DIOSDADO C.

TY vs FILIPINAS COMPAÑIA DE SEGUROS, et al

G.R. No. L-21821-22 and L-21824-27

May 31, 1966

FACTS:

Ty was an employee of Broadway Cotton Factory at Grace Park, Caloocan City, working as
mechanic operator, with monthly salary of P185.00.

He took Personal Accident Policies from several insurance companies, among which are herein
respondents, on different dates, effective for 12 months.

During the effectivity of these policies, or on December 24, 1953, a fire broke out in the factory and
as Ty was trying to put out said fire with a fire extinguisher, a heavy object fell upon his left hand.

Ty received treatment at the National Orthopedic Hospital from December 26, 1953 to February 8,
1954 which injuries, the attending surgeon certified, would cause temporary total disability of Ty's left
hand.

The insurance companies refused to pay his claim for compensation under the policies by reason
of the said disability of his left hand.

On appeal to the Court of First Instance by the insurance companies, the cases were dismissed on
the ground that under the uniform terms of the insurance policies, partial disability of the insured
caused by loss of either hand to be compensable, the loss must result in the amputation of that
hand. Hence, these appeals by the insured.

Ty based his claim for indemnity under the provision of the insurance contract. ("any Bodily Injury
which is effected by x x x accidental means, and which shall not prove fatal but shall result, x x x in
Total or Partial Disability of the Insured, the Company shall pay x x x either hand 650.00)

Appellant contends that to be entitled to indemnification under the foregoing provision, it is enough
that the insured is disabled to such an extent that he cannot substantially perform all acts or duties of
the kind necessary in the prosecution of his business.

It is argued that what is compensable is the disability and not the amputation of the hand. The
definition of what constitutes loss of hand, placed in the contract, according to appellant,
consequently, makes the provision ambiguous and calls for the interpretation thereof by this Court.

ISSUE: WON the Insurance companies must indemnify Ty under the insurance policies.

RULING: No. The Court cannot go beyond the clear and express conditions of the insurance
policies, all of which definite partial disability as loss of either hand by amputation through the bones
of the wrist. There was no such amputation in the case at bar. All that was found by the trial court,
which is not disputed on appeal, was that the physical injuries "caused temporary total disability of
plaintiff's left hand." Note that the disability of plaintiff's hand was merely temporary.
We might add that the agreement contained in the insurance policies is the law between the parties.
As the terms of the policies are clear, express and specific that only amputation of the left hand
should be considered as a loss thereof, an interpretation that would include the mere fracture or
other temporary disability not covered by the policies would certainly be unwarranted.
FILIPINAS COMPAÑIA DE SEGUROS vs CHRISTERN, HUENEFELD and CO., INC.

G.R. No. L-2294

May 25, 1951

FACTS:

On October 1, 1941, Christern Huenefeld, & Co., Inc., obtained from the petitioner ,Filipinas Cia. de
Seguros, fire policy in the sum of P1000,000, covering merchandise contained in a building located
at No. 711 Roman Street, Binondo Manila.

During the Japanese military occupation, the building and insured merchandise were burned.

The salvage goods were sold at public auction and, after deducting their value, the total loss
suffered by the respondent was fixed at P92,650.

The petitioner refused to pay the claim on the ground that the policy in favor of the respondent that
ceased to be a force on the date the United States declared war against Germany, the respondent
corporation (through organized under and by virtue of the laws of Philippines) being controlled by
German subjects and the petitioner being a company under American jurisdiction when said policy
was issued on October 1, 1941.

The theory of the petitioner is that the insured merchandise were burned up after the policy issued in
1941 in favor of the respondent corporation has ceased to be effective because of the outbreak of
the war between the United States and Germany on December 10, 1941, and that the payment
made by the petitioner to the respondent corporation during the Japanese military occupation was
under pressure.

ISSUE: Whether or not Filipinas is liable to Christern, Huenfeld & Co.

RULING: NO. There is no question that majority of the stockholders of the respondent corporation
were German subjects. This being so, we have to rule that said respondent became an enemy
corporation upon the outbreak of the war between the United States and Germany.

The Philippine Insurance Law (Act No. 2427, as amended,) in section 8, provides that "anyone
except a public enemy may be insured." It stands to reason that an insurance policy ceases to be
allowable as soon as an insured becomes a public enemy.

Effect of war, generally. — All intercourse between citizens of belligerent powers which is
inconsistent with a state of war is prohibited by the law of nations. Such prohibition includes all
negotiations, commerce, or trading with the enemy; x x x It further prohibits insurance upon trade
with or by the enemy, upon the life or lives of aliens engaged in service with the enemy; this for
the reason that the subjects of one country cannot be permitted to lend their assistance to
protect by insurance the commerce or property of belligerent, alien subjects, or to do anything
detrimental too their country's interest.

In the case of an ordinary fire policy, which grants insurance only from year, or for some other
specified term it is plain that when the parties become alien enemies, the contractual tie is
broken and the contractual rights of the parties, so far as not vested. lost. (Vance, the Law on
Insurance, Sec. 44, p. 112.)
The respondent having become an enemy corporation on December 10, 1941, the insurance policy
issued in its favor on October 1, 1941, by the petitioner (a Philippine corporation) had ceased to be
valid and enforcible, and since the insured goods were burned after December 10, 1941, and during
the war, the respondent was not entitled to any indemnity under said policy from the petitioner.

However, the petitioner will be entitled to recover only the equivalent, in actual Philippines currency
of P92,650 paid on April 19, 1943, in accordance with the rate fixed in the Ballantyne scale.

Wherefore, respondent corporation is ordered to pay to the petitioner the sum of P77,208.33,
Philippine currency, less the amount of the premium, in Philippine currency