Constantino v.

Asia Life- Non-payment

of Insurance Premiums
87 PHIL 248
Facts:
> Appeal consolidates two cases.
> Asia life insurance Company (ALIC)
was incorporated in Delaware.
> For the sum of 175.04 as annual
premium duly paid to ALIC, it issued
Policy No. 93912 whereby it insured
the life of Arcadio Constantino for 20
years for P3T with Paz Constantino as
beneficiary.
First premium covered the period up to
Sept. 26, 1942. No further premiums
were paid after the first premium and
Arcadio died on Sept. 22, 1944.
> Due to Jap occupation, ALIC closed
its branch office in Manila from Jan. 2
1942-1945.
> On Aug. 1, 1938, ALIC issued Policy
no. 78145 covering the lives of
Spouses Tomas Ruiz and Agustina
Peralta for the sum of P3T for 20
years. The annual premium stipulated
was regularly paid from Aug. 1, 1938
up to and including Sept. 30, 1940.
Effective Aug. 1, 1941, the mode of
payment was changed from annually
to quarterly and such quarterly
premiums were paid until Nov. 18,
1941.
Last payment covered the period until
Jan. 31, 1942.
Tomas Ruiz died on Feb. 16, 1945 with
Agustina Peralta as his beneficiary.
> Due to Jap occupation, it became
impossible and illegal for the insured to
deal with ALIC. Aside from this the
insured borrowed from the policy
P234.00 such that the cash surrender
value of the policy was sufficient to
maintain the policy in force only up to
Sept. 7, 1942.
> Both policies contained this
provision: All premiums are due in
advance and any unpunctuality in
making such payment shall cause this
policy to lapse unless and except as

kept in force by the grace period

condition.
> Paz Constantino and Agustina
Peralta claim as beneficiaries, that
they are entitled to receive the
proceeds of the policies less all sums
due for premiums in arrears. They
also allege that non-payment of the
premiums were caused by the closing
of ALICs offices during the war and
the impossible circumstances by the
war, therefore, they should be excused
and the policies should not be
forfeited.
> Lower court ruled in favor of ALIC.
Issue:
May a beneficiary in a life insurance
policy recover the amount thereof
although the insured died after
repeatedly failing to pay the stipulated
premiums, such failure being caused
by war?
Held:
NO.
Due to the express terms of the policy,
non-payment of the premium produces
its avoidance. In Glaraga v. Sun Life, it
was held that a life policy was avoided
because the premium had not been
paid within the time fixed; since by its
express terms, non-payment of any
premium when due or within the
31 day grace period ipso fact caused
the policy to lapse.
When the life insurance policy
provides that non-payment of
premiums will cause its forfeiture, war
does NOT excuse non-payment and
does not avoid forfeiture. Essentially,
the reason why punctual payments are
important is that the insurer calculates
on the basis of the prompt payments.
Otherwise, malulugi sila.
It should be noted that the parties
contracted not only as to peace time

conditions but also as to war-time

conditions since the policies contained
provisions applicable expressly to
wartime days. The logical inference
therefore is that the parties
contemplated the uninterrupted
operation of the contract even if armed
conflict should ensue.
Insular v Ebrado G.R. No. L-44059
October 28, 1977
Facts:
J. Martin:
Cristor Ebrado was issued by The Life
Assurance Co., Ltd., a policy for
P5,882.00 with a rider for Accidental
Death. He designated Carponia T.
Ebrado as the revocable beneficiary in
his policy. He referred to her as his
wife.
Cristor was killed when he was hit by a
failing branch of a tree. Insular Life
was made liable to pay the coverage in
the total amount of P11,745.73,
representing the face value of the
policy in the amount of P5,882.00 plus
the additional benefits foraccidental
death.
Carponia T. Ebrado filed with the
insurer a claim for the proceeds as the
designated beneficiary therein,
although she admited that she and the
insured were merely living as husband
and wife without the benefit of
marriage.
Pascuala Vda. de Ebrado also filed her
claim as the widow of
the deceased insured. She asserts
that she is the one entitled to the
insurance proceeds.
Insular commenced an action for
Interpleader before the trial court as to
who should be given the proceeds.
The courtdeclared Carponia
as disqualified.
Issue: WON a common-law wife
named as beneficiary in the life
insurance policy of a legally married

man can claim the proceeds in case of

death of the latter?
Held: No. Petition
Ratio:
Section 50 of the Insurance Act which
provides that "the insurance shall be
applied exclusively to the proper
interest of the person in whose name it
is made"
The word "interest" highly suggests
that the provision refers only to the
"insured" and not to the beneficiary,
since a contract of insurance is
personal in character. Otherwise, the
prohibitory laws
against illicit relationships especially
on property and descent will be
rendered nugatory, as the same could
easily be circumvented by modes of
insurance.
When not otherwise specifically
provided for by the Insurance Law, the
contract of life insurance is governed
by the general rules of the civil law
regulating contracts. And under Article
2012 of the same Code, any person
who is forbidden from receiving any
donation under Article 739 cannot be
named beneficiary of a fife insurance
policy by the person who cannot make
a donation to him. Common-law
spouses are barred from receiving
donations from each other.
Article 739 provides that void
donations are those made between
persons who were guilty of adultery or
concubinage at the time of donation.
There is every reason to hold that the
bar in donations between legitimate
spouses and those between
illegitimate ones should be enforced in
life insurance policies since the same
are based on similar consideration. So
long as marriage remains the
threshold of family laws, reason and
morality dictate that the impediments
imposed upon married couple should

likewise be imposed upon extra-marital

relationship.
A conviction for adultery or
concubinage isnt required exacted
before the disabilities mentioned in
Article 739 may effectuate. The article
says that in the case referred to in No.
1, the action for declaration of nullity
may be brought by the spouse of the
donor or donee; and the guilty of the
donee may be proved by
preponderance of evidence in the
same action.
The underscored clause neatly
conveys that no criminal conviction for
the offense is a condition precedent.
The law plainly states that the guilt of
the party may be proved in the same
acting for declaration of nullity of
donation. And, it would be sufficient if
evidence preponderates.
The insured was married to Pascuala
Ebrado with whom she has six
legitimate children. He was also living
in with his common-law wife with
whom he has two children.
Qua Chee Gan v. Law Union Rock Breach of Warranty
98 PHIL 85
Facts:
> Qua Chee Gan, a merchant, owned
4 warehouses in Albay which were
used for the storage or copra and
hemp in which the appelle deals with
exclusively.
> The warehouses together with the
contents were insured with Law Union
since 1937 and the loss made payable
to PNB as mortgagee of the hemp and
copra.
> A fire of undetermined cause broke
out in July 21, 1940 and lasted for
almost 1 whole week.
> Bodegas 1, 3, and 4 including the
merchandise stored were destroyed
completely.
> Insured then informed insurer of the
unfortunate event and submitted the

corresponding fire claims, which were

later reduced to P370T.
> Insurer refused to pay claiming
violations of the warranties and
conditions, filing of fraudulent claims
and that the fire had been deliberately
caused by the insured.
> Insured filed an action before CFI
which rendered a decision in favor of
the insured.
Issues and Resolutions:
(1) Whether or not the policies should
be avoided for the reason that there
was a breach of warranty.
Under the Memorandum of Warranty,
there should be no less than 1 hydrant
for each 150 feet of external wall
measurements of the compound, and
since bodegas insured had an external
wall per meter of 1640 feet, the
insured should have 11 hydrants in the
compound. But he only had 2.
Even so, the insurer is barred by
estoppel to claim violation of the fire
hydrants warranty, because knowing
that the number of hydrants it
demanded never existed from the very
beginning, appellant nevertheless
issued the policies subject to such
warranty and received the
corresponding premiums. The
insurance company was aware, even
before the policies were issued, that in
the premises there were only 2
hydrants and 2 others were owned by
the Municipality, contrary to the
requirements of the warranties in
question.
It should be close to conniving at fraud
upon the insured to allow the insurer to
claim now as void the policies it issued
to the insured, without warning him of
the fatal defect, of which the insurer
was informed, and after it had misled
the insured into believing that the
policies were effective.

Accdg to American Jurisprudence: It is

a well-settled rule that the insurer at
the time of the issuance of a policy
has the knowledge of existing facts,
which if insisted on, would invalidate
the contract from its very inception,
such knowledge constitutes a waiver
of conditions in the contract
inconsistent with known facts, and the
insurer is stopped thereafter from
asserting the breach of such
conditions. The reason for the rule is:
To allow a company to accept ones
money for a policy of insurance which
it knows to be void and of no effect,
though it knows as it must that the
insured believes it to be valid and
binding is so contrary to the dictates of
honesty and fair dealing, as so closely
related to positive fraud, as to be
abhorrent to fair-minded men. It would
be to allow the company to treat the
policy as valid long enough to get the
premium on it, and leave it at liberty to
repudiate it the next moment.
Moreover, taking into account the wellknown rule that ambiguities or
obscurities must strictly be interpreted
against the party that cause them, the
memorandum of warranty invoked by
the insurer bars the latter from
questioning the existence of the
appliances called for, since its initial
expression the undernoted appliances
for the extinction of fire being kept on
the premises insured hereby.. admits
of the interpretation as an admission of
the existence of such appliances which
insurer cannot now contradict, should
the parole evidence apply.
(2) Whether or not the insured violated
the hemp warranty provision against
the storage of gasoline since insured
admitted there were 36 cans of
gasoline in Bodega 2 which was a
separate structure and not affected by
the fire.

It is well to note that gasoline is not

specifically mentioned among the
prohibited articles listed in the socalled hemp warranty. The clause
relied upon by the insurer speaks of
oils. Ordinarily, oils mean lubricants
and not gasoline or kerosene. Here
again, by reason of the exclusive
control of the insurance company over
the terms of the contract, the ambiguity
must be held strictly against the
insurer and liberally in favor of the
insured, specially to avoid a forfeiture.
Furthermore, the gasoline kept was
only incidental to the insureds
business. It is a well settled rule that
keeping of inflammable oils in the
premises though prohibited by the
policy does NOT void it if such keeping
is incidental to the business. Also, the
hemp warranty forbade the storage
only in the building to which the
insurance applies, and/or in any
building communicating therewith; and
it is undisputed that no gasoline was
stored in the burnt bodegas and that
Bodega No. 2 which was where the
gasoline was found stood isolated from
the other bodegas.
Ty v. Filipinas Compaia de Seguros Insurance Policy
17 SCRA 364
Facts:
> Ty was employed as a mechanic
operator by Braodway Cotton Factory
at Grace Park, Caloocan.
> In 1953, he took personal accident
policies from 7 insurance companies
(6 defendants), on different dates,
effective for 12 mos.
> On Dec. 24. 1953, a fire broke out in
the factory were Ty was working. A
hevy object fell on his hand when he
was trying to put out the fire.
> From Dec. 1953 to Feb. 6, 1954 Ty
received treatment at the Natl
Orthopedic Hospital for six listed
injuries. The attending surgeon

certified that these injuries would

cause the temporary total disability of
Tys left hand.
> Insurance companies refused to pay
Tys claim for compensation under the
policies by reason of said disability of
his left hand. Ty filed a complaint in
the municipal court who decided in his
favor.
> CFI reversed on the ground that
under the uniform terms of the policies,
partial disability due to loss of either
hand of the insured, to be
compensable must be the result of
amputation.
Issue:
Whether or not Ty should be
indemnified under his accident
policies.
Held.
NO.
SC already ruled in the case of Ty v.
FNSI that were the insurance policies
define partial disability as loss of either
hand by amputation through the bones
of the wrist, the insured cannot recover
under said policies for temporary
disability of his left hand caused by the
fractures of some fingers. The
provision is clear enough to inform the
party entering into that contract that
the loss to be considered a disability
entitled to indemnity, must be
severance or amputation of the
affected member of the body of the
insured.
Del Rosario v. Equitable Insurance Life Insurance Policy
118 PHIL 349
Facts:
> Equitable Insurance issued a life
Insurance policy to del Rosario binding
itself to pay P1,000 to P3,000 as
indemnity.
> Del Rosario died in a boating
accident. The heirs filed a claim and
Equitable paid them P1,000.

> The heir filed a complaint for

recovery of the balance of P2,000,
claiming that the insurere should pay
him P3,000 as stated in the policy.
Issue:
Whether or not the heir is entitled to
recover P3,000.
Held:
YES.
Generally accepted principles or ruling
on insurance, enunciate that where
there is an ambiguity with respect to
the terms and conditions of the policy,
the same shall be resolved against the
one responsible thereof. The insured
has little, if any, participation in the
preparation of the policy. The
interpretation of obscure stipulations in
a contract should not favor the party
who cause the obscurity.
Philamlife v. Ansaldo - Jurisdiction of
the Insurance Commissioner
234 SCRA 509
Facts:
> Ramon M. Paterno sent a lettercomplaint to the Insurance
Commissioner alleging certain
problems encountered by agents,
supervisors, managers and public
consumers of the Philamlife as a result
of certain practices by said company.
> Commissioner requested petitioner
Rodrigo de los Reyes, in his capacity
as Philamlife's president, to comment
on respondent Paterno's letter.
> The complaint prays that provisions
on charges and fees stated in the
Contract of Agency executed between
Philamlife and its agents, as well as
the implementing provisions as
published in the agents' handbook,
agency bulletins and circulars, be
declared as null and void. He also
asked that the amounts of such
charges and fees already deducted
and collected by Philamlife in

connection therewith be reimbursed to

the agents, with interest at the
prevailing rate reckoned from the date
when they were deducted
> Manuel Ortega, Philamlife's Senior
Assistant Vice-President and
Executive Assistant to the President,
asked that the Commissioner first rule
on the questions of the jurisdiction of
the Insurance Commissioner over the
subject matter of the letters-complaint
and the legal standing of Paterno.
> Insurance Commissioner set the
case for hearing and sent subpoena to
the officers of Philamlife. Ortega filed
a motion to quash the subpoena
alleging that the Insurance company
has no jurisdiction over the subject
matter of the case and that there is no
complaint sufficient in form and
contents has been filed.
> The motion to quash was denied.
Issue:
Whether or not the insurance
commissioner had jurisdiction over the
legality of the Contract of Agency
between Philamlife and its agents.
Held:
No, it does not have jurisdiction.
The general regulatory authority of the
Insurance Commissioner is described
in Section 414 of the Insurance Code,
to wit:
"The Insurance Commissioner shall
have the duty to see that all laws
relating to insurance, insurance
companies and other insurance
matters, mutual benefit associations
and trusts for charitable uses are
faithfully executed and to perform the
duties imposed upon him by this Code,
. . . ."
On the other hand, Section 415
provides:
"In addition to the administrative
sanctions provided elsewhere in this
Code, the Insurance Commissioner is

hereby authorized, at his discretion, to

impose upon insurance companies,
their directors and/or officers and/or
agents, for any willful failure or refusal
to comply with, or violation of any
provision of this Code, or any order,
instruction, regulation or ruling of the
Insurance Commissioner, or any
commission of irregularities, and/or
conducting business in an unsafe or
unsound manner as may be
determined by the Insurance
Commissioner, the following:
a) fines not in excess of five hundred
pesos a day; and
b) suspension, or after due hearing,
removal of directors and/or officers
and/or agents."
A plain reading of the above-quoted
provisions show that the Insurance
Commissioner has the authority to
regulate the business of insurance,
which is defined as follows:
"(2)
The term 'doing an insurance
business' or 'transacting an insurance
business,' within the meaning of this
Code, shall include (a) making or
proposing to make, as insurer, any
insurance contract; (b) making, or
proposing to make, as surety, any
contract of suretyship as a vocation
and not as merely incidental of the
surety; (c) doing any kind of business,
including a reinsurance business,
specifically recognized as constituting
the doing of an insurance business
within the meaning of this Code; (d)
doing or proposing to do any business
in substance equivalent to any of the
foregoing in a manner designed to
evade the provisions of this Code.
(Insurance Code, Sec. 2 [2])
Since the contract of agency entered
into between Philamlife and its agents
is not included within the meaning of
an insurance business, Section 2 of
the Insurance Code cannot be invoked
to give jurisdiction over the same to

the Insurance Commissioner.

Expressio unius est exclusio alterius.
Insurance Case Digest: Philamcare
Health Systems, Inc. V. CA (2002)
G.R. No. 125678
March 18, 2002
Lessons Applicable:
Elements (Insurance)
Blood Relationship (Insurance)
FACTS:
Ernani Trinos, deceased husband of
Julita Trinos, applied for a health care
coverage with Philamcare Health
Systems, Inc.
He answered the standard application
form: Have you or any of your family
members ever consulted or been
treated for high blood pressure, heart
trouble, diabetes, cancer, liver disease,
asthma or peptic ulcer? (If Yes, give
details). - NO
the application was approved for a
period of one year from March 1, 1988
to March 1, 1989. Accordingly, he was
issued Health Care Agreement No.
P010194
Under the agreement, respondents
husband was entitled to avail of
hospitalization benefits, whether
ordinary or emergency, listed therein.
He was also entitled to avail of "outpatient benefits" such as annual
physical examinations, preventive
health care and other out-patient
services.
Upon the termination of the
agreement, the same was extended
for another year from March 1, 1989 to
March 1, 1990, then from March 1,
1990 to June 1, 1990. The amount of
coverage was increased to a
maximum sum of P75,000.00 per
disability.
During the period of his coverage,
Ernani suffered a heart attack and was
confined at the Manila Medical Center
(MMC) for 1 month beginning March 9,
1990.

While her husband was in the hospital,

Julina Trinos tried to claim the benefits
under the health care agreement.
Philamcare denied her claim saying
that the Health Care Agreement was
void for concealing Ernanis medical
history so she paid the hospitalization
expenses of P76,000.00 herself.
Doctors at the MMC allegedly
discovered at the time of Ernanis
confinement that he was hypertensive,
diabetic and asthmatic, contrary to his
answer in the application form.
After being discharged from the MMC,
he was attended by a physical
therapist at home.
Later, he was admitted at the Chinese
General Hospital.
Due to financial difficulties, however,
he was brought home again.
April 13, 1990 morning: Ernani had
fever and was feeling very weak
He was brought to Chinese General
Hospital where he died
July 24, 1990: She brought action for
damages against Philamcare Health
Systems Inc. and its president, Dr.
Benito Reverente
RTC: Philamcare and Dr. Benito
Reverent to pay and reimburse P76k
plus interest, moral damages,
exemplary damages, attorney's fees
and cost of suit
CA: affirmed the decision of RTC but
deleted all awards for damages and
absolved Philamcare
Philamcare brought an instant petition
for review arguing that:
health care agreement is not an
insurance contract; hence the
"incontestability clause" under the
Insurance Code does not apply.
grants "living benefits," such as
medical check-ups and hospitalization
which a member may immediately
enjoy so long as he is alive upon
effectivity of the agreement until its
expiration one-year thereafter
only medical and hospitalization
benefits are given under the

agreement without any

indemnification, unlike in an insurance
contract where the insured is
indemnified for his loss
since Health Care Agreements are
only for a period of one year, as
compared to insurance contracts
which last longer; incontestability
clause does not apply, as the same
requires an effectivity period of at least
two years
insurance company is governed by the
Insurance Commission, but a Health
Maintenance Organization under the
authority of the Department of Health
ISSUE:
W/N the health care agreement is a
contract of insurance. - YES
W/N the spouse being "not" legal
wife can claim - YES

All rights, title and interest in the policy of insurance

the life or health of a minor shall automatically vest i
original owner, unless otherwise provided for in the p

In the case at bar, the insurable

interest of respondent's husband in
obtaining the health care agreement
was his own health.
in the nature of non-life insurance,
which is primarily a contract of
indemnity
Once the member incurs hospital,
medical or any other expense arising
from sickness, injury or other
stipulated contingent, the health care
provider must pay for the same to the
extent agreed upon under the contract.
The answer in response to the
question relating to the medical history
of the applicant largely depends on
opinion rather than fact, especially
coming from respondent's husband
HELD: Petition is DENIED. CA
who was not a medical doctor.
AFFIRMED.
Where matters of opinion or judgment
are called for, answers made in good
1. YES.
faith and without intent to deceive will
not avoid a policy even though they
are untrue.
P.D. 612 Insurance Code
The fraudulent intent on the part of the
Sec. 2 (1)
insured must be established to warrant
(1) A "contract of insurance" is an agreement rescission
whereby one
undertakes
a
of the
insuranceforcontract.
consideration to indemnify another against loss,
damage oras
liability
arising
Concealment
a defense
forfrom
the an
unknown or contingent event.
health care provider or insurer to avoid
Sec. 3
liability is an affirmative defense and
the duty
to or
establish
such defense
by a
Sec. 3. Any contingent or unknown event, whether
past
future, which
may damnify
and convincing
person having an insurable interest, or createsatisfactory
a liability against
him, may evidence
be insured
rests upon the provider or insurer.
against, subject to the provisions of this chapter.
P.D. 612 Insurance Code
The consent of the husband is not necessary for
the27validity of an insurance policy
Sec.
taken out by a married woman on her life or that
of 27.
her A
children.
Sec.
concealment whether intentional or uninte
rescind a contract of insurance.
Any minor of the age of eighteen years or more,
may, notwithstanding
minority,
cancellation
of health caresuch
agreements
contract for life, health and accident insurance,
with
any
insurance
company
as in insurance policies require duly
the
authorized to do business in the Philippines, provided
the insurance
is taken on his own
concurrence
of the following
life and the beneficiary appointed is the minor's
estate or-the
minor's
father,
conditions:
none
of these
wasmother,
made
husband, wife, child, brother or sister.
1. Prior notice of cancellation to
insured;
The married woman or the minor herein allowed
to takemust
out an
policy may
2. Notice
be insurance
based on the
exercise all the rights and privileges of an owner
under a after
policy.
occurrence
effective date of the

policy of one or more of the grounds

mentioned;
3. Must be in writing, mailed or
delivered to the insured at the address
shown in the policy;
4. Must state the grounds relied upon
provided in Section 64 of the
Insurance Code and upon request of
insured, to furnish facts on which
cancellation is based.
When the terms of insurance contract
contain limitations on liability, courts
should construe them in such a way as
to preclude the insurer from noncompliance with his obligation.
Being a contract of adhesion, the
terms of an insurance contract are to
be construed strictly against the party
which prepared the contract - the
insurer.
(U)nder the title Claim procedures of
expenses, the defendant Philamcare
Health Systems Inc. had twelve
months from the date of issuance of
the Agreement within which to contest
the membership of the patient if he
had previous ailment of asthma, and
six months from the issuance of the
agreement if the patient was sick of
diabetes or hypertension. The periods
having expired, the defense of
concealment or misrepresentation no
longer lie.
2. YES.

health care agreement is in the nature

of a contract of indemnity.
payment should be made to the party
who incurred the expenses
Insurance Case Digest: White Gold
Marine Services, Inc. V. Pioneer
Insurance Surety Corp. (2005)
G.R.No. 154514 July 28, 2005
Lessons Applicable: Mutual Insurance
Companies (Insurance)

FACTS: (White Gold > Pioneer >

Steamship Mutual)
White Gold Marine Services, Inc.
(White Gold) procured a protection and
indemnity coverage for its vessels from
The Steamship Mutual Underwriting
Association (Bermuda) Limited
(Steamship Mutual) through Pioneer
Insurance and Surety Corporation
(Pioneer)
When White Gold failed to fully pay its
accounts, Steamship Mutual refused to
renew the coverage
Steamship Mutual thereafter filed a
case against White Gold for collection
of sum of money to recover the latters
unpaid balance
White Gold filed a complaint before the
Insurance Commission
Steamship Mutual violated Sections
186[4] and 187[5] of the Insurance
Code
Pioneer violated Sections 299,[6]
300[7] and 301[8] in relation to
P.D. 612 Insurance Code
Sections 302 and 303, thereof
Insurance Commission: dismissed the
Sec. 10
complaint
Sec. 10. Every person has an insurable interest
in the life and health:
no
need
for Steamship Mutual to
(1) of himself, of his spouse and of his children;
secure
a license
becauseorit support, or in
(2) of any person on whom he depends wholly
or in part
for education
was
a
Protection
and Indemnity Club
whom he has a pecuniary interest;
(P &for
I Club)
(NOT engaged
in the
(3) of any person under a legal obligation to him
the payment
of money,
respecting
insurance
business)
property or service, of which death or illness might delay or prevent the performance;
Pioneer need not obtain another
and
as insurance
agent
and/or a
(4) of any person upon whose life any estate license
or interest
vested in him
depends.
broker for Steamship Mutual because
Steamship Mutual was not engaged in
not the legal wife (deceased was
the insurance business
previously married to another woman
Moreover, Pioneer was already
who was still alive)
licensed

CA: affirmed Insurance Commission

ISSUE:
1. W/N Steamship Mutual, a P & I
Club, is engaged in the
insurance business in the Philippines YES.
2. W/N Pioneer as resident agent of
Steamship Mutual is required to obtain
a license as an insurance agent/broker
- YES

a marine insurance undertakes to

indemnify the assured against marine
losses, such as the losses incident to a
marine adventure
a mutual insurance company is a
cooperative enterprise where the
members are both the insurer and
insured
the members all contribute, by a
system of premiums or assessments,
to the creation of a fund from which all
HELD: petition is PARTIALLY
losses and liabilities are paid, and
GRANTED. CA affirmed. the
where the profits are divided among
revocation of Pioneers Certificate of
themselves, in proportion to their
Authority and removal of its directors
interest
and officers, is DENIED
provide 3 types of coverage:
protection and indemnity
1. YES
war risks
defense costs
Insurance Code
P & I Club
Sec. 2(2)
form of insurance
against business",
third party
(2) The term "doing an insurance business" ora "transacting
an insurance
within the meaning of this Code, shall include:liability, where the third party is anyone
other than the P & I Club and the
members
Mutual
as a P & I Club is a
(a) making or proposing to make, as insurer, Steamship
any insurance
contract;
mutual
insurance
association
(b) making or proposing to make, as surety, any
contract
of suretyship
as aengaged
vocation
in
the
marine
insurance
business
and not as merely incidental to any other legitimate business or activity of the surety;
Since a contract of insurance involves
public interest, regulation by the State
is necessary.
Thus, specifically
no insurer or
(c) doing any kind of business, including a reinsurance
business,
recognized
insurance
is allowed
as constituting the doing of an insurance business
withincompany
the meaning
of thistoCode;
engage in the insurance business
without a license or a certificate of
(d) doing or proposing to do any business in substance
authority from
equivalent
the Insurance
to any of the
foregoing in a manner designed to evade theCommission
provisions of this Code.
2. YES.
Although Pioneer is already licensed
In the application of the provisions of this Code
fact that nocompany,
profit is derived
as the
an insurance
it needsfrom
a the
making of insurance contracts, agreements orseparate
transactions
or that
noasseparate
or direct
license
to act
insurance
consideration is received therefor, shall not beagent
deemed
conclusiveMutual.
to show that the
for Steamship
making thereof does not constitute the doing or
transacting
of
an
insurance
business.
Insurance Code
The test to determine if a contract is an
Sec. 299
insurance contract or not, depends on
Sec. 299. No insurance company
the nature of the promise, the act
doing business in the Philippines,
required to be performed, and the
nor any agent thereof, shall pay any
exact nature of the agreement in the
commission or other compensation
light of the occurrence, contingency, or
to any person for services in
circumstances under which the
obtaining insurance, unless such
performance becomes requisite
person shall have first procured from
the Commissioner a license to act as

an insurance agent of such

company or as an insurance broker
as hereinafter provided.
No person shall act as an insurance
agent or as an insurance broker in
the solicitation or procurement of
applications for insurance, or receive
for services in obtaining insurance,
any commission or other
compensation from any insurance
company doing business in the
Philippines, or any agent thereof,
without first procuring a license to
act from the Commissioner, which
must be renewed annually on the
first day of January, or within six
months thereafter. Such license shall
be issued by the Commissioner only
upon the written application of the
person desiring it, such application if
for a license to act as insurance
agent, being approved and
countersigned by the company such
person desires to represent, and
shall be upon a form prescribed by
the Commissioner giving such
information as he may require, and
upon payment of the corresponding
fee hereinafter prescribed. The
Commissioner shall satisfy himself
as to competence and
trustworthiness of the applicant and
shall have the right to refuse to issue
or renew and to suspend or revoke
any such license in his discretion.
No such license shall be valid after
the thirtieth day of June of the year
following its issuance unless it is
renewed.
Insurance Case Digest: CCC
Insurance Corp. V. CA (1970)
G.R. No. L-25920 January 30, 1970
Lessons Applicable: Motor vehicle
liability insurance - "Authoried Driver
Clause" (Insurance)

Laws Applicable:
FACTS:
Carlos F. Robes insured with the CCC
Insurance Corporation his Dodge
Kingsway car against loss or damage
through accident for an amount not
exceeding P8,000
June 25 1961: Carlos' driver Domingo
Reyes met a vehicular collision along
Rizal Avenue Extension, Potrero,
Malabon, Rizal
Ccc Insurance Corporation denied his
claim reasoning that the driver was not
an "authorized driver"
Reyes, who cannot read and write,
who has never passed any
examination for drivers, and has not
applied for a license from the duly
constituted government agency
entrusted with the duty of licensing
drivers, cannot be considered an
authorized driver
AUTHORIZED DRIVER:
Any of the following:
(a) The insured;
(b) Any person driving on the
Insured's order or with his permission,
provided that the person driving is
permitted in accordance with licensing
laws or regulations to drive the motor
vehicle covered by this Policy, or has
been so permitted and is not
disqualified by order of a court of law
or by reason of any enactment or
regulation from driving such Motor
Vehicle.
RTC: favored Robes and CCC was
order to pay
ISSUE: W/N Domingo Reyes was an
authorized driver
HELD: YES. CA affirmed
Court of Appeals found that the driver's
license No. 271703 DP was genuine
Domingo Reyes is in possession of a
driver's license issued by the Motor

Vehicles Office which on its face

appears to have been regularly issued
Neither Gloria Presa nor the officer-incharge Marciano A. Monzon was
placed on the witness stand to be
examined in order to determine
whether said license is indeed void
Section 24 of the Revised Motor
Vehicles Law, Act 3992 of the
Philippine Legislature, as amended by
Republic Acts Nos. 587, 1204 and
2863,1
An examination or demonstration to
show any applicant's ability to operate
motor vehicles may also be required in
the discretion of the Chief, Motor
Vehicles Office or his deputies.
Section 26 of the Act prescribes
further:

SEC. 26. Issuance of chauffeur's

license; professional badge: If, after
examination, or without the same, the
Chief, Motor Vehicles Office or his
deputies, believe the applicant to
possess the necessary qualifications
and knowledge, they shall issue to
such applicant a license to operate as
chauffeur ...
There is no proof that the owner of the
automobile knew that the circumstance
surrounding such issuance showed
that it was irregular
the weight of authority is in favor of a
liberal interpretation of the insurance
policy for the benefit of the party
insured, and strictly against the
insurer