3ysum insurance 2 i and ii digest

8/10/2019 3ysum Insurance 2 I and II Digest

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Gallardo V. Morales (1960)

FACTS:

CFI: Hermenegilda S. Morales to pay P7,000 to a creditor FranciscaGallardo

writ of execution was issued and delivered to the Sheriff who garnishedand levied execution on the sum of P7,000 out of the P30,000 due from

the Capital Insurance & Surety Co. Inc., to Morales as beneficiary whosehusband Luis Morales died by assassination.

Morales asked the sheriff to quash and lift said garnishment or levy on

execution invoking Rule 39, section 12, subdivision (k) of the Rules ofCourt but it was denied.

All moneys, benefits, privileges, or annuities accruing or in any mannergrowing out of any life insurance, if the annual premiums paid do not

exceed five hundred pesos, and if they exceed that sum a like exemption

shall exist which shall bear the same proportion to the moneys, benefits,privileges, and annuities so accruing or growing out of such insurance thatsaid five hundred pesos bears to the whole annual premiums paid.

Morales appealed maintaining that it was a life insurance for it insured herhusband for injuries and/or death as a result of murder or assault or

attempt thereatISSUE: W/N the insurance is a life insurance and not an accident insurance

HELD: NO. order appealed from is reversed, and the garnishment in dispute

hereby set aside and quashed

the annual premium was for P15 If it were an ordinary life insurance policy, taking into account that the

insured, Luis G. Morales, was 38 years of age and the amount of thepolicy was for P50,000.00 the annual premium would have been around

P1,206

the period for the policy was stipulated for one year, and considerations

as to age, health, occupation and other personal circumstances were nottaken into account in an accident insurance policy

Annex "1" of the opposition, shows that the Capital Insurance and SuretyCompany Inc. is a non-life insurance company and that the only authority

granted to it to transact business covers fire, marine, surety, fidelity,accident, motor car, and miscellaneous insurance, except life insurance

Accident vs Life Insurance Policy accident policy - merely insures the person from injury and or death

resulting from murder, assault, or an attempt thereat

Accident insurance indemnity or casualty contract


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life insurance policy - what is insured is the life of the subject for a

definite number of years life insurance

investment contract contract by which the insurer, for a stipulated sum, engages to pay a

certain amount of money if another dies within the time limited by thepolicy

contract for insurance for one year in consideration of an advancedpremium, with the right of assured to continue it from year to year uponpayment of a premium as stipulated

includes accident insurance, since life is insured under either contract

includes all policies of insurance in which payment of insurance money is

contingent upon loss of life

"any life insurance"

applies to ordinary life insurance contracts, as well as to those which,

although intended primarily to indemnify for risks arising from accident,

likewise, insure against loss of life due, either to accidental causes, or tothe willful and criminal act of another, which, as such, is not strictly

accidental in nature

statutes of this nature seek to enable the head of the family to secure his

widow and children from becoming a burden upon the community and,accordingly, should merit a liberal interpretation

Calanoc vs. CA (98 PHIL 79)

Facts: Basilio was a watchman of the Manila Auto Supply located at the corner of

Avenida Rizal and Zurbaran. He secured a life insurance policy from thePhilippine American Life Insurance Company in the amount of P2,000 to which wasattached asupplementary contract covering death by accident. On January 25, 1951, hedied of a gunshot wound on the occasion of a robbery committed in the house of Atty.Ojeda at the corner of Oroquieta and Zurbaran streets. Calanoc, the widow, was paidthe sum of P2,000, face value of the policy, but when she demanded the payment of theadditional sum of P2,000 representing the value of the supplemental policy, thecompany refused alleging, as main defense, that the deceased died because he wasmurdered by a person who took part in the commission of the robbery and while makingan arrest as an officer of the law which contingencies were expressly excluded in thecontract and have the effect of exempting the company from liability.

It is contended in behalf of the company that Basilio was killed which "making an arrestas an officer of the law" or as a result of an "assault or murder" committed in the placeand therefore his death was caused by one of the risks excluded bythe supplementarycontract which exempts the company from liability. This contentionwas upheld by the Court of Appeals. Hence, this petition.
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Issue: Whether or not the death of the victim comes within the purview of the exceptionclause of the supplementary policy and, hence, exempts the company from liability.

Held: NO. Basilio was a watchman of the Manila Auto Supply which was a block awayfrom the house of Atty. Ojeda where something suspicious was happening which

caused the latter to ask for help. While at first he declined the invitation of Atty. Ojeda togo with him to his residence to inquire into what was going on because he was not aregular policeman, he later agreed to come along when prompted by the trafficpoliceman, and upon approaching the gate of the residence he was shot and died. Thecircumstance that he was a mere watchman and had no duty to heed the call of Atty.Ojeda should not be taken as a capricious desire on his part to expose his life to dangerconsidering the fact that the place he was in duty-bound to guard was only a blockaway. In volunteering to extend help under the situation, he might have thought, rightlyor wrongly, that to know the truth was in the interest of his employer it being a matterthat affects the security of the neighborhood. No doubt there was some risk coming tohim in pursuing that errand, but that risk always existed it being inherent in the position

he was holding. He cannot therefore be blamed solely for doing what he believed was inkeeping with his duty as a watchman and as a citizen. And he cannot be considered asmaking an arrest as an officer of the law, as contended, simply because he went withthe traffic policeman, for certainly he did not go there for that purpose nor was he askedto do so by the policeman.

Much less can it be pretended that Basilio died in the course of an assault or murderconsidering the very nature of these crimes. In the first place, there is no proof that thedeath of Basilio is the result of either crime for the record is barren of any circumstanceshowing how the fatal shot was fired. Perhaps this may be clarified in the criminal casenow pending in court as regards the incident but before that is done anything that mightbe said on the point would be a mere conjecture. Nor can it be said that the killing wasintentional for there is the possibility that the malefactor had fired the shot merely toscare away the people around for his own protection and not necessarily to kill or hit thevictim. In any event, while the act may not exempt the triggerman from liability for thedamage done, the fact remains that the happening was a pure accident on the part ofthe victim. The victim could have been either the policeman or Atty. Ojeda for it cannotbe pretended that the malefactor aimed at the deceased precisely because he wantedto take his life.

Biagtan vs. The Insular Life Assurance Company, LTD|

Makalintal, J. March 29, 1972|

NATURE

Appeal from CFIs decision


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FACTS

- Juan Biagtan was insured with Insular for P5k and a supplementary contract Accidental Death Benefit

clause for another P5kif

"the death of the Insured resulted directly from bodily injury effected solely throughexternal and violent means sustained in an accident . . . and independently of all other causes." The clause,

however, expressly provided that it would not apply where death resulted from an injury "intentionally

inflicted by a third party."

- One night, a band of robbers entered their house. Juan went out of his room and he was met with 9 knife

stabs. He died. The robbers were convicted of robbery with homicide.

- The family was claiming the additional P5k from Insular under the Accidental Death Benefit clause.

Insular refused on the ground that the death resulted from injuries intentionally inflicted by 3rdparties and

was therefore not covered.

- Biagtans filed against Insular. CFI ruled in favor of Biagtans.

ISSUES & ARGUMENTS

WON the injuries were intentionally inflicted by a third party? Yes

RATIONALE

- Whether the robbers had the intent to kill or merely to scare the victim or to ward off

any defense he might offer, it cannot be denied that the act itself of inflicting the injuries

was intentional.

- The exception in the accidental benefit clause invoked by the appellant does not

speak of the purpose whether homicidal or not of a third party in causing the

injuries, but only of the fact that such injuries have been "intentionally" inflicted this

obviously to distinguish them from injuries which, although received at the hands of a

third party, are purely accidental.

- Examples of unintentional:

>> A gun which discharges while being cleaned and kills a bystander;

>> a hunter who shoots at his prey and hits a person instead;

>> an athlete in a competitive game involving physical effort who collides with an

opponent and fatally injures him as a result.


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- In Calanoc vs. CA: Where a shot was fired and it turned out afterwards that the

watchman was hit in the abdomen, the wound causing his death, the Court held that it

could not be said that the killing was intentional for there was the possibility that the

malefactor had fired the shot to scare the people around for his own protection and not

necessarily to kill or hit the victim. A similar possibility is clearly ruled out by the facts in

this case. For while a single shot fired from a distance, and by a person who was not

even seen aiming at the victim, could indeed have been fired without intent to kill or

injure, nine wounds inflicted with bladed weapons at close range cannot

conceivably be considered as innocent insofar as such intent is concerned.

- In Hucthcraft's Ex'r vs. Travelers' Ins. Co.(US case): where the insured was waylaid

and assassinated for the purpose of robbery, the court rendered judgment for the

insurance company and held that while the assassination of the insured was as to him

an unforeseen event and therefore accidental, "the clause of the proviso that excludes

the (insurer's) liability, in case death or injury is intentionally inflicted by any other

person, applies to this case."

DE LA CRUZ V. CAPITAL INSURANCE & SURETY CO., G.R. NO. L-21574, JUNE 30,

1966

Chris, a boxer, is a holder of an accident insurance policy. In a boxing match, he died after being

knocked out by the opponent. Can his father who is a beneficiary under said insurance policy

successfully claim indemnity from the insurance company?

Yes. Clearly, the proximate cause of death was the boxing contest. Death sustained in a

boxing contest is an accident. (De la Cruz v. Capital Insurance & Surety Co., G.R. No.L-21574, June 30, 1966)

FACTS:

Eduardo de la Cruz, employed as a mucker in the Itogon-Suyoc Mines,

Inc. in Baguio, was the holder of an accident insurance policy "againstdeath or disability caused by accidental means"

January 1, 1957: For the celebration of the New Year, the Itogon-SuyocMines, Inc. sponsored a boxing contest for general entertainment wherein

Eduardo, a non-professional boxer participated In the course of his bout with another non-professional boxer of the same

height, weight, and size, Eduardo slipped and was hit by his opponent on

the left part of the back of the head, causing Eduardo to fall, with his headhittingthe rope of the ring

He was brought to the Baguio General Hospital the following day. He died

due to hemorrhage, intracranial.
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Simon de la Cruz, the father of the insured and who was named

beneficiary under the policy, thereupon filed a claim with theinsurance company

The Capital Insurance and Surety co., inc denied stating that the deathcaused by his participation in a boxing contest was not accidental

RTC: favored SimonISSUE: W/N the cause of death was accident

HELD:YES.

Eduardo slipped, which was unintentional The terms "accident" and "accidental"

as used in insurance contracts, have not acquired any technicalmeaning and are construed by the courts in their ordinary and common

acceptation happen by chance or fortuitously, without intention and design, and which

is unexpected, unusual, and unforeseen

event that takes place without one's foresight or expectation event that proceeds from an unknown cause, or is an unusual effect of a

known cause and, therefore, not expected where the death or injury is not the natural or probable result of the

insured's voluntary act, or if something unforeseen occurs in the doing ofthe act which produces the injury, the resulting death is within the

protection of policies insuring against death or injury from accident while the participation of the insured in the boxing contest is voluntary,

the injury was sustained when he slid, giving occasion to the infliction by

his opponent of the blow that threw him to the ropes of the ring is not The fact that boxing is attended with some risks of external injuries does

not make any injuries received in the course of the game not accidental

In boxing as in other equally physically rigorous sports, such as basketballor baseball, death is not ordinarily anticipated to result. If, therefore, it

ever does, the injury or death can only be accidental or produced by some

unforeseen happening or event as what occurred in this case Furthermore, the policy involved herein specifically excluded from its

coverage (e) Death or disablement consequent upon the Insured engaging in

football, hunting, pigsticking, steeplechasing, polo-playing, racing of anykind,mountaineering, or motorcycling.

Death or disablement resulting from engagement in boxing contests wasnot declared outside of the protection of the insurance contract


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Sun Insurance Office, Ltd. v. CA and Emilio Tan

G.R. No. 89741 March 13, 1991Paras, J.

FACTS:

Emilio Tan took from Sun Insurance Office a P300,000.00 propertyinsurance policy to cover his interest in the electrical supply store of hisbrother. Four days after the issuance of the policy, the building was burnedincluding the insured store. On August 20, 1983, Tan filed his claim for fireloss with Sun Insurance Office, but on February 29, 1984, Sun InsuranceOffice wrote Tan denying the latters claim. On April 3, 1984, Tan wrote SunInsurance Office, seeking reconsideration of the denial of his claim. SunInsurance Office answered the letter, advising Tans counsel that theInsurers denial of Tans claim remained unchanged.

ISSUES:

(1)WON the filing of a motion for reconsideration interrupts the 12months prescriptive period to contest the denial of the insuranceclaim; and

(2)WON the rejection of the claim shall be deemed final only of itcontains words to the effect that the denial is final;

HELD:

(1) No. In this case, Condition 27 of the Insurance Policy of the parties

reads:

27. Action or suit clause- If a claim be made and rejectedand an action or suit be not commenced either in theInsurance Commission or in any court of competentjurisdiction within twelve (12) months from receipt ofnotice of such rejection, or in case of arbitration takingplace as provided herein, within twelve (12) months afterdue notice of the award made by the arbitrator orarbitrators or umpire, then the claim shall for all purposesbe deemed to have been abandoned and shall notthereafter be recoverable hereunder.

As the terms are very clear and free from any doubt or ambiguitywhatsoever, it must be taken and understood in its plain, ordinary andpopular sense.


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Tan, in his letter addressed to Sun Insurance Office dated April 3,1984, 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 saiddate of April 2, 1984, for such is the plain meaning and intention of Section27 of the insurance policy.

The condition contained in an insurance policy that claims must bepresented within one year after rejection is not merely a proceduralrequirement but an important matter essential to a prompt settlement ofclaims against insurance companies as it demands that insurance suits bebrought by the insured while the evidence as to the origin and cause ofdestruction have not yet disappeared.

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

Sec. 63. A condition, stipulation or agreement in anypolicy of insurance, limiting the time for commencing anaction thereunder to a period of less than one year fromthe time when the cause of action accrues, is void.

It also begs to ask, when does the cause of action accrue? Theinsureds cause of action or his right to file a claim either in the InsuranceCommission or in a court of competent jurisdiction commences from thetime of the denial of his claim by the Insurer, either expressly or impliedly.But the rejection referred to should be construed as the rejection in the firstinstance (i.e. at the first occasion or for the first time), not rejection

conveyed in a resolution of a petition for reconsideration. Thus, to allow thefiling of a motion for reconsideration to suspend the running of theprescriptive period of twelve months, a whole new body of rules on thematter should be promulgated so as to avoid any conflict that may bebrought by it, such as:

a. whether the mere filing of a plea for reconsideration of a denialis sufficient or must it be supported byarguments/affidavits/material evidence;

b. how many petitions for reconsideration should be permitted?

(2) No. The Eagle Starcase cited by Tan to defend his theory that therejection of the claim shall be deemed final only of it contains words to theeffect that the denial is final is inapplicable in the instant case. Finalrejection or denial cannot be taken to mean the rejection of a petition forreconsideration. The Insurance policy in the Eagle Star case provides thatthe insured should file his claim, first, with the carrier and then with the


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insurer. The final rejection being referred to in said case is the rejection bythe insurance company.

EL ORIENTE V. POSADAS - TAXABILITY OF INSURANCE PROCEEDS

56 PHIL 147 (1931)

Facts:

> El Oriente in order to protect itself against the loss that it might suffer by reason of the

death of its manager, A. Velhagen, who had had more than thirty-five (35) years of

experience in the manufacture of cigars in the Philippines, procured from the

Manufacturers Life Insurance Co., of Toronto, Canada, thru its local agent E. E. Elser,

an insurance policy on the life of the said A. Velhagen for the sum of $50,000, United

States currency designating itself as the beneficiary.

> El Oriente paid for the premiums due thereon and charged as expenses of its

business all the said premiums and deducted the same from its gross incomes as

reported in its annual income tax returns, which deductions were allowed upon a

showing that such premiums were legitimate expenses of its business.

> Upon the death of A. Velhagen in 1929, the El Oriente received all the proceeds of

the said life insurance policy, together with the interests and the dividends accruing

thereon, aggregating P104,957.88

> CIR assessed El Oriente for deficiency taxes because El Oriente did not include as

income the proceeds received from the insurance.

Issue:

Whether or not the proceeds of insurance taken by a corporation on the life of animportant official to indemnify it against loss in case of his death, are taxable as income

under the Philippine Income Tax Law

Held:

NOT TAXABLE.

In Chapter I of the Tax Code, is to be found section 4 which provides that, "The

following incomes shall be exempt from the provisions of this law: (a) The proceeds of

life insurance policies paid to beneficiaries upon the death of the insured . . ." Section

10, as amended, in Chapter II On Corporations, provides that, "There shall be levied,

assessed, collected, and paid annually upon the total net income received in thepreceding calendar year from all sources by every corporation . . .a tax of three per

centum upon such income . .." Section 11 in the same chapter, provides the

exemptions under the law, but neither here nor in any other section is reference made

to the provisions of section 4 in Chapter I.
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Under the view we take of the case, it is sufficient for our purposes to direct attention to

the anomalous and vague condition of the law. It is certain that the proceeds of life

insurance policies paid to individual beneficiaries upon the death of the insured are

exempt. It is not so certain that the proceeds of life insurance policies paid to corporate

beneficiaries upon the death of the insured are likewise exempt. But at least, it may besaid that the law is indefinite in phraseology and does not permit us unequivocally to

hold that the proceeds of life insurance policies received by corporations constitute

income which is taxable

It will be recalled that El Oriente, took out the insurance on the life of its manager, who

had had more than thirty-five years' experience in the manufacture of cigars in the

Philippines, to protect itself against the loss it might suffer by reason of the death of its

manager. We do not believe that this fact signifies that when the plaintiff received

P104,957.88 from the insurance on the life of its manager, it thereby realized a net profit

in this amount. It is true that the Income Tax Law, in exempting individual beneficiaries,

speaks of the proceeds of life insurance policies as income, but this is a very slight

indication of legislative intention. In reality, what the plaintiff received was in the nature

of an indemnity for the loss which it actually suffered because of the death of its

manager.

3ysum insurance 2 i and ii digest

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