Tio Khe Chio vs.

Court of Appeals [GR 76101-02, 30 September 1991]

Facts:
Tio Khe Chio imported 1,000 bags of fishmeal valued at $36,000.30 from U.S.A. The goods were insured with Eastern
Assurance and Surety Corporation (EASCO) and shipped on board the M/V Peskov. When the goods reached Manila,
they were found to have been damaged by sea water which rendered the fishmeal useless. Tio filed a claim with EASCO
and Far Eastern Shipping. Both refused to pay. Whereupon, Tio sued them before the then CFI of Cebu for damages. The
trial court rendered judgment ordering EASCO and Far Eastern Shipping to pay Tio solidarily the sum of P105,986.68
less the amount of P18,387.86 for unpaid premiums with interest at the legal rate from the filing of the complaint. The
judgment became final as to EASCO. The trial court, upon motion by Tio, issued a writ of execution against EASCO. The
sheriff enforcing the writ reportedly fixed the legal rate of interest at 12%. EASCO moved to quash the writ alleging that
the legal interest to be computed should be 6% per annum in accordance with Article 2209 of the Civil Code and not 12%
as insisted upon by Tio's counsel.

Issue [1]: Whether Sections 243 and 244, as to interest, apply in the present case.

Held: In the case at bar, the Court of Appeals made no finding that there was an unjustified refusal or withholding of
payment on petitioners claim. In fact, respondent court had this to say on EASCOs refusal to settle the claim of
petitioner: ". . . EASCOs refusal to settle the claim to Tio Khe Chio was based on some ground which, while not
sufficient to free it from liability under its policy, nevertheless is sufficient to negate any assertion that in refusing to pay,
it acted unjustifiably. In the case of Philippine Rabbit Bus Lines, Inc. v. Cruz, G.R. No. 71017, July 28, 1986, 143 SCRA
158, the Court declared that the legal rate of interest is six (6%) per cent per annum, and not twelve (12%) per cent, where
a judgment award is based on an action for damages for personal injury, not use or forbearance of money, goods or credit.
In the same vein, the Court held in GSIS v. Court of Appeals, G.R. No. 52478, October 30, 1986, 145 SCRA 311, that the
rates under the Usury Law (amended by P.D. 116) are applicable only to interest by way of compensation for the use or
forbearance of money, interest by way of damages is governed by Article 2209 of the Civil Code.
FINMAN GENERAL ASSURANCE CORPORATION vs. CA and SURPOSA G.R. No. 100970 September 2, 1992

FACTS:
On October 22, 1986, deceased, Carlie Surposa was insured with under Finman General Teachers Protection Plan (an
accident insurance) and Individual Policy with his parents, spouses Julia and Carlos Surposa, and brothers Christopher,
Charles, Chester and Clifton, all surnamed, Surposa, as beneficiaries.

The insured died on October 18, 1988 as a result of a stab wound inflicted by one of the 3 unidentified men as he and his
cousin, Winston Surposa, were waiting for a ride on their way home along Rizal-Locsin Streets, Bacolod City.

Private respondent and the other beneficiaries of said insurance policy filed a written notice of claim with the insurance
company which denied said claim contending that murder and assault are not within the scope of the coverage of the
insurance policy.

The Insurance Commission rendered a decision holding the insurer is liable to pay the proceeds of the policy which was
affirmed by the CA.

ISSUE:
Whether the death of the insured was committed with deliberate intent which, by the very nature of a personal accident
insurance policy, cannot be indemnified

RULING:
No, the death of the insured was no commited with deliberate intent.

The generally accepted rule is that, death or injury does not result from accident or accidental means within the terms of
an accident-policy if it is the natural result of the insured's voluntary act, unaccompanied by anything unforeseen except
the death or injury. The happening, on the part of the insured is a pure accident. The insured died from an event that took
place without his foresight or expectation, an event that proceeded from an unusual effect of a known cause and,
therefore, not expected. Neither can it be said that where was a capricious desire on the part of the accused to expose his
life to danger considering that he was just going home after attending a festival.

Furthermore, the personal accident insurance policy involved herein specifically enumerated only ten (10) circumstances
wherein no liability attaches to insurance company for any injury, disability or loss suffered by the insured as a result of
any of the stipulated causes. The principle of " expresso unius exclusio alterius" is therefore applicable in the instant case
since murder and assault, not having been expressly included in the enumeration of the circumstances that would negate
liability in said insurance policy, cannot be considered by implication to discharge the petitioner insurance company from
liability for, any injury, disability or loss suffered by the insured.

The interpretation of obscure words or stipulations in a contract shall not favor the party who caused the obscurity (NCC
1377). Moreover,it is well settled that contracts of insurance are to be construed liberally in favor of the insured and
strictly against the insurer. Thus ambiguity in the words of an insurance contract should be interpreted in favor of its
beneficiary.
 COUNTRY BANKERS INSURANCE CORPORATION, vs. LIANGA BAY AND COMMUNITY MULTI-
PURPOSE COOPERATIVEG.R. No. 136914 January 25, 2002DE LEON JR J:

Facts:
The petitioner is a domestic corporation principally engaged in the insurance business wherein it undertakes, for a
consideration, to indemnify another against loss, damage or liability from an unknown or contingent event including fire while the respondent
is a duly registered cooperative judicially declared insolvent and represented by the elected assignee, Cornelio Jamero.
Sometime in1989, the petitioner and the respondent entered into a contract of fire insurance, Fire Insurance Policy No. F-
1397. Under Fire Insurance, the petitioner insured the respondents stocks-in-trade against fire loss, damage or liability
during the period starting from June 20, 1989 to June 20, 1990 for the sum of Two Hundred Thousand Pesos. On July 1, 1989, the respondents
building located at Surigao del Sur was gutted by fire and reduced to ashes, resulting in the total loss of the respondents stocks-in-trade, pieces of
furniture and fixtures, equipment and records. Due to the loss, the respondent filed an insurance claim with the petitioner under its Fire Insurance.
The petitioner, however, denied the insurance claim on the ground that, based on the submitted documents, the building
was set on fire by two NPA rebels who wanted to obtain canned goods, rice and medicines as provisions for their comrades in the forest, and
that such loss was an excepted risk under the policy conditions of Fire Insurance Policy which provides: This insurance does
not cover any loss or damage occasioned by or through or in consequence, directly or indirectly, of any of the following occurrences, namely:(d)
Mutiny, riot, military or popular uprising, insurrection, rebellion, revolution, military or usurped power. Respondent then instituted in the
trial court the complaint for recovery of "loss, damage or liability" against petitioner. The petitioner answered the complaint and
reiterated the ground it earlier cited to deny the insurance claim. The trial court rendered its Decision in favor of the respondent
declaring that the defendant-Country Bankers was liable to plaintiff-Insolvent Cooperative and to fully pay the insurance
claim for the loss the insured-plaintiff sustained as a result of the fire under its Fire Insurance in its full face value of P

200,000.00 with interest of 12% per annum from date of filing of the complaint until the same is fully paid. Petitioner appealed to the Court of
Appeals which affirmed the decision of the trial court in its entirety. Hence, this petition.

Issue:
Whether Country Bankers in liable

Ruling:
Yes Country bankers is liable. The petitioner does not dispute that the respondents stocks-in-trade were insured against fire loss, damage or
liability under Fire Insurance Policy and that the respondent lost its stocks-in-trade in a fire that occurred within the duration
of said fire insurance. The petitioner, however, posits the view that the cause of the loss was an excepted risk under the
terms of the fire insurance policy. Where a risk is excepted by the terms of a policy which insures against other
perils or hazards, loss from such a risk constitutes a defense which the insurer may urge, since it has not assumed that risk, and
from this it follows that an insurer seeking to defeat a claim because of an exception or limitation in the policy has the burden of
proving that the loss comes within the purview of the exception or limitation set up. If a proof is made of a loss apparently within a contract of
insurance, the burden is upon the insurer to prove that the loss arose from a cause of loss which is excepted or for which it is not liable, or from a
cause which limits its liability. Stated else wise, since the petitioner in this case is defending on the ground of non-coverage and relying upon
an exemption or exception clause in the fire insurance policy, it has the burden of proving the facts upon which such excepted
risk is based, by a preponderance of evidence. But petitioner failed to do so. The petitioner relies on the Sworn Statements of Jose
Lomocso and Ernesto Urbiztondo and on the Spot Report of Pfc. Arturo V. Juarbal specifically that:
investigation revealed by Jose Lomocso that those armed men wanted to get can goods and rice for their consumption in the forest PD
investigation further disclosed that the perpetrator are members of the NPA
.Such testimony is considered hearsay and may not be received as proof of the truth of what he has learned. Such is the
hearsay rule which applies not only to oral testimony or statements but also to written evidence as well. The petitioners
evidence to prove its defense is sadly wanting and thus, gives rise to its liability to the respondent under Fire Insurance
Policy.
 PERLA COMPANIA DE SEGUROS, INC V RAMOLETE G.R. No. L-60887 | November 13, 1991 | J. Feliciano
Facts:
On June 1976, a Cimarron PUJ owned by Nelia Enriquez, and driven by Cosme Casas, was travelling from Cebu City to Danao
City. While passing through Liloan, Cebu, the Cimarron PUJ collided with a private jeep owned by the late Calixto Palmes
(husband of private respondent Primitiva Palmes) who was then driving the private jeep. The impact of the collision was such
that the private jeep was flung away to a distance of about thirty (30) feet and then fell on its right side pinning down Calixto
Palmes. He died as a result of cardio-respiratory arrest due to a crushed chest. The accident also caused physical injuries on the
part of 2-year-old Adeudatus Borbon.
Private respondents Primitiva and Honorato Borbon, Sr. (father of Adeudatus) filed a complaint against Cosme and Nelia
before the then Cebu CFI claiming actual, moral, nominal and exemplary damages as a result of the accident. The claim of
Borbon, Sr. was excluded from the complaint due to jurisdiction.
The CFI ruled in favor of Primitiva, ordering common carrier Nelia to pay her damages and attorneys fees. The judgment of
the trial court became final and executory and a writ of execution was issued, which however, returned unsatisfied, prompting
the court to summon and examine Nelia. She declared that the Cimarron PUJ was covered by a third-party liability insurance
policy issued by petitioner Perla.
Palmes then filed a motion for garnishment praying that an order of garnishment be issued against the insurance policy issued
by petitioner in favor of the judgment debtor. Respondent Judge then issued an Order directing the Provincial Sheriff or his
deputy to garnish the third-party liability insurance policy. Petitioner filed for MR and quashal of the writ of garnishment on the
ground that Perla was not a party to the case and that jurisdiction over its person had never been acquired by the trial court by
service of summons or by any process. The trial court denied petitioners motion.An Order for issuance of an alias writ of
garnishment was subsequently issued.
More than two (2) years later, the present Petition for Certiorari and Prohibition was filed with this Court alleging grave abuse
of discretion on the part of respondent Judge Ramolete in ordering garnishment of the third-party liability insurance contract
issued by petitioner Perla in favor of the judgment debtor, Nelia Enriquez. The Petition should have been dismissed forthwith
for having been filed way out of time but, for reasons which do not appear on the record, was nonetheless entertained.
Issue: W/N there insurance policy may be subject to garnishment
Held:
2. Yes. Garnishment has been defined as a species of attachment for reaching any property or credits pertaining or payable to a
judgment debtor. In legal contemplation, it is a forced novation by the substitution of creditors: the judgment debtor, who is the
original creditor of the garnishee is, through service of the writ of garnishment, substituted by the judgment creditor who
thereby becomes creditor of the garnishee. Garnishment has also been described as a warning to a person having in his
possession property or credits of the judgment debtor, not to pay the money or deliver the property to the latter, but rather to
appear and answer the plaintiffs suit.
In order that the trial court may validly acquire jurisdiction to bind the person of the garnishee, it is not necessary that summons
be served upon him. The garnishee need not be impleaded as a party to the case. All that is necessary for the trial court lawfully
to bind the person of the garnishee or any person who has in his possession credits belonging to the judgment debtor is service
upon him of the writ of garnishment.
Rule 39, Section 15 and Rule 57, Section 7(e) of the ROC themselves do not require that the garnishee be served with summons
or impleaded in the case in order to make him liable.
In the present case, there can be no doubt, therefore, that the trial court actually acquired jurisdiction over petitioner Perla when
it was served with the writ of garnishment of the third-party liability insurance policy it had issued in favor of judgment debtor
Nelia Enriquez. Perla cannot successfully evade liability thereon by such a contention.
In a third-party liability insurance contract, the insurer assumes the obligation of paying the injured third party to whom the
insured is liable. The insurer becomes liable as soon as the liability of the insured to the injured third person attaches. Prior
payment by the insured to the injured third person is not necessary in order that the obligation of the insurer may arise. From
the moment that the insured became liable to the third person, the insured acquired an interest in the insurance contract, which
interest may be garnished like any other credit.
A separate action is not necessary to establish petitioners liability. Petition for Certiorari and Prohibition is hereby
DISMISSED for having been filed out of time and for lack of merit. Judgment AFFIRMED.
 G.R. No. L-49699 August 8, 1988
PERLA COMPANIA de SEGUROS, INC., petitioner, vs.
HON. CONSTANTE A. ANCHETA, Presiding Judge of the Court of First instance of Camarines Norte, Branch III,
ERNESTO A. RAMOS and GOYENA ZENAROSA-RAMOS, for themselves and as Guardian Ad Litem for Minors JOBET,
BANJO, DAVID and GRACE all surnamed RAMOS, FERNANDO M. ABCEDE, SR., for himself and Guardian Ad Litem
for minor FERNANDO G. ABCEDE, JR., MIGUEL JEREZ MAGO as Guardian Ad Litem for minors ARLEEN R. MAGO,
and ANACLETA J. ZENAROSA., respondents.

The instant petition for certiorari and prohibition with preliminary injunction concerns the ability of insurers under the
"no fault indemnity" provision of the Insurance Code. *

On December 27, 1977, in a collision between the IH Scout in which private respondents were riding and a Superlines
bus along the national highway in Sta. Elena, Camarines Norte, private respondents sustained physics injuries in varying
degrees of gravity. Thus, they filed with the Court of First Instance of Camarines Norte on February 23,1978 a complaint
for damages against Superlines, the bus driver and petitioner, the insurer of the bus [Rollo, pp. 27-39.] The bus was
insured with petitioner for the amount of P50,000.00 as and for passenger liability and P50,000.00 as and for third party
liability. The vehicle in which private respondents were riding was insured with Malayan Insurance Co.

Even before summons could be served, respondent judge issued an order dated March 1, 1978 [Rollo, pp. 40-41], the
pertinent portion of which stated:

The second incident is the prayer for an order of this court for the Insurance Company, Perla Compania de Seguros,
Inc., to pay immediately the P5,000.00 under the "no fault clause" as provided for under Section 378 of the Insurance
Code, and finding that the requisite documents to be attached in the record, the said Insurance Company is therefore
directed to pay the plaintiffs (private respondents herein) within five (5) days from receipt of this order.

Petitioner denied in its Answer its alleged liability under the "no fault indemnity" provision [Rollo, p. 44] and likewise
moved for the reconsideration of the order. Petitioner held the position that under Sec. 378 of the Insurance Code, the
insurer liable to pay the P5,000.00 is the insurer of the vehicle in which private respondents were riding, not petitioner, as
the provision states that "[i]n the case of an occupant of a vehicle, claim shall lie against the insurer of the vehicle in
which the occupant is riding, mounting or dismounting from." Respondent judge, however, denied reconsideration. A
second motion for reconsideration was filed by petitioner. However, in an order dated January 3, 1979, respondent judge
denied the second motion for reconsideration and ordered the issuance of a writ of execution [Rollo, p. 69.] Hence, the
instant petition praying principally for the annulment and setting aside of respondent judge's orders dated March 1, 1978
and January 3, 1979.

The Court issued a temporary restraining order on January 24,1979 [Rollo pp. 73-74.]

The sole issue raised in this petition is whether or not petitioner is the insurer liable to indemnify private respondents
under Sec. 378 of the Insurance Code.

The key to the resolution of the issue is of courts e Sec. 378, which provides:

Sec. 378. Any claim for death or injury to any passenger or third party pursuant to the provision of this chapter shall
be paid without the necessity of proving fault or negligence of any kind. Provided, That for purposes of this section

(i) The indemnity in respect of any one person shall not exceed five thousand pesos;

(ii) The following proofs of loss, when submitted under oath, shall be sufficient evidence to substantiate the claim:

(a) Police report of accident, and

(b) Death certificate and evidence sufficient to establish the proper payee, or
 (c) Medical report and evidence of medical or hospital disbursement in respect of which refund is claimed;

(iii) Claim may be made against one motor vehicle only. In the case of an occupant of a vehicle, claim shall lie against
the insurer of the vehicle in which the occupant is riding, mounting or dismounting from. In any other case, claim
shall lie against the insurer of the directly offending vehicle. In all cases, the right of the party paying the claim to
recover against the owner of the vehicle responsible for the accident shall be maintained. [Emphasis supplied.]

From a reading of the provision, which is couched in straight-forward and unambiguous language, the following rules on
claims under the "no fault indemnity" provision, where proof of fault or negligence is not necessary for payment of any
claim for death Or injury to a passenger or a third party, are established:

1. A claim may be made against one motor vehicle only.

2. If the victim is an occupant of a vehicle, the claim shall lie against the insurer of the vehicle. in which he is riding,
mounting or dismounting from.

3. In any other case (i.e. if the victim is not an occupant of a vehicle), the claim shall lie against the insurer of the directly
offending vehicle.

4. In all cases, the right of the party paying the claim to recover against the owner of the vehicle responsible for the
accident shall be maintained.

The law is very clear the claim shall lie against the insurer of the vehicle in which the "occupant" ** is riding, and no
other. The claimant is not free to choose from which insurer he will claim the "no fault indemnity," as the law, by using
the word "shall, makes it mandatory that the claim be made against the insurer of the vehicle in which the occupant is
riding, mounting or dismounting from.

That said vehicle might not be the one that caused the accident is of no moment since the law itself provides that the party
paying the claim under Sec. 378 may recover against the owner of the vehicle responsible for the accident. This is
precisely the essence of "no fault indemnity" insurance which was introduced to and made part of our laws in order to
provide victims of vehicular accidents or their heirs immediate compensation, although in a limited amount, pending final
determination of who is responsible for the accident and liable for the victims'injuries or death. In turn, the "no fault
indemnity" provision is part and parcel of the Insurance Code provisions on compulsory motor vehicle ability insurance
[Sec. 373-389] and should be read together with the requirement for compulsory passenger and/or third party liability
insurance [Sec. 377] which was mandated in order to ensure ready compensation for victims of vehicular accidents.

Irrespective of whether or not fault or negligence lies with the driver of the Superlines bus, as private respondents were
not occupants of the bus, they cannot claim the "no fault indemnity" provided in Sec. 378 from petitioner. The claim
should be made against the insurer of the vehicle they were riding. This is very clear from the law. Undoubtedly, in
ordering petitioner to pay private respondents the 'no fault indemnity,' respondent judge gravely abused his discretion in a
manner that amounts to lack of jurisdiction. The issuance of the corrective writ of certiorari is therefore warranted.

WHEREFORE, the petition is GRANTED and respondent judge's order dated March 1, 1978, requiring petitioner to pay
private respondents the amount of P5,000.00 as "no fault indemnity' under Sec. 378 of the Insurance Code, and that of
January 3, 1979, denying the second motion for reconsideration and issuing a writ of execution, are ANNULLED and
SET ASIDE. The temporary restraining order issued by the Court on January 24, 1979 is made permanent.

SO ORDERED.
 First Quezon City v CA GR. 98414 Feb 8, 1993

Facts:
One Jose del Rosario was injured while boarding a bus owned by DMTC in the Manila International Airport. He was
hospitalized for forty days. He filed suit against the bus company and the court granted him of over 100,000 pesos in
damages. The appellate court reduced damages to 55,090 pesos. The insurance companys liability was limited to 12,000.
The amount for insurance was made Php 50,000 in the appellate courts decision.
First Quezon City, the insurer of DTMC, filed a motion for reconsideration to limit the damages back to 12,000 pesos, the
amount stipulated in the contract. This was denied hence this petition for review.

Issue: Can the amount of the insurance companys liability be limited to Php 12,000?

Held: Yes

Ratio: The contract stipulated liability at Php 12,000 per passenger and at Php 50,000 as the maximum liability per
accident. This means that the insurers liability for a single accident will not exceed 50,000 pesos. The court gave the
example of 10 persons injured leaving a total of Php 120,000 in insurance liability payments. But with the Php 50,000
limit, only such value was to be paid by the company to the insured.
 Insurance Case Digest: Phil. American Life Insurance Company V. Ansaldo (1994)
G.R. No. 76452 July 26, 1994

FACTS:
Ramon M. Paterno, Jr. sent a letter dated April 17, 1986 to Insurance Commissioner alleging certain problems
encountered by agents, supervisors, managers and public consumers of the Philippine American Life Insurance
Company (Philamlife)
During the hearing Ramon stated that the contract of agency is illegal
Philamlife through its president De los Reyes contended that the Insurance Commissioner as a quasi-judicial body
cannot rule on the matter
ISSUE:
1. W/N the Insurance Commissioner has the authority to regulate the business of insurance - YES
2. W/N the business of insurance covers the contract of agency - NO

HELD: petition is GRANTED

1. YES.
Insurance Code
Sec. 414. 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, and shall,
notwithstanding any existing laws to the contrary, have sole and exclusive authority to regulate the
issuance and sale of variable contracts as defined in section two hundred thirty-two and to provide for the
licensing of persons selling such contracts, and to issue such reasonable rules and regulations governing
the same.

The Commissioner may issue such rulings, instructions, circulars, orders and decision as he may deem
necessary to secure the enforcement of the provisions of this Code, subject to the approval of the
Secretary of Finance. Except as otherwise specified, decisions made by the Commissioner shall be
appealable to the Secretary of Finance.
Sec. 415. In addition to the administrative sanctions provided elsewhere in this Code, the Insurance
Commissioner is hereby authorized, at his discretion, to impose upon the 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 or 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.

Insurance Commissioner has the authority to regulate the business of insurance

 INSULAR LIFE ASSURANCE CO., LTD. vs. MANUEL M. SERRANO
G.R. No. 163255 June 22, 2007.

FACTS: In June 1987, respondent Manuel M. Serrano bought from petitioner Insular Life Assurance Company, Limited,
a life insurance policy called "Diamond Jubilee, Participating" on his understanding that he shall be paying premiums for
seven (7) years only. Dividend accumulations and earned interests were to be applied to subsequent premium payments.
Respondent obtained six Diamond Jubilee Life Insurance policies, and religiously paid the premiums.
In early 1996, respondent was informed by his accountant that he had been paying premiums on some of his policies even
beyond the seven-year period of their effectivity. Consequently, respondent wrote a letter to Atty. Ernesto G. Montalban,
petitioner's Senior Vice President, Sales Operations Group, requesting that the overpayments be applied as premium
payments of his other policies which have not reached the seven-year period. The request was denied on the ground that
the self-liquidating option of the policies was not guaranteed because it was based on dividends which vary. Atty.
Montalban, however, assured respondent that some of his policies will self-liquidate but only on specific dates. On
October 8 and 11, 1996, respondent caused a notice to be published in the Manila Bulletin, viz:
URGENT NOTICE TO ALL INSULAR LIFE DIAMOND JUBILEE POLICY-HOLDERS IF YOU ARE A VICTIM OF INSULAR
LIFE ASSURANCE'S REFUSAL TO HONOR ITS REPRESENTATION THAT YOUR POLICY BECOMES SELF-
LIQUIDATING AFTER A LAPSE OF SEVEN (7) YEARS, PLEASE ATTEND A SPECIAL MEETING OF SIMILARLY
SITUATED POLICY HOLDERS AND CO-OWNERS OF INSULAR LIFE ON OCTOBER 16, 1996, 2:00 P.M. AT THE MAKATI
SPORTS CLUB, ALFARO ST., SALCEDO VILLAGE, MAKATI, TO CONSIDER COLLECTIVE ACTION TO PROTECT
YOUR INTERESTS. RSVP CALL MRS. VILLAROYA OR MRS. CARIAGA AT 817-22-35 OR 816-25-64
In addition, respondent filed on December 11, 1996 a civil case for specific performance, sum of money, and damages
before the Regional Trial Court of Makati City against petitioner and some of its officers. In turn, petitioner filed in May
1997 a complaint for libel against respondent before the City Prosecution Office of Makati City. On October 6, 1997, the
City Prosecutor of Makati dismissed petitioner's complaint for lack of probable cause, ruling that there was no defamatory
imputation, and no malice in the publication. Petitioner's motion for reconsideration was denied. Petitioner sought a
review before the Secretary of Justice. On April 18, 2002, the Secretary of Justice affirmed the dismissal of petitioner's
complaint for lack of probable cause. Petitioner assailed the ruling before the Court of Appeals via a petition for certiorari
which was dismissed. Petitioner's motion for reconsideration was denied.
Considering the foregoing, application of the Courts policy of non-interference in the conduct of preliminary
investigations[25] is warranted. The Court will not interfere with the executive determination of probable cause for the
purpose of filing an information in court, in the absence of grave abuse of discretion. We reiterate:
The institution of a criminal action depends upon the sound discretion of the [prosecutor]. He may or may
not file the complaint or information, follow or not follow that presented by the offended party, according to
whether the evidence in his opinion, is sufficient or not to establish the guilt of the accused beyond
reasonable doubt. The reason for placing the criminal prosecution under the direction and control of the
[prosecutor] is to prevent malicious or unfounded prosecution by private persons. x x x Prosecuting officers under
the power vested in them by law, not only have the authority but also the duty of prosecuting persons who,
according to the evidence received from the complainant, are shown to be guilty of a crime committed within the
jurisdiction of their office. They have equally the legal duty not to prosecute when after an investigation they
become convinced that the evidence adduced is not sufficient to establish a prima facie case.
x x x The Courts cannot interfere with the [prosecutor]s discretion and control of the criminal prosecution. It is
not prudent or even permissible for a Court to compel the [prosecutor] to prosecute a proceeding originally
initiated by him on an information, if he finds that the evidence relied upon by him is insufficient for conviction.
Neither has the Court any power to order a [prosecutor] to prosecute or file an information within a certain period
of time, since this would interfere with the [prosecutor]s discretion and control of criminal prosecutions. x x x In a
clash of views between a judge who did not investigate and the [prosecutor] who did, or between the [prosecutor]
and the offended party or the defendant, those of the [prosecutor]s should normally prevail. x x x[26]

IN VIEW WHEREOF, the petition is DENIED. The assailed Decision dated October 9, 2003 and Resolution dated April 15,
2004 of the Court of Appeals in CA-G.R. SP No. 76341 are AFFIRMED.
SO ORDERED.
 G.R. No. L-47593 December 29, 1943
THE INSULAR LIFE ASSURANCE CO., LTD., petitioner, vs. SERAFIN D. FELICIANO ET AL., respondents.

In a four-to-three decision promulgated on September 13, 1941, 1 this Court affirmed the judgment of the Court of Appeals in
favor of the respondents and against the petitioner for the sum of P25,000, representing the value of two insurance policies
issued by the petitioner on the life of Evaristo Feliciano. A motion to reconsider and set aside said decision has been filed by the
petitioner, and both parties have submitted exhaustive and luminous written arguments in support of their respective contentions.

The facts of the case are set forth in the majority and dissenting opinions heretofore handed down by this Court, the
salient points of which may be briefly restated as follows:

Evaristo Feliciano, who died on September 29, 1935, was suffering with advanced pulmonary tuberculosis when he
signed his applications for insurance with the petitioner on October 12, 1934. On that same date Doctor Trepp, who had
taken X-ray pictures of his lungs, informed the respondent Dr. Serafin D. Feliciano, brother of Evaristo, that the latter
"was already in a very serious ad practically hopeless condition." Nevertheless the question contained in the application
"Have you ever suffered from any ailment or disease of the lungs, pleurisy, pneumonia or asthma?" appears to have
been answered , "No" And above the signature of the applicant, following the answers to the various questions
propounded to him, is the following printed statement:1awphil.net

I declare on behalf of myself and of any person who shall have or claim any interest in any policy issued
hereunder, that each of the above answers is full, complete and true, and that to the best of my knowledge and
belief I am a proper subject for life insurance. (Exhibit K.)

The false answer above referred to, as well as the others, was written by the Company's soliciting agent Romulo M.
David, in collusion with the medical examiner Dr. Gregorio Valdez, for the purpose of securing the Company's approval
of the application so that the policy to be issued thereon might be credited to said agent in connection with the inter-
provincial contest which the Company was then holding among its soliciting agents to boost the sales of its policies.
Agent David bribed Medical Examiner Valdez with money which the former borrowed from the applicant's mother by
way of advanced payment on the premium, according to the finding of the Court of Appeals. Said court also found that
before the insured signed the application he, as well as the members of his family, told the agent and the medical
examiner that he had been sick and coughing for some time and that he had gone three times to the Santol Sanatorium and
had X-ray pictures of his lungs taken; but that in spite of such information the agent and the medical examiner told them
that the applicant was a fit subject for insurance.

Each of the policies sued upon contains the following stipulations:

This policy and the application herefor constitute the entire contract between the parties hereto. . . . Only the President, or
the Manager, acting jointly with the Secretary or Assistant Secretary (and then only in writing signed by them) have power
in behalf of the Company to issue permits, or to modify this or any contract, or to extend the same time for making any
premium payment, and the Company shall not be bound by any promise or representation heretofore or hereafter given by
any person other than the above-named officials, and by them only in writing and signed conjointly as stated.

The application contains, among others, the following statements:

18. I [the applicant] hereby declare that all the above statements and answers as well as all those that I may make to
the Company's Medical Examiner in continuation of this application, to be complete, true and correct to the best of my
knowledge and belief, and I hereby agree as follows:

1. That his declaration, with the answers to be given by me to the Medical Examiner, shall be the basis of the policy
and form part of same.
xxx xxx xxx
3. That the said policy shall not take effect until the first premium has been paid and the policy has been delivered to
and accepted by me, while I am in good health.
 4. That the agent taking this application has no authority to make, modify or discharge contracts, or to waive any of
the Company's rights or requirements.
5. My acceptance of any policy issued on this application will constitute a ratification by me of any corrections in or
additions to this application made by the Company in the space provided "For Home Office Corrections or Additions
Only." I agree that photographic copy of this applications as corrected or added to shall constitute sufficient notice to
me of the changes made. (Emphasis added.)

The petitioner insists that upon the facts of the case the policies in question are null and void ab initio and that all that the
respondents are entitled to is the refund of the premiums paid thereon. After a careful re-examination of the facts and the
law, we are persuaded that petitioner's contention is correct. To the reasons adduced in the dissenting opinion heretofore
published, we only desire to add the following considerations:

When Evaristo Feliciano, the applicant for insurance, signed the application in blank and authorized the soliciting agent
and/or medical examiner of the Company to write the answers for him, he made them his own agents for that purpose,
and he was responsible for their acts in that connection. If they falsified the answers for him, he could not evade the
responsibility for he falsification. He was not supposed to sign the application in blank. He knew that the answers to the
questions therein contained would be "the basis of the policy," and for that every reason he was required with his
signature to vouch for truth thereof.

Moreover, from the facts of the case we cannot escape the conclusion that the insured acted in connivance with the
soliciting agent and the medical examiner of the Company in accepting the policies in question. Above the signature of
the applicant is the printed statement or representation: " . . . I am a proper subject for life insurance." In another sheet of
the same application and above another signature of the applicant was also printed this statement: "That the said policy shall not
take effect until he first premium has been paid and the policy as been delivered to and accepted by me, while I am in good
health." When the applicant signed the application he was "having difficulty in breathing, . . . with a very high fever." He had
gone three times to the Santol Sanatorium and had X-ray pictures taken of his lungs. He therefore knew that he was not "a
proper subject for life insurance." When he accepted the policy, he knew that he was not in good health. Nevertheless, he not
only accepted the first policy of P20,000 but then and there applied for and later accepted another policy of P5,000.

We cannot bring ourselves to believe that the insured did not take the trouble to read the answers contained in the
photostatic copy of the application attached to and made a part of the policy before he accepted it and paid the premium
thereon. He must have notice that the answers to the questions therein asked concerning his clinical history were false,
and yet he accepted the first policy and applied for another. In any event, he obligated himself to read the policy when he
subscribed to this statement: "My acceptance of any policy issued on this application will constitute a ratification by me
of any corrections in or additions to this application made by the Company . . ." By accepting the policy he became
charged with knowledge of its contents, whether he actually read it or not. He could not ostrich-like hide his head from it
in order to avoid his part of the bargain and at the same time claim the benefit thereof. He knew, or was chargeable with
knowledge, from the very terms of the two policies sued upon (one of which is printed in English and the other in
Spanish) that the soliciting agent and the medical examiner had no power to bind the Company by any verbal promise or
oral representation. The insured, therefore, had no right to rely and we cannot believe he relied in good faith upon
the oral representation. The insured, therefore, had no right to rely and we cannot believe he relied in good faith
upon the oral representation of said agent and medical examiner that he (the applicant) was a fit subject for insurance
notwithstanding that he had been and was still suffering with advanced pulmonary tuberculosis.

From all the facts and circumstances of this case, we are constrained to conclude that the insured was a coparticipant, and
coresponsible with Agent David and Medical Examiner Valdez, in the fraudulent procurement of the policies in question
and that by reason thereof said policies are void ab initio.

Wheretofore, the motion for reconsideration is sustained and the judgment of the Court of Appeals is hereby reversed. Let
another judgment be entered in favor of the respondents and against the petitioner for the refund of the premiums
amounting to P1,389, with legal interest thereon from the date of the complaint, and without any finding as to costs.
 G.R. No. 89741 March 13, 1991
SUN INSURANCE OFFICE, LTD., petitioner, vs. COURT OF APPEALS and EMILIO TAN, respondents.

This is a petition for review on certiorari of the June 20, 1989 decision1 of the Court of Appeals in CA-G.R. SP. Case No.
13848 affirming the November 3, 1987 and January 14, 1988 orders of the Regional Trial Court 2 of Iloilo, Branch 27, in
Civil Case No. 16817, denying the motion to dismiss and the subsequent motion for reconsideration; and the August 22,
1989 resolution of the same court denying the motion for reconsideration.

On August 15, 1983, herein private respondent Emilio Tan took from herein petitioner a P300,000.00 property insurance
policy to cover his interest in the electrical supply store of his brother housed in a building in Iloilo City. Four (4) days
after the issuance of the policy, the building was burned including the insured store. On August 20, 1983, Tan filed his
claim for fire loss with petitioner, but on February 29, 1984, petitioner wrote Tan denying the latter's claim. On April 3,
1984, Tan wrote petitioner, seeking reconsideration of the denial of his claim. On September 3, 1985, Tan's counsel wrote
the Insurer inquiring about the status of his April 3, 1984 request for reconsideration. Petitioner answered the letter on
October 11, 1985, advising Tan's counsel that the Insurer's denial of Tan's claim remained unchanged, enclosing copies of
petitioners' letters of February 29, 1984 and May 17, 1985 (response to petition for reconsideration). On November 20,
1985, Tan filed Civil Case No. 16817 with the Regional Trial Court of Iloilo, Branch 27 but petitioner filed a motion to
dismiss on the alleged ground that the action had already prescribed. Said motion was denied in an order dated November
3, 1987; and petitioner's motion for reconsideration was also denied in an order dated January 14, 1988.

Petitioner went to the Court of Appeals and sought the nullification of the said Nov. 3, 1987 and January 14, 1988 orders,
but the Court of Appeals, in its June 20, 1989 decision denied the petition and held that the court a quo may continue until
its final termination.

A motion for reconsideration was filed, but the same was denied by the Court of Appeals in its resolution of August 22,
1989 (Rollo, pp. 42-43).

Hence, the instant petition.

The Second Division of this Court, in its resolution of December 18, 1989 resolved to give due course to the petition and
to require the parties to submit simultaneous memoranda (Ibid., p. 56).

Petitioner raised two (2) issues which may be stated in substance, as follows:

I WHETHER OR NOT THE FILING OF A MOTION FOR RECONSIDERATION INTERRUPTS THE

TWELVE (12) MONTHS PRESCRIPTIVE PERIOD TO CONTEST THE DENIAL OF THE INSURANCE CLAIM;

II WHETHER OR NOT THE REJECTION OF THE CLAIM SHALL BE DEEMED FINAL ONLY IF IT
CONTAINS WORDS TO THE EFFECT THAT THE DENIAL IS FINAL.

The answer to the first issue is in the negative.

While it is a cardinal principle of insurance law that a policy or contract of insurance is to be construed liberally in favor
of the insured and strictly against the insurer company, yet, contracts of insurance, like other contracts, are to be
construed according to the sense and meaning of the terms which the parties themselves have used. If such terms are clear
and unambiguous, they must be taken and understood in their plain, ordinary and popular sense (Pacific Banking Corp. v.
Court of Appeals, 168 SCRA 1 [1988]).

Condition 27 of the Insurance Policy, which is the subject of the conflicting contentions of the parties, reads:

27. Action or suit clause If a claim be made and rejected and an action or suit be not commenced either in the
Insurance Commission or in any court of competent jurisdiction within twelve (12) months from receipt of notice
 of such rejection, or in case of arbitration taking place as provided herein, within twelve (12) months after due
notice of the award made by the arbitrator or arbitrators or umpire, then the claim shall for all purposes be
deemed to have been abandoned and shall not thereafter be recoverable hereunder.

As the terms are very clear and free from any doubt or ambiguity whatsoever, it must be taken and understood in its plain,
ordinary and popular sense pursuant to the above-cited principle laid down by this Court.

Respondent Tan, in his letter addressed to the petitioner insurance company dated April 3, 1984 (Rollo, pp. 50-52),
admitted that he received a copy of the letter of rejection on April 2, 1984. Thus, the 12-month prescriptive period started
to run from the said date of April 2, 1984, for such is the plain meaning and intention of Section 27 of the insurance
policy.

While the question of whether or not the insured was definitely advised of the rejection of his claim through the letter
(Rollo, pp. 48-49) of petitioner dated February 29, 1984, may arise, the certainty of the denial of Tan's claim was clearly
manifested in said letter, the pertinent portion of which reads:

We refer to your claim for fire loss of 20th August, 1983 at Huervana St., La Paz, Iloilo City.

We now have the report of our adjusters and after a thorough and careful review of the same and the
accompanying documents at hand, we are rejecting, much to our regrets, liability for the claim under our policies
for one or more of the following reasons:

1. xxx xxx xxx

2. xxx xxx xxx

For your information, we have referred all these matters to our lawyers for their opinion as to the compensability
of your claim, particularly referring to the above violations. It is their opinion and in fact their strong
recomendation to us to deny your claim. By this letter, we do not intend to waive or relinquish any of our rights
or defenses under our policies of insurance.

It is also important to note the principle laid down by this Court in the case of Ang v. Fulton Fire Insurance Co., (2 SCRA
945 [1961]), to wit:

The condition contained in an insurance policy that claims must be presented within one year after rejection is not
merely a procedural requirement but an important matter essential to a prompt settlement of claims against
insurance companies as it demands that insurance suits be brought by the insured while the evidence as to the
origin and cause of destruction have not yet disappeared.

In enunciating the above-cited principle, this Court had definitely settled the rationale for the necessity of bringing suits
against the Insurer within one year from the rejection of the claim. The contention of the respondents that the one-year
prescriptive period does not start to run until the petition for reconsideration had been resolved by the insurer, runs
counter to the declared purpose for requiting that an action or suit be filed in the Insurance Commission or in a court of
competent jurisdiction from the denial of the claim. To uphold respondents' contention would contradict and defeat the
very principle which this Court had laid down. Moreover, it can easily be used by insured persons as a scheme or device
to waste time until any evidence which may be considered against them is destroyed.

It is apparent that Section 27 of the insurance policy was stipulated pursuant to Section 63 of the Insurance Code, which
states that:

Sec. 63. A condition, stipulation or agreement in any policy of insurance, limiting the time for commencing an
action thereunder to a period of less than one year from the time when the cause of action accrues, is void.
The crucial issue in this case is: When does the cause of action accrue?

In support of private respondent's view, two rulings of this Court have been cited, namely, the case of Eagle Star
Insurance Co. vs. Chia Yu (96 Phil. 696 (1955]), where the Court held:

The right of the insured to the payment of his loss accrues from the happening of the loss. However, the cause of
action in an insurance contract does not accrue until the insured's claim is finally rejected by the insurer. This is
because before such final rejection there is no real necessity for bringing suit.

and the case of ACCFA vs. Alpha Insurance & Surety Co., Inc. (24 SCRA 151 [1968], holding that:

Since "cause of action" requires as essential elements not only a legal right of the plaintiff and a correlated
obligation of the defendant in violation of the said legal right, the cause of action does not accrue until the party
obligated (surety) refuses, expressly or impliedly, to comply with its duty (in this case to pay the amount of the
bond).

Indisputably, the above-cited pronouncements of this Court may be taken to mean that the insured's cause of action or his
right to file a claim either in the Insurance Commission or in a court of competent jurisdiction commences from the time
of the denial of his claim by the Insurer, either expressly or impliedly.

But as pointed out by the petitioner insurance company, the rejection referred to should be construed as the rejection, in
the first instance, for if what is being referred to is a reiterated rejection conveyed in a resolution of a petition for
reconsideration, such should have been expressly stipulated.

Thus, to allow the filing of a motion for reconsideration to suspend the running of the prescriptive period of twelve
months, a whole new body of rules on the matter should be promulgated so as to avoid any conflict that may be brought
by it, such as:

a) whether the mere filing of a plea for reconsideration of a denial is sufficient or must it be supported by
arguments/affidavits/material evidence;

b) how many petitions for reconsideration should be permitted?

While in the Eagle Star case (96 Phil. 701), this Court uses the phrase "final rejection", the same cannot be taken to mean
the rejection of a petition for reconsideration as insisted by respondents. Such was clearly not the meaning contemplated
by this Court. The Insurance policy in said case provides that the insured should file his claim, first, with the carrier and
then with the insurer. The "final rejection" being referred to in said case is the rejection by the insurance company.

PREMISES CONSIDERED, the questioned decision of the Court of Appeals is REVERSED and SET ASIDE, and Civil
Case No. 16817 filed with the Regional Trial Court is hereby DISMISSED.

SO ORDERED.
 G.R. No. L-27932 October 30, 1972
UNION MANUFACTURING CO., INC. and the REPUBLIC BANK, plaintiffs, REPUBLIC BANK, plaintiff-appellant,
vs. PHILIPPINE GUARANTY CO., INC., defendant-appellee.

In a suit arising from a fire insurance policy, the insurer, Philippine Guaranty Co., Inc., defendant in the lower court and
now appellee, was able to avoid liability upon proof that there was a violation of a warranty. There was no denial thereof
from the insured, Union Manufacturing Co., Inc. With such a legally crippling blow, the effort of the Republic Bank, the
main plaintiff and now the sole appellant, 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 as its interest may appear, was in vain. The
defect being legally incurable, its appeal is likewise futile. We affirm.

As noted in the decision, the following facts are not disputed: "(1) That on January 12, 1962, the Union Manufacturing
Co., Inc. obtained certain loans, overdrafts and other credit accommodations from the Republic Bank in the total sum of
P415,000.00 with interest at 9% per annum from said date and to secure the payment thereof, said Union Manufacturing
Co., Inc. executed a real and chattel mortgages on certain properties, which are more particularly described and listed at
the back of the mortgage contract ...; (2) That as additional condition of the mortgage contract, the Union Manufacturing
Co., Inc. undertook to secure insurance coverage over the mortgaged properties for the same amount of P415,000.00
distributed as follows: (a) Buildings, P30,000.00; (b) Machineries, P300,000.00; and (c) Merchandise Inventory,
P85,000.00, giving a total of P415,000.00; (3) That as Union Manufacturing Co., Inc. failed to secure insurance coverage
on the mortgaged properties since January 12, 1962, despite the fact that Cua Tok, its general manager, was reminded of
said requirement, the Republic Bank procured from the defendant, Philippine Guaranty Co., Inc. an insurance coverage
on loss against fire for P500,000.00 over the properties of the Union Manufacturing Co., Inc., as described in defendant's
'Cover Note' dated September 25, 1962, with the annotation that 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 defendant's Fire Insurance
Policy Form; (4) That on September 27, 1962, Fire Insurance Policy No. 43170 ... was issued for the sum of P500,000.00
in favor of the assured, Union Manufacturing Co., Inc., for which the corresponding premium in the sum of P8,328.12,
which was reduced to P6,688.12, was paid by the Republic Bank to the defendant, Philippine Guaranty Co., Inc. ...; (5)
That upon the expiration of said fire policy on September 25, 1963, the same was renewed by the Republic Bank upon
payment of the corresponding premium in the same amount of P6,663.52 on September 26, 1963; (6) That in the
corresponding voucher ..., it appears that although said renewal premium was paid by the Republic Bank, such payment
was for the account of Union Manufacturing Co., Inc. and that the cash voucher for the payment of the first premium was
paid also by the Republic Bank but for the account Union Manufacturing Co., Inc.; (7) That sometime on September 6,
1964, a fire occurred in the premises of the Union Manufacturing Co., Inc.; (8) That on October 6, 1964, the Union
Manufacturing Co., Inc. filed its fire claim with the defendant Philippine Guaranty Co., Inc., thru its adjuster, H. H.
Bayne Adjustment Co., which was denied by said defendant in its letter dated November 27, 1964 ..., on the following
grounds: 'a. Policy Condition No. 3 and/or the 'Other Insurance Clause' of the policy violated because you did not give
notice to us the other insurance which you had taken from New India for P80,000.00, Sincere Insurance for P25,000.00
and Manila Insurance for P200,000.00 with the result that these insurances, of which we became aware of only after the
fire, were not endorsed on our policy; and (b) Policy Condition No. 11 was not complied with because you have failed to
give to our representatives the required documents and other proofs with respect to your claim and matters touching on
our liability, if any, and the amount of such liability'; (9) That as of September, 1962, when the defendant Philippine
Guaranty Co., issued Fire Insurance Policy No. 43170 ... in the sum of P500,000.00 to cover the properties of the Union
Manufacturing Co., Inc., the same properties were already covered by Fire Policy No. 1533 of the Sincere Insurance
Company for P25,000.00 for the period from October 7, 1961 to October 7, 1962 ...; and by insurance policies Nos. F-
2314 ... and F-2590 ... of the Oceanic Insurance Agency for the total sum of P300,000.00 and for periods respectively,
from January 27, 1962 to January 27, 1963, and from June 1, 1962 to June 1, 1963; and (10) That when said defendant's
Fire Insurance Policy No. 43170 was already in full force and effect, the Union Manufacturing Co., Inc. without the
consent of the defendant, Philippine Guaranty Co., Inc., obtained other insurance policies totalling P305,000.00 over the
same properties prior to the fire, to wit: (1) Fire Policy No. 250 of New India Assurance Co., Ltd., for P80,000.00 for the
period from May 27, 1964 to May 27, 1965 ...; (2) Fire Policy No. 3702 of the Sincere Insurance Company for
P25,000.00 for the period from October 7, 1963 to October 7, 1964 ...; and (3) Fire Policy No. 6161 of Manila Insurance
Co. for P200,000.00 for the period from May 15, 1964 to May 15, 1965 ... ."1 There is in the cover note2 and in the fire
insurance policy3 the following warranty: "[Co- Insurance Declared]: Nil."4
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 properties, 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 defendant's policy, and it appearing furthermore that while
the policy of the defendant was in full force and effect the Union Manufacturing Co., Inc. secured other fire insurance
policies without the written consent of the defendant endorsed on the 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."5 The tone of confidence apparent in the above excerpts from the lower court decision is
understandable. The conclusion reached by the lower court finds support in authoritative precedents. It is far from easy,
therefore, for appellant Republic Bank to impute to such a decision a failure to abide by the law. Hence, as noted at the
outset, the appeal cannot prosper. An affirmance is indicated.

It is to Santa Ana v. Commercial Union Assurance Co.,6 a 1930 decision, that one turns to for the first explicit
formulation as to the controlling principle. As was made clear in the opinion of this Court, penned by Justice Villa-Real:
"Without deciding whether notice of other insurance upon the same property must be given in writing, or whether a
verbal notice is sufficient to render an insurance valid which requires such notice, whether oral or written, we hold that in
the absolute absence of such notice when it is one of the conditions specified in the fire insurance policy, the policy is null
and void."7 The next year, in Ang Giok Chip v. Springfield Fire & Marine Ins. Co.,8 the conformity of the insured to the
terms of the policy, implied from the failure to express any disagreement with what is provided for, was stressed in these
words of the ponente, Justice Malcolm: "It is admitted that the policy before us was accepted by the plaintiff. The receipt
of this policy by the insured without objection binds both the acceptor and the insured to the terms thereof. The insured
may not thereafter be heard to say that he did not read the policy or know its terms, since it is his duty to read his policy
and it will be assumed that he did so." 9 As far back as 1915, in Young v. Midland Textile Insurance Company, 10 it was
categorically set forth that as a condition precedent to the right of recovery, there must be compliance on the part of the
insured with the terms of the policy. As stated in the opinion of the Court through Justice Johnson: "If the insured has
violated or failed to perform the conditions of the contract, and such a violation or want of performance has not been
waived by the insurer, then the insured cannot recover. Courts are not permitted to make contracts for the parties. The
function and duty of the courts consist simply in enforcing and carrying out the contracts actually made. While it is true,
as a general rule, that contracts of insurance are construed most favorably to the insured, yet contracts of insurance, like
other contracts, are to be construed according to the sense and meaning of the terms which the parties themselves have
used. If such terms are clear and unambiguous they must be taken and understood in their plain, ordinary and popular
sense." 11 More specifically, there was a reiteration of this Santa Ana ruling in a decision by the then Justice, later Chief
Justice, Bengzon, in General Insurance & Surety Corp. v. Ng Hua. 12 Thus: "The annotation then, must be deemed to be a
warranty that the property was not insured by any other policy. Violation thereof entitles the insurer to rescind. (Sec. 69,
Insurance Act) Such misrepresentation is fatal in the light of our views in Santa Ana v. Commercial Union Assurance
Company, Ltd. ... . The materiality of non-disclosure of other insurance policies is not open to doubt." 13As a matter of
fact, in a 1966 decision, Misamis Lumber Corp. v. Capital Ins. & Surety Co., Inc., 14 Justice J.B.L. Reyes, for this Court,
made manifest anew its adherence to such a principle in the face of an assertion that thereby a highly unfavorable
provision for the insured would be accorded recognition. This is the language used: "The insurance contract may be rather
onerous ('one sided', as the lower court put it), but that in itself does not justify the abrogation of its express terms, terms
which the insured accepted or adhered to and which is the law between the contracting parties." 15

There is no escaping the conclusion then that the lower court could not have disposed of this case in a way other than it
did. Had it acted otherwise, it clearly would have disregarded pronouncements of this Court, the compelling force of
which cannot be denied. There is, to repeat, no justification for a reversal.

WHEREFORE, the decision of the lower court of March 31, 1967 is affirmed. No costs.