Transcript
Spouses Cha v Court of Appeals227 SCRA 690PADILLA, J .Facts: Spouses Nilo Cha and Stella Uy-Cha, as lessees, entered into a lease contract with CKSDevelopment Corporation (CKS), as lessor.One of the stipulations of the one (1) year lease contract states: 18. . . . The LESSEE shall not insure against fire the chattels, merchandise, textiles, goods and effects placed at any stall or store or space in the leased premises without first obtaining the written consent and approval of the LESSOR. If the LESSEE obtain(s) the insurance thereof without the consent of the LESSORthen the policy is deemed assigned and transferred to the LESSOR for its own benefit; . . . Notwithstanding the above stipulation, the Cha spouses insured against loss by fire their merchandise inside the leased premises for Five Hundred Thousand (P500,000.00) with theUnited Insurance without the written consent CKS.On the day that the lease contract was to expire, fire broke out inside the leased premises. WhenCKS learned of the insurance earlier procured by the Cha spouses (without its consent), it wrotethe United a demand letter asking that the proceeds of the insurance contract (between the Chaspouses and United) be paid directly to CKS, based on its lease contract with the Cha spouses.United refused to pay CKS, alleging that the latter had no insurable interest. Hence, the latter filed a complaint against the Cha spouses and United. Issue: Whether or not CKS can claim the proceeds of the fire insurance. Ruling: NO. CKS has no insurable interest. Sec. 18 of the Insurance Code provides: Sec. 18. No contract or policy of insurance on property shall be enforceable except for thebenefit of some person having an insurable interest in the property insured. A non-life insurance policy such as the fire insurance policy taken by petitioner-spouses over their merchandise is primarily a contract of indemnity. Insurable interest in the property insuredmust exist at the time the insurance takes effect and at the time the loss occurs. The basis of suchrequirement of insurable interest in property insured is based on sound public policy: to prevent a person from taking out an insurance policy on property upon which he has no insurable interestand collecting the proceeds of said policy in case of loss of the property.In the present case, it cannot be denied that CKS has no insurable interest in the goods andmerchandise inside the leased premises under the provisions of Section 17 of the Insurance Codewhich provide: Section 17. The measure of an insurable interest in property is the extent to which theinsured might be damnified by loss of injury thereof. Therefore, CKS cannot, under the Insurance Code — a special law — be validly a beneficiary of the fire insurance policy taken by the petitioner-spouses over their merchandise. This insurableinterest over said merchandise remains with the insured, the Cha spouses. The automaticassignment of the policy to CKS under the provision of the lease contract previously quoted isvoid for being contrary to law and/or public policy. The proceeds of the fire insurance policythus rightfully belong to the spouses Nilo Cha and Stella Uy-Cha (herein co-petitioners). Theinsurer (United) cannot be compelled to pay the proceeds of the fire insurance policy to a person(CKS) who has no insurable interest in the property insured. Great Pacific Life Insurance Corp. v Court of Appeals316 SCRA 677MALCOLM, J.Facts: A contract of group life insurance was executed between petitioner Great Pacific LifeAssurance Corporation (hereinafter Grepalife) and Development Bank of the Philippines(hereinafter DBP). Grepalife agreed to insure the lives of eligible housing loan mortgagors of DBP.In Nov. 1983, Dr. Wilfredo Leuterio, a physician and a housing debtor of DBP applied for membership in the group life insurance plan. In an application form, Dr. Leuterio answered Qsconcerning his health condition as follows: Q: Have you ever had, or consulted, a physician for a heart condition, high blood pressure,cancer, diabetes, lung, kidney or stomach disorder or any other physical impairment? No.Q: Are you now, to the best of your knowledge, in good health? Yes. Grepalife issued an insurance coverage of Dr. Leuterio, to the extent of his DBP mortgageindebtedness of P86,200.00. In Aug. 1984, Dr. Leuterio died due to massive cerebralhemorrhage. DBP submitted a death claim to Grepalife. Grepalife denied the claim because Dr.Leuterio was not physically healthy when he applied for an insurance. Grepalife insisted that Dr.Leuterio did not disclose he had been suffering from hypertension, which caused his death.Allegedly, such non-disclosure constituted concealment that justified the denial of the claim.Herein respondent Medarda Leuterio, widow, filed a complaint with RTC against Grepalife for Specific Performance with Damages. Dr. Mejia, who issued the death certificate, testified thatDr. Leuterio complained of headaches presumably due to high blood pressure. The inference wasnot conclusive because Dr. Leuterio was not autopsied, hence, other causes were not ruled out.RTC ruled in favor of respondent widow and against Grepalife. CA sustained the RTC decision.Hence, the present petition. Issue: WON CA erred in holding petitioner liable to DBP as beneficiary in a group life insurancecontract from a complaint filed by the widow of the decedent/mortgagor. Ruling: NO. Insured, being the person with whom the contract was made, is primarily the proper person to bring suit. Subject to some exceptions, insured may thus sue, although the policy istaken wholly or in part for the benefit of another person named or unnamed, and although it isexpressly made payable to another as his interest may appear or otherwise. Although a policy issued to a mortgagor is taken out for the benefit of the mortgagee and is made payable to him,yet the mortgagor may sue thereon in his own name, especially where the mortgagee's interest isless than the full amount recoverable under the policy. (See Sec. 8, Insurance Code) Harvardian Colleges of San Fernando, Pampanga, Inc. v Country Bankers InsuranceCorp.CA CV No. 03771Facts: Harvardian College is a family corporation owned by spouses Yap and their children.They insured the school building, per advice of an insurance agent. During the effectivity of the policy, the school building was totally burned. They tried to claim from the insurance company but they were denied on the ground that the building and land it was constructed on was owned by Ildefonso Yap and not by Harvadian Colleges. Ruling: Any title to, or interest in property, legal or equitable, will support a contract of fireinsurance, and even when the insured had no title the contract will be upheld if his interest, or hisrelation to, the property is such that he will, or may be benefited by its continued existence or suffer a direct pecuniary loss from its destruction or injury. The plaintiff in this case has long been using and possessing the building for several years with both the consent and knowledge of Ildefonso Yap. As such, it is reasonable to assume that had the building not been burned, plaintiff would have been allowed the continued use of the same in its operation of aneducational institution. Ang Ka Yu v Phoenix Assurance Co. Ltd.1 SCRA 704Facts: Ang Ka Yu had a piece of property in his possession. He insured it with Phoenix. The property was lost, so Ang Ka Yu sought to claim the proceeds. Phoenix denied liability on theground that Ang was not the owner but a mere possessor and as such, had no insurable interestover the property. Issue: Whether or not a mere possessor has insurable interest over the property. Ruling: A person having a mere right or possession of property may insure it to its full value andin his own name, even when he is not responsible for its safekeeping. The reason is that even if a person is NOT interested in the safety and preservation of material in his possession becausethey belong to 3 rd parties, said person still has insurable interest, because he stands either to benefit from their continued existence or to be prejudiced by their destruction. Insular Life Assurance Corp. v Feliciano73 Phil 201OZAETA, J. Facts: Evaristo Feliciano was issued an insurance policy by Insular Life. In September 1935, hedied. His heirs filed an insurance claim but Insular Life denied the application as it averred that Feliciano’s application was attended by fraud. It was later found in court that the insurance agent and the medical examiner of Insular Life who assisted Feliciano in signing the application knewthat Feliciano was already suffering from tuberculosis; that they were aware of the true medicalcondition of Feliciano yet they still made it appear that he was healthy in the insuranceapplication form; that Feliciano signed the application in blank and the agent filled theinformation for him. Issue: Whether or not Insular Life can avoid the insurance policy by reason of the fact that itsagent knowingly and intentionally wrote down the answers in the application differing fromthose made by Feliciano hence instead of serving the interests of his principal, acts in his own or another’s interest and adversely to that of his principal, the said principal is not bound by said acts of the agent. Ruling: No. Insular Life must pay the insurance policy. The weight of authority is that if anagent of the insurer, after obtaining from an applicant for insurance a correct andtruthful answer to interrogatories contained in the application for insurance,without knowledge of the applicant fills in false answers, either fraudulently or otherwise, theinsurer cannot assert the falsity of such answers as a defense to liability on the policy, and this istrue generally without regard to the subject matter of the answers or the nature of the a gent’s duties or limitations on his authority, at least if not brought to the attention of the applicant.The fact that the insured did not read the application which he signed, is not indicative of badfaith. It has been held that it is not negligence for the insured to sign an application without firstreading it if the insurer by its conduct in appointing the agent influenced the insured to placetrust and confidence in the agent. Sun Life Assurance Corp. of Canada v Court of Appeals245 SCRA 268Facts: Bacani procured a life insurance contract for himself from Sunlife Assurance.Specifically, the policy included a double indemnity in case of accidental death, designating hismother as beneficiary.Later, Bacani died in a plane crash and so the mother filed a claim. After investigation, Sunliferejected the claim on ground of non-disclosure of material facts. They said that Bacani did notmention that two weeks prior to his insuranceapplication he was examined and confined at theLung Center of the Philippines, where he was diagnosed for renal failure. The trial court ruledthat the facts concealed by the insured were made in good faith and under the belief that theyneed not be disclosed. Also, it held that the health history of the insured was immaterial since the insurance policy was “non - medical.” The CA affirmed, stating that the cause of death wasunrelated to the facts concealed by the insured. Issue: Whether or not the concealment made by Bacani warranted the rejection of the insuranceclaim Ruling: The Supreme Court reversed the decision of the CA and ruled that rescission of theinsurance contract was proper.Disclosure of Material Facts required Under sec. 26 of the Insurance Code, a party to a contract of insurance is required to
