoflocationofrisk,onlythetwoswimming
poolswerespecifiedasincluded,viz.:
ITEM 3393,000.00 On the20 two (2) swimming pools only (against the
perilofearthquakeshockonly)
21
Second,underthebreakdownforpremiumpayments, itwasstated
that:
PREMIUMRECAPITULATION
ITEMNOS. AMOUNT RATES PREMIUM
xxx
22
3 393,000.00 0.100%E/S 393.00
Third,PolicyConditionNo.6stated:
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
occurrences,namely:
23
(a)Earthquake,volcaniceruptionorotherconvulsionofnature.
Fourth, the rider attached to the policy, titled Extended Coverage

Endorsement (To Include the Perils of Explosion, Aircraft, Vehicle
andSmoke),stated,viz.:
ANNUALPAYMENTAGREEMENTON
LONGTERMPOLICIES
THE INSURED UNDER THIS POLICY HAVING ESTABLISHED

AGGREGATE SUMS INSURED IN EXCESS OF FIVE MILLION
PESOS,INCONSIDERATIONOFADISCOUNTOF5%OR71/2%
_______________
23Rollo,p.70.
565
VOL.458,MAY16,2005 565
OF THE NET PREMIUM x x x POLICY HEREBY UNDERTAKES TO

CONTINUE THE INSURANCE UNDER THE ABOVE NAMED x x x
ANDTOPAYTHEPREMIUM.
EarthquakeEndorsement
In consideration of the payment by the Insured to the Company of the
sumofP.................additionalpremiumtheCompanyagrees,
notwithstandingwhatisstatedintheprintedconditionsofthisPolicytothe
contrary,thatthisinsurancecoverslossordamage(includinglossordamage
by fire) to any of the property insured by this Policy occasioned by or
throughorinconsequenceofEarthquake.
ProvidedalwaysthatalltheconditionsofthisPolicyshallapply(except
in so far as they may be hereby expressly varied) and that any reference
thereintolossordamagebyfireshouldbedeemedtoapplyalsotolossor
24
damageoccasionedbyorthroughorinconsequenceofEarthquake.
Petitionercontendsthatpursuanttothisrider,noqualificationswere
placed on the scope of the earthquake shock coverage. Thus, the
policy extended earthquake shock coverage to all of the insured
properties.
Itisbasicthatalltheprovisionsoftheinsurancepolicyshouldbe
25
examined and interpreted in consonance with each other. All its
partsarereflectiveofthetrueintentoftheparties.Thepolicycannot
be construed piecemeal. Certain stipulations cannot be segregated
and then made to control neither do particular words or phrases
necessarily determine its character. Petitioner cannot focus on the
earthquake shock endorsement to the exclusion of the other
provisions. All the provisions and riders, taken and interpreted
together, indubitably show the intention of the parties to extend
earthquakeshockcoveragetothetwoswimmingpoolsonly.
_______________
25Ruiz v. Sheriff of Manila,34 SCRA 83 (1970) National Union Fire Insurance
CompanyofPittsburgv.StoltNielsenPhilippines,Inc.,184SCRA682(1990).
566
Acarefulexaminationofthepremiumrecapitulationwillshowthat
it is the clear intent of the parties to extend earthquake shock
coverage only to the two swimming pools. Section 2(1) of the
Insurance Code defines a contract of insurance as an agreement
whereby one undertakes for a consideration to indemnify another
against loss, damage or liability arising from an unknown or
contingent event. Thus, an insurance contract exists where the
followingelementsconcur:
1. Theinsuredhasaninsurableinterest
2. Theinsuredissubjecttoariskoflossbythehappeningof
thedesignatedperil
3. Theinsurerassumestherisk
4. Such assumption of risk is part of a general scheme to
distribute actual losses among a large group of persons
bearingasimilarriskand
5. In consideration26of the insurers promise, the insured
paysapremium. (Emphasisours)
An insurance premium is the consideration paid an insurer27 for

undertaking to indemnify the insured against a specified peril. In
fire,casualty,andmarineinsurance,thepremiumpayablebecomesa
28
debtassoonastheriskattaches. Inthesubjectpolicy,nopremium
payments were made with regard to earthquake shock coverage,
except on the two swimming pools. There is no mention of any
premium payable for the other resort properties with regard to
earthquakeshock.Thisisconsistentwiththehistoryofpetitioners
previous insurance policies from AHACAIU. As borne out by
petitionerswitnesses:
_______________
26SeeVance,pp.12,citedinAgbayani,CommercialLawsofthePhilippines,vol.
2,(1986),p.6PhilamcareHealthSystems,Inc.v.CourtofAppeals,379 SCRA 356

(2002).
2743Am.Jur.2d878.
28DeLeon,HectorS.,TheInsuranceCodeofthePhilippines(1992),p.194.
567
VOL.458,MAY16,2005 567
CROSSEXAMINATIONOFLEOPOLDOMANTOHAC
TSN,November25,1991
pp.1213
Q. NowMr.Mantohac,willitbecorrecttostatealsothatinsofaras
yourinsurancepolicyduringtheperiodfromMarch4,1984to
March4,1985thecoverageonearthquakeshockwaslimitedto
thetwoswimmingpoolsonly?
A. Yes,sir.Itislimitedtothetwoswimmingpools,specifically
showninthewarranty,thereisaprovisionherethatitwasonly
foritem5.
Q. MorespecificallyItem5statestheamountofP393,000.00
correspondingtothetwoswimmingpoolsonly?
A. Yes,sir.
TSN,November25,1991
pp.2326
Q. FortheperiodfromMarch14,1988uptoMarch14,1989,did
youpersonallyarrangefortheprocurementofthispolicy?
A. Yes,sir.
Q. Didyoualsodothisthroughyourinsuranceagency?
A. IfyouarereferringtoForteInsuranceAgency,yes.
Q. IsForteInsuranceAgencyadepartmentordivisionofyour
company?
A. No,sir.Theyareourinsuranceagency.
Q. Andtheyareindependentofyourcompanyinsofarasoperations
areconcerned?
A. Yes,sir,theyareseparateentity.
Q. Butinsofarastheprocurementoftheinsurancepolicyis
concernedtheyareofcoursesubjecttoyourinstruction,isthat
notcorrect?
A. Yes,sir.Thefinalactionisstillwithusalthoughtheycan
recommendwhatinsurancetotake.
Q. Intheprocurementoftheinsurancepolice(sic)fromMarch14,
1988toMarch14,1989,didyougivewritten
568
instructiontoForteInsuranceAgencyadvisingitthatthe
earthquakeshockcoveragemustextendtoallpropertiesof
AgooPlayaResortinLaUnion?
A. No,sir.Wedidnotmakeanywritteninstruction,although
wemadeanoralinstructiontothateffectofextendingthe
coverageon(sic)theotherpropertiesofthecompany.
Q. Andthatinstruction,accordingtoyou,wasveryimportant
becauseinApril1987therewasanearthquaketremorin
LaUnion?
A. Yes,sir.
Q. Andyouwantedtoprotectallyourpropertiesagainst
similartremorsinthe[future],isthatcorrect?
A. Yes,sir.
Q. Now,afterthispolicywasdeliveredtoyoudidyoubother
tochecktheprovisionswithrespecttoyourinstructions
thatallpropertiesmustbecoveredagainbyearthquake
shockendorsement?
A. Areyoureferringtotheinsurancepolicyissuedby
AmericanHomeAssuranceCompanymarkedExhibit
G?
Atty.Mejia:Yes.
Witness:
A. Iexaminedthepolicyandseeingthatthewarrantyonthe
earthquakeshockendorsementhasnomorelimitation
referringtothetwoswimmingpoolsonly,Iwascontented
alreadythatthepreviouslimitationpertainingtothetwo
swimmingpoolswasalreadyremoved.
Petitioner also cited and relies on the attachment of the phrase

Subject to: Other Insurance Clause, Typhoon Endorsement,
Earthquake Shock Endorsement, Extended Coverage
Endorsement,FEAWarranty&AnnualPaymentAgreementon
29
LongTermPolicies totheinsurancepolicyasproofoftheintent
ofthepartiestoextendthecoverageforearthquakeshock.However,
this
_______________
29ExhibitsIandI2.
569
VOL.458,MAY16,2005 569
phrase is merely an enumeration of the descriptive titles of the

riders, clauses, warranties or endorsements to which the policy is
subject,asrequiredunderSection50,paragraph2oftheInsurance
Code.
Wealsoholdthatnosignificancecanbeplacedonthedeletionof
the qualification limiting the coverage to the two swimming pools.
Theearthquakeshockendorsementcannotstandalone.Asexplained
bythetestimonyofJuanBarandaIII,underwriterforAHACAIU:
30
DIRECTEXAMINATIONOFJUANBARANDAIII
TSN,August11,1992
pp.912
Atty.Mejia:
WerespectfullymanifestthatthesameExhibitsCtoH
inclusivehavebeenpreviouslymarkedbycounselfordefendant
asExhibit[s]16inclusive.Didyouhaveoccasiontoreviewof
(sic)thesesix(6)policiesissuedbyyourcompany[infavor]of
AgooPlayaResort?
WITNESS:
Q. Yes[,]Irememberhavinggoneoverthesepoliciesatonepointof
time,sir.
Now,wach(sic)ofthesesix(6)policiesmarkedinevidenceas
ExhibitsCtoHrespectivelycarriesanearthquakeshock
endorsement[?]Myquestiontoyouis,onthebasison(sic)the
wordingsindicatedinExhibitsCtoHrespectivelywhatwas
theextentofthecoverage[against]theperilofearthquakeshock
asprovidedforineachofthesix(6)policies?
xxx
WITNESS:
Theextentofthecoverageisonlyuptothetwo(2)swimming
pools,sir.
_______________
30 The underwriter for PhilAmerican Insurance Corporation (formerly AIU) who
reviewedtheAgooPlayaResortinsurancepolicies.
570
Q. Isthatforeachofthesix(6)policiesnamely:ExhibitsC,D,
E,F,GandH?
A. Yes,sir.
ATTY.MEJIA:
Whatisyourbasisforstatingthatthecoverageagainst
earthquakeshockasprovidedforineachofthesix(6)policies
extendtothetwo(2)swimmingpoolsonly?
WITNESS:
Becauseitsayshereinthepolicies,intheenumeration
EarthquakeShockEndorsement,intheClausesandWarranties:
Item5only(EarthquakeShockEndorsement),sir.
ATTY.MEJIA:
WitnessreferringtoExhibitC1,yourHonor.
WITNESS:
Wedonotnormallycoverearthquakeshockendorsementon
standalonebasis.Forswimmingpoolswedocoverearthquake
shock.Forbuildingwecovereditforfullearthquakecoverage
whichincludesearthquakeshock
COURT:
Asfarasearthquakeshockendorsementyoudonothavea
specificcoverageforotherthingsotherthanswimmingpool?
Youarecoveringbuilding?Theyarecoveredbyageneral
insurance?
WITNESS:
Earthquakeshockcoveragecouldnotstandalone.Ifweare
coveringbuildingoranotherwecanissueearthquakeshock
solelybutthatthemomentIseethis,thethingthatcomestomy
mindiseitherinsuringaswimmingpool,foundations,theyare
normallyaffectedbyearthquakebutnotbyfire,sir.
DIRECTEXAMINATIONOFJUANBARANDAIII
TSN,August11,1992
pp.2325
Q. Plaintiffswitness,Mr.Mantohactestifiedandheallegedthat
onlyExhibitsC,D,EandFinclusive[remained]its
coverageagainstearthquakeshocktotwo(2)swimmingpools
onlybutthatExhibitsGandHre
571
VOL.458,MAY16,2005 571
spectivelyextendthecoverageagainstearthquakeshocktoallthe
propertiesindicatedintherespectiveschedulesattachedtosaid
policies,whatcanyousayaboutthattestimonyofplaintiffs
witness?
WITNESS:
AsIhavementionedearlier,earthquakeshockcannotstandalone
withouttheotherhalfofit.Iassureyouthatthisonecoversthe
twoswimmingpoolswithrespecttoearthquakeshock
endorsement.Basedonit,ifwearegoingtolookatthepremium
therehasbeennochangewithrespecttotherates.Everytime
(sic)thereisarenewaliftheintentionoftheinsurerwasto
includetheearthquakeshock,Ithinkthereisasubstantial
increaseinthepremium.Wearenotonlygoingtoconsiderthe
two(2)swimmingpoolsoftheotherasstatedinthepolicy.AsI
see,thereisnoincreaseintheamountofthepremium.Imustsay
thatthecoveragewasnotbroaden(sic)toincludetheotheritems.
COURT:
Theyarethesame,thepremiumrates?
WITNESS:
Theyarethesameinthesence(sic),intheamountofthe
coverage.Ifyouaregoingtodosomecomputationbasedonthe
ratesyouwillarriveatthesamepremiums,yourHonor.
CROSSEXAMINATIONOFJUANBARANDAIII
TSN,September7,1992
pp.46
ATTY.ANDRES:
Wouldyouasamatterofpractice[insure]swimmingpoolsfor
fireinsurance?
WITNESS:
No,wedont,sir.
Q. Thatiswhythephraseearthquakeshocktothetwo(2)
swimmingpoolsonlywasplaced,isitnot?
A. Yes,sir.
572
ATTY.ANDRES:
Willyounotalsoagreewithmethattheseexhibits,ExhibitsG
andHwhichyouhavepointedtoduringyourdirect
examination,thephraseItemno.5onlymeaningto(sic)the
two(2)swimmingpoolswasdeletedfromthepoliciesissuedby
AIU,isitnot?
xxx
ATTY.ANDRES:
Asaninsuranceexecutivewillyounotattachanysignificanceto
thedeletionofthequalifyingphraseforthepolicies?
WITNESS:
Myanswertothatwouldbe,thedeletionofthatparticularphrase
isinadvertent.Beingacompanyunderwriter,wedonotcover..
itwasinadvertentbecauseofthepreviouspoliciesthatwehave
issuedwithnospecificattachments,premiumratesandsoon.It
wasinadvertent,sir.
The Court also rejects petitioners contention that respondents

contemporaneous and subsequent acts to the issuance of the
insurance policy falsely gave the petitioner assurance that the
coverage of the earthquake shock endorsement included all its
properties in the resort. Respondent only insured the properties as
intendedbythepetitioner.Petitionersownwitnesstestifiedtothis
agreement,viz.:
TSN,January14,1992
pp.45
Q. JusttobeclearaboutthisparticularanswerofyoursMr.Witness,
whatexactlydidyoutellAtty.Omlas(sic)tocopyfromExhibit
HforpurposesofprocuringthepolicyfromPhilippineCharter
InsuranceCorporation?
A. Itoldhimthattheinsurancethattheywillhavetogetwillhave
thesameprovisionsasthisAmericanHomeInsurancePolicyNo.
20645680619.
Q. YouarereferringtoExhibitHofcourse?
A. Yes,sir,toExhibitH.
573
VOL.458,MAY16,2005 573
Q. So,alltheprovisionsherewillbethesameexceptthatofthe
premiumrates?
A. Yes,sir.Heassuredmethatwithregardstotheinsurance
premiumratesthattheywillbechargingwillbelimitedtothis
one.I(sic)canevenbelesser.
TSN,January14,1992
pp.1214
Atty.Mejia:
Q. Willitbecorrecttostate[,]Mr.Witness,thatyoumadea
comparisonoftheprovisionsandscopeofcoverageofExhibits
IandHsometimeinthethirdweekofMarch,1990or
thereabout?
A. Yes,sir,aboutthattime.
Q. Andatthattimedidyounoticeanydiscrepancyordifference
betweenthepolicywordingsaswellasscopeofcoverageof
ExhibitsIandHrespectively?
A. No,sir,Ididnotdiscoveranydifferenceinasmuch(sic)asIwas
assuredalreadythatthepolicywordingsandrateswerecopied
fromtheinsurancepolicyIsentthembutitwasonlywhenthis
caseeruptedthatwediscoveredsomediscrepancies.
Q. Withrespecttotheitemsdeclaredforinsurancecoveragedidyou
noticeanydiscrepancyatanytimebetweenthoseindicatedin
ExhibitIandthoseindicatedinExhibitHrespectively?
A. WithregardtothewordingsIdidnotnoticeanydifference
becauseitwasexactlythesameP393,000.00onthetwo(2)
swimmingpoolsonlyagainsttheperilofearthquakeshock
whichIunderstoodbeforethatthisprovisionwillhavetobe
placedherebecausethisparticularprovisionundertheperilof
earthquakeshockonlyisrequestedbecausethisisaninsurance
policyandthereforecannotbeinsuredagainstfire,sothishasto
beplaced.
The verbal assurances allegedly given by respondents

representative Atty. Umlas were not proved. Atty. Umlas
categoricallydeniedhavinggivensuchassurances.
574
Finally, petitioner puts much stress on the letter of respondents

independent claims adjuster, Bayne Adjusters and Surveyors, Inc.
But as testified to by the representative of Bayne Adjusters and
Surveyors,Inc.,respondentnevermeanttoleadpetitionertobelieve
thattheendorsementforearthquakeshockcoveredpropertiesother
thanthetwoswimmingpools,viz.:
DIRECTEXAMINATIONOFALBERTODELEON(Bayne
AdjustersandSurveyors,Inc.)
TSN,January26,1993
pp.2226
Q.
Doyourecallthecircumstancesthatledtoyourdiscussion
regardingtheextentofcoverageofthepolicyissuedby
PhilippineCharterInsuranceCorporation?
A. IrememberthatwhenIreturnedtotheofficeaftertheinspection,
Igotaphotocopyoftheinsurancecoveragepolicyanditwas
indicatedunderItem3specificallythatthecoverageisonlyfor
earthquakeshock.Then,IrememberIhadatalkwithAtty.
Umlas(sic),andIrelayedtohimwhatIhadfoundoutinthe
policyandheconfirmedtomeindeedonlyItem3whichwerethe
twoswimmingpoolshavecoverageforearthquakeshock.
xxx
Q. Now,mayweknowfromyouEngr.deLeonyourbasis,ifany,
forstatingthatexceptfortheswimmingpoolsallaffecteditems
havenocoverageforearthquakeshock?
xxx
A. Ibasedmystatementonmyfindings,becauseuponmy
examinationofthepolicyIfoundoutthatunderItem3itwas
specificonthewordingsthatonthetwoswimmingpoolsonly,
thenenclosedinparenthesis(againsttheperil[s]ofearthquake
shockonly),andsecondly,whenIexaminedthesummaryof
premiumpaymentonlyItem3whichreferstotheswimming
poolshaveacomputationforpremiumpaymentforearthquake
shockandalltheotheritemshavenocomputationforpaymentof
premiums.
575
VOL.458,MAY16,2005 575
In sum, there is no ambiguity in the terms of the contract and its

riders. Petitioner cannot rely on the general rule that insurance
contracts are contracts of adhesion which should be liberally
construed in favor of the insured 31and strictly against the insurer
companywhichusuallypreparesit. Acontractofadhesionisone
wherein a party, usually a corporation, prepares the stipulations in
thecontract,whiletheotherpartymerelyaffixeshissignatureorhis
adhesion thereto. Through the years, the courts have held that in
thesetypeofcontracts,thepartiesdonotbargainonequalfooting,
the weaker partys participation being reduced to the alternative to
takeitorleaveit.Thus,thesecontractsareviewedastrapsforthe 32
weaker party whom the courts of justice must protect.
Consequently,anyambiguitythereinisresolvedagainsttheinsurer,
33
orconstruedliberallyinfavoroftheinsured.
The case law will show that this Court will only rule out blind
adherence to terms where facts and circumstances will show that
34
theyarebasicallyonesided. Thus,wehavecalledonlowercourts
34
theyarebasicallyonesided. Thus,wehavecalledonlowercourts
to remain careful in scrutinizing the factual circumstances behind
each case to determine the efficacy of the claims of contending
parties. In Development Bank of35 the Philippines v. National
Merchandising Corporation, et al., the parties, who were acute
businessmenofexperience,were
_______________
31 Western Guaranty Corporation v. Court of Appeals, 187 SCRA 652 (1990)

Verendiav.CourtofAppeals,217SCRA417(1993).
32PhilippineNationalBankv.CourtofAppeals,196SCRA536(1991).
33Verendia v. Court of Appeals,217 SCRA 417 (1993) New Life Enterprises v.
Court of Appeals, 207 SCRA 669 (1992) Sun Insurance Office, Ltd. v. Court of
Appeals,211SCRA554(1992).
34PanAmericanWorldAirways,Inc.v.Rapadas,209SCRA67(1992)BPICredit
Corporationv.CourtofAppeals,204SCRA601(1991)Serrav.CourtofAppeals,229
SCRA60(1994).
3540SCRA624(1971).
576
presumed to have assented to the assailed documents with full

knowledge.
Wecannotapplythegeneralruleoncontractsofadhesiontothe
caseatbar.Petitionercannotclaimitdidnotknowtheprovisionsof
thepolicy.Fromtheinceptionofthepolicy,petitionerhadrequired
therespondenttocopyverbatimtheprovisionsandtermsofitslatest
insurancepolicyfromAHACAIU.ThetestimonyofMr.Leopoldo
Mantohac, a direct participant in securing the insurance policy of
petitioner,isreflectiveofpetitionersknowledge,viz.:
36
DIRECTEXAMINATIONOFLEOPOLDOMANTOHAC
TSN,September23,1991
pp.2021
Q. DidyouindicatetoAtty.Omlas(sic)whatkindofpolicyyou
wouldwantforthosefacilitiesinAgooPlaya?
A. Yes,sir.ItoldhimthatIwillagreetothatrenewalofthispolicy
underPhilippineCharterInsuranceCorporationaslongasitwill
followthesameorexactprovisionsofthepreviousinsurance
policywehadwithAmericanHomeAssuranceCorporation.
Q. DidyoutakeanystepMr.Witnesstoensurethattheprovisions
whichyouwantedintheAmericanHomeInsurancepolicyareto
beincorporatedinthePCICpolicy?
A. Yes,sir.
Q. Whatstepsdidyoutake?
A. WhenIexaminedthepolicyofthePhilippineCharterInsurance
CorporationIspecificallytoldhimthatthepolicyandwordings
shallbecopiedfromtheAIUPolicyNo.20645680619.
Respondent,incompliancewiththeconditionsetbythepetitioner,
copied AIU Policy No. 20645680619 in drafting its Insurance
PolicyNo.31944.Itistruethattherewasvarianceinsometerms,
specificallyinthereplacementcostendorse
_______________
36Testimonyofthevicepresidentforcorporateaffairsandcorporatesecretaryof
petitioner,TSN,September23,1991.
577
VOL.458,MAY16,2005 577
ment,buttheprincipalprovisionsofthepolicyremainedessentially
similar to AHACAIUs policy. Consequently, we cannot apply the
fineprintorcontractofadhesionruleinthiscaseastheparties
intenttolimitthecoverageofthepolicytothetwoswimmingpools
37
onlyisnotambiguous.
IN VIEWWHEREOF, the judgment of the Court of Appeals is
affirmed.Thepetitionforcertiorariisdismissed.Nocosts.
SOORDERED.
AustriaMartinez, Callejo, Sr., Tinga and ChicoNazario,

JJ.,concur.
Petitiondismissed,judgmentaffirmed.
Notes.In an accident insurance, the insureds beneficiary has

theburdenofproofindemonstratingthatthecauseofdeathisdueto
thecoveredperil.(Vda.deGabrielvs.CourtofAppeals,264SCRA
137[1996])
Itisusuallythemanwhoinsureshimselfwiththewifeorfuture
wifeasbeneficiaryinsteadoftheotherwayaround.(Peoplevs.Yip
WaiMing,264SCRA224[1996])
o0o
_______________
37Sweet Lines, Inc. v. Teves,83 SCRA 361 (1978) Tan v. Court of Appeals, 174
SCRA403(1989).
578
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Gulf Resorts, Inc. Vs Phil. Charter Insurance Corp

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Gulf Resorts, Inc. Vs Phil. Charter Insurance Corp

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550 SUPREMECOURTREPORTSANNOTATED

GULF RESORTS, INC., petitioner, vs. PHILIPPINE CHARTER

Insurance It is basic that all the provisions of the insurance policy

The facts as established by the court a quo, and affirmed by the

Item P7,691,000.00 ontheClubhouseonly@.392%

that plaintiff agreed to insure with defendant the properties covered by

that in Exhibit 7C the word included above the underlined portion

A. THE TRIAL COURT ERRED IN FINDING THAT PLAINTIFF

ISOLATED FROM THE CIRCUMSTANCES SURROUNDING ITS

On the other hand, respondent filed a partial appeal, assailing the

dent assured petitioner that it was covered for earthquake shock.

Third, the deletion of the phrase pertaining to the limitation of the

6. This insurance does not cover any loss or damage occasioned by or

Fourth, the rider attached to the policy, titled Extended Coverage

THE INSURED UNDER THIS POLICY HAVING ESTABLISHED

OF THE NET PREMIUM x x x POLICY HEREBY UNDERTAKES TO

25Ruiz v. Sheriff of Manila,34 SCRA 83 (1970) National Union Fire Insurance

An insurance premium is the consideration paid an insurer27 for

2,(1986),p.6PhilamcareHealthSystems,Inc.v.CourtofAppeals,379 SCRA 356

Petitioner also cited and relies on the attachment of the phrase

phrase is merely an enumeration of the descriptive titles of the

30 The underwriter for PhilAmerican Insurance Corporation (formerly AIU) who

The Court also rejects petitioners contention that respondents

The verbal assurances allegedly given by respondents

Finally, petitioner puts much stress on the letter of respondents

In sum, there is no ambiguity in the terms of the contract and its

31 Western Guaranty Corporation v. Court of Appeals, 187 SCRA 652 (1990)

33Verendia v. Court of Appeals,217 SCRA 417 (1993) New Life Enterprises v.

presumed to have assented to the assailed documents with full

AustriaMartinez, Callejo, Sr., Tinga and ChicoNazario,

Notes.In an accident insurance, the insureds beneficiary has

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