Roque vs IAC

G.R. No. L-66935 November 11, 1985

ISABELA ROQUE, doing business under the name and style of Isabela Roque Timber Enterprises
and ONG CHIONG, petitioners, vs. HON. INTERMEDIATE APPELATE COURT and PIONEER
INSURANCE AND SURETY CORPORATION, respondent.

FACTS:
On February 19, 1972, the Manila Bay Lighterage Corporation (Manila Bay), a common carrier, entered into
a contract with the petitioners whereby the former would load and carry on board its barge Mable 10 about
422.18 cubic meters of logs from Malampaya Sound, Palawan to North Harbor, Manila. The petitioners
insured the logs against loss for P100,000.00 with respondent Pioneer Insurance and Surety Corporation
(Pioneer).
On February 29, 1972, the petitioners loaded on the barge, 811 pieces of logs at Malampaya Sound, Palawan
for carriage and delivery to North Harbor, Port of Manila, but the shipment never reached its destination
because Mable 10 sank with the 811 pieces of logs somewhere off Cabuli Point in Palawan on its way to
Manila.
Hence, petitioners commenced Civil Case No. 86599 against Manila Bay and respondent Pioneer.

DECISION OF LOWER COURTS:

(1) Trial Court: found in favor of petitioners.
(2) Intermediate Appellate Court: absolved the respondent insurance company from liability on the grounds
that the vessel carrying the insured cargo was unseaworthy and the loss of said cargo was caused not by the
perils of the sea but by the perils of the ship

ISSUES:
I. THE INTERMEDIATE APPELLATE COURT ERRED IN HOLDING THAT IN CASES OF MARINE
CARGO INSURANCE, THERE IS A WARRANTY OF SEAWORTHINESS BY THE CARGO OWNER.
II. THE INTERMEDIATE APPELLATE COURT ERRED IN HOLDING THAT THE LOSS OF THE
CARGO IN THIS CASE WAS CAUSED BY "PERILS OF THE SHIP" AND NOT BY "PERILS OF THE
SEA.”

RULING:
I. No. The IAC is correct.
The liability of the insurance company is governed by law. Section 113 of the Insurance Code provides:
In every marine insurance upon a ship or freight, or freightage, or upon any thing that is the subject of
marine insurance, a warranty is implied that the ship is seaworthy.
Section 99 of the same Code also provides in part. Marine insurance includes:
(1) Insurance against loss of or damage to:
(a) Vessels, craft, aircraft, vehicles, goods, freights, cargoes, merchandise, ...

From the above-quoted provisions, there can be no mistaking the fact that the term "cargo" can be the subject
of marine insurance and that once it is so made, the implied warranty of seaworthiness immediately attaches
to whoever is insuring the cargo whether he be the shipowner or not.
Since the law provides for an implied warranty of seaworthiness in every contract of ordinary marine
insurance, it becomes the obligation of a cargo owner to look for a reliable common carrier which keeps its
vessels in seaworthy condition. The shipper of cargo may have no control over the vessel but he has full
control in the choice of the common carrier that will transport his goods. Or the cargo owner may enter into a
contract of insurance which specifically provides that the insurer answers not only for the perils of the sea
but also provides for coverage of perils of the ship.
II. No, the IAC is correct.
In marine cases, the risks insured against are "perils of the sea"
A policy does not cover a loss or injury that must inevitably take place in the ordinary course of things.
There is no doubt that the term 'perils of the sea' extends only to losses caused by sea damage, or by the
violence of the elements, and does not embrace all losses happening at sea. They insure against losses
from extraordinary occurrences only, such as stress of weather, winds and waves, lightning, tempests, rocks
and the like. These are understood to be the "perils of the sea" referred in the policy, and not those ordinary
perils which every vessel must encounter. "Perils of the sea" has been said to include only such losses as are
of extraordinary nature, encounter. "Perils of the sea" has been said to include only such losses as are
of extraordinary nature, or arise from some overwhelming power, which cannot be guarded against by the
ordinary exertion of human skill and prudence. Damage done to a vessel by perils of the sea includes every
species of damages done to a vessel at sea, as distinguished from the ordinary wear and tear of the voyage,
and distinct from injuries suffered by the vessel in consequence of her not being seaworthy at the outset of
her voyage (as in this case). It is also the general rule that everything which happens thru the inherent vice of
the thing, or by the act of the owners, master or shipper, shall not be reputed a peril, if not otherwise borne in
the policy.
It is quite unmistakable that the loss of the cargo was due to the perils of the ship rather than the perils of the
sea. The facts clearly negate the petitioners' claim under the insurance policy.
In the present case the entrance of the sea water into the ship's hold through the defective pipe already
described was not due to any accident which happened during the voyage, but to the failure of the ship's
owner properly to repair a defect of the existence of which he was apprised. The loss was therefore more
analogous to that which directly results from simple unseaworthiness than to that which result from the perils
of the sea.
Philam v Pineda G.R. No. L-54216 July 19, 1989

Facts:
Rodolfo C. Dimayuga procured an ordinary life insurance policy from the petitioner company and
designated his wife and children as irrevocable beneficiaries.
He then filed a petition to amend the designation of the beneficiaries in his life policy from irrevocable to
revocable.
The judge granted the request.
Petitioner promptly filed a motion but was denied. Hence, this petition.

Issues:
1. WON the designation of the irrevocable beneficiaries could be changed or amended without the consent of
all the irrevocable beneficiaries.
2. WON the irrevocable minor beneficiaries could give consent to the change in designation

Held: No to both. Petition dismissed.

Ratio:
Under the Insurance Act, the beneficiary designated in a life insurance contract cannot be changed without
the consent of the beneficiary because he has a vested interest in the policy.
There was an express stipulation to this effect: “It is hereby understood and agreed that, notwithstanding the
provisions of this policy to the contrary, inasmuch as the designation of the
primary/contingent beneficiary/beneficiaries in this Policy has been made without reserving the right to
change said beneficiary/ beneficiaries, such designation may not be surrendered to the Company, released or
assigned; and no right or privilege under the Policy may be exercised, or agreement made with the Company
to any change in or amendment to the Policy, without the consent of the said beneficiary/beneficiaries.”
The alleged acquiescence of the six (6) children beneficiaries of the policy cannot be considered an effective
ratification due to the fact that they were minors. Neither could they act through their father insured since
their interests are quite divergentfrom one another.
Therefore, the parent-insured cannot exercise rights and/or privileges pertaining to the insurance contract, for
otherwise, the vested rights of the irrevocable beneficiaries would be rendered inconsequential.
Of equal importance is the well-settled rule that the contract between the parties is the law binding on both of
them and for so many times, this court has consistently issued pronouncements upholding the validity and
effectivity of contracts. Likewise, contracts which are the private laws of the contracting parties should be
fulfilled according to the literal sense of their stipulations, for contracts are obligatory, no matter in what
form they may be, whenever the essential requisites for their validity are present
The change in the designation of was not within the contemplation of the parties. The lower court instead
made a new contract for them. It acted in excess of its authority when it did so.
Sun v CA G.R. No. 92383 July 17, 1992
J. Cruz

Facts:
Lim accidentally killed himself with his gun after removing the magazine, showing off, pointing the gun at
his secretary, and pointing the gun at his temple. The widow, the beneficiary, sued the petitioner and won
200,000 as indemnity with additional amounts for other damages and attorney’s fees. This was sustained in
the Court of Appeals then sent to the Supreme court by the insurance company.

Issue:
1. Was Lim’s widow eligible to receive the benefits?
2. Were the other damages valid?

Held:
1. Yes
2. No

Ratio:
1. There was an accident.
De la Cruz v. Capital Insurance says that "there is no accident when a deliberate act is performed unless
some additional, unexpected, independent and unforeseen happening occurs which produces or brings about
their injury or death." This was true when he fired the gun.

Under the insurance contract, the company wasn’t liable for bodily injury caused by attempted suicide or by
one needlessly exposing himself to danger except to save another’s life.
Lim wasn’t thought to needlessly expose himself to danger due to the witness testimony that he took steps to
ensure that the gun wasn’t loaded. He even assured his secretary that the gun was loaded.
There is nothing in the policy that relieves the insurer of the responsibility to pay the indemnity agreed upon
if the insured is shown to have contributed to his own accident.

2. “In order that a person may be made liable to the payment of moral damages, the law requires that his act
be wrongful. The adverse result of an action does not per se make the act wrongful and subject the act or to
the payment of moral damages. The law could not have meant to impose a penalty on the right to litigate;
such right is so precious that moral damages may not be charged on those who may exercise it erroneously.
For these the law taxes costs.”
If a party wins, he cannot, as a rule, recover attorney's fees and litigation expenses, since it is not the fact of
winning alone that entitles him to recover such damages of the exceptional circumstances enumerated in Art.
2208. Otherwise, every time a defendant wins, automatically the plaintiff must pay attorney's fees thereby
putting a premium on the right to litigate which should not be so. For those expenses, the law deems the
award of costs as sufficient.”
 CALANOC vs CA and THE PHILIPPINE AMERICAN LIFE INSURANCE CO. G.R. No. L-8151
December 16, 1955
FACTS
Basilio was a watchman of the Manila Auto Supply, secured a life insurance policy from the Philippine
American Life Insurance Company in the amount of P2,000 to which was attached a supplementary contract
covering death by accident. On January 25, 1951, he died of a gunshot wound on the occasion of a robbery
committed in the house of Atty. Ojeda (he was on the site, few blocks away from the premises of the Manila
Auto Supply because of the policeman’s invitation to accompany them in checking the lawyers house which
the lawyer suspected of being robbed). Virginia, the widow, was paid the sum of P2,000, face value of the
policy, but when she demanded the payment of the additional sum of P2,000 representing the value of the
supplemental policy, the company refused alleging that the deceased died because he was murdered by a
person who took part in the commission of the robbery and while making an arrest as an officer of the law
which contingencies were expressly excluded in the contract and have the effect of exempting the company
from liability.

ISSUE:
Whether the insurer is liable to the insured under the supplementary contract

HELD:

Yes the insurer is liable under the supplementary contract .The circumstance that he was a mere watchman
and had no duty to heed the call of Atty. Ojeda should not be taken as a capricious desire on his part to
expose his life to danger considering the fact that the place he was in duty-bound to guard was only a block
away. In volunteering to extend help under the situation, he might have thought, rightly or wrongly, that to
know the truth was in the interest of his employer it being a matter that affects the security of the
neighborhood. He cannot therefore be blamed solely for doing what he believed was in keeping with his duty
as a watchman and as a citizen. And he cannot be considered as making an arrest as an officer of the law for
certainly he did not go there for that purpose nor was he asked to do so by the policeman. Much less can it be
pretended that Basilio died in the course of an assault or murder considering the very nature of these crimes.
It cannot be said be said that the killing was intentional for there is the possibility that the malefactor had
fired the shot merely to scare away the people around for his own protection and not necessarily to kill or hit
the victim. In any event, the fact remains that the happening was a pure accident on the part of the victim.

The terms and phraseology of the exception clause be clearly expressed so as to be within the easy grasp and
understanding of the insured, for if the terms are doubtful or obscure the same must of necessity be
interpreted or resolved against the one who has caused the obscurity.
MALAYAN INSURANCE CO., INC., petitioner,
vs.
THE HON. COURT OF APPEALS (THIRD DIVISION) MARTIN C. VALLEJOS, SIO CHOY, SAN
LEON RICE MILL, INC. and PANGASINAN TRANSPORTATION CO., INC., respondents.
September 26, 1988
FACTS:

THE PLAYERS:
Sio Choy - registered owner of the Willy’s Jeep
Malayan Insurance - insurer of the jeep, up to P600 for damage to the jeep and up to P20,000 for “third-
party liability”
PANTRANCO (Pangasinan Transit Co.)
San Leon Rice Mill – employer of Juan Campollo
Juan Campollo - driver of jeep at the time of accident
Martin Vallejos – injured passenger of the jeep

At the time of the accident, Campollo was driving the jeep with Vallejo as the passenger. Travelling at high
speed, the jeep bumped a Pantranco bus which already tried to avoid the jeep by stopping at the shoulder of
the national highway. The accident resulted in the death of the driver, Campollo, and injuries to Vallejo, the
passenger.
Vallejo filed an action for damages against Sio Choy, Malayan Insurance, and Pantranco.
Pantranco disclaimed any liability saying it was Campollo who was negligent, and that it exercised the
diligence of a good father of a family in its selection and supervision of its drivers and in the maintenance of
its buses.
Sio Choy filed a cross-claim against Malayan.
Malayan filed a cross claim.

TRIAL COURT: Pantranco is free from liability. Sio Choy, Malayan and San Leon Rice Mill are
jointly and severally liable. With respect to Malayan, however, its liability is up to P20,000 only.
COURT OF APPEALS: Affirmed the judgment of the trial court. CA also ruled that, “San Leon Rice Mill,
Inc. has no obligation to indemnify or reimburse the petitioner insurance company for whatever
amount it has been ordered to pay on its policy, since the San Leon Rice Mill, Inc. is not a privy to the
contract of insurance between Sio Choy and the insurance company.”
Hence, Malayan appealed to the SC.

ISSUES:

(1) Whether the trial court, as upheld by the Court of Appeals, was correct in Malayan, Sio Choy and San
Leon Rice Mill, Inc. "solidarily liable" to respondent Vallejos. NO.

(2) Whether Malayan is entitled to be reimbursed by San Leon Rice Mill, Inc. for whatever amount Malayan
has been adjudged to pay Vallejos on its insurance policy. YES.

HELD:

(1) Sio Choy and San Leon Rice Mill are jointly and solidarity liable to Vallejos. Malayan is NOT
SOLIDARILY LIABLE WITH THE OTHER TWO.

Sio Choy is liable under 2184 because he is the registered owner of the jeep.
Art. 2184. In motor vehicle mishaps, the owner is solidarily liable with his driver, if the
former, who was in the vehicle, could have, by the use of the due diligence, prevented the
misfortune. It is disputably presumed that a driver was negligent, if he had been found guilty
 or reckless driving or violating traffic regulations at least twice within the next preceding
two months.
If the owner was not in the motor vehicle, the provisions of Article 2180 are applicable.

San Leon Rice Mill was held liable under 2180 .

Art. 2180. The obligation imposed by article 2176 is demandable not only for one's own acts
or omissions, but also for those of persons for whom one is responsible.

xxx xxx xxx

Employers shall be liable for the damages caused by their employees and household helpers
acting within the scope of their assigned tasks, even though the former are not engaged ill
any business or industry.
Sio Choy and San Leon are solidarily liable because of 2194.
Art. 2194. The responsibility of two or more persons who are liable for quasi-delict is
solidary.

SC: “It thus appears that respondents Sio Choy and San Leon Rice Mill, Inc. are the principal tortfeasors
who are primarily liable to respondent Vallejos. The law states that the responsibility of two or more persons
who are liable for a quasi-delict is solidarily.”

“On the other hand, the basis of MALAYAN’s liability is its insurance contract with Sio Choy. If
MALAYAN is adjudged to pay Vallejos in the amount of not more than P20,000.00, this is on
account of its being the insurer of respondent Sio Choy under the third party liability clause included
in the private car comprehensive policy existing between petitioner and respondent Sio Choy at the
time of the complained vehicular accident.”
“While it is true that where the insurance contract provides for indemnity against liability to third
persons, such third persons can directly sue the insurer, however, the direct liability of the insurer
under indemnity contracts against third party liability does not mean that the insurer can be held
solidarily liable with the insured and/or the other parties found at fault. The liability of the insurer is
based on contract; that of the insured is based on tort.”
Thus, it would seem that Malayan’s liability is DIRECT by reason of its contract with Sio Choy, but
it is NOT SOLIDARY.
(2) Malayan is entitled to re-imbursement from San Leon by virtue of SUBROGATION. Article
1217 says,
Art. 1217. Payment made by one of the solidary debtors extinguishes the obligation. If two
or more solidary debtors offer to pay, the creditor may choose which offer to accept.
He who made the payment may claim from his co-debtors only the share which corresponds
to each, with the interest for the payment already made. If the payment is made before the
debt is due, no interest for the intervening period may be demanded.
In accordance with Article 1217, MALAYAN, upon payment to Vallejos and thereby becoming the
subrogee of solidary debtor Sio Choy, is entitled to reimbursement from respondent San Leon Rice
Mill, Inc.
The SC summarized it as follows:
“To recapitulate then: We hold that only respondents Sio Choy and San Leon Rice Mill, Inc. are
solidarily liable to the respondent Martin C. Vallejos for the amount of P29,103.00. Vallejos may
enforce the entire obligation on only one of said solidary debtors. If Sio Choy as solidary debtor is
made to pay for the entire obligation (P29,103.00) and petitioner, as insurer of Sio Choy, is
compelled to pay P20,000.00 of said entire obligation, petitioner would be entitled, as subrogee of
Sio Choy as against San Leon Rice Mills, Inc., to be reimbursed by the latter in the amount of
P14,551.50 (which is 1/2 of P29,103.00 ).”
PERLA COMPANIA DE SEGUROS, INC V RAMOLETE

G.R. No. L-60887 | November 13, 1991 | J. Feliciano

Facts:
On June 1976, a Cimarron PUJ owned by Nelia Enriquez, and driven by Cosme Casas, was travelling from
Cebu City to Danao City. While passing through Liloan, Cebu, the Cimarron PUJ collided with a private
jeep owned by the late Calixto Palmes (husband of private respondent Primitiva Palmes) who was then
driving the private jeep. The impact of the collision was such that the private jeep was flung away to a
distance of about thirty (30) feet and then fell on its right side pinning down Calixto Palmes. He died as a
result of cardio-respiratory arrest due to a crushed chest. The accident also caused physical injuries on the
part of 2-year-old Adeudatus Borbon.

Private respondents Primitiva and Honorato Borbon, Sr. (father of Adeudatus) filed a complaint against
Cosme and Nelia before the then Cebu CFI claiming actual, moral, nominal and exemplary damages as a
result of the accident. The claim of Borbon, Sr. was excluded from the complaint due to jurisdiction.

The CFI ruled in favor of Primitiva, ordering common carrier Nelia to pay her damages and attorney’s fees.
The judgment of the trial court became final and executory and a writ of execution was issued, which
however, returned unsatisfied, prompting the court to summon and examine Nelia. She declared that the
Cimarron PUJ was covered by a third-party liability insurance policy issued by petitioner Perla.

Palmes then filed a motion for garnishment praying that an order of garnishment be issued against the
insurance policy issued by petitioner in favor of the judgment debtor. Respondent Judge then issued an
Order directing the Provincial Sheriff or his deputy to garnish the third-party liability insurance policy.
Petitioner filed for MR and quashal of the writ of garnishment on the ground that Perla was not a party to the
case and that jurisdiction over its person had never been acquired by the trial court by service of summons or
by any process. The trial court denied petitioner’s motion.An Order for issuance of an alias writ of
garnishment was subsequently issued.
More than two (2) years later, the present Petition for Certiorari and Prohibition was filed with this Court
alleging grave abuse of discretion on the part of respondent Judge Ramolete in ordering garnishment of the
third-party liability insurance contract issued by petitioner Perla in favor of the judgment debtor, Nelia
Enriquez. The Petition should have been dismissed forthwith for having been filed way out of time but, for
reasons which do not appear on the record, was nonetheless entertained.

Issue:
W/N there is GADALEJ on the part of the respondent judge

W/N there insurance policy may be subject to garnishment

Held:
1. No. The SC found no grave abuse of discretion or act in excess of or without jurisdiction on the part of
respondent Judge Ramolete in ordering the garnishment of the judgment debtor’s third-party liability
insurance.
2. Yes. Garnishment has been defined as a species of attachment for reaching any property or credits
pertaining or payable to a judgment debtor. In legal contemplation, it is a forced novation by the substitution
of creditors: the judgment debtor, who is the original creditor of the garnishee is, through service of the writ
of garnishment, substituted by the judgment creditor who thereby becomes creditor of the garnishee.
Garnishment has also been described as a warning to a person having in his possession property or credits of
the judgment debtor, not to pay the money or deliver the property to the latter, but rather to appear and
answer the plaintiff’s suit.
In order that the trial court may validly acquire jurisdiction to bind the person of the garnishee, it is
not necessary that summons be served upon him. The garnishee need not be impleaded as a party to
the case. All that is necessary for the trial court lawfully to bind the person of the garnishee or any
person who has in his possession credits belonging to the judgment debtor is service upon him of the
writ of garnishment.
Rule 39, Section 15 and Rule 57, Section 7(e) of the ROC themselves do not require that the garnishee be
served with summons or impleaded in the case in order to make him liable.

In the present case, there can be no doubt, therefore, that the trial court actually acquired jurisdiction over
petitioner Perla when it was served with the writ of garnishment of the third-party liability insurance policy it
had issued in favor of judgment debtor Nelia Enriquez. Perla cannot successfully evade liability thereon by
such a contention.

In a third-party liability insurance contract, the insurer assumes the obligation of paying the injured third
party to whom the insured is liable. The insurer becomes liable as soon as the liability of the insured to the
injured third person attaches. Prior payment by the insured to the injured third person is not necessary in
order that the obligation of the insurer may arise. From the moment that the insured became liable to the
third person, the insured acquired an interest in the insurance contract, which interest may be garnished like
any other credit.

A separate action is not necessary to establish petitioner’s liability.

Petition for Certiorari and Prohibition is hereby DISMISSED for having been filed out of time and for lack
of merit. Judgment AFFIRMED.
S
G.R. No. L-36480 May 31, 1988 ANDREW PALERMO, plaintiff-appellee, vs. PYRAMID
INSURANCE CO., INC., defendant- appellant.

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 (Exh. A). 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: WON plaintiff was not authorized to drive the insured motor vehicle because his driver's license had
expired.

RULING:

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.