SURETYSHIP G.R. Nos.

152505-06 September 13, 2007

only P1,285,959.12. Of this amount, Equinox paid JMarc only P697,005.12 because the former paid EXAN P588,954.00 for concrete mix. Shortly after Equinox paid JMarc based on its first billing, the latter again requested an advanced of P150,000.00. Again Equinox paid JMarc this Eventually, Equinox found that the amount owing to laborers was only P121,000.00, not P150,000.00. progress payment amount. JMarcs

PRUDENTIAL GUARANTEE and ASSURANCE, INC., petitioner, vs. EQUINOX LAND CORPORATION, respondent. DECISION SANDOVAL-GUTIERREZ, J.: Before us for resolution is the instant Petition for Review on Certiorari assailing the Decision1 of the Court of Appeals (Third Division) dated November 23, 2001 in CA-G.R. SP No. 56491 and CA-G.R. SP No. 57335. The undisputed facts of the case, as established by the Construction Industry Arbitration Commission (CIAC) and affirmed by the Court of Appeals, are: Sometime in 1996, Equinox Land Corporation (Equinox), respondent, decided to construct five (5) additional floors to its existing building, the Eastgate Centre, located at 169 EDSA, Mandaluyong City. It then sent invitations to bid to various building contractors. Four (4) building contractors, including JMarc Construction & Development Corporation (JMarc), responded. Finding the bid of JMarc to be the most advantageous, Equinox offered the construction project to it. On February 22, 1997, JMarc accepted the offer. Two days later, Equinox formally awarded to JMarc the contract to build the extension for a consideration of P37,000,000.00. On February 24, 1997, JMarc submitted to Equinox two (2) bonds, namely: (1) a surety bond issued by Prudential Guarantee and Assurance, Inc. (Prudential), herein petitioner, in the amount of P9,250,000.00 to guarantee the unliquidated portion of the advance payment payable to JMarc; and (2) a performance bond likewise issued by Prudential in the amount of P7,400,000.00 to guarantee JMarcs faithful performance of its obligations under the construction agreement. On March 17, 1997, Equinox and JMarc signed the contract and related documents. Under the terms of the contract, JMarc would supply all the labor, materials, tools, equipment, and supervision required to complete the project. In accordance with the terms of the contract, Equinox paid JMarc a downpayment of P9,250,000.00 equivalent to 25% of the contract price. JMarc did not adhere to the terms of the contract. It failed to submit the required monthly progress billings for the months of March and April 1997. Its workers neglected to cover the drainpipes, hence, they were clogged by wet cement. This delayed the work on the project. On May 23, 1997, JMarc requested an unscheduled cash advance of P300,000.00 from Equinox, explaining it had encountered cash problems. Equinox granted JMarcs request to prevent delay. On May 31, 1997, JMarc submitted its first progress billing showing that it had accomplished only 7.3825% of the construction work estimated at P2,731,535.00. After deducting the advanced payments, the net amount payable to JMarc was
Surety & Life Insurance Cases

In June 1997, EXAN refused to deliver concrete mix to the project site due to JMarcs recurring failure to pay on time. Faced with a looming delay in the project schedule, Equinox acceded to EXANs request that payments for the concrete mix should be remitted to it directly. On June 30, 1997, JMarc submitted its second progress billing showing that it accomplished only 16.0435% of the project after 4 months of construction work. Based on the contract and its own schedule, JMarc should have accomplished at least 37.70%. Faced with the problem of delay, Equinox formally gave JMarc one final chance to take remedial steps in order to finish the project on time. However, JMarc failed to undertake any corrective measure. Consequently, on July 10, 1997, Equinox terminated its contract with JMarc and took over the project. On the same date, Equinox sent Prudential a letter claiming relief from JMarcs violations of the contract. On July 11, 1997, the work on the project stopped. The personnel of both Equinox and JMarc jointly conducted an inventory of all materials, tools, equipment, and supplies at the construction site. They also measured and recorded the amount of work actually accomplished. As of July 11, 1997, JMarc accomplished only 19.0573% of the work or a shortage of 21.565% in violation of the contract. The cost of JMarcs accomplishment was only P7,051,201.00. In other words, Equinox overpaid JMarc in the sum of P3,974,300.25 inclusive of the 10% retention on the first progress billing amounting to P273,152.50. In addition, Equinox also paid the wages of JMarcs laborers, the billings for unpaid supplies, and the amounts owing to subcontractors of JMarc in the total sum of P664,998.09. On August 25, 1997, Equinox filed with the Regional Trial Court (RTC), Branch 214, Mandaluyong City a complaint for sum of money and damages against JMarc and Prudential. Equinox prayed that JMarc be ordered to reimburse the amounts corresponding to its (Equinox) advanced payments and unliquidated portion of its downpayment; and to pay damages. Equinox also prayed that Prudential be ordered to pay its liability under the bonds. In its answer, JMarc alleged that Equinox has no valid ground for terminating their contract. For its part, Prudential denied Equinoxs claims and instituted a cross-claim against JMarc for any judgment that might be rendered against its bonds. During the hearing, Prudential filed a motion to dismiss the complaint on the ground that pursuant to Executive Order No. 1008, it is the CIAC which has jurisdiction over it. On February 12, 1999, the trial court granted Prudentials motion and dismissed the case. On May 19, 1999, Equinox filed with the CIAC a request for arbitration, docketed as CIAC Case No. 17-99. Prudential submitted a position paper contending that the CIAC has no
1

jurisdiction over it since it is not a privy to the construction contract between Equinox and JMarc; and that its surety and performance bonds are not construction agreements, thus, any action thereon lies exclusively with the proper court. On December 21, 1999, the CIAC rendered its Decision in favor of Equinox and against JMarc and Prudential, thus: AWARD After considering the evidence and the arguments of the parties, we find that: 1. JMarc has been duly notified of the filing and pendency of the arbitration proceeding commenced by Equinox against JMarc and that CIAC has acquired jurisdiction over JMarc; 2. The construction Contract was validly terminated by Equinox due to JMarcs failure to provide a timely supply of adequate labor, materials, tools, equipment, and technical services and to remedy its inability to comply with the construction schedule; 3. Equinox is not entitled to claim liquidated damages, although under the circumstances, in the absence of adequate proof of actual and compensatory damages, we award to Equinox nominal or temperate damages in the amount of P500,000.00; 4. The percentage of accomplishment of JMarc at the time of the termination of the Contract was 19.0573% of the work valued at P7,051,201.00. This amount should be credited to JMarc. On the other hand, Equinox [i] had paid JMarc 25% of the contract price as down or advance payment, [ii] had paid JMarc its first progress billing, [iii] had made advances for payroll of the workers, and for unpaid supplies and the works of JMarcs subcontractors, all in the total sum of P11,690,483.34. Deducting the value of JMarcs accomplishment from these advances and payment, there is due from JMarc to Equinox the amount ofP4,639,285.34. We hold JMarc liable to pay Equinox this amount of P4,639,285.34. 5. If JMarc had billed Equinox for its accomplishment as of July 11, 1997, 25% of the P7,051,201.00 would have been recouped as partial payment of the advanced or down payment. This would have resulted in reducing Prudentials liability on the Surety Bond from P8,250,000.00 to P7,487,199.80. We, therefore, find that Prudential is liable to Equinox on its Surety Bond the amount of P7,487,199.80; 6. Prudential is furthermore liable on its Performance Bond for the following amounts: the advances made by Equinox on behalf of JMarc to the workers, suppliers, and subcontractors amounting to P664,985.09, the nominal damages of P500,000.00 and attorneys fees of P100,000.00 or a total amount of P1,264,985.00; 7. All other claims and counterclaims are denied; 8. JMarc shall pay the cost of arbitration and shall indemnify Equinox the total amount paid by Equinox as expenses of arbitration; 9. The total liability of JMarc to Equinox is determined to be P5,139,285.34 plus attorneys fees ofP100,000.00.
Surety & Life Insurance Cases

The suretys liability cannot exceed that of the principal debtor [Art. 2054, Civil Code}. We hold that, notwithstanding our finding in Nos. 5 and 6 of this Award, Prudential is liable to Equinox on the Surety Bond and Performance Bond an amount not to exceed P5,239,285.34. The cost of arbitration shall be paid by JMarc alone. The amount of P5,239,285.34 shall be paid by respondent JMarc and respondent Prudential, jointly and severally, with interest at six percent [6%] per annum from promulgation of this award. This amount, including accrued interest, shall earn interest at the rate of 12% per annum from the time this decision becomes final and executory until the entire amount is fully paid or judgment fully satisfied. The expenses of arbitration, which shall be paid by JMarc alone, shall likewise earn interest at 6% per annum from the date of promulgation of the award, and 12% from the date the award becomes final until this amount including accrued interest is fully paid. SO ORDERED. Thereupon, Prudential filed with the Court of Appeals a petition for review, docketed as CA-G.R. SP No. 56491. Prudential alleged that the CIAC erred in ruling that it is bound by the terms of the construction contract between Equinox and JMarc and that it is solidarily liable with JMarc under its bonds. Equinox filed a motion for reconsideration on the ground that there is an error in the computation of its claim for unliquidated damages; and that it is entitled to an award of liquidated damages. On February 2, 2000, the CIAC amended its Award by reducing the total liability of JMarc to Equinox toP4,060,780.21, plus attorneys fees of P100,000 or P4,160,780.21, and holding that Prudentials liability to Equinox on the surety and performance bonds should not exceed the said amount of P4,160,780.21, payable by JMarc and Prudential jointly and severally. Dissatisfied, Equinox filed with the Court of Appeals a petition for review, docketed as CA-G.R. SP No. 57335. This case was consolidated with CA-G.R. SP No. 56491 filed by Prudential. On November 23, 2001, the Court of Appeals rendered its Decision in CA-G.R. SP No. 57335 and CA-G.R. SP No. 56491, the dispositive portion of which reads: WHEREFORE, the Amended Decision dated February 2, 2000 is AFFIRMED with MODIFICATION in paragraph 4 in the Award by holding JMarc liable for unliquidated damages to Equinox in the amount ofP5,358,167.09 and in paragraph 9 thereof by increasing the total liability of JMarc to Equinox toP5,958,167.09 (in view of the additional award of P500,000.00 as nominal and temperate damages andP100,000.00 in attorneys fees), and AFFIRMED in all other respects. SO ORDERED. Prudential seasonably filed a motion for reconsideration but it was denied by the Court of Appeals. The issue raised before us is whether the Court of Appeals erred in (1) upholding the jurisdiction of the CIAC over the case; and (2) finding Prudential solidarily liable with JMarc for damages.

On the first issue, basic is the rule that administrative agencies are tribunals of limited jurisdiction and as such, can only wield such powers as are specifically granted to them by their enabling statutes.2 Section 4 of Executive Order No. 1008,3 provides: SEC. 4. Jurisdiction. The CIAC shall have original and exclusive jurisdiction over disputes arising from, or connected with contracts entered into by parties involved in construction in the Philippines, whether the dispute arises before or after the completion of the contract, or after the abandonment or breach thereof. These disputes may involve government or private contracts. For the Board to acquire jurisdiction, the parties to a dispute must agree to submit the same to voluntary arbitration. The jurisdiction of the CIAC may include but is not limited to violation of specifications for materials and workmanship, violation of the terms of agreement, interpretation and/or application of contractual time and delays, maintenance and defects, payment, default of employer or contractor and changes in contract cost. Excluded from the coverage of the law are disputes arising from employer-employee relationships which continue to be covered by the Labor Code of the Philippines. In David v. Construction Industry and Arbitration Commission,4 we ruled that Section 4 vests upon the CIAC original and exclusive jurisdiction over disputes arising from or connected with construction contracts entered into by parties who have agreed to submit their case for voluntary arbitration. As earlier mentioned, when Equinox lodged with the RTC its complaint for a sum of money against JMarc and Prudential, the latter filed a motion to dismiss on the ground of lack of jurisdiction, contending that since the case involves a construction dispute, jurisdiction lies with CIAC. Prudentials motion was granted. However, after the CIAC assumed jurisdiction over the case, Prudential again moved for its dismissal, alleging that it is not a party to the construction contract between Equinox and JMarc; and that the surety and performance bonds it issued are not construction agreements. After having voluntarily invoked before the RTC the jurisdiction of CIAC, Prudential is estopped to question its jurisdiction. As we held in Lapanday Agricultural & Development Corporation v. Estita,5 the active participation of a party in a case pending against him before a court or a quasi-judicial body is tantamount to a recognition of that courts or quasi-judicial bodys jurisdiction and a willingness to abide by the resolution of the case and will bar said party from later on impugning the courts or quasi-judicial bodys jurisdiction. Moreover, in its Reply to Equinoxs Opposition to the Motion to Dismiss before the RTC, Prudential, citingPhilippine National Bank v. Pineda6 and Finman General Assurance Corporation v. Salik,7 argued that as a surety, it is considered under the law to be the same party as the obligor in relation to whatever is adjudged regarding the latters obligation. Therefore, it is the CIAC which has jurisdiction over the case involving a construction contract between Equinox and JMarc. Such an admission by Prudential binds it and it cannot now claim otherwise. Anent the second issue, it is not disputed that Prudential entered into a suretyship contract with JMarc. Section 175 of the Insurance Code defines a suretyship as "a contract or agreement whereby a party, called the suretyship, guarantees the performance
Surety & Life Insurance Cases

by another party, called the principal or obligor, of an obligation or undertaking in favor of a third party, called the obligee. It includes official recognizances, stipulations, bonds, or undertakings issued under Act 5368, as amended." Corollarily, Article 2047 of the Civil Code provides that suretyship arises upon the solidary binding of a person deemed the surety with the principal debtor for the purpose of fulfilling an obligation. In Castellvi de Higgins and Higgins v. Seliner,9 we held that while a surety and a guarantor are alike in that each promises to answer for the debt or default of another, the surety assumes liability as a regular party to the undertaking and hence its obligation is primary. In Security Pacific Assurance Corporation v. Tria-Infante,10 we reiterated the rule that while a contract of surety is secondary only to a valid principal obligation, the suretys liability to the creditor is said to be direct, primary, and absolute. In other words, the surety is directly and equally bound with the principal. Thus, Prudential is barred from disclaiming that its liability with JMarc is solidary. WHEREFORE, we DENY the petition. The assailed Decision of the Court of Appeals (Third Division) dated November 23, 2001 in CA-G.R. SP No. 56491 and CA-G.R. SP No. 57355 is AFFIRMED in toto. Costs against petitioner. DBP POOL OF ACCREDITED INSURANCE COMPANIES, Petitioner, vs. RADIO MINDANAO NETWORK, INC., Respondent. FACTS: Radio Mindanao Network, Inc. (respondent) owns several broadcasting stations all over the country. Provident Insurance Corporation (Provident) covered respondents transmitter equipment and generating set for the amount of P13,550,000.00 under Fire Insurance Policy No. 30354, while petitioner covered respondents transmitter, furniture, fixture and other transmitter facilities for the amount of P5,883,650.00 under Fire Insurance Policy No. F-66860. respondents radio station located in SSS Building, Bacolod City, was razed by fire causing damage in the amount of P1,044,040.00. Respondent sought recovery under the two insurance policies but the claims were denied on the ground that the cause of loss was an excepted risk excluded under condition no. 6 (c) and (d), to wit: 6. This insurance does not cover any loss or damage occasioned by or through or in consequence, directly or indirectly, of any of the following consequences, namely: (c) War, invasion, act of foreign enemy, hostilities, or warlike operations (whether war be declared or not), civil war. (d) Mutiny, riot, military or popular rising, insurrection, rebellion, revolution, military or usurped power.3 The insurance companies maintained that the evidence showed that the fire was caused by members of CPP/NPA); and consequently, denied the claims. Both RTC and CA found that evidence of the insurers are not sufficient to prove that the fire was caused by NPAs. the only person who seems to be so sure that that the CPP-NPA had a hand in the burning of DYHB was Lt. Col. Nicolas Torres. However, his testimonies were inadmissible as they were merely based on the testimonies of witnesses who were not even presented as a witness hence considered hearsay evidence.
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ISSUE: W/N petitioner is liable for the loss HELD: YES. In insurance cases, where a risk is excepted by the terms of a policy which insures against other perils or hazards, loss from such a risk constitutes a defense which the insurer may urge, since it has not assumed that risk, and from this it follows that an insurer seeking to defeat a claim because of an exception or limitation in the policy has the burden of proving that the loss comes within the purview of the exception or limitation set up. If a proof is made of a loss apparently within a contract of insurance, the burden is upon the insurer to prove that the loss arose from a cause of loss which is excepted or for which it is not liable, or from a cause which limits its liability. G.R. No. 107062 February 21, 1994 PHILIPPINE PRYCE ASSURANCE CORPORATION, petitioner, vs. THE COURT OF APPEALS, (Fourteenth Division) and GEGROCO, INC., respondents. NOCON, J.: Two purely technical, yet mandatory, rules of procedure frustrated petitioner's bid to get a favorable decision from the Regional Trial Court and then again in the Court of Appeals. 1 These are nonappearance during the pre-trial despite due notice, and nonpayment of docket fees upon filing of its third-party complaint. Just how strict should these rules be applied is a crucial issue in this present dispute. Petitioner, Interworld Assurance Corporation (the company now carries the corporate name Philippine Pryce Assurance Corporation), was the butt of the complaint for collection of sum of money, filed on May 13, 1988 by respondent, Gegroco, Inc. before the Makati Regional Trial Court, Branch 138. The complaint alleged that petitioner issued two surety bonds (No. 0029, dated July 24, 1987 and No. 0037, dated October 7, 1987) in behalf of its principal Sagum General Merchandise for FIVE HUNDRED THOUSAND (P500,000.00) PESOS and ONE MILLION (1,000,000.00) PESOS, respectively. On June 16, 1988, summons, together with the copy of the complaint, was served on petitioner. Within the reglementary period, two successive motions were filed by petitioner praying for a total of thirty (30) days extention within which to file a responsible pleading. In its Answer, dated July 29, 1988, but filed only on August 4, 1988, petitioner admitted having executed the said bonds, but denied liability because allegedly 1) the checks which were to pay for the premiums bounced and were dishonored hence there is no contract to speak of between petitioner and its supposed principal; and 2) that the bonds were merely to guarantee payment of its principal's obligation, thus, excussion is necessary. After the issues had been joined, the case was set for pre-trial conference on September 29, 1988. the petitioner received its notice on September 9, 1988, while the notice addressed to its counsel was returned to the trial court with the notation "Return to Sender, Unclaimed." 2 On the scheduled date for pre-trial conference, only the counsel for petitioner appeared while both the representative of respondent and its counsel were present. The counsel for petitioner manifested that he was unable to contract the Vice-President for operations of petitioner, although his client intended to file a third party complaint against its principal. Hence, the pre-trial was re-set to October 14, 1988. 3
Surety & Life Insurance Cases

On October 14, 1988, petitioner filed a "Motion with Leave to Admit Third-Party Complaint" with the Third-Party Complaint attached. On this same day, in the presence of the representative for both petitioner and respondent and their counsel, the pre-trial conference was re-set to December 1, 1988. Meanwhile on November 29, 1988, the court admitted the Third Party Complaint and ordered service of summons on third party defendants. 4 On scheduled conference in December, petitioner and its counsel did not appear notwithstanding their notice in open court. 5 The pre-trial was nevertheless re-set to February 1, 1989. However, when the case was called for pre-trial conference on February 1, 1989, petitioner was again nor presented by its officer or its counsel, despite being duly notified. Hence, upon motion of respondent, petitioner was considered as in default and respondent was allowed to present evidenceex-parte, which was calendared on February 24, 1989. 6 Petitioner received a copy of the Order of Default and a copy of the Order setting the reception of respondent's evidence ex-parte, both dated February 1, 1989, on February 16, 1989. 7 On March 6, 1989, a decision was rendered by the trial court, the dispositive portion reads: WHEREFORE, judgment is hereby rendered in favor of the plaintiff and against the defendant Interworld Assurance Corporation to pay the amount of P1,500,000.00 representing the principal of the amount due, plus legal interest thereon from April 7, 1988, until date of payment; and P20,000.00 as and for attorney's fees. 8 Petitioner's "Motion for Reconsideration and New Trial" dated April 17, 1989, having been denied it elevated its case to the Court of Appeals which however, affirmed the decision of the trial court as well as the latter's order denying petitioner's motion for reconsideration. Before us, petitioner assigns as errors the following: I. The respondent Court of Appeals gravely erred in declaring that the case was already ripe for pre-trial conference when the trial court set it for the holding thereof. II. The respondent Court of Appeals gravely erred in affirming the decision of the trial court by relying on the ruling laid down by this Honorable Court in the case of Manchester Development Corporation v. Court of Appeals, 149 SCRA 562, and disregarding the doctrine laid down in the case of Sun Insurance Office, Ltd. (SIOL) v. Asuncion, 170 SCRA 274. III. The respondent Court of Appeals gravely erred in declaring that it would be useless and a waste of time to remand the case for further proceedings as defendant-appellant has no meritorious defense. We do not find any reversible error in the conclusion reached by the court a quo. Relying on Section 1, Rule 20 of the Rules of court, petitioner argues that since the last pleading, which was supposed to be the third-party defendant's answer has not been filed, the case is not yet ripe for pre-trial. This argument must fail on three points. First, the trial court asserted, and we agree, that no answer to the third party
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complaint is forthcoming as petitioner never initiated the service of summons on the third party defendant. The court further said: . . . Defendant's claim that it was not aware of the Order admitting the third-party complaint is preposterous. Sec. 8, Rule 13 of the Rules, provides: Completeness of service . . . Service by registered mail is complete upon actual receipt by the addressee, but if he fails to claim his mail from the post office within five (5) days from the date of first notice of the postmaster, service shall take effect at the expiration of such time. 9 Moreover, we observed that all copies of notices and orders issued by the court for petitioner's counsel were returned with the notation "Return to Sender, Unclaimed." Yet when he chose to, he would appear in court despite supposed lack of notice. Second, in the regular course of events, the third-party defendant's answer would have been regarded as the last pleading referred to in Sec. 1, Rule 20. However, petitioner cannot just disregard the court's order to be present during the pre-trial and give a flimsy excuse, such as that the answer has yet to be filed. The pre-trial is mandatory in any action, the main objective being to simplify, abbreviate and expedite trial, if not to fully dispense with it. Hence, consistent with its mandatory character the Rules oblige not only the lawyers but the parties as well to appear for this purpose before the Court 10 and when a party fails to appear at a pre-trial conference he may be non-suited or considered as in default. 11 Records show that even at the very start, petitioner could have been declared as in default since it was not properly presented during the first scheduled pre-trial on September 29, 1988. Nothing in the record is attached which would show that petitioner's counsel had a special authority to act in behalf of his client other than as its lawyer. We have said that in those instances where a party may not himself be present at the pre-trial, and another person substitutes for him, or his lawyer undertakes to appear not only as an attorney but in substitution of the client's person, it is imperative for that representative or the lawyer to have "special authority" to enter into agreements which otherwise only the client has the capacity to make. 12 Third, the court of Appeals properly considered the third-party complaint as a mere scrap of paper due to petitioner's failure to pay the requisite docket fees. Said the court a quo: A third-party complaint is one of the pleadings for which Clerks of court of Regional Trial Courts are mandated to collect docket fees pursuant to Section 5, Rule 141 of the Rules of Court. The record is bereft of any showing tha(t) the appellant paid the corresponding docket fees on its third-party complaint. Unless and until the corresponding docket fees are paid, the trial court would not acquire jurisdiction over the third-party complaint (Manchester Development Corporation vs.
Surety & Life Insurance Cases

Court of Appeals, 149 SCRA 562). The thirdparty complaint was thus reduced to a mere scrap of paper not worthy of the trial court's attention. Hence, the trial court can and correctly set the case for pre-trial on the basis of the complaint, the answer and the answer to the counterclaim. 13 It is really irrelevant in the instant case whether the ruling in Sun Insurance Office, Ltd. (SIOL) v. Asuncion 14 or that in Manchester Development Corp. v. C.A. 15 was applied. Sun Insurance and Manchester are mere reiteration of old jurisprudential pronouncements on the effect of non-payment of docket fees. 16 In previous cases, we have consistently ruled that the court cannot acquire jurisdiction over the subject matter of a case, unless the docket fees are paid. Moreover, the principle laid down in Manchester could have very well been applied in Sun Insurance. We then said: The principle in Manchester [Manchester Development Corp. v. C.A., 149 SCRA 562 (1987)] could very well be applied in the present case. The pattern and the intent to defraud the government of the docket fee due it is obvious not only in the filing of the original complaint but also in the filing of the second amended complaint. xxx xxx xxx In the present case, a more liberal interpretation of the rules is called for considering that, unlike Manchester, private respondent demonstrated his willingness to abide by the rules by paying the additional docket fees as required. The promulgation of the decision in Manchester must have had that sobering influence on private respondent who thus paid the additional docket fee as ordered by the respondent court. It triggered his change of stance by manifesting his willingness to pay such additional docket fees as may be ordered. 17 Thus, we laid down the rules as follows: 1. It is not simply the filing of the complaint or appropriate initiatory pleading, but the payment of the prescribed docket fee, that vests a trial court with jurisdiction over the subject-matter or nature of the action. Where the filing of the initiatory pleading is not accompanied by payment of the docket fee, the court may allow payment of the fee within a reasonable time, but in no case beyond the applicable prescriptive or reglamentary period. 2. The same rule applies to permissive counterclaims, third-party claims and similar pleadings, which shall not be considered filed until and unless the filing fee prescribed therefor is paid. The court may also allow payment of said fee within a prescriptive or reglementary period. 3. Where the trial court acquires jurisdiction over a claim by the filing of the appropriate pleading and payment of the prescribed filing fee, but subsequently, the judgment awards a
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claim nor specified in the pleading, or if specified the same has not been left for determination by the court, the additional filing fee therefor shall constitute a lien on the judgment. It shall be the responsibility of the clerk of court or his duly authorized deputy to enforce said lien and assess and collect the additional fee. 18 It should be remembered that both in Manchester and Sun Insurance plaintiffs therein paid docket fees upon filing of their respective pleadings, although the amount tendered were found to be insufficient considering the amounts of the reliefs sought in their complaints. In the present case, petitioner did not and never attempted to pay the requisite docket fee. Neither is there any showing that petitioner even manifested to be given time to pay the requisite docket fee, as in fact it was not present during the scheduled pre-trial on December 1, 1988 and then again on February 1, 1989. Perforce, it is as if the third-party complaint was never filed. Finally, there is reason to believe that partitioner does not really have a good defense. Petitioner hinges its defense on two arguments, namely: a) that the checks issued by its principal which were supposed to pay for the premiums, bounced, hence there is no contract of surety to speak of; and 2) that as early as 1986 and covering the time of the Surety Bond, Interworld Assurance Company (now Phil. Pryce) was not yet authorized by the insurance Commission to issue such bonds. The Insurance Code states that: Sec. 177. The surety is entitled to payment of the premium as soon as the contract of suretyship or bond is perfected and delivered to the obligor. No contract of suretyship or bonding shall be valid and binding unless and until the premium therefor has been paid, except where the obligee has accepted the bond, in which case the bond becomes valid and enforceable irrespective of whether or not the premium has been paid by the obligor to the surety. . . . (emphasis added) The above provision outrightly negates petitioner's first defense. In a desperate attempt to escape liability, petitioner further asserts that the above provision is not applicable because the respondent allegedly had not accepted the surety bond, hence could not have delivered the goods to Sagum Enterprises. This statement clearly intends to muddle the facts as found by the trial court and which are on record. In the first place, petitioner, in its answer, admitted to have issued the bonds subject matter of the original action.19 Secondly, the testimony of Mr. Leonardo T. Guzman, witness for the respondent, reveals the following: Q. What are the conditions and terms of sales you extended to Sagum General Merchandise? A. First, we required him to submit to us Surety Bond to guaranty payment of the spare parts to be purchased. Then we sell to them on 90 days credit.
Surety & Life Insurance Cases

Also, we required them to issue post-dated checks. Q. Did Sagum General merchandise comply with your surety bond requirement? A. Yes. They submitted to us and which we have accepted two surety bonds. Q Will you please present to us the aforesaid surety bonds? A. Interworld Assurance Corp. Surety Bond No. 0029 for P500,000 dated July 24, 1987 and Interworld Assurance Corp. Surety Bond No. 0037 for P1,000.000 dated October 7, 1987. 20 Likewise attached to the record are exhibits C to C-18 21 consisting of delivery invoices addressed to Sagum General Merchandise proving that parts were purchased, delivered and received. On the other hand, petitioner's defense that it did not have authority to issue a Surety Bond when it did is an admission of fraud committed against respondent. No person can claim benefit from the wrong he himself committed. A representation made is rendered conclusive upon the person making it and cannot be denied or disproved as against the person relying thereon. 22 WHEREFORE, in view of the foregoing, the decision of the Court of Appeals dismissing the petition before them and affirming the decision of the trial court and its order denying petitioner's Motion for Reconsideration are hereby AFFIRMED. The present petition is DISMISSED for lack of merit. SO ORDERED. Narvasa, C.J., Padilla, Regalado and Puno, JJ., concur.

LIFE INSURANCE Republic vs Sun Life Assurance Company Petitioner: Republic of the Philippines- Represented by CIR Respondent: Sun Life Assurance Company of Canada Facts: Sun Life filed with the CIR its insurance premium tax return for the third quarter of 1997 and paid the premium tax in the amount of P31,485,834.51. For the period covering August 21 to December 18, 1997, petitioner filed with the CIR its [documentary stamp tax (DST)] declaration returns and paid the total amount of P30,000,000.00. Subsequently, (CTA) rendered its decision in Insular Life Assurance Co. Ltd. v. [CIR], which held that mutual life insurance companies are purely cooperative companies and are exempt from the payment of premium tax and DST. This pronouncement was later affirmed by this court in [CIR] v. Insular Life Assurance Company, Ltd. Sun Life surmised that[,] being a mutual life insurance company, it was likewise exempt from the payment of premium tax and DST. Hence, on August 20, 1999, Sun Life filed with the CIR an administrative claim for tax credit of its alleged
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erroneously paid premium tax and DST for the aforestated tax periods. CIR then refuses to refund the said claims hence this suit. CTA ruled in favor of Sun Life and on appeal it was affirmed. Issue: Whether or not respondent is exempted from payment of tax on life insurance premiums and documentary stamp tax Held: The Petition has no merit. Sun Life Assurance Company is licensed for the mutual protection of its members, not for the profit of anyone. A mutual life insurance company is conducted for the benefit of its memberpolicyholders,who pay into its capital by way of premiums. To that extent, they are responsible for the payment of all its losses. The cash paid in for premiums and the premium notes constitute their assets x x x. In the event that the company itself fails before the terms of the policies expire, the member-policyholders do not acquire the status of creditors. Rather, they simply become debtors for whatever premiums that they have originally agreed to pay the company, if they have not yet paid those amounts in full, for [m]utual companies x x x depend solely upon x x x premiums. Only when the premiums will have accumulated to a sum larger than that required to pay for company losses will the memberpolicyholders be entitled to a pro rata division thereof as profits. Contributing to its capital, the member-policyholders of a mutual company are obviously also its owners. Sustaining a dual relationship inter se, they not only contribute to the payment of its losses, but are also entitled to a proportionate share and participate aliin its profits and surplus. The rates of premium charged by a mutual company be larger than might reasonably be expected to carry the insurance, in order to constitute a margin of safety and because a mutual company has no capital stock and relies solely upon its premiums to meet unexpected losses, contingencies and expenses. Sharing in the common fund, any member-policyholder may choose to withdraw dividends in cash or to apply them in order to reduce a subsequent premium, purchase additional insurance, or accelerate the payment period. Although the premium made at the beginning of a year is more than necessary to provide for the cost of carrying the insurance, the member-policyholder will nevertheless receive the benefit of the overcharge by way of dividends, at the end of the year when the cost is actually ascertained. The declaration of a dividend upon a policy reduces pro tanto the cost of insurance to the holder of the policy. That is its purpose and effect.[ A stipulated insurance premium cannot be increased, but may be lessened annually by so much as the experience of the preceding year has determined it to have been greater than the cost of carrying the insurance x x x. The difference between that premium and the cost of carrying the risk of loss constitutes the socalled dividend which, however, is not in any real sense a dividend. It is a technical term that is well understood in the insurance business to be widely different from that to which it is ordinarily attached. The so-called dividend that is received by memberpolicyholders is not a portion of profits set aside for distribution to the stockholders in proportion to their subscription to the capital stock of a corporation. One, a mutual company has no capital stock to which subscription is necessary; there are no stockholders to speak of, but only members. And, two, the amount they receive does not partake of the nature of a profit or income. The quasiappearance of profit will not change its character. It remains an overpayment, a benefit to which the member-policyholder is equitably entitled. Verily, a mutual life insurance corporation is a cooperative that promotes the welfare of its own members. It does not operate for profit, but for the mutual benefit of its member-policyholders. They receive their insurance at cost, while reasonably and properly guarding and maintaining the stability and solvency of the
Surety & Life Insurance Cases

company. The economic benefits filter to the cooperative members. Either equally or proportionally, they are distributed among members in correlation with the resources of the association utilized. The respondent is a cooperative that does not have to be registered with the CDA, we hold that it is entitled to exemption from both premium taxes and documentary stamp taxes (DST). HERMINIA Q. KANAPI, vs INSULAR LIFE G.R. No. L-5642 February 25, 1954 FACTS: Defendant insurance company issued a policy on the life of plaintiff's husband, Henry G. Canapi, whereby defendant undertook to pay to plaintiff as beneficiary, upon the death of the insured, the sum of P5,000.00 if the death be due to natural causes and an additional P5,000.00 if the death be due to accidental means, under the Accidental Death Benefit Policy Clause. However, it was provided that liability will not attach if death resulted from injury intentionally inflicted by a third party. During the life of the policy, the insured died from a bullet wound inflicted, without provocation, by one Conrado Quemosing, who, as author of the killing, was found guilty of murder and sentenced to prison. The insurer denied liability alleging that the Accidental Death Benefit Policy Clause did not apply. The lower court ruled against the Kanapi. ISSUE: Whether or not plaintiff is entitled to claim the additional benefits under the accident benefit clause of the policy. HELD: No. This clause provide for the payment of the sum upon proof that the death of the insured resulted directly from bodily injury affected through external and violent means sustained in an accident . . . and independently of all other clauses. But far from proving that the insured died from bodily injury sustained in an accident, the agreed facts are to the effect that the insured was murdered, thus making it indisputable that his death resulted from injury intentionally inflicted by a third party; which is one of the exceptions to the accident benefit clause, according to which the benefit shall not apply to death resulting from (5) Any injury received . . .(e) that has been inflicted intentionally by a third party, either with or without provocation on the part of the insured, and whether or not the attack or the defense by the third party was caused by a violation of the law by the insured. . . . There is nothing to the suggestion that the case comes under exception 5(d) or that portion of it which excepts from the benefit any injury received in any assault provoked by the Insured, it being argued that by express mention of provoked assault an unprovoked one is inferentially excluded. The inference is not admissible because where the injury is inflicted without provocation the case comes within the te rms ofexception 5(e), which, is, therefore, the one that should be applied G.R. No. L-25579; March 29, 1972 EMILIA, JUAN, MIGUEL, GIL and GRACIA T. BIAGTAN, plaintiffs-appellee vs. THE INSULAR LIFE ASSURANCE COMPANY, LTD., defendant-appellant MAKALINTAL, J.: FACTS:
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Juan S. Biagtan was insured with Insular Life Assurance Company for P5,000 and, under a supplementary contract denominated "Accidental Death Benefit Clause, for an additional sum of P5,000 if "the death of the Insured resulted directly from bodily injury effected solely through external and violent means sustained in an accident ... and independently of all other causes." The clause, however, expressly provided that it would not apply where death resulted from an injury" intentionally inflicted by another party." In 1964, a band of robbers entered the house of Juan. They were charged in and convicted by CFI Pangasinan for robbery with homicide for thrusting their sharp-pointed instruments on the body of Juan resulting in his death. Emilia, et al., as beneficiaries of the insured, filed a claim under the policy. The insurance company paid the basic amount of P5,000 but refused to pay the additional sum of P5,000 under the accidental death benefit clause, on the ground that the insured's death resulted from injuries intentionally inflicted by third parties and therefore was not covered. They filed suit to recover. RTC ruled in their favor. Hence, the present appeal by Insular. ISSUE: Whether the wounds received by the insured were inflicted intentionally. YES HELD: YES. Nine wounds were inflicted upon the deceased, all by means of thrusts with sharp-pointed instruments wielded by the robbers. This is a physical fact as to which there is no dispute. So is the fact that five of those wounds caused the death of the insured. Whether the robbers had the intent to kill or merely to scare the victim or to ward off any defense he might offer, it cannot be denied that the act itself of inflicting the injuries was intentional. It should be noted that the exception in the accidental benefit clause invoked by the appellant does not speak of the purpose whether homicidal or not of a third party in 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. This construction is the basic idea expressed in the coverage of the clause itself. Where a gang of robbers enter a house and coming face to face with the owner, even if unexpectedly, stab him repeatedly, it is contrary to all reason and logic to say that his injuries are not intentionally inflicted, regardless of whether they prove fatal or not. As it was, in the present case they did prove fatal, and the robbers have been accused and convicted of the crime of robbery with homicide. Decision appealed from is reversed and the complaint dismissed. Calanoc v. CA G.R. No. L-8151, December 16, 1955J. Doctrine: INSURANCE LAW; ACCIDENTAL DEATH; AMBIGUOUS TERMS IN INSURANCE POLICY; HOW CONSTRUED. While as a general rule "the parties may limit the coverage of the policy to certain particular accidents and risks or causes of less, and may expressly except other risks or causes of loss therefrom" (45 C. J. S, 781-782), however, it is to be desired that the terms and phraseology of the exception clause be clearly expressed so as to be within the easy grasp and understanding of the insured, for if the terms are doubtful or obscure the same must of necessity be interpreted or resolved against the one who has caused the obscurity. (Article 1377, new Civil Code.) And so it has been generally held that the "terms in an insurance policy, which are ambiguous, equivocal, or uncertain . . . are to be construed strictly and most strongly against the insurer, and liberally in favor of the insured so as to effect the dominant purpose of indemnity or
Surety & Life Insurance Cases

payment to the insured, especially where a forfeited is involved" (29 Am. Jur., 181), and the reason for this rule is that the "insured usually has no voice in the selection or arrangement of the words employed and that the language of the contract is selected with great care and deliberation by experts and legal advisers employed by, and acting exclusively in the interest of, the insurance company." (44 C. J. S., p. 1174.) In case of ambiguity in an insurance contract covering accidental death, the Supreme Courtheld that such terms shall be construed strictly against the insurer and liberally in favor of the insured inorder 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 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: s 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 G.R. No. L-21574 June 30, 1966

SIMON DE LA CRUZ, plaintiff and appellee, vs. THE CAPITAL INSURANCE and SURETY CO., INC., defendant and appellant. Achacoso, Nera and Ocampo for defendant and appellant. Agustin M. Gramata for plaintiff and appellee.
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BARRERA, J.: This is an appeal by the Capital Insurance & Surety Company, Inc., from the decision of the Court of First Instance of Pangasinan (in Civ Case No. U-265), ordering it to indemnify therein plaintiff Simon de la Cruz for the death of the latter's son, to pay the burial expenses, and attorney's fees. Eduardo de la Cruz, employed as a mucker in the Itogon-Suyoc Mines, Inc. in Baguio, was the holder of an accident insurance policy (No. ITO-BFE-170) underwritten by the Capital Insurance & Surety Co., Inc., for the period beginning November 13, 1956 to November 12, 1957. On January 1, 1957, in connection with the celebration of the New Year, the Itogon-Suyoc Mines, Inc. sponsored a boxing contest for general entertainment wherein the insured Eduardo de la Cruz, a non-professional boxer participated. In the course of his bout with another person, likewise a nonprofessional, 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. The cause of death was reported as hemorrhage, intracranial, left. 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 for payment of the indemnity under the insurance policy. As the claim was denied, De la Cruz instituted the action in the Court of First Instance of Pangasinan for specific performance. Defendant insurer set up the defense that the death of the insured, caused by his participation in a boxing contest, was not accidental and, therefore, not covered by insurance. After due hearing the court rendered the decision in favor of the plaintiff which is the subject of the present appeal. It is not disputed that during the ring fight with another nonprofessional boxer, Eduardo slipped, which was unintentional. At this opportunity, his opponent landed on Eduardo's head a blow, which sent the latter to the ropes. That must have caused the cranial injury that led to his death. Eduardo was insured "against death or disability caused by accidental means". Appellant insurer now contends that while the death of the insured was due to head injury, said injury was sustained because of his voluntary participation in the contest. It is claimed that the participation in the boxing contest was the "means" that produced the injury which, in turn, caused the death of the insured. And, since his inclusion in the boxing card was voluntary on the part of the insured, he cannot be considered to have met his death by "accidental means".1wph1.t 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.1 Appellant however, would like to make a distinction between "accident or accidental" and "accidental means", which is the term used in the insurance policy involved here. It is argued that to be considered within the protection of the policy, what is required to be accidental is the means that caused or brought the death and not the death itself. It may be mentioned in this connection, that the tendency of court decisions in the United States in recent years is to eliminate the fine distinction between the terms "accidental" and "accidental means" and to consider them as legally synonymous.2 But, even if we take appellant's theory, the death of the insured in the case at bar would still be entitled to indemnification under the policy. The generally accepted rule is that, death or injury does not result from accident or accidental
Surety & Life Insurance Cases

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.3 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.4 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 policies insuring against death or injury from accident. In the present case, 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. Without this unfortunate incident, that is, the unintentional slipping of the deceased, perhaps he could not have received that blow in the head and would not have died. 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. 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. Failure of the defendant insurance company to include death resulting from a boxing match or other sports among the prohibitive risks leads inevitably to the conclusion that it did not intend to limit or exempt itself from liability for such death.5 Wherefore, in view of the foregoing considerations, the decision appealed from is hereby affirmed, with costs against appellant. so ordered. G.R. No. 100970 September 2, 1992 FINMAN GENERAL ASSURANCE CORPORATION, petitioner, vs. THE HONORABLE COURT OF APPEALS and JULIA SURPOSA, respondents. Aquino and Associates for petitioner. Public Attorney's Office for private respondent. NOCON, J.: This is a petition for certiorari with a prayer for the issuance of a restraining order and preliminary mandatory injunction to annul and set aside the decision of the Court of Appeals dated July 11, 1991, 1 affirming the decision dated March 20, 1990 of the Insurance Commission 2 in ordering petitioner Finman General Assurance Corporation to pay private respondent Julia Surposa the proceeds of the personal accident Insurance policy with interest. It appears on record that on October 22, 1986, deceased, Carlie Surposa was insured with petitioner Finman General Assurance
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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. 3 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 three (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 along Rizal-Locsin Streets, Bacolod City after attending the celebration of the "Maskarra Annual Festival." Thereafter, private respondent and the other beneficiaries of said insurance policy filed a written notice of claim with the petitioner insurance company which denied said claim contending that murder and assault are not within the scope of the coverage of the insurance policy. On February 24, 1989, private respondent filed a complaint with the Insurance Commission which subsequently rendered a decision, the pertinent portion of which reads: In the light of the foregoing. we find respondent liable to pay complainant the sum of P15,000.00 representing the proceeds of the policy with interest. As no evidence was submitted to prove the claim for mortuary aid in the sum of P1,000.00, the same cannot be entertained. WHEREFORE, judgment is hereby rendered ordering respondent to pay complainant the sum of P15,000.00 with legal interest from the date of the filing of the complaint until fully satisfied. With costs. 4 On July 11, 1991, the appellate court affirmed said decision. Hence, petitioner filed this petition alleging grove abuse of discretion on the part of the appellate court 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. Therefore, said death was committed with deliberate intent which, by the very nature of a personal accident insurance policy, cannot be indemnified. We do not agree. 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.

. . . 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. 5 As correctly pointed out by the respondent appellate court in its decision: In the case at bar, it cannot be pretended that Carlie Surposa died in the course of an assault or murder as a result of his voluntary act considering the very nature of these crimes. In the first place, the insured and his companion were on their way home from attending a festival. They were confronted by unidentified persons. The record is barren of any circumstance showing how the stab wound was inflicted. Nor can it be pretended that the malefactor aimed at the insured precisely because the killer wanted to take his life. In any event, 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. Neither can it be said that where was a capricious desire on the part of the accused to expose his life to danger considering that he was just going home after attending a festival. 6 Furthermore, the personal accident insurance policy involved herein specifically enumerated only ten (10) circumstances wherein no liability attaches to petitioner insurance company 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 cannot be considered by implication to discharge the petitioner insurance company from liability for, any injury, disability or loss suffered by the insured. Thus, the failure of the petitioner insurance company 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. Article 1377 of the Civil Code of the Philippines provides that: The interpretation of obscure words or stipulations in a contract shall not favor the party who caused the obscurity. Moreover,

Surety & Life Insurance Cases

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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. 7 WHEREFORE, finding no irreversible error in the decision of the respondent Court of Appeals, the petition forcertiorari with restraining order and preliminary injunction is hereby DENIED for lack of merit. SO ORDERED. Narvasa, C.J., Padilla, Regalado and Melo, JJ., concur. QUESTIONS: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. What is Casualty Insurance & Example Liability Insurance & Example what types are covered? Actual Loss vs 3rd Party Liability how do you determine the liability? What is suretyship? extent of liability nature of liability (solidary) Suretyship vs Guaranty Suretyship vs Property Insurance in general (enumerate all; found in the memaid) What is credit accommodation? Is it necessary for the obligee to implead both principal and surety in the suit? (no because solidary obligation) Is the approval of obligee required for a contract of suretyship to be valid? (yes) Is the general rule in Sec. 77 applicable in suretyship? (Yes) Who pays the premium in suretyship? Sec. 179 - Memorize; When is surety entitled to service fee? Different types of surety bonds (Book) Prudential Case Pryce Case Life Insurance Definition & Characteristics Types of Life Insurance (better explanation in the book) Does life insurance cover death caused by accident? What is "accident" in the purview of insurance? Dela Cruz Case - amateur competition or professional? What is the tenor of the policy? (medyo detailed ang facts dito) Does life insurance cover death caused by intentional killing? a. Can the insurer just show that the third person was guilty or convicted of a crime to be exonerated from payment? (No, not automatic) Kanapi Case Calanoc Case (Detailed) Biagtan Case (Detailed) Differentiate Calanoc & Biagtan Is the number of stab wounds indicative of intent to kill or the lack thereof? (yes - intentional killing as enunciated in the case of Biagtan) Liability in case of suicide why 2 years? Max or min? (Max) Discuss assignment of life insurance policy

22. 23. 24. 25. 26. 27. 28.

Surety & Life Insurance Cases

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