Azuelo, Josiebeth B.

JD III

An Outline of the Insurance Code

Republic Act No. 10607 (Amending Presidential Decree 612)

h. Notice of loss
-is the more or less formal notice given the insurer by the insured or claimant under a policy of the
occurrence of the loss insured against. (De Leon)

The purpose of a notice of loss is:

a. to apprise the insurance company with the occurrence of the loss,

b. so that it may gather information and make proper investigation while the evidence is still
fresh, and
c. take such action as may be necessary to protect its interest from fraud or imposition;
d. in the case of property insurance, to prevent further loss to the property.

Requisites before the insured become entitled to the insurer:

1. Notice of loss must be given to the insurer; (Sec. 88) and
2. When required by the policy, a preliminary proof of loss must be likewise given. (Sec. 89)

i. Double insurance
-exists where the same person is insured by several insurers separately in respect to the same
subject and interest. (Sec 93)
-In double insurance, there is co-insurance by two or more insurers; hence, it is also known as "co-
insurance." (De Leon)

There is no double insurance unless the following requisites exist:

(1) The person insured is the same;
(2) Two or more insurers insuring separately;
(3) The subject matter is the same;
(4) The interest insured is also the same; and
(5) The risk or peril insured against is likewise the same.

j. Reinsurance
-is one by which an insurer procures a third person to insure him against loss or liability by reason
of such original insurance. (Sec. 95)

-It is a contract whereby one party, the reinsurer, agrees to indemnify another, the reinsured
(original insurer), either in whole or in part, against loss or liability which the latter may sustain
or incur under a separate and original contract of insurance with a third party, the original insured
(De Leon)

a. Payment of claims
 The principle of contribution applies. This principle requires each insurer to contribute RATABLY
to the loss or damage considering that the several insurances cover the same subject matter and
interest against the same peril. If the loss is greater than the sum total of all the policies issued,
each insurer is liable for the amount of his policy. (Sec. 96)

2. Classes of Insurance
a. Marine Insurance
Marine Insurance includes:
A. Insurance against loss of or damage to:

1. Vessels, craft, aircraft, vehicles, goods, freights, cargoes, merchandise, effects, disbursements,
profits, moneys, securities, choses in action, instruments of debts, valuable papers, bottomry,
and respondentia interests and all other kinds of property and interests therein, in respect to,
appertaining to or in connection with any and all risks or perils of navigation, transit or
transportation, or while being assembled, packed, crated, baled, compressed or similarly
prepared for shipment or while awaiting shipment, or during any delays, storage,
transhipment, or reshipment incident thereto, including war risks, marine builder’s risks, and
all personal property floater risks;

2. Person or property in connection with or appertaining to a marine, inland marine, transit or

transportation insurance, including liability for loss of or damage arising out of or in
connection with the construction, repair, operation, maintenance or use of the subject matter
of such insurance (but not including life insurance or surety bonds nor insurance against loss
by reason of bodily injury to any person arising out of ownership, maintenance, or use of
automobiles);

3. Precious stones, jewels, jewelry, precious metals, whether in course of transportation or

otherwise; and

4. Bridges, tunnels and other instrumentalities of transportation and communication (excluding

buildings, their furniture and furnishings, fixed contents and supplies held in storage); piers,
wharves, docks and slips, and other aids to navigation and transportation, including dry docks
and marine railways, dams and appurtenant facilities for the control of waterways.

B. Marine protection and indemnity insurance, meaning insurance against, or against legal liability
of the insured for loss, damage, or expense incident to ownership, operation, chartering,
maintenance, use, repair, or construction of any vessel, craft or instrumentality in use of ocean or
inland waterways, including liability of the insured for personal injury, illness or death or for loss
of or damage to the property of another person. (Sec. 101)

i. The vessel
-Vessels, craft, aircraft, vehicles, goods, freights, cargoes, merchandise, effects, disbursements, profits,
moneys, securities, choses in action, instruments of debts, valuable papers, bottomry, and respondentia
interests and all other kinds of property and interests therein, in respect to, appertaining to or in
connection with any and all risks or perils of navigation, transit or transportation, or while being
assembled, packed, crated, baled, compressed or similarly prepared for shipment or while awaiting
shipment, or during any delays, storage, transhipment, or reshipment incident thereto, including war
risks, marine builder’s risks, and all personal property floater risks.

ii. Cargoes and merchandise

-Vessels, craft, aircraft, vehicles, goods, freights, cargoes, merchandise, effects, disbursements, profits,
moneys, securities, choses in action, instruments of debts, valuable papers, bottomry, and respondentia
interests and all other kinds of property and interests therein, in respect to, appertaining to or in
connection with any and all risks or perils of navigation, transit or transportation, or while being
assembled, packed, crated, baled, compressed or similarly prepared for shipment or while awaiting
shipment, or during any delays, storage, transhipment, or reshipment incident thereto, including war
risks, marine builder’s risks, and all personal property floater risks.

iii. Goods stowed on deck

-It is a well-understood and well-established rule of marine insurance that goods are presumed to be
shipped under deck, that is, below the weather deck of the vessel. If the goods are shipped on deck, they
are not covered by the policy unless special notice of the stowage is given to the underwriter and he
accepts the enhanced risk. The reason for this presumption is that the deck of a vessel is not designed to
carry goods. Its primary function is to make the holds watertight and to protect the cargo laden in the
holds. Goods carried on deck are subject to weather damage, sea damage, and the hazard of being washed
overboard. Shipowners have no legal right to load goods on deck, and if they do, such goods are at the
shipowner's risk unless he had obtained the consent of the cargo owner to such stowage.

Accordingly, underwriters cannot be expected, without special notice, to assume the risk of goods laden
on deck and will be released from their contract if the insured subject is so loaded. There are certain
cases, however, which may furnish an exception to this rule. Certain kinds of goods, dangerous in
themselves, are, by custom and sometimes by law, required to be shipped on deck so that they will not
endanger the other cargo and can, if necessity arises, be quickly thrown overboard. Underwriters are
presumed to know of these customs and legal requirements. (Marine Insurance, Its Principles and
Practice, by William D. Winter, 3rd Ed., pp. 1-2 [1952], published by McGraw Hill Book & Co., Inc., N.Y.)

iv. Freightage
-Signifies all the benefits derived by the owner, either from chartering of the ship or its
employment for the carriage of his own goods or those of others.
-Meaning of freightage. Section 122 gives the meaning of freightage (also called "freight") in
marine insurance. In other words, it is the benefit which is to accrue to the owner of the vessel
from its use in the voyage contemplated or the benefit derived from the employment of the ship.
Sources of freightage.

-Freightage may be derived from: (1) the chartering of the ship; (2) its employment for the
carriage of his own goods; and (3) its employment for the carriage of the goods of others. (Sec.
102.)

v. Insurable risks
-Under a marine insurance policy, all risks or losses may be insured against, except such as are repugnant
to public policy or positively prohibited.3 (Bell vs. Western M & F Inc. Co., [La] 5 Rob. 423.) A general
marine insurance policy which does not state the risks assured is valid and covers the usual marine risks
(Parkhurst vs. Gloucester Mut. Fishing Ins. Co., 100 Mass. 301.); and in a marine policy, the general
enumeration of "all other perils" etc., extends only to marine damage of like kind to those enumerated.
(Thamas & Mersey M. Ins. Co. vs. Hamilton [Eng.], LR 12 AC 484 [HL].)
Of course, to sustain a recovery on a marine policy, the loss must have been occasioned by a risk or peril
insured against.4 Thus:

(1) The contract of insurance on freight is that the perils insured against shall not prevent the ship from
earning full freight for the insured in that voyage; such a contract does not undertake that the goods shall
be delivered in a sound or merchantable state or that the vessel shall be safe from the dangers of the sea.
(Hugg vs. Augusta Ins. & Bkg. Co., 12 L. Ed. 235.)

(2) The underwriter of a vessel does not undertake for the cargo but engages only for the ability of the
vessel to perform her voyage and to bear damage which the vessel may sustain in making the voyage.
(Alexander vs. Baltimore Ins. Co., 9 L. Ed. 650.) Similarly, an insurance on cargo merely does not insure
the ship.

(2) An insurance on time by no means contains an engagement that any particular voyage undertaken by
the insured within the prescribed period shall be performed before the expiration of the policy but only
that the ship shall be capable of performing the voyage undertaken notwithstanding any loss or injury
which may occur to her during the time for which she is insured. (Bradie vs. Maryland Ins. Co., 9 L. Ed.
1123.)

(3) In marine policies, as in other kinds of insurance, the insurer may except liability from certain causes.
Thus, under a marine policy excluding coverage for breakage unless caused by an accident to the vessel, it
has been held that bad weather causing the damage is not an accident within the policy. (Traders vs.
Poland, [La App.] 181 So 2d. 879; see 44 Am. Jur. 2d 214-215.)

vi. Perils of the sea

-The phrase "perils of the sea" or "perils of navigation" include only those casualties due to the
unusual violence or extraordinary action of wind and wave, or to other extraordinary causes
connected with navigation (De Leon)

-Embraces all kinds of marine casualties and damages done to the ship or goods at sea by the
violent action of the winds or waves, or one that could not be foreseen and not attributable to the
fault of anybody.

Go Tiaoco Y Hnos vs. Union Insurance Society of Canton Ltd., 40:40

“a loss which, in the ordinary course of events, results from the natural and inevitable action of the sea, from
the ordinary wear and tear of the ship, or from the negligent failure of the ship's owner to provide the vessel
with proper equipment to convey the cargo under ordinary conditions, is not a peril of the sea. Such a loss is
rather due to what has been aptly called the "peril of the ship." The insurer undertakes to insure against
perils of the sea and similar perils, not against perils of the ship.”

vii. Insurable interest

1. Shipowner – over the vessel, except that if chartered, the insurance is only up to the amount not
recoverable from the charterer; and if hypothecated by a bottomry loan, the insurable interest is
 only up to the excess of the value of the vessel over the loan. He also has an insurable interest on
expected profits.
2. Cargo owner – over the cargo and on expected profits
3. Charterer – over the amount he is liable to the shipowner if the ship is lost or damaged during
the voyage.

1. As to freightage
-Freightage, in the sense of a policy of marine insurance, signifies all the benefits derived by the
owner, either from the chartering of the ship or its employment for the carriage of his own goods
or those of others. (Sec 104)

-The owner of a ship has an insurable interest in expected freightage which according to the
ordinary and probable course of things he would have earned but for the intervention of a peril
insured against or other peril incident to the voyage. (Sec 105)

2. In expected profits
-One who has an interest in the thing from which profits are expected to proceed, has an insurable
interest in the profits. (Sec 107)

viii. Loan on bottomry

-One which is payable only if the vessel, given as a security for the loan, completes in safety the
contemplated voyage. The lender in bottomry is entitled to receive a high rate of interest to
compensate him for the risk of losing his loan. The owner of the vessel receives in case of loss no
indemnity for his loss, but he does secure immunity from payment of the loan. (De Leon)

-The insurable interest of the owner of a ship hypothecated by bottomry is only the excess of its
value over the amount secured by bottomry. (Sec 101)

ix. Loan on respondentia

-A loan in which under any condition whatever, the repayment of the sum loaned, and of the
premium stipulated, depends upon the safe arrival in port of the goods on which it is made or of
the price they may receive in case of accident.
-The security is cargo

x. Passage money
-Passage money, unlike freight, is customarily payable in advance; it cannot be recovered if the
vessel is lost before the completion of the passage. Under such circumstances, the passenger can
clearly insure his advances of passage money but the shipowner may not insure it unless it is
payable only upon the completion of the voyage. (De Leon)

xi. Concealment
1. Standards for marine vs. fire insurance

- In marine insurance, each party is bound to communicate, in addition to what is required by Section 28,
all the information which he possesses, material to the risk, except such as is mentioned in Section 30,
and to state the exact and whole truth in relation to all matters that he represents, or upon inquiry
discloses or assumes to disclose.

- In marine insurance, information of the belief or expectation of a third person, in reference to a material
fact, is material.

- A person insured by a contract of marine insurance is presumed to have knowledge, at the time of
insuring, of a prior loss, if the information might possibly have reached him in the usual mode of
transmission and at the usual rate of communication.

- Concealment in a marine insurance, in respect to any of the following matters, does not vitiate the entire
contract, but merely exonerates the insurer from a loss resulting from the risk concealed:

(a) The national character of the insured;

(b) The liability of the thing insured to capture and detention;
(c) The liability to seizure from breach of foreign laws of trade;
(d) The want of necessary documents; and
(e) The use of false and simulated papers.

- As used in this Code, the term fire insurance shall include insurance against loss by fire, lightning,
windstorm, tornado or earthquake and other allied risks, when such risks are covered by extension to
fire insurance policies or under separate policies.

- An alteration in the use or condition of a thing insured from that to which it is limited by the policy
made without the consent of the insurer, by means within the control of the insured, and increasing the
risks, entitles an insurer to rescind a contract of fire insurance.

- An alteration in the use or condition of a thing insured from that to which it is limited by the policy,
which does not increase the risk, does not affect a contract of fire insurance.

- A contract of fire insurance is not affected by any act of the insured subsequent to the execution of the
policy, which does not violate its provisions, even though it increases the risk and is the cause of the loss.

- If there is no valuation in the policy, the measure of indemnity in an insurance against fire is the
expense it would be to the insured at the time of the commencement of the fire to replace the thing lost or
injured in the condition in which it was at the time of the injury; but if there is a valuation in a policy of
fire insurance, the effect shall be the same as in a policy of marine insurance.

- Whenever the insured desires to have a valuation named in his policy, insuring any building or structure
against fire, he may require such building or structure to be examined by an independent appraiser and
the value of the insured’s interest therein may then be fixed as between the insurer and the insured. The
cost of such examination shall be paid for by the insured. A clause shall be inserted in such policy stating
substantially that the value of the insured’s interest in such building or structure has been thus fixed. In
the absence of any change increasing the risk without the consent of the insurer or of fraud on the part of
the insured, then in case of a total loss under such policy, the whole amount so insured upon the insured’s
interest in such building or structure, as stated in the policy upon which the insurers have received a
premium, shall be paid, and in case of a partial loss the full amount of the partial loss shall be so paid, and
in case there are two (2) or more policies covering the insured’s interest therein, each policy shall
contribute pro rata to the payment of such whole or partial loss. But in no case shall the insurer be
required to pay more than the amount thus stated in such policy. This section shall not prevent the
parties from stipulating in such policies concerning the repairing, rebuilding or replacing of buildings or
structures wholly or partially damaged or destroyed.

- No policy of fire insurance shall be pledged, hypothecated, or transferred to any person, firm or
company who acts as agent for or otherwise represents the issuing company, and any such pledge,
hypothecation, or transfer hereafter made shall be void and of no effect insofar as it may affect other
creditors of the insured.

2. Fraudulent intent
- If a representation, by a person insured by a contract of marine insurance, is intentionally false in any
material respect, or in respect of any fact on which the character and nature of the risk depends, the
insurer may rescind the entire contract.

Applicability of rules on representation to marine insurance

The rules governing representations with respect to insurance policies generally have been held to apply
to marine insurance policies. Thus, the general rules have been applied to marine insurance with respect
to the distinctions between representations and warranties and to the construction of representations,
and a substantial misrepresentation of any material fact or circumstance relating to marine insurance
avoids the policy. (45 C.J.S. 552.)
The general rule that a representation is material where it would influence the judgment of a prudent
insurer in fixing the premium or in determining whether he would take the risk, is applicable to marine
insurance. (38 C.J.S. 1062.)

Effect of false representation by insured

(1) Intentional. — Any misrepresentation of a material fact made with fraudulent intent avoids the policy.
(2) Not intentional. — If the misrepresentation is not intentional or fraudulent but the fact
misrepresented is material to the risk, the insurer may also rescind the contract from the time the
representation becomes false. Section 111 qualifies the general provision in Section 45 under which the
injured party may rescind the contract only "from the time when the representation becomes false"
although the representation is intentionally false.
(3) Materiality of representations. — Representations as to the age, equipment, earnings, and particular
condition or rating of a vessel; that she is to be repaired at a certain place; that she has arrived at her port
of destination, or was at a certain place at a certain time; that other underwriters had insured her at a
certain rate; or as to anything which concerns the state of the vessel at any particular period of her
voyage, have been held to be material. But statements of the nature and amount of the cargo, where she
was not overloaded or where the underwriter did not rely thereon, have been held to be immaterial. (38
C.J.S. 554.)

NOTE: The eventual falsity of a representation as to expectation does not, in the absence of fraud, avoid a
contract of marine insurance.

xii. Representations
1. Distinction between promissory representation and expectation
Effect of falsity of representation as to expectation.
Representations of expectation or intention are to be carefully distinguished from promissory
representations. The former are statements of future facts or events which are in their nature contingent
and which the insurer is bound to know that the insured could not have intended to state as known facts,
but as intentions or expectations merely. Hence, unless made with fraudulent intent, their failure of
fulfillment is not a ground for rescission.
This rule applies to statements of the time a vessel will sail or is expected to sail, the nature of the cargo
to be shipped, the amount of profits expected, the destination of the vessel, or that the insured has no
doubt that he can get insurance effected for a certain premium. (45 C.J.S. 553.)

2. When fraud essential to falsity

- unless made with fraudulent intent, their failure of fulfillment is not a ground for rescission.

xiii. Implied warranties

1. Seaworthiness
a. Extent
A warranty of seaworthiness extends not only to the condition of the structure of the ship itself, but
requires that it be properly laden, and provided with a competent master, a sufficient number of
competent officers and seamen, and the requisite appurtenances and equipment, such as ballasts, cables
and anchors, cordage and sails, food, water, fuel and lights, and other necessary or proper stores and
implements for the voyage.

Scope of seaworthiness of vessel

Seaworthiness requires that the vessel must have equipment and appliances appropriate to the voyage in
which it is engaged and the cargo it carries; it must have sufficient fuel, stores and provisions to last for
the entire voyage; it must have sufficient number of competent officers and men; and if the insurance is
on cargo, the same must be properly loaded, stowed, dunnaged and secured so as not to imperil the
navigation of the vessel or to cause injury to the vessel or cargo.
A ship, however, is not unseaworthy because of some defect in loading or stowage which is easily curable
by those on board, and was cured before the loss. But carrying a deck cargo raises a presumption of
unseaworthiness which can be overcome only by showing affirmatively that the deck cargo was not likely
to interfere with the due management of the vessel; and when, by a jettison or otherwise, the vessel can
be made seaworthy, the warranty is satisfied, (see 45 C.J.S. 564-566.)
It is settled that the carrying of cargo on deck raises the presumption of unseaworthiness unless it can be
shown that the deck cargo will not interfere with the proper management of the ship. A ship may not be
designed to carry substantial amount of cargo on deck and the inordinate loading of cargo on deck may
result in the decrease of the vessel's metacentric height thus making it unstable. (Phil. American General
Insurance Co. vs. Court of Appeals, 273 SCRA 262 [1997].)

b. Different portions of trip require different degrees of seaworthiness

Where different portions of the voyage contemplated by a policy differ in respect to the things requisite
to make the ship seaworthy therefor, a warranty of seaworthiness is complied with if, at the
commencement of each portion, the ship is seaworthy with reference to that portion.

Seaworthiness during voyage in stages

This section provides the third exception to the general rule stated under Section 115. Where the policy
contemplates a voyage in different stages during which the subject matter insured will be exposed to
different degrees or kinds of perils, or the ship will require different kinds of equipment, she must be
seaworthy at the commencement of each stage, but it is sufficient if at the commencement of each stage
she is seaworthy for the purpose of that stage. (Northwestern SS. Co. vs. Maritime Ins. Co., 161 F. Ed. 166.)
The stages must be separate and distinct in order to have a different degree of seaworthiness for
particular parts. (Quebec Mar. Ins. Co. vs. Commercial Bank, L.R. 3 PC. 234.)

C. Transhipment of cargo
1. In maritime law, transshipment is defined as "the act of taking cargo out of one ship and loading it in
another," or "the transfer of goods from the vessel stipulated in the contract of affreightment to another
vessel before the place of destination named in the contract has been reached," or "the transfer for
further transportation from one ship or conveyance to another." In its ordinary or strictly legal
acceptation, there is transshipment whether or not the same person, firm or entity owns the vessels. In
other words, the fact of transshipment is not dependent upon the ownership of the transporting
conveyances but rather on the fact of actual physical transfer or cargoes from one vessel to another. It is a
well-known commercial usage that transshipment of freight without legal excuse, however competent
and safe the vessel into which the transfer is made, is an infringement on the right of the shipper and
subjects the carrier to liability if the freight is lost even by a cause otherwise excepted. (Magellan Mfg.
Marketing Corp. vs. Court of Appeals, 201 SCRA 102 [1991].)
2. The vessel shall not deviate from the agreed voyage
In every insurance upon any marine venture whether of vessel, cargo, or freight, there are conditions
upon the underwriter's liability for the risks assumed, usually termed as implied warranties. That is, the
insurer will not be liable for any loss under his policy in case the vessel: (1) is unseaworthy at the
inception of the insurance (Sec. 113.); or (2) deviates from the agreed voyage (see Sees. 123, 124, 125.);
or (3) engages in an illegal venture. (Vance, op. cit., p. 920.)
3. The vessel shall not engage in illegal ventures
In every insurance upon any marine venture whether of vessel, cargo, or freight, there are conditions
upon the underwriter's liability for the risks assumed, usually termed as implied warranties. That is, the
insurer will not be liable for any loss under his policy in case the vessel: (1) is unseaworthy at the
inception of the insurance (Sec. 113.); or (2) deviates from the agreed voyage (see Sees. 123, 124, 125.);
or (3) engages in an illegal venture. (Vance, op. cit., p. 920.)

xiv. Voyage and deviation

1. Seaworthiness vs. warranty of due diligence
Where ship becomes unseaworthy during voyage
As a general rule, the implied warranty of seaworthiness is complied with if the ship be seaworthy at the
time of the commencement of the risk. (Sec. 115.) There is no implied warranty that the vessel will
remain in a seaworthy condition throughout the life of the policy.
However, when the vessel becomes unseaworthy during the voyage, it is the duty of the master, as the
shipowner's representative, to exercise due diligence to make it seaworthy again, and if loss should occur
because of his negligence in repairing the defect, the insurer is relieved of liability (Paddock vs. Franklin
Ins. Co., 11 Pick 234; see Sec. 133.) but the contract of insurance is not affected as to any other risk or loss
covered by the policy and not caused or increased by such particular defect. (Union Ins. Co. of Philadelphia
vs. Smith, 124 U.S. 405.)
Note that the benefit of exoneration is given only to an "insurer on ship or shipowner's interest."

2. Exceptions
When deviation is proper
(1) Deviation from the course of the voyage will not vitiate a policy of marine insurance if the deviation is
justified or caused by actual necessity which is equal in importance to such deviation. (Maryland Ins. Co.
vs. Le Roy, 3 L. Ed., 257.) Thus, the insurance is not affected: (a) Where the ship is compelled to head for
another port by stress of weather (Graham vs. Commercial Ins. Co., 11 Johns [N.Y.] 352.); or
(b) Where a departure from the course is made to take on a pilot when necessary to the safety of the
adventure (Pouverin vs. Louisiana State M. & F. Ins. Co., 4 Bob [La.] 234.); or in order to proceed to a place
where the ship will meet a convoy if the policy warrants that the ship will not proceed from one port to
another without convoy (Gordon vs. Morley, 2 Strange 1265.); or to escape capture (Whitney vs. Haven,
13 Mass. 172.); or
(c) Where the master seeks another port of discharge when the water of the river to the port in which he
is supposed to discharge is too shallow for his vessel to enter. (Byrne vs. Louisiana State Ins. Co., 7 Mart.
[La.] 126.)
(2) Such compulsory deviations are risks impliedly assumed by the underwriter. But while deviation to
save property is not justified, unless it is to save another vessel in distress (see Burgeos vs. Equitable
Marine Ins. Co., 126 Mass. 70 [1878].), a deviation for the purpose of saving life does not constitute a
breach of warranty. (Sec. 124[d].) In this case, the justification rests on ground of humanity.

3. Effect of improper deviation

Where there has been any deviation or change of the risk without just cause, the insurer becomes
immediately absolved from further liability under the policy for losses occurring subsequent (not before)
to the deviation. (45 C.J.S. 567.)
Just as a surety is discharged if the creditor materially changes the contract with the principal debtor,
irrespective of actual injury to the surety, so the marine underwriter is entitled to be discharged if the
risk assumed is changed by a deviation from the voyage insured. And the fact that the deviation did not
increase the risk, or in any wise contribute to the loss suffered, is wholly immaterial. (Vance, op. cit., p.
924.) The underwriter can always defend himself by saying: "I never undertook this risk." (African
Merchants Co. vs. British, Etc., Mar. Ins. Co., L.R. 8 Esch. 154.)

xv. Loss
1. Actual total loss
An actual total loss exists when the subject matter of the insurance is wholly destroyed or lost or when it
is so damaged as no longer to exist in its original character. (Vance, op. cit., p. 935.)

2. Partial loss
In insurance, damage that neither destroys the insured good or property nor renders it useless for its
designed purpose.

3. Constructive total loss

A constructive total loss is one which gives to a person insured a right to abandon, under section one
hundred thirty-nine

Meaning of constructive total loss

-constructive total loss, or, as it is sometimes called, a "technical total loss," is one in which the loss,
although not actually total, is of such a character that the insured is entitled, if he thinks fit, to treat it as
total by abandonment. (45 C.J.S. 1150.)

4. Liability refers to insurance on cargo

When a ship is prevented, at an intermediate port, from completing the voyage, by the perils insured
against, the liability of a marine insurer on the cargo continues after they are thus reshipped.
Nothing in this section shall prevent an insurer from requiring an additional premium if the hazard be
increased by this extension of liability

5. Liability in case of reshipment

Liability of insurer in case of reshipment
The above section contemplates an insurance upon cargo:
(1) If the original ship be disabled, and the master, acting with a wise discretion, as the agent of the
merchant and the shipowners, forwards the cargo in another ship, such necessary and justifiable change
of ship will not discharge the underwriter on the goods from liability for any loss which may take place
on goods subsequently to such reshipment. (Salisbury vs. St. Louis Mar. Ins. Co., 66 Am. Dec. 687.)
(2) This rule will not be obligatory where resort must be had to distant places to procure a vessel, and
there are serious impediments in the way of putting the cargo on board. (Bryant vs. Commonwealth Ins.
Co., 6 Pick. [Mass.] 13.)
In any case, the insurer may require an additional premium if the hazard be increased by the extension of
liability. (Sec. 133.)

6. Particular average
Simple or particular averages which include all damages and expenses caused to the vessel or to her
cargo which have not inured to the common benefit and profit of all the persons interested in the vessel
and her cargo. (Art. 809, ibid.) They refer to those losses which occur under such circumstances as do not
entitle the unfortunate owners to receive contribution from other owners concerned in the venture as
where a vessel accidentally runs aground and goes to pieces after the cargo is saved. (Vance, op. cit., p.
934.)
A particular average loss is suffered by and borne alone by the owner of the cargo or of the vessel, as the
case may be.
The terms "partial loss," "particular average," and "average, unless general" are generally regarded as
synonymous when used in marine insurance. (44 Am. Jur. 2d 548.)

7. General average
Gross or general averages which include damages and expenses which are deliberately caused by the
master of the vessel or upon his authority, in order to save the vessel, her cargo, or both at the same time
from a real and known risk. (Art. 811, ibid.)
A general average loss must be borne equally by all of the interests concerned in the venture

General average is a principle of customary law, independent of contract, whereby, when it is decided by
the master of a vessel, acting for all the interests concerned, to sacrifice any part of a venture exposed to a
common and imminent peril in order to save the rest, the interests so saved are compelled to contribute
ratably or proportionately to the owner of the interest sacrificed, so that the cost of the sacrifice shall fall
equally upon all.

This practice of "general average" contribution is a device for a limited distribution of loss. The loss is pro
tanto made up by proportionate or "general average" contributions from the owners of the other
interests benefited by the sacrifice. (Vance, op. cit., p. 9.)

8. FPA (Free from Particular Average) Clauses

It may be agreed by the parties that the insurance shall be free from particular average. In such case, the
marine insurer is liable only for general average and not for particular average unless such particular
average loss has the effect of "depriving the insured of the possession at the port of destination of the
whole" of the thing insured. (Sec. 136.) In the absence of any contrary stipulation, the insurer is liable for
particular average loss.

9. Deductible Franchise Clause

A franchise deductible is the amount the insured has to pay before the insurer covers the rest of the
damages. Unlike an ordinary deductible, once the franchise deductible is paid, the entire loss will be
covered.
Supposing that the policy states that the franchise deductible is $100, the policyholder will pay for that
out-of-pocket any time he gets charged $100 or less. Only when it goes above $100 does the insurance
company will financially intervene on the policyholder's behalf. However, once the amount exceeds that
particular deductible, the policy will pay for everything up to the policy's limit.

10. Memorandum
This clause is there to protect the marine insurance company. Many times, goods are perishable and
therefore, get damaged. The clause saves the insurer from paying the small losses related to perishable
items.

11. Inchmaree Clause

An ocean marine insurance provision adding coverage for damage directly resulting from the bursting of
boilers, breakage of shafts, other mechanical failures, latent defects in the ship's equipment or machinery,
and faults or errors in the navigation or management of the ship.

xvi. Rules of Abandonment

Requisites for valid abandonment
The requisites for a valid abandonment in marine insurance are:
(1) There must be an actual relinquishment by the person insured of his interest in the thing insured (Sec.
138.);
(2) There must be a constructive total loss (Sec. 139.);
(3) The abandonment be neither partial nor conditional (Sec. 140.);
(4) It must be made within a reasonable time after receipt of reliable information of the loss (Sec. 141.);
(5) It must be factual (Sec. 142.);
(6) It must be made by giving notice thereof to the insurer which may be done orally or in writing (Sec.
143.); and
(7) The notice of abandonment must be explicit and must specify the particular cause of the
abandonment. (Sec. 144.)

The international rule is to the effect that the right of abandonment of vessels, as a legal limitation of a
shipowner's liability, does not apply to cases where the injury or average was occasioned by the
shipowner's own fault. Article 587 (supra.) of the Code of Commerce speaks only of situations where the
fault or negligence is committed solely by the captain. Where the shipowner is likewise to be blamed,
Article 587 will not apply and such situation will be covered by the provisions of the Civil Code on
Common Carriers. (Phil. American General Insurance Co., Inc. vs. Court of Appeals, 273 SCRA 262 [1997].)

xvii. Nature of Indemnity

1. Co-insurance
A marine insurer is liable upon a partial loss, only for such proportion of the amount Insured by him as
the loss bears to the value of the whole interest of the insured in the property Insured.

When insured a co-insurer in marine insurance

In every marine insurance, the insured is expected to cover by insurance the full value of the property
insured. If the value of his interest exceeds the amount of insurance, he is considered the co-insurer for
an amount determined by the difference between the insurance taken out and the value of the property.
The rule is different in fire insurance, (see Sec. 172.)

2. Co-insurance implied in marine but not fire insurance

Insured not a co-insurer under fire policies in the absence of stipulation. Under the usual contract of fire
insurance, the insurer, in case of a partial loss of the subject of the contract, is required to give full
indemnity for such loss up to the amount written in the policy even though the property be very
inadequately insured.

3. Primage
Primage is excluded from gross freightage. It is a small compensation paid by a shipper to the master of
the vessel for his care and trouble bestowed on the shipper's goods and which the master is entitled to
retain in the absence of an agreement to the contrary with the owners of the vessels. (Ballantine's Law
Dictionary [1948 ed.], p. 64.)

4. Drawback
St. Paul Fire & Marine Insurance Co. vs. Macondray & Co., Inc., et. al., 70 SCRA 122
Commercial law; Bill of lading; Common carriers; Insurance law; Stipulation in bill of lading limiting
carrier’s liability to the valid of goods appearing therein, unless shipper declares a greater value, is valid
and binding. The stipulation in the bill of lading limiting the common carrier’s liability to the value of the
goods appearing in the bill, unless the shipper or owner declares a greater value, is valid and binding.
This limitation of the carrier’s liability is sanctioned by the freedom of the contracting parties to establish
such stipulations, clauses, terms, or conditions as they may deem convenient, provided they are not
contrary to law, morals, good customs and public policy.
Insurance carrier is subrogated merely to rights of the assured and can recover from common carrier
only the amount recoverable by the latter. The plaintiff-appellant, as insurer, after paying the claim of the
insured for damages under the insurance, is subrogated merely to the rights of the assured. As subrogee,
it can recover only the amount that is recoverable by the latter. Since the right of the assured, in case of
loss or damage to the goods, is limited or restricted by the provisions in the bill of lading, a suit by the
insurer as subrogee necessarily is subject to like limitations and restrictions.
Banks; Obligation of common carrier to pay for damage to goods shipped commenced on the date it failed
to deliver the ship in good condition to the consignee. Foreign insurance carrier should be reimbursed for
its dollar payments at the rate of exchange on the date of the loss or damage, not on the date of the
judgment. Equally untenable is the contention of the plaintiff-appellant that because of extraordinary
inflation it should be reimbursed for its dollar payments at the rate of exchange on the date of the
judgment and not on the date of the loss or damage. The obligation of the carrier to pay for the damage
commenced on the date it failed to deliver the shipment in good condition to the consignee.

5. Remedies in case of gross average

The value of freightage is the gross freightage, exclusive of primage, without reference to the cost of
earning it

b. Fire Insurance
Filipinas Cia. Seguros vs. Tan Chuaco, 47 O.G. 3486
The findings of the Court of Appeals (1) that the sealing of, and the placing of posters on, the building by
the Japanese forces did not increase the hazard or risk to which the building was exposed and, therefore,
the insurance did not cease to attach. under article 8 of the policies; and (2) that the fire which destroyed
the building "was purely an ordinary 'and accidental one, unrelated to war, invasion, civil commotion, or
to the abnormal conditions arising therefrom," are binding and conclusive upon the Supreme Court.

Tan Chuco vs. Yorkshire Fire Ins. Co., 14:346

ACTION ON FlRE INSURANCE POLICY; BURDEN OF PROOF-In the absence of an express valuation in a
fire insurance policy, recovery thereunder, in the event of fire, is limited to the amount of the actual loss
incurred, and the burden is upon the claimant to establish the amount of such loss.

Go Lu vs. Yorkshire Ins. Co, 43:633

BURDEN ON PLAINTIFF-In an action on a fire insurance policy to recover the value of bolt goods alleged
to have been destroyed by fire, it devolves upon the plaintiff to prove the amount of his loss by a
preponderance of the evidence.

PLAINTIFF CAN ONLY RECOVER FOR THE AMOUNT OF HIS ACTUAL LOSS.- Where the proof shows that
all of plaintiff's bolt goods were together in one corner of the building, and the plaintiff claims that there
were sixty-six different boxes or bales of goods destroyed in the fire, it devolves upon him to prove by a
preponderance of the evidence that the sixty-six bales were consumed or destroyed by the fire, and he
can only recover for the number of bales shown to have been destroyed

DUTY OF PLAINTIFF- Where after the fire there is evidence that sixteen boxes or bales of goods were
found in a damaged condition, and the testimony is conclusive that there was no remaining evidence of
any kind after the fire of the loss or destruction of the other fifty bales, it creates a presumption which it
is the duty of the plaintiff to overcome by competent and satisfactory evidence.

PRESUMPTION- This court will legally presume that in an ordinary fire fifty bales or boxes of bolt goods
of cloth cannot be wholly consumed or totally destroyed, and that in the very nature of things some trace
or evidence will be left remaining of their loss or destruction.

EVIDENCE NOT SUFFICIENT- Where plaintiff's evidence as to the amount of the goods which he had in
the bodega at the time of the fire is largely confined and limited to entries made in his books tending to
show the amount of goods which he had purchased and the amount which he had sold, leaving a balance
of sixty-six boxes or bales of bolt goods, which he claimed to have in stock at the time of the fire, it is not
sufficient to establish his case by a preponderance of the evidence where the testimony is conclusive that
right after the fire there was no evidence or trace of anything left of more than sixteen cases.

Gonzales vs. LaO Yeck Tong Lin Fire & Marine Ins. Co., 55:386
FIRE INSURANCE; POLICIES MORTGAGED TO A THIRD PARTY; REAL PARTY IN INTEREST- The fact that
the plaintiff himself presented in evidence the policies mortgaged to the Bank of the Philippine Islands
gives rise to the presumption that the debt secured by the mortgage has been paid, in accordance with
article 1191 of the Civil Code. On the other hand, "Insured may be regarded as 'the real party in interest,
although he has assigned the policy for the purpose of collection, or has assigned as collateral security
any judgment he may obtain." (33 C. J., pp. 82 et seq.)

INSURANCE IN VARIOUS COMPANIES- The tobacco insured in the other companies was different from
that insured with the defendant, since the number of bales of tobacco in the warehouse greatly exceeded
that insured with the defendant and the other companies put together. And according to the doctrine
enunciated in 26 Corpus Juris, 188, "to be insurance of the sort prohibited the prior policy must have
been insurance upon the same subject matter, and upon the same interest therein."

WAIVER TO AN ACTION FOR ANNULMENT OF CONTRACT- If, with the knowledge of the existence of
other insurances which the defendant deemed violations of the contract, it has preferred to continue the
policy, its action amounts to a waiver of the annulment of the contract (19 Cyc., 791, 792).

Yu Hun & Co. vs, British Traders Ins. Co., G.R. Nos. L-3719-25,May 18, 1954

Garris, Terren & Co. vs. North China Ins. Co., 44:749
FRAUD; ANSWER; SPECIAL DEFENSE; EVIDENCE- In an action for damages caused to insured goods, the
defendant insurer cannot set up the defense that the plaintiff insured acted fraudulently in including in
his claim, presented after the accident, things which were not in existence at the time of said accident,
unless said fraud was alleged in his answer. No such allegation of fraud having been made in the answer,
the evidence introduced, without objection on the part of the plaintiff, cannot be used for the purpose of
showing fraud on the part of the latter, if his failure to object to said evidence was due to the fact that the
same was introduced for other purposes and not that of showing fraud.

VALUE OF DAMAGED GOODS; EVIDENCE- The valuation of said goods based on the price brought by
similar goods in the sales known as baratillo (bargain sales) is not sufficient, especially when the
witnesses making such valuation did not examine the damaged goods in detail but in confused lots, and
without taking into consideration their materials, but their color only.

Pioneer Insurance & Surety Corp. vs. Yap, 61 SCRA 426

Insurance; Co-insurance; Violation by insured of co-insurance clause; Procurement of additional
insurance without the consent of the insurer renders policy void- By the plain terms of the policy, other
insurance without the consent of petitioner would ipso facto avoid the contract. It required no affirmative
act of election on the part of the company to make operative the clause avoiding the contract, wherever
the specified conditions should occur. Its obligations ceased, unless, being informed of the fact, it
consented to the additional insurance.

Clause providing that policy shall be void if the insured procures additional insurance without the
consent of the insurer; Purpose of: The obvious purpose of the aforesaid requirement in the policy is to
prevent over-insurance and thus avert the perpetration of fraud. The public, as well as the insurer, is
interested in preventing the situation in which a fire would be profitable to the insured.

C. Casualty Insurance
Casualty insurance is insurance covering loss or liability arising from accident or mishap, excluding
certain types of loss which by law or custom are considered as falling exclusively within the scope of
other types of insurance such as fire or marine. It includes, but is not limited to, employer's liability
insurance, workmen's compensation insurance, public liability insurance, motor vehicle liability
insurance, plate glass insurance, burglary and theft insurance, personal accident and health insurance as
written by non-life insurance companies, and other substantially similar kinds of insurance.
Casualty insurance includes all forms of insurance against loss or liability arising from accident or mishap
excluding certain types of loss or liability which are not within the scope of other types of insurance,
namely: marine; fire; suretyship; and life.

d. Suretyship
A contract of suretyship is an agreement whereby a party called the surety guarantees the performance
by another party called the principal or obligor of an obligation or undertaking in favor of a third party
called the obligee. It includes official recognizances, stipulations bonds or undertakings issued by any
company by virtue and under the provisions of Act No. 536, as amended by Act No. 2206. (n)
Section 175 defines the contract of suretyship. It is an agreement whereby one1 (usually an insurance
company) undertakes to answer, under specified terms and conditions, for the debt, default or
miscarriage of another (principal or obligor), such as failure to perform a contract or certain duties, or for
breach of trust, negligence and the like, in favor of a third party (obligee), (see Sec. 2[1, 2].)

e. Life insurance
Teresa vda. De Fernadez vs. National Life Insurance Co. G.R. L- 14242, June 30, 1960
INSURANCE; LIFE INSURANCE POLICY WHEN MATURES.•In life insurance, the policy matures either
upon the expiration of the term set forth therein, in which case its proceeds are immediately payable to
the insured himself, or upon his death occurring at any time prior to the expiration of such stipulated
term, in which case, the proceeds are payable to his beneficiary, within sixty days after their filing of
proof of death (Sec. 91-A Insurance Law.)

It is the happening of the suspensive condition of death that renders a life policy matured and not the
filing of proof of death which is merely procedural.

LIFE POLICY MATURED DURING JAPANESE OCCUPATION; PAYMENT UNDER BALLANTYNE SCALE OF
VALUES- An insurance life policy which matured and was payable during the Japanese occupation under
the doctrine in Valero vs. Sycip, payment should be adjusted in accordance with the Ballantyne Scale of
Values.

Gercio vs. Sun Life, 48:53

INSURANCE; LAW APPLICABLE IN THE PHILIPPINES- The Philippine Law of Insurance should be
supplemented by the general principles prevailing on the subject. The purpose should be to have the
Philippine Law of Insurance conform as nearly as possible to the modern Law of Insurance as found in
the United States proper.

INSURABLE INTEREST OF WIFE- The wife has an insurable interest in the life of her husband.

BENEFICIARIES- The beneficiary has an absolute vested interest in the policy f rom the date of its
issuance and delivery.

When a policy of life insurance is taken out by the husband in which the wife is named as beneficiary, she
has a subsisting interest in the policy. And this applies to a policy to which there attached the incidents of
a loan value, cash surrender value, and automatic extension by premiums paid, and to an endowment
policy, as well as to an ordinary life insurance policy.

RIGHT TO CHANGE BENEFICIARY- If the policy contains no provision authorizing a change of beneficiary
without the beneficiary's consent, the insured cannot make such change.

A life insurance policy of a husband made payable to the wife as beneficiary, is the separate property of
the beneficiary and beyond the control of the husband.

EFFECT OF DIVORCE- In the absence of a statute to the contrary, if a policy is taken out upon a husband's
life and the wife is named as beneficiary therein, a subsequent divorce does not destroy her rights under
the policy.

The insured, the husband has no power to change the beneficiary the former wife and to name instead his
actual wife, where the insured and the beneficiary have been divorced, and where the policy of insurance
does not expressly reserve to the insured the right to change the beneficiary.

Insular vs. Suva, 62:246Nario vs. Philam Life, 20 SCRA 434

LlFE INSURANCE POLICY; ATTEMPTED CHANGE OF BENEFICIARY- The conclusion of the trial court is
sustained by the decision in the case of Gercio vs. Sun Life Assurance Co. of Canada (48 Phil., 53), and the
American authorities therein cited. The attempted change of beneficiary made by the insured on August
16, 1933, no right to change having been reserved, and endorsed by the company on the back of the
policy on August 24, 1933, was due to a mutual mistake. The application in which the insured, over his
personal signature, renounced the right to change the beneficiary, should prevail over the printed phrase
"WITH RIGHT OF REVOCATION" which occurs in the policy. It is to be noted that the application itself is
made a part of the contract.

BPI vs. Posadas, 56:215

LIFE INSURANCE; AMOUNT OF POLICY; KIND OF PROPERTY- The proceeds of a life-insurance policy
payable to the insured person's estate, on which the premiums were paid by the conjugal partnership,
constitute community property, and belong one-half to the husband exclusively, and the other half to the
wife.

If the premiums were paid partly with paraphernal and partly conjugal funds, the proceeds are in like
proportion paraphernal in part and conjugal in part.

INHERITANCE TAX- The proceeds of a lif einsurance policy payable to the insured person's estate as
beneficiary, if delivered to the testamentary administrator of the former as part of the assets of said
estate under probate administration, are subject to the inheritance tax according to the law on the
matter, if they belong to the assured exclusively, and it is immaterial that he was domiciled in these
Islands or outside.

Sun Life vs. Ingersoll, 42:331

BANKRUPTCY; ASSETS IN BANKRUPTCY; DATE WHEN TITLE ACCRUES TO ASSIGNEE- An assignee in
bankruptcy acquires title to the property of the bankrupt by virtue of the transfer of the bankrupt's
property by the clerk of the court; but this instrument relates back to the commencement of the
proceedings in bankruptcy, with the result that the title of the assignee is determined as of the date when
the petition in bankruptcy is filed.

INSURANCE ON LIFE OF BANKRUPT; ASSIGNEE'S INTEREST LIMITED TO CASH SURRENDER VALUE- An

assignee in bankruptcy acquires no beneficial interest in a policy of insurance on the bankrupt's life,
payable to himself or his legal representative, if it has no cash surrender value at the time of the
commencement of the proceedings in bankruptcy; and if the bankrupt dies thereafter the proceeds of the
policy go to the bankrupt's estate as represented by his administrator, not to the estate in bankruptcy.

Biagtan vs. Insular Life. 44 SCRA 58

Insurance Law; Exception under double indemnity insurance clause- Under an Accidental Death Benefit
Claus providing for an additional sum of P5,000.00 if „the death of the Insured resulted directly from
bodily injury effected solely through external and violent means sustained in an accident and
independently of all other causes‰ but expressly excepting therefrom a case where death resulted from
an injury „intentionally inflicted by a third party, the insured who died under the following circumstances
is not entitled to the said additional sum, to wit: That on the night... while the said life policy and
supplementary contract were in full force and effect the house of the insured was robbed by a band of
robbers who-were charged in and convicted by the Court of First Instance of Pangasinan for robbery with
homicide; that in committing the robbery, the robbers, on reaching the staircase landing of the second
floor, rushed towards the doors of the second floor room, where they suddenly met a person near the
door of one of the rooms who turned out to be the insured who received thrusts from their sharppointed
instruments, causing wounds on the body resulting in his death…”

3. The Business of Insurance

Power of state to regulate insurance business
(1) Basic reasons for governmental regulation. — The insurance business is heavily regulated by law
because of public policy considerations to insure that every insurance company comply with the
applicable laws in conducting its business and in its dealing with the Insured.
The insurance business possesses peculiar characteristics justifying governmental control and provision.
(a) The chief characteristic is that an insurance contract is an aleatory contract, that is, a contract
under which the obligation of one party, the insurer, will mature (become immediately payable)
only upon the happening of a fortuitous event which is, generally speaking, much more likely not
to occur during the coverage bargained for.1
(b) Inequality of values to be exchanged characterizes insurance since the premium paid by the
insured unconditionally is ordinarily for less than the amount which the insurer may become
obligated to pay on a contingency which will probably not occur. The insured gets only a promise
by the insurer and may never have occasion to find out, by his own experience, whether that
promise would be performed. He is, therefore, more gullible with respect to insurance and more
susceptible to the wiles of the salesmen.
(c) The insured's inability to look out for his own interest is increased by the technical character of
the insurance contract.

3. Security Fund
The Security Fund created assures the payment of allowed claims against an insurance company which
remains unpaid by reason of insolvency of such company. It will not only provide assistance to companies
on the brink of bankruptcy but also assure continued trust and confidence in the industry from the
public.
The Fund has also a secondary purpose. In the event of national emergency or calamity (e.g., war, riots,
rebellion, earthquake, or flood), the Fund may likewise be used to pay insured claims which otherwise
would not be compensable under the provisions of the policy. (Sec. 365.)

4. Compulsory Motor Vehicle Liability Insurance

Meaning of motor vehicle
Under Section 3(a) of Republic Act No. 4136, a motor vehicle shall mean any vehicle propelled by any
power other than muscular power using the public highways,5 but excepting road rollers, trolley cars,
street sweepers, sprinklers, lawn mowers, bulldozers, graders, forklifts, amphibian trucks, and cranes if
not used in public highways, vehicles which run only on rails or tracks, and tractors, trailers and traction
engines of all kinds used exclusively for agricultural purposes.
Trailers having any number of wheels, when propelled or intended to be propelled by attachment to a
motor vehicle shall be classified as separate motor vehicle with no power rating.

Meaning of motor vehicle liability insurance

Motor vehicle liability insurance is a protection coverage that will answer for legal liability for losses and
damages for bodily injuries or property damage that may be sustained by another arising from the use
and operation of a motor vehicle by its owner.

How protection is obtained:

Usually it is obtained purely on voluntary basis by a motor vehicle owner to meet his needs in connection
with whatever liability may be incurred in operating the vehicle. At present, however, motor vehicle
liability insurance must, to a certain extent, be taken on compulsory basis by a motor vehicle owner.

Prerequisite regarding the operation and registration of motor vehicles

Section374 of the Insurance Code enjoins a land transportation operator (LTO) or a motor vehicle owner
(MVO) not to operate his vehicle in public highways unless there is in force in relation thereto a policy
insurance or guaranty in cash or surety bond to indemnify the death or bodily injury of the third party or
passenger,7 as the case may be, arising from the use thereof what the law mandates is third party9
liability coverage for such death or bodily injury.

5. Mutual Benefit Associations and Trusts for Charitable Uses

Distinguished from mutual insurance companies:
While it has been said that there is no distinction between mutual insurance companies and mutual
benefit societies, except where a statute has created a difference, and while insurance principles are
applicable in the case of mutual benefit certificates, benefit societies as usually constituted are materially
different from mutual insurance companies. They differ chiefly in that:
(1) They partake of many of the characteristics and incidents of fraternal societies;
(2) The membership is generally limited to those belonging to a particular organization or order;
and
(3) The real purpose of the societies or certificates issued by them is not that of indemnification or
security against loss, but of contribution and relief against distress or misfortune. (43 Am. Jur. 2d.
162.)
 CASE DIGESTS

1. Go Tiaoco y Hermanos vs. Union Insurance Society of Canton G.R. No. 13983, 1 September
1919

FACTS: Respondent issued a policy of marine insurance to Petitioner for a cargo of rice
transported by steamship from Saigon to Cebu. Upon arrival at Cebu it was discovered that 1,473
sacks were damaged by seawater, the loss amounted to P3,875.25. The loss happened the
drainpipe from water closet (comfort room) passed through the compartment where the rice was
stored, and eventually led to the sea. The joint/elbow of the pipe was made of cast iron and
already corroded through time, a 1-inch horizontal opening was already present, though attempt
to repair it with cement and bolting a strip of iron over it has been made. Loading the boat with
cargo resulted to the exit end of the pipe to be submerged in sea water; in consequence sea water
rose in the pipe which washed out the cement filling and permitted the flow of seawater into the
compartment of rice. The trial court ruled that the Insurance Company is not liable since the
opening in the pipe resulted from the ordinary wear and tear and not from the straining/rough
weather during voyage. The court also found that the repairs were made rather carelessly making
the ship unseaworthy to receive the cargo. The insurance policy provided compensation for
"Perils . . . of the seas, men, of war, fire, enemies, pirates, rovers, thieves, jettisons, . . . barratry of
the master and mariners, and of all other perils, losses, and misfortunes that have or shall come to
the hurt, detriment, or damage of the said goods and merchandise or any part thereof."

ISSUE: Is the Respondent insurance company liable for the damage to the rice?

RULING: No. A marine insurer upon a policy in the usual form is not liable for a loss which, in the
ordinary course of events, results from the natural and inevitable action of the sea, from the
ordinary wear and tear of the ship, or from the negligent failure of the ship's owner to provide the
vessel with proper equipment to convey the cargo under ordinary conditions.
The meaning of the expression "perils . . . of the seas . . . and, all other perils, losses, and
misfortunes," should be interpreted to cover risks which are of like kind (ejusdem generis), with
reference to the words that immediately precede them. The policy should only cover risks arising
from perils of the sea.
A policy of insurance upon a cargo of rice stipulated that the insurer should be liable for losses
incident to the perils of the sea "and all other perils, losses, and misfortunes that have (or shall)
come to the hurt, detriment or damage of the said goods." During the voyage sea water entered the
compartment where the cargo was stored through a defective drain pipe, and damaged the rice.
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 results from perils of the sea.
2. St. Paul Fire & Marine Insurance Co. vs Macondray & Co., Inc. et. al., G.R. No. L – 27796,
March 25, 1976

FACTS: Winthrop Products, Inc., of New York, New York, U.S.A., shipped aboard the SS “Tai Ping”,
owned and operated by Wilhelm Wilhelmsen, 218 cartons and drums of drugs and medicine, with
the freight prepaid, which were consigned to Winthrop Stearns, Inc., Manila, Philippines. The
shipment was insured by the shipper against loss and/or damage with the St. Paul Fire & Marine
Insurance Company. The SS “Tai Ping” arrived at the Port of Manila and discharged its aforesaid
shipment into the custody of Manila Port Service, the arrastre contractor for the Port of Manila.
The said shipment was discharged complete and in good order with the exception of one (1) drum
and several cartons which were in bad order condition. Because consignee failed to receive the
whole shipment and as several cartons of medicine were received in bad order condition, the
consignee filed the corresponding claim in the amount of P1,109.67 representing the C.I.F. value of
the damaged drum and cartons of medicine with the carrier and the Manila Port Service. However,
both refused to pay such claim. Consequently, the consignee filed its claim with the insurer, St.
Paul Fire & Marine Insurance Co. and the insurance company, on the basis of such claim, paid to
the consignee the insured value of the lost and damaged goods, including other expenses in
connection therewith, in the total amount of $1,134.46 U.S. currency. As subrogee of the rights of
the shipper and/or consignee, the insurer, St. Paul Fire & Marine Insurance Co., instituted with the
Court of First Instance of Manila the present action against the defendants for the recovery of said
amount of $1,134.46, plus costs. The defendants Manila Port Service and Manila Railroad
Company resisted the action, contending, among others, that the whole cargo was delivered to the
consignee in the same condition in which it was received from the carrying vessel; that their
rights, duties and obligations as arrastre contractor at the Port of Manila are governed by and
subject to the terms, conditions and limitations contained in the Management Contract between
the Bureau of Customs and Manila Port Service, and their liability is limited to the invoice value of
the goods, but in no case more than P500.00 per package, pursuant to paragraph 15 of the said
Management Contract; and that they are not the agents of the carrying vessel in the receipt and
delivery of cargoes in the Port of Manila. While the defendants Macondray & Co., Inc., Barber
Steamship Lines, Inc. and Wilhelm Wilhelmsen also contested the claim alleging, among others,
that the carrier’s liability for the shipment ceased upon discharge thereof from the ship’s tackle;
that they and their co-defendant Manila Port Service are not the agents of the vessel.
After due trial, the lower court rendered judgment ordering defendants Macondray & Co., Inc.,
Barber Steamship Lines, Inc. and Wilhelm Wilhelmsen to pay to the plaintiff, jointly, and severally,
the sum of P300.00, with legal interest. Contending that it should recover the amount of $1,134.46,
or its equivalent in pesos at the rate of P3.90, instead of P2.00, for every US$1.00, the plaintiff filed
a motion for reconsideration, but this was denied by the lower court.

ISSUE:
1. Whether or not, in case of loss or damage, the liability of the carrier to the consignee is limited
to the C.I.F. value of the goods which were lost or damaged?
2. Whether the insurer who has paid the claim in dollars to the consignee should be reimbursed in
its peso equivalent on the date of discharge of the cargo or on the date of the decision?

RULING:
1. Yes. The stipulation in the bill of lading limiting the common carrier’s liability to the value of the
goods appearing in the bill, unless the shipper or owner declares a greater value, is valid and
binding. This limitation of the carrier’s liability is sanctioned by the freedom of the contracting
parties to establish such stipulations, clauses, terms, or conditions as they may deem convenient,
provided they are not contrary to law, morals, good customs and public policy. A stipulation fixing
or limiting the sum that may be recovered from the carrier on the loss or deterioration of the
goods is valid, provided it is (a) reasonable and just under the circumstances, and (b) has been
fairly and freely agreed upon. In the case at bar, the liabilities of the defendants-appellees with
respect to the lost or damaged shipments are expressly limited to the C.I.F. value of the goods as
per contract of sea carriage embodied in the bill of lading. It is not pretended that those conditions
are unreasonable or were not freely and fairly agreed upon. The shipper and consignee are,
therefore, bound by such stipulations since it is expressly stated in the bill of lading that in
“accepting this Bill of Lading, the shipper, owner and consignee of the goods, and the holder of the
Bill of Lading agree to be bound by all its stipulations, exceptions and conditions, whether written,
stamped or printed, as fully as if they were all signed by such shipper, owner, consignee or
holder.” It is obviously for this reason that the consignee filed its claim against the defendants-
appellees on the basis of the C.I.F. value of the lost or damaged goods in the aggregate amount of
P1,109.67. The plaintiff appellant, as insurer, after paying the claim of the insured for damages
under the insurance, is subrogated merely to the rights of the assured. As subrogee, it can recover
only the amount that is recoverable by the latter. Since the right of the assured, in case of loss or
damage to the goods, is limited or restricted by the provisions in the bill of lading, a suit by the
insurer as subrogee necessarily is subject to like limitations and restrictions.

2. On the date of the discharge of the cargo.

Obligation of common carrier to pay for damage to goods shipped commenced on the date it failed
to deliver the ship in good condition to the consignee. Foreign insurance carrier should be
reimbursed for its dollar payments at the rate of exchange on the date of the loss or damage, not
on the date of the judgment. Equally untenable is the contention of the plaintiff-appellant that
because of extraordinary inflation it should be reimbursed for its dollar payments at the rate of
exchange on the date of the judgment and not on the date of the loss or damage.

The C.I.F. Manila value of the goods which were lost or damaged, according to the claim of the
consignee is $226.37 and $324.33 or P456.14 and P653.53, respectively, in Philippine Currency.
The peso equivalent was based by the consignee on the exchange rate of P2.015 to $1.00 which
was the rate existing at that time. We find, therefore, that the trial court committed no error in
adopting the aforesaid rate of exchange.

3. FILIPINAS COMPAÑA A DE SEGUROS vs. TAN CHUACO, L-1559 31 January 1950

FACTS: Petitioner, Filipinas Compaña a de Seguros (Filipnas), is a domestic insurance corporation

licensed to engage in the insurance business in the Philippines. The respondent, Tan Chauco (Tan),
is the owner of the building located in the Municipality of Lucena, province of Tayabas and is
insured for P20, 000.00 and P10, 000.00 in two policies issued by Filipinas. On January 5, 1942,
while both of the policies were still on going, the building was burned and was completely
destroyed. Notice of proof of loss were duly made but Filipinas refused to pay and an action was
brought to recover said policies.

Article 8 of the policies provides that:

Under any of the following circumstances the insurance ceases to attach as regards the property
affected unless the insured, before the occurrence of any loss or damage, obtains the sanction of
the company signified by endorsement upon the policy, by or on behalf of the Company.

a.) If the trade or manufacture carried on be altered, or if the nature of the occupation of or
other circumstances affecting the building insured or containing the insured property be changed
in such a way as to increase the risk of loss or damage by fire.

Filipinas contends that the sealing of Tan’s property by Japanese forces on December 28,1941
changed the nature of the occupation in a manner which increased the risk of loss, and that in
accordance with the provisions of article 8 of the policies above quoted, the insurance ceased to
attach as of the aforesaid date of December 28,1941 because it maded the building a natural target
for the guerilla and USAFFE to destroy being in the time of war.

Filipinas also contends that under Article 6 of the insurance policies, that a consuming fire was
accidental is not proof of the fact that such fire was not the remote or indirect result of, or
contributed to, by the abnormal conditions.

And finally, that under Article 13 (a), all benefits under the policy shall be forfeited if the claim be
in any respect fraudulent. Pursuant to this, it said that Tan made a fraudulent claim in not
disclosing that the building where the burned building stood before was also destroyed by a fire.

ISSUE #1: Was the nature of the building changed when the Japanese forces sealed the building?

RULING #1: No. The reason why the Japanese forces sealed the buildings was because it found that
the stores in the building insured were sealed, not because they belonged to enemy nationals, but
because they were abandoned by the owners and precautionary measures had to be adopted to
prevent their being looted.

As regards the increased risk of being attacked, the building was burned on January 5, 1942 and
on that time, the war was shifted already around Bataan and Corregidor and the Guerilla was only
organized after the fall of Bataan on April 1942.

ISSUE #2: Was the fire the result of an abnormal condition?

RULING #2: No. Although it is true that during the fire, an abnormal condition was present in such
that the government offices were not fully functioning, including the fire department, the court
said that based on the facts, the abnormal condition was not the proximate cause of the
destruction. The term "abnormal" means "not conformed to rule or system; deviating from type;
anomalous; irregular. For one, the fire started at the neighboring building that was very close the
Tan’s building that even if the normal condition was present, the fire department could have not
prevented the spread of the fire due to the close proximity. The risk caused by the proximity of the
building to the contiguous building is not a new one, and must have already been considered at
the time of issuing the policy. And lastly, the fire department by January 5 had not yet been
organized and there was no equipment, except the hose. The fire in question was purely an
ordinary and accidental one, unrelated to war, invasion, civil commotion, or to the abnormal
conditions arising therefrom.
ISSUE #3: Was there fraud when Tan failed to discloed of the prior building also destroyed by fire
where the insured building stood?

RULING #3: No. The previous fire that Tan failed to mention in answering the questions appearing
in the claims application is certainly immaterial and irrelevant, in so far as the fire in question is
concerned. Hence, there was no need for Tan to disclose such information.

4. TAN CHUCO VS. YORKSHIRE FIRE AND LIFE INSURANCE COMPANY, G.R. No. 5069,
OCTOBER 25, 1909

CARSON, J;
PRINCIPLE (for the outline):
In the Absence of an express valuation in a fire insurance policy, recovery thereunder, in the event
of fire, is limited to the amount of the actual loss incurred, and the burden is upon the claimant to
establish the amount of such loss.

FACTS: Plaintiff-insuree Yorkshire insured goods belonging to third parties in his building with
Respondent-insurer Yorkshire under an “open” fire insurance policy. Plaintiff claimed
compensation to the full extent of the policy for alleged loss by fire. The insurer as counterclaim
alleged that the fire was intentional and fraudulently set.
Trial Court:
The Trial court found no evidence to support the claim on the intentional burning of the building
by the plaintiff. However, it found that plaintiff failed to establish the value of the goods which he
alleges were destroyed by fire and he had failed to live up to the terms of his contract set out in the
policy, thereby voiding the policy and defeating his claim to indemnification.

ISSUE: Whether or not Plaintiff may recover from his fire insurance policy and if so, up to what
amount?

RULING: Yes, but plaintiff is only entitled to recover the amount of actual loss sustained by him,
there being no express valuation in the policy, judgement of the trial court was properly entered
against him for lack of satisfactory proof of the amount of his loss. The Supreme Court does not
disturb the factual findings of the Lower court and affirms that there is insufficient preponderance
of evidence to support that plaintiff deliberately set fire to the building. However, the plaintiff
failed to prove the value of the insured goods and submitted fabricated written evidence and false
testimony to support his claim that the insured goods actually destroyed by fire were worth more
than the total amount of the insurance thereon. There cast a doubt as to the accuracy of the
inventory report submitted to support their claim. Because conveniently no such effort was made
to save from destruction any books or papers connected with the business that would serve or
corroborate the date contained in the alleged inventory.

5. Go Lu vs Yorkshire Insurance Company G.R. no. 18090, July 25, 1922

FACTS: Three Insurance Companies for a premium of P250, issued its policy against loss from fire
for the period of one year to and in favor of the plaintiff for P10,000 on his stock of piece goods in
the bodega, subject to certain terms and provisions therein stated. While all of the policies were in
force and effect, a fire occurred in that portion of the building occupied by the Eastern Asia
Commercial Company, resulting in a loss and damage to the plaintiff's goods, which were insured.
At the time of the fire, the plaintiff claims that he was the owner of 66 cases of bolt goods in the
bodega, and that there was a total loss of 50 cases, and that the remaining 16 were seriously
damaged. This was evidenced by the entries made in the plaintiff’s book. The insurance companies
contended that not more than 16 cases of plaintiff's goods were destroyed. Futhermore, the
insurance companies alleged that plaintiff submitted fraudulent proof of the amount of his loss,
and that, for such reason, he is not entitled to recover anything and also contended that the
plaintiff violated the express terms of the policies in keeping his goods in the same building where
hemp was stored.

ISSUE: Did the plaintiff sufficiently prove the loss of the alleged 50 cases?

RULING: No. In an action on a fire insurance policy to recover the value of bolt goods alleged to
have been destroyed by fire, it devolves upon the plaintiff to prove the amount of his loss by a
preponderance of the evidence. Where the proof shows that all of plaintiff's bolt goods were
together in one corner of the building, and the plaintiff claims that there were sixty-six different
boxes or bales of goods destroyed in the fire, it devolves upon him to prove by a preponderance of
the evidence that the sixty-six bales were consumed or destroyed by the fire, and he can only
recover for the number of bales shown to have been destroyed. Where after the fire there is
evidence that sixteen boxes or bales of goods were found in a damaged condition, and the
testimony is conclusive that there was no remaining evidence of any kind after the fire of the loss
or destruction of the other fifty bales, it creates a presumption which it is the duty of the plaintiff
to overcome by competent and satisfactory evidence. This court will legally presume that in an
ordinary fire fifty bales or boxes of bolt goods of cloth cannot be wholly consumed or totally
destroyed, and that in the very nature of things some trace or evidence will be left remaining of
their loss or destruction.In this case, plaintiff failed to prove by preponderance of evidence the
loss of the 50 cases. Only 16 that was severely damaged was proven.

However, plaintiff's claim was fraudulent, and that he knew it was fraudulent when he made it. His
proof of claim was for 66 cases of piece goods of the actual value of P51,427.96 and this court finds
the amount of his actual loss to be P7,594.67 representing the 16 cases severely damaged. For
such reason, he is not entitled to recover anything.

6. GONZALES VS. LAO YECK TONG LIN FIRE & MARINE INS. CO., G.R. No. L-33131, December
13, 1930

FACTS: This is an action to recover of the defendant the Yek Tong Lin Fire & Marine Insurance Co.,
Ltd., the amount of two insurance policies totaling P100,000 upon leaf tobacco belonging to the
plaintiff, which was damaged by the fire that destroyed the building on Soler Street No. 188, where
said tobacco was stored. The trial court ruled in favor of plaintiff Gonzales. On appeal, defendant
company assigns this error, among others: the plaintiff cannot recover under the policy as he has
failed to prove that the Bank of the Philippine Islands, to whom the policy was made payable, no
longer has any rights and interests in it.

ISSUE: Can the plaintiff Gonzales recover from the fire insurance policy?
RULING: Yes. It should be noted that the defendant did not in its answer allege the defect of parties
regarding the plaintiff, and, besides, it does not appear that the plaintiff ceded to the bank all his
rights or interests in the insurance, the note attached to the policies merely stating: "There shall
be paid to the Bank of the Philippine Islands an indemnity for any loss caused by fire, according to
the interest appearing in its favor." And the fact that the plaintiff himself presented in evidence the
policies mortgaged to the Bank of the Philippine Islands gives rise to the presumption that the
debt thus secured has been paid, in accordance with article 1191 of the Civil Code.

Corpus Juris, volume 26, pages 483 et seq., states: Insured, being the person with whom the
contract was made, is primarily the proper person to bring suit thereon. Subject to some
exceptions, insured may thus sue, although the policy is taken wholly or in part for the benefit of
another person named or unnamed, and although it is expressly made payable to another as his
interest may appear or otherwise. Although a policy issued to a mortgagor is taken out for the
benefit of the mortgagee and is made payable to him, yet the mortgagor may sue thereon in his
own name, especially where the mortgagee's interest is less than the full amount recoverable
under the policy. And in volume 33, page 82, of the same work, we read the following: Insured may
be regarded as the real party in interest, although he has assigned as collateral security any
judgment he may obtain.

Thus, in view of the foregoing, the plaintiff can recover the fire insurance policy.

7. YU HUN &Co. vs. BRITISH TRADERS INS. CO. G.R. Nos. L-3719-25,May 18, 1954

Full text of case not available.

8. GARRIZ, TERREN & Co. vs. THE NORTH CHINA INS. Co., LTD., ET AL GR Nos. 19831, 19832,
and 19833 March 31, 1923

FACTS: The defendants North China Ins. Co., Ltd., Phoenix Assurance Co., Ltd., and Law Union &
Rock Ins. Co., Ltd., issued insurance policies in favor of the plaintiff for P20,000, P10,000 and
P10,000 respectively, covering all of the goods and merchandise belonging to plaintiff which were
located in room No. 5, second story, of the building situated at Nos. 12-14, Escolta, Manila. In the
policy of the Law Union & Rock Ins. Co., Ltd., there was included the furniture, consisting of
shelves, tables, mirrors, and other household goods. A fire subsequently took place in room No. 5
of the above-mentioned building where the insured goods were located, which were damaged by
the fire and the water of the pumps. The plaintiff brought this action to recover the amount of the
damages caused to the insured goods. According to the plaintiff, the goods and merchandise
existing on the day of the fire and covered by the insurance are those stated in Exhibit B with their
respective values (P39,738.47). The goods that were identified by their remains immediately after
the fire are specified in Exhibit D, also with their respective values (P36,320.37) It should be noted
that in Exhibit B there are included goods which do not appear in Exhibit D, the cost value of
which is P3,418.10. The trial court held the plaintiff to be entitled to recover only for the damages
caused to the goods described in Exhibit D. Both plaintiff and the defendants appealed. The former
claimed that court should have declared it entitled to recover for the damages caused to the goods
described in Exhibit B. The defendants, on the other hand, merely contend that the court should
not have allowed the plaintiff anything under the conditions of the policies because it made false
and fraudulent claims for losses. They Alleged that the plaintiff included in its claim goods which
were not in existence at the time of the fire. They infer this from the fact that in Exhibit B, which,
according to plaintiff, is the list of the goods that existed on the premises at the time of the fire, are
included goods which do not appear in Exhibit D, which is the list of the goods that were identified
by their remains after the fire.

ISSUE: Did the plaintiff make false and fraudulent claims for losses, thereby disallowing it to claim
anything under the policy?
RULING: No. There is no merit in the defendants' appeal. Even supposing that really there were on
the premises at the time of the fire no more goods than those described in Exhibit D, it does not
necessarily follow that the plaintiff acted fraudulently in claiming damages for the goods
described in Exhibit B, which are not included in Exhibit D. It may be an inexact claim, but not
necessarily fraudulent. Moreover, it appears that the defendants cannot set up this supposed
fraudulent claim of the plaintiff, the same not having been alleged as a defense in their answer.
And not only did they fail to allege this defense, but they admitted in their answer the allegation of
the plaintiff that it had complied with all the conditions imposed upon it by the insurance policies.
With regard to plaintiff's appeal, the object of which is to recover damages for the goods described
in Exhibit B its contention is not sufficiently supported by the evidence and the court believes that
it is entitled only to the amount of the damages caused to the goods described in Exhibit D, which
are the only goods the existence of which prior to, and at, the time of the fire was established by
their remains.

9. PIONEER INSURANCE AND SURETY CORPORATION v. OLIVA YAP G.R. No. L-36232,
December 19, 1974

FACTS: Respondent was the owner of a store in a two-storey building where she sold shopping
bags and footwear, such as shoes, sandals and step-ins. Respondent took out a fire insurance
policy from petitioner company with a face value of P25,000.00 covering her stocks, office
furniture, fixtures and fittings of every kind and description. Among the conditions in the policy
include the duty of the insured to give notice to the Company of any insurance or insurances
already effected, or which may subsequently be effected, covering any of the property hereby
insured. Without such notice, all benefits under this Policy will be forfeited. At the time of the
insurance, another insurance policy for P20,000.00 issued by the Great American Insurance
Company covering the same properties was noted on the policy as co-insurance.

Still later, respondent took out another fire insurance policy for P20,000.00 covering the same
properties, this time from the Federal Insurance Company, Inc., which new policy was, however,
procured without notice to and the written consent of petitioner and, therefore, was not noted as a
co-insurance in Policy No. 4219.

Three months after, a fire broke out in the building housing respondent store, and the said store
was burned. Respondent filed an insurance claim, but the same was denied on the ground of
"breach and/or violation of any and/or all terms and conditions" of the insurance policy.

Respondent then filed with the CFI Manila a complaint asking for payment of the face value of her
fire insurance policy. The trial court decided for respondent, and its judgment was affirmed in full
by the CA. Both courts held that a co-insurance in the amount of P20,000.00 was secured from the
Great American Insurance and was declared by the respondent and recognized by the petitioner.
This was later on substituted for the same amount and secured by the Federal Insurance
Company.

ISSUE: Should the petitioner be absolved from liability on the fire insurance policy on account of
any violation by respondent of the co-insurance clause therein?

RULING: YES. The finding of the Court of Appeals that the Great American Insurance policy was
substituted by the Federal Insurance policy is unsubstantiated by the evidence on record and and
is grounded entirely on speculation, surmises or conjectures, hence, not binding on the Supreme
Court.

By the plain terms of the policy, other insurance without the consent of petitioner would ipso facto
avoid the contract. It required no affirmative act of election on the part of the company to make
operative the clause avoiding the contract, wherever the specified conditions should occur. Its
obligations ceased, unless, being informed of the fact, it consented to the additional insurance.

The obvious purpose of the aforesaid requirement in the policy is to prevent over-insurance and
thus avert the perpetration of fraud. The public, as well as the insurer, is interested in preventing
the situation in which a fire would be profitable to the insured. According to Justice Story: "The
insured has no right to complain, for he assents to comply with all the stipulation on his side, in
order to entitle himself to the benefit of the contract, which, upon reason or principle, he has no
right to ask the court to dispense with the performance of his own part of the agreement, and yet
to bind the other party to obligations, which, but for those stipulation would not have been
entered into." /GARA

10. TERESA VDA. DE FERNANDEZ v. THE NATIONAL LIFE INSURANCE COMPANY OF THE
PHILIPPINES, G.R. No. L-9146, January 27, 1959

FACTS: Respondent insured the life of Juan D. Fernandez which the beneficiaries thereof being his
mother Teresa Duat Vda. De Fernandez and his sisters Maria Teresa Fernandez and Manuela
Fernandez. The insured died on November 2, 1944, at Muntinglupa, Rizal, while the policy was in
force. After a lapse of more than seven years, or on August 1st, 1952, Atty. Alberto L. de la Torre,
in representation of the beneficiaries, wrote the company advising it that and insured had died in
1944, and claimed the proceeds of the policy. The company advised and argued that the
beneficiaries that inasmuch as the policy matured upon the death of the insured on November 2,
1944, the proceeds should be computed in accordance with the Ballantyne scale, which amount
only to P500. In view of this, the beneficiaries commenced suit on August 6, 1954, but the lower
court sustained the stand of the company and dismissed the complaint, awarding however to
plaintiffs the sum of P500 in Philippine currency, without interest; hence the appeal.

ARGUMENTS: TERESA VDA. DE FERNANDEZ, ET AL.,:

Appellants vigorously maintain that the obligation of the company to pay the proceeds of the
insurance accrued not upon the death of the insured on November 2, 1944, but only upon receipt
and approval by the company, at its Home Office, of proof of death of the insured, which was on
July 9, 1954 in accordance with the provision of the insurance policy.
ISSUE: Whether or not the filing of proof of death by the beneficiaries is a condition precedent to
the demandability of the obligation of the insurer to pay the proceeds, appellants claim that they
should be paid P10,000 in Philippine currency and not under the Ballantyne scale of values.

RULING: No. In life insurance, the policy matures either upon the expiration of the term set forth
therein in which case its proceeds are immediately payable to the insured himself, or upon his
death occurring at any time prior to the expiration of such stipulated term, in which case, the
proceeds are payable to his beneficiaries within sixty days after their filing of proof of death (Sec.
91-A Insurance Law). In the case at bar, the policy matured upon the death of the insured on
November 2, 1944, and the obligation of the insurer to pay arose as of that date. The sixty-day
period fixed by law within which to pay the proceeds after presentation of proof of death is merely
procedural in nature, evidently to determine the exact amount to be paid and the interest thereon
to which the beneficiaries may be entitled to collect in case of unwarranted refusal of the company
to pay, and also to enable the insurer to verify or check on the fact of death which it may even
validly waive. It is the happening of the suspensive condition of death that renders a life policy
matured and not the filing of proof of death which, as above stated, is merely procedural, for even
if such proof were presented but it turns out later that the insured is alive, such filing does not give
maturity to the policy. The insured having died on November 2, 1944, during the Japanese
occupation, the proceeds of his policy should be adjusted accordingly. “The rule is already settled
that where a debtor could have paid his obligation at any time during the Japanese occupation,
payment after liberation must be adjusted in accordance with the Ballantyne schedule.”

At any rate, irrespective of whether there was delay or not in the filing of proof of death, the hard
fact remains that the policy matured and was payable during the Japanese occupation, and under
the doctrine in the Valero vs. Sycip case, supra, payment should be adjusted in accordance with the
Ballantyne scale of values. / LUMINGKIT

11. HILARIO GERCIO vs SUN LIFE ASSURANCE OF CANADA, ET AL. G.R. No. 23703, September
28, 1925

FACTS: On January 29, 1910, the Sun Life Assurance Co. of Canada issued a twenty-year
endowment insurance policy on the life of Hilario Gercio. By its terms, the insurance company
agreed to insure the life of Hilario Gercio for the sum of P/2,000, to be paid him on February 1,
1930, or if the insured should die before said date, then to his wife, Mrs. Andrea Zialcita, should
she survive him; otherwise to the executors, administrators, or assigns of the insured. The policy
did not include any provision reserving to the insured the right to change the beneficiary.
Subsequently, his wife was convicted of the crime of adultery. A decree of divorce was then issued
which had the effect of completely dissolving the bonds of matrimony contracted by Hilario Gercio
and Andrea Zialcita. Gercio notified the Sun Life Assurance Co. of Canada that he had revoked his
donation in favor of Andrea Zialcita, and that he had designated his present wife, Adela Garcia de
Gercio, as the beneficiary of the policy. However, the insurance company refused.

ISSUE: W/N Gercio has the right to change the beneficiary of the policy
RULING: NO. The wife has an insurable interest in the life of her husband. The beneficiary has an
absolute vested interest in the policy from the date of its issuance and delivery. So when a policy
of life insurance is taken out by the husband in which the wife is named as beneficiary, she has a
subsisting interest in the policy. And this applies to a policy to which there are attached the
incidents of a loan value, cash surrender value, an automatic extension by premiums paid, and to
an endowment policy, as well as to an ordinary life insurance policy. If the husband wishes to
retain to himself the control and ownership of the policy he may so provide in the policy. But if the
policy contains no provision authorizing a change of beneficiary without the beneficiary's consent,
the insured cannot make such change. Accordingly, it is held that a life insurance policy of a
husband made payable to the wife as beneficiary, is the separate property of the beneficiary and
beyond the control of the husband. As to the effect produced by the divorce, the Philippine Divorce
Law, Act No. 2710, merely provides in section 9 that the decree of divorce shall dissolve the
community property as soon as such decree becomes final. Unlike the statutes of a few
jurisdictions, there is no provision in the Philippine Law permitting the beneficiary in a policy for
the benefit of the wife of the husband to be changed after a divorce. It must follow, therefore, in
the absence of a statute to the contrary, that if a policy is taken out upon a husband's life the wife
is named as beneficiary therein, a subsequent divorce does not destroy her rights under the policy.

12. THE INSULAR LIFE ASSURANCE Co., LTD vs. MARIA NARCISA SUVA, G. R. No. 42874.
October 22, 1935

FACTS: This is an appeal from a judgment of the Court of First Instance of Manila in an action
brought by the Insular Life Assurance Co., Ltd., for the cancellation of two policies of P5,000 each
issued and delivered by it upon the life of Benito Patrocinio Suva, now deceased. The action was
originally brought only against the administratrix of the estate of the insured, but by leave of
court, Maria Narcisa Suva, in her own right, and Felicidad Cruz filed their interventions claiming to
be the beneficiaries of the two policies involved in this action. The first of the policies, numbered
47726, bears date of December 1, 1932, and names as beneficiary Isabel Simbulan, the wife of the
insured. The second of the said policies, numbered 48819, bears date of February 1,1933, and
names as beneficiary the appellee, Maria Narcisa Suva, sister of the insured. The company
acknowledges having received the premium due on said policies for the first year and tenders the
return of the same in its petition. Felicidad Cruz appeals from that part of the judgment which
holds that the insured, Benito Patrocinio Suva, having renounced in his application the right to
change the beneficiary in policy No. 47726, his wife, Isabel Simbulan, acquired a vested interest in
the policy which neither the insured nor the company could take from her without her consent.

ISSUE: Was the attempted change of beneficiary made by the insured valid and thus acceptable?

RULING: The conclusion of the trial court is sustained by our decision in the case of Gercio vs. Sun
Life Assurance Co. of Canada (48 Phil., 53), and the American authorities therein cited. We think
that the attempted change of beneficiary made by the insured on August 16, 1933, and endorsed
by the company on the back of the policy on August 24, 1933, was due to a mutual mistake. The
application in which the insured, over his personal signature, renounced the right to change the
beneficiary, should prevail over the printed phrase "WITH RIGHT OF REVOCATION" which occurs
in the policy. It is to be noted that the application itself is made a part of the contract.
13. NARIO vs. PHILIPPINE AMERICAN LIFE INSURANCE
G.R. No. L-22796, June 26, 1967

FACTS: Mrs. Alejandra Santos-Nario was, upon application, issued, on June 12, 1959, by the
Philippine American Life Insurance Co., a life insurance policy under a 20-year endowment plan,
with a face value of P5,000.00. She designated thereon her husband, Delfin Nario, and their
unemancipated minor son, Ernesto Nario, as her irrevocable beneficiaries.
About the middle of June, 1963, She then applied for a loan on the above policy with PHILAMLIFE
w/c she is entitled to as policy holder, after the policy has been in force for 3 years. The purpose of
such loan was for the school expenses of Ernesto. The application bore the written signature and
consent of Delfin Nario in two capacities first, as one of the irrevocable beneficiaries of the policy;
and the other, as the father-guardian of said minor son and irrevocable beneficiary, Ernesto Nario,
and as the legal administrator of the minor’s properties, pursuant to Article 320 of the Civil Code
of the Philippines. PHILAMLIFE denied the loan application contending that written consent of the
minor son must not only be given by his father as legal guardian but it must also be authorized by
the court in a competent guardianship proceeding. Mrs. Nario then signified her decision to
surrender her policy and demand its cash value which then amounted to P 520. The Insurance
Company also denied the surrender of the policy on the same ground as that given in disapproving
the loan application.

On September 10, 1963, Mrs. Nario and her husband, Delfin, sued PHILAMLIFE praying that the
latter grant their loan application and/or accept the surrender of said policy in exchange for its
cash value. Defendant PHILAMLIFE contends that the loan application and the surrender of the
policy involved acts of disposition and alienation of the property rights of the minor, said acts are
not within the power of administrator granted under Art. 320 in relation to Art. 326 CC, hence,
mere written consent given by the father-guardian, for and in behalf of the minor son, without any
court authority therefor, was not a sufficient compliance of the law.
The lower court agreed with defendant’s contention and rendered its decision dismissing
plaintiffs’ complaint. Unable to secure reconsideration of the trial Court’s ruling, petitioner
appealed directly to this Court, contending that the minor’s interest amounted to only one-half of
the policy’s cash surrender value of P520.00; that under Rule 96, Section 2 of the Revised Rules of
Court, payment of the ward’s debts is within the powers of the guardian, where no realty is
involved; hence, there is no reason why the father may not validly agree to the proposed
transaction on behalf of the minor without need of court authority.

ISSUES:
1. How should the vested interest or right of the beneficiaries in a life insurance policy be
measured?
2. Was Mrs. Nario’s act of securing a loan on her life insurance policy and the act of surrendering
said policy because the loan was not granted considered acts of management and administration
of her minor child's property rights such that judicial authorization is NOT required?
3. Was PHILAMLIFE justified in refusing to grant the loan application and the surrender of the
policy?

RULING:
1. The vested interest or right of the beneficiaries in the policy should be measured on its full face
value and not on its cash surrender value, for in case of death of the insured, said beneficiaries are
paid on the basis of its face value and in case the insured should discontinue paying premiums, the
beneficiaries may continue paying it and are entitled to automatic extended term or paid-up
insurance options, etc. Said vested right under the policy cannot be divisible at any given time.

2. NO, they are acts of alienation of the minor child’s property. Where a person secured a life
insurance policy with a face value of P5,000, and she designated her husband and minor child as
irrevocable beneficiaries, her act of securing a loan on said policy and the act of surrendering the
policy because the loan was not granted are acts of disposition or alienation of her minor child's
property rights and are not merely acts of management or administration. Said acts involve the
incurring or termination of contractual obligations.
The full face value of the policy is P5,000.00 and the minor’s vested interest therein, as one of the
two (2) irrevocable beneficiaries, consists of one-half (½) of said amount or P2,500.00. Judicial
authorization is necessary for the consent to be given by the father to a policy loan or to the
surrender of a life insurance policy wherein a minor has a vested interest worth P2,500. To obtain
such judicial authorization, the father should be appointed guardian of 'the child's property. If the
minor's property is valued at less than P2,000, the father or mother, as legal administrator, needs
judicial authorization to alienate or encumber the same. As legal administrator, the father or
mother can perform only acts of administration or management, as distinguished from
encumbrance or disposition.

3. YES. Applying laws (CC and rules of Court), the father a must file a petition for guardianship
and post a guardianship bond. In the case at bar, the father did not file any petition for
guardianship nor post a guardianship bond, and as such cannot possibly exercise the powers
vested on him as legal administrator of the minor’s property. The consent gives for and in behalf of
the son without prior court authorization to the loan application and the surrender was
insufficient and ineffective and PHILAMLIFE was justified in disapproving the said applications.
Assuming that the property of the ward was less than P2,000, the effect would be the same, since
the parents would only be exempted from filing a bond and judicial authorization, but their acts as
legal administrators are only limited to acts of management or administration and not to acts of
encumbrance or disposition.

14. BPI vs Posadas

FACTS: BPI, as administrator of the estate of deceased Adolphe Schuetze, appealed to CFI Manila
absolving defendant, Collector of Internal Revenue, from the complaint filed against him in
recovering the inheritance tax amounting to P1209 paid by the plaintiff, Rosario Gelano Vda de
Schuetze, under protest, and sum of P20,150 representing the proceeds of the insurance policy of
the deceased.
Rosario and Adolphe were married in January 1914. The wife was actually residing and living in
Germany when Adolphe died in December 1927. The latter while in Germany, executed a will in
March 1926, pursuant with its law wherein plaintiff was named his universal heir. The deceased
possessed not only real property situated in the Philippines but also personal property consisting
of shares of stocks in 19 domestic corporations. Included in the personal property is a life
insurance policy issued at Manila on January 1913 for the sum of $10,000 by the Sun Life
Assurance Company of Canada, Manila Branch. In the insurance policy, the estate of the deceased
was named the beneficiary without any qualification. Rosario is the sole and only heir of the
deceased. BPI, as administrator of the decedent’s estate and attorney in fact of the plaintiff, having
been demanded by Posadas to pay the inheritance tax, paid under protest. Notwithstanding
various demands made by plaintiff, Posadas refused to refund such amount.

ISSUE: Is the widow entitled to ½ of the proceeds of the policy?

RULING: YES. With the exception of the premium for the first year covering the period from
January 14, 1913 to January 14, 1914, all the money used for paying the premiums, i. e., from the
second year, or January 16, 1914, or when the deceased Adolphe Oscar Schuetze married the
plaintiff appellant Rosario Gelano, until his death on February 2, 1929, is conjugal property
inasmuch as it does not appear to have exclusively belonged to him or to his wife (art. 1407, Civil
Code). As the sum of P20,150 here in controversy is a product of such premium it must also be
deemed community property, because it was acquired for a valuable consideration, during said
Adolphe Oscar Schuetze's marriage with Rosario Gelano at the expense of the common fund (art.
1401, No. 1, Civil Code), except for the small part corresponding to the first premium paid with the
deceased's own money.
Thus, both according to our Civil Code and to the ruling of those North American States where the
Spanish Civil Code once governed, the proceeds of a life-insurance policy whereon the premiums
were paid with conjugal money, belong to the conjugal partnership.
As all the premiums on the life-insurance policy taken out by the late Adolphe Oscar Schuetze,
were paid out of the conjugal funds, with the exception of the first, the proceeds of the policy,
excluding the proportional part corresponding to the first premium, constitute community
property, notwithstanding the fact that the policy was made payable to the deceased's estate, so
that one-half of said proceeds belongs to the estate, and the other half to the deceased's widow,
the plaintiff-appellant Rosario Gelano Vda. de Schuetze.

ISSUE:
Whether the Collector of Internal Revenue has authority, under the law, to collect the inheritance
tax upon one-half of the life insurance policy taken out by the late Adolphe Oscar Schuetze, which
belongs to him and is made payable to his estate.

RULING:
YES. Inasmuch as the proceeds of the insurance policy on the life of the late Adolphe Oscar
Schuetze were paid to the Bank of the Philippine Islands, as administrator of the deceased's estate,
for management and partition, and as such proceeds were turned over to the sole and universal
testamentary heiress Rosario Gelano Vda. de Schuetze, the plaintiffappellant, here in Manila, the
situs of said proceeds is the Philippine Islands.
If the proceeds of the life-insurance policy taken out by the late Adolphe Oscar Schuetze and made
payable to his estate, were delivered to the Bank of the Philippine Islands for administration and
distribution, they were not in transit but were more or less permanently located in the Philippine
Islands, according to the foregoing rules. If this be so, half of the proceeds which is community
property, belongs to the estate of the deceased and is subject to the inheritance tax, in accordance
with the legal provision quoted above, irrespective of whether or not the late Adolphe Oscar
Schuetze was domiciled in the Philippine Islands at the time of his death.
By virtue of the foregoing, we are of opinion and so hold: (1) That the proceeds of a life-insurance
policy payable to the insured's estate, on which the premiums were paid by the conjugal
partnership, constitute community property, and belong one-half to the husband and the other
half to the wife, exclusively; (2) that if the premiums were paid partly with paraphernal and partly
conjugal funds, the proceeds are likewise in like proportion paraphernal in part and conjugal in
part; and (3) that the proceeds of a life-insurance policy payable to the insured's estate as the
beneficiary, if delivered to the testamentary administrator of the former as part of the assets of
said estate under probate administration, are subject to the inheritance tax according to the law
on the matter, if they belong to the assured exclusively, and it is immaterial that the insured was
domiciled in these Islands or outside.
Thus, defendant is ordered to return to the plaintiff the one-half of the tax collected upon the
amount of P20,150, being the proceeds of the insurance policy on the life of the late Adolphe Oscar
Schuetze, after deducting the proportional part corresponding to the first premium, without
special pronouncement of costs.

15. Sun Life v Ingersoll G.R. No. 16475 November 8, 1921

Facts: Sun Life issued a policy on Dy Poco’s life for US$12,500. The contract stipulated that it
would be payable to the said assured or his assigns on the 21st day of February, 1938, and if he
should die before that date, then it would be given to his legal representatives. The payment of a
stipulated annual premium during the period of the policy, or until the premiums had been
completely paid for twenty years, Dy Poco, was adjudged an insolvent by the trial court and Frank
B. Ingersoll was appointed assignee of his estate. Poco died, and Tan Sit, was appointed as the
administratrix of his intestate estate. Both Ingersoll, as assignee, and Tan Sit, as administratix of
Dy Poco's estate, asserted claims to the proceeds of the policy. The lower court found that
Ingersoll had a better right and ordered Sun Life to pay. The policy stipulated that after the
payment of three full premiums, the assured could surrender the policy to the company for a "cash
surrender value." But no more than two premiums had been paid upon the policy up to the time
of the death of the assured. Hence this provision had not become effective. It must therefore be
accepted that this policy had no cash surrender value, at the time of the assured's death, either by
contract or by convention practice of the company in such cases.

Issue: WON Ingersoll, as assignee, has a right to the proceeds of the insurance

Held: No. Sunlife must pay to the administratrix. The property and interests of the insolvent which
become vested in the assignee of the insolvent are specified in section 32 of the Insolvency Law.
Sec 32 declares that the assignment to be made by the clerk of the court "shall operate to vest in
the assignee all of the estate of the insolvent debtor not exempt by law from execution." Moreover,
by section 24, the court is required, upon making an order adjudicating any person insolvent, to
stay any civil proceedings pending against him; and it is declared in section 60 that no creditor
whose debt is provable under the Act shall be allowed, after the commencement of proceedings in
insolvency, to prosecute to final judgment any action therefor against the debtor. In connection
with the foregoing may be mentioned subsections 1 and 2 of section 36, as well as the opening
words of section 33, to the effect that the assignee shall have the right and power to recover and to
take into his possession, all of the estate, assets, and claims belonging to the insolvent, except such
as are exempt by law from execution. These provisions clearly evince an intention to vest in the
assignee, for the benefit of all the creditors of the insolvent, such elements of property and
property right as could be reached and subjected by process of law by any single creditor suing
alone. "leviable assets" and "assets in insolvency" are practically coextensive terms. Hence, in
determining what elements of value constitute assets in insolvency, the court is at liberty to
consider what elements of value are subject to be taken upon execution, and vice versa. Section 48
of the Insolvency Law, didn’t declare items from the ownership of which the assignee is excluded.
Moreover, all life insurance policies are declared by law to be assignable, regardless of whether
the assignee has an insurable interest in the life of the insured or not.

The assignee in insolvency acquired no beneficial interest in the policy of insurance in question;
that its proceeds are not liable for any of the debts provable against the insolvent in the pending
proceedings, and that said proceeds should therefore be delivered to his administratrix.

In re McKinney: no beneficial interest in this policy had ever passed to the assignee over and
beyond what constituted the surrender value, and that the legal title to the policy was vested in
the assignee merely in order to make the surrender value available to him. The conclusion
therefore was that the assignee should surrender the policy upon the payment to him of said
value, as he was in fact directed to do. A surrender value of a policy "arises from the fact that the
fixed annual premiums is much in excess of the annual risk during the earlier years of the policy,
an excess made necessary in order to balance the deficiency of the same premium to meet the
annual risk during the latter years of the policy. This is the practical, though not the legal, relation
of the company to this fund. "Upon the surrender of the policy before the death of the assured, the
company, to be relieved from all responsibility for the increased risk, which is represented by this
accumulating reserve, could well afford to surrender a considerable part of it to the assured, or his
representative. A return of a part in some form or other is now Usually made."

The stipulation providing for a cash surrender value is a comparatively recent innovation in life
insurance. Furthermore, the practice is common among insurance companies even now to
concede nothing in the character of cash surrender value, until three full premiums have been
paid, as in this case. The courts are therefore practically unanimous in refusing to permit the
assignee in insolvency to wrest from the insolvent a policy of insurance which contains in it no
present realizable assets.

16. BIAGTAN VS THE INSULAR LIFE ASSURANCE COMPANY, LTD. G.R. No. L-25579, March 29,
1972

FACTS: Juan S. Biagtan was insured with Insular life Assurance Company for the sum of P5,000.00
and, under a supplementary contract denominated Accidental Death Benefit Clause, for an
additional sum of P5,000.00 if the death of the Insured resulted directly from bodily injury
effected solely through external and violent means sustained in an accident and independently of
all other causes. The clause, however, expressly provided that it would not apply where death
resulted from an injury intentionally inflicted by a third party. On May 20, 1964 a band of robbers
entered the house of the insured Juan S. Biagtan, robbed the house and killed Biagtan. Plaintiffs, as
beneficiaries of the insured, filed a claim under the policy. The insurance company paid the basic
amount of P5,000.00 but refused to pay the additional sum of P5,000.00 under the accidental
death benefit clause, on the ground that the insured’s death resulted from injuries intentionally
inflicted by third parties and therefore was not covered. Plaintiffs filed suit to recover, and after
due hearing the court a quo rendered judgment in their favor.

ISSUE: Whether the wounds received by the insured at the hands of the robbers were inflicted
intentionally and thus, no recovery may be made?
RULING: Yes. The parties presented no evidence that the act of receiving thrust from the sharp-
pointed instrument of the robbers was intended to inflict injuries upon the person of the insured
or any other person or merely to scare away any person so as to ward off any resistance or
obstacle that might be offered in the pursuit of their main objective which was robbery. Nine
wounds were inflicted upon the deceased, all by means of thrusts with sharp-pointed instruments
wielded by the robbers. So is the fact that five of those wounds caused the death of the insured.
Whether the robbers had the intent to kill or merely to scare the victim or to ward off any defense
he might offer, it cannot be denied that the act itself of inflicting the injuries was intentional. It
should be noted that the exception in the accidental benefit clause invoked by the appellant does
not speak of the purpose, whether homicidal or not of a third party in causing the injuries, but
only of the fact that such injuries have been intentionally inflicted this obviously to distinguish
them from injuries which, although received at the hands of a third party, are purely accidental.
This construction is the basic idea expressed in the coverage of the clause itself, namely, that the
death of the insured resulted directly from bodily injury effected solely through external and
violent means sustained in an accident and independently of all other causes. Where a gang of
robbers enter a house and coming face to face with the owner, even if unexpectedly, stab him
repeatedly, it is contrary to all reason and logic to say that his injuries are not intentionally
inflicted, regardless of whether they prove fatal or not. As it was, in the present case they did
prove fatal, and the robbers have been accused and convicted of the crime of robbery with
homicide. Thus, it has been held that “intentional” as used in an accident policy excepting
intentional injuries inflicted by the insured or any other person, etc., implies the exercise of the
reasoning faculties, consciousness, and volition. Where a provision of the policy excludes
intentional injury, it is the intention of the person inflicting the injury that is controlling. If the
injuries suffered by the insured clearly resulted from the intentional act of a third person the
insurer is relieved from liability as stipulated. In rendering judgment for the insurance company
the Court held that while the assassination of the insured was as to him an unforeseen event and
therefore accidental, the clause of the proviso that excludes the insurer’s liability, in case death or
injury is intentionally inflicted by any other person, applies to this case. The policy did not cover
death resulting from intentional injuries inflicted by the insured or any other person. Under the
facts, showing that the murderer knew his victim and that he fired with intent to kill, there could
be no recovery under the policy which excepted death from intentional injuries inflicted by any
person.