Insular v Ebrado G.R. No.

L-44059 October 28,

1977
Facts:
J. Martin:
Cristor Ebrado was issued by The Life Assurance Co., Ltd., a policy for P5,882.00 with a rider for
Accidental Death. He designated Carponia T. Ebrado as the revocable beneficiary in his policy. He
referred to her as his wife.
Cristor was killed when he was hit by a failing branch of a tree. Insular Life was made liable to pay
the coverage in the total amount of P11,745.73, representing the face value of the policy in the
amount of P5,882.00 plus the additional benefits for accidental death.
Carponia T. Ebrado filed with the insurer a claim for the proceeds as the designated beneficiary
therein, although she admited that she and the insured were merely living as husband and wife
without the benefit of marriage.
Pascuala Vda. de Ebrado also filed her claim as the widow of the deceased insured. She asserts
that she is the one entitled to the insurance proceeds.
Insular commenced an action for Interpleader before the trial court as to who should be given the
proceeds. The court declared Carponia as disqualified.
Issue: WON a common-law wife named as beneficiary in the life insurance policy of a legally married
man can claim the proceeds in case of death of the latter?
Held: No. Petition
Ratio:
Section 50 of the Insurance Act which provides that "the insurance shall be applied exclusively to the
proper interest of the person in whose name it is made"
The word "interest" highly suggests that the provision refers only to the "insured" and not to the
beneficiary, since a contract of insurance is personal in character. Otherwise, the prohibitory laws
against illicit relationships especially on property and descent will be rendered nugatory, as the same
could easily be circumvented by modes of insurance.
When not otherwise specifically provided for by the Insurance Law, the contract of life insurance is
governed by the general rules of the civil law regulating contracts. And under Article 2012 of the
same Code, any person who is forbidden from receiving any donation under Article 739 cannot be
named beneficiary of a fife insurance policy by the person who cannot make a donation to him.
Common-law spouses are barred from receiving donations from each other.
Article 739 provides that void donations are those made between persons who were guilty of
adultery or concubinage at the time of donation.
There is every reason to hold that the bar in donations between legitimate spouses and those
between illegitimate ones should be enforced in life insurance policies since the same are based on
similar consideration. So long as marriage remains the threshold of family laws, reason and morality
dictate that the impediments imposed upon married couple should likewise be imposed upon extramarital relationship.

A conviction for adultery or concubinage isnt required exacted before the disabilities mentioned in
Article 739 may effectuate. The article says that in the case referred to in No. 1, the action for
declaration of nullity may be brought by the spouse of the donor or donee; and the guilty of the
donee may be proved by preponderance of evidence in the same action.
The underscored clause neatly conveys that no criminal conviction for the offense is a condition
precedent. The law plainly states that the guilt of the party may be proved in the same acting for
declaration of nullity of donation. And, it would be sufficient if evidence preponderates.
The insured was married to Pascuala Ebrado with whom she has six legitimate children. He was
also living in with his common-law wife with whom he has two children.

Del Rosario v Equitable G.R. No. L-16215 June 29,

1963
J. Paredes
Facts:
Equitables insurance policy covered indemnities for bodily injuries and deaths, however, it never
specificed an amount to be given in case of a persons death by drowning. It specified amounts from
1,000 to 3,000 for other causes of death, however.
Francisico del Rosario died from drowning after jumping from a sinking ship. The insurer, Equitable,
agreed to pay Php 1,000 as the claim for an accident. His attorney, howvever, contended that he
amount should be greater under section 2, Php 1500. The issue was resolved in the Insurance
Commison, where it was held that Section 1, under the provisions applied. (Php 1,000 as indemnity)
The lawyer still didint agree and instituted a suit. The trail court held that the company had the
discretion to pay from Php 1,000 to 3,000 for death by drowning since there was no fixed amount for
this type of death. The amended decision ordered the company to pay Php 2,000
Issue: What should the amount be?
Held: Judgment affirmed. Still 2,000.
Ratio:
The interpretation of obscure stipulations in a contract should not favor the party who cause the
obscurity.
Ambigious terms in a policy are to be construed strictly against, the insurer, and liberally in favor of
the insured for the payment of indemnity where forfeiture is involved. The company takes great care
in the wording and has legal advisers who create the contracts to the benefit of the company.

Trial court ruling are well considered because they are supported by doctrines on insurance
resolving cases against the party who caused the ambiguity in the wording of the contracts terms.
This was also due to the fact that the insured didnt have much of a say in formulating the contract.

ALPHA INSURANCE AND SURETY CO. vs.

ARSENIA SONIA CASTOR
July 2, 2014 Leave a comment

G.R. No. 198174, September 2, 2013 (PERALTA, J.)

FACTS:

Arsenia Sonia Castor (Castor) obtained a Motor Car Policy for her Toyota Revo DLX DSL with Alpha
Insurance and Surety Co (Alpha). The contract of insurance obligates the petitioner to pay the
respondent the amount of P630,000 in case of loss or damage to said vehicle during the period
covered.

On April 16, 2007, respondent instructed her driver, Jose Joel Salazar Lanuza to bring the vehicle to
nearby auto-shop for a tune up. However, Lanuza no longer returned the motor vehicle and despite
diligent efforts to locate the same, said efforts proved futile. Resultantly, respondent promptly reported
the incident to the police and concomitantly notified petitioner of the said loss and demanded payment
of the insurance proceeds.

Alpha, however, denied the demand of Castor claiming that they are not liable since the culprit who
stole the vehicle is employed with Castor. Under the Exceptions to Section III of the Policy, the
Company shall not be liable for (4) any malicious damage caused by the insured, any member of his
family or by A PERSON IN THE INSUREDS SERVICE.

Castor filed a Complaint for Sum of Money with Damages against Alpha before the Regional Trial Court
of Quezon City. The trial court rendered its decision in favor of Castor which decision is affirmed in toto
by the Court of Appeals. Hence, this Petition for Review on Certiorari.

ISSUE:

Whether or not the loss of respondents vehicle is excluded under the insurance policy

HELD:

NO. The words loss and damage mean different things in common ordinary usage. The word loss
refers to the act or fact of losing, or failure to keep possession, while the word damage means
deterioration or injury to property. Therefore, petitioner cannot exclude the loss of Castors vehicle
under the insurance policy under paragraph 4 of Exceptions to Section III, since the same refers only
to malicious damage, or more specifically, injury to the motor vehicle caused by a person under
the insureds service. Paragraph 4 clearly does not contemplate loss of property.

A contract of insurance is a contract of adhesion. So, when the terms of the insurance contract contain
limitations on liability, courts should construe them in such a way as to preclude the insurer from noncompliance with his obligation. Thus, in Eternal Gardens Memorial Park Corporation vs. Philippine
American Life Insurance Company, this Court ruled that it must be remembered that an insurance
contract is a contract of adhesion which must be construed liberally in favor of the insured and strictly
against the insurer in order to safeguard the latters interest.

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

May 31, 1966

DIOSDADO C. TY, plaintiff-appellant,

vs.
FILIPINAS COMPAIA DE SEGUROS, et al., defendants-appellees.
Porfirio V. Villaroman for plaintiff-appellant.
Ramirez and Ortigas for defendants-appellees Filipinas Compaia de Seguros, Philippine Guaranty
Co., Inc. and Universal Insurance and Indemnity Co.
Renato L. Liboro for defendant-appellee People's Surety and Insurance Co., Inc.

Perfecto P. R. Chua Cheng for defendant-appellee South Sea Surety and Insurance Co., Inc.
Gil Carlos and Associates for defendant-appellee Plaridel Surety and Insurance Co., Inc.
BARRERA, J.:
These are appeals instituted by Diosdado C. Ty from a single decision of the Court of First Instance
of Manila (in Civ. Cases Nos. 26343, 26344, 26404, 26405, 26406, 26442, which were tried
together), dismissing the six separate complaints he filed against six insurance companies (Filipinas
Compaia de Seguros, People's Surety & Insurance Co., Inc., South Sea Surety & Insurance Co.,
Inc., The Philippine Guaranty Company, Inc., Universal Insurance & Indemnity Co., and Plaridel
Surety & Insurance Co., Inc.) for collection from each of them, of the sum of P650.00, as
compensation for the disability of his left hand.
The facts of these cases are not controverted:
Plaintiff-appellant was an employee of Broadway Cotton Factory at Grace Park, Caloocan City,
working as mechanic operator, with monthly salary of P185.00. In the latter part of 1953, he took
Personal Accident Policies from several insurance companies, among which are herein defendantsappellees, on different dates,1 effective for 12 months. During the effectivity of these policies, or on
December 24, 1953, a fire broke out in the factory where plaintiff was working. As he was trying to
put out said fire with the help of a fire extinguisher, a heavy object fell upon his left hand. Plaintiff
received treatment at the National Orthopedic Hospital from December 26, 1953 to February 8,
1954, for the following injuries, to wit:
(1) Fracture, simple, oraximal phalanx, index finger, left;
(2) Fracture, compound, communite proximal phalanx, middle finger, left and 2nd phalanx
simple;
(3) Fracture, compound, communite phalanx, 4th finger, left;
(4) Fracture, simple, middle phalanx, middle finger, left;
(5) Lacerated wound, sutured, volar aspect, small finger, left;
(6) Fracture, simple, chip, head, 1st phalanx 5th digit, left.
which injuries, the attending surgeon certified, would cause temporary total disability of appellant's
left hand.
As the insurance companies refused to pay his claim for compensation under the policies by reason
of the said disability of his left hand, Ty filed motions in the Municipal Court of Manila, which
rendered favorable decision. 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.
1wph1.t

Plaintiff-appellant is basing his claim for indemnity under the provision of the insurance contract,
uniform in all the cases, which reads:

"INDEMNITY FOR TOTAL OR PARTIAL DISABILITY

If the Insured sustains any Bodily Injury which is effected solely through violent, external,
visible and accidental means, and which shall not prove fatal but shall result, independently
of all other causes and within sixty (60) days from the occurrence, thereof, in Total or Partial
Disability of the Insured, the Company shall pay, subject to the exceptions as provided for
hereinafter, the amount set opposite such injury.
xxx

xxx

xxx

xxx

xxx

xxx

xxx

xxx

xxx

PARTIAL DISABILITY
LOSS OF:

Either Hand P650.00

The loss of a hand shall mean the loss, by amputation through the bones of the wrist.
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.
This is not the first time that the proper construction of this provision, which is uniformly carried in
personal accident policies, has been questioned. Herein appellant himself has already brought this
matter to the attention of this Court in connection with the other accident policies which he took and
under which he had tried to collect indemnity, for the identical injury that is the basis of the claims in
these cases. And, we had already ruled:
While we sympathize with the plaintiff or his employer, for whose benefit the policies were
issued, we can not 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, having been caused by fractures of the index, the middle and the fourth fingers of
the left hand.
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. 2

We find no reason to depart from the foregoing ruling on the matter.

Plaintiff-appellant cannot come to the courts and claim that he was misled by the terms of the
contract. The provision is clear enough to inform the party entering into that contract that the loss to
be considered a disability entitled to indemnity, must be severance or amputation of that affected
member from the body of the insured.
Wherefore, finding no error in the decision appealed from, the same is hereby affirmed, without
costs. So ordered.

Misamis v Capital Insurance GR L-21380 May 20,

1966
En Banc
Facts:
Misamis Lumber Company insured its Ford Falcon to Capital Insurance for P 14,000. One day, the
cars crank and flywheel broke when it passed over a water hole in Aurora Boulevard. Misamis sent
it to be repaired at the cost of 302 pesos. However, Capital did not want to pay the entire amount
because the repair limit in the contract stipulated up to 150 pesos only. Misamis filed suit.
The lower court ruled against the insurance corporation because the company did not show that the
cost was excessive. Also , the court ruled that absolving the company of the excess amount would
make the contract one sided.
Issue: Is the insurance company liable for more than the amount in the repair limit?
Held: No. Insurance company only ordered to pay 150 pesos.
Ratio:
Paragraph 4, subpar a. of the insurance contract is clear and specific. It authorizes up to 150 pesos
only as a repair limit.
The lower court did not heed the express stipulation in the agreement. The policy specifically noted
the mechanics for repair in par. 2 and the limits of the liability in par 4. The company didnt notify the
insurance provider before it did the repairs. Also, even if the contract is onerous, this doesnt justify
its abrogation.

Insurance Case Digest: Verendia V CA G.R.

No. 75605 January 22, 1993
G.R. No. 75605 January 22, 1993
Lessons Applicable: Exception to Ambiguous Provisions Interpreted Against Insurer
(Insurance)

FACTS:

Rafael (Rex) Verendia's residential building was insured with Fidelity and Surety
Insurance Company, Country Bankers Insurance and Development

Insurance with Monte de Piedad & Savings Bank as beneficiary

December 28, 1980 early morning: the building was completely destroyed by fire

Fidelity refused the claim stating that there was a misrepresentation since the
lessee was not Roberto Garcia but Marcelo Garcia
trial court: favored Fidelity
CA: reversed

ISSUE: W/N there was false declaration which would forfeit his benefits under Section
13 of the policy

HELD: YES.

Section 13 thereof which is expressed in terms that are clear and unambiguous,
that all benefits under the policy shall be forfeited "If the claim be in any respect
fraudulent, or if any false declaration be made or used in support thereof, or if any
fraudulent means or devises are used by the Insured or anyone acting in his behalf

to obtain any benefit under the policy"

Robert Garcia then executed an affidavit before the National Intelligence and
Security Authority (NISA) to the effect that he was not the lessee of Verendia's

house and that his signature on the contract of lease was a complete forgery.
Worse yet, by presenting a false lease contract, Verendia, reprehensibly

disregarded the principle that insurance contracts are uberrimae fidae and
demand the most abundant good faith

Filipinas v Christern G.R. No. L-2294 May 25, 1951

J. Paras

Facts:
Christern obtained from Filipinas a fire insurance policy of P1000,000, covering merchandise
contained in a building located at Binondo. During the Japanese military occupation, the building and
insured merchandise were burned. The respondent its claim under the policy. 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 had
ceased to be in force on the date the U.S. declared war on Germany with the respondent
Corporation being controlled by German subjects and the petitioner being a company under
American jurisdiction (though organized by Philippine laws) when the policy was issued on October
1, 1941. The petitioner, however, paid to the respondent the sum of P92,650 on April 19, 1943 under
orders from the military government.
The insurer filed for a suit to recover the sum. The contention was that the policy ceased to be
effective because of the outbreak of the war and that the payment made by the petitioner to the
respondent corporation during the Japanese military occupation was under pressure.
The tiral and the appellate courts dismissed the action. The Court of Appeals claimed that a
corporation is a citizen of the country or state by and under the laws of which it was created or
organized.
Hence this appeal.

Issue: Whether the policy in question became null and void upon the declaration of war

Held: Yes. Petition granted.

Ratio:
The majority of the stockholders of the respondent corporation were German subjects. The
respondent became an enemy corporation upon the outbreak of the war. The English and American
cases relied upon by the Court of Appeals have lost their force in view of the latest decision of the

Supreme Court of the United States in Clark vs. Uebersee Finanz Korporation where the controls
test has been adopted.
Measures of blocking foreign funds, the so called freezing regulations, and other administrative
practice in the treatment of foreign-owned property in the United States allowed to large degree the
determination of enemy interest in domestic corporations and thus the application of the control test.
In Clark vs. Uebersee, the court held that The property of all foreign interest was placed within the
reach of the vesting power (of the Alien Property Custodian) not to appropriate friendly or neutral
assets but to reach enemy interest which masqueraded under those innocent fronts. . . . The power
of seizure and vesting was extended to all property of any foreign country or national so that no
innocent appearing device could become a Trojan horse.
The Philippine Insurance Law states 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.
All individuals therefore, who compose the belligerent powers, exist, as to each other, in a state of
utter exclusion, and are public enemies.
Vance- 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, are lost.
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 had ceased to be valid and enforceable, 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. The premium must be
returned for the sake of justice.
It results that the petitioner is entitled to recover the indemnity paid. However, the petitioner will be
entitled to recover only the equivalent of P92,650 paid on April 19, 1943.

Perez v CA G.R. No. 112329. January 28, 2000

J. Ynares-Santiago

Facts:
Primitivo B. Perez had been insured with the BF Lifeman Insurance Corporation for P20,000.00.
Sometime in October 1987, an agent of the insurance corporation, visited Perez in Quezon and
convinced him to apply for additional insurance coverage of P50,000.00. Virginia A. Perez,

Primitivos wife, paid P2,075.00 to the agent. The receipt issued indicated the amount received was
a "deposit." Unfortunately, the agent lost the application form accomplished by Perez and he asked
the latter to fill up another application form. The agent sent the application for additional insurance of
Perez to the Quezon office. Such was supposed to forwarded to the Manila office.
Perez drowned. His application papers for the additional insurance of P50,000.00 were still with the
Quezon. It was only after some time that the papers were brought to Manila. Without knowing that
Perez died, BF Lifeman Insurance Corporation approved the application and issued the
corresponding policy for the P50,000.00.
Petitioner Virginia Perez went to Manila to claim the benefits under the insurance policies of the
deceased. She was paid P40,000.00 under the first insurance policy for P20,000.00 but the
insurance company refused to pay the claim under the additional policy coverage of P50,000.00, the
proceeds of which amount to P150,000.00.
The insurance company maintained that the insurance for P50,000.00 had not been perfected at the
time of the death of Primitivo Perez. Consequently, the insurance company refunded the amount
paid.
BF Lifeman Insurance Corporation filed a complaint against Virginia Perez seeking the rescission
and declaration of nullity of the insurance contract in question.
Petitioner Virginia A. Perez, on the other hand, averred that the deceased had fulfilled all his
prestations under the contract and all the elements of a valid contract are present.
On October 25, 1991, the trial court rendered a decision in favor of petitioner ordering respondent to
pay 150,000 pesos. The Court of Appeals, however, reversed the decision of the trial court saying
that the insurance contract for P50,000.00 could not have been perfected since at the time that the
policy was issued, Primitivo was already dead.
Petitioners motion for reconsideration having been denied by respondent court, the instant petition
for certiorari was filed on the ground that there was a consummated contract of insurance between
the deceased and BF Lifeman Insurance Corporation.

Issue: WON the widow can receive the proceeds of the 2 nd insurance policy

Held: No. Petition dismissed.

Ratio:
Perezs application was subject to the acceptance of private respondent BF Lifeman Insurance
Corporation. The perfection of the contract of insurance between the deceased and respondent
corporation was further conditioned with the following requisites stated in the application form:

"there shall be no contract of insurance unless and until a policy is issued on this application and that
the said policy shall not take effect until the premium has been paid and the policy delivered to and
accepted by me/us in person while I/We, am/are in good health."
BF Lifeman didnt give its assent when it merely received the application form and all the requisite
supporting papers of the applicant. This happens only when it gives a policy.
It is not disputed, however, that when Primitivo died on November 25, 1987, his application papers
for additional insurance coverage were still with the branch office of respondent corporation in
Quezon. Consequently, there was absolutely no way the acceptance of the application could have
been communicated to the applicant for the latter to accept inasmuch as the applicant at the time
was already dead.
Petitioner insists that the condition imposed by BF that a policy must have been delivered to and
accepted by the proposed insured in good health is potestative, being dependent upon the will of the
corporation and is therefore void. The court didnt agree. A potestative condition depends upon the
exclusive will of one of the parties and is considered void. The Civil Code states: When the fulfillment
of the condition depends upon the sole will of the debtor, the conditional obligation shall be void.
The following conditions were imposed by the respondent company for the perfection of the contract
of insurance: a policy must have been issued, the premiums paid, and the policy must have been
delivered to and accepted by the applicant while he is in good health.
The third condition isnt potestative, because the health of the applicant at the time of the delivery of
the policy is beyond the control or will of the insurance company. Rather, the condition is a
suspensive one whereby the acquisition of rights depends upon the happening of an event which
constitutes the condition. In this case, the suspensive condition was the policy must have been
delivered and accepted by the applicant while he is in good health. There was non-fulfillment of the
condition, because the applicant was already dead at the time the policy was issued.
As stated above, a contract of insurance, like other contracts, must be assented to by both parties
either in person or by their agents. So long as an application for insurance has not been either
accepted or rejected, it is merely an offer or proposal to make a contract. The contract, to be binding
from the date of application, must have been a completed contract.
The insurance company wasnt negligent because delay in acting on the application does not
constitute acceptance even after payment. The corporation may not be penalized for the delay in the
processing of the application papers due to the fact that process in a week wasnt the usual
timeframe in fixing the application. Delay could not be deemed unreasonable so as to constitute
gross negligence.

Geagonia v CA G.R. No. 114427 February 6, 1995

Facts:
Geagonia, owner of a store, obtained from Country Bankers fire insurance policy for P100,000.00.
The 1 year policy and covered thestock trading of dry goods.
The policy noted the requirement that
"3. The insured shall give notice to the Company of any insurance or insurances already effected, or
which may subsequently be effected, covering any of the property or properties consisting of stocks
in trade, goods in process and/or inventories only hereby insured, and unless notice be given and
the particulars of such insurance or insurances be stated therein or endorsed in this policy pursuant
to Section 50 of the Insurance Code, by or on behalf of the Company before the occurrence of any
loss or damage, all benefits under this policy shall be deemed forfeited, provided however, that this
condition shall not apply when the total insurance or insurances in force at the time of the loss or
damage is not more than P200,000.00."
The petitioners stocks were destroyed by fire. He then filed a claim which was subsequently denied
because the petitioners stocks were covered by two other fire insurance policies for Php 200,000
issued by PFIC. The basis of the private respondent's denial was the petitioner's alleged violation of
Condition 3 of the policy.
Geagonia then filed a complaint against the private respondent in the Insurance Commission for the
recovery of P100,000.00 under fire insurance policy and damages. He claimed that he knew the
existence of the other two policies. But, he said that he had no knowledge of the provision in the
private respondent's policy requiring him to inform it of the prior policies and this requirement was
not mentioned to him by the private respondent's agent.
The Insurance Commission found that the petitioner did not violate Condition 3 as he had no
knowledge of the existence of the two fire insurance policies obtained from the PFIC; that it was
Cebu Tesing Textiles w/c procured the PFIC policies w/o informing him or securing his consent; and
that Cebu Tesing Textile, as his creditor, had insurable interest on the stocks.
The Insurance Commission then ordered the respondent company to pay complainant the sum of
P100,000.00 with interest and attorneys fees.
CA reversed the decision of the Insurance Commission because it found that the petitioner knew of
the existence of the two other policies issued by the PFIC.

Issues:
1. WON the petitioner had not disclosed the two insurance policies when he obtained the fire
insurance and thereby violated Condition 3 of the policy.
2. WON he is prohibited from recovering

Held: Yes. No. Petition Granted

Ratio:
1. The court agreed with the CA that the petitioner knew of the prior policies issued by the PFIC. His
letter of 18 January 1991 to the private respondent conclusively proves this knowledge. His
testimony to the contrary before the Insurance Commissioner and which the latter relied upon cannot
prevail over a written admission made ante litem motam. It was, indeed, incredible that he did not
know about the prior policies since these policies were not new or original.
2. Stated differently, provisions, conditions or exceptions in policies which tend to work a forfeiture of
insurance policies should be construed most strictly against those for whose benefits they are
inserted, and most favorably toward those against whom they are intended to operate.
With these principles in mind, Condition 3 of the subject policy is not totally free from ambiguity and
must be meticulously analyzed. Such analysis leads us to conclude that (a) the prohibition applies
only to double insurance, and (b) the nullity of the policy shall only be to the extent exceeding
P200,000.00 of the total policies obtained.
Furthermore, by stating within Condition 3 itself that such condition shall not apply if the total
insurance in force at the time of loss does not exceed P200,000.00, the private respondent was
amenable to assume a co-insurer's liability up to a loss not exceeding P200,000.00. What it had in
mind was to discourage over-insurance. Indeed, the rationale behind the incorporation of "other
insurance" clause in fire policies is to prevent over-insurance and thus avert the perpetration of
fraud. When a property owner obtains insurance policies from two or more insurers in a total amount
that exceeds the property's value, the insured may have an inducement to destroy the property for
the purpose of collecting the insurance. The public as well as the insurer is interested in preventing a
situation in which a fire would be profitable to the insured.