Insurance Case Digest: Gallardo v. Morales (1960)

G.R. No. L-12189  April 29, 1960
Lessons Applicable: Definition and Coverage of Life Insurance (Insurance)

Laws Applicable: Rule 39, section 12, subdivision (k) of the Rules of Court (old law)

FACTS:

• CFI: Hermenegilda S. Morales to pay P7,000 to a creditor Francisca Gallardo
• writ of execution was issued and delivered to the Sheriff who garnished and levied execution on the sum of P7,000 out of the P30,000 due from the Capital Insurance & Surety Co. Inc., to Morales as beneficiary whose husband Luis Morales died by assassination. 
• Morales asked the sheriff to quash and lift said garnishment or levy on execution invoking Rule 39, section 12, subdivision (k) of the Rules of Court but it was denied. 
• All moneys, benefits, privileges, or annuities accruing or in any manner growing out of any life insurance, if the annual premiums paid do not exceed five hundred pesos, and if they exceed that sum a like exemption shall exist which shall bear the same proportion to the moneys, benefits, privileges, and annuities so accruing or growing out of such insurance that said five hundred pesos bears to the whole annual premiums paid.
• Morales appealed maintaining that it was a life insurance for it insured her husband for injuries and/or death as a result of murder or assault or attempt thereat

ISSUE: W/N the insurance is a life insurance and not an accident insurance

HELD: NO. order appealed from is reversed, and the garnishment in dispute hereby set aside and quashed

• the annual premium was for P15
• If it were an ordinary life insurance policy, taking into account that the insured, Luis G. Morales, was 38 years of age and the amount of the policy was for P50,000.00 the annual premium would have been around P1,206
• the period for the policy was stipulated for one year, and considerations as to age, health, occupation and other personal circumstances were not taken into account in an accident insurance policy
• Annex "1" of the opposition, shows that the Capital Insurance and Surety Company Inc. is a non-life insurance company and that the only authority granted to it to transact business covers fire, marine, surety, fidelity, accident, motor car, and miscellaneous insurance, except life insurance
• Accident vs Life Insurance Policy
• accident policy - merely insures the person from injury and or death resulting from murder, assault, or an attempt thereat
• Accident insurance
• indemnity or casualty contract
• life insurance policy - what is insured is the life of the subject for a definite number of years
• life insurance
• investment contract
• contract by which the insurer, for a stipulated sum, engages to pay a certain amount of money if another dies within the time limited by the policy
• contract for insurance for one year in consideration of an advanced premium, with the right of assured to continue it from year to year upon payment of a premium as stipulated
• includes accident insurance, since life is insured under either contract
• includes all policies of insurance in which payment of insurance money is contingent upon loss of life
• "any life insurance" 
• applies to ordinary life insurance contracts, as well as to those which, although intended primarily to indemnify for risks arising from accident, likewise, insure against loss of life due, either to accidental causes, or to the willful and criminal act of another, which, as such, is not strictly accidental in nature
• statutes of this nature seek to enable the head of the family to secure his widow and children from becoming a burden upon the community and, accordingly, should merit a liberal interpretation

Insurance Case Digest: Ty v. First National Surety and Assurance Co., Inc. (1961)

G.R. No. L-16138             April 29, 1961

Lessons Applicable: Clear Provision Given Ordinary Meaning (Insurance)

FACTS:

• 2 months prior to December 24, 1953: Diosdado C. Ty, employed as operator mechanic foreman in the Broadway Cotton Factory insured himself in 18 local insurance companies with Broadway Cotton Factory as his beneficiary
• December 24, 1953: fire broke out at the Broadway Cotton Factory where Ty, fighting his way out, injured his left hand by a heavy object.  
• He was brought to the Manila Central University hospital, and after receiving first aid there, he went to the National Orthopedic Hospital for treatment of his injuries.
• His injuries caused temporary total disability on his left hand so he filed a claim against all defendants who rejected the claim reasoning that there it was not covered in his policy because there was no severance of amputation of the left hand
• Trial Court: absolved the defendants

ISSUE: W/N Ty can claim 

HELD: NO. Affirmed.

• can not go beyond the clear and express conditions of the insurance policies, all of which define partial disability as loss of either hand by amputation through the bones of the wrist
• Note that the disability of plaintiff's hand was merely temporary, having been caused by fracture of the index, the middle and the fourth fingers of the left hand
• agreement contained in the insurance policies is the law between the parties

Jurisprudence: G.R. No. L-16138

EN BANC

G.R. No. L-16138             April 29, 1961

DIOSDADO C. TY, plaintiff-appellant,
vs.
FIRST NATIONAL SURETY & ASSURANCE CO., INC., defendant-appellee.

x---------------------------------------------------------x

G.R. No. L-16139             April 29, 1961.

DIOSDADO C. TY, plaintiff-appellant,
vs.
ASSOCIATED INSURANCE & SURETY CO., INC., defendant-appellee.

x---------------------------------------------------------x

G.R. No. L-16140             April 29, 1961

DIOSDADO C. TY, plaintiff-appellant,
vs.
UNITED INSURANCE CO., INC., defendant-appellee.

x---------------------------------------------------------x

G.R. No. L-16141             April 29, 1961.

DIOSDADO C. TY. plaintiff-appellant,
vs.
PHILIPPINE SURETY & INSURANCE CO., INC., defendant-appellee.

x---------------------------------------------------------x

G.R. No. L-16142             April 29, 1961.

DIOSDADO C. TY, plaintiff-appellant,
vs.
RELIANCE SURETY & INSURANCE CO., INC., defendant-appellee.

x---------------------------------------------------------x

G.R. No. L-16143             April 29, 1961

DIOSDADO C. TY, plaintiff-appellant,
vs.
FAR EASTERN SURETY & INSURANCE CO., INC., defendant-appellee.

x---------------------------------------------------------x

G.R. No. L-16144             April 29, 1961

DIOSDADO C. TY, plaintiff-appellant,
vs.
CAPITAL INSURANCE & SURETY CO., INC., defendant-appellee.

x---------------------------------------------------------x

G.R. No. L-16145             April 29, 1961

DIOSDADO C. TY, plaintiff-appellant,
vs.
CAPITAL INSURANCE & SURETY CO., INC., defendant-appellee.

V. B. Gesunundo for plaintiff-appellant.
M. Perez Cardenas for defendant-appellee.

LABRADOR, J.:

Appeal from a judgment of the Court of First Instance of Manila, Hon. Gregorio S. Narvasa, presiding, dismissing the actions filed in the above-entitled cases.

The facts found by the trial court, which are not disputed in this appeal, are as follows:

At different times within a period of two months prior to December 24, 1953, the plaintiff herein Diosdado C. Ty, employed as operator mechanic foreman in the Broadway Cotton Factory, in Grace Park, Caloocan, Rizal, at a monthly salary of P185.00, insured himself in 18 local insurance companies, among which being the eight above named defendants, which issued to him personal accident policies, upon payment of the premium of P8.12 for each policy. Plaintiff's beneficiary was his employer, Broadway Cotton Factory, which paid the insurance premiums.

On December 24, 1953, a fire broke out which totally destroyed the Broadway Cotton Factory. Fighting his way out of the factory, plaintiff was injured on the left hand by a heavy object. He was brought to the Manila Central University hospital, and after receiving first aid there, he went to the National Orthopedic Hospital for treatment of his injuries which were as follows:

1. Fracture, simple, proximal phalanx index finger, left;

2. Fracture, compound, comminuted, proximal phalanx, middle finger, left and 2nd phalanx, simple;

3. Fracture, compound, comminute phalanx, 4th finger, left;

4. Fracture, simple, middle phalanx, middle finger, left;

5. Lacerated wound, sutured, volar aspect, small finger, left;

6. Fracture, simple, chip, head, 1st phalanx, 5th digit, left. He underwent medical treatment in the Orthopedic Hospital from December 26, 1953 to February 8, 1954. The above-described physical injuries have caused temporary total disability of plaintiff's left hand. Plaintiff filed the corresponding notice of accident and notice of claim with all of the abovenamed defendants to recover indemnity under Part II of the policy, which is similarly worded in all of the policies, and which reads pertinently as follows:

INDEMNITY FOR TOTAL OR PARTIAL DISABILITY

If the Insured sustains any Bodily Injury which is effected solely through violent, external, visible and accidental means, and which shall not prove fatal but shall result, independently of all other causes and within sixty (60) days from the occurrence thereof, in Total or Partial Disability of the Insured, the Company shall pay, subject to the exceptions as provided for hereinafter, the amount set opposite such injury:

PARTIAL DISABILITY

LOSS OF:

x x x           x x x           x x x

Either hand ............................................................................ P650.00

x x x           x x x           x x x

... The loss of a hand shall mean the loss by amputation through the bones of the wrist....

Defendants rejected plaintiff's claim for indemnity for the reason that there being no severance of amputation of the left hand, the disability suffered by him was not covered by his policy. Hence, plaintiff sued the defendants in the Municipal Court of this City, and from the decision of said Court dismissing his complaints, plaintiff appealed to this Court. (Decision of the Court of First Instance of Manila, pp. 223-226, Records).

In view of its finding, the court absolved the defendants from the complaints. Hence this appeal.

The main contention of appellant in these cases is that in order that he may recover on the insurance policies issued him for the loss of his left hand, it is not necessary that there should be an amputation thereof, but that it is sufficient if the injuries prevent him from performing his work or labor necessary in the pursuance of his occupation or business. Authorities are cited to the effect that "total disability" in relation to one's occupation means that the condition of the insurance is such that common prudence requires him to desist from transacting his business or renders him incapable of working. (46 C.J.S., 970). It is also argued that obscure words or stipulations should be interpreted against the person who caused the obscurity, and the ones which caused the obscurity in the cases at bar are the defendant insurance companies.

While we sympathize with the plaintiff or his employer, for whose benefit the policies were issued, we can not go beyond the clear and express conditions of the insurance policies, all of which define partial disability as loss of either hand by amputation through the bones of the wrist." There was no such amputation in the case at bar. All that was found by the trial court, which is not disputed on appeal, was that the physical injuries "caused temporary total disability of plaintiff's left hand." Note that the disability of plaintiff's hand was merely temporary, having been caused by fracture of the index, the middle and the fourth fingers of the left hand.

We might add that the agreement contained in the insurance policies is the law between the parties. As the terms of the policies are clear, express and specific that only amputation of the left hand should be considered as a loss thereof, an interpretation that would include the mere fracture or other temporary disability not covered by the policies would certainly be unwarranted.

WHEREFORE, the decision appealed from is hereby affirmed, with costs against the plaintiff-appellant.

Bengzon, C.J., Padilla, Bautista Angelo, Concepcion, Reyes, J.B.L., Barrera, Paredes and Dizon, JJ., concur.