Manila Mahogany Mfg. Corp v. CA (L-52756, 12 Oct. 1987) Padilla, J.: Facts: Manila Mahogany Mfg.

Corp (Manila hereinafter) insured its Mercedes Benz with Zenith Insurance Corp. (Zenith hereinafter). Such was bumped by a truck owned by San Miguel Corporation. Manila and Zenith amicably settled the amount of damage to P5,000, allowing the latter to be subrogated over all the formers right to action against San Miguel. When demanding from San Miguel the amount for the damages, through Insurance Adjusters, Inc., it said that Manila was already paid P4,500 for the damages to Manilas motor vehicle, as evidenced by a cash voucher and a Release of Claim executed by the General Manager of Manila discharging San Miguel Corporation. Zenith then asked for the reimbursement of P4,500 from Manila, to which the latter refused. Manila contended that it had a right to both amounts received, as payment for the total damages the car incurred, amounting to P9,486.43. Zenith filed with the City Court of Manila to recover the P4,500, to which the latter granted. On appeal the Court of First Instance of Manila affirmed the City Court's decision in toto, which CFI decision was affirmed by the Court of Appeals, with the modification that Manila was to pay Zenith the total amount of P5,000.00 that it had earlier received from Zenith. Hence, this petition Issue/s: Whether or not Manila had the right to receive from Zenith the amount of P5,000 and from San Miguel the amount of P4,500, covering the deficiency of the total amount of damages Held: The Supreme Court upheld the CA, stating that the right of subrogation by the insurer from the insured was nullified when Manila issued a release claim in favor of San Miguel, after agreeing with Zenith to receive the P5,000 as per insurance policy. Manila is entitled to keep the sum of P4,500.00 paid by San Miguel Corporation under its clear right to file a deficiency claim for damages incurred, against the wrongdoer, should the insurance company not fully pay for the injury caused (Article 2207, New Civil Code). However, when Manila released San Miguel Corporation from any liability, petitioner's right to retain the sum of P5,000.00 no longer existed, thereby entitling Zenith to recover the same. The SC also found it just and equitable (under the general prayer or such further or other relief as may be deemed just or equitable) to increase the amount from P4,500 to P5,000.

Saura Import Export Co. v. Phil. International Surety, (118 SCRA 150) FACTS: Saura mortgaged to PNB a parcel of land to secure the payment of a promissory note of P27,000. The mortgage was amended to guarantee an increased amount, bringing the total mortgaged debt to P37,000. The building found on the mortgaged land, as per agreement of the parties, was insured with Philippine International Surety (PSI hereinafter), an insurance firm acceptable to mortgagee Bank, for P29,000 against fire for the period of one year. Later on, PSI cancelled the insurance, to which was received by PNB. Fire broke out in the building, with losses amounting to P40,685.69. Upon refusal by PSI to pay, Saura filed a civil case with the CFI, including PNB as party defendant. CFI dismissed the complaint, hence this petition

Issue/s: Whether or not the insurance company is liable in spite of not giving notice to Saura Held: The policy in question does not provide for the notice, its form or period. The Insurance Law, Act No. 2427, 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. From what has been heretofore stated, actual notice of cancellation in a clear and unequivocal manner, preferably in writing, in view of the importance of an insurance contract, 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 insured and not to and/or through any unauthorized person by the policy. In the case at bar, the defendant insurance company, must have realized the paramount importance of sending a notice of cancellation, when it sent the notice of cancellation of the policy to the defendant PNB (as mortgagee), but not to the insured Saura with which it (insurance company) had direct dealing. It was the primary duty of the defendant-appellee insurance company to notify the insured, but it did not. The Court held insurance company liable.