TITLE FACTS ISSUE HELDWHITE GOLD MARINE SERCICES INC VS PIONEER INSURANCE AND SURETY CORPORATION AND THE STEAMSHIP MUTUAL UNDERWRITING ASSOCIATION

LICENSE

INSURANCE COMPANY LIABLE

PROTECTION AND INDEMNITY COVERAGE FOR ITS VESSEL

STEAMSHIP MUTUAL = P& I CLUB = INSURANCE COMPANY ENGAGED IN MARINE INSURANCE BUSINESS THEREFORE, IT NEEDS TO OBTAIN LICENSE FROM THE INSURANCE COMMISSION

PIONEER INSURANCE = INSURANCE COMPANY AGENT OF STEAMSHIP MUTUAL IT NEEDS A SEPARATE LICENSE TO ACT AS INSURANCE AGENT FOR STEAMSHIP MUTUAL

DOCTRINES:1. TEST TO TERMINE IF A CONTRACT IS

AN INSURANCE CONTRACT = 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

2. INSURANCE CONTRACT = CONTRACT OF INDEMNITY

3. INSURANCE CONTRACT – REGULATION BY THE STATE IS NECESSARY = therefore, 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

White gold procured a protection and indemnity coverage for its vessel from The Steamship Mutual through Pioneer Insurance and Surety Corporation

White Gold was issued a Certificate of Entry and Acceptance

Pioneer also issued receipts When White Gold failed to pay its account,

Steamship Mutual refused to renew the coverage

Steamship mutual thereafter filed a case against White Gold for collection of sum of money to recover for unpaid balance

White Gold, on the other hand, filed a complaint before the Insurance Commission claiming that Steamship Mutual and Pioneer violated the provisions of the insurance Code stating that Steamship Mutual is not a licensed insurance company

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 and that was a Protection and Indemnity club (P&I) Pioneer was not required to obtain another license as insurance agent because Steamship mutual was not engaged in the insurance business it also said that Pioneer was already licensed, hence a separate license is not needed

CA – affirmed the decision of the Insurance Commissioner the CA distinguished between P&I club members vis-à-vis conventional insurance and that Pioneer merely acted a collection agent of Steamship Inurance

Hence this petition by White Gold White Gold insists that Steamship Mutual

as a P&I Club is engaged in the insurance business

It cites the definition as “an association composed of shipowners in general who band together for the specific purpose of providing insurance over on a mutual basis against liabilities incidental to shipowning that members incur in favor of third parties”

WG argued that Steamship Mutual’s primary purpose is to solict and provide protection and indemnity coverage and for this purpose, it has engaged the services of Pioneer to act as its agenbt

Respondents contended that although SM is a P&I club, it is not engaged in the business in the insurance business in the Philippines – it is merely an association of vessel owners who have come together to provide mutual protection against liabilities incidental to shipowning

1. W/N Steamship Mutual, A P&I club, is engaged in the insurance business in the Philippines

2. W/N Pioneer needs a license an insurer agent/broker of Steamship Mutual

YES! PETITION GRANTED 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.  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 Pioneer is the resident agent of

Steamship Mutual as evidenced by the certificate of registration issued by the Insurance Commission.  It has been licensed to do or transact insurance business by virtue of the certificate of authority issued by the same agency.  However, a Certification from the Commission states that Pioneer does not have a separate license to be an agent/broker of Steamship Mutual.

Although Pioneer is already licensed as an insurance company, it needs a separate license to act as insurance agent for Steamship Mutual.

Section 299 of the Insurance Code clearly states: 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

PHILAMCARE HEALTH SYSTEMS, INC. vs. COURT OF APPEALSHEART ATTACK

Ernani Trinos applied for a health care coverage with Philam Care Health System Inc

1. W/N the health care agreement is not an insurance contract

2. W/N there is concealment of material facts

1. YES! Sect 2 (1) of the Insurance Code defines a

contract of insurance as an agreement

INSURANCE COMPANY LIABLE

ERNANI WAS INSURED BY PHILAM CARE HEALTH SYSTEM HOSPITALIZED DUE IN MMC TO HEART ATTACH PHILAM CARE REFUSED TO PAY BECAUSE ALLEGEDLY CONCEALED HEART PROBLEMS DIED IN CHINESE GENERAL HOSPITAL WIFE FILED CASE AGAISNST PHILAMCARE TC RULED IN FAVOR OF PHILAMCARE CA AFFIRMED DECISION THUS THIS APPEAL

HEALTH CARE AGREEMENT = NON-LIFE INSURANCE = CONTRACT OF INDEMNITY

CONCEALMENT BY ERMANI = DONE IN GF, X MEDICAL DOCTOR, X INTENT TO DECEIVE (X PROVEN = ENTITLED TO INSURANCE

FRAUDULENT INTENT MUST BE ESTABLISHED BY SATISFACTORY AND CONVINCING EVIDENCE BY INSURER

RESCISSION OF CONDITIONS NOT FULFILLED IN THE CASE AT BAR It should be exercised previous to the commencement of an action on the contract

INSURABLE INTEREST = HEALTH OF THE ERMANI (THE INSURED)

CONTRACT OF ADHESION CONSTRUED STRICTLY AGAINST THE INSURER

DOCTRINE:ELEMENTS OF INSURANCE CONTRACT:

1. The insured has an insurable interest2. The insured is subject to a risk of loss

by the happening of the designated peril

3. The insurer assumed the risk4. Such assumption of risk is part of a

general scheme to distribute actual losses among a large group of persons bearing a similar risk

5. In consideration of the insurer’s promise, the insured pays a premium

To the question ‘Have you or any of your family members ever consulted or been treated for high blood pressure, heart trouble, diabetes, cancer, liver disease, asthma or peptic ulcer?’, Ernani answered NO

Under the agreement, Ernani is entitled to avail of hospitalization benefits and out-patient benefits. coverage was approved for a period of 1 year from March 1, 1998 to March 1, 1989 Agreement was extended yearly until June 1, 1990 which increased the amount of coverage to a maximum sum of 75k per disability

During the period of said coverage, Ernani suffered a heart attack and was confined at the Manila Medical Center (MMC) for one month wife tried to avail of the benefits BUT Philamcare denied her claim alleging that the agreement was void because Ermani concealed his medical history Doctors at the MMC allegedly discovered at the time of Ernani’s confinement that he was hypertensive, diabetic and asthmatic, contrary to his answer in the application form. Thus, Julita paid for all the hospitalization expenses.

After Ermani was discharged from MMC he was attended by physical therapists at home later he was admitted to Chinese general hospital but due to financial difficulties, Ermani was brought home high fever brought back to CGH where he died on the same day

Julita filed an action for damages and reimbursement of her expenses plus moral damages against Philam care RTC rendered judgement in favor of Julita CA affirmed but deleted awards for damages and absolved Reverente (Pres. Of Philam care)

Hence this petition for review raising that a health care agreement is not an insurance contract; hence the “incontestability clause” under the Insurance Code does not apply

made by Ermani whereby one undertakes for a consideration to indemnify another against loss, damage or liability arising from an unknown or contingent event

Sec 3 - any contingent or unknown event, whether past or future, which my damnify a person having an insurable against him, may be insured against. Every person has an insurable interest in the life and health of himself.

Sec 10 - Every person has an insurable interest in the life and health (1) of himself of his (2) spouse and of his (3) children

Insurable interest of respondent’s husband in obtaining the health care agreement was his own health.

The health care agreement was in the nature of non-life insurance, which is primarily a contract of indemnity.

Once the member incurs hospital, medical or any other expense arising from sickness, injury or other stipulated contingent, the health care provider must pay for the same to the extent agreed upon under the contract.

2. NO! Answer was made in response to the

question relating to the medical history of the applicant depends on opinion rather than fact, especially coming from the husband who is not a medical doctor made in GF and without intent to deceive = X avoid a policy even though they are untrue

Fraudulent intent must be proved Petitioner is liable for claims under the

contract having assumed a responsibility under the agreement

The liability of the health care provider attaches once the member is hospitalized for the disease or injury covered by the agreement or wherever he avails of the covered benefits which he has prepaid.

Contract of adhesion construed strictly against the party which prepared the contract (insurer)

Ambiguity must be resolved in favor of the insured, especially to avoid forfeiture this is equally applicable to Health Care Agreements

Payment should be made to the party who made the expenses (Julita)

FORTUNE VS CA

GUARDS NG BANK; THEFT

INSURANCE COMPANY X LIABLE

ENTERED INTO CASUALTY INSURANCE (THEFT OR ROBBERY INSURANCE)

GUARDS OF BANK LIABLE FOR THEFT GUARDS = AUTHORIZED

Producers Bank’s money was stolen while it was being transported from Pasay to Makati The people guarding (GUARDS) the money were charged with THEFT the bank filed a claim for the amount of P725K and such was refused by the insurance corporation due to the stipulation:

GENERAL EXCEPTIONSThe company shall not be liable under this policy in report of any loss caused by any dishonest, fraudulent or criminal act of the insured or any

W/N the guards fall under the general exception clause of the insurance policy and thus absolved the insurance company from liability

YES!

The guards fall under the general exception The insurance company is not liable The insurance agency contended that the

guards automatically become the AUTHORIZED REPRESENTATIVES OF THE BANK = EMPLOYER-EMPLOYEE RELATIONSHIP between the owner of the project and the employees of the “labor-only” contractor

REPRESENTATIVES = FALLS UNDER EXCEPTION TO LIABILITY = X ENTITLED TO INSURANCE

BANK’S ASSERTION: GUARDS X EMPLOYEES (LABOR ONLY CONTRACT)

officer, employee, partner, director, trustee or authorized representative of the Insured whether acting alone or in conjunction with others. . . . The bank claimed that the suspects were

not any of the abovementioned TC ruled in favor of them CA affirmed on the basis that the bank had no power to hire or dismiss the guard and could only ask for replacement from security agency

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.

“The term "employee," should be read as a person who qualifies as such as 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.’”

ENRIQUEZ VS SUN LIFE ASSURANCE OF CANADA

X PERFECTED CONTRACT OF LIFE ANNUITY BECAUSE APPROVAL LETTER WAS NEVER RECEIVED

INSURANCE COMPANY X LIABLE

HERRER MADE APPLICATION TO INSURANCE COMPANY FOR LIFE ANNUITY PAID SUM TO MANAGER OF COMPANY IN MANILA OFICE AND WAS GIVEN RECEIPT HEAD OFFICE GAVE NOTICE OF ACCEPTANCE BY CAPABLE TO MANILA MANILA OFFICE PREPARED LETTER NOTIFYING H THAT HIS APPLICATION WAS APPROVED AND WAS PLACED FOR TRANSMISSION BUT WAS NEVER ACTUALLY MAILED AND WAS NEVER RECEIVED BY APPLICANT DIED ON DEC 20, 1917

INSURANCE X COMMUNICATED TO APPLICANT = X PERFECTED CONTRACT FOR LIFE ANNUITY

Life annuity is the opposite of a life insurance.

In life annuity - a big amount is given to the insurance company, and if after a certain period of time the insured is stil living, he is entitled to regular smaller amounts for the rest of his life. Examples of Life annuity are pensions.

Joaquin Herrer made application to the Sun Life Assurance Company of Canada through its office in Manila for a life annuity

2 days later  he paid P6,000 to the manager of the company's Manila office given a receipt

According to the provisional receipt, 3 things had to be accomplished by the insurance company before there was a contract:

o (1) There had to be a medical examination of the applicant; -check

o (2) there had to be approval of the application by the head office of the company; and – check

o (3) this approval had in some way to be communicated by the company to the applicant

The head office at Montreal, Canada gave notice of acceptance by cable to Manila but this was not mailed

Policy was issued at Montreal attorney Aurelio A. Torres wrote to the Manila office of the company stating that Herrer desired to withdraw his application

Local office replied to Mr. Torres, stating that the policy had been issued, and called attention to the notification of November 26, 1917

December 21, 1917 morning: received by Mr. Torres

December 20, 1917: Mr. Herrer died Rafael Enriquez, as administrator of the

W/N the insurance contract was perfect NO!

The contract for life annuity was NOT perfected because it had NOT been proved satisfactorily that the acceptance of the application ever came to the knowledge of the applicant.

An acceptance of an offer of insurance NOT actually or constructively communicated to the proposer does NOT make a contract of insurane, as the locus poenitentiae is ended when an acceptance has passed beyond the control of the party.

Enriquez shall have and recover from the Sun Life the sum of P6,000 with legal interest from November 20, 1918, until paid, without special finding as to costs in either instance

Life Insurance - on the other hand, the insured during the period of the coverage makes small regular payments and upon his death, the insurer pays a big amount to his beneficiaries.

estate of the late Joaquin Ma. Herrer filed to recover from Sun Life Assurance Company of Canada through its office in Manila for a life annuity

RTC ruled in favor of Sun Life

GREAT PACIFIC LIFE INSURANCE COMPANY VS CA

INFLUENZA, MONGOLOID

INSURANCE COMPANY X LIABLE

NGO HING APPLIED FOR INSURANCE FOR 20 YEAR ENDOWMENT FOR 1 YEAR OLD DAUGHTER HELEN HANDLED BY MONDRAGON REJECTED BY GREAT PACIFIC INSURANCE AND OFFERED JUVENILE TRIPLE ACTION PLAN INSTEAD HELEN DIED OF INFLUENZA FILED ACTION FOR RECOVERY OF INSURANCE BENEFIT

DEPOSIT RECEIPT = PROVISIONAL INSURANCE CONTRACT = X BINDING = ONLY SERVES AS ACKNOWLEDGEMENT THAT BRANCH RECEIVED THE INSURANCE PREMIUM

NGO HING CONCEALED FACT THAT HELEN IS MONGOLOID = X UBBERIMA FIDES = GROUND FOR RESCISSION OF CONTRACT OF INSURANCE

UBBERIMA FIDES - The contract of insurance is one of perfect good faith (uberrima fides meaning good faith; absolute and perfect candor or openness and honestly; the absence ofany concealment or deception, however slight not for the insured alone but equally so for the insurer.|||

Ngo Hing filed an application with Great Pacific for a 20 year endowment policy in the amount of 50k on the life of his 1 year old daughter Helen

He supplied the essential data which petitioner Mondragon, the Branch Manager, wrote on the form Mondragon paid the annual premium to the Company, but retained a certain amount as his commission for being a duly authorized agent of Pacific Life

Upon the payment of the insurance premium the binding deposit receipt was issued to Ngo Hing

Likewise, petitioner Mondragon handwrote at the bottom of the back page of the application form his strong recommendation for the approval of the insurance applicable Mondragon received a letter from Pacific Life disapproving the insurance application The letter stated that the said life insurance application for 20-year endowment plan is not available for minors below seven years old, but Pacific Life can consider the same under the Juvenile Triple Action Plan, and advised that if the offer is acceptable, the Juvenile Non-Medical Declaration be sent to the company.

The non-acceptance of the insurance plan by Pacific Life was allegedly not communicated by petitioner Mondragon to private respondent Ngo Hing.

Instead, on May 6, 1957, Mondragon wrote back Pacific Life again strongly recommending the approval of the 20-year endowment insurance plan to children, pointing out that since the customers were asking for such coverage.

Helen Go died of influenza. Ngo Hing sought the payment of the proceeds of the insurance, but having failed in his effort, he filed the action for the recovery before the Court of First Instance of Cebu RTC ruled against him

1. W/N the binding deposit receipt constituted a temporary contract of the life insurance in question

2. Whether Ngo Hing concealed the state of health and physical condition of Helen Go, which rendered the policy void

1. NO!

The receipt was intended to be merely a provisional insurance contract.

Its perfection was subject to compliance of the following conditions: (1) that the company shall be satisfied that the applicant was insurable on standard rates; (2) that if the company does not accept the application and offers to issue a policy for a different plan, the insurance contract shall not be binding until the applicant accepts the policy offered; otherwise, the deposit shall be refunded; and (3) that if the company disapproves the application, the insurance applied for shall not be in force at any time, and the premium paid shall be returned to the applicant.

The receipt = merely an acknowledgment that the latter's branch office had received from the applicant the insurance premium and had accepted the application subject for processing by the insurance company. There was still approval or rejection the same on the basis of whether or not the applicant is "insurable on standard rates."

Since Pacific Life disapproved the insurance application of respondent Ngo Hing, the binding deposit receipt in question had never become in force at any time. The binding deposit receipt is conditional and does not insure outright.

The deposit paid by private respondent shall have to be refunded by Pacific Life.

2. YES Ngo Hing had deliberately concealed the

state of health of his daughter Helen Go. When he supplied data, he was fully aware

that his one-year old daughter is typically a mongoloid child. He withheld the fact material to the risk insured.

“The contract of insurance is one of perfect good faith uberrima fides meaning good faith, absolute and perfect candor or openness and honesty; the absence of any concealment or demotion, however slight.”

The concealment entitles the insurer to rescind the contract of insurance.