G.R. No.
L-2910 June 29, 1951 (b) Whether or not, in the application of the automatic premium loan
THE MANUFACTURERS LIFE INSURANCE CO., plaintiff-appellant, vs.
BIBIANO L. MEER, in the capacity as Collector of Internal Revenue,
defendant-appellee.
Manufacturer Life Insurance in a corporation duly organized in Canada
with head office at Toronto, which maintains a branch office in Manila.
In the course of its operations before the war, plaintiff issued a number of
life insurance policies in the Philippines containing stipulations referred to
as non-forfeiture clauses.
From January 1, 1942 to December 31, 1946 for failure of the insured
under the policies to pay the corresponding premiums for one or more
years, the plaintiff's head office of Toronto, applied the provision of the
automatic premium loan clauses contained in the policy; and the net
amount of premiums so advanced or loaned totalled P1,069,254.98. On
this sum the defendant Collector of Internal Revenue assessed P17,917.12
— which plaintiff paid supra protest. The assessment was made pursuant
to section 255 of the National Internal Revenue Code as amended.
It is the plaintiff's contention that when it made premium loans or
premium advances, by virtue of the non-forfeiture clauses, it did not
collect premiums within the meaning of section 255, and therefore it is not
amendable to the tax therein provided.
ISSUES:
(a) Whether or not premium advances made by plaintiff-appellant under
the automatic premium loan clause of its policies are "premium collected"
by the Company subject to tax;
clause of plaintiff-appellant's policies, there is "payment in money, notes,
credit, or any substitutes for money";
HELD:
A) Yes.
Here again it may be urged that if the credit is paid out of the cash
surrender value, there were no new funds added to the company's
assets. Cash surrender value "as applied to life insurance policy, is the
amount of money the company agrees to pay to the holder of the policy
if he surrenders it and releases his claims upon it. The more premiums
the insured has paid the greater will be the surrender value; but the
surrender value is always a lesser sum than the total amount of
premiums paid."
The cash value or cash surrender value is therefore an amount which the
insurance company holds in trust2 for the insured to be delivered to him
upon demand. It is therefore a liability of the company to the insured.
Now then, when the company's credit for advances is paid out of the
cash value or cash surrender value, that value and the company's liability
is thereby dismissed pro tanto. Consequently, the net assets of the
insurance company increased corresponding; for it is plain mathematics
that the decrease of a person's liabilities means a corresponding increase
in his net assets.
b) yes.
Even assuming, for the sake of argument, that the operation of the
automatic loan provision contributed no additional cash to the funds of the
insurer, it must be admitted that the insurer agreed to consider the
premium paid on the strength of the automatic loan. The premium was
therefore paid by means of a "note" or "credit" or "other substitute for
money" and the taxis due because section 255 above quoted levies taxes
according to the total premiums collected by the insurer "whether such
premiums are paid in money, notes, credits or any substitutes for money.”
G.R. No. 76101-02 September 30, 1991
TIO KHE CHIO, petitioner, vs. THE HONORABLE COURT OF APPEALS and
EASTERN ASSURANCE AND SURETY CORPORATION, respondents.
On December 18, 1978, petitioner Tio Khe Chio imported (1,000) bags of
fishmeal valued at $36,000.30 from Agro Impex, U.S.A. The goods were
insured with respondent EASCO and shipped on board the M/V Peskov, a
vessel owned by Far Eastern Shipping Company. When the goods reached
Manila on January 28, 1979, they were found to have been damaged by
sea water which rendered the fishmeal useless. Petitioner filed a claim
with EASCO and Far Eastern Shipping. Both refused to pay. Whereupon,
petitioner sued them. EASCO, as the insurer, filed a counterclaim against
the petitioner for the recovery of the unpaid insurance premiums.
On June 30, 1982, the trial court rendered judgment ordering EASCO and
Far Eastern Shipping to pay petitioner solidarily the sum of P105,986.68
less the amount of P18,387.86 for unpaid premiums with interest at the
legal rate from the filing of the complaint, the sum of P15,000.00 as
attorney's fees and the costs.
The judgment became final as to EASCO but the shipping company
appealed to the Court of Appeals and was absolved from liability.
The trial court, upon motion by petitioner, issued a writ of execution
against EASCO, fixing the legal rate of interest at 12%. EASCO moved to
quash the writ alleging that the legal interest to be computed should be
(6%) per annum in accordance with Article 2209 of the Civil Code. Upon
EASCO’s petition, the CA fixed the same to (6%) per annum.
In disputing the aforesaid decision of the Court of Appeals, petitioner
maintains that not only is it unjust and unfair but it is also contrary to the
correct interpretation of the fixing of interest rates under Sections 243 and
244 of the Insurance Code. And since petitioner's claims is based on an
insurance contract, then it is the Insurance Code which must govern and
not the Civil Code.
ISSUE:
WON the CA is correct in reducing the interest to 6% per annum.
HELD: YES.
The aforecited sections of the Insurance Code are not pertinent to the
instant case. They apply only when the court finds an unreasonable delay
or refusal in the payment of the claims.
Clearly, the applicable law is Article 2209 of the Civil Code which reads:
If the obligation consists in the payment of a sum of money and the debtor
incurs in delay, the indemnity for damages, there being no stipulation to
the contrary, shall be the payment of interest agreed upon, and in the
absence of stipulation, the legal interest which is six per cent per annum.
The contending parties did not allege the rate of interest stipulated in the
insurance contract, hence the legal interest was properly pegged by the
Appellate Court at six (6%) per cent. The legal rate of interest is six (6%)
per cent per annum, and not twelve (12%) per cent, where a judgment
award is based on an action for damages for personal injury, not use or
forbearance of money, goods or credit.
G.R. No. 138737 July 12, 2001
FINMAN GENERAL ASSURANCE CORPORATION, petitioner, vs. COURT OF
APPEALS and USIPHIL INCORPORATED, respondents.
On September 15, 1981, private respondent obtained a fire insurance
policy from petitioner (then doing business under the name Summa
Insurance) covering certain properties. Under said policy, petitioner
undertook to indemnify private respondent for any damage to or loss of
said properties arising from fire.
Sometime in 1982, private respondent filed with petitioner an insurance
claim amounting to P987,126.11 for the loss of the insured properties due
to fire.
Despite repeated demands by private respondent, petitioner refused to
pay the insurance claim. Thus, private respondent was constrained to file a
complaint against petitioner for the unpaid insurance claim. In its Answer,
petitioner maintained that the claim of private respondent could not be
allowed because it failed to comply with Policy Condition No. 13 regarding
the submission of certain documents to prove the loss.
Trial ensued. On July 6, 1994, the trial court rendered judgment in favor of
private respondent. In its judgement, the trial court ordered the
defendant, to pay the plaintiff the sum of P842,683.40 and to pay 24%
interest per annum from February 28, 1985 until fully paid. On appeal, the
CA substantially affirmed the decision of the trial court.
Petitioner thereafter assailed, inter alia, the award in favor of private
respondent of an interest rate of 24% per annum. Since there was
allegedly no express finding that petitioner unreasonably denied or
withheld the payment of the subject insurance claim, then the award of
24% per annum is not proper. Petitioner opines that the judgment should
only bear the legal interest rate of 12% per annum for the delay in the
payment of the claim.
ISSUE:
WON the judgment should only bear the legal interest rate of 12% per
annum for the delay in the payment of the claim.
HELD: NO.
The 24% interest per annum computed from May 3, 1985 until fully paid, is
authorized by Sections 243 and 244 of the Insurance Code. Notably, under
Section 244, a prima facie evidence of unreasonable delay in payment of
the claim is created by the failure of the insurer to pay the claim within the
time fixed in both Sections 243 and 244. Further, the policy itself obliges
petitioner to pay the insurance claim within thirty days after proof of loss
and ascertainment of the loss made in an agreement between private
respondent and petitioner. In this case, as found by the CA, petitioner and
private respondent signed the agreement indicating that the amount due
private respondent was P842,683.40 on April 2, 1985. Petitioner thus had
until May 2, 1985 to pay private respondent’s insurance.12 For its failure
to do so, the CA and the trial court rightfully directed petitioner to pay,
inter alia, 24% interest per annum in accordance with the above quoted
provisions.
G.R. No. L-49699 August 8, 1988
PERLA COMPANIA de SEGUROS, INC., petitioner, vs. HON. CONSTANTE A.
ANCHETA
On December 27, 1977, in a collision between the IH Scout, in which
private respondents were riding, and a Superlines bus, private respondents
sustained physics injuries. Thus, they filed a complaint for damages against
Superlines, the bus driver and Perla Compania, the insurer of the bus. The
vehicle in which private respondents were riding was insured with Malayan
Insurance Co.
Perla contends that under Sec. 378 of the Insurance Code, the insurer
liable to pay is the insurer of the vehicle in which private respondents were
riding, not Perla, 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 or not petitioner is the insurer liable to indemnify private
respondents.
HELD: NO.
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. This is precisely the essence of "no fault indemnity" insurance
which was introduced to and made part of our laws in order to provide
victims of vehicular accidents or their heirs immediate compensation
pending final determination of who is responsible for the accident and
liable for the victims'injuries or death. 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.
G.R. No. L-60887 November 13, 1991
PERLA COMPANIA DE SEGUROS, INC., petitioner, vs. HON. JOSE R.
RAMOLETE, PRIMITIVA Y. PALMES, HONORATO BORBON, SR., OFFICE OF
THE PROVINCIAL SHERIFF, PROVINCE OF CEBU, respondents.
On 1 June 1976, a Cimarron PUJ owned by Nelia Enriquez, and driven by
Cosme Casas, collided with a private jeep owned and driven Calixto Palmes
(husband of Primitiva Palmes) who was then driving the private jeep. As a
result, Calixto Palmes died as a result of cardio-respiratory arrest due to a
crushed chest. The accident also caused physical injuries on the part of two
year-old Adeudatus Borbon. On 25 June 1976, private respondents
Primitiva Palmes filed a complaint for damages against Cosme Casas and
Nelia Enriquez.
On 4 April 1977, the Court ruled in favor of Primitiva Palmes. The judgment
of the trial court became final and executory and a writ of execution was
thereafter issued. The writ of execution was, however, returned
unsatisfied. Consequently, the judgment debtor Nelia Enriquez was
summoned before the trial court. She declared under oath that the
Cimarron PUJ registered in her name was covered by a third-party liability
insurance policy issued by Perla.
Thus, on 31 July 1979, Palmes filed a motion for garnishment against the
insurance policy issued by petitioner in favor of the judgment debtor. Such
was grabted. Perla then moved for quashal of the writ of garnishment,
alleging that the writ was void on the ground that it (Perla) was not a party
to the case and the trial court did not acquire jurisdiction over petitioner's
person.
ISSUE:
WON an insurance contract cannot be subjected to garnishment or
execution to satisfy the judgment.
HELD: NO.
In the present case, there can be no doubt that the trial court actually
acquired jurisdiction over petitioner Perla when it was served with the writ
of garnishment of the third-party liability insurance policy it had issued in
favor of judgment debtor Nelia Enriquez. Perla cannot successfully evade
liability thereon by such a contention.
Every interest which the judgment debtor may have in property may be
subjected to execution. In the instant case, the judgment debtor Nelia
Enriquez clearly had an interest in the proceeds of the third-party liability
insurance contract. In a third-party liability insurance contract, the insurer
assumes the obligation of paying the injured third party to whom the
insured is liable. 20 The insurer becomes liable as soon as the liability of
the insured to the injured third person attaches. Prior payment by the
insured to the injured third person is not necessary in order that the
obligation of the insurer may arise. From the moment that the insured
became liable to the third person, the insured acquired an interest in the
insurance contract, which interest may be garnished like any other credit.
G.R. No. 101439 June 21, 1999
GOVERNMENT SERVICE INSURANCE SYSTEM (GSIS), petitioner, vs. COURT
OF APPEALS (former Tenth Division), VICTORIA JAIME VDA. DE KHO
National Food Authority was the owner of a Chevrolet truck which was
insured against liabilities for death of and injuries to third persons with the
GSIS.
On May 9, 1979, at the said truck driven by Guillermo Corbeta collided
with a a Toyota Tamaraw. The Toyota Tamaraw was owned and operated
by Victor Uy, under the name and style of "Victory Line." The Tamaraw was
a total wreck.
All the collision victims were passengers of the Toyota Tamaraw. Five (5)
passengers died 4 while ten (10) others sustained bodily injuries. Among
those injured were private respondents, Victoria Jaime Vda. de Kho and
Gloria Kho Vda. de Calabia. Among the dead were Maxima Ugmad Vda. de
Kho, Roland Kho and Willie Calabia, Sr.
Three (3) cases were consequently filed, which were thereafter
consolidated. The court rendered its decision holding that Corbeta's
negligence was the proximate cause of the collision. The trial court thus
awarded Uy for damages; dismissed the case against Uy; and ordered
MIGC, Corbeta and NFA to pay plaintiff Taer jointly and severally for
damages plus attorney's fees. Damages were likewise awarded to the
herein private respondents.
ISSUES:
1) Whether the respondent court erred in holding GSIS solidarily
liable with the negligent insured/owner-operator of the Chevrolet truck for
damages awarded to private respondents.
HELD:
1. No.
The injured or the heirs of a deceased victim of a vehicular accident may
sue directly the insurer of the vehicle, but its liability, although solidary,
shall be limited to the value of the insurance policy. The general purpose of
such 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. Note that common carriers are
required to secure Compulsory Motor Vehicle Liability Insurance coverage
as provided under Sec. 374 13 of the Insurance Code, precisely for the
benefit of victims of vehicular accidents and to extend them immediate
relief.
Compulsory Motor Vehicle Liability Insurance (third party liability, or TPL)
is primarily intended to provide compensation for the death or bodily
injuries suffered by innocent third parties or passengers as a result of a
negligent operation and use of motor vehicles. The victims and/or their
dependents are assured of immediate financial assistance, regardless of
the financial capacity of motor vehicle owners.