Insurance Case Digest: New Life Enterprises v. Court of Appeals (1992)

G.R. No. 94071 March 31, 1992
Lessons Applicable: Requisites of Double insurance (Insurance)

FACTS:

• May 15, 1981: Western Guaranty Corporation issued Fire Insurance Policy to New Life Enterprises foar P350,000
• renewed on May, 13, 1982
• July 30,1981: Reliance Surety and Insurance Co., Inc. issued Fire Insurance Policy to New Life Enterprises for P300,000
• November 12, 1981; Additional P700,000
• February 8, 1982: Equitable Insurance Corporation issued Fire Insurance Policy to New Life Enterprises for P200,000
• October 19, 1982 2 am: fire electrical in nature destroyed the stock in trade worth P1,550,000
• Julian Sy went to Reliance to claim but he was refused.  Same thing happened with the others who were sister companies.
• Sy violated the "Other Insurance Clause"
• RTC: favored New Life and against the three insurance companies
• CA: reversed -failure to state or endorse the other insurance coverage

ISSUE: W/N Sy can claim against the three insurance companies for violating the "Other Insurance Clause"

HELD: NO.

• The terms of the contract are clear and unambiguous.
• The insured is specifically required to disclose to the insurer any other insurance and its particulars which he may have effected on the same subject matter. 
• The knowledge of such insurance by the insurer's agents, even assuming the acquisition thereof by the former, is not the "notice" that would estop the insurers from denying the claim. 
• conclusion of the trial court that Reliance and Equitable are "sister companies" is an unfounded conjecture drawn from the mere fact that Yap Kam Chuan was an agent for both companies which also had the same insurance claims adjuster
• Availmentof the services of the same agents and adjusters by different companies is a common practice in the insurancebusiness and such facts do not warrant the speculative conclusion of the trial court.
• The conformity of the insured to the terms of the policy isimplied from his failure to express any disagreement with what is provided for. 
• a clear misrepresentation and a vital one because where the insured had been asked to reveal but did not, that was deception - guilty of clear fraud 
• total absence of such notice nullifies the policy
• assuming arguendo that petitioners felt the legitimate need to be clarified as to the policy condition violated, there was a considerable lapse of time from their receipt of the insurer's clarificatory letter dated March 30, 1983, up to the time the complaint was filed in court on January 31, 1984. The one-year prescriptive period was yet toexpire on November 29, 1983, or about eight (8) months from the receipt of the clarificatory letter, but petitioners let the period lapse without bringing their action in court

Insurance Case Digest: Coquia v. Fieldmen's Insurance Co., Inc. (1968)

G.R. No. L-23276      November 29, 1968

Lessons Applicable: stipulation pour autrui (Insurance)

FACTS:

• December 1, 1961: Fieldmen's Insurance Company, Inc. issued in favor of the Manila Yellow Taxicab Co., Inc. (Manila) from December 1, 1961 to December 1, 1962
• February 10, 1962: A taxicab of Manila driven by Carlito Coquia, met a vehicular accident at Mangaldan, Pangasinana and died
• The insured filed a claim for P5,000 in which Fieldmen's replied with an offer to pay P2,000 by way of compromise
• The insured rejected it and countered with P4,000
• September 18, 1962: Carlito's parents filed a complaint against the Company for collection
• The company pleaded lack of cause of action
• RTC: ordered to pay the parents

ISSUE: W/N there is a stipulation pour autrui that exempts the general rule that the parents are not a party to the contract

HELD: YES. RTC affirmed. 

• There is a stipulation that the Company "will indemnify any authorized Driver who is driving the Motor Vehicle" of the Insured and, in the event of death of said driver, the Company shall, likewise, "indemnify his personal representatives."
• typical of contracts pour autrui, this character being made more manifest by the fact that the deceased driver paid 50% of the corresponding premiums, which were deducted from his weekly commissions
• expressly stipulated and declared that it shall be a condition precedent to any right of action or suit upon this Policy that the award by such arbitrator, arbitrators or umpire of the amount of the Company's liability hereunder if disputed shall be first obtained
• both parties from the inception of their dispute proceeded in entire disregard of the provisions of the contract relating to arbitration
• conduct was as effective a rejection of the right to arbitrate 

Insurance Case Digest: Gulf Resorts Inc. v. Philippine Charter Insurance Corp. (2005)

G.R. No. 156167  May 16, 2005

Lessons Applicable: Stipulations Cannot Be Segregated (Insurance)

FACTS:

• Gulf Resorts, Inc at Agoo, La Union was insured with American Home Assurance Company which includes loss or damage to shock to any of the property insured by this Policy occasioned by or through or in consequence of earthquake 
• July 16, 1990: an earthquake struck Central Luzon and Northern Luzon so the properties and 2 swimming pools in its Agoo Playa Resort were damaged
• August 23, 1990: Gulf's claim was denied on the ground that its insurance policy only afforded earthquake shock coverage to the two swimming pools of the resort
• Petitioner contends that pursuant to this rider, no qualifications were placed on the scope of the earthquake shock coverage.  Thus, the policy extended earthquake shock coverage to all of the insured properties.
• RTC: Favored American Home - endorsement rider means that only the two swimming pools were insured against earthquake shock 
• CA: affirmed RTC

ISSUE: W/N Gulf can claim for its properties aside from the 2 swimming pools

HELD: YES. Affirmed.

• It is basic that all the provisions of the insurance policy should be examined and interpreted in consonance with each other.
• All its parts are reflective of the true intent of the parties.

Insurance Code

Section 2(1)

contract of insurance as an agreement whereby one undertakes for a consideration to indemnify another against loss, damage or liability arising from an unknown or contingent event

• An insurance premium is the consideration paid an insurer for undertaking to indemnify the insured against a specified peril.
• In the subject policy, no premium payments were made with regard to earthquake shock coverage, except on the two swimming pools.  

Insurance Case Digest: Constantino v. Asia Life Insurance Co. (1950)

G.R. No. L-1669             August 31, 1950

Lessons Applicable:  General Principles on Insurance (Insurance)


FACTS:

• Case 1:
• The life of Arcadio Constantino was insured with Asia Life Insurance Company (Asia) for a term of 20 years with Paz Lopez de Constantino as beneficiary.  The first premium covered the period up to September 26, 1942.  
• After the first premium, no further premiums were paid. The insured died on September 22, 1944.
• Asia Life Insurance Company, being an American Corp., had to close its branch office in Manila by reason of the Japanese occupation, i.e. from January 2, 1942, until the year 1945.
• Case 2:
• Spouses Tomas Ruiz and Agustina Peralta.  Their premium were initially annually but subsequently changed to quarterly.  The last quarterly premium was delivered on on November 18, 1941 and it covered the period until January 31, 1942. 
• Upon the Japanese occupation, the insurer and insured were not able to deal with each other
• Because the insured had borrowed on the policy P234.00 in January, 1941, the cash surrender value of the policy was sufficient to maintain the policy in force only up to September 7, 1942. 
• Tomas Ruiz died on February 16, 1945 with Agustina Peralta as  beneficiary. Her demand for payment was refused on the ground of non-payment of the premiums.
• Plaintiffs: As beneficiaries, they are entitled to receive the proceeds of the policies minus all sums due for premiums in arrears. The non-payment of the premiums was caused by the closing of Asia's offices in Manila during the Japanese occupation and the impossible circumstances created by war.
• lower court: absolved Asia

ISSUE: W/N the insurers still have a right to claim.

HELD: YES. lower court affirmed.

• it would seem that pursuant to the express terms of the policy, non-payment of premium produces its avoidance
• Forfeitures of insurance policies are not favored, but courts cannot for that reason alone refuse to enforce an insurance contract according to its meaning.
• Nevertheless, inasmuch as the non-payment of premium was the consequence of war, it should be excused and should not cause the forfeiture of the policy
• 3 Rules in case of war:
• Connecticut Rule
• 2 elements in the consideration for which the annual premium is paid:
• mere protection for the year
• privilege of renewing the contract for each succeeding year by paying the premium for that year at the time agreed upon
• payment of premiums is a condition precedent, the non-performance would be illegal necessarily defeats the right to renew the contract
• New York Rule - greatly followed by a number of cases
• war between states in which the parties reside merely suspends the contracts of the life insurance, and that, upon tender of all premiums due by the insured or his representatives after the war has terminated, the contract revives and becomes fully operative
• United States Rule
• contract is not merely suspended, but is abrogated by reason of non-payments is peculiarly of the essence of the contract
• it would be unjust to allow the insurer to retain the reserve value of the policy, which is the excess of the premiums paid over the actual risk carried during the years when the policy had been in force
• The business of insurance is founded on the law of average; that of life insurance eminently so
• contract of insurance is sui generis
• Whether the insured will continue it or not is optional with him. There being no obligation to pay for the premium, they did not constitute a debt.
• It should be noted that the parties contracted not only for peacetime conditions but also for times of war, because the policies contained provisions applicable expressly to wartime days. The logical inference, therefore, is that the parties contemplated uninterrupted operation of the contract even if armed conflict should ensue.
• the fundamental character of the undertaking to pay premiums and the high importance of the defense of non-payment thereof, was specifically recognized
• adopt the United States Rule: first policy had no reserve value, and that the equitable values of the second had been practically returned to the insured in the form of loan and advance for premium