Filipino Merchants Insurance Co. Inc. vs. Court of Appeals (Insurance Law)

 

Filipino Merchants Insurance Co. Inc. vs. Court of Appeals

(Insurance Law)

179 SCRA 638 (G.R. No. 85141)

November 28, 1989

 

Petitioners:	Filipino Merchants Insurance Co., Inc.
Respondents:	Court of Appeals and Choa Tiek Seng

 

J. Regalado:

 

FACTS:

 

This is an action brought by Choa Tiek Seng the consignee of the shipment of fishmeal loaded on board the SS Bouganville and unloaded at the Port of Manila on or about December 11, 1976 and seeks to recover from defendant Filipino Merchants Inc., Co. the amount of ₱51,568.62 representing damages to said shipment which has been insured by the defendant insurance company.

 

ISSUE:

 

1.  Whether an “all risks” policy covers all losses other than those caused by the willful and fraudulent act of insured.

 

2.  Whether a perfected contract of sale ever without delivery vests in the vendee an existing interest over the goods sufficient to be subject of insurance.

 

HELD:

 

1.  No. The very nature of the term “all risks” must be given a broad and comprehensive meaning as covering any loss other than a willful and fraudulent act of the insured. This is pursuant to the very purpose of an “all risks” insurance to give protection to the insured in those cases where difficulties of logical explanation or some mystery surround the loss or damage to property. An “all risk” policy has been evolved to grant greater protection than that afforded by the “perils clause” in order to assure that no loss can happen through the incidence of a cause neither insured against nor creating liability in the ship; it is written against losses, that is, attributable to external causes.

 

Generally, the burden of proof is upon the insured to show that a loss arose from a covered peril, but under an “all risks”, policy the burden is not on the insured to prove the precise cause of loss or damage for which it seeks compensation. The insured under an “all risks insurance policy” has the initial burden of proving that the cargo was in good condition when the policy attached and that the cargo was damaged when unloaded from the vessel; thereafter, the burden then shifts to the insurer to show the exception to the coverage. As we held in Paris-Manila Perfumery Co., vs. Phoenix Assurance Co., Ltd the basic rule is that the insurance company has the burden of proving that the loss is caused by the risks excepted and for want of such proof, the company is liable.

 

2.  Yes. Herein private respondent, as vendee/consignee of the goods in transit has such existing interest therein as may be subject of a valid contract of insurance. His interest over the goods is based on the perfected contract of sale. The perfected contract of sale between him and the shipper of the goods operates to vest in him an equitable title even before delivery or before the performed the conditions of the sale. The contract of shipment, whether under F.O.B., C.I.F., or C&F as in this case, is immaterial in the determination of whether the vendee has an insurable interest or not in the goods in transit. The perfected contract of sale even without delivery vests in the vendee an equitable title, an existing interest over the goods sufficient to be the subject of insurance.

 

Further, Article 1523 of the Civil Code provides that where in pursuance of a contract of sale, the seller is authorized or required to send the goods to the buyer, delivery of the goods to a carrier, whether named by the buyer or not, for the purpose of transmission to the buyer is deemed to be a delivery of the goods to the buyer, the exceptions to said rule not obtaining in the present case. The Court has heretofore ruled that the delivery of the goods on board the carrying vessels partake of the nature of actual delivery since, from that time, the foreign buyers assumed the risks of loss of the goods and paid the insurance premium covering them.

 

UCPB General Insurance Co., Inc. vs. Masagana Telemart Inc. (Insurance)

UCPB General Insurance Co., Inc. vs. Masagana Telemart Inc.

(Insurance Law)

356 SCRA 307 (G.R. No. 137172)

April 4, 2001

Petitioners:	UCPB General Insurance Co., Inc.
Respondents:	Masagana Telemart Inc.

CJ. Davide, Jr.:

FACTS:

On April 15, 1991, petitioner issued five (5) insurance policies covering respondent’s various property described therein against fire, for the period from May 22, 1991 to May 22, 1992.

In March 1992, petitioner evaluated the policies and decided not to renew them upon expiration of their terms on May 22, 1992. Petitioner advised respondent’s broker, Zuellig Insurance Broker’s, Inc. of its intention not to renew the policies.

On April 6, 1992, petitioner gave written notice to respondent of the non-renewal of the policies at the address stated in the policies.

On June 13, 1992, fire razed respondent’s property covered by three of the insurance policies petitioner issued.

On July 13, 1992, respondent presented to petitioner’s cashier at its head office five (5) manager’s checks in the total amount of ₱225,753.95, representing premium for the renewal of the policies from May 22, 1992 to May 22, 1993. No notice of loss was filed by respondent under the policies prior to July 14, 1992.

On July 14, 1992, respondent filed with petitioner its formal claim for indemnification of the insured property razed by fire.

On the same day, July 14, 1992, petitioner returned to respondent the five (5) manager’s check that it tendered, and at the same time rejected respondent’s claim for the reasons (a) that the policies had expired and were not renewed and (b) that the fire occurred on June 13, 1992, before respondent’s tender of premium payment.

On July 21, 1992, respondent filed with the Regional Trial Court, Branch 58, Makati City, a civil complaint against petitioner for recovery of ₱18,645,000.00 representing the face value of the policies covering respondent’s insured property razed by fire and for attorney’s fees.

ISSUE:

Whether Sec. 77 of the Insurance Code of 1978 must strictly be applied to petitioner’s advantage despite its practice of granting a 60 to 90 day credit term for the payment of the premiums.

HELD:

No. It can be seen at once that Section 77 does not restate the portion of Section 72 expressly permitting an agreement to extend the period to pay the premium. But are there exceptions to Section 77? The answer is in the affirmative. The first exception is provided by Section 77 itself, and that is, in case of a life or industrial life policy whenever the grace period provision applies. The second is that covered by Section 78 of the Insurance Code, which provides: SEC. 78. Any acknowledgment in a policy or contract of insurance of the receipt of premium is conclusive evidence of its payment, so far as to make the policy binding, notwithstanding any stipulation therein that it shall not be binding until premium is actually paid. A third exception was laid down in Makati Tuscany Condominium Corporation vs. Court of Appeals, wherein we ruled that Section 77 may not apply if the parties have agreed to the payment in installments of the premium and partial payment has been made at the time of loss, x x x Not only that. In Tuscany, we also quoted with approval the following pronouncement of the Court of Appeals in its Resolution denying the motion for reconsideration of its decision: x x x By the approval of the aforequoted findings and conclusion of the Court of Appeals, Tuscany has provided a fourth exception to Section 77, namely, that the insurer may grant credit extension for the payment of the premium. This simply means that if the insurer has granted the insured a credit term for the payment of the premium and loss occurs before the expiration of the term, recovery on the policy should be allowed even though the premium is paid after the loss but within the credit term.

Moreover, there is nothing in Section 77 which prohibits the parties in an insurance contract to provide a credit term within which to pay the premiums. That agreement is not against the law, morals, good customs, public order or public policy. The agreement binds the parties.

Finally in the instant case, it would be unjust and inequitable if recovery on the policy would not be permitted against Petitioner, which had consistently panted a 60- to 90-day credit term for the payment of premiums despite its full awareness of Section 77. Estoppel bars it from taking refuge under said Section, since Respondent relied in good faith on such practice. Estoppel then is the fifth exception to Section 77.

Malayan Insurance Co., Inc. vs. Cruz Arnaldo (Insurance Law)

Malayan Insurance Co., Inc. vs. Cruz Arnaldo

(Insurance Law)

154 SCRA 672 (G.R. No. L-67835)

October 12, 1987

Petitioners:	Malayan Insurance Co., Inc. (MICO)
Respondents:	Gregoria Cruz Arnaldo, in her capacity as the Insurance Commissioner and Coronacion Pinca

J. Cruz:

FACTS:

On June 7, 1981, the petitioner Malayan Insurance Co., (MICO) issued to respondent, Coronacion Pinca, a Fire Insurance Policy on her property for ₱100,000.00, effectively July 22, 1981, until July 22, 1982.

On October 15, 1981, MICO allegedly cancelled the policy for non-payment of the premium and sent the corresponding notice to Pinca.

On December 24, 1981, payment of the premium for Pinca was received by Domingo Adora agent of MICO.

On January 15, 1982, Adora remitted this payment to MICO, together with other payments.

On January 18, 1982, Pinca’s property was completely burned.

On February 5, 1982, Pinca’s payment was returned by MICO to Adora on the ground that her policy had been cancelled earlier. But Adora refused to accept it.

In due time, Pinca made the prerequisite demands for payment, which MICO rejected. She then went to the Insurance Commission. It is because she was ultimately sustained by the latter that MICO has come to us for relief.

ISSUE:

Whether there is a valid insurance contract at the time of the loss.

HELD:

Yes. MICO claims it cancelled the policy in question on October 15, 1981, for non-payment of premium. To support this assertion, it presented one of its employees, who testified that "the original of the endorsement and credit memo"—presumably meaning the alleged cancellation—"were sent the assured by mail through our mailing section." However, there is no proof that the notice, assuming it complied with the other requisites mentioned above, was actually mailed to and received by Pinca. All MICO offers to show that the cancellation was communicated to the insured is its employee's testimony that the said cancellation was sent "by mail through our mailing section," without more. The petitioner then says that its "stand is enervated (sic) by the legal presumption of regularity and due performance of duty," (not realizing perhaps that "enervated" means "debilitated," not "strengthened").