CONSTRUCTION OF INSURANCE CONTRACTS

09 Ty v. Filipinas Compaia de Seguros - Insurance Policy

17 SCRA 364

Facts:
> Ty was employed as a mechanic operator by Braodway Cotton Factory at
Grace Park, Caloocan.
> In 1953, he took personal accident policies from 7 insurance companies (6
defendants), on different dates, effective for 12 mos.
> On Dec. 24. 1953, a fire broke out in the factory were Ty was working. A hevy
object fell on his hand when he was trying to put out the fire.
> From Dec. 1953 to Feb. 6, 1954 Ty received treatment at the Natl Orthopedic
Hospital for six listed injuries. The attending surgeon certified that these injuries
would cause the temporary total disability of Tys left hand.
> Insurance companies refused to pay Tys claim for compensation under the
policies by reason of said disability of his left hand. Ty filed a complaint in the
municipal court who decided in his favor.
> CFI reversed on the ground that under the uniform terms of the policies, partial
disability due to loss of either hand of the insured, to be compensable must be
the result of amputation.

Issue:
Whether or not Ty should be indemnified under his accident policies.

Held.
NO.
SC already ruled in the case of Ty v. FNSI that were the insurance policies define
partial disability as loss of either hand by amputation through the bones of the
wrist, the insured cannot recover under said policies for temporary disability of
his left hand caused by the fractures of some fingers. 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
the affected member of the body of the insured.
10 Fortune v CA G.R. No. 115278 May 23, 1995
J. Davide Jr.
Facts:
Producers Banks money was stolen while it was being transported from Pasay
to Makati. The people guarding the money were charged with the theft. The bank
filed a claim for the amount of Php 725,000, and such was refused by the
insurance corporation due to the stipulation:
GENERAL EXCEPTIONS
The company shall not be liable under this policy in report of
(b) any loss caused by any dishonest, fraudulent or criminal act of the insured or
any officer, employee, partner, director, trustee or authorized representative of
the Insured whether acting alone or in conjunction with others. . . .
In the trial court, the bank claimed that the suspects were not any of the above
mentioned. They won the case. The appellate court affirmed on the basis that the
bank had no power to hire or dismiss the guard and could only ask for
replacements from the security agency.
generally and universally understood, or jurisprudentially established in the light
of the four standards in the determination of the employer-employee relationship,
or as statutorily declared even in a limited sense as in the case of Article 106 of
the Labor Code which considers the employees under a "labor-only" contract as
employees of the party employing them and not of the party who supplied them
to the employer.
But even if the contracts were not labor-only, the bank entrusted the suspects
with the duty to safely transfer the money to its head office, thus, they were
representatives. According to the court, a representative is defined as one who
represents or stands in the place of another; one who represents others or
another in a special capacity, as an agent, and is interchangeable with agent.

Issue: Did the guards fall under the general exceptions clause of the insurance
policy and thus absolved the insurance company from liability?

Held: Yes to both. Petition granted.

Ratio:
The insurance agency contended that the guards automatically became the
authorized representatives of the bank when they cited International Timber
Corp. vs. NLRC where a contractor is a "labor-only" contractor in the sense that
there is an employer-employee relationship between the owner of the project and
the employees of the "labor-only" contractor.

They cited Art. 106. Of the Labor Code which said:

Contractor or subcontractor. There is "labor-only" contracting where the
person supplying workers to an employer does not have substantial capital or
investment in the form of tools, equipment, machineries, work premises, among
others, and the workers recruited and placed by such persons are performing
activities which are directly related to the principal business of such employer. In
such cases, the person or intermediary shall be considered merely as an agent
of the employer who shall be responsible to the workers in the same manner and
extent as if the latter were directly employed by him.

The bank asserted that the guards were not its employees since it had nothing to
do with their selection and engagement, the payment of their wages, their
dismissal, and the control of their conduct.

They cited a case where an employee-employer relationship was governed by

(1) the selection and engagement of the employee; (2) the payment of wages; (3)
the power of dismissal; and (4) the power to control the employee's conduct.

The case was governed by Article 174 of the Insurance Code where it stated that
casualty insurance awarded an amount to loss cause by accident or mishap.

The term "employee," should be read as a person who qualifies as such as

11 Del Rosario v Equitable G.R. No. L-16215 June 29, 1963 12 Misamis Lumber v. Capital Insurance - Insurance Policy
J. Paredes 123 Phil 1077

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.
Francisco 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, however, contended that he amount should be greater under section 2,
Php 1500. The issue was resolved in the Insurance Commission, where it was
held that Section 1, under the provisions applied. (Php 1,000 as indemnity) The
lawyer still didnt 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?
Facts:
> Misamis lumber insured its motor car for P14T with Capital Insurance. The
policy stipulated that the insured may authorize the repair of the vehicle
necessitated by damage and the liability of the insured is limited to 150.
> Car met an accident and was repaired by Morosi Motors at a total cost of
P302.27. Misamis made a report of the accident to Capital who refused to pay
the cost of the repairs.
Issue:
Whether or not the insurer is liable for the total amount of the repair.
Held: NO.
The insurance policy stipulated that if it is the insured who authorized the repair,
the liability of the insurer is limited to 150. The literal meaning of the stipulation
must control, it being the actual contract, expressly and plainly provided for in the
policy.

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.
13 Verendia v. CA - Insurance Policy
217 SCRA 1993
Facts:
> Fidelity and Surety Insurance Company (Fidelity) issued Fire Insurance Policy
No. F-18876 effective between June 23, 1980 and June 23, 1981 covering
Rafael (Rex) Verendia's residential in the amount of P385,000.00. Designated as
beneficiary was the Monte de Piedad & Savings Bank.
> Verendia also insured the same building with two other companies, namely,
The Country Bankers Insurance for P56,000.00 and The Development Insurance
for P400,000.00.
> While the three fire insurance policies were in force, the insured property was
completely destroyed by fire.
> Fidelity appraised the damage amounting to 385,000 when it was accordingly
informed of the loss. Despite demands, Fidelity refused payment under its policy,
thus prompting Verendia to file a complaint for the recovery of 385,000
> Fidelity, averred that the policy was avoided by reason of over-insurance, that
Verendia maliciously represented that the building at the time of the fire was
leased under a contract executed on June 25, 1980 to a certain Roberto Garcia,
when actually it was a Marcelo Garcia who was the lessee.
Issue:
Whether or not Verendia can claim on the insurance despite the
misrepresentation as to the lessee and the overinsurance.
Held:
NOPE.
The contract of lease upon which Verendia relies to support his claim for
insurance benefits, was entered into between him and one Robert Garcia, a
couple of days after the effectivity of the insurance policy. When the rented
residential building was razed to the ground, it appears that Robert Garcia was
still within the premises. However, according to the investigation by the police,
the building appeared to have "no occupants" and that Mr. Roberto Garcia was
"renting on the otherside of said compound" These pieces of evidence belie
Verendia's uncorroborated testimony that Marcelo Garcia whom he considered
as the real lessee, was occupying the building when it was burned.
recovery from the. As it is also a contract of adhesion, an insurance contract
should be liberally construed in favor of the insured and strictly against the
insurer company which usually prepares it
.
Considering, however, the foregoing discussion pointing to the fact that Verendia
used a false lease contract to support his claim under Fire Insurance Policy, the
terms of the policy should be strictly construed against the insured. Verendia
failed to live by the terms of the policy, specifically 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". Verendia, having presented a false declaration to
support his claim for benefits in the form of a fraudulent lease contract, he
forfeited all benefits therein by virtue of Section 13 of the policy in the absence of
proof that Fidelity waived such provision
There is also no reason to conclude that by submitting the subrogation receipt as
evidence in court, Fidelity bound itself to a "mutual agreement" to settle
Verendia's claims in consideration of the amount of P142,685.77. While the said
receipt appears to have been a filled-up form of Fidelity, no representative of
Fidelity had signed it. It is even incomplete as the blank spaces for a witness and
his address are not filled up. More significantly, the same receipt states that
Verendia had received the aforesaid amount. However, that Verendia had not
received the amount stated therein, is proven by the fact that Verendia himself
filed the complaint for the full amount of P385,000.00 stated in the policy. It might
be that there had been efforts to settle Verendia's claims, but surely, the
subrogation receipt by itself does not prove that a settlement had been arrived at
and enforced. Thus, to interpret Fidelity's presentation of the subrogation receipt
in evidence as indicative of its accession to its "terms" is not only wanting in
rational basis but would be substituting the will of the Court for that of the parties

Ironically, during the trial, Verendia admitted that it was not Robert Garcia who
signed the lease contract but it was Marcelo Garcia cousin of Robert, who had
also been paying the rentals all the while. Verendia, however, failed to explain
why Marcelo had to sign his cousin's name when he in fact he was paying for the
rent and why he (Verendia) himself, the lessor, allowed such a ruse. Fidelity's
conclusions on these proven facts appear, therefore, to have sufficient bases:
Verendia concocted the lease contract to deflect responsibility for the fire towards
an alleged "lessee", inflated the value of the property by the alleged monthly
rental of P6,500) when in fact, the Provincial Assessor of Rizal had assessed the
property's fair market value to be only P40,300.00, insured the same property
with two other insurance companies for a total coverage of around P900,000,
and created a dead-end for the adjuster by the disappearance of Robert Garcia.

Basically a contract of indemnity, an insurance contract is the law between the

parties. Its terms and conditions constitute the measure of the insurer's liability
and compliance therewith is a condition precedent to the insured's right to

14 Qua Chee Gan v. Law Union Rock - Breach of Warranty
98 PHIL 85
Facts:
> Qua Chee Gan, a merchant, owned 4 warehouses in Albay which were used
for the storage or copra and hemp in which the appelle deals with exclusively.
> The warehouses together with the contents were insured with Law Union since
1937 and the loss made payable to PNB as mortgagee of the hemp and copra.
> A fire of undetermined cause broke out in July 21, 1940 and lasted for almost 1
whole week.
> Bodegas 1, 3, and 4 including the merchandise stored were destroyed
completely.
> Insured then informed insurer of the unfortunate event and submitted the
corresponding fire claims, which were later reduced to P370T.
> Insurer refused to pay claiming violations of the warranties and conditions,
filing of fraudulent claims and that the fire had been deliberately caused by the
insured.
> Insured filed an action before CFI which rendered a decision in favor of the
insured.
Issues and Resolutions:
(1) Whether or not the policies should be avoided for the reason that there was a
breach of warranty.
Under the Memorandum of Warranty, there should be no less than 1 hydrant for
each 150 feet of external wall measurements of the compound, and since
bodegas insured had an external wall per meter of 1640 feet, the insured should
have 11 hydrants in the compound. But he only had 2.
Even so, the insurer is barred by estoppel to claim violation of the fire hydrants
warranty, because knowing that the number of hydrants it demanded never
existed from the very beginning, appellant nevertheless issued the policies
subject to such warranty and received the corresponding premiums. The
insurance company was aware, even before the policies were issued, that in the
premises there were only 2 hydrants and 2 others were owned by the
Municipality, contrary to the requirements of the warranties in question.
company to treat the policy as valid long enough to get the premium on it, and
leave it at liberty to repudiate it the next moment.
Moreover, taking into account the well-known rule that ambiguities or obscurities
must strictly be interpreted against the party that cause them, the memorandum
of warranty invoked by the insurer bars the latter from questioning the existence
of the appliances called for, since its initial expression the undernoted
appliances for the extinction of fire being kept on the premises insured hereby..
admits of the interpretation as an admission of the existence of such appliances
which insurer cannot now contradict, should the parole evidence apply.
(2) Whether or not the insured violated the hemp warranty provision against the
storage of gasoline since insured admitted there were 36 cans of gasoline in
Bodega 2 which was a separate structure and not affected by the fire.
It is well to note that gasoline is not specifically mentioned among the prohibited
articles listed in the so-called hemp warranty. The clause relied upon by the
insurer speaks of oils. Ordinarily, oils mean lubricants and not gasoline or
kerosene. Here again, by reason of the exclusive control of the insurance
company over the terms of the contract, the ambiguity must be held strictly
against the insurer and liberally in favor of the insured, specially to avoid a
forfeiture.
Furthermore, the gasoline kept was only incidental to the insureds business. It is
a well settled rule that keeping of inflammable oils in the premises though
prohibited by the policy does NOT void it if such keeping is incidental to the
business. Also, the hemp warranty forbade the storage only in the building to
which the insurance applies, and/or in any building communicating therewith; and
it is undisputed that no gasoline was stored in the burnt bodegas and that
Bodega No. 2 which was where the gasoline was found stood isolated from the
other bodegas.

It should be close to conniving at fraud upon the insured to allow the insurer to
claim now as void the policies it issued to the insured, without warning him of the
fatal defect, of which the insurer was informed, and after it had misled the insured
into believing that the policies were effective.

Accdg to American Jurisprudence: It is a well-settled rule that the insurer at the

time of the issuance of a policy has the knowledge of existing facts, which if
insisted on, would invalidate the contract from its very inception, such knowledge
constitutes a waiver of conditions in the contract inconsistent with known facts,
and the insurer is stopped thereafter from asserting the breach of such
conditions. The reason for the rule is: To allow a company to accept ones
money for a policy of insurance which it knows to be void and of no effect, though
it knows as it must that the insured believes it to be valid and binding is so
contrary to the dictates of honesty and fair dealing, as so closely related to
positive fraud, as to be abhorrent to fair-minded men. It would be to allow the
15 Paramount Insurance v Spouses Remondeulaz
FACTS:
On May 26, 1994, respondents insured with petitioner their 1994 Toyota Corolla
sedan under a comprehensive motor vehicle insurance policy for one year.
During the effectivity of said insurance, respondents car was unlawfully taken.
Respondents alleged that a certain Ricardo Sales (Sales) took possession of the
subject vehicle to add accessories and improvements thereon, however, Sales
failed to return the subject vehicle within the agreed three-day period. Then,
respondents notified petitioner to claim for the reimbursement of their lost
vehicle. However, petitioner refused to pay.
Accordingly, respondents lodged a complaint for a sum of money against
petitioner before the Regional Trial Court of Makati City but dismissed the
complaint filed by respondents. Not in conformity with the trial courts Order,
respondents filed an appeal to the Court of Appeals and in its decision the
appellate court reversed and set aside the Order issued by the trial court.
Petitioner, thereafter, filed a motion for reconsideration against said Decision, but
the same was denied by the appellate court.
Hence this Petition for Review on Certiorari.
ISSUE:
Whether or not Paramount Insurance Corporation is liable under the insurance
policy for the loss of respondents vehicle.
RULING:
The Supreme Court DENIED the motion of Paramount Insurance Company and
AFFIRMED the Decision of the Court of Appeals entirely.
Paramount Insurance Corporation is liable under the insurance policy.
In People v. Bustinera,8 this Court had the occasion to interpret the "theft clause"
of an insurance policy. In this case, the Court explained that when one takes the
motor vehicle of another without the latters consent even if the motor vehicle is
later returned, there is theft there being intent to gain as the use of the thing
unlawfully taken constitutes gain.
Also, in Malayan Insurance Co., Inc. v. Court of Appeals,9 this Court held that the
taking of a vehicle by another person without the permission or authority from the
owner thereof is sufficient to place it within the ambit of the word theft as
contemplated in the policy, and is therefore, compensable.
Records would show that respondents entrusted possession of their vehicle only
to the extent that Sales will introduce repairs and improvements thereon, and not
to permanently deprive them of possession thereof. Since, Theft can also be
committed through misappropriation, the fact that Sales failed to return the
subject vehicle to respondents constitutes Qualified Theft. Hence, since
repondents car is undeniably covered by a Comprehensive Motor Vehicle
Insurance Policy that allows for recovery in cases of theft, petitioner is liable
under the policy for the loss of respondents vehicle under the "theft clause."
MEANING OF ACCIDENT
16 Calanoc v CA, G.R. No. L-8151, December 16, 1955
J. Bautista Angelo
Doctrine: In case of ambiguity in an insurance contract covering accidental death,
the Supreme Court held that such terms shall be construed strictly against the
insurer and liberally in favor of the insured in order to effect the purpose of
indemnity.
Facts:
Melencio Basilio, a watchman of the Manila Auto Supply, secured a life insurance
policy from the Philippine American Insurance Company in the amount of P2,000
to which was attached a supplemental contract covering death by accident. He
later died from a gunshot wound on the occasion of a robbery committed;
subsequently, his widow was paid P2,000 representing the face value of the
policy. The widow demanded the payment of the additional sum of P2,000
representing the value of the supplemental policy which the company refused
because the deceased died by murder during the robbery and while making an
arrest as an officer of the law which were expressly excluded in the contract. The
companys contention which was upheld by the Court of Appeals provides that
the circumstances surrounding Basilios death was caused by one of the risks
excluded by the supplementary contract which exempts the company from
liability.
Issue:
Is the Philippine American Life Insurance Co. liable to the petitioner for the
amount covered by the supplemental contract?
Held:
Yes. The circumstances of Basilios death cannot be taken as purely intentional
on the part of Basilio to expose himself to the danger. There is no proof that his
death was the result of intentional killing because there is the possibility that the
malefactor had fired the shot merely to scare away the people around. In this
case, the companys defense points out that Basilios is included among the risks
excluded in the supplementary contract; however, the terms and phraseology of
the exception clause should be clearly expressed within the understanding of the
insured. Art. 1377 of the New Civil Code provides that in case ambiguity,
uncertainty or obscurity in the interpretation of the terms of the contract, it shall
be construed against the party who caused such obscurity. Applying this to the
situation, the ambiguous or obscure terms in the insurance policy are to be
construed strictly against the insurer and liberally in favor of the insured party.
The reason is to ensure the protection of the insured since these insurance
contracts are usually arranged and employed by experts and legal advisers
acting exclusively in the interest of the insurance company. As long as insurance
companies insist upon the use of ambiguous, intricate and technical provisions,
which conceal their own intentions, the courts must, in fairness to those who
purchase insurance, construe every ambiguity in favor of the insured.
 intentionally inflicted by any other person, applies to this case."

TEEHANKEE [dissent]
- Calanoc v. CA is controlling in this case because the insurance company
17 Biagtan v Insular Life wasnt able to prove that the killing was intentional. (Burden of proof is with the
insurance company)
FACTS - Insurance, being contracts of adhesion, must be construed strictly against
- Juan Biagtan was insured with Insular for P5k and a supplementary contract insurance company in cases of ambiguity.
Accidental Death Benefit clause for another P5k if "the death of the Insured - The supplementary contract enumerated exceptions. The only exception which
resulted directly from bodily injury effected solely through external and violent is not susceptible of classification is that provided in par 5(e), the very exception
means sustained in an accident . . . and independently of all other causes." The herein involved, which would also except injuries "inflicted intentionally by a third
clause, however, expressly provided that it would not apply where death resulted party, either with or without provocation on the part of the insured, and whether or
from an injury "intentionally inflicted by a third party." not the attack or the defense by the third party was caused by a violation of the
- One night, a band of robbers entered their house. Juan went out of his room law by the insured."
and he was met with 9 knife stabs. He died. The robbers were convicted of - This ambiguous clause conflicts with all the other 4 exceptions in the same par
robbery with homicide. 5 particularly that immediately preceding it in item (d) which excepts injuries
- The family was claiming the additional P5k from Insular under the Accidental received where the insured has violated the law or provoked the injury, while this
Death Benefit clause. Insular refused on the ground that the death resulted from clause, construed as the insurance company now claims, would seemingly
injuries intentionally inflicted by 3rd parties and was therefore not covered. except also all other injuries, intentionally inflicted by a third party, regardless of
- Biagtans filed against Insular. CFI ruled in favor of Biagtans. any violation of law or provocation by the insured, and defeat the very purpose of
the policy of giving the insured double indemnity in case of accidental death by
ISSUES & ARGUMENTS "external and violent means" in the very language of the policy.'
WON the injuries were intentionally inflicted by a third party? Yes - It is obvious from the very classification of the exceptions and applying the rule
of noscitus a sociis, that the double-indemnity policy covers the insured against
RATIONALE accidental death, whether caused by fault, negligence or intent of a third party
- Whether the robbers had the intent to kill or merely to scare the victim or to which is unforeseen and unexpected by the insured. All the associated words
ward off any defense he might offer, it cannot be denied that the act itself of and concepts in the policy plainly exclude the accidental death from the coverage
inflicting the injuries was intentional. of the policy only where the injuries are self-inflicted or attended by some
- The exception in the accidental benefit clause invoked by the appellant does proscribed act of the insured or are incurred in some expressly excluded calamity
not speak of the purpose whether homicidal or not of a third party in such as riot, war or atomic explosion.
causing the injuries, but only of the fact that such injuries have been
"intentionally" inflicted this obviously to distinguish them from injuries which,
although received at the hands of a third party, are purely accidental.
- Examples of unintentional:
>> A gun which discharges while being cleaned and kills a bystander;
>> a hunter who shoots at his prey and hits a person instead;
>> an athlete in a competitive game involving physical effort who collides with an
opponent and fatally injures him as a result.
- In Calanoc vs. CA: Where a shot was fired and it turned out afterwards that the
watchman was hit in the abdomen, the wound causing his death, the Court held
that it could not be said that the killing was intentional for there was the possibility
that the malefactor had fired the shot to scare the people around for his own
protection and not necessarily to kill or hit the victim. A similar possibility is clearly
ruled out by the facts in this case. For while a single shot fired from a distance,
and by a person who was not even seen aiming at the victim, could indeed have
been fired without intent to kill or injure, nine wounds inflicted with bladed
weapons at close range cannot conceivably be considered as innocent insofar as
such intent is concerned.
- In Hucthcraft's Ex'r vs. Travelers' Ins. Co. (US case): where the insured was
waylaid and assassinated for the purpose of robbery, the court rendered
judgment for the insurance company and held that while the assassination of the
insured was as to him an unforeseen event and therefore accidental, "the clause
of the proviso that excludes the (insurer's) liability, in case death or injury is

18 Finman General Assurance v CA
FACTS
- Oct. 22, 1986: Carlie Surposa was insured with Finman General Assurance
Corporation under Finman General Teachers Protection Plan Master Policy No.
2005 and Individual Policy No. 08924 with his parents, spouses Julia and Carlos
Surposa, and brothers Christopher, Charles, Chester and Clifton, all surnamed,
Surposa, as beneficiaries.
- While said insurance policy was in full force and effect, the insured, Carlie
Surposa, died on October 18, 1988 as a result of a stab wound inflicted by one of
the 3 unidentified men without provocation and warning on the part of the former
as he and his cousin, Winston Surposa, were waiting for a ride on their way
home after attending the celebration of the "Maskarra Annual Festival."
- Thereafter, Julia Surposa and the other beneficiaries of said insurance policy
filed a written notice of claim with the FINMAN Corp which denied said claim
contending that murder and assault are not within the scope of the coverage of
the insurance policy.
- Feb. 24, 1989: Surposa filed a complaint with the Insurance Commission which
subsequently ordered FINMAN to pay Surposa the proceeds of the policy with
interest.
- CA affirmed said decision.
ISSUE
WON CA committed GAD in applying the principle of "expresso unius exclusio
alterius" in a personal accident insurance policy (since death resulting from
murder and/or assault are impliedly excluded in said insurance policy considering
that the cause of death of the insured was not accidental but rather a deliberate
and intentional act of the assailant in killing the former as indicated by the
location of the lone stab wound on the insured) [TF they cannot be made to
indemnify the Surposa heirs]
Ratio The generally accepted rule is that, death or injury does not result from
accident or accidental means within the terms of an accident-policy if it is the
natural result of the insured's voluntary act, unaccompanied by anything
unforeseen except the death or injury. There is no accident when a deliberate act
is performed unless some additional, unexpected, independent, and unforeseen
happening occurs which produces or brings about the result of injury or death. In
other words, where the death or injury is not the natural or probable result of the
insured's voluntary act, or if something unforeseen occurs in the doing of the act
which produces the injury, the resulting death is within the protection of the
policies insuring against death or injury from accident.
- The personal accident insurance policy involved herein specifically enumerated
only 10 circumstances wherein no liability attaches to FINMAN for any injury,
disability or loss suffered by the insured as a result of any of the stimulated
causes.
-The principle of " expresso unius exclusio alterius" the mention of one thing
implies the exclusion of another thing is therefore applicable in the instant case
since murder and assault, not having been expressly included in the enumeration
of the circumstances that would negate liability in said insurance policy: the
failure of the FINMAN to include death resulting from murder or assault among
the prohibited risks leads inevitably to the conclusion that it did not intend to limit
or exempt itself from liability for such death.
- A1377 NCC: The interpretation of obscure words or stipulations in a contract
shall not favor the party who caused the obscurity.
- NPC vs. CA [1986]~ It is well settled that contracts of insurance are to be
construed liberally in favor of the insured and strictly against the insurer. Thus
ambiguity in the words of an insurance contract should be interpreted in favor of
its beneficiary.
Disposition DENIED for lack of merit.

HELD
NO
- The record is barren of any circumstance showing how the stab wound was
inflicted. While the act may not exempt the unknown perpetrator from criminal
liability, the fact remains that the happening was a pure accident on the part of
the victim. The insured died from an event that took place without his foresight or
expectation, an event that proceeded from an unusual effect of a known cause
and, therefore, not expected.

Reasoning
- De la Cruz vs. Capital Insurance & Surety Co., Inc (1966)~ The terms
"accident" and "accidental" as used in insurance contracts have not acquired any
technical meaning, and are construed by the courts in their ordinary and common
acceptation. Thus, the terms have been taken to mean that which happen by
chance or fortuitously, without intention and design, and which is unexpected,
unusual, and unforeseen. An accident is an event that takes place without one's
foresight or expectation an event that proceeds from an unknown cause, or is an
unusual effect of a known cause and, therefore, not expected.

19 De la Cruz v Capital Insurance
FACTS: Eduardo de la Cruz, employed as a mucker in the Itogon-Suyoc Mines,
Inc. in Baguio, was the holder of an accident insurance policy "against death or
disability caused by accidental means"
- In boxing as in other equally physically rigorous sports, such as basketball or
baseball, death is not ordinarily anticipated to result. If, therefore, it ever does,
the injury or death can only be accidental or produced by some unforeseen
happening or event as what occurred in this case
- Furthermore, the policy involved herein specifically excluded from its coverage
(e) Death or disablement consequent upon the Insured engaging in football,
hunting, pigsticking, steeplechasing, polo-playing, racing of any kind,
mountaineering, or motorcycling.
- Death or disablement resulting from engagement in boxing contests was not
declared outside of the protection of the insurance contract

January 1, 1957: For the celebration of the New Year, the Itogon-Suyoc Mines,
Inc. sponsored a boxing contest for general entertainment wherein Eduardo, a
non-professional boxer participated

In the course of his bout with another non-professional boxer of the same height,
weight, and size, Eduardo slipped and was hit by his opponent on the left part of
the back of the head, causing Eduardo to fall, with his head hitting the rope of the
ring

He was brought to the Baguio General Hospital the following day. He died due
to hemorrhage, intracranial.

Simon de la Cruz, the father of the insured and who was named beneficiary
under the policy, thereupon filed a claim with the insurance company

The Capital Insurance and Surety co., inc denied stating that the death caused
by his participation in a boxing contest was not accidental

RTC: favored Simon

ISSUE: W/N the cause of death was accident

HELD: YES. Eduardo slipped, which was unintentional

The terms "accident" and "accidental"
- as used in insurance contracts, have not acquired any technical meaning and
are construed by the courts in their ordinary and common acceptation
- happen by chance or fortuitously, without intention and design, and which is
unexpected, unusual, and unforeseen
- event that takes place without one's foresight or expectation
- event that proceeds from an unknown cause, or is an unusual effect of a known
cause and, therefore, not expected
- where the death or injury is not the natural or probable result of the insured's
voluntary act, or if something unforeseen occurs in the doing of the act which
produces the injury, the resulting death is within the protection of policies insuring
against death or injury from accident
- while the participation of the insured in the boxing contest is voluntary, the injury
was sustained when he slid, giving occasion to the infliction by his opponent of
the blow that threw him to the ropes of the ring is not
- The fact that boxing is attended with some risks of external injuries does not
make any injuries received in the course of the game not accidental
20 Sun Insurance v CA

Facts:
Lim accidentally killed himself with his gun after removing the magazine, showing
off, pointing the gun at his secretary, and pointing the gun at his temple. The
widow, the beneficiary, sued the petitioner and won 200,000 as indemnity with
additional amounts for other damages and attorneys fees. This was sustained in
the Court of Appeals then sent to the Supreme court by the insurance company.

Issue:
1. Was Lims widow eligible to receive the benefits?
2. Were the other damages valid?

Held:
1. Yes 2. No
Ratio: 1. There was an accident.
De la Cruz v. Capital Insurance says that "there is no accident when a deliberate
act is performed unless some additional, unexpected, independent and
unforeseen happening occurs which produces or brings about their injury or
death." This was true when he fired the gun.

Under the insurance contract, the company wasnt liable for bodily injury caused
by attempted suicide or by one needlessly exposing himself to danger except to
save anothers life.
Lim wasnt thought to needlessly expose himself to danger due to the witness
testimony that he took steps to ensure that the gun wasnt loaded. He even
assured his secretary that the gun was loaded.

There is nothing in the policy that relieves the insurer of the responsibility to pay
the indemnity agreed upon if the insured is shown to have contributed to his own
accident.
2. In order that a person may be made liable to the payment of moral damages,
the law requires that his act be wrongful. The adverse result of an action does
not per se make the act wrongful and subject the act or to the payment of moral
damages. The law could not have meant to impose a penalty on the right to
litigate; such right is so precious that moral damages may not be charged on
those who may exercise it erroneously. For these the law taxes costs.

If a party wins, he cannot, as a rule, recover attorney's fees and litigation

expenses, since it is not the fact of winning alone that entitles him to recover
such damages of the exceptional circumstances enumerated in Art. 2208.
Otherwise, every time a defendant wins, automatically the plaintiff must pay
attorney's fees thereby putting a premium on the right to litigate which should not
be so. For those expenses, the law deems the award of costs as sufficient.