INS.1.1 Travellers Insurance & Surety Corporation vs. Hon. Court of Appeals & Vicente Mendoza G.R. No.

82036. May 22, 1997

PONENTE: Hermosisima, JR.

MAINPOINT: The prescriptive period to bring suit in court under an insurance policy, begins to run from the date of the
insurers rejection of the claim filed by the insured, the beneficiary or any person claiming under an insurance contract.
Respondent appellate court committed reversible error in finding petitioner liable under an insurance contract the
existence of which had not at all been proven in court.
FACTS: Vicente Mendoza, Jr. as heir of his mother (Feliza Vineza de Mendoza) who was killed in a vehicular accident,
filed an action for damages against the erring taxicab driver (Rodrigo Dumlao), the owner (Armando Abellon) of the
maroon taxicab (Lady Love Taxi with Plate No. 438-HA Pilipinas Taxi 1980) and the alleged insurer of the vehicle. The
erring taxicab was allegedly covered by a third-party liability insurance policy issued by petitioner Travellers Insurance &
Surety Corporation. Petitioner was included in the complaint as the compulsory insurer of the said taxicab under
Certificate of Cover No. 1447785-3.
The trial court rendered judgment in favor of private respondent and ordered Rodrigo Dumlao, Armando Abellon and
petitioner to pay private respondent death indemnity, moral damages, exemplary damages, attorneys fees and other
litigation expenses, jointly and severally.
The decision was affirmed by the CA and the subsequent MR was denied. Hence, this petition seeking the review and
reversal of the decision of respondent CA
Petitioner mainly contends that it did not issue an insurance policy as compulsory insurer of the Lady Love Taxi and that,
assuming arguendo that it had indeed covered said taxicab for third-party liability insurance, private respondent failed to
file a written notice of claim with petitioner as required by Section 384 of P.D. No. 612, otherwise known as the Insurance
Code.
ISSUE: Whether petitioner is liable to private respondent
RULING: NO. The SC ruled with consistency that the prescriptive period to bring suit in court under an insurance policy,
begins to run from the date of the insurers rejection of the claim filed by the insured, the beneficiary or any person
claiming under an insurance contract. This ruling is premised upon the compliance by the persons suing under an
insurance contract, with the indispensable requirement of having filed the written claim mandated by Section 384 of the
Insurance Code before and after its amendment. Absent such written claim filed by the person suing under an insurance
contract, no cause of action accrues under such insurance contract, considering that it is the rejection of that claim that
triggers the running of the one-year prescriptive period to bring suit in court, and there can be no opportunity for the
insurer to even reject a claim if none has been filed in the first place, as in the instant case.
When petitioner asseverates, thus, that no written claim was filed by private respondent and rejected by petitioner, and
private respondent does not dispute such asseveration through a denial in his pleadings, we are constrained to rule that
respondent appellate court committed reversible error in finding petitioner liable under an insurance contract the existence
of which had not at all been proven in court. Even if there were such a contract, private respondents cause of action
cannot prevail because he failed to file the written claim mandated by Section 384 of the Insurance Code. He is deemed,
under this legal provision, to have waived his rights as against petitioner-insurer.

INS.2.1 GULF RESORTS, INC. V PCIC

Ponente: Justice Puno

Main Point: Provisions in the insurance policy should be examined and interpreted in consonance with each other, and
should not be construed piecemeal. All parts of the insurance contract reflect the true intent of the parties. Since insurance
contracts are contracts of adhesion, any ambiguity is resolved against the insurer and construed liberally in the insureds
favor.

Parties: Gulf Resorts, Inc. v PCIC

Facts: Petitioner Gulf Resorts owned Playa Resorts at Agoo, La Union, and it entered into an insurance contract with the
respondent American Home Assurance Company which insured Plaza Resorts properties against loss or damage due to
earthquakes. On 16 July 1990, an earthquake struck Central Luzon and Northern Luzon and the properties in Playa Resort
were damaged including the two (2) swimming pools. On 11 August 1990, Gulf Resorts filed its formal demand for
settlement of the damage to all of its properties in the Agoo Playa Resort, but on 23 August 1990, American Home
Assurance Company denied Gulf Resorts claim on the ground that its insurance policy only covered the two swimming
pools of Playa Resort against earthquake shock, and not the other properties damaged by the said earthquake. Gulf Resorts
contended that pursuant to this rider, no qualifications were placed on the scope of the earthquake shock coverage, and
thus, the policy extended earthquake shock coverage to its properties.

On 24 January 1991, Gulf Resorts filed a complaint with the RTC Pasig where it asked for payment for P5, 427,779.00 as
amount of the lost/damaged properties, attorney fees, lost income, etc. However, on 21 February 1994, the said RTC ruled
in favor of American Home Assurance Company, where it ruled that the insurance coverage against earthquake is limited
only to the two swimming pools of Gulf Resorts Playa Resort and does not extend against the other properties damaged
by the earthquake. Gulf Resort filed a motion for the trial court to reconsider its decision, but to no avail. Gulf Resorts
filed an appeal with the Court of Appeals, but the Court of Appeals affirmed the trial courts decision.

Issue: Whether the insurance policy issued by American Home Assurance Company to Gulf Resorts coverage is not
limited to the two swimming pools of the latter.

Ruling: The Supreme Court held that the insurance policy issued to Gulf Resorts is only limited to the two swimming
pools and the other properties of Playa Resort are not covered by the property insurance issued by American Home
Assurance Company (AHAC-AIU). The Court held that there is no ambiguity in the insurance contract and the earthquake
shock rider, as Gulf Resorts stated that the swimming pools are the only items covered by the insurance against loss due to
earthquakes. The Court stated that provisions in the insurance policy should be examined and interpreted in consonance
with each other, and should not be construed piecemeal. All parts of the insurance contract reflect the true intent of the
parties. The Supreme Court also defined contracts of adhesion as contracts where one party prepares the stipulations in the
contract while the other party merely affixes his/her signature thereto, citing the case of Philippine National Bank vs.
Court of Appeals. Any ambiguity is resolved against the insurer (who prepared the contract) and construed liberally in the
insureds favor. However, since the policy and its riders are clear about the insurance coverage against earthquake shock,
the Gulf Resorts cannot use the doctrine of contract of adhesion and liberal interpretation of insurance contract in the
insureds favor in case of ambiguity.

INS.2.1 NEW WORLD INTERNATIONAL DEVELOPMENT (PHILS.) v. SEABOARD-EASTERN INSURANCE

CO., INC.,

Ponente : ROBERTO A. ABAD

Doctrine/Main Point: The marine open policy that Seaboard issued to New World was an all- risk policy. Such a policy
insured against all causes of conceivable loss or damage except when otherwise excluded or when the
loss or damage was due to fraud or intentional misconduct committed by the insured. The policy covered
all losses during the voyage whether or not arising from a marine peril.

Petitioner : NEW WORLD INTERNATIONAL DEVELOPMENT (PHILS.)

Respondent : SEABOARD-EASTERN INSURANCE CO., INC.,

FACTS: Petitioner New World International Development (Phils.), Inc. (New World) bought from DMT Corporation
(DMT) through its agent, Advatech Industries, Inc. (Advatech) three emergency generator sets worth US$721,500.00.
On its journey to Manila, however, ACX Ruby encountered typhoon Kadiang whose captain filed a sea protest on
arrival at the Manila South Harbor on October 5, 1993 respecting the loss and damage that the goods on board his vessel
suffered.

An examination of the three generator sets revealed that all three sets suffered extensive damage and could no longer be
repaired. For these reasons, New World demanded recompense for its loss from respondents.

Since Seaboard covered the goods with a marine insurance policy, petitioner New World sent it a formal claim dated
November 16, 1993. Replying on February 14, 1994, Seaboard required petitioner New World to submit to it an itemized
list of the damaged units, parts, and accessories, with corresponding values, for the processing of the claim. But
petitioner New World did not submit what was required of it, insisting that the insurance policy did not include the
submission of such a list in connection with an insurance claim. Reacting to this, Seaboard refused to process the claim.

On October 11, 1994 petitioner New World filed an action for specific performance and damages against all the
respondents before the Regional Trial Court (RTC) ofMakati City, Branch 62, in Civil Case 94-2770.

The RTC ruled that petitioner New World filed its claim against the vessel owner NYK beyond the one year provided
under the Carriage of Goods by Sea Act (COGSA). New World filed its complaint on October 11, 1994 when the deadline
for filing the action (on or before October 7, 1994) had already lapsed. The RTC held that the one-year period should be
counted from the date the goods were delivered to the arrastre operator and not from the date they were delivered to
petitioners job site.[1]

As regards petitioner New Worlds claim against Seaboard, its insurer, the RTC held that the latter cannot be faulted for
denying the claim against it since New World refused to submit the itemized list that Seaboard needed for assessing the
damage to the shipment. Likewise, the belated filing of the complaint prejudiced Seaboards right to pursue a claim against
NYK in the event of subrogation.

On appeal, the Court of Appeals (CA) rendered judgment on January 31, 2006, [2] affirming the RTCs rulings except with
respect to Seaboards liability. The CA held that petitioner New World can still recoup its loss from Seaboards marine
insurance policy, considering a) that the submission of the itemized listing is an unreasonable imposition and b) that the
one-year prescriptive period under the COGSA did not affect New Worlds right under the insurance policy since it was the
Insurance Code that governed the relation between the insurer and the insured.

On August 17, 2006 the CA rendered an amended decision, reversing itself as regards the claim against Seaboard. The CA
held that the submission of the itemized listing was a reasonable requirement that Seaboard asked of New World. Further,
the CA held that the one-year prescriptive period for maritime claims applied to Seaboard, as insurer and subrogee of New
Worlds right against the vessel owner. New Worlds failure to comply promptly with what was required of it prejudiced
such right.

Instead of filing a motion for reconsideration, petitioner instituted a second petition for review before the Court in G.R.
174241, assailing the CAs amended decision.

ISSUES: 1) Whether or not the CA erred in ruling that Seaboards request from petitioner New World for an itemized list
is a reasonable imposition and did not violate the insurance contract between them; and

2) Whether or not the CA erred in failing to rule that the one-year COGSA prescriptive period for marine claims
does not apply to petitioner New Worlds prosecution of its claim against Seaboard, its insurer.

RULING: 1) Yes, CA erred in ruling that Seaboards request from petitioner New World for an itemized list is a
reasonable imposition and did not violate the insurance contract between them. The marine open policy that Seaboard
issued to New World was an all-risk policy. Such a policy insured against all causes of conceivable loss or damage except
when otherwise excluded or when the loss or damage was due to fraud or intentional misconduct committed by the
insured. The policy covered all losses during the voyage whether or not arising from a marine peril.

Seaboard had been unable to explain how it could not verify the damage that New Worlds goods suffered going by the
documents that it already submitted. Seaboard cannot pretend that the documents are inadequate since they were precisely
the documents listed in its insurance policy. Being a contract of adhesion, an insurance policy is construed strongly
against the insurer who prepared it. The Court cannot read a requirement in the policy that was not there.

2) Regarding prescription of claims, Section 3(6) of the COGSA provides that the carrier and the ship shall be discharged
from all liability in case of loss or damage unless the suit is brought within one year after delivery of the goods or the date
when the goods should have been delivered.

The record shows that petitioner New World filed its formal claim for its loss with Seaboard, its insurer, a remedy it had
the right to take, as early as November 16, 1993 or about 11 months before the suit against NYK would have fallen due.
As discussed above, Seaboard made an unreasonable demand on February 14, 1994 for an itemized list of the damaged
units, parts, and accessories, with corresponding values when it appeared settled that New Worlds loss was total and when
the insurance policy did not require the production of such a list in the event of a claim. Ultimately, the fault for the
delayed court suit could be brought to Seaboards doorstep.

Section 241 of the Insurance Code provides that no insurance company doing business in the Philippines shall refuse
without just cause to pay or settle claims arising under coverages provided by its policies. And, under Section 243, the
insurer has 30 days after proof of loss is received and ascertainment of the loss or damage within which to pay the
claim. If such ascertainment is not had within 60 days from receipt of evidence of loss, the insurer has 90 days to pay or
settle the claim. And, in case the insurer refuses or fails to pay within the prescribed time, the insured shall be entitled to
interest on the proceeds of the policy for the duration of delay at the rate of twice the ceiling prescribed by the Monetary
Board.

Notably, Seaboard already incurred delay when it failed to settle petitioner New Worlds claim as Section 243
required. Under Section 244, a prima facie evidence of unreasonable delay in payment of the claim is created by the
failure of the insurer to pay the claim within the time fixed in Section 243.

With respect to G.R. 174241, the Court GRANTS the petition and REVERSES and SETS ASIDE the Court of Appeals
Amended Decision of August 17, 2006. The Court DIRECTS Seaboard-Eastern Insurance Company, Inc. to pay
petitioner New World International Development (Phils.), Inc. US$721,500.00 under Policy MA-HO-000266, with 24%
interest per annum for the duration of delay in accordance with Sections 243 and 244 of the Insurance Code and attorneys
fees equivalent to 10% of the insurance proceeds. Seaboard shall also pay, from finality of judgment, a 12% interest per
annum on the total amount due to petitioner until its full satisfaction

INS 4.1 WHITE GOLD MARINE SERVICES V. PIONEER

Ponente: QUISUMBING, J.
Doctrine/Mainpoint: Pioneer is the resident agent of Steamship Mutual as evidenced by the certificate of registration
issued by the Insurance Commission. However, a Certification from the Commission states that Pioneer does not have a
separate license to be an agent/broker of Steamship Mutual. Although Pioneer is already licensed as an insurance
company, it needs a separate license to act as insurance agent for Steamship Mutual.
Parties: White Gold Marine Services Inc., petitioner; Pioneer Insurance and Surety Corporation and the Steamship
Mutual Underwriting, respondents
Facts: White Gold Marine Services, Inc. procured a protection and indemnity coverage for its vessels from The
Steamship Mutual Underwriting Association through Pioneer Insurance and Surety Corporation. White Gold was issued a
Certificate of Entry and Acceptance. Pioneer also issued receipts evidencing payments for the coverage. 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 on the other
hand, filed a complaint before the Insurance Commission claiming that Steamship Mutual violated Sections 186 and 187
of the Insurance Code which focused on the requirements on who can transact an insurance business in the Philippines,
while Pioneer violated Sections 299, 300 which talks about the requirement and what it is to be an insurance broker or
insurance agent and 301 in relation to Sections 302 and 303, thereof.

The Insurance Commission dismissed the complaint. It said that there was no need for Steamship Mutual to secure a
license because it was not engaged in the insurance business. It explained that Steamship Mutual was a Protection and
Indemnity Club (P & I Club). Likewise, Pioneer need not obtain another license as insurance agent and/or a broker for
Steamship Mutual because Steamship Mutual was not engaged in the insurance business. Moreover, Pioneer was already
licensed; hence, a separate license solely as agent/broker of Steamship Mutual was already superfluous. The Court of
Appeals affirmed the decision of the Insurance Commissioner.
Issues:1) Is Steamship Mutual, a P & I Club, engaged in the insurance business in the Philippines? (2) Does Pioneer need
a license as an insurance agent/broker for Steamship Mutual?
Ruling: 1. Yes. The records reveal Steamship Mutual is doing business in the country albeit without the requisite
certificate of authority mandated by Section 187 (procurement of license fees) of the Insurance Code. It maintains a
resident agent in the Philippines to solicit insurance and to collect payments in its behalf. The Court notes that Steamship
Mutual even renewed its P & I Club cover until it was cancelled due to non-payment of the calls. Thus, to continue doing
business here, Steamship Mutual or through its agent Pioneer, must secure a license from the Insurance Commission. 2.
Yes. Pioneer is the resident agent of Steamship Mutual as evidenced by the certificate of registration issued by the
Insurance Commission. It has been licensed to do or transact insurance business by virtue of the certificate of authority
issued by the same agency. However, a Certification from the Commission states that Pioneer does not have a separate
license to be an agent/broker of Steamship Mutual. Although Pioneer is already licensed as an insurance company, it
needs a separate license to act as insurance agent for Steamship Mutual.

The petition is partially granted. The Decision of the Court of Appeals affirming the decision of the Insurance
Commission is reversed and set aside. The Steamship Mutual and Pioneer Insurance are ordered to obtain licenses and to
secure proper authorization to do business as insurer and insurance agent, respectively. The petitioners prayer for the
revocation of Pioneers Certificate of Authority and removal of its directors and officers is denied.

5.1 REPUBLIC V. DEL MONTE MOTORS

MAINPOINT: No judgment creditor or other claimant shall have the right to levy upon any of the securities of the
insurer held on deposit this securities are held as a contingency fund to answer for the claims against the insurance
company by all its policy holders and their beneficiaries. This step is taken in the event that the company becomes
insolvent or otherwise unable to satisfy the claims against it. Thus, a single claimant may not lay stake on the securities to
the exclusion of all others. The other parties may have their own claims against the insurance company under other
insurance contracts it has entered into.
FACTS: Vilfran Liner lost in a case against Del Monte Motors. They were made to pay 11 million pesos for service
contracts with Del Monte, Case involves a petition seeking the reversal of the trial court decision which found Comm.
Malinis guilty of indirect contempt when he refused to obey a certain resolution. RTC rendered a decision finding Vilfran
Liner Inc and the Vilegas to be solidary liable to Del Monte Motors. The trial court ordered that execution of the decision
against the counterbond posted by Vilfran Liner Inc and issued by Capital Insurance and Surety Co. Inc.
On April 18, 2002 CISCO opposed the Motion for Execution filed by respondent. Claiming that the latter had no record
or document regarding the alleged issuance of the counterbond; thus the bond was not valid and enforceable.
On june 13 2002. The RTC granted the Motion for Execution and issued the corresponding writ. Armed with this writ.
Sheriff Paguyo proceeded to levy on the properties of CISCO. He also issued a Notice of Garnishment on several
depository banks of the insurance company. Moreover, he served a similar notice on the Insurance Commission, so as to
enforce the Writ on the security deposit filed by CISCO with the Commission in accordance with Sec 203 of Insurance
code. After hearing on all the pending Motions, The RTC ruled that the Notice of Garnishment served by Sheriff Paguyo
on the insurance commission was valid. Respondent moved to cite insurance Commissioner Malinis in contempt of court
for his refusal to obey the Dec 18 2002 Resolution of the Trial court.
RTC decision; Malinis found to be in contempt of court.
ISSUE: Whether or not the security deposit held by the Insurance Commissioner pursuant to Section 203 of the Insurance
Code may be levied or garnished in favor of only one insured.
RULING: NO. Sec 203- No judgment creditor or other claimant shall have the right to levy upon any of the
securities of the insurer held on deposit pursuant to the requirement of the Commissioner. To allow the garnishment
of that deposit would impair the fund by decreasing it to less than the percentage of paid-up capital that the law requires to
be maintained. Further, this move would create, in favor of respondent, a preference of credit over the other policy holders
and beneficiaries.
The court also claimed that the security deposit shall be (1) answerable for all the obligations of the depositing insurer
under its insurance contracts; (2) at all times free from any liens or encumbrance; and (3) exempt from levy by
any claimant.
INS.6.1 PHILIPPINE HEALTH CARE V. CIR | GR. NO. 167330

MAINPOINT: (1) Various courts in the United States, whose jurisprudence has a persuasive effect on our decisions, have
determined that Health Maintenance Organizations (HMOs) are not in the insurance business.

(2) Even if a contract contains all the elements of a contract, if its primary purpose is the rendering of service; it is not a
contract of insurance.

PARTIES: Philippine Health Care v. CIR

FACTS: Philippine Health Care Providers, Inc. is a domestic corporation whose primary purpose is "[t]o establish,
maintain, conduct and operate a prepaid group practice health care delivery system or a health maintenance organization
to take care of the sick and disabled persons enrolled in the health care plan and to provide for the administrative, legal,
and financial responsibilities of the organization." Individuals enrolled in its health care programs pay an annual
membership fee and are entitled to various preventive, diagnostic and curative medical services provided by its duly
licensed physicians, specialists and other professional technical staff participating in the group practice health delivery
system at a hospital or clinic owned, operated or accredited by it.

On January 27, 2000, the Commissioner of Internal Revenue (CIR) sent petitioner a formal demand letter and the
corresponding assessment notices demanding the payment of deficiency taxes, including surcharges and interest, for the
taxable years 1996 and 1997 in the total amount of P224,702,641.18 imposed on petitioners health care agreement with
the members of its health care program pursuant to Section 185 of the 1997 Tax Code.

Petitioner protested the assessment in a letter dated February 23, 2000. CIR did not act on the protest, petitioner filed a
petition for review in the Court of Tax Appeals (CTA) seeking the cancellation of the deficiency VAT and Documentary
Stamp Tax (DST) assessments.

CTA: PARTIALLY GRANTED to pay VAT and the DST assessment was CANCELLED AND SET ASIDE. (No
explanation why)

CA: Health care agreement was in the nature of a non-life insurance contract subject to DST
Court Affirmed CA

ISSUES: (1) Whether or not Philippine Health Care Providers, Inc. engaged in insurance business.

(2) Whether or not the agreements between petitioner and its members possess all elements necessary in the insurance
contract.

RULINGS: (1) NO. Health Maintenance Organizations (HMO), as the petitioner in this case, are not engaged in the
insurance business. However, on the issue on imposition of DST, the SC pointed out that it is irrelevant that petitioner is
an HMO or not because its agreements are in the nature of a non-life insurance policy and the DST is not a tax on the
business but an excise on the privilege, opportunity or facility used in the transaction of the business.

(2) NO. In our jurisdiction, a commentator of our insurance laws has pointed out that, even if a contract contains all the
elements of an insurance contract, if its primary purpose is the rendering of service, it is not a contract of insurance. The
primary purpose of the parties in making the contract may negate the existence of an insurance contract. Thus, health care
agreements are clearly not within the ambit of Section 185 of the NIRC and there was never any legislative intent to
impose the same on HMOs.

Overall, petitioner appears to provide insurance-type benefits to its members (with respect to its curative medical
services), but these are incidental to the principal activity of providing them medical care. The insurance-like aspect of
petitioners business is miniscule compared to its noninsurance activities. Therefore, since it substantially provides health
care services rather than insurance services, it cannot be considered as being in the insurance business.

INS.7.1 DEL ROSARIO V. THE EQUITABLE INSURANCE AND EQUITABLE, CO., INC.
MAINPOINT: the "terms in an insurance policy, which are ambiguous, equivocal or uncertain . . . Are to be
construed strictly against, the insurer, and liberally in favor of the insured so as
to effect the dominant purpose of indemnity or payment to the insured, especially where a forfeiture is involved,"
and the reason for this rule is that the "insured usually has no voice in the selection or arrangement of the words
employed and that the language of the contract is selected with great
care and deliberation by expert and legal advisers employed by, and acting exclusively in the interest of, the
insurance company

FACTS: On February 7, 1957, Equitable Insurance and Casualty Co., Inc., issue Personal Accident Policy No.7136
on the life of Francisco del Rosario, alias Paquito Bolero, son of Simeon, binding itself to pay the sum of P1,000.00
to P3,000.00, as indemnity for the death of the insured. The provisions of the insurance policy pertinent to the case
are as follows:

Part I. Indemnity For Death: If the insured sustains any bodily injury which is
effected solely through violent, external, visible and accidental means, and which shall result, independently of all
other causes and within sixty (60) days from the occurrence thereof, in the Death of the
insured, the Company shall pay the amount set opposite such injury:

Section1. Injury sustained other than those specified below unless excepted hereinafter - P1,000.00

Section 2. Injury sustained by the wrecking or disablement of a railroad passenger car or street railway car in or
on which the Insured is travelling as a fare paying passenger - P1,500.00

Part VI. Exceptions: This policy shall not cover disappearance of the insured nor shall it cover Death, Disability,
Hospital fees, or Loss of Time, caused to the insured:. . . (h) By drowning except as a consequence of the wrecking
or disablement in the Philippine waters of a passenger steam or motor vessel in which the Insured is travelling as a
fare paying passenger;

A rider to the Policy contained the following: IV. Drowning: it is hereby declared and agreed that exemption clause
letter (h) embodied in PART VI of the policy is hereby waived by the company, and to form a part of the provision
covered by the policy. A fire broke out in the motor launch ISLAMA in Jolo.

As a consequence of which, Francisco del Rosario and 33 others were forced to jump off the launch. This resulted
in the death of Francisco and his beneficiary Remedios Jayme. Equitable insurance paid Simeon del Rosario, father
of Francisco Php1000 pursuant to Sec.1 of Part 1 of the policy. On the day of receipt, Atty. Francisco wrote
equitable acknowledging the receipt of Simeon of the amount of Php1000 but informed the company that the
amount is incorrect as Simeon was entitled tophp1,500, under Sec.2 Part 1 of the policy.
Equitable referred the matter to the insurance commissioner who opined that the liability of the company is only
Php1000. Thus, Equitable refused to pay. Subsequently, Atty. Francisco asked for Php3000from Equitable. The
company refused to pay. Hence a complaint for the recovery of the balance was instituted.

ISSUE: How much should the indemnity be?

RULING: The CFI ruled that: On the face of the policy Exhibit "A" itself, death by drowning is a ground for
recovery apart from the bodily injury because death by bodily injury is covered by Part I of the policy while death
by drowning is covered by Part VI thereof. But while the policy mentions specific amounts that may be recovered
for death for bodily injury, yet, there is not specific amount mentioned in the policy for death thru drowning
although the latter is, under Part VI of the policy, a ground for recovery thereunder. Since the
defendant has bound itself to pay P1000.00 top 3,000.00 as indemnity for the death of the insured but the policy
does not positively state any definite amount that may be recovered in case of death by drowning, there is an
ambiguity in this respect in the policy, which ambiguity must be interpreted in favor of the insured and strictly
against the insurer so as to allow greater indemnity. Thus, del Rosario is entitled tophp3000. Since Equitable has
already paid Php1000, a balance of Php2000 remains to be paid.SC upheld the ruling of the CFI for it is supported
by the generally accepted principles of insurance, which enunciate that where there is an ambiguity with respect to
the terms and conditions of the policy, the same will be resolved against the one responsible thereof. It should be
recalled in this connection, that generally, the insured, has little, if any, participation in the preparation of the
policy, together with the drafting of its terms and Conditions. The interpretation of obscure stipulations in a
contract should not favor the party who cause the obscurity (Art. 1377, N.C.C.), which, in the case at bar, is the
insurance company.. . . . And so it has been generally held that the "terms in an insurance policy, which
are ambiguous, equivocal or uncertain . . . Are to be construed strictly against, the insurer, and liberally in favor of
the insured so as to effect the dominant purpose of indemnity or payment to the insured, especially where a
forfeiture is involved," and the reason for this rule is that the "insured usually has no voice in the selection or
arrangement of the words employed and that the language of the contract is selected with great
care and deliberation by expert and legal advisers employed by, and acting exclusively in the interest of, the
insurance company.

INS.8.1 TAURUS TAXI CO., INC v. The Capital Insurance

PONENTE: FERNANDO, J.

MAINPOINT: If there is doubt concerning the liability of the defendant insurance firm, it should be resolved against the
insurance and in favor of the insured because a contract of insurance couched in language chosen by the insurer is, if open
to the construction contended for by the insured, to be construed most strongly, or strictly, against the insurer and liberally
in favor of the contention of the insured, which means in accordance with the rule contra proferentem.

PARTIES: TAURUS TAXI CO., INC v. The Capital Insurance

FACTS: Alfredo Monje was employed as a taxi driver of the Taurus Taxi. On December 6, 1962, the taxi he was driving
collided with a Transport Taxicab at the intersection of Old Sta. Mesa and V. Mapa Streets, Manila, resulting in his death.
Commercial Vehicle Comprehensive Policy was subsisting at the time of the accident. The policy states that the amount
for which each passenger, including the driver is insured P5,000.00. The indorsement No. 1 which forms part of the policy
was given to Petitioner Felicitas and his children. Taurus Taxi made representation for the payment of the insurance
benefit which corresponds to the wife and children. Defendant refused to pay. The defendant contended that in view of
the fact that the deceased Alfredo Monje was entitled to indemnify under another insurance policy issued by Ed. A. Keller
Co., Ltd., the heirs of the said deceased are not entitled to indemnify under the insurance policy issued by appellant for the
reason that the latter policy contains stipulation that the company will indemnify any authorized driver provided that
such authorized driver is not entitled to indemnity under any other policy. The RTC ruled in favor of the plaintiffs. Order
the defendant to pay the plaintiff. Defendant would seek to escape liability on the plea that the workmans compensation.
The Court of Appeals affirmed RTCs decision.

ISSUE: Whether the heirs of Alfredo Monje be entitled to the proceeds of the insurance policy issued by the Capital
Insurance Company even if there is an existing indemnity contract with another insurance company at the time of his
death.

RULING: Yes. What is prohibited by the insurance policy in question is that any authorized driver of plaintiff Taurus
Taxi Co., Inc should not be entitled to any indemnity under any policy, it would appear indisputable that the obligation
of defendant-appellant under the policy had not been extinguished. It is too well-settled to need the citation of authorities
that what the law requires enters into and forms part of every contract. The Workmen's Compensation Act, explicitly
requires that an employee suffering any injury or death arising out of or in the course of employment be compensated. The
fulfillment of such statutory obligation cannot be the basis for evading the clear, explicit and mandatory terms of a policy.
Same way with sickness benefits under the Social Security Act.

INS.9.1 CCC INSURANCE v. CA | 31 SCRA 264 (1970)

PONENTE: REYES, J.B.L., J.
DOCTRINE/MAINPOINT: A driver's license that bears all the earmarks of a duly issued license is a public document
which is presumed genuine. The presumption of genuineness in its issuance is not disproved by a mere certification by an
agency of the Motor Vehicles Office official that it did not issue the license in question because it does not remove the
possibility that said office may have been mistaken or that said license was issued by another agency, particularly in view
of the fact that the person who issued the certification was not placed on the witness stand. As the law stood (in 1961)
when the claim arose, the examination could be dispensed with in the discretion of MVO officials.
A driver's license is a representation by the government of holder's qualification to operate motor vehicles. The issuance of
the license is a proof that MVO officials considered the driver of the insured qualified to operate motor vehicles and the
insured was entitled to rely upon such license. And considering that 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.
PARTIES: CCC Insurance as petitioner | Court of Appeals and Carlos Robes as respondents | Domingo Reyes, driver
FACTS: Carlos F. Robes took an insurance, with the CCC Insurance Corporation, on his Dodge Kingsway car against
loss or damage through accident for an amount not exceeding P8,000.
Later, the insured vehicle, while being driven by the owner's driver, Domingo Reyes, became involved in a vehicular
collision along Rizal Avenue Extension. The car was damaged, and the repair was estimated to cost P5,300. The insurance
company refused to pay the repair or to cause the restoration of the car to its original condition, alleging that there had
been violation of the insurance contract because the one driving the car at the time of the incident was not an "authorized
driver." Robes then instituted a Civil Case in the CFI of Rizal for recovery not only of the amount necessary for the repair
of the insured car but also of actual and moral damages, attorneys' fees and costs.
After due hearing, judgment was rendered in favor of Robes, and defendant insurer was ordered to pay unto the former the
cost of repair of the car in the sum of P5,031.28. The insurance company went to the CA, raising the question of the
qualification of plaintiff's driver to operate the insured vehicle. The CA affirmed the ruling of the lower court. Not content,
the insurance company filed the present petition for review.
ISSUE: Whether the damage to the insured car was not covered by the insurance policy because at the time of the
accident it was being driven by one who was not an authorized driver.
RULING: An Authorized driver is 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.
It has been found as a fact by the Court of Appeals that Domingo Reyes, the driver who was at the wheel of the insured
car at the time of the accident, does not know how to read and write; that he was able to secure a driver's license, without
passing any examination therefor, by paying P25 to a certain woman; and that the Cavite agency of the Motor Vehicles
Office has certified not having issued Reyes' purported driver's license. In holding that the damage sustained by the car
comes within the coverage of the insurance policy, the Court of Appeals argued that since Reyes' purported driver's license
bears all the earmarks of a duly issued license, then it is a public document, and petitioner insurance company then has the
burden of disproving its genuineness, which the latter has failed to do. In effect, the Court of Appeals found that the
driver's license was genuine, that is, one really issued by the Motor Vehicles Office or its authorized deputy; and this
finding of fact is now conclusive and may not be questioned in this appeal.
The appellant insurer insists that, under the established facts of this case, Reyes, being admittedly one 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.
The fatal flaw in appellant's argument is that it studiously ignores the provisions of law existing at the time of the mishap.
Under Section 24 of the Revised Motor Vehicles Law, Act 3992 of the Philippine Legislature, as amended by Republic
Acts Nos. 587, 1204 and 2863,
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.
and reinforcing such discretion, 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 ...
It is thus clear that the issuance of a driving license without previous examination does not necessarily imply that the
license issued is invalid. As the law stood in 1961, when the claim arose, the examinations could be dispensed with in the
discretion of the Motor Vehicles Office official officials. Whether discretion was abused in issuing the license without
examination is not a proper subject of inquiry in these proceedings, though, as a matter of legislative policy, the discretion
should be eliminated. There is no proof that the owner of the automobile knew that the circumstance surrounding such
issuance showed that it was irregular.
Also, the fact that the Cavite Agency of the Motor Vehicles Office states that Driver's License was not issued by that
office, does not remove the possibility that said office may have been mistaken or that said license was issued by another
agency. The issuance of the license is proof that the Motor Vehicles Office official considered Reyes, the driver of the
insured- appellee, qualified to operate motor vehicles, and the insured was entitled to rely upon such license. In this
connection, it should be observed that the chauffeur, Reyes, had been driving since 1957, and without mishap, for all the
record shows. Considering that, as pointed out by the Court of Appeals, 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, We find no reason
to diverge from the conclusion reached by the Court of Appeals that no breach was committed of the above-quoted
provision of the policy. WHEREFORE, the decision of the Court of Appeals is affirmed.

INS.10.1 ASSOCIATION OF BAPTISTS VS. FIELDMENS INSURANCE

PONENTE: Melencio-Herrera, J.
MAINPOINT: Unlawful and wrongful taking of vehicle for a joy ride constitutes theft within the meaning of
insurance policy; recovery for damage not barred by the illegal use of the vehicle.
FACTS: The plaintiff, having an insurable interest in a Chevrolet Carry-all, 1955 Model, with Motor No.
032433272555 and Plate No. E-73317 covered by Registration Certificate No. 288141 Rizal, issued by the
Davao Motor Vehicles Office Agency No. 20 and owned by Reverend Clinton Bonnel, insured said vehicle with
the defendant under Fieldmens Insurance Co., Inc. Private Car Comprehensive Policy No. 22 Jl 1107, against
loss or damage up to the amount of P5,000.00
In 1961, the aforementioned Chevrolet Carry-all was placed at the Jones Monument Mobilgas Service
Station at Davao City, under the care of said stations operator, Rene Te so that said carry-all could be displayed
as being for sale.
In 1962, Romeo Catiben, one of the boys at the aforementioned Jones Monument Service Station, took
the aforementioned chevrolet carry-all for a joy ride to Toril, Davao City, without the prior permission, authority
or consent of either the plaintiff or its representative Dr. Antonio Lim, or of Rene Te, and on its way back to
Davao City, said vehicle, due to some mechanical defect accidentally bumped an electric post causing actual
damages valued at P5,518.61.
ISSUE: Whether or not for the damage to the abovementioned Chevrolet Carry-all to be compensable under the
aforementioned Fieldmens Private Car Comprehensive Policy No. 22 JL 11107, there must be a prior criminal
conviction of Romeo Catiben for theft.
HELD: The Comprehensive Policy issued by the insurance company includes loss of or damage to the motor
vehicle by "burglary . . . or theft." It is settled that the act of Catiben in taking the vehicle for a joy ride to Toril,
Davao City, constitutes theft within the meaning of the insurance policy and that recovery for damage to the car
is not barred by the illegal use of the car by one of the station boys.

INS.11.1 LANDICHO VS. GOVERNMENT SERVICE INSURANCE SYSTEM, 46SCRA7[1972]

Mainpoint: Where the language used in an insurance contractor application is such as to create ambiguity, the
same should be resolved liberally in favor of the insured and strictly against the party responsible therefor, i.e.,
the insurance company which prepared the contract.
Facts: GSIS issued in favor of Flaviano Landicho, an employee of Bureau of Public Works, optional additional
life insurance in which a provision in the application states this condition: "That my policy shall be made
effective on the first day of the month next following the month the first premium is paid; x x x." Another
condition provides: "That failure to deduct from my salary the monthly premiums shall not make the
policy lapse, however, the premium account shall be considered as indebtedness which, I bind myself to
pay the System. Landicho died in an airplane crash. Herein petitioners are his surviving wife and children
whose claim has been denied by the GSIS on the ground that the policy had never been in force because it
appears that the Bureau had not remitted to the GSIS even a single premium because the Bureau's collecting
officer was not advised by the GSIS to make the required deduction pursuant to the provision in the application.
Issue: Should the policy be considered in force notwithstanding that not a single premium had been paid
thereon?
Held: Yes. The language used in the application is such as to create an ambiguity that should be resolved against
the party responsible therefor GSIS, as the party who prepared and furnished the application form and in
favor of the party misled thereby, the insured employee. This rule is especially true in insurance policies where
forfeiture is involved.

INS.12.1 American Home Assurance Company vs. Tantuco Enterprises, Inc. | G.R. No. 138941 | October 8, 2001

MAIN POINT: Liberality is the rule of construction in insurance contracts.

FACTS: Tantuco Enterprises, Inc. is a coconut oil milling and refining company. It owned two mills (the first oil mill and
a new one), both located at its factory compound at Iyam, Lucena City. The two oil mills are separately covered by fire
insurance policies issued by American Home Assurance Co.

On Sept. 30, 1991, a fire broke out and gutted and consumed the new oil mill. American Home rejected the claim for the
insurance proceeds on the ground that no policy was issued by it covering the burned oil mill. It stated that the new oil
mill was under Building No. 15 while the insurance coverage extended only to the oil mill under Building No. 5.

ISSUE: Whether or not the new oil mill is covered by the fire insurance policy

RULING: In construing the words used descriptive of a building insured, the greatest liberality is shown by the courts in
giving effect to the insurance. In view of the custom of insurance agents to examine buildings before writing policies upon
them, and since a mistake as to the identity and character of the building is extremely unlikely, the courts are inclined to
consider the policy of insurance covers any building which the parties manifestly intended to insure, however inaccurate
the description may be.
Notwithstanding, therefore, the misdescription in the policy, it is beyond dispute, to our mind, that what the parties
manifestly intended to insure was the new oil mill.

If the parties really intended to protect the first oil mill, then there is no need to specify it as new. Indeed, it would be
absurd to assume that the respondent would protect its first oil mill for different amounts and leave uncovered its second
one.

INS.13.1: Misamis Lumber v Capital Insurance, G.R. No. L-21380; May 20, 1966
PONENTE: Reyes, J.B.L., J.:
MAINPOINT: The court ruled in this manner because the policy expressly limits the liability for authorized repair at
P150.00, and being expressed and unambiguous it leaves no room for interpretation, and it must be applied as such. The
cardinal principle of insurance law of interpreting insurance contracts favorably to the insured is applicable only in cases
of doubt, not when the intention of the policy is clear or the language is sufficiently clear to convey the meaning of the
parties, although the contract may be onerous.
FACTS: Misamis Lumber Corp insured its Ford Falcon motor car with Capital Insurance and Surety Company Inc. with
the following stipulations:
Par 2 - At its option, Capital Insurance may pay or may repair, reinstate or replace the motor vehicle or
any part. The liability of Capital insurance shall not exceed the value of the parts lost or damaged and
the reasonable cost of fitting such parts.

Par 4 - Misamis Lumber may authorize the repair of motor vehicle necessitated by damage for which
Capital insurance may be liable provided that the estimated cost of such repair does not exceed the
authorized repair limit of P150

While travelling along Aurora Blvd, the motor vehicle passed over a water hole, which caused the cars crankcase and
flyhouse to break. The car was towed and repaired by Morosi Motors. After the repairs, Misamis Lumber made a report of
the accident to Capital Insurance, but the latter refused to pay for the total cost of the repairs. A case filed in the municipal
court did not exonerate Capital Insurance for the excess (beyond P150) because (1) its absolution would render the
insurance contract one-sided, and (2) said insurer had not shown that the cost of the repairs is unreasonable.
ISSUE: WON Capital Insurance is liable for the excess of the authorized repair limit of P150.
RULING: No. The insurance policy clearly stipulated that if the insured authorizes the repair the liability of the insurer is
limited to P150. The literal meaning of this stipulation must control, it being the actual contract, expressly and plainly
provided for in the policy. The option to undertake the repairs is accorded to Capital Insurance per Par 2. The insurer was
deprived of the option because Misamis Lumber took it upon itself to have the repairs made, and only notified Capital
insurance when the repairs were done. As a consequence, Par 4, which limits the liability to P150, applies. The insurance
contract may rather be one-sided, as the lower court put it, but that does not justify the abrogation of its express terms
which is the law between the contracting parties. To require Capital Insurance to prove that the cost of repairs is
unreasonable without being given the opportunity to inspect and assess the damage before the repairs were done is
contrary to elementary justice and equity. Judgment Modified. Capital Insurance ordered to pay not more than P150 to
Misamis Lumber.

INS.14.1 UNION MARKETING CO VS PHILIPPINE GUARANTY CO (1972)

PONENTE: Fernando

MAINPOINT: This suit arises from a fire insurance policy wherein Philippine Guaranty Co., the insurer, was able to
avoid liability upon proof that there was a violation of a warranty. Republic Bank wished to recover on such policy as
mortgagee, by virtue of the cover note in the insurance policy providing that it is entitled to the payment of loss or
damages, but was in vain. It cannot recover from the same policy of the defendant because the same is null and void on
the ground that Union Manufacturing Co., violated the policy by not revealing the existence of other insurance policies
while the policy of the defendant was in full force and effect.

PARTIES: Plaintiff-appellant: Union Manufacturing Co., Inc. (Union Manufacturing) is the mortgagor and the Republic
Bank is the mortgagee. Defendant-appelee: Philippine Guaranty Co., Inc. (Phil. Guaranty) is the insurer.

FACTS: On January 12, 1962, the Union Manufacturing obtained certain loans, overdrafts and other credit
accommodations from the Republic Bank; and to secure payment thereof, Union Manufacturing executed a real and
chattel mortgages on certain properties, which are described and listed at the back of the mortgage contract. That as
additional condition of the said contract, Union Manufacturing undertook to secure insurance coverage over the
mortgaged properties.

Union Manufacturing failed to secure insurance coverage on the mortgaged properties. Thus, Republic Bank procured
from Phil. Guaranty an insurance coverage on loss against fire over the properties of Union Manufacturing as described in
Phil. Guarantys Cover Note with the annotation that the loss or damage if any, under said cover note, is payable to
Republic Bank as its interest may appear, subject however to the printed conditions of said defendants fire insurance
policy form.

A fire insurance policy was issued in favour of assured, Union Manufacturing, for which a premium was paid by the
Republic Bank to Phil. Guaranty. It appears that although said renewal premium was paid by the Republic Bank, such
payment was for the account of Union Manufacturing and that the cash voucher for the payment of the first premium was
paid also by the Republic Bank but for the account of Union Manufacturing.

A fire occurred in the premises of Union Manufacturing. They then filed a fire claim with the Phil. Guaranty which was
denied on the ground that policy condition no. 3 was violated because plaintiff did not give notice to the defendant of the
other insurance which they had taken from New India and Manila Insurance with the results that these insurances, of
which the defendant became aware of only after the fire, were not endorsed on their policy; and policy condition no. 1 was
not complied with because plaintiff has failed to give to the defendants representatives the required documents and other
proofs with respect to their claim and matters touching Phil Guarantys liability, if any, and the amount of such liability.

That when the defendant issued a fire insurance policy to cover the properties of the Union Manufacturing, the same
properties were already covered by fire policy of the Sincere Insurance company and Oceanic Insurance. That when said
Phil. Guarantys fire insurance policy was already in full force and effect, the Union Manufacturing without the consent of
Phil. Guaranty, obtained another insurance policy over the same property prior to the fire from New India Assurance,
Sincere Insurance Co., and Manila Insurance Co.

ISSUE: Whether Republic Bank can recover from the Philippine Guaranty

RULING: NO. Why the appellant Republic Bank could not recover, as payee, in case of loss as its interest may appear
subject to the terms and conditions, clauses and warranties of the policy was expressed in the appealed decision thus:
However, inasmuch as the Union Manufacturing Co., Inc. has violated the condition of the policy to the effect that it did
not reveal the existence of other insurance policies over the same parties, as required by the warranty appearing on the
face of the policy issued by the defendant and that on the other hand said Union Manufacturing Co.,Inc. represented that
there were no other insurance policies at the time of the issuance of said defendants policy, and it appearing furthermore
that while the policy of the defendant was in full force and effect the Union Maufacturing secured other fire insurance
policies without the written consent of the defendant endorsed on the defendants policy, the conclusion is inevitable that
both the Republic Bank and Union Manufacturing Co., Inc. cannot recover from the same policy of the defendant because
the same is null and void. The appeal cannot prosper. The decision of the lower court is affirmed and the SC found no
justification for a reversal.

INS.15.1 TY VS FIRST NATIONAL SURETY 1 SCRA 1324 (1961)

PONENTE: Labrador

MAINPOINT:Only the amputation of hand is considered as a loss thereof. As the terms of the policy 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 policy, would be unwarranted. The insurance
contract is the law between the parties. (De Leon Book)

PARTIES: Diosdado Ty (Operator Mechanic Foreman employed in Broadway Cotton Factory located in Caloocan, Rizal)
filed an action against: 1. First National Surety; 2. Associated Insurance, 3. United Insurance, 4. Philippine Surety, 5.
Reliance Surety, 6. Far Eastern Insurance, 7. Capital Insurance (GR L-16144) and 8. Capital Insurance (GR L-16145).

FACTS: A consolidated case of 8 actions.

Within a period of two months prior to December 24, 1953, Diosdado C. Ty 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. His 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, Ty was injured on the left hand by a heavy object. He underwent medical treatment in the National Orthopedic
Hospital for his fractures from December 26, 1953 to February 8, 1954 (44 days).

Said physical injuries have caused temporary total disability of Ty's left hand. He filed the corresponding notice of
accident and notice of claim with all of the abovenamed insurance companies to recover indemnity.

The policy provides indemnity for partial disability xxx loss of xxx either hand --- P650.00. xxx --- ... The loss of a hand
shall mean the loss by amputation through the bones of the wrist....

The companies rejected Tys 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.

Municipal Court of Rizal dismissed the complaint.

CFI Manila denied the appeal. Hence, the petition.

ISSUE: WN amputation of the injured left hand is necessary to be able to claim indemnity.

RULING:Decision of the lower courts was affirmed Ty cannot recover from the insurance companies.

SC said that the express conditions of the insurance policies were clear, defining 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. It was undisputed that the physical injuries "caused temporary total
disability of plaintiff's left hand."

INS.16.1 PERLA V CA

FACTS: Cayas was the registered owner of a Mazda bus which was insured with petitioner PERLA COMPANIA DE
SEGUROS, INC (PCSI). The bus figured in an accident in Cavite, injuring several of its passengers. One of them, Perea,
sued Cayas for damages in the CFI, while three others agreed to a settlement of P4,000.00 each with Cayas.

After trial, the court rendered a decision in favor of Perea, Cayas ordered to compensate the latter with damages. Cayas
filed a complaint with the CFI, seeking reimbursement from PCSI for the amounts she paid to ALL victims, alleging that
the latter refused to make such reimbursement notwithstanding the fact that her claim was within its contractual liability
under the insurance policy.

The decision of the CA affirmed in toto the decision of the RTC of Cavite, the dispositive portion of which states:

IN VIEW OF THE FOREGOING, judgment is hereby rendered ordering defendant PCSI to pay plaintiff Cayas the sum of
P50,000.00 under its maximum liability as provided for in the insurance policy;

In this petition for review on certiorari, petitioner seeks to limit its liability only to the payment made by private
respondent to Perea and only up to the amount of P12,000.00. It altogether denies liability for the payments made by
private respondents to the other 3 injured passengers totaling P12,000.00.

ISSUE: how much should PCSI pay?

RULING: The decision of the CA is modified, petitioner only to pay Cayas P12,000,000.00

The insurance policy provides:

5. No admission, offer, promise or payment shall be made by or on behalf of the insured without the written consent of the
Company
 It being specifically required that petitioners written consent be first secured before any payment in settlement of any
claim could be made, private respondent is precluded from seeking reimbursement of the payments made to the other 3
victims in view of her failure to comply with the condition contained in the insurance policy.

We observe that although Cayas was able to prove a total loss of only P44,000.00, petitioner was made liable for the
amount of P50,000.00, the maximum liability per accident stipulated in the policy. This is patent error. An insurance
indemnity, being merely an assistance or restitution insofar as can be fairly ascertained, cannot be availed of by any
accident victim or claimant as an instrument of enrichment by reason of an accident.