G.R. No.

L-16215             June 29, 1963

SIMEON DEL ROSARIO, plaintiff-appellee, This policy shall not cover disappearance of

vs. the Insured nor shall it cover Death, Disability,
THE EQUITABLE INSURANCE AND CASUALTY Hospital fees, or Loss of Time, caused to the
CO., INC., defendant-appellant. insured:

Vicente J. Francisco and Jose R. Francisco for . . . (h) By drowning except as a consequence
plaintiff-appellee. of the wrecking or disablement in the
K. V. Faylona for defendant-appellant. Philippine waters of a passenger steam or
motor vessel in which the Insured is travelling
PAREDES, J.: as a farepaying passenger; . . . .

On February 7, 1957, the defendant Equitable A rider to the Policy contained the following:
Insurance and Casualty Co., Inc., issued Personal
Accident Policy No. 7136 on the life of Francisco del IV. DROWNING
Rosario, alias Paquito Bolero, son of herein plaintiff-
appellee, binding itself to pay the sum of P1,000.00 to It is hereby declared and agreed that exemption
P3,000.00, as indemnity for the death of the insured. clause Letter (h) embodied in PART VI of the policy is
The pertinent provisions of the Policy, recite: hereby waived by the company, and to form a part of
the provision covered by the policy.
Part I. Indemnity For Death
On February 24, 1957, the insured Francisco del
If the insured sustains any bodily injury which Rosario, alias Paquito Bolero, while on board the
is effected solely through violent, external, motor launch "ISLAMA" together with 33 others,
visible and accidental means, and which shall including his beneficiary in the Policy, Remedios
result, independently of all other causes and Jayme, were forced to jump off said launch on
within sixty (60) days from the occurrence account of fire which broke out on said vessel,
thereof, in the Death of the Insured, the resulting in the death of drowning, of the insured and
Company shall pay the amount set opposite beneficiary in the waters of Jolo. 
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such injury:
On April 13, 1957, Simeon del Rosario, father of the
Section 1. Injury sustained other than those specified insured, and as the sole heir, filed a claim for payment
below unless excepted hereinafter. . . . . . . . P1,000.00with defendant company, and on September 13,
1957, defendant company paid to him (plaintiff) the
Section 2. Injury sustained by the wrecking or disablement sum of P1,000.00, pursuant to Section 1 of Part I of
of a railroad passenger car or street railway car in or on the policy. The receipt signed by plaintiff reads —
which the Insured is travelling as a farepaying
passenger. . . . . . . . P1,500.00 RECEIVED of the EQUITABLE
Section 3. Injury sustained by the burning of a church, INSURANCE & CASUALTY CO.,
theatre, public library or municipal administration building INC., the sum of PESOS — ONE
while the Insured is therein at the commencement of the THOUSAND (P1,000.00) Philippine
fire. . . . . . . . P2,000.00 Currency, being settlement in full for
all claims and demands against said
Section 4. Injury sustained by the wrecking or disablement Company as a result of an accident
of a regular passenger elevator car in which the Insured is which occurred on February 26, 1957,
being conveyed as a passenger (Elevator in mines insured under out ACCIDENT Policy
excluded) P2,500.00 No. 7136, causing the death of the
Assured.
Section 5. Injury sustained by a stroke of lightning or by a
cyclone. . . . . . . . P3,000.00
In view of the foregoing, this policy is
hereby surrendered and
xxx     xxx     xxx CANCELLED.

Part VI. Exceptions LOSS COMPUTATION

 Amount of Insurance                 Since the contemporaneous and subsequent
P1,000.00 acts of the parties show that it was not their
__________ intention that the payment of P1,000.00 to the
vvvvv plaintiff and the signing of the loss receipt
exhibit "1" would be considered as releasing
On the same date (September 13, 1957), Atty. the defendant completely from its liability on
Vicente J. Francisco, wrote defendant company the policy in question, said intention of the
acknowledging receipt by his client (plaintiff herein), of parties should prevail over the contents of the
the P1,000.00, but informing said company that said loss receipt "1" (Articles 1370 and 1371, New
amount was not the correct one. Atty. Francisco Civil Code).
claimed —
". . . . Under the terms of this policy, defendant
The amount payable under the policy, I company agreed to pay P1,000.00 to
believe should be P1,500.00 under the P3,000.00 as indemnity for the death of the
provision of Section 2, part 1 of the policy, insured. The insured died of drowning. Death
based on the rule of pari materia as the death by drowning is covered by the policy the
of the insured occurred under the pertinent provisions of which reads as follows:
circumstances similar to that provided under
the aforecited section. xxx     xxx     xxx

Defendant company, upon receipt of the letter, "Part I of the policy fixes specific
referred the matter to the Insurance Commissioner, amounts as indemnities in case of
who rendered an opinion that the liability of the death resulting from "bodily injury
company was only P1,000.00, pursuant to Section 1, which is effected solely thru violence,
Part I of the Provisions of the policy (Exh. F, or 3). external, visible and accidental
Because of the above opinion, defendant insurance means" but, Part I of the Policy is not
company refused to pay more than P1,000.00. In the applicable in case of death by
meantime, Atty. Vicente Francisco, in a subsequent drowning because death by drowning
letter to the insurance company, asked for P3,000.00 is not one resulting from "bodily injury
which the Company refused, to pay. Hence, a which is affected solely thru violent,
complaint for the recovery of the balance of P2,000.00 external, visible and accidental
more was instituted with the Court of First Instance of means" as "Bodily Injury" means a cut,
Rizal (Pasay City, Branch VII), praying for it further a bruise, or a wound and drowning is
sum of P10,000.00 as attorney's fees, expenses of death due to suffocation and not to
litigation and costs. any cut, bruise or wound."

Defendant Insurance Company presented a Motion to xxx     xxx     xxx

Dismiss, alleging that the demand or claim is set forth
in the complaint had already been released, plaintiff Besides, on the face of the policy Exhibit "A"
having received the full amount due as appearing in itself, death by drowning is a ground for
policy and as per opinion of the Insurance recovery apart from the bodily injury because
Commissioner. An opposition to the motion to death by bodily injury is covered by Part I of
dismiss, was presented by plaintiff, and other the policy while death by drowning is covered
pleadings were subsequently file by the parties. On by Part VI thereof. But while the policy
December 28, 1957, the trial court deferred action on mentions specific amounts that may be
the motion to dismiss until termination of the trial of recovered for death for bodily injury, yet, there
the case, it appearing that the ground thereof was not is not specific amount mentioned in the policy
indubitable. In the Answer to the complaint, defendant for death thru drowning although the latter is,
company practically admitted all the allegations under Part VI of the policy, a ground for
therein, denying only those which stated that under recovery thereunder. Since the defendant has
the policy its liability was P3,000.00. bound itself to pay P1000.00 to P3,000.00 as
indemnity for the death of the insured but the
On September 1, 1958, the trial court promulgated an policy does not positively state any definite
Amended Decision, the pertinent portions of which amount that may be recovered in case of
read — death by drowning, there is an ambiguity in
this respect in the policy, which ambiguity
xxx     xxx     xxx must be interpreted in favor of the insured and
 strictly against the insurer so as to allow forfeiture is involved," (29 Am. Jur. 181) and
greater indemnity. the reason for this rule is that the "insured
usually has no voice in the selection or
xxx     xxx     xxx arrangement of the words employed and that
the language of the contract is selected with
. . . plaintiff is therefore entitled to recover great care and deliberation by expert and
P3,000.00. The defendant had already paid legal advisers employed by, and acting
the amount of P1,000.00 to the plaintiff so that exclusively in the interest of, the insurance
there still remains a balance of P2,000.00 of company" (44 C.J.S. 1174). Calanoc v. Court
the amount to which plaintiff is entitled to of Appeals, et al., G.R. No. L-8151, Dec. 16,
recover under the policy Exhibit "A". 1955.

The plaintiff asks for an award of P10,000.00 . . . . Where two interpretations, equally fair, of
as attorney's fees and expenses of litigation. languages used in an insurance policy may be
However, since it is evident that the defendant made, that which allows the greater indemnity
had not acted in bad faith in refusing to pay will prevail. (L'Engel v. Scotish Union & Nat. F.
plaintiff's claim, the Court cannot award Ins. Co., 48 Fla. 82, 37 So. 462, 67 LRA 581
plaintiff's claim for attorney's fees and 111 Am. St. Rep. 70, 5 Ann. Cas. 749).
expenses of litigation.
At any event, the policy under consideration, covers
IN VIEW OF THE FOREGOING, the Court death or disability by accidental means, and the
hereby reconsiders and sets aside its decision appellant insurance company agreed to pay
dated July 21, 1958 and hereby renders P1,000.00 to P3,000.00. is indemnity for death of the
judgment, ordering the defendant to pay insured.
plaintiff the sum of Two Thousand (P2,000.00)
Pesos and to pay the costs. In view of the conclusions reached, it would seem
unnecessary to discuss the other issues raised in the
The above judgment was appealed to the Court of appeal.
Appeals on three (3) counts. Said Court, in a
Resolution dated September 29, 1959, elevated the The judgment appealed from is hereby affirmed.
case to this Court, stating that the genuine issue is Without costs.
purely legal in nature.
Padilla, Bautista Angelo, Labrador, Concepcion,
All the parties agree that indemnity has to be paid. Reyes, J.B.L., Barrera, Dizon and Regala, JJ.,
The conflict centers on how much should the concur.
indemnity be. We believe that under the proven facts Makalintal, J., reserves his vote.
and circumstances, the findings and conclusions of
the trial court, are well taken, for they are supported
by the generally accepted principles or rulings on
insurance, which enunciate that where there is an
ambiguity with respect to the terms and conditions of
the policy, the same will be resolved against the one
responsible thereof. It should be recalled in this
connection, that generally, the insured, has little, if
any, participation in the preparation of the policy,
together with the drafting of its terms and Conditions.
The interpretation of obscure stipulations in a contract
should not favor the party who cause the obscurity
(Art. 1377, N.C.C.), which, in the case at bar, is the
insurance company.

. . . . And so it has been generally held that

the "terms in an insurance policy, which are
ambiguous, equivocal or uncertain . . . are to
be construed strictly against, the insurer, and
liberally in favor of the insured so as to effect
the dominant purpose of indemnity or
payment to the insured, especially where a
 G.R. No. L-16215             June 29, 1963

SIMEON DEL ROSARIO, plaintiff-appellee,

vs.
THE EQUITABLE INSURANCE AND CASUALTY CO., INC., defendant-appellant.

FACT:

Plaintiff-appelle herein is the father of Francisco del Rosario who was insured with Personal Accident Policy by the
Equitable Insurance and Casualty Co., Inc, binding itself to pay the sum of 1000 to 3000 as indemnity for the death
of the insured.

The insured Francisco del Rosario, alias Paquito Bolero, while on board the motor launch "ISLAMA" together with
33 others, including his beneficiary in the Policy, Remedios Jayme, were forced to jump off said launch on account
of fire which broke out on said vessel, resulting in the death of drowning, of the insured and beneficiary in the waters
of Jolo. 
1ä

Simeon del Rosario, father of the insured, and as the sole heir, filed a claim for payment with defendant company
and company paid to him the sum of P1000.00.

The lawyers of the said plaintiff acknowledged the P1000.00 but informing that the said amount was not correct. The
plaintiff lawyer demanded for P3000,00 pesos but the company refused to pay.

Recovery for the balance of 2000.00 was then filed before the CFI, and praying for it further sum of 10,000.00 as
atty’s fees, expenses of litigation and costs.

ISSUE

W/N Simeon is entitled to recover P3,000

RULING: YES

 terms in an insurance policy, which are ambiguous, equivocal or uncertain are to

be construed strictly against, the insurer, and liberally in favor of the insured so as to
effect the dominant purpose of indemnity or payment to the insured, especially
where a forfeiture is involved
 reason for this rule is that the "insured usually has no voice in the selection or
arrangement of the words employed and that the language of the contract is selected
with great care and deliberation by expert and legal advisers employed by, and acting
exclusively in the interest of, the insurance company
,Defendant Insurance Company presented a Motion to Dismiss, alleging that the demand or claim is set forth in the
complaint had already been released, plaintiff having received the full amount due as appearing in policy and as per
opinion of the Insurance Commissioner. An opposition to the motion to dismiss, was presented by plaintiff, and other
pleadings were subsequently file by the parties. On December 28, 1957, the trial court deferred action on the motion
to dismiss until termination of the trial of the case, it appearing that the ground thereof was not indubitable. In the
Answer to the complaint, defendant company practically admitted all the allegations therein, denying only those
which stated that under the policy its liability was P3,000.00.

On September 1, 1958, the trial court promulgated an Amended Decision, the pertinent portions of which read —

xxx     xxx     xxx

Since the contemporaneous and subsequent acts of the parties show that it was not their intention that the
payment of P1,000.00 to the plaintiff and the signing of the loss receipt exhibit "1" would be considered as
releasing the defendant completely from its liability on the policy in question, said intention of the parties
should prevail over the contents of the loss receipt "1" (Articles 1370 and 1371, New Civil Code).

". . . . Under the terms of this policy, defendant company agreed to pay P1,000.00 to P3,000.00 as indemnity
for the death of the insured. The insured died of drowning. Death by drowning is covered by the policy the
pertinent provisions of which reads as follows:

xxx     xxx     xxx

"Part I of the policy fixes specific amounts as indemnities in case of death resulting from "bodily
injury which is effected solely thru violence, external, visible and accidental means" but, Part I of the
Policy is not applicable in case of death by drowning because death by drowning is not one resulting
from "bodily injury which is affected solely thru violent, external, visible and accidental means" as
"Bodily Injury" means a cut, a bruise, or a wound and drowning is death due to suffocation and not to
any cut, bruise or wound."

xxx     xxx     xxx

Besides, on the face of the policy Exhibit "A" itself, death by drowning is a ground for recovery apart from the
bodily injury because death by bodily injury is covered by Part I of the policy while death by drowning is
covered by Part VI thereof. But while the policy mentions specific amounts that may be recovered for death
for bodily injury, yet, there is not specific amount mentioned in the policy for death thru drowning although
the latter is, under Part VI of the policy, a ground for recovery thereunder. Since the defendant has bound
itself to pay P1000.00 to P3,000.00 as indemnity for the death of the insured but the policy does not
positively state any definite amount that may be recovered in case of death by drowning, there is an
ambiguity in this respect in the policy, which ambiguity must be interpreted in favor of the insured and strictly
against the insurer so as to allow greater indemnity.

xxx     xxx     xxx

. . . plaintiff is therefore entitled to recover P3,000.00. The defendant had already paid the amount of
P1,000.00 to the plaintiff so that there still remains a balance of P2,000.00 of the amount to which plaintiff is
entitled to recover under the policy Exhibit "A".

The plaintiff asks for an award of P10,000.00 as attorney's fees and expenses of litigation. However, since it
is evident that the defendant had not acted in bad faith in refusing to pay plaintiff's claim, the Court cannot
award plaintiff's claim for attorney's fees and expenses of litigation.

IN VIEW OF THE FOREGOING, the Court hereby reconsiders and sets aside its decision dated July 21,
1958 and hereby renders judgment, ordering the defendant to pay plaintiff the sum of Two Thousand
(P2,000.00) Pesos and to pay the costs.
The above judgment was appealed to the Court of Appeals on three (3) counts. Said Court, in a Resolution dated
September 29, 1959, elevated the case to this Court, stating that the genuine issue is purely legal in nature.

All the parties agree that indemnity has to be paid. The conflict centers on how much should the indemnity be. We
believe that under the proven facts and circumstances, the findings and conclusions of the trial court, are well taken,
for they are supported by the generally accepted principles or rulings on insurance, which enunciate that where
there is an ambiguity with respect to the terms and conditions of the policy, the same will be resolved against the
one responsible thereof. It should be recalled in this connection, that generally, the insured, has little, if any,
participation in the preparation of the policy, together with the drafting of its terms and Conditions. The interpretation
of obscure stipulations in a contract should not favor the party who cause the obscurity (Art. 1377, N.C.C.), which, in
the case at bar, is the insurance company.

. . . . And so it has been generally held that the "terms in an insurance policy, which are ambiguous,
equivocal or uncertain . . . are to be construed strictly against, the insurer, and liberally in favor of the
insured so as to effect the dominant purpose of indemnity or payment to the insured, especially where a
forfeiture is involved," (29 Am. Jur. 181) and the reason for this rule is that the "insured usually has no voice
in the selection or arrangement of the words employed and that the language of the contract is selected with
great care and deliberation by expert and legal advisers employed by, and acting exclusively in the interest
of, the insurance company" (44 C.J.S. 1174). Calanoc v. Court of Appeals, et al., G.R. No. L-8151, Dec. 16,
1955.

. . . . Where two interpretations, equally fair, of languages used in an insurance policy may be made, that
which allows the greater indemnity will prevail. (L'Engel v. Scotish Union & Nat. F. Ins. Co., 48 Fla. 82, 37
So. 462, 67 LRA 581 111 Am. St. Rep. 70, 5 Ann. Cas. 749).

At any event, the policy under consideration, covers death or disability by accidental means, and the appellant
insurance company agreed to pay P1,000.00 to P3,000.00. is indemnity for death of the insured.

In view of the conclusions reached, it would seem unnecessary to discuss the other issues raised in the appeal.

The judgment appealed from is hereby affirmed. Without costs.

Padilla, Bautista Angelo, Labrador, Concepcion, Reyes, J.B.L., Barrera, Dizon and Regala, JJ., concur.
Makalintal, J., reserves his vote.