Vda. de Gabriel vs. Court of Appeals (Insurance Law)

Vda. de Gabriel vs. Court of Appeals

(Insurance Law)

264 SCRA 137 (G.R. No. 103883)

November 11, 1996

Petitioners:	Jacqueline Jimenez Vda. de Gabriel
Respondents:	Court of Appeals and Fortune Insurance and Surety Company, Inc.

J. Vitug:

FACTS:

The petitioner for review on certiorari seeks the reversal of the decision of the Court of Appeals setting aside the judgment of the Regional Trial Court which ordered private respondent Fortune Insurance and Surety Company, Inc., to pay petitioner Jacqueline Jimenez Vda. de Gabriel, the surviving spouse and beneficiary in an accident (group) insurance of her dead husband, the amount of ₱100,000.00, plus legal interest.

Marcelino Gabriel, the insured, was employed by Emerald Construction & Development Corporation (“ECDC”) at its construction project in Iraq. He was covered by a personal accident insurance in the amount of ₱100,000.00 under a group policy procured from private respondent by ECDC for its overseas workers.

On May 22, 1982, within the life of the policy, Gabriel died in Iraq. A year later, or on July 12, 1983, ECDC reported Gabriel’s death to private respondent by telephone. Ultimately private respondent denied the claim of ECDC on the ground of prescription. Petitioner went to court alleging that her husband died of electrocution while working.

ISSUE:

Whether or not the cause of action had prescribed.

HELD:

Yes. On the issue of “prescription”, private respondent correctly invoked Section 384 of the Insurance Code; viz: “Sec. 384. Any person having any claim upon the policy issued pursuant to this chapter shall without any unnecessary delay, present to the insurance company concerned a written notice of claim setting forth the nature, extent and duration of the injuries sustained as certified by a duly licensed physician. Notice of claim must be filed within six months from date of the accident, otherwise, the claim shall be deemed waived. Action or suit for recovery of damage due to loss or injury must be brought, in proper cases, with the Commissioner on the Courts within one year from the denial of the claim, otherwise, the claimant’s right of action shall prescribe.” The notice of death was given to private respondent, concededly, more than a year after the death of petitioner’s husband. Private respondent in invoking prescription, was not referring to the one-year period from the denial of the claim within which to file an action against an insurer but obviously to the written notice of claim that had to be submitted within six months from the time of the accident.

Yes. The petitioner’s claim that the insurance covered only the building and not the elevator is absured, to say the least. This Court has little patience with puerile arguments that affront common sense, let alone basic legal principles with which even law students are familiar. The circumstance that the building insured is seven stories high and so had to be provided with elevators a legal requirement known to the petitioner as an insurance company makes its contention all the more ridiculous.

No less preposterous is the petitioner’s claim that the elevators were insured after the occurrence of the fire, a case of shutting the barn door after the horse had escaped, so to speak. This pretense merits scant attention. Equally underserving of serious is its submission that the elevators were not damaged by the fire, against the report of arson investigators of the INP and indeed, its own expressed admission in its answer where it affirmed that the fire “damaged or destroyed a portion of the 7^th floor of the insured building and more particularly a Hitachi elevator control panel.”

The petitioner argues that since at the time of the fire the building insured was worth ₱5,800,000.00, the private respondent should be considered its own insurer for the difference between that amount and the face value of the policy and should share pro rata in the loss sustained. Accordingly, the private respondent is entitled to an indemnity of only ₱67,629.31, the rest of the loss to be shouldered by it alone. In support of this contention, the petitioner cites Condition 17 of the policy, which provides: xxx. However, there is no evidence on record that the building was worth ₱5,800,000.00 at the time of the loss; only the petitioner says so and it does not back up its self-serving estimate with any independent corroboration. On the contrary, the building was insured at ₱2,500,000.00, and this must be considered, by agreement of the insurer and the insured, the actual value of the property insured on the day the fire occurred. This valuation becomes even more believable if it is remembered that at the time the building was burned it was still under construction and not yet completed.

As defined in the aforestated provision, which is not Section 60 of the Insurance Code,” and open policy is one which the value of the thing insured is not agreed upon but is left to be ascertained in case of loss.” This means that the actual loss, as determined will represent the total indemnity due the insured from the insurer except only that the total indemnity shall not be exceed the face value of the policy.

The actual loss has been ascertained in this case and, to repeat, this Court will respect such factual determination in the absence of proof that it was arrived at arbitrarily. There is no such showing. Hence, applying the open policy clause as expressly agreed upon by the parties in their contract we hold that the private respondent is entitled to the payment of indemnity under the said contract in the total amount of ₱508,867.00.