G.R. No.

L-5188 October 29, 1952

ALICIA S. GONZALES, Plaintiff-Appellee

Vs.

ASIA LIFE INSURANCE COMPANY, Defendant-Appellant

Case: This is an appeal from the decision of the trial court excusing the plaintiff’s non-
payment of premiums caused by the occurrence of war.

FACTS:

On April 15, 1940, Celso R. Gonzales took up a twenty-year endowment policy

life insurance with the defendant, American Corporation, and designated the plaintiff,
Alicia Gonzales, as his beneficiary. The premiums for the first two years were duly paid
but the third premium was not accepted by the defendant’s branch office when it was
tendered due to a bombing threat by Japanese planes.

On September 22, 1942 Celso R. Gonzales died and on January 1947, after the
liberation, this suit is filed. The defendant contended that the insurance policy has
lapsed before the insured’s death due to non-payment of the premium. However, the
trial court allowed the plaintiff to recover. Hence, this appeal.

ISSUE: WON the insurance policy lapsed by reason of non-payment of premiums.

RULING:

No. Tender to an agent authorized to receive payment of premium is obviously

sufficient to prevent a forfeiture for non-payment.

When the assured was involved in no default, but was at the place when and
where payment was to be made, ready and willing to pay, but was prevented by the
disability of the company to receive the payment from whatever cause, he having had
no agency in producing it, the company is not entitled to claim forfeiture, or to be
relieved from its obligation to pay the sum assured. (Manhattan L. Ins. Co. vs. Warwick,
supra)
G.R. No. 156167 May 16, 2005

GULF RESORTS, INC., petitioner,

vs.
PHILIPPINE CHARTER INSURANCE CORPORATION, respondent.

Case: This is a petition for certiorari under Rule 45 of the Revised Rules of Court
wherein the petitioner and respondent contend each other’s interpretation of the
respondent’s liability to pay indemnity on the loss and damage incurred by the petitioner
due to the earthquake, as per the insurance contract.
FACTS:
The plaintiff, owner of the Playa Resort situated at Agoo, La Union, had its
properties in said resort insured originally with the American Home Assurance Company
(AHAC-AIU) from 1984 to March 14, 1990 with the risk of loss from earthquake shock
extending only to plaintiff’s two swimming pools. In the policy covering the period March
14, 1988 to March 14, 1989, the earthquake endorsement clause was deleted.
Subsequently, the plaintiff agreed to insure with defendant, Philippine Charter
Insurance Corporation, the properties covered by AHAC (AIU) provided that the policy
wording and rates in said policy be copied in the new policy to cover the period from
March 14, 1990 to March 14, 1991.
On July 16, 1990, an earthquake struck Central and Northern Luzon damaging
the plaintiff’s insured properties including the two swimming pools in its Agoo Playa
Resort. On August 11, 1990, petitioner (plaintiff) filed a formal demand for settlement of
the damage to all its properties in the Agoo Playa Resort which the PCIC denied on the
ground that its insurance policy only afforded earthquake shock coverage to the two
swimming pools of the resort.
The petitioner contends that pursuant to the rider attached to the policy titled:
“Extended Coverage Endorsement,” no qualifications were placed on the scope of the
earthquake shock coverage. Thus, the policy extended earthquake shock coverage to
all of the insured properties.
Both parties failed to arrive to a settlement, therefore, the petitioner filed a
complaint with the RTC of Pasig.
The lower court ruled in favor of the respondent since the plaintiff paid only a
premium of Php. 393.00 against the peril of earthquake shock which is the same
amount it consistently paid with AHAC (AIU) covering only the two swimming pools. The
Court of Appeals affirmed the trial court’s decision.
ISSUE:
WON only the two swimming pools, rather than all of the properties covered by
the insurance policy, were insured against the risk of Earthquake Shock.
RULING:
The Supreme Court ruled in the affirmative. There is no ambiguity in the
insurance contract and the earthquake shock rider. Provisions in the insurance policy
should be examined and interpreted in consonance with each other, and should not be
construed piecemeal. All parts of the insurance contract reflect the true intent of the
parties. Since insurance contracts are contracts of adhesion, any ambiguity is resolved
against the insurer (who prepared the contract) and construed liberally in the insured’s
favor.