MARINE INSURANCE

1. Malayan Insurance Corp. vs. CA (1997)

FACTS:
TKC Marketing imported 3,000 metric tons of soya from Brazil to Manila. It was insured by Malayan at the value
of almost 20 million pesos. The vessel, however, was stranded on South Africa because of a lawsuit regarding the
possession of the soya. TKC consulted Malayan on recovery of the amount, but the latter claimed that it wasnt
covered by the policy. The soya was sold in Africa for Php 10 million, but TKC wanted Malayan to shoulder the
remaining value of 10 million as well.
Petitioner filed suit due to Malayans reticence to pay. Malayan claimed that arrest by civil authorities wasnt
covered by the policy. The trial court ruled in TKCs favor with damages to boot. The appellate court affirmed the
decision under the reason that clause 12 of the policy regarding an excepted risk due to arrest by civil authorities
was deleted by Section 1.1 of the Institute War Clauses which covered ordinary arrests by civil authorities. Failure
of the cargo to arrive was also covered by the Theft, Pilferage, and Non-delivery Clause of the contract. Hence
this petition.
ISSUES:
1) Whether the arrest of the vessel was a risk covered under the subject insurance policies.
2) Whether the insurance policies must strictly construed against the insurer.
RULING:
1) YES. If a marine insurance company desires to limit or restrict the operation of the general provisions of its
contract by special proviso, exception, or exemption, it should express such limitation in clear and unmistakable
language.
The deletion of the F.C. & S. Clause and the consequent incorporation of subsection 1.1 of Section 1 of the
Institute War Clauses (Cargo) gave rise to ambiguity. If the risk of arrest occasioned by ordinary judicial
process was expressly indicated as an exception in the subject policies, there would have been no controversy
with respect to the interpretation of the subject clauses.
Any construction of a marine policy rendering it void should be avoided. Such policies will, therefore, be
construed strictly against the company in order to avoid a forfeiture, unless no other result is possible from the
language used.
Exceptions to the general coverage are construed most strongly against the company. Even an express
exception in a policy is to be construed against the underwriters by whom the policy is framed, and for whose
benefit the exception is introduced.
2) YES. Indemnity and liability insurance policies are construed in accordance with the general rule of resolving any
ambiguity therein in favor of the insured, where the contract or policy is prepared by the insurer
2. International Container Terminal Services Inc. vs. FGU Insurance Corp (2008)
FACTS:
Petitioner insists that the Marine Open Policy under which the shipment was insured was no longer in force at the
time it was loaded on board as provided in the Endorsement portion of the policy.
FGU, on the other hand, insists that it was under Marine Risk Note which was executed on an earlier date that
said shipment was covered.
ISSUE:
Whether the marine open policy should be upheld
RULING:
YES. A marine risk note is not an insurance policy. It is only an acknowledgment or declaration of the insurer
confirming the specific shipment covered by its marine open policy, the evaluation of the cargo and the
chargeable premium. It is the marine open policy which is the main insurance contract. Prior to the cancellation
by FGU of Marine Open Policy, it had already undertaken to insure the shipment of the 400 kgs. of silver nitrate,
specially since RAGC had already paid the premium on the insurance of said shipment.
Marine insurance policy needs to be presented in evidence before the trial court or even belatedly before the
appellate court.
3. Eastern Shipping Lines Inc., Prudential Guarantee & Assurance Inc. (2009)
4. Go Tiaco vs. Union Ins. Society of Canton (1919)

FACTS:
A cargo of rice belonging to the Go Tiaoco Brothers, was transported in the early days of May, 1915, on the
steamship Hondagua from the port of Saigon to Cebu.
On discharging the rice from one of the compartments in the after hold, upon arrival at Cebu, it was discovered
that 1,473 sacks had been damaged by sea water.
The trial court found that the inflow of the sea water during the voyage was due to a defect in one of the drain
pipes of the ship and concluded that the loss was not covered by the policy of insurance. Judgment was
accordingly entered in favor of Union Insurance and Go Tiaoco Brothers appealed.
ISSUE:
Whether perils of the sea includes entrance of water into the ships hold through a defective pipe.
RULING:
NO. It is determined that the words "all other perils, losses, and misfortunes" are to be interpreted as covering
risks which are of like kind (ejusdem generis)
According to the ordinary rules of construction these words must be interpreted with reference to the words
which immediately precede them
It must be considered to be settled, furthermore, that a loss which, in the ordinary course of events, results
from the natural and inevitable action of the sea, from the ordinary wear and tear of the ship, or from the
negligent failure of the ship's owner to provide the vessel with proper equipment to convey the cargo under
ordinary conditions, is not a peril of the sea. Such a loss is rather due to what has been aptly called the "peril
of the ship."
The insurer undertakes to insure against perils of the sea and similar perils, not against perils of the ship.
There must, in order to make the insurer liable, be "some casualty, something which could not be foreseen as
one of the necessary incidents of the adventure. Herein, the entrance of the sea water into the ship's hold
through the defective pipe already described was not due to any accident which happened during the voyage,
but to the failure of the ship's owner properly to repair a defect of the existence of which he was apprised. The
loss was therefore more analogous to that which directly results from simple unseaworthiness than to that
which results from perils of the sea
5. Cathay Insurance Co vs. CA
6. Choa Tiek Seng vs. CA
7. Filipino Merchants Insurance Co. vs. CA (1989)
FACTS:
Choa insured 600 tons of fishmeal for the sum of P267,653.59 from Bangkok, Thailand to Manila against all risks
under warehouse to warehouse terms. What was imported in the SS Bougainville was 59.940 metric tons at
$395.42 a ton. The cargo was unloaded from the ship and 227 bags were found to be in bad condition by the
arrastre.
Choa made a formal claim against the defendant Filipino Merchants Insurance Company for P51,568.62 He also
presented a claim against the ship, but the defendant Filipino Merchants Insurance Company refused to pay the
claim. The plaintiff brought an action against the company and presented a third party complaint against the
vessel and the arrastre contractor.
The court below, after trial on the merits, rendered judgment in favor of private respondent, for the sum of
P51,568.62 with interest at legal rate.
The common carrier, Compagnie, was ordered to pay as a joint debtor.
On appeal, the respondent court affirmed the decision of the lower court insofar as the award on the complaint is
concerned and modified the same with regard to the adjudication of the third-party complaint. A motion for
reconsideration of the aforesaid decision was denied. The AC made Filipino Merchants pay but absolved the
common carrier, Compagnie.
ISSUES:
1) Whether the "all risks" clause of the marine insurance policy held the petitioner liable to the private respondent
for the partial loss of the cargo, notwithstanding the clear absence of proof of some fortuitous event, casualty,
or accidental cause to which the loss is attributable
2) Whether the CA erred in not holding that the private respondent had no insurable interest in the subject cargo,
hence, the marine insurance policy taken out by private respondent is null and void.

RULING:
1) NO. An "all risks policy" should be read literally as meaning all risks whatsoever and covering all losses by
an accidental cause of any kind. Accident is construed by the courts in their ordinary and common acceptance.
Institute Cargo Clauses extends to all damages/losses suffered by the insured cargo except (a) loss or damage
or expense proximately caused by delay, and (b) loss or damage or expense proximately caused by the
inherent vice or nature of the subject matter insured.
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. The
burden then shifts to the insurer to show the exception to the coverage.
Under an 'all risks' policy, it was sufficient to show that there was damage occasioned by
some accidental cause of any kind, and there is no necessity to point to any particular cause.
2) NO. Choa, as vendee/consignee of the goods in transit, has such existing interest as may be the subject of a
valid contract of insurance. 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 conditions have been performed.
8. Monarch Insurance Co. Inc. vs. CA (2000)
9. Puromines Inc. vs. CA (1993)
10. National Food Authority vs. CA (1999)
11. Planters Products Inc. vs. CA (1993)
12. Litonjua Shipping Co. Inc. vs. Natl Seaman Board (1989)
13. Maritime Agencies & Services Inc vs. CA (1990)
14. Tabacalera Insurance Co vs. North Front Shipping Services Inc (1997)
15. Caltex Phils Inc. vs. Sulpicio Lines
16. San Miguel Corp vs. Heirs of S. Inguito (2002)
17. Phil. American General Insurance Co vs. CA (1997)
18. Roque vs. IAC (1985)
19. Madrigal, Tiangco & Co. vs. Hanson (1958)
20. Magellan Mfg Marketing Corp vs. CA (1991)
21. Delsan Transport Lines Inc. vs. CA (2001)
22. Pan Malayan Insurance Corp. vs. CA (1991)
23. De la Torre vs. CA (2011)
24. Phil. Home Assurance Corp vs. CA (1996)
25. Aboitiz Shipping Corp vs. CA (2008)
26. Oriental Assurance Corp vs. CA (1991)
27. Keppel Cebu Shipyard Inc. vs. Pioneer Insurance and Surety Corp (2009)

FIRE INSURANCE
1. Phil. Home Assurance Corp vs. CA
CASUALTY INSURANCE
1. Fortune Insurance & Surety vs. CA
Facts
Producers Bank of the Phil was insured by Fortune Insurance against robbery (Money, Security, and Payroll
Robbery policy). The loss took place along Taft Ave in Pasay City as Producers armored car was robbed. The
armored car was transferring P725k cash from the Pasay City branch to the head office in Makati.
The cash was under the custody of teller Maribeth Alampay while the car was driven by Benjamin Magalong and
escorted by Security Guard Saturnino Atiga. Driver Magalong was assigned by PRC Management Systems while
the guard was assigned by Unicorn Security Services Inc (both contractors). Atiga and Magalong were both
charged with several others in violating PD 532 or the Anti-Highway Robbery Law.
Producers filed an action to recover P725k under the policy. Fortune claims that, under the policy, the General
Exceptions preclude recovery when the loss is caused by any dishonest, fraudulent or criminal act of the
insured or any officer, employee, partner, director, trustee or authorized representative of the Insured
whether acting alone or in conjunction with others. Fortune claims that Atiga and Magalong are either
employees or authorized representatives of Producers.
RTC: Not employees, Fortune must pay
Driver and security guard were merely offered by the contractors and assigned to Producers Bank
Producers did NOT have the power to (1) select and engage (2) pay wages (3) dismiss or (4) control. It was the
respective contractors.
CA affirmed.
Labor Code is a special law designed to protect labor. Its definition of employee-employer relationships is
inapplicable to an insurance contract, which is to be constructed liberally in favor of the insured.
Had Fortune intended to apply the Labor Code in defining employee it should have stated such expressly
Fortunes contentions:
When Producers commissioned a guard and a driver to transfer its funds, they effectively and necessarily became its
authorized representatives in the care and custody of the money.
Employees of Producers. Existence of an employer-employee relationship is determined by law and being such, it
cannot be the subject of agreement. The provisions in the contracts of Producers with PRC Management System for
Magalong and with Unicorn Security Services for Atiga which state that Producers is not their employer and that it is
absolved from any liability as an employer, would not obliterate the relationship.
Power of selection and engagement, payment of wages, dismissal and control over Magalong and Atiga was vested in
and exercised by Producers
PRC and Unicorn merely labor-only contractors, thus the principal (Producers) is the direct employer.
Producers arguments (reiterate basis of RTC and CA decisions)
ISSUE:
Whether Magalong and Atiga were employees of Producers
RULING:
YES. Fortune is NOT liable. In burglary, robbery, and theft insurance, the opportunity to defraud the insurer
the moral hazard is so great that insurers have found it necessary to fill up their policies with countless
restrictions, many designed to reduce this hazard.
Persons frequently excluded under such provisions are those in the insured's service and employment. The
purpose of the exception is to guard against liability should the theft be committed by one having unrestricted
access to the property. The terms specifying the excluded classes are to be given their meaning as understood in
common speech. "Service" and "employment" are generally associated with the idea of selection, control, and
compensation.
As far as Fortune is concerned, it was its intention to exclude and exempt from protection and coverage losses
arising from dishonest, fraudulent, or criminal acts of persons granted or having unrestricted access to Producers'
money or payroll. When it used then the term "employee," it must have had in mind any person who qualifies as

such as generally and universally understood, or jurisprudentially established in the light of the 4 standards in the
determination of the employer-employee relationship.
Labor-only contracts is a question of fact. In the case, the stipulation of facts is limited to the insurance policy,
the contracts with PRC Management Systems and Unicorn Security Services, the complaint for violation of PD
532, and the information filed by the City Fiscal, there is a paucity of evidence.
They were authorized representatives. Producers entrusted the three with the specific duty to safely transfer the
money to its head office, with Alampay to be responsible for its custody in transit; Magalong to drive the armored
vehicle which would carry the money; and Atiga to provide the needed security for the money, the vehicle, and his
two other companions. The three acted as agents

2. Perla Compania de Seguros vs. Ancheta

FACTS:
On December 1977, private respondents vehicle collided with a Superlines bus along a national highway. Because
of the collision, private respondents sustained physics injuries in varying degrees of gravity. As such, they filed with a
complaint for damages against Superlines, the bus driver and Perla Compania de Seguros (Perla, the insurer of the bus.
The bus was insured with Perla for the amount of P50,000.00 as and for passenger liability and P50,000.00 as and for
third party liability. On the other hand, the vehicle in which private respondents were riding was insured with Malayan
Insurance Co.
On March 1978, the CFI judge issued an order requiring Perla to pay immediately the P5,000.00 under the "no
fault clause" as provided for under Section 378 of the Insurance Code.
Petitioners Argument:
Under Sec. 378 of the Insurance Code, the insurer liable to pay the P5,000.00 is the insurer of the vehicle in
which private respondents were riding, not petitioner, as the provision states that "[i]n the case of an occupant
of a vehicle, claim shall lie against the insurer of the vehicle in which the occupant is riding, mounting or
dismounting from."
ISSUE:
Whether petitioner is the insurer liable to indemnify private respondents under Sec. 378 of the Insurance Code
RULING:
NO. Sec. 378. Any claim for death or injury to any passenger or third party pursuant to the provision of this
chapter shall be paid without the necessity of proving fault or negligence of any kind. Provided, That for purposes
of this section
xxx
(iii) Claim may be made against one motor vehicle only. In the case of an occupant of a vehicle, claim
shall lie against the insurer of the vehicle in which the occupant is riding, mounting or dismounting
from. In any other case, claim shall lie against the insurer of the directly offending vehicle. In all cases,
the right of the party paying the claim to recover against the owner of the vehicle responsible for the
accident shall be maintained.
The following rules on claims under the "no fault indemnity" provision, where proof of fault or negligence is not
necessary for payment of any claim for death or injury to a passenger or a third party, are established:
1. A claim may be made against one motor vehicle only.
2. If the victim is an occupant of a vehicle, the claim shall lie against the insurer of the vehicle. in which he is riding,
mounting or dismounting from.
3. In any other case (i.e. if the victim is not an occupant of a vehicle), the claim shall lie against the insurer of the
directly offending vehicle.
4. In all cases, the right of the party paying the claim to recover against the owner of the vehicle responsible for the
accident shall be maintained.
The claim shall lie against the insurer of the vehicle in which the "occupant" ** is riding, and no other . The
claimant is not free to choose from which insurer he will claim the "no fault indemnity," as the law, by using the
word "shall, makes it mandatory that the claim be made against the insurer of the vehicle in which the occupant is
riding, mounting or dismounting from.

That said vehicle might not be the one that caused the accident is of no moment since the law itself provides
that the party paying the claim under Sec. 378 may recover against the owner of the vehicle responsible for the
accident.
Irrespective of whether or not fault or negligence lies with the driver of the Superlines bus, as private respondents
were not occupants of the bus, they cannot claim the "no fault indemnity" provided in Sec. 378 from petitioner. The claim
should be made against the insurer of the vehicle they were riding.

3. Shafer vs. Judge RTC

FACTS:
Sherman Shafer obtained a private car policy over his Ford Laser car from Makati Insurance Company for third party
liability (TPL). During the effectivity of the policy, Shafer got into an accident while driving the vehicle. He hit and bump
and Volkswagen driven by Felipo Legaspi causing damage amounting to 12,345 pesos and a passenger on the vehicle,
Jovencio Poblete, sustained physical injuries.
CASES:
Owner of the Volkswagen car filed a separate civil action v. Shafer for damages
Criminal case-Poblete testified on claim to serious physical injuries sustained from the accident.
Shafer was granted leave by the judge to file a 3rd party complaint v. Makati insurance Co. Court dismissed this
claiming it was premature- Shafer would have to be convicted and sentenced to pay the offended party first. Court
suggested to wait for outcome of case to determine WON Shafer has a cause of action v. insurer for 3 rd party liability
(TPL).
Shafer: dismissal of the 3rd party complaint would amount to denial of this rights, must be allowed to legally
implead the insurance company in a criminal action for reckless imprudence with a civil action jointly prosecuted.
Makati Insurance: TPL available only if defendant has a right ot demand contribution/indemnity/or other relief.
The contract of motor vehicle insurance is DISTINCT from the criminal liability of Shafer.
ISSUES & RULINGS:
1 When does liability of the insurance company arise?
Compulsory Motor Vehicle Liability Insurance in this case was for loss or damage, where the insurance policy insures
directly against liability, the insurers liability ACCURES IMMEDIATELY UPON THE OCCURRENCE OF THE
INJURY OR EVENT. No need for the insured to wait for the court decision. Third party complaint is allowed by the rules
of procedure to avoid unnecessary lawsuits, predicated on the need for expediency and avoidance of unnecessary lawsuits.
Intent of the Insurance contract: to provide compensation for death or bodily injuries suffered by innocent 3 rd parties or
passengers as a result of the negligent operation and use of vehicles
2 Can the injured sue the insurer directly?
The injured for whom the contract of insurance is intended can directly sue the insurer. Intent was to protect the injured
persons against insolvency of the insured who causes such injury

4. Republic Glass Corp vs. Qua

FACTS:
Republic and Gervel seeks to recover from Qua his share in the payment they made as sureties of Ladtek.
Ladtek obtained a loan from Metrobank. Republic Glass (RGC), Gervel, and Qua were Ladtek's sureties.
Agreement: RGC, Gervel and Qua would reimburse each other the proportionate share on any sum that any of
them might pay to the creditor (Metrobank).
Ladtek defaulted. RGC and Gervel paid a sum of money thereby partially paying Ladtek's obligation to
Metrobank. They then wrote to Qua demanding that he pay them. Qua refused. As a result, RGC and Gervel
foreclosed several stocks Qua owned and sold them. Qua is not happy.
TC & CA: Qua is not liable to reimburse RGC and Gervel. RGC and Gervel only made partial payments and did
not pay the entire obligation. Hence, Qua remains to be solely liable for the remaining debt. The foreclosure and

sale of Qua's stocks was unjustified because the obligation secured by the underlying pledgee had been
extinguised by novation.
RGC and Gervel contention in this appeal: Payment of the entire obligation is not a condition sine qua non for
them to claim reimbursement from Qua.
ISSUE:
Whether Payment of the entire obligation is not a condition sine qua non for them to claim reimbursement from
Qua
Whether they are entitled to reimbursement
RULING:
NO. Payment of entire obligation is not a requisite for liability to arise in a contract of indemnity against liablity.
The contract becomes operative as soon as the liability of the person indemnified arises (because of default)
whether or not he has suffered actual loss.
HOWEVER, if we allow RGC and Gervel to collect from Qua, then Qua would pay much more than his
stipulated liability. They can recover reimbursement from the co-debtor Qua only in so far as their payment
exceed their share in the obligation. This is not the case here. The two paid less than their share in the obligation,
therefore they cannot demand reimbursement since their payment is actually less than their actual debt.
In addition to theP3,860,646 claimed by RGC and Gervel, Qua would have to pay his liability of P6.2 million to
Metrobank and more than P1 million to PDCP. Since Qua would surely exceed his proportionate share, he would
then recover from RGC and Gervel the excess payment. This situation is absurd and circuitous.
5. Associated Insurance vs. Chua
6. Guingon vs. Del Monte
FACTS:
Plaintiffs: Guingon Family
Defendants: Iluminado Del Monte (jeepney driver), Julio Aguilar, Capital Insurance & Surety Co
Julio Aguilar was a jeepney operator. He insured his jeepneys with Capital Insurance against third-party liability.
A provision of the insurance policy called Liability to the Public states that Capital Insurance will indemnify the
INSURED in the event of accident arising out of the use of the motor vehicle or in connection with loading/unloading
of passengers, against all sums including the claimants costs and expenses which the INSURED shall be liable to
pay in respect of:
a Death of or bodily injury to any person
b Damage to property
One of Aguilars jeepney drivers, driving one of the jeepneys insured, bumped Gervasio Guingon who had just
alighted from another jeep.
- Guingon died some days later.
The driver was charged and found guilty of homicide thru reckless imprudence.
The heirs of Guingon filed an action for damages
- they prayed that P80k be paid to them jointly and severally by the driver, Julio Aguilar, and Capital Insurance
In the policy is a no action clause that says:
- ...nothing contained in this policy shall give any person the right to join the Company as co-defendant in
any action against the Insured to determine the Insureds liability
Capital Insurance says:
- The Guingons have no cause of action against it because of the no action clause in the policy.
ISSUES:
Whether Capital Insurance may be sued by the Guingons
Whether Capital Insurance may be sued jointly with the Insured
RULING:
YES. Capital Insurance may be sued. The policy involves insurance for third-party liability. Since the insured is liable to
the third person, such third person can sue the insurer.
The right of the person injured to sue the insurer of depends on whether the contract of insurance is intended to
benefit third persons also or only the insured.

If the contract provides for indemnity against liability to third persons , third persons can sue the insurer.
If the contract is for indemnity against actual loss or payment third persons cannot sue the insurer (the
contract being solely to reimburse the insured for liability actually discharged by him thru payment to third
persons)

Re: May be sued jointly with Aguilar

Rules of Court Sec 5 Rule 2 (Joinder of causes of action) and Sec 6 Rule 3 (Permissive joinder of parties) are aimed
at avoiding multiplicity of suits.
The no action clause cannot override procedural rules

7. Malayan Insurance vs. CA

8. First Integrated Bonding vs. Hernando
9. Heirs of G.V. Poe vs. Malayan
10. Vda de Maglana vs. Consolacion
FACTS:
Bureau of Customs employee Lope Maglana was on his way to work, driving a BoC-owned motorcycle, when a
PUJ jeep bumped him. He was thrown from the road, and he died on the spot.
Maglanas heirs filed an action for damages against the jeepney operator and Afisco Insurance [AFISCO]. An
information for homicide thru reckless imprudence was filed against the driver. The lower court found that the
jeepney operator did not exercised sufficient diligence. AFISCO was ordered to reimburse whatever amounts
the jeepney operator shall have paid only up to the extent of its insurance coverage.
ARGUMENTS
- MAGLANAs AFISCO should not merely be held secondarily liable. The 20k coverage of the insurance policy
issued by AFISCO should have been awarded in their favor.
o IC: The insurer's liability is direct and primary and/or jointly and severally with the operator of the
vehicle, although only up to the extent of the insurance coverage.
o Insurance policy provides: In the event of the death of any person entitled to indemnity under this Policy,
the Company will, in respect of the liability incurred to such person indemnify his personal
representatives in terms of, and subject to the terms and conditions hereof.
- AFISCO Presumption: JOINT obligation, since IC does not expressly provide for a solidary obligation
The lower court denied the Maglanas MfR. Since the insurance contract is in the nature of suretyship, then AFISCOs
liability is secondary only up to the extent of the coverage.
ISSUE:
Whether AFISCO is directly liable with the jeepney operator up to the extent of its insurance coverage.
RULING:
YES. AFISCOs liability based on the insurance contract is direct [but NOT solidary with jeepney operators liability
under NCC 2180]. Since the Maglanas received 5k from AFISCO under the no-fault clause, AFISCO's liability is now
limited to 15k. The Maglanas can choose from either of the following:
- Claim P15,000 from AFISCO and the balance from the jeepney operator
- Enforce the entire judgment from the jeepney operator subject to reimbursement from AFISCO to the extent of
the insurance coverage
The UNDERLYING REASON behind the third party liability of the Compulsory Motor Vehicle Liability Insurance
is to protect injured persons against the insolvency of the insured who causes such injury, and to give such injured
person a certain beneficial interest in the proceeds of the policy.

Where an insurance policy insures directly against liability, the insurer's liability accrues immediately upon
the occurrence of the injury or event upon which the liability depends, and does not depend on the recovery of
judgment by the injured party against the insured.
AFISCO is directly liable, but NOT solidarily liable with jeepney operator
Where the insurance contract provides for indemnity against liability to third persons, such third persons can directly sue
the insurer. However, the insurers direct liability under indemnity contracts against third party liability does not mean that
the insurer can be held solidarily liable with the insured and/or the other parties found at fault. Insurers liability is based
on contract; insureds liability based on tort.
While in solidary obligations, the creditor may enforce the entire obligation against one of the solidary debtors,
in an insurance contract, the insurer undertakes for a consideration to indemnify the insured against loss, damage or
liability arising from an unknown or contingent event.
11. GSIS vs. CA
12. Philamcare Health System vs. CA
13. Blue Cross Health Care vs. Olivarez
14. Philhealth vs. CIR
15. Vda de Gabriel vs. CA
16. Dela Cruz vs. Capital Insurance
17. Filipino Merchants vs. CA
18. GSIS vs. Angel
19. Pan Malayan Insurance vs. CA
20. NFD Intl Manning Agents vs. Illereas
21. Sun Insurance vs. CA
22. Biagtan vs. Insular Life Assurance
23. Finman General Assurance vs. CA
SURETYSHIP
1. Machete vs. Hospicio de San Jose
2. AFP General Insurance vs. Molina
3. Reparations Commission vs. Universal Deep-Sea
4. Arranz vs. Manila Fidelity & Surety
FACTS:
Ylang ylang distillery: creditor/obligee
Arranz: principal
Manila fidelity: surety
Arranz brought a property from Ylang Ylang (did not say what property). Manila fidelity undertook to be Arranz'
surety in his obligation to Ylang ylang distillery.
Surety stipulation: Distillery can proceed against Manila Fidelity without proceeding against the Principal
(Arranz) for the latters' obligation.

As added security in favor this time of Manila fidelity, Arranz also executed a mortgage of his property for any
loss that will be suffered by Manila Fidelity (by virtue of Manila answering Arranz' obligations to Distillery.)
1st installment (50K) on the property became due and Manila Fidelity was unable to pay Ylang-ylang.
2nd installment (40K) became due, and Manila fidelity still was unable to pay.
Arranz, in order to be able to pay his obligations, wanted to mortgage the same properties to PNB in order to
secure a loan. But PNB will only agree if Arranz were to cancel the initial mortgage he executed on the property
in favor of Manila Distillery. In response, Manila Distillery will only accede to this cancellation of the mortgage
originally established in its favor if Arranz pays the premiums he owes for the years 1950-1945 amounting to
Php7,200.
Arranz was constrained to pay the premiums because he needed the loan from PNB in order to be able to pay
Ylang-ylang distillery.
Present case: Arranz wants to recover the amount he paid Manila Fidelity as premium. He asserts that the
premiums were not due and he is not obliged to pay them since Manila fidelity failed to pay Ylang-ylang.

ISSUE:
Is Arranz under obligation to pay the premiums because of his surety (manila fidelity)'s failure to pay the
indebtedness he secured from Ylang-ylang?
RULING:
Yes, Manila Fidelity, as Arranz' surety, committed no breach. Their agreement only allowed the creditor (Ylangylang) to proceed against the surety without the need of proceeding against Arranz. The failure or refusal of the
surety to pay the debt for the principal's account did not have the effect of relieving the principal of his obligation
to pay the premium on the bond furnished.
As long as the liability of the surety to creditor exists, the premium remains to be collectible from Arranz. As the
loan and interest to Ylang-ylang remains unpaid, the surety continued to be bound to the creditor & as a corollary
its right to premiums.

5. Capital Insurance vs. Ronquillo Trading

6. Finman vs. Inocencio