AMBIGUITIES:

Del Rosario v. Equitable Insurance GR No. L-16215, June 29, 1963

Facts:
Defendant Equitable Insurance and Casualty Co., Inc., issued Personal Accident
Policy on the life of Francisco del Rosario binding itself to pay P1,000 to P3,000 as
indemnity in case of death. It does not however cover disappearance of the insured and
drowning as a consequence of the wrecking or disablement in the Philippine waters of a
passenger steam or motor vehicle. But then, this clause was waived later on by the
company but no amount was specified for it.
On February 24, 1957, del Rosario while on board the motor launch of “ISLAMA”
together with 33 others including his beneficiary were forced to jump offsaid launch on
account of fire which broke out on the vessel, resulting in his death by drowning and of
the beneficiary.
The father of the insured then filed a claim and defendant company paid to him
P1,000. On the same date, Atty. Francisco acknowledged receipt but informed the
company that it was not the correct one because such was only for those caused by
bodily injury. That it should be P1,500 as covered by Section 2 of the policy. They then
referred the case to the Insurance Commissioner who rendered an opinion that the
amount of liability was only P1,000.
In the meantime, Atty Francisco asked for P3,000 which the company refused.
Hence, this case. The trial court ruled that plaintiff was entitled to recover P3,000.

Issue:
Whether or not plaintiff is entitled to recover P3,000.

Ruling:
The Supreme Court upheld the decision of the lower court. As held by the lower
court, death by drowning is covered by the Policy, but such is not one resulting from
“bodily injury”. Because bodily injury means “a cut, a bruise, or a wound” and drowning
is death due to suffocation not to any cut, bruise, or wound.
And since, there is no specific amount mentioned in the policy for death thru
drowning, the ambiguity must be interpreted in favor of the insured and strictly against
the insurer. It is further stated by the court that the insured, has little if any,
participation in the preparation of the policy. The interpretation of obscure stipulations
in a contract should not favor the party who cause the obscurity which in this case, is the
insurance company.
Lastly, where two interpretations, equally fair, of languages used in an insurance
policy may be made, that which allows the greater indemnity shall prevail. Plaintiff is
therefore entitled to recover P3,000.