SUBJECT:

TOPIC:

Date Made:

Digest Maker:

INSURANCE

Construction and
Interpretation

29 Aug 2016

AJLCardeo

CASE NAME: Sun Insurance Office, Ltd. vs Court of Appeals & Nerissa Lim
PONENTE: Cruz, J.

Case Date: 17 Jul 1992

Case Summary:
Felix Lim, Jr. accidentally killed himself with his gun after removing the magazine and
pointing the gun at his temple (thinking it was not loaded). Sun Insurance ruled that it
was not suicide but also said that it was not an accident and therefore not covered by
insurance. The widow (beneficiary of the Php 200K Life Policy) sued Sun Insurance. SC
said it was an accident and that it didnt fall on the exceptions stipulated in the said
Insurance contract.
Rule of Law:
As a rule, Insurance contracts are to be interpreted liberally in favor of the assured.

Detailed Facts:
1. Sun Insurance issued a Personal Accident Policy to Felix Lim, Jr. with a face value of
Php 200,000.00 (with his wife Nerissa as beneficiary).
2. On Oct. 6, 1982, Lim "accidentally" shot himself in the head and was killed on the
spot.
3. According to his secretary (lone witness), Lim pointed the gun at her as a joke and
assured her that it was not loaded (the magazine was removed), then he put the
gun to his temple and fired it.
4. Sun Insurance agreed that it was not suicide, but argued that it was not an accident
(therefore not covered by Insurance).
5. Sun Insurance: one of the four exceptions in the said Insurance contract includes
bodily injury consequent upon the insured person attempting to commit suicide or
"willfully exposing himself to needless peril" except in an attempt to save a human
life, and that the mere act of pointing the gun to his temple showed that Felix
willfully exposed himself to danger.
6. Nerissa Lim: Felix believed the gun to be safe because he had removed the
magazine and he repeatedly assured his secretary that the gun was not loaded.
Issue:
WON Lim's death was an accident. - YES
WON Nerissa is entitled to damages. NO
Holding:
"Accident/Accidental" in Insurance Contracts are construed and considered according to
the ordinary understanding and common usage and speech: That which happens by
chance or fortuitously, without intention or design, and which is unexpected, unusual,
and unforeseen.
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The SC defines an accident as 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 case, and therefore not expected; an event which happens without any human
agency or, if happening through human agency, an event which, under the
circumstances, is unusual to and not expected by the person to whom it happens. It is
also defined as an injury which happens by reason of some violence or casualty to the
insured without his design, consent, or voluntary co-operation.
There was no "willful exposure to needless peril" for the part of Lim when he pointed the
gun to his temple, because he thought it was not unsafe to do so (having removed the
magazine). He was unquestionably negligent but it should not prevent Nerissa from
recovering the insurance policy that Lim obtained "precisely against accident."
Suicide and exposure to needless peril are similar in the sense that both signify disregard
for ones life. The firing of the gun was deemed to be the unexpected and independent
and unforeseen occurrence that led to Lims death (he did not know that the gun was still
loaded).
There is nothing in the Insurance policy that relieves Sun Insurance of the
responsibility to pay the indemnity agreed upon if the insured is shown to have
"contributed to his own accident."
Accident insurance policies were never meant to reward the insured for his tendency to
show off or for his miscalculations. They were intended to provide for contingencies.
Insurance contracts are supposed to be interpreted liberally in favor of the assured. There
is no reason to deviate from this rule.
Nerissa Lim is not entitled to damages because Sun Insurance acted in good faith when it
rejected the Insurance claim. The rejection of Nerissas claim was not raised for the
purpose of evading a legitimate obligation.
Ruling:
CA Decision AFFIRMED, but MODIFIED with deletion of award for damages.
Other Opinions:

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