FISHER; August 10, 1918 FACTS
- Mrs. Harding was the owner of a Studebaker automobile; in consideration of the payment to the defendant of the premium of P150, by said plaintiff, Mrs. Henry E. Harding, with the consent of her husband, the defendant by its duly authorized agent, Smith, Bell & Company (limited), made its policy of insurance in writing upon said automobile was set forth in said policy to be P3,000 that the value of said automobile was set forth in said policy to be P3,000; that on March 24, 1916, said automobile was totally destroyed by fire; that the loss thereby to plaintiffs was the sum of P3,000.
- The defendant’s version is that by request of Mrs. Harding, it issued the policy of insurance on an automobile alleged by the said plaintiff to be her property. It was made by means of a proposal in writing signed and delivered by said plaintiff to the defendant, guaranteeing the truth of the statements contained therein which said proposal is referred to in the said policy of insurance made a part thereof; that certain of the statements and representations contained in said proposal and warranted by said plaintiff to be true, to wit: (a) the price paid by the proposer for the said automobile; (b) the value of said automobile at the time of the execution and delivery of the said proposal and (c) the ownership of said automobile, were false and known to be false by the said plaintiff at the time of signing and delivering the said proposal and were made for the purpose of misleading and deceiving the defendant, and inducing the defendant, relying upon the warranties, statements, and representations contained in the said proposal and believing the same to be true, issued the said policy of insurance.
- The evidence shows that Hermanos, the Manila agents for the Studebaker automobile, sold the automobile to Canson for P3,200 (testimony of Mr. Diehl); who sold the said automobile to Henry Harding for the sum of P1,500. Harding sold the said automobile to J. Brannigan for the sum of P2,000 who sold the said automobile Henry Harding for the sum of P2,800; Henry Harding gave the said automobile to his wife as a present; that said automobile was repaired and repainted at the Luneta Garage at a cost of some P900; that while the said automobile was at the Luneta Garage; the latter solicited of Mrs. Harding the insurance of said automobile by the Company; that a proposal was filled out by the said agent and signed by the plaintiff Mrs. Henry E. Harding, and in said proposal under the heading "Price paid by proposer," is the amount of "3,500" and under another heading "Present value" is the amount of "3,000".
- After the said proposal was made a representative of the Manila agent of defendant went to the Luneta Garage and examined said automobile and Mr. Server, the General Manager of the Luneta Garage, an experienced automobile mechanic, testified that at the time this automobile was insured it was worth about P3,000, and the defendant, by and through its said agent Smith, Bell & Company (limited), thereafter issued a policy of insurance upon proposal in which policy the said automobile was described as of the "present value" of P3,000 and the said
defendant charged the said plaintiff Mrs. Henry E. Harding as premium on said policy the sum of P150, or 5 per cent of the then estimated value of P3,000. - The "Schedule" in said policy of insurance describes the automobile here in question, and provides in part of follows:
"That during the period above set forth and during any period for which the company may agree to renew this policy the company will subject to the exception and conditions contained herein or endorsed hereon indemnify the insured against loss of or damage to any motor car described in the schedule hereto (including accessories) by whatever cause such loss or damage may be occasioned and will further indemnify the insured up to the value of the car or P3,000 whichever is the greater against any claim at common law made by any person (not being a person in the said motor car nor in the insured's service) for loss of life or for accidental bodily injury or damage to property caused by the said motor car including law costs payable in connection with such claim when incurred with the consent of the company."
- On March 24, 1916, the said automobile was totally destroyed by fire, and that the iron and steel portions of said automobile which did not burn were taken into the possession of the defendant by and through its agent Smith, Bell & Company (limited), and sold by it for a small sum, which had never been tendered to the plaintiff prior to the trial of this case, but in open court during the trial the sum of P10 as the proceeds of such sale was tendered to plaintiff and refused.
- Trial judge decided that there was no proof of fraud on the part of plaintiff in her statement of the value of the automobile, or with respect to its ownership; that she had an insurable interest therein; and that defendant, having agreed to the estimated value, P3,000, and having insured the automobile for that amount, upon the basis of which the premium was paid, is bound by it and must pay the loss in accordance with the stipulated insured value.
ISSUE
1. WON Mrs. Harding was not the owner of the automobile at the time of the issuance of the policy, and, therefore, had no insurable interest in it
2. WON the statement regarding the cost of the automobile was a warranty, that the statement was false, and that, therefore, the policy never attached to the risk
HELD 1. NO
- Article 1334 of the Civil Code which provides that "All gifts between spouses during the marriage shall be void. Moderate gifts which the spouses bestow on each other on festive days of the family are not included in this rule."
- Even assuming that defendant might have invoked article 1334 as a defense, the burden would be upon it to show that the gift in question does not fall within the exception therein established. We cannot say, as a matter of law, that the gift of an automobile by a husband to his wife is not a moderate one. Whether it is or is not would depend upon the circumstances of the parties, as to which nothing is disclosed by the record.
- We are of the opinion that it would be unfair to hold the policy void simply because the outlay represented by the automobile was made by the plaintiff's husband and not by his wife, to whom he had given the automobile. It cannot be assumed that defendant should not have issued the policy unless it were strictly true that the price representing the cost of the machine had been paid by the insured and by no other person ? that it would no event insure an automobile acquired by gift, inheritance, exchange, or any other title not requiring the owner to make a specific cash outlay for its acquisition.
2. NO
- It has not been shown by the evidence that the statement was false; on the contrary we believe that it shows that the automobile had in fact cost more than the amount mentioned. The court below found, and the evidence shows, that the automobile was bought by plaintiff's husband a few weeks before the issuance of the policy in question for the sum of P2,800, and that between that time and the issuance of the policy some P900 was spent upon it in repairs and repainting.
- The witness Server, an expert automobile mechanic, testified that the automobile was practically as good as new at the time the insurance was effected. The form of proposal upon which the policy was issued does not call for a statement regarding the value of the automobile at the time of its acquisition by the applicant for the insurance, but merely a statement of its cost. The amount stated was less than the actual outlay which the automobile represented to Mr. Harding, including repairs, when the insurance policy was issued.
- The court below found and the evidence shows, without dispute, that the proposal upon which the
policy in question was issued was made out by defendant's agent by whom the insurance was solicited, and that appellee simply signed the same. It also appears that an examiner employed by the defendant made an inspection of the automobile before the acceptance of the risk, and that the sum after this examination. The trial court found that Mrs. Harding, in fixing the value of the automobile at P3,000, acted upon information given her by her husband and by Mr. Server, the manager of the Luneta Garage. She merely repeated the information which had been given her by her husband, and at the same time disclosed to defendant's agent the source of her information. There is no evidence to sustain the contention that this communication was made in bad faith. We do not think that the facts stated in the proposal can be held as a warranty of the insured, even if it should have been shown that they were incorrect in the absence of proof of willful misstatement. Under such circumstance, the proposal is to be regarded as the act of the insurer and not of the insured.
Disposition Plaintiff was the owner of the
automobile in question and had an insurable interest therein; that there was no fraud on her part in procuring the insurance; that the valuation of the automobile, for the purposes of the insurance, is binding upon the defendant corporation, and that the judgment of the court below is, therefore, correct and must be affirmed, with interest, the costs of this appeal to be paid by the appellant.
WHITE GOLD MARINE SERVICES v. PIONEER INSURANCE
464 SCRA 448
QUISUMBING; July 28, 2005 NATURE
This petition for review assails the Decision of the Court of Appeals, affirming the Decision of the Insurance Commission. Both decisions held that there was no violation of the Insurance Code and the respondents do not need license as insurer and insurance agent/broker.
FACTS
- White Gold procured a protection and indemnity coverage for its vessels from Steamship Mutual through Pioneer Insurance. Subsequently, White Gold was issued a Certificate of Entry and Acceptance. Pioneer also issued receipts evidencing payments for the coverage. When White Gold failed
to fully pay its accounts, Steamship Mutual refused to renew the coverage.
- Steamship Mutual thereafter filed a case against White Gold for collection of sum of money to recover the latter’s unpaid balance. White Gold on the other hand, filed a complaint before the Insurance Commission claiming that Steamship Mutual violated Sections 186 and 187 of the Insurance Code, while Pioneer violated Sections 299, 300 and 301 in relation to Sections 302 and 303, thereof.
- The Insurance Commission dismissed the complaint. It said that there was no need for Steamship Mutual to secure a license because it was not engaged in the insurance business. It explained that Steamship Mutual was a Protection and Indemnity Club (P & I Club). Likewise, Pioneer need not obtain another license as insurance agent and/or a broker for Steamship Mutual because Steamship Mutual was not engaged in the insurance business. Moreover, Pioneer was already licensed, hence, a separate license solely as agent/broker of Steamship Mutual was already superfluous.
- The Court of Appeals affirmed the decision of the Insurance Commissioner. In its decision, the appellate court distinguished between P & I Clubs vis-à-vis conventional insurance. The appellate court also held that Pioneer merely acted as a collection agent of Steamship Mutual.
ISSUES
1. WON Steamship Mutual, a P & I Club, is engaged in the insurance business in the Philippines
2. WON Pioneer needs a license as an insurance agent/broker for Steamship Mutual
HELD 1. YES
- The test to determine if a contract is an insurance contract or not, depends on the nature of the promise, the act required to be performed, and the exact nature of the agreement in the light of the occurrence, contingency, or circumstances under which the performance becomes requisite. It is not by what it is called. Basically, an insurance contract is a contract of indemnity. In it, one undertakes for a consideration to indemnify another against loss, damage or liability arising from an unknown or contingent event.
- In particular, a marine insurance undertakes to indemnify the assured against marine losses, such as the losses incident to a marine adventure. Section 99
of the Insurance Code enumerates the coverage of marine insurance.
- Relatedly, a mutual insurance company is a cooperative enterprise where the members are both the insurer and insured. In it, the members all contribute, by a system of premiums or assessments, to the creation of a fund from which all losses and liabilities are paid, and where the profits are divided among themselves, in proportion to their interest. Additionally, mutual insurance associations, or clubs, provide three types of coverage, namely, protection and indemnity, war risks, and defense costs.
- A P & I Club is “a form of insurance against third party liability, where the third party is anyone other than the P & I Club and the members.” By definition then, Steamship Mutual as a P & I Club is a mutual insurance association engaged in the marine insurance business.
- The records reveal Steamship Mutual is doing business in the country albeit without the requisite certificate of authority mandated by Section 187 of the Insurance Code. It maintains a resident agent in the Philippines to solicit insurance and to collect payments in its behalf. We note that Steamship Mutual even renewed its P & I Club cover until it was cancelled due to non-payment of the calls. Thus, to continue doing business here, Steamship Mutual or through its agent Pioneer, must secure a license from the Insurance Commission.
- Since a contract of insurance involves public interest, regulation by the State is necessary. Thus, no insurer or insurance company is allowed to engage in the insurance business without a license or a certificate of authority from the Insurance Commission.
2. YES
- SEC. 299 . . .
- No person shall act as an insurance agent or as an insurance broker in the solicitation or procurement of applications for insurance, or receive for services in obtaining insurance, any commission or other compensation from any insurance company doing business in the Philippines or any agent thereof, without first procuring a license so to act from the Commissioner, which must be renewed annually on the first day of January, or within six months thereafter.
Disposition The petition is PARTIALLY GRANTED.
The Decision dated July 30, 2002 of the Court of Appeals affirming the Decision dated May 3, 2000 of the Insurance Commission is hereby REVERSED AND
SET ASIDE. The Steamship Mutual Underwriting Association (Bermuda) Ltd., and Pioneer Insurance and Surety Corporation are ORDERED to obtain licenses and to secure proper authorizations to do business as insurer and insurance agent, respectively. The petitioner’s prayer for the revocation of Pioneer’s Certificate of Authority and removal of its directors and officers, is DENIED. PANDIMAN v. MARINE MANNING MNGT CORP. 460 SCRA 418
GARCIA; June 21, 2005 NATURE
Petition for certiorari to review CA decision FACTS
- Benito Singhid was hired as chief cook on board the vessel MV Sun Richie Five for a term of one year by Fullwin Maritime Limited through its Philippine agent, Marine Manning and Management Corporation. While the said vessel was on its way to Shanghai from Ho Chih Minh City, Benito suffered a heart attack and subsequently died on June 24, 1997.
- Apparently, the vessel and the crew were insured with Ocean Marine Mutual Insurance Association Limited (OMMIAL), a Protective and Indemnity Club of which Sun Richie Five Bulkers S.A. is a member. Pandiman Philippines, the petitioner, is the local correspondent of OMMIAL.
- Benito’s widow, Rosita, filed a claim for death benefits with Marine which referred her to Pandiman. After her submission of the required documentation, Pandiman recommended payment of the death benefits amounting to $79,000. However, payment has not been made.
- Rosita filed a complaint with the Labor Arbiter naming Marine, Pandiman, OMMIAL, and Fullwin as respondents. The Arbiter ordered all the respondents, except Pandiman, to jointly and severally pay the widow the death benefits plus legal fees. The NLRC, on appeal by Marine, limited the liable parties to Pandiman and OMMIAL but maintained the money award. The CA sustained the decision of the NLRC. Hence this appeal.
ISSUE
1. WON Pandiman may be held liable for the death benefits
2. WON Marine and its foreign principal, Fullwin, should be absolved from the death claim liabilities
HELD 1. NO
- Pandiman is not an insurance agent as defined by Section 3007 of the Insurance Code. In this case,
there was no showing that Pndiman in fact negotiated the insurance contract between Sun Richie Five and the insurer OMMIAL. Even, if Pandiman were an agent, payment for claims arising from peril insured against, to which the insurer is liable, is definitely not one of the liabilities of an insurance agent. Thus, there is no legal basis whatsoever for holding petitioner solidarily liable with insurer OMMIAL for the widow’s claim for death benefits. Also, Pandiman is not a party to the insurance contract and hence under Article 1311 of the Civil Code, it is not liable for the obligation arising out of the insurance contract.
2. NO
- Fullwin, as Benito’s principal employer is liable under the employment contract. Marine is also bound by its undertaking pursuant to the Rules and Regulations Governing Overseas Employment that “it shall assume joint and solidary liability with the employer for all the claims and liabilities which may arise in connection with the implementation of the contract, including but not limited to the payment of wages, heath and disability compensation and repatriation”. In other words, both Fullwin and Marine should be held liable for whatever death benefits the widow of Benito may be entitled to.
Disposition The petition is granted and the CA
decision is reversed and set aside.
FILIPINAS COMPANIA DE SEGUROS V CHRISTERN, HUENEFELD AND CO INC
89 PHIL 54
PARAS; May 25, 1951 FACTS
- October 1, 1941 - Christern Huenefeld, & Co., Inc., after payment of corresponding premium, obtained from the Filipinas Cia. de Seguros a fire policy in the sum of P1000,000, covering merchandise contained in No. 711 Roman Street, Binondo Manila.
7 Section 300. Any person who for compensation solicits or obtains on behalf of any insurance company transmits for a person other than himself an application for a policy or contract of insurance to or from such company or offers or assumes to act in the negotiating of such insurance shall be an insurance agent within the intent of this section and shall thereby become liable to all the duties, requirements, liabilities, and penalties to which an insurance agent is subject.