Philippine Health Care Providers loaded to petitioner vessel, MV
vs. CIR Super Concarrier I. The cargo was received by Mr. Willig informing him Facts: Petitioner is a health that the cargo sustained water maintenance organization. Individuals damage. Willig informed Aboitiz of enrolled in the health care programs pay the damage noticed upon opening of an annual membership fee and are the cargo. The consignee (STIP) entitled to various preventive, diagnostic contacted the Phil office of ICNA for and curative medical services provided insurance claims. STIP filed a formal by its duly licensed physicians, claim with Aboitiz the latter refused specialists and other professional to settled the claim. ICNA paid the technical staff. amount to consignee. ICNA advised CIR sent petitioner a demand letter and Aboitiz of the claim & subrogation the corresponding assessment notices receipt executed in its favor. ICNA demanding the payment of deficiency filed a civil complaint against Aboitiz taxes. The deficiency (documentary for collection of actual damages. stamp tax) DST assessment was ISSUE: Whether respondent ICNA imposed on petitioner’s health care possesses the right of subrogation to agreement with the members of its claim reimbursement from health care program. petitioner? Issue: Whether petitioner is engaged in HELD: Yes. Respondent's cause of the business of insurance? action is founded on it being subrogated Held: No. Petitioner health care to the rights of the consignee of the programs are designed to prevent or to damaged shipment. The right of minimize the possibility of any subrogation springs from Article 2207 of assumption of risk on its part. Thus, its the Civil Code, which states: undertaking under its agreements is not Article 2207. If the plaintiff's property to indemnify its members against any has been insured, and he has received loss or damage arising from a medical indemnity from the insurance company condition but, on the contrary, to provide for the injury or loss arising out of the the health and medical services needed wrong or breach of contract complained to prevent such loss or damage. of, the insurance company shall be subrogated to the rights of the insured against the wrongdoer or the person 2. Aboitiz Shipping Corp vs. who has violated the contract. If the amount paid by the insurance company Insurance Company of N. does not fully cover the injury or loss, America the aggrieved party shall be entitled to Facts: MSAS Cargo Int’l Ltd and/or recover the deficiency from the person Assoc and/or Subsidiary Com causing the loss or injury. (MSAS) procured a marine Upon payment to the consignee of insurance policy from respondent indemnity for damage to the insured ICNA UK ltd of London. The goods, ICNA's entitlement to insurance was for a transshipment of subrogation equipped it with a cause of certain wooden work tools and action against petitioner in case of a workbenches purchased for the contractual breach or negligence. This consignee STIP. ICNA issued an “all right of subrogation, however, has its risk” open marine policy. The cargo limitations. First, both the insurer and was received by petitioner Aboitiz the consignee are bound by the and issued a bill of lading contained contractual stipulations under the bill of the notation “grounded outside lading. Second, the insurer can be warehouse”. The container was then subrogated only to the rights as the insured may have against the Facts: Philippine Postal Savings Bank, wrongdoer. If by its own acts after Inc (PPSBI) applied for & obtained receiving payment from the insurer, the insurance from Paramount as stated in insured releases the wrongdoer who the policy “all death benefits shall be caused the loss from liability, the insurer payable to the creditor, PPSBI, as its loses its claim against the latter. interest may appeal. Virgilio Castro obtained a housing loan from the 3. White Gold Marine Services Vs. PPSBI, the latter required Virgilio to Pioneer Insurance & Surety apply for a mortgage redemption Corporation insurance (MRI) from Paramount to Facts: Petitioner procured a protection & cover the loan. Virgilio named indemnity coverage for its vessels from Respondent as beneficiaries. Virgilio the Steamship Mutual Underwriting died, a claim was filed for death benefits Assoc (Bermuda) Limited (Steamship under the individual insurance coverage Mutual) through Pioneer Insurance & however Paramount denied the claim on Surety Corp (Pioneer). Pioneer issued the ground of material concealment or receipts evidencing payments for the misrepresentation. Paramount filed a coverage. When White Gold failed to complaint praying that the individual fully pay its accounts, Steamship Mutual insurance of Virgilio be declared null refused to renew the coverage. and void by reason of material Steamship filed a case against White concealment and misrepresentation. Gold for collection of sum of money to Respondent filed a motion to file a third recover the latter’s unpaid balance. In party complain and to admit attached turn, White Gold file a case against third party complaint. They argued that Steamship Mutual contending that it due to the death of Virgilio, PPSBI violated the Insurance Code for its stepped into the shoes of respondents failure to obtain a license and certificate under the principle of indemnity, of authority while being engaged in the subrogation, or any other reliefs. CA insurance business. allowed third party complaint to be filed against PPSBI. ISSUE: Whether Steamship Mutual is engaged in insurance business. ISSUE: Whether the admission of the third party complaint against PPSBI is HELD: Yes. Steamship Mutual as a P&I correct. Club is a form of insurance against third party liability, where the third party is HELD: In allowing the inclusion of anyone other than the P&I Club and the PPSBI as a third party defendant, the member hence Steamship is a mutual court recognizes the inseparable insurance assoc engaged in the marine interest of the bank in the validity of the insurance business. Basically, an individual insurance certificates issued insurance contract is a contract of by Paramount. The PPSBI as the indemnity, one undertakes for a mortgagee bank required Virgilio to consideration to indemnity another obtain MRI from Paramount to cover his against loss, damage or liability arising housing loan. Paramount undertook to from an unknown or contingent event. In pay the PPSBI “the benefits in particular, a marine insurance accordance with Insurance Schedule, undertakes to indemnify the assured upon receipt and approval of due proof against marine losses, such as the that the member has incurred a loss for losses incident to a marine adventure. which benefits are payable. As stated in the policy it is hereby agreed that all death benefits shall be payable to the 4. Paramount Life & General Creditors, PPSBI, as its interest may Insurance Corporation VS. appeal. Castro person (CKS) who has no insurable interest in the property insured. 5. Cha vs. CA
FACTS: Petitioner Spouses Cha 6. Rizal Surety & Insurance
(lessees) entered into a lease contract Company Vs. Court of Appeals & with private respondent CKS Dev’t Corp Transworld Knitting Mills, Inc. (lessor). One of the stipulation of the FACTS: Rizal Surety & Insurance lease contract states: Company (Rizal) issued a Fire The LESSEE shall not insure against for the Insurance Policy in favor of chattels, merchandise, textiles, goods and Transworld amounting Php1.5Million. effects placed at any stall or store or space Pertinent portions of subject policy in the lease premises without first obtaining on the buildings insured and location the written consent and approval of the thereof. Fire broke out in the LESSOR. If the LESSEE obtain the compound of Transworld razing the insurance w/o the consent of the LESSOR, then the policy is deemed assigned and middle portion of its 4 span building transferred to the LESSOR for its own and partly gutting the left & right benefit. sections. Transworld filed its insurance claims with Rizal Surety & The spouses Cha insured against loss Insurance Company but to no avail. by fire their merchandise inside the Private respondent brought against leased premises for 500K with United the said insurance companies an Insurance Co., Inc without the written action for collection of sum of money consent of private respondent CKS. On & damages. Petitioner countered the day that the lease contract was to that its fire insurance policy sued expire, fire broke out inside the leased upon covered only the contents of premises. CKS wrote to the insurer the 4- span building, which was demanding that the proceeds be paid partly burned, and not the damage directly to CKS by virtue of the caused by the fire on the 2-storey stipulation in the leased contract. annex building where fun & ISSUE: Whether CKS had insurable amusement machines & spare parts interest in the subject property insured were stored. so as to enable it to recover under the ISSUE: Whether Transworld has an policy. insurable interest in the fun & HELD: No. Insurable interest in the amusement machines & spare parts, property insured must exist at the time which entitles it to be indemnified for insurance takes effect and at the time the loss. the loss occurs. Therefore, the HELD: The fire insurance policy in respondent CKS cannot be a valid question did not limit its coverage to beneficiary of the fire insurance policy what were stored in the 4-span taken by the petitioner Sps. Cha over building. Two requirements must their merchandise. The insurable concur in order that the said fun & interest over said merchandise remains amusement machines and spare with the insured Sps Cha. The parts would be deemed protected by automatic assignment of the policy to the fire insurance policy. (1) CKS under the provision of the lease Properties must be contained and/or contract is void for being contrary to law stored in the areas occupied by and/or public policy. The insurer (united) Transworld & (2) said areas must cannot be compelled to pay the form part of the building described in proceeds of the fire insurance policy to a the policy. The so called “annex” was not an annex building but an integral and inseparable part of the 4-span claim on the ground of non-payment building described in the policy & of premium. consequently, the machines and ISSUE: Whether FEBTC had spare parts stored therein were insurable interest over the covered by the fire insurance in merchandise. dispute. Therefore, Petitioner is liable for the total loss and damage HELD. Prior to the full settlement of suffered by Transworld. the trust receipt account, FEBTC had insurable interest over the merchandise, and thus had greater 7. Far Eastern Bank & Trust reason to debit Maxilite’s account. Company vs. Jose Marques & Maxilite’s bank account had Maxilite Technologies sufficient funds to pay the insurance premium prior to the settlement of FACTS: Maxilite is a domestic the trust receipt account, FEBTC corporation engaged in the should have debited Maxilite’s importation & trading of equipment account with respect to the for energy-efficiency systems. Jose insurance policies. However, FEBTC Marques is the President & failed to debit Maxilite’s accounts controlling stockholder of Maxilite. which constitutes negligence. As a Far Eastern Bank & Trust Co. consequence of its negligence, (FEBTC) is a local bank which FEBTC must be held liable for handled the financing and related damages. requirements of Marques & Maxilite who maintained accounts with FEBTC. Accordingly, FEBTC 8. Vicente Ong Lim Sing Jr. Vs. financed Maxilite’s capital & FEB Leasing & Finance operational requirements through Corporation loans secured with properties of Marques under the latter’s name. FACTS: FEB entered into a lease of equipment and motor vehicles with Maxilite and Marques entered into a JVL Food Products (JVL). On the trust receipt transaction with FEBTC same date, Lim executed an for the shipment of various high- Individual Guaranty Agreement with technology equipment with the FEB to guarantee the prompt and merchandise serving as collateral. faithful performance of the terms and Marques agrees to keep said conditions of the aforesaid lease merchandise insured against fire to agreement. JVL was obliged to pay its full value, payable to the said FEB an aggregate gross monthly bank at the cost and expense of rental. JVL defaulted in the payment Marques who agrees to pay all of the monthly rentals hence the charges for storage on said arrears, including the penalty merchandise or other expenses charges and insurance premiums incurred thereon. FEBTC facilitated amounted to 3,414,468.75. FEB filed the procurement & processing form a complaint for sum of money and Makati Insurance Company 4 replevin against JVL & Lim. separate and independent fire insurance policies over the trust ISSUE: Whether Petitioner is a receipted merchandise. A fire gutted lessee with insurable interest over Maxilite’s office and warehouse. the subject personal properties. Maxilite suffered losses and claimed against the fire insurance policy with HELD: Yes, the stipulation of the the Makati Insurance Company lease contract, that the equipment where the latter denied the fire loss shall be insured at the cost and expense of the lessee against loss, of which is that an insured should damage, or destruction form fire, have insurable interest. Section 10 theft, accident or other insurable risk provides that every person has an for the full term of the lease is a insurable interest in the life and binding and valid stipulation. health of himself. In the case at bar, Petitioner as lessee has an insurable the insurable interest of respondents’ interest in the equipment and motor husband in obtaining the health care vehicles leased. Section 17 of agreement was his own health. The Insurance Code provides that the health care agreement was in the measurement of an insurable nature of a non-life insurance, which interest in property is the extent to was a contract of indemnity. Hence, which the insured might be reimbursement should be made to damnified by loss or injury. It cannot the party who incurred all expenses. be denied that JVL will be directly Once the member incurs hospital, damnified in case of loss, damage or medical or any other expense arising destruction of any of the properties from sickness, injury or other leased. stipulated contingent, the health care provider must pay for the same to 9. Philamcare Health System, Inc the extent agreed upon under the vs. Court of Appeals and Julita contract. Hence, Julita Trinos is Trinos therefore entitled to reimbursement. FACTS: Ernani Trinos, deceased husband of respondent Julita Trinos applied for a health care coverage 10. Malayan Insurance Company Inc. with Petitioner. The application was Vs. PAP Co., ltd. approved but the deceased lied with FACTS: Petitioner Malayan issued regards to his medical history, which Fire Insurance Policy to PAP Co., was invoked by insurer when Ltd for the latter’s machineries and petitioner tried to claim the benefits equipment located at Sanyo building. upon the death of Ernani. Petitioner The insurance was procured by PAP points out that only medical and Co. for RCBC the mortgagee of the hospitalization benefits are given insured machineries and equipment. under the agreement without any During the subsistence of the indemnification, unlike in an renewal policy, the insured insurance contract where the insured machineries and equipment were is indemnified for his loss. totally lost by fire. Hence, PAP Co. Respondent instituted the instant filed a fire insurance claim with case asking for reimbursement of Malayan in the amount insured her expenses and other legal fees. (Php15Million). Malayan denied the ISSUE: Whether a health care claim on the ground that the insured agreement is an insurance contract. machineries and equipment were Whether Julita Trinos has insurable transferred to a different location interest over the insurance contract. (Pace Pacific). Hence this petition. HELD: Insurance Code defines a ISSUE: Whether PAP committed contract of insurance as an concealment, misrepresentation and agreement whereby one undertakes breach of an affirmative warranty for a consideration to indemnify under the renewal policy when it another against loss, damage, or transferred the location of the liability arising from an unknown or insured properties without informing contingent event. The court also it. enumerates the requisites for an insurance contract to exist and one HELD: Yes. The transfer of the When the insured died, insured properties to the Pace respondent filed a death claim Factory without notice and without however, Manulife conducted Malayan’s consent exposed the an investigation and properties to a hazardous concluded that the insured environment and negatively affected misrepresented or concealed material facts with regards to the fire rating stated in the renewal his medical history at the time policy. PAP clearly committed the subject insurance policies concealment, misrepresentation and were applied for, hence, a breach of a material warranty. Sec. Manulife denied respondent’s 26, a neglect to communicate that death claim and refunded the which a party knows and ought to premiums that the insured communicate is called a paid on the subject insurance concealment. Hence Malayan is policies. Due to insured’s entitled to rescind the insurance concealment of material facts contract. Sec 27, a concealment Manulife exercised its right to entitles the injured party to rescind a rescind he subject insurance contract of insurance. contract and denied the claim on those policies. Accordingly, an insurer can exercise its right to rescind an ISSUE: Whether Manulife’s insurance contract when the Complaint for rescission of following conditions are present, insurance contracts for failure to wit: to prove concealment on the part of the insured is correct. 1) the policy limits the use or condition of the thing insured; HELD: The fraudulent intent 2) there is an alteration in said on the part of the insured use or condition; must be established to entitle the insurer to rescind the 3) the alteration is without the contract. Misrepresentation as consent of the insurer; a defense of the insurer to avoid liability is an affirmative 4) the alteration is made by means within the insured’s defense and the duty to control; and establish such defense by satisfactory and convincing 5) the alteration increases the evidence rests upon the risk of loss insurer.” For failure of Manulife to prove intent to defraud on the part of the insured, it cannot validly sue 11. Manulife Philippine, Inc. for rescission of insurance Vs. Ybanez contracts. FACTS: The insurance policy which Manulife issued both in 12. Sun Life of Canada vs. favor of Dr. Gumersindo Sibya Ybanez (insured) were void due to concealment or FACTS: Atty. Jesus Sibya Jr. misrepresentation of material applied for life insurance with facts in the latter’s application Sun Life. In his application for for life insurance. insurance, he indicated that Hermenegilda wife of the said he had sought advice for insured, was revocably kidney problems, had designated as beneficiary in undergone lithotripsy due to the subject insurance policies. kidney stone. Sun Life approved Atty. Jesus Jr.’s Sps.Rolando & Bernarda application and issued insurance Bacani. policy. The policy indicated the respondents as beneficiaries and FACTS: Robert John Bacani entitles them to a death benefit procured a life insurance of 1M should Atty dies on or contract for himself from before Feb 5, 2021 or a sum of petitioner. He was issued Policy money if Atty is still living on the valued at Php100K with double endowment date. Atty died as a indemnity in case of accidental result of a gunshot wound. As death. The designated such, Ma. Daisy seek the death beneficiary was his mother, benefits with Sun Life indicated respondent Bernarda. The in his insurance policy. insured died in a plane crash. Respondent Bernarda filed a Sun Life denied the claim on the claim with petitioner seeking the ground that the details on Atty benefits of the insurance policy medical history were not thus rendering the contract of disclosed in his application. Sun insurance voidable. Petitioner Life tendered a check claimed that the insured gave representing the refund of the false statements in his premiums paid by Atty. application when he answered several questions. Respondent ISSUE: Whether there was a filed an action for specific concealment or performance against petitioner. misrepresentation when Atty. Jesus, Jr. submitted his ISSUE: Whether concealment insurance application with Sun can be invoked by insurer even Life. though it was not the cause for the loss. HELD: No. Atty. Jesus Jr., admitted in his application his HELD: Yes. Sec. 26 of the medical treatment for kidney Insurance Code is explicit in ailment. Moreover, he executed requiring a party to a contract of an authorization in favor of Sun insurance to communicate to the Life to conduct investigation in other, in good faith, all facts reference with his medical within its knowledge which are history. Given the express material to the contract and as to language of the Authorization, it which he makes no warranty and cannot be said that Atty which the other has no means of concealed his medical history ascertaining. “A neglect to since Sun Life had the means of communicate that which a party ascertaining insured’s medical knows and ought to record. Where matters of opinion communicate, is called or judgment are called for, concealment. The insured is answers made in good faith and specifically required to disclose without intent to deceive will not to the insurer matters relating to avoid a policy even though they his health. Thus “good faith” is are untrue. Indeed, concealment no defense in concealment. The as a defense for the insurer to insured’s failure to disclose the avoid liability is an affirmative fact that he was hospitalized for defense and the duty to establish two weeks prior to filing his such defense by satisfactorily application for insurance, raises and convincing evidence rests grave doubts about his upon the provider or insurer. In bonafides. It appears that such the case at bar, Sun Life failed to concealment was deliberate on clearly and satisfactorily his part. establish its allegations, and is therefore liable to pay the proceeds of the insurance.
13. Sunlife Assurance Company
of Canada vs. CA & 14. Manila Bankers Life last reinstatement. At least Insurance Corporation vs. two (2) years from the Aban issuance of the policy or its last reinstatement, the Facts: Delia Sotero took out a beneficiary is given the life insurance policy from stability to recover under the Manila Bankers Life Insurance policy when the insured dies. Corp. (Banker’s Life) The provision also makes designating respondent clear when the two-year Cresencia Aban, her niece, as period should commence in her beneficiary. case the policy should lapse and is reinstated, that is, from When the insurance policy the date of the last had been in force for more reinstatement. than 2 years and 7 months, Sotero died. Respondent After two years, the defenses claim for the insurance of concealment or proceeds. Petitioner misrepresentation, no matter conducted an investigation how patent or well-founded, into the claim and denied the will no longer lie. respondent’s claim with the following reasons, Sotero was 15. Great Pacific Life sick since 1990; Respondent Assurance Corp vs. Court was the one who filed the of Appeals & Medarda insurance application and Leuterio designated herself as the beneficiary, etc. and refunded FACTS: A contract of group the premiums paid on the life insurance was executed policy. Petitioner filed a civil between petitioner and case for rescission and/or Development Bank of the annulment of the policy. Philippines (DBP). Grepalife agreed to insure the lives of ISSUE: Whether fraud, eligible housing loan concealment or mortgagors of DBP. Dr. misrepresentation was Wilfredo Leuterio a housing present when the insurance debtor of DBP applied for was obtained. membership in the group life insurance plan. Grepalife HELD: No. It was Sotero who issued insurance coverage to obtained the insurance for the extent of his DBP herself. Fraudulent intent on mortgage indebtedness. Dr. the part of the insured must Leuterio died due to massive be established to entitle the cerebral hemorrhage. DBP insurer to rescind the contract. submitted a death claim to In the absence of proof of Grepalife, but the later denied such fraudulent intent, no right the same alleging that Dr. to rescind arises. Leuterio was not physically healthy when he applied for The purpose of the law is to an insurance coverage and give protection to the insured insisted that Dr. did not or his beneficiary by limiting disclose he had been the rescinding of the contract suffering for hypertension of insurance on the ground of which caused his death. Such fraudulent concealment or non-disclosure constituted misrepresentation to a period concealment that justified the of only two (2) years from the denial of the claim. The issuance of the policy or its widow-respondent filed a complaint against Grepalife Facts: Manuel Florendo filed an for Specific Performance with application for comprehensive damages. pension plan with respondent PhilAm Plans. After some ISSUE: Whether there was convincing by respondent Perla concealment was aptly Abcede. Manuel signed the answered by Dr. Leuterio. application and left the task to Perla of supplying the information HELD: The insured, Dr. needed in the application. Perla’s Leuterio, had answered in his daughter signed the application insurance application that he as sales counselor. Aside from was in good health and that pension benefits, the he had not consulted a doctor comprehensive pension plan also or any of the enumerated provided life insurance coverage ailments, including to Florendo covered by PhilAm hypertension. The former died Life. Under the master policy, of cerebral hemorrhage. PhilAm Life was to automatically There was no sufficient proof provide life insurance coverage to that the insured had suffered all who signed PhilAm Plans hypertension. Insurance comprehensive plan. If the plan company had failed to holder died before the maturity of establish that there was the plan, his beneficiary was to concealment made by the instead receive the proceeds of insured, hence, it cannot the life insurance further, the life refuse payment of the claim. insurance was to take care of any The fraudulent intent on the unpaid premium until the pension part of the insured must be plan matured, entitling the established to entitle the beneficiary to the maturity value insurer to rescind the contract. of the pension plan. Manuel died Misrepresentation as a before his pension mature, defense of the insured to Lourdes filed a claim with PhilAm avoid liability is an affirmative Plans and was to get benefits of defense and the duty to his life insurance. PhilAm Plans establish such defense by forwarded her claim to PhilAm satisfactory and convincing Life. PhilAm Plans declined the evidence rests upon the claim because PhilAm Life found insurer. In the case at bar, the that Manuel was on maintenance petitioner failed to clearly and medicine for his heart and had an satisfactorily establish its implanted pacemaker, prompting defense, and is therefore Lourded to file the instant case. liable to pay the proceeds of the insurance. ISSUE: Whether Manuel is guilty of concealing his illness regarding the ailments he suffered from. 16. Florendo vs. PhilAm Plan, Inc, Perla Abcede & HELD: Yes. It is cleared that Celeste Abcede Manuel concealed his chronic heart ailment and diabetes from (This case is about an PhilAm Plans. Though, Perla insured’s alleged concealment knew that Manuel had a in his pension plan application pacemaker implanted before he of his true state of health and signed up for the pension plan, its effect on the life insurance the responsibility for preparing portion of that in case of the application belonged to death) Manuel. Nothing in it implies that someone else may provide the information that PhilAm Plans respondent, hence, it should not be needed. Pursuant to Sec. 27 made liable to pay compensatory Manuel’s concealment entitles interest. PhilAm Plans to rescind its contract of insurance with him. 18. PhilamCare Health Systems, Inc 17. Sun Life of Canada vs. vs. CA and Julita Trinos Sandra Tan Kit re: Concealment FACTS: Respondent Tan Kit is the widow and designated ISSUE: Whether there was a beneficiary of Norberto whose misrepresentation by Ernani in his application for a life insurance application was granted by petitioner. Within the 2-year contestability period, HELD: Where a matter of opinion is Norberto died, respondent filed a called for, answers made in good faith claim under the subject policy. and without intent to deceive will not avoid a policy even though they are Petitioner denied respondent Tan untrue. Thus, a misrepresentation of Kit’s claim on account of expectation, intention, opinion of Norberto’s failure to fully and judgment of the insured, although false, faithfully disclose in his insurance will not avoid the policy if there is no application certain material and actual fraud in inducing the acceptance relevant information about his of the risk or its acceptance at a lower health and smoking history. premium. Believing that the policy is null and void, petitioner opined that its liability is limited to the refund of all the premiums paid hence enclosed the check sent to 19. Insular Life Assurance Company respondent but the latter refuse vs. Paz Khu to accept and insisted on the payment of the insurance FACTS: Felipe N. Khu Sr. applied for a proceeds. Petitioner file a life insurance with Insular Life. Felipe complaint for rescission of accomplished the required medical insurance contract. questionnaire wherein he did not declare any illness or adverse medical ISSUE: Whether petitioner is condition. Insular issued him Policy with liable to pay interest on the a face value of 1M. Felipe’s policy premium to be refunded to lapsed due to non-payment of the respondent. premium. Felipe applied for the reinstatement of his policy. Felipe died. HELD: No. In this case, what is involved Respondents or Felipe’s beneficiary is an order for petitioner to refund to filed with Insular Life a claim for benefit respondents the insurance premium under the reinstated policy. However, paid by Norberto as a consequence of the claim was denied. Insular decided to the rescission of the insurance contract rescind the reinstated policy on the on account of the latter’s concealment of grounds of concealment and material information in his insurance misrepresentation. Respondents application. Moreover, petitioner did not instituted a complaint for specific unreasonably deny or withhold the performance with damages. Insular insurance proceeds as it was countered that Felipe did not disclose satisfactorily established that Norberto the ailments. was guilty of concealment. Petitioner properly complied with its obligation when he tendered the check in favor of ISSUE: Whether Felipe’s reinstated life 20. Heirs of Loreto Maramag insurance policy is already incontestable vs. Eva Maramag at the time of his death. FACTS: Petitioner were the legit HELD: No. Sec. 48. Whenever a wife and children of Loreto, while right to rescind a contract of respondent were illegitimate insurance is given to the insurer family. Eva was a concubine of by any provision of this chapter, Loreto. Loreto obtained an such right must be exercised insurance policy designating his previous to the commencement concubine and his 3 illegitimate of an action on the contract. children as beneficiary. The legit family challenged the designation After a policy of life insurance contending that (Eva) her share made payable on the death of the should be forfeited in their favor insured shall have been in force as she is disqualified and that the during the lifetime of the insured share of the illegit children should for a period of two years from the be limited to that provided by law date of its issue or of its last on the rules of legitime. reinstatement, the insurer cannot prove that the policy is void ab ISSUE: Whether the petitioner is initio or is rescindible by reason entitled to the proceeds. of the fraudulent concealment or misrepresentation of the insured HELD: Although petitioners are or his agent. the legitimate heirs of Loreto, they were not named as ‘The insurer is deemed to have beneficiaries. Sec. 53 provides the necessary facilities to that the Insurance proceeds shall discover such fraudulent be applied exclusively to the concealment or proper interest of the person in misrepresentation within a period whose name or for whose benefit of two (2) years. It is not fair for is made. The designation of the the insurer to collect the illegitimate children remained premiums as long as the insured valid. Because no legal is still alive, only to raise the prescription exists in naming as issue of fraudulent concealment beneficiaries the illegit children of or misrepresentation when the the insured, the shares of Eva insured dies in order to defeat the should be awarded to the illegit right of the beneficiary to recover children to the exclusion of the under the policy. petitioners. It is only in cases where the insured has not At least two (2) years from the designated any beneficiary or issuance of the policy or its last when the beneficiary is reinstatement, the beneficiary is disqualified by law to receive the given the stability to recover proceeds, that the proceeds shall under the policy when the insured redound to the benefit of the dies. The provision also makes estate of the insured. clear when the two-year period should commence in case the 21. New Life Enterprises & policy should lapse and is Julian Sy vs. CA reinstated, that is, from the date of the last reinstatement’. Facts: Julian Sy and Jose Sy Bang formed partnership under the business name of New Life Enterprises engaged in the sale of construction materials. Sy insured the stocks in trade of Western Guaranty Corp – fire petitioner. Pedroso claims policy in the amount of Php300K; Renato Valle was her insurance agent and collected her monthly Reliance Surety and Insurance premiums. Valle told her that Co., Inc. – fire policy in the petitioner holding a promotional amount 300k additional 700k; investment program for policyholders. Enticed, she Equitable Insurance Corporation invested. Relying on the – fire policy in the amount of representation made by 200k. petitioners duly authorized representatives known agent When the building is gutted by Valle, respondent waited for the fire, the stocks were insured maturity of her initial investment. against fire in the total amount of A month after, her investment 1,550,000.00. Sy went to the was returned. After a second Reliance Insurance and file his investment, she tried to withdraw claim, he further testified that 3 her investment but Valle did not insurance companies are sister return some of it. Hence, companies. Ultimately, the 3 respondent filed an action for the denied plaintiff’s claim for recovery of a sum of money. RTC payment by reason of breach of of Manila held Filipinas and its policy, “which requires the co-defendants Valle jointly and insured to give notice of any solidarily liable to the insurance/s already effected respondents. covering the stocks in trade”. Hence this petition. ISSUE: Whether petitioner & its co-defendants jointly and ISSUE: Whether insurance severally liable? contracts were violated by misrepresentation resulting in the HELD: Yes. It appears that forfeiture of all the benefits. respondents had invested respectively and were received HELD: Yes. The terms of the by Valle and remitted to Filipinas contract are clear and Life using Filipinas Life’s Official unambiguous. The insured is Receips. Filipinas Life, as the specifically required to disclose to principal, is liable for obligations the insure any other insurance contracted by its agent Valle. The and its particulars which he may general rule is that the principal is have effected on the same responsible for the acts of its subject matter. The parties must agent done within the scope of its abide by the terms of the contract authority, and should bear the because such terms constitute damage caused to third persons. the measure of the insurer’s When the agents exceed his liability and compliance therewith authority, the agent becomes is a condition precedent to the personally liable for the damage. insured’s right of recovery from Filipinas Life cannot profess the insurer. ignorance of Valles acts. Even if Valles representations were beyond his authority as a debit/insurance agent, Filipinas 22. Filipinas Life Assurance Life thru Alcantara & Apetrior Company now Ayala Life expressly and knowingly ratified Assurance Inc vs. Pedroso Valles acts. It cannot even be denied that Filipinas Life FACTS: Respondent is a benefited from the investments policyholder of a 20-year deposited by Valle in the account endowment life insurance by of Filipinas Life. In our considered view, Filipinas Life had clothed ISSUE: Whether the subsequent Valle with apparent authority; act of reinstating the wrongfully hence, it is now estopped to deny cancelled insurance policy by said authority. respondent absolving the latter from its liability for damages. 23. Santos Areola vs. CA & Prudential Guarantee & HELD: Consequently, respondent Assurance, Inc. insurance company is liable by way of damages for the FACTS: Petitioner bought a fraudulent acts committed by personal accident insurance Malapit that gave occasion to the policy with the Prudential. erroneous cancellation of subject Petitioner was supposed to pay insurance policy. Its earlier act of Php1,609.65. In the lower-hand reinstating the insurance policy corner of the term and condition cannot obliterate the injury is legibly printed. “SOA must not inflicted on petitioner-insured. be considered a OR. OR will be Respondent company should be issued upon payment of this reminded that a contract of account. insurance creates reciprocal obligations for both insurer and If payment was made to a insured. Reciprocal obligations representative, demand for are those which arise from the provisional receipt and if OR is same cause and in which each not received within 7 days please party is both a debtor and a notify us.” If payment is made to creditor of the other, such that the our office, demand for an OR. obligation of one is dependent upon the obligation of the other. Respondent insurance company issued collector’s provisional 24. AFP General Insurance receipt to petitioner for the Corporation Vs. Noel amount of Php1,609.65. Molina
Respondent sent petitioner FACTS: Private respondent are
endorsement which “cancelled the complainants in a case for flat” for non-payment of premium. illegal dismissal filed against Radon Security & Allied Services Shocked by the cancellation of Agency and/or Raquel Aquias the policy, petitioner confronted and Ever Emporium, Inc. The Carlito Ang, agent of respondent Labor Arbiter ruled that private and demanded the issuance of respondent were illegally an OR. dismissed and ordered Radon Security to pay them separation Respondent offered to reinstate pay, backwages, and other same policy it had previously monetary claims. Radon cancelled and even proposed to appealed and posted extend its lifetime, upon finding supersedeas bond issued by that the cancellation was herein petitioner, AFPGIC as erroneous and that the premiums surety. were paid in full by petitioner but were not remitted by Malapit, AFPGIC entered the fray filing respondent insurance company’s before the LA an Omnibus Motion branch manager. to Quash Notice/Writ of Garnishment and to discharge Hence, petitioner filed an action AFPGIC appeal bond on the for damages due to breach of ground that said bond has been contract. cancelled and thus non-existent in view of the failure of Radon to pay yearly premiums, but it was FACTS: Petitioner is engaged in subsequently denied. Hence this the business of buying, selling petition. and manufacturing Christmas lights. UMC leased a warehouse ISSUE: Whether the subject in QC where UMC assembled appeal bong was already and stored its products. UMC cancelled for non-payment of insured its stocks in trade against premium and thus it could not be fire with CBIC for Php15M valid subject of execution or until Sept 6, 1996. A fire gutted garnishment. the warehouse rented by UMC, and demanded for at least 50% HELD: The instant case pertains payment of its claim but UMC to a surety bond; thus, the rejected the claim due to breach applicable provision of the of Condition in Insurance Policy. Insurance Code is Section 177, which specifically governs If the claim be in any respect suretyship. It provides that a fraudulent, or if any false declaration be made or used in support thereof, surety bond, once accepted by or if any fraudulent means or the obligee becomes valid and devices are used by the Insured or enforceable, irrespective of anyone acting in his behalf to obtain whether or not the premium has any benefit under this Policy; or if been paid by the obligor. The the loss or damage be occasioned by the willful act, or with the private respondents, the obligees connivance of the Insured, all the here, accepted the bond posted benefits under this Policy shall be by Radon Security and issued by forfeited the petitioner. Hence, the bond is both valid and enforceable. Hence, UMC filed a complaint against CBIC. The Labor Arbiter directed the NLRC Sheriff to garnish the ISSUE: Whether arson and fraud surety bond issued by the in the instant case is present and petitioner. The latter, as surety, is whether UMC is entitled to claim mandated to comply with the writ from CBIC the full coverage of its of garnishment, for as earlier fire insurance policy. pointed out, the bond remains enforceable and under the HELD: In the present case, CBIC jurisdiction of the NLRC until it is evidence did not prove that the discharged. In turn, the petitioner fire was intentionally caused by may proceed to collect the the insured. amount it paid on the bond, plus the premiums due and An insurer who seeks to defeat a claim demandable, plus any interest because of an exception or limitation in owing from Radon Security. This is pursuant to the principle of the policy has the burden of establishing subrogation enunciated in Article that the loss comes within the purview of 2067 of the Civil Code which we the exception or limitation. If loss is apply to the suretyship proved apparently within a contract agreement between AFPGIC and of insurance, the burden is upon the Radon Security, in accordance with Section 178 of the Insurance insurer to establish that the loss arose Code. from a cause of loss which is excepted or for which it is not liable, or from a 25. United Merchants cause which limits its liability.[24] In the Corporation (UMC) vs. present case, CBIC failed to discharge Country Banker’s its primordial burden of establishing that Insurance Corporation (CBIC) the damage or loss was caused by While under the official custody of arson, a limitation in the policy. Noah’s Ark Manager, Pacquing as a service company vehicle, the vehicle was stolen and its However, the Insurance Code provides whereabouts cannot be that a policy may declare that a violation recovered. of specified provisions thereof shall avoid it. Thus, in fire insurance policies, Oblivious of the incident, Trans- Pacific picked up the check and which contain provisions such as issued an OR acknowledging the Condition No. 15 of the Insurance receipt for premium. Policy, a fraudulent discrepancy between the actual loss and that Pacquing informed petitioner of claimed in the proof of loss voids the the vehicle’s loss. Petitioner reported the loss and filed a claim insurance policy. Mere filing of such a with respondent for the insurance claim will exonerate the insurer. proceeds of P1.5M. Considering that all the circumstances point to the inevitable conclusion that Respondent denied petitioner’s UMC padded its claim and was guilty of claim on the ground that there was no insurance contract. fraud, UMC violated Condition No. 15 of the Insurance Policy. Thus, UMC Petitioner filed a complaint for forfeited whatever benefits it may be collection of sum of money and entitled under the Insurance Policy, damages against respondent. including its insurance claim. ISSUE: Whether there is a 26. Gaisano vs. Dev’t binding insurance contract Insurance and Surety between petitioner and Corporation. respondent.
FACTS: Petitioner was the HELD: No. Insurance is a contract
registered owner of a Montero, whereby one undertakes for a while respondent is a domestic consideration to indemnify another corporation engaged in the against loss, damage or liability arising insurance business. Respondent from an unknown or contingent event. issued a comprehensive Just like any other contract, it requires a commercial vehicle policy to cause or consideration. The petitioner in the amount of 1.5M consideration is the premium, which over the vehicle. Respondent must be paid at the time and in the way also issued 2 other commercial and manner specified in the policy. If not vehicle policies covering another so paid, the policy will lapse and be 2 motor vehicles of petitioner. forfeited by its own terms. To collect premium, respondent The general rule is that unless the agents, Trans-Pacific, issued a premium is paid the insurance policy id SOA to petitioner’s company, not valid and binding. Sec 77 of Noah’s Ark Merchandising Insurance Code (Noah’s Ark) the latter immediately processed the Sec. 77. An insurer is entitled to payment of the payments and issued a Far East premium as soon as the thing insured is Bank Check representing exposed to the peril insured against. payment for the 3 insurance Notwithstanding any agreement to the policies. However, nobody from contrary, no policy or contract of insurance Trans-Pacific picked up the check issued by an insurance company is valid and and informed Noah’s Ark that its binding unless and until the premium thereof messenger would get the check. has been paid, except in the case of a life or an operational requirements through loans industrial life policy whenever the grace period secured with properties of Marques. provision applies. Exception to the rule is that, 1) in case of life or industrial life policy FEB Insurance Broker’s Inc. (FEBIBI) is whenever the grace period provision applies. a local insurance brokerage corporation while Makati Insurance Company is a 2) Sec. 78. SEC. 78. Any acknowledgment in a local insurance company both are policy or contract of insurance of the receipt of subsidiaries of FEBTC. premium is conclusive evidence of its payment, so far as to make the policy binding, Marques entered into a trust receipt notwithstanding any stipulation therein that it transaction with FEBTC and further shall not be binding until premium is actually agrees to keep said merchandise paid. insured against fire to its full value, payable to the said bank. 3) A third exception was laid down in Makati Tuscany Condominium Corporation vs. Court of FEBIBI facilitated the procurement and Appeals, wherein we ruled that Section 77 may processing from Makati Insurance not apply if the parties have agreed to the Company of 4 separate & independent payment in installments of the premium and fire insurance policies. Maxilite paid the partial payment has been made at the time of premiums for 4 policies through debit loss. arrangement. FEBTC would debit Maxilites account for the premium 4) That the insurer may grant credit extension payments, as reflected in SOA sent by for the payment of the premium. This simply means that if the insurer has granted the FEBTC to Maxilite. insured a credit term for the payment of the On 9 March 1995, a fire gutted the premium and loss occurs before the expiration Aboitiz Sea Transport Building along of the term, recovery on the policy should be M.J. Cuenco Avenue, Cebu City, where allowed even though the premium is paid after Maxilite's office and warehouse were the loss but within the credit term. located. As a result, Maxilite suffered 5) Estoppel. bars it from taking refuge under losses amounting to at least P 2.1 said Section, since Respondent relied in good million, which Maxilite claimed against faith on such practice when it has consistently the fire insurance policy with Makati granted a 60 to 90-day credit term for the Insurance Company. Makati Insurance payment of premiums. Company denied the fire loss claim on the ground of non-payment of premium. Thus, petitioner is not entitled to the insurance FEBTC and FEBIBI disclaimed any proceeds because no insurance policy became responsibility for the denial of the claim. effective for lack of premium payment. ISSUE: Whether there was a non- 27. Jose Marques and Maxilite payment of premiums Technologies, Inc., vs. Far East Bank & Trust Company (FEBTC) HELD: Both trial and appellate courts basically agree that FEBTC is estopped FACTS: Maxilite Technologies is a from claiming that the insurance domestic corporation engaged in the premium has been unpaid. That FEBTC importation and trading of equipment for induced Maxilite and Marques to believe energy-efficiency systems. Marques is that the insurance premium has in fact the President and controlling been debited from Maxilite's account is stockholder of Maxilite. grounded on the the following facts: (1) FEBTC is a local bank which handled FEBTC represented and committed to the financing and related requirements handle Maxilite's financing and capital of Marques and Maxilite. FEBTC requirements, including the related financed Maxilite’s capital and transactions such as the insurance of the trust receipted merchandise; (2) prior to the subject Insurance Policy No. 1024439, the premiums for the three that its insurance policy only afforded separate fire insurance policies had earthquake shock coverage to the 2 been paid through automatic debit swimming pools of the resort. Both arrangement; (3) FEBIBI sent FEBTC, parties failed to arrive at a settlement not Maxilite nor Marques, written thus, petitioner filed a complaint. reminders dated 19 October 1994, 24 ISSUE: Whether petitioner can only January 1995, and 6 March 1995 to recover for the damage to its 2 debit Maxilite's account, establishing swimming pool rather than all the FEBTC's obligation to automatically properties covered under its policy. debit Maxilite's account for the premium amount; (4) there was no written HELD: Four key items are important in demand from FEBTC or Makati the resolution of the case at bar. Insurance Company for Maxilite or Marques to pay the insurance premium; 1) In the designation of location of (5) the subject insurance policy was risk, only 2 swimming pools were released to Maxilite on 19 August 1994; specified. and (6) the subject insurance policy 2) Under the breakdown for remained uncancelled despite the premium payments, it was stated alleged non-payment of the premium, PREMIUM RECAPITULATION making it appear that the insurance 3) The insurance does not cover policy remained in force and binding. any loss or damage occasioned by or through or in consequence, As a consequence of its negligence, directly or indirectly of FEBTC must be held liable for earthquake, volcanic eruption or damages. other convulsion of nature. 4) The rider attached to the policy, which shall apply to any 28. Gulf Resorts, Inc. vs. Philippine reference to loss or damage by Charter Insurance Corporation fire through or in consequence of Earthquake. Facts: Plaintiff is the owner of the Plaza Resort and had its properties in said An insurance premium is the resort insured originally with American consideration paid an insurer for Home Assurance Company (AHAC-AIU) undertaking to indemnify the insured and the risk of loss is from earthquake against a specified peril. In the shock. The plaintiff agreed to insure with subject policy, no premium payments defendant the properties covered by were made with regard to AHAC (AIU) provided that the policy earthquake shock coverage except wording and rates in said policy be on the 2 swimming pools. There is copied in the policy to be issued by no mention of any premium payable defendant. for the other resort properties with regard to earthquake shock. An earthquake struck Central & Northern Luzon and plaintiffs properties covered by policy issued by defendant 29. UCPB General Insurance Co, were damaged. Inc Vs. Masagana Telemart, Inc After earthquake, respondent advised Facts: Masagana Telemart obtained petitioner to file a formal claim. After from herein Petitioner 5 insurance investigation, finding extensive damage policies on its properties in Pasay City & caused by the earthquake to the Manila. All 5 policies effectivity term until clubhouse and to the 2 swimming pool, May 22, 1992. On June 13, 1992, but all affected items have no coverage plaintiff’s properties in Pasay City were for earthquake shocks. Respondent, razed by fire. On July 14, 1992, Plaintiff denied petitioners claim on the ground tendered and defendant accepted 5 Refer: exception to sec. 77 Manager’s Checks as renewal premium Finally in the instant case, it would payment. July 14, 1992 Masagana be unjust and inequitable if recovery on made its formal demand for the policy would not be permitted indemnification for the burned insured against Petitioner, which had properties. On the same day defendant consistently granted a 60- to 90-day returned the 5 checks and rejecting credit term for the payment of premiums Masagana’s claim on the ground that: despite its full awareness of Section 1. Said policies expired last May 22, 77. Estoppel bars it from taking refuge 1992 and were not renewed for under said Section, since Respondent another term. relied in good faith on such 2. Defendant had put plaintiff and its practice. Estoppel then is the fifth alleged broker on notice of non- exception to Section 77. renewal earlier; and 3. The properties covered by the said policies were burned in a fire that 30. Gaisano vs. Development took place last June 13, or before Insurance & Surety Corporation. tender of premium payment.
Hence Masagana filed the instant case.
Both the Court of Appeals and the trial court found that sufficient proof exists that Respondent, which had procured insurance coverage from Petitioner for a number of years, had been granted a 60 to 90-day credit term for the renewal of the policies. Such a practice had existed up to the time the claims were filed. ISSUE: Whether Sec. 77 of the insurance code must be strictly applied to Petitioners advantage despite is practice of granting a 60-90-day credit term for the payment of premiums.
HELD: SEC. 77. An insurer is entitled to
payment of the premium as soon as the thing insured is exposed to the peril insured against. Notwithstanding any agreement to the contrary, no policy or contract of insurance issued by an insurance company is valid and binding unless and until the premium thereof has been paid, except in the case of a life or an industrial life policy whenever the grace period provision applies.
SEC. 72. An insurer is entitled to
payment of premium as soon as the thing insured is exposed to the peril insured against, unless there is clear agreement to grant the insured credit extension of the premium due. No policy issued by an insurance company is valid and binding unless and until the premium thereof has been paid.