Case Digest

Perez vs.
Court of Appeals
Case
G.R. No. 112329
Ponente
YNARES-SANTIAGO, J
Decision Date
Jan 28, 2000
A widow's claim for increased insurance coverage is denied after her husband's death, as
the policy was not issued before his passing, resulting in a null and void contract that
cannot be rescinded.
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Facts:
 Primitivo B. Perez was insured with BF Lifeman Insurance
Corporation since 1980 for P20,000.00.
 Perez was convinced to increase the coverage to P50,000.00 and
avail of its promotional discount.
 There was a delay in processing the application form.
 Perez died in an accident before the policy was issued.
 BF Lifeman approved the application form and issued the
corresponding policy a few days after his death.
 Virginia A. Perez, the widow of Primitivo Perez, claimed the
benefits under the insurance policies.
 She was paid under the first insurance policy but was refused the
claim under the increased coverage.
 The insurance company argued that the insurance had not been
perfected at the time of the insured's death.
 BF Lifeman filed a complaint for rescission of the contract, while
Virginia Perez filed a counterclaim for collection of the amount
under the increased policy.
 The trial court ruled in favor of Virginia Perez, but the Court of
Appeals reversed the decision, stating that the insurance
contract for the increased indemnity could not have been
perfected since the insured was already dead when the policy
was issued.
Issue:
 Whether the insurance contract for increased coverage can be
considered perfected even if the insured had already died before
the policy was issued.
Ruling:
 The Supreme Court affirmed the decision of the Court of Appeals,
declaring the insurance policy for increased indemnity null and
void.
 The non-fulfillment of the suspensive condition, which required
the policy to be delivered and accepted by the applicant while in
good health, resulted in the non-perfection of the contract.
 Rescission presupposes the existence of a valid contract, and a
contract that is null and void cannot be the subject of rescission.
Ratio:
 A contract of insurance, like all other contracts, requires the
assent of both parties.
 The contract is only deemed perfected when the applicant pays
the premium, receives, and accepts the policy while in good
health.
 In this case, the applicant had already died before the policy was
issued, and there was no way for the acceptance of the
application to be communicated to the applicant.
 The condition that the policy must be delivered and accepted by
the applicant while in good health is a suspensive condition, not
a potestative one, as it depends on the happening of an event.
 The delay in processing the application papers does not
constitute gross negligence on the part of the insurance
company.
 Lastly, a contract that is null and void cannot be rescinded.
Title
Finman General Assurance Corp. vs. Court of Appeals
Case
G.R. No. 100970
Ponente
NOCON, J
Decision Date
Sep 2, 1992
A court rules that an insurance company is liable to pay the proceeds of an insurance
policy despite the insured's death resulting from murder and assault, as the policy did not
expressly exclude liability for such circumstances.
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Background and Parties Involved

 The case involves a personal accident insurance policy.
 The insurance company is Finman General Assurance
Corporation.
 The insured is Carlie Surposa.
 The beneficiaries are Carlie Surposa's parents and siblings.
Circumstances of the Case

 Carlie Surposa was covered by a personal accident insurance
policy with Finman General Assurance Corporation.
 Carlie Surposa was killed by an unidentified assailant who
stabbed him without provocation or warning.
 The beneficiaries filed a claim with the insurance company, but
the claim was denied on the grounds that murder and assault
were not covered by the policy.
Insurance Commission Ruling

 The Insurance Commission ruled in favor of the beneficiaries.
 The Insurance Commission ordered the insurance company to
pay the proceeds of the policy with interest.
Court of Appeals Decision

 The Court of Appeals affirmed the decision of the Insurance
Commission.
 The insurance company filed a petition for certiorari.
Insurance Company's Argument

 The insurance company argued that death resulting from murder
and assault should be excluded from coverage because they are
deliberate and intentional acts, not accidents.
Court's Interpretation of "Accident"

 The court disagreed with the insurance company's argument.
 The court cited the ordinary and common meaning of the terms
"accident" and "accidental" in insurance contracts.
 An accident is an event that happens by chance or fortuitously,
without intention or design, and is unexpected, unusual, and
unforeseen.
 There is no accident when a deliberate act is performed unless
there is an additional, unexpected, independent, and unforeseen
happening that produces the injury or death.
Principle of "Expresso Unius Exclusio Alterius"

 The court applied the principle of "expresso unius exclusio
alterius."
 This principle means that the mention of one thing implies the
exclusion of another.
 Since murder and assault were not expressly included in the list
of circumstances that would negate liability in the insurance
policy, the court concluded that the insurance company did not
intend to limit or exempt itself from liability for death resulting
from murder or assault.
Interpretation of Obscure Words or Stipulations in a Contract

 The court considered the interpretation of obscure words or
stipulations in a contract, as provided by Article 1377 of the Civil
Code of the Philippines.
 The interpretation should not favor the party who caused the
obscurity.
 The court interpreted the insurance contract liberally in favor of
the insured and strictly against the insurer.
 Contracts of insurance should be construed in favor of the
insured.
Court's Decision
 The court denied the petition for certiorari.
 The court upheld the decision of the Court of Appeals.
 The insurance company was ordered to pay the proceeds of the
policy to the beneficiaries.
 Saura Import Export Co. v. Philippine

International Surety - Cancellation of Policy

 118 PHIL 150

 Facts:
 > On Dec. 26, 1952, Saura mortgaged to PNB its registered parcel of land in Davao to
secure the payment of a promissory note of P27T.
 > A building of strong materials which was also owned by Saura, was erected on the
parcel of land and the building had always been covered by insurance even before the
execution of the mortgage contract.
 > Pursuant to the mortgage agreement which required Saura to insure the building
and its contents, it obtained a fire insurance for P29T from PISC for a period of 1 year
starting Oct. 2, 1954.
 > The mortgage also required Saura to endorse the insurance policy to PNB. The
memo stated: Loss if any, payable to PNG as their interest may appear, subject to the
terms, conditions and warranties of this policy.
 > The policy was delivered to PNB by Saura.
 > On Oct. 15, 1954, barely 13 days after the issuance of the fire insurance, PISC
canceled the same, effective as of the date of issue. Notice of the cancellation was
sent to PNB in writing and was received by the bank on Nov. 8, 1954.
 > On Apr. 6, 1955, the building and its contents worth P4,685 were burned. On April
11, 1985, Saura filed a claim with PISC and mortgagee bank.
 > Upon presentation of notice of loss with PNB, Saura learned for the first time that
the policy had been previously canceled by PISC, when Saura’s folder in the bank’s file
was opened and the notice of the cancellation by PISC was found.

 Issue:

 Whether or not there was proper cancellation of the policy?

 Held:
 NO.
 The policy in question does NOT provide for the notice of cancellation, its form or
period. The Insurance Law does not likewise provide for such notice. This being the
case, it devolves upon the Court to apply the generally accepted principles of
insurance, regarding cancellation of the insurance policy by the insurer.

 Actual notice of cancellation in a clear and unequivocal manner, preferably in writing
should be given by the insurer to the insured so that the latter might be given an
opportunity to obtain other insurance for his own protection. The notice should be
personal to the insurer and not to and/or through any unauthorized person by the
policy. Both the PSIC and the PNB failed, wittingly or unwittingly to notify Saura of the
cancellation made.

 The insurer contends that it gave notice to PNB as mortgagee of the property and that
was already substantial compliance with its duty to notify the insured of the
cancellation of the policy. But notice to the bank, as far as Saura herein is concerned,
is not effective notice. PISC is then ordered to pay Saura P29T, the amount involved in
the policy subject matter of this case.
Title
Great Pacific Life Assurance Co. vs. Court of Appeals
Case
G.R. No. L-31845, L-31878
Ponente
DE CASTRO, J
Decision Date
Apr 30, 1979
Great Pacific Life Assurance Co. v. Court of Appeals involves a dispute over the validity
of an insurance contract, where the Supreme Court ruled in favor of the insurance
company due to the deliberate concealment of the insured's physical condition,
emphasizing the importance of full disclosure in insurance applications and the
conditions necessary for the perfection of an insurance contract.
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Facts:
 The petitioner, Great Pacific Life Assurance Company, issued a
binding deposit receipt to the respondent, Ngo Hing, for a 20-year
endowment policy on the life of his one-year-old daughter.
 The daughter had a physical condition known as mongoloid.
 The insurance company disapproved the application because the
20-year endowment plan was not available for minors.
 Instead, they offered the Juvenile Triple Action Plan.
 The child died before the approval of the application.
 Ngo Hing filed a suit to recover the proceeds of the insurance.
 Both the trial court and the Court of Appeals ruled against him.
Issue:
 Whether the binding deposit receipt constituted a temporary
contract of the insurance.
 Whether Ngo Hing concealed the physical condition of his child.
Ruling:
 The Supreme Court ruled in favor of the insurance company.
Ratio:
 The binding deposit receipt does not insure by itself.
 No insurance contract was perfected between the parties due to
the non-compliance of the conditions provided in the binding
receipt and the concealment committed by Ngo Hing.
 A contract of insurance, like other contracts, must be assented
to by both parties, and there can be no contract unless the minds
of the parties have met in agreement.
 Full disclosure in insurance applications is important.
 Both parties have a duty to act in good faith.
 Ngo Hing's deliberate concealment of his daughter's physical
condition rendered the policy void.
 The insurance company was absolved from liability.
 Ngo Hing was ordered to be reimbursed the amount he paid.

Case Digest

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Perez vs.

Background and Parties Involved

Circumstances of the Case

Insurance Commission Ruling

Court of Appeals Decision

Insurance Company's Argument

Court's Interpretation of "Accident"

Principle of "Expresso Unius Exclusio Alterius"

Interpretation of Obscure Words or Stipulations in a Contract

 Saura Import Export Co. v. Philippine

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